UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number:         811-04852

 

Victory Portfolios

(Exact name of registrant as specified in charter)

 

4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144
(Address of principal executive offices) (Zip code)

 

Citi Fund Services Ohio, Inc., 4400 Easton Commons, Suite 200, Columbus, OH 43219

(Name and address of agent for service)

 

Registrant’s telephone number, including area code: 800-539-3863

 

Date of fiscal year end: October 31

 

Date of reporting period: April 30, 2022

 

 

 

 

 

Item 1. Reports to Stockholders.

 

 

 

April 30, 2022

Semi Annual Report

Victory Diversified Stock Fund

Victory NewBridge Large Cap Growth Fund

Victory Special Value Fund

Victory THB US Small Opportunities Fund

Victory Strategic Allocation Fund

Victory INCORE Fund for Income

Victory INCORE Investment Grade Convertible Fund

 

www.vcm.com

News, Information And Education 24 Hours A Day, 7 Days A Week

The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:

•  Detailed performance records

•  Daily share prices

•  The latest fund news

•  Investment resources to help you become a better investor

•  A section dedicated to investment professionals

Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.

 

Victory Portfolios

TABLE OF CONTENTS

Investment Objectives and Portfolio
Holdings (Unaudited)		    

3

    

Schedule of Portfolio Investments

  

Victory Diversified Stock Fund

    

10

    

Victory NewBridge Large Cap Growth Fund

    

13

    

Victory Special Value Fund

    

15

    

Victory THB US Small Opportunities Fund

    

18

 

  

Victory Strategic Allocation Fund

     21    

Victory INCORE Fund for Income

     22    

Victory INCORE Investment Grade Convertible Fund

    

24

    

Financial Statements

      

Statements of Assets and Liabilities

    

27

    

Statements of Operations

     32    

Statements of Changes in Net Assets

     35    

Financial Highlights

     44    

Notes to Financial Statements

    

64

    

Supplemental Information (Unaudited)

    

77

    

Proxy Voting and Portfolio Holdings Information

     77    

Expense Examples

     77    

Advisory Contract Approval

     79    

Liquidity Risk Management Program

     83    

Privacy Policy (inside back cover)

      
 


1

 

IRA DISTRIBUTION WITHHOLDING DISCLOSURE

We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call 800-539-3863 (800-235-8396 for Member Class) and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.

If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.

For more specific information, please consult your tax adviser.

The Funds are distributed by Victory Capital Services, Inc. Victory Capital Management Inc. is the investment adviser to the Funds and receives fees from the Funds for performing services for the Funds.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus of the Victory Funds.

For additional information about any Victory Fund, including fees, expenses, and risks, view our prospectus online at vcm.com or call 800-539-3863 (800-235-8396 for Member Class). Read it carefully before you invest or send money.

The information in this report is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections, or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Past investment performance of the Funds, markets or securities mentioned herein should not be considered to be indicative of future results.

• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

Call Victory at:

800-539-FUND (800-539-3863)
800-235-8396 for Member Class

Visit our website at:

www.vcm.com

 


2

 

Victory Portfolios  
Victory Diversified Stock Fund  April 30, 2022

  (Unaudited)

Investment Objective and Portfolio Holdings:

The Fund seeks to provide long-term growth of capital.

Top 10 Holdings*:

April 30, 2022

(% of Net Assets)

Apple, Inc.

    

6.7

%

  

Microsoft Corp.

    

5.3

%

  

Alphabet, Inc., Class C

    

4.6

%

  

NVIDIA Corp.

    

2.3

%

  

SPDR S&P 500 ETF Trust

    

2.3

%

  

Broadcom, Inc.

    

2.1

%

  

UnitedHealth Group, Inc.

    

2.0

%

  

Regeneron Pharmaceuticals, Inc.

    

1.9

%

  

PepsiCo, Inc.

    

1.8

%

  

Tesla, Inc.

    

1.7

%

  

Sector Allocation*:

April 30, 2022

(% of Net Assets)

*  Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.

Percentages are of the net assets of the Fund and may not equal 100%.

Refer to the Schedule of Portfolio Investments for a complete list of securities.

 


3

 

Victory Portfolios  
Victory NewBridge Large Cap Growth Fund  April 30, 2022

  (Unaudited)

Investment Objective and Portfolio Holdings:

The Fund seeks to provide long-term capital appreciation.

Top 10 Holdings*:

April 30, 2022

(% of Net Assets)

Amazon.com, Inc.

    

7.0

%

  

Alphabet, Inc., Class C

    

6.7

%

  

NVIDIA Corp.

    

5.6

%

  

Visa, Inc., Class A

    

5.3

%

  

Thermo Fisher Scientific, Inc.

    

4.2

%

  

ServiceNow, Inc.

    

4.1

%

  

Zoetis, Inc.

    

3.9

%

  

Cadence Design Systems, Inc.

    

3.9

%

  

Lululemon Athletica, Inc.

    

3.6

%

  

Microsoft Corp.

    

3.5

%

  

Sector Allocation*:

April 30, 2022

(% of Net Assets)

*  Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.

Percentages are of the net assets of the Fund and may not equal 100%.

Refer to the Schedule of Portfolio Investments for a complete list of securities.

 


4

 

Victory Portfolios  
Victory Special Value Fund  April 30, 2022

  (Unaudited)

Investment Objective and Portfolio Holdings:

The Fund seeks to provide long-term growth of capital and dividend income.

Top 10 Holdings*:

April 30, 2022

(% of Net Assets)

Apple, Inc.

    

6.2

%

  

Microsoft Corp.

    

5.2

%

  

Alphabet, Inc., Class C

    

4.5

%

  

SPDR S&P 500 ETF Trust

    

2.5

%

  

NVIDIA Corp.

    

2.3

%

  

UnitedHealth Group, Inc.

    

2.0

%

  

Broadcom, Inc.

    

2.0

%

  

Regeneron Pharmaceuticals, Inc.

    

1.9

%

  

PepsiCo, Inc.

    

1.8

%

  

Tesla, Inc.

    

1.7

%

  

Sector Allocation*:

April 30, 2022

(% of Net Assets)

*  Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.

Percentages are of the net assets of the Fund and may not equal 100%.

Refer to the Schedule of Portfolio Investments for a complete list of securities.

 


5

 

Victory Portfolios  
Victory THB US Small Opportunities Fund  April 30, 2022

  (Unaudited)

Investment Objective and Portfolio Holdings:

The Fund seeks to provide capital appreciation.

Top 10 Holdings*:

April 30, 2022

(% of Net Assets)

RPC, Inc.

    

3.2

%

  

Transcat, Inc.

    

3.0

%

  

First Busey Corp.

    

2.9

%

  

ePlus, Inc.

    

2.9

%

  

TETRA Technologies, Inc.

    

2.6

%

  

Movado Group, Inc.

    

2.4

%

  

The Greenbrier Cos., Inc.

    

2.1

%

  

Insteel Industries, Inc.

    

2.1

%

  

Universal Technical Institute, Inc.

    

2.0

%

  

Old Second Bancorp, Inc.

    

1.9

%

  

Sector Allocation*:

April 30, 2022

(% of Net Assets)

*  Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.

Percentages are of the net assets of the Fund and may not equal 100%.

Refer to the Schedule of Portfolio Investments for a complete list of securities.

 


6

 

Victory Portfolios  
Victory Strategic Allocation Fund  April 30, 2022

  (Unaudited)

Investment Objective and Portfolio Holdings:

The Fund seeks to provide income and long-term growth of capital.

Top 10 Holdings*:

April 30, 2022

(% of Net Assets)

Victory RS Global Fund, Class Y

    

26.8

%

  

Victory Market Neutral Income Fund, Class I

    

20.6

%

  

Victory INCORE Total Return Bond Fund, Class R6

    

9.9

%

  

Victory Sophus Emerging Markets Fund, Class R6

    

8.8

%

  

VictoryShares U.S. Multi-Factor Minimum Volatility ETF

    

7.4

%

  

Victory INCORE Investment Grade Convertible Fund, Class I

    

6.3

%

  

Victory Global Energy Transition Fund, Class Y

    

5.9

%

  

Victory Trivalent International Small-Cap Fund, Class I

    

5.8

%

  

Victory Integrity Discovery Fund, Class Y

    

3.9

%

  

Victory RS Partners Fund, Class Y

    

3.9

%

  

Asset Allocation*:

April 30, 2022

(% of Net Assets)

*  Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.

Percentages are of the net assets of the Fund and may not equal 100%.

Refer to the Schedule of Portfolio Investments for a complete list of securities.

 


7

 

Victory Portfolios  
Victory INCORE Fund for Income  April 30, 2022

  (Unaudited)

Investment Objective and Portfolio Holdings:

The Fund seeks to provide a high level of current income consistent with preservation of shareholders' capital.

Asset Allocation*:

April 30, 2022

(% of Net Assets)

*  Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.

Percentages are of the net assets of the Fund and may not equal 100%.

Refer to the Schedule of Portfolio Investments for a complete list of securities.

 


8

 

Victory Portfolios  
Victory INCORE Investment Grade Convertible Fund  April 30, 2022

  (Unaudited)

Investment Objective and Portfolio Holdings:

The Fund seeks to provide a high level of current income together with long-term capital appreciation.

Top 10 Holdings*:

April 30, 2022

(% of Net Assets)

Anthem, Inc.

    

5.4

%

  

Booking Holdings, Inc.

    

5.3

%

  

Southwest Airlines Co.

    

5.1

%

  

Western Digital Corp.

    

5.1

%

  

Pioneer Natural Resources Co.

    

4.9

%

  

Euronet Worldwide, Inc.

    

4.9

%

  

Illumina, Inc.

    

4.5

%

  

Wells Fargo & Co.

    

4.1

%

  

Bank of America Corp.

    

4.0

%

  

Expedia Group, Inc.

    

3.9

%

  

Sector Allocation*:

April 30, 2022

(% of Net Assets)

*  Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.

Percentages are of the net assets of the Fund and may not equal 100%.

Refer to the Schedule of Portfolio Investments for a complete list of securities.

 


9

 
Victory Portfolios
Victory Diversified Stock Fund		   Schedule of Portfolio Investments
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Common Stocks (96.3%)

  

Communication Services (7.6%):

  

Alphabet, Inc., Class C (a)

    

5,629

    

$

12,943

    

Nexstar Media Group, Inc., Class A

    

27,603

      

4,373

    

World Wrestling Entertainment, Inc., Class A (b)

    

71,712

      

4,187

    
     

21,503

    

Communications Equipment (1.0%):

  

Lumentum Holdings, Inc. (a)

    

33,710

      

2,738

    

Consumer Discretionary (11.7%):

  

Amazon.com, Inc. (a)

    

1,327

      

3,298

    

Asbury Automotive Group, Inc. (a)

    

23,205

      

4,263

    

Brunswick Corp.

    

34,144

      

2,582

    

Crocs, Inc. (a)

    

30,051

      

1,996

    

D.R. Horton, Inc.

    

28,033

      

1,951

    

Group 1 Automotive, Inc.

    

15,601

      

2,717

    

Lithia Motors, Inc.

    

10,881

      

3,081

    

MarineMax, Inc. (a)

    

71,156

      

2,912

    

Meritage Homes Corp. (a)

    

17,952

      

1,482

    

Tesla, Inc. (a)

    

5,664

      

4,932

    

Vista Outdoor, Inc. (a)

    

42,080

      

1,482

    

Winnebago Industries, Inc. (b)

    

45,072

      

2,397

    
     

33,093

    

Consumer Staples (4.5%):

  

BJ's Wholesale Club Holdings, Inc. (a)

    

60,555

      

3,897

    

Darling Ingredients, Inc. (a)

    

23,402

      

1,717

    

PepsiCo, Inc.

    

29,561

      

5,076

    

Philip Morris International, Inc.

    

21,496

      

2,150

    
     

12,840

    

Electronic Equipment, Instruments & Components (3.0%):

  

Fabrinet (a)

    

43,730

      

4,294

    

Jabil, Inc.

    

75,539

      

4,361

    
     

8,655

    

Energy (7.3%):

  

Chevron Corp.

    

24,976

      

3,913

    

Diamondback Energy, Inc.

    

16,780

      

2,118

    

EOG Resources, Inc.

    

40,902

      

4,776

    

Matador Resources Co.

    

46,846

      

2,287

    

Pioneer Natural Resources Co.

    

13,895

      

3,230

    

Schlumberger NV

    

110,187

      

4,298

    
     

20,622

    

Financials (11.4%):

  

Ally Financial, Inc.

    

42,078

      

1,681

    

Ameriprise Financial, Inc.

    

14,519

      

3,855

    

Bank of America Corp.

    

99,159

      

3,538

    

Chubb Ltd.

    

22,637

      

4,673

    

See notes to financial statements.

 


10

 
Victory Portfolios
Victory Diversified Stock Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Customers Bancorp, Inc. (a)

    

36,678

    

$

1,543

    

JPMorgan Chase & Co.

    

30,419

      

3,631

    

Morgan Stanley

    

38,306

      

3,087

    

ServisFirst Bancshares, Inc.

    

48,502

      

3,896

    

Signature Bank

    

13,449

      

3,258

    

Western Alliance Bancorp

    

42,454

      

3,231

    
     

32,393

    

Health Care (12.5%):

  

AbbVie, Inc.

    

11,218

      

1,648

    

AmerisourceBergen Corp.

    

28,538

      

4,318

    

AMN Healthcare Services, Inc. (a)

    

29,318

      

2,866

    

Cigna Corp.

    

19,697

      

4,861

    

ICON PLC (a)

    

14,015

      

3,170

    

McKesson Corp.

    

14,846

      

4,596

    

Regeneron Pharmaceuticals, Inc. (a)

    

8,006

      

5,277

    

Stryker Corp.

    

6,030

      

1,455

    

Thermo Fisher Scientific, Inc.

    

2,697

      

1,491

    

UnitedHealth Group, Inc.

    

11,099

      

5,644

    
     

35,326

    

Industrials (8.4%):

  

Builders FirstSource, Inc. (a)

    

28,893

      

1,779

    

Chart Industries, Inc. (a)

    

26,685

      

4,505

    

GXO Logistics, Inc. (a)

    

24,271

      

1,437

    

Marten Transport Ltd.

    

232,948

      

4,049

    

Old Dominion Freight Line, Inc.

    

8,997

      

2,520

    

Parker-Hannifin Corp.

    

9,731

      

2,635

    

Saia, Inc. (a)

    

11,982

      

2,468

    

Trex Co., Inc. (a)

    

26,264

      

1,528

    

UFP Industries, Inc.

    

37,528

      

2,903

    
     

23,824

    

Materials (3.6%):

  

Graphic Packaging Holding Co.

    

78,601

      

1,714

    

Greif, Inc., Class A

    

24,925

      

1,512

    

Materion Corp.

    

21,744

      

1,851

    

Summit Materials, Inc., Class A (a)

    

80,494

      

2,238

    

Valvoline, Inc.

    

96,420

      

2,915

    
     

10,230

    

Real Estate (2.1%):

  

American Tower Corp.

    

8,303

      

2,001

    

CBRE Group, Inc., Class A (a)

    

17,634

      

1,464

    

Simon Property Group, Inc.

    

20,940

      

2,471

    
     

5,936

    

Semiconductors & Semiconductor Equipment (9.1%):

  

Advanced Micro Devices, Inc. (a)

    

46,984

      

4,018

    

Alpha & Omega Semiconductor Ltd. (a)

    

45,573

      

1,955

    

Applied Materials, Inc.

    

26,468

      

2,921

    

Broadcom, Inc.

    

10,471

      

5,805

    

See notes to financial statements.

 


11

 
Victory Portfolios
Victory Diversified Stock Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

NVIDIA Corp.

    

35,269

    

$

6,541

    

QUALCOMM, Inc.

    

31,875

      

4,453

    
     

25,693

    

Software (6.3%):

  

Cadence Design Systems, Inc. (a)

    

18,802

      

2,836

    

Microsoft Corp.

    

53,699

      

14,903

    
     

17,739

    

Technology Hardware, Storage & Peripherals (7.8%):

  

Apple, Inc.

    

119,996

      

18,918

    

HP, Inc.

    

84,721

      

3,103

    
     

22,021

    

Total Common Stocks (Cost $206,083)

    

272,613

    

Exchange-Traded Funds (2.3%)

  

SPDR S&P 500 ETF Trust

    

15,644

      

6,445

    

Total Exchange-Traded Funds (Cost $6,102)

    

6,445

    

Collateral for Securities Loaned (1.9%)^

  

BlackRock Liquidity Funds TempFund, Institutional Shares, 0.31% (c)

    

105,008

      

105

    
Fidelity Investments Money Market Government Portfolio, Institutional Shares,
0.19% (c)		    

2,907,766

      

2,908

    
Goldman Sachs Financial Square Prime Obligations Fund, Institutional Shares,
0.45% (c)		    

52,404

      

52

    

JPMorgan Prime Money Market Fund, Capital Shares, 0.40% (c)

    

417,853

      

418

    
Morgan Stanley Institutional Liquidity Prime Portfolio, Institutional Shares,
0.37% (c)		    

1,878,750

      

1,879

    

Total Collateral for Securities Loaned (Cost $5,362)

    

5,362

    

Total Investments (Cost $217,547) — 100.5%

    

284,420

    

Liabilities in excess of other assets — (0.5)%

    

(1,387

)

  

NET ASSETS — 100.00%

  

$

283,033

    

^  Purchased with cash collateral from securities on loan.

(a)  Non-income producing security.

(b)  All or a portion of this security is on loan.

(c)  Rate disclosed is the daily yield on April 30, 2022.

ETF — Exchange-Traded Fund

PLC — Public Limited Company

See notes to financial statements.

 


12

 
Victory Portfolios
Victory NewBridge Large Cap Growth Fund		   Schedule of Portfolio Investments
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Common Stocks (98.3%)

  

Communication Services (8.3%):

  

Alphabet, Inc., Class C (a)

    

298

    

$

685

    

Meta Platforms, Inc., Class A (a)

    

830

      

167

    
     

852

    

Communications Equipment (5.0%):

  

Arista Networks, Inc. (a)

    

2,604

      

301

    

Motorola Solutions, Inc.

    

982

      

210

    
     

511

    

Consumer Discretionary (24.3%):

  

Airbnb, Inc., Class A (a)

    

1,776

      

272

    

Amazon.com, Inc. (a)

    

290

      

721

    

Aptiv PLC (a)

    

1,736

      

185

    

Burlington Stores, Inc. (a)

    

1,105

      

225

    

Lululemon Athletica, Inc. (a)

    

1,050

      

372

    

NIKE, Inc., Class B

    

2,598

      

324

    

O'Reilly Automotive, Inc. (a)

    

466

      

283

    

Tractor Supply Co.

    

513

      

103

    
     

2,485

    

Electronic Equipment, Instruments & Components (2.5%):

  

CDW Corp.

    

1,590

      

259

    

Financials (4.7%):

  

Blackstone, Inc.

    

2,372

      

241

    

MSCI, Inc.

    

559

      

235

    
     

476

    

Health Care (14.6%):

  

Align Technology, Inc. (a)

    

626

      

181

    

Dexcom, Inc. (a)

    

630

      

257

    

Thermo Fisher Scientific, Inc.

    

775

      

429

    

Veeva Systems, Inc., Class A (a)

    

1,226

      

223

    

Zoetis, Inc.

    

2,282

      

405

    
     

1,495

    

Industrials (7.1%):

  

CoStar Group, Inc. (a)

    

3,179

      

202

    

Generac Holdings, Inc. (a)

    

1,060

      

233

    

Uber Technologies, Inc. (a)

    

9,126

      

287

    
     

722

    

IT Services (5.3%):

  

Visa, Inc., Class A

    

2,542

      

542

    

Semiconductors & Semiconductor Equipment (7.2%):

  

Broadcom, Inc.

    

288

      

160

    

NVIDIA Corp.

    

3,116

      

578

    
     

738

    

See notes to financial statements.

 


13

 
Victory Portfolios
Victory NewBridge Large Cap Growth Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Software (19.3%):

  

Adobe, Inc. (a)

    

779

    

$

308

    

Cadence Design Systems, Inc. (a)

    

2,608

      

393

    

Crowdstrike Holdings, Inc., Class A (a)

    

848

      

169

    

Microsoft Corp.

    

1,304

      

362

    

Palo Alto Networks, Inc. (a)

    

177

      

99

    

ServiceNow, Inc. (a)

    

882

      

422

    

The Trade Desk, Inc., Class A (a)

    

3,618

      

213

    
     

1,966

    

Total Common Stocks (Cost $7,093)

    

10,046

    

Total Investments (Cost $7,093) — 98.3%

    

10,046

    

Other assets in excess of liabilities — 1.7%

    

174

    

NET ASSETS — 100.00%

  

$

10,220

    

(a)  Non-income producing security.

PLC — Public Limited Company

See notes to financial statements.

 


14

 
Victory Portfolios
Victory Special Value Fund		   Schedule of Portfolio Investments
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Common Stocks (94.9%)

  

Communication Services (7.5%):

  

Alphabet, Inc., Class C (a)

    

849

    

$

1,952

    

Nexstar Media Group, Inc., Class A

    

4,107

      

651

    

World Wrestling Entertainment, Inc., Class A

    

10,816

      

631

    
     

3,234

    

Communications Equipment (0.9%):

  

Lumentum Holdings, Inc. (a)

    

5,010

      

407

    

Consumer Discretionary (11.5%):

  

Amazon.com, Inc. (a)

    

197

      

490

    

Asbury Automotive Group, Inc. (a)

    

3,509

      

645

    

Brunswick Corp.

    

5,313

      

402

    

Crocs, Inc. (a)

    

4,576

      

304

    

D.R. Horton, Inc.

    

4,225

      

294

    

Group 1 Automotive, Inc.

    

2,291

      

399

    

Lithia Motors, Inc.

    

1,588

      

449

    

MarineMax, Inc. (a)

    

11,072

      

453

    

Meritage Homes Corp. (a)

    

2,706

      

223

    

Tesla, Inc. (a)

    

854

      

744

    

Vista Outdoor, Inc. (a)

    

6,141

      

216

    

Winnebago Industries, Inc.

    

6,885

      

366

    
     

4,985

    

Consumer Staples (4.5%):

  

BJ's Wholesale Club Holdings, Inc. (a)

    

9,038

      

582

    

Darling Ingredients, Inc. (a)

    

3,436

      

252

    

PepsiCo, Inc.

    

4,598

      

789

    

Philip Morris International, Inc.

    

3,272

      

327

    
     

1,950

    

Electronic Equipment, Instruments & Components (3.0%):

  

Fabrinet (a)

    

6,615

      

649

    

Jabil, Inc.

    

11,517

      

665

    
     

1,314

    

Energy (7.2%):

  

Chevron Corp.

    

3,768

      

590

    

Diamondback Energy, Inc.

    

2,563

      

324

    

EOG Resources, Inc.

    

6,222

      

727

    

Matador Resources Co.

    

6,909

      

337

    

Pioneer Natural Resources Co.

    

2,096

      

487

    

Schlumberger NV

    

16,769

      

654

    
     

3,119

    

Financials (11.3%):

  

Ally Financial, Inc.

    

6,264

      

250

    

Ameriprise Financial, Inc.

    

2,190

      

582

    

Bank of America Corp.

    

15,312

      

546

    

Chubb Ltd.

    

3,372

      

696

    

Customers Bancorp, Inc. (a)

    

5,533

      

233

    

See notes to financial statements.

 


15

 
Victory Portfolios
Victory Special Value Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

JPMorgan Chase & Co.

    

4,608

    

$

550

    

Morgan Stanley

    

5,694

      

459

    

ServisFirst Bancshares, Inc.

    

7,326

      

589

    

Signature Bank

    

2,094

      

507

    

Western Alliance Bancorp

    

6,244

      

475

    
     

4,887

    

Health Care (12.4%):

  

AbbVie, Inc.

    

1,711

      

251

    

AmerisourceBergen Corp.

    

4,345

      

657

    

AMN Healthcare Services, Inc. (a)

    

4,464

      

436

    

Cigna Corp.

    

2,875

      

710

    

ICON PLC (a)

    

2,091

      

473

    

McKesson Corp.

    

2,261

      

700

    

Regeneron Pharmaceuticals, Inc. (a)

    

1,210

      

798

    

Stryker Corp.

    

918

      

222

    

Thermo Fisher Scientific, Inc.

    

412

      

228

    

UnitedHealth Group, Inc.

    

1,727

      

878

    
     

5,353

    

Industrials (8.4%):

  

Builders FirstSource, Inc. (a)

    

4,467

      

275

    

Chart Industries, Inc. (a)

    

4,025

      

680

    

GXO Logistics, Inc. (a)

    

3,641

      

216

    

Marten Transport Ltd.

    

35,470

      

616

    

Old Dominion Freight Line, Inc.

    

1,336

      

374

    

Parker-Hannifin Corp.

    

1,514

      

410

    

Saia, Inc. (a)

    

1,760

      

362

    

Trex Co., Inc. (a)

    

4,057

      

236

    

UFP Industries, Inc.

    

5,660

      

438

    
     

3,607

    

Materials (3.6%):

  

Graphic Packaging Holding Co.

    

11,857

      

258

    

Greif, Inc., Class A

    

3,760

      

228

    

Materion Corp.

    

3,300

      

281

    

Summit Materials, Inc., Class A (a)

    

11,748

      

327

    

Valvoline, Inc.

    

14,607

      

442

    
     

1,536

    

Real Estate (2.1%):

  

American Tower Corp.

    

1,250

      

301

    

CBRE Group, Inc., Class A (a)

    

2,632

      

219

    

Simon Property Group, Inc.

    

3,172

      

374

    
     

894

    

Semiconductors & Semiconductor Equipment (9.0%):

  

Advanced Micro Devices, Inc. (a)

    

7,113

      

608

    

Alpha & Omega Semiconductor Ltd. (a)

    

6,894

      

296

    

Applied Materials, Inc.

    

3,892

      

429

    

Broadcom, Inc.

    

1,584

      

878

    

See notes to financial statements.

 


16

 
Victory Portfolios
Victory Special Value Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

NVIDIA Corp.

    

5,343

    

$

991

    

QUALCOMM, Inc.

    

4,829

      

675

    
     

3,877

    

Software (6.2%):

  

Cadence Design Systems, Inc. (a)

    

2,796

      

422

    

Microsoft Corp.

    

8,204

      

2,277

    
     

2,699

    

Technology Hardware, Storage & Peripherals (7.3%):

  

Apple, Inc.

    

16,845

      

2,656

    

HP, Inc.

    

13,189

      

483

    
     

3,139

    

Total Common Stocks (Cost $31,440)

    

41,001

    

Exchange-Traded Funds (2.5%)

  

SPDR S&P 500 ETF Trust

    

2,658

      

1,095

    

Total Exchange-Traded Funds (Cost $1,266)

    

1,095

    

Total Investments (Cost $32,706) — 97.4%

    

42,096

    

Other assets in excess of liabilities — 2.6%

    

1,120

    

NET ASSETS — 100.00%

  

$

43,216

    

(a)  Non-income producing security.

ETF — Exchange-Traded Fund

PLC — Public Limited Company

See notes to financial statements.

 


17

 
Victory Portfolios
Victory THB US Small Opportunities Fund		   Schedule of Portfolio Investments
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Common Stocks (98.0%)

  

Communication Services (1.2%):

  

EverQuote, Inc., Class A (a)

    

64,430

    

$

894

    

Consumer Discretionary (16.2%):

  

America's Car-Mart, Inc. (a)

    

6,210

      

502

    

Bassett Furniture Industries, Inc.

    

63,130

      

1,045

    

BJ's Restaurants, Inc. (a)

    

23,634

      

657

    

Brilliant Earth Group, Inc. (a)

    

24,010

      

185

    

Century Communities, Inc.

    

15,640

      

825

    

Charles & Colvard Ltd. (a)

    

113,330

      

159

    

Chuy's Holdings, Inc. (a)

    

14,844

      

371

    

Holley, Inc. (a)

    

57,570

      

607

    

Lazydays Holdings, Inc. (a)

    

47,160

      

916

    

M/I Homes, Inc. (a)

    

13,565

      

601

    

MasterCraft Boat Holdings, Inc. (a)

    

22,680

      

546

    

Movado Group, Inc.

    

49,780

      

1,791

    

Red Robin Gourmet Burgers, Inc. (a)

    

28,120

      

371

    

Ruth's Hospitality Group, Inc. (b)

    

63,110

      

1,323

    

Universal Technical Institute, Inc. (a)

    

141,550

      

1,466

    

Vera Bradley, Inc. (a)

    

100,190

      

616

    
     

11,981

    

Consumer Staples (0.4%):

  

Vital Farms, Inc. (a)

    

24,300

      

279

    

Energy (11.2%):

  

Clean Energy Fuels Corp. (a)

    

155,720

      

913

    

Expro Group Holdings NV (a)

    

53,136

      

812

    

Geospace Technologies Corp. (a)

    

49,200

      

284

    

Natural Gas Services Group, Inc. (a)

    

11,768

      

145

    

Profire Energy, Inc. (a)

    

552,220

      

746

    

RPC, Inc. (a)

    

228,260

      

2,360

    

Select Energy Services, Inc., Class A (a)

    

89,180

      

692

    

Solaris Oilfield Infrastructure, Inc., Class A

    

38,590

      

434

    

TETRA Technologies, Inc. (a)

    

513,150

      

1,888

    
     

8,274

    

Financials (10.6%):

  

BayCom Corp.

    

34,506

      

781

    

Coastal Financial Corp. (a)

    

12,190

      

500

    

Colony Bankcorp, Inc.

    

29,920

      

513

    

First Busey Corp.

    

96,091

      

2,159

    

Heritage Financial Corp.

    

55,485

      

1,344

    

Old Second Bancorp, Inc.

    

105,012

      

1,446

    

P10, Inc., Class A (a)

    

36,050

      

436

    

The First Bancshares, Inc.

    

20,617

      

664

    
     

7,843

    

Health Care (14.6%):

  

Addus HomeCare Corp. (a)

    

8,691

      

733

    

Amneal Pharmaceuticals, Inc. (a)

    

240,048

      

927

    

See notes to financial statements.

 


18

 
Victory Portfolios
Victory THB US Small Opportunities Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Atrion Corp.

    

1,034

    

$

648

    

BioLife Solutions, Inc. (a)

    

37,744

      

478

    

Catalyst Pharmaceuticals, Inc. (a)

    

40,330

      

307

    

CryoLife, Inc. (a)

    

23,795

      

483

    

Lantheus Holdings, Inc. (a)

    

18,021

      

1,197

    

LeMaitre Vascular, Inc.

    

30,566

      

1,321

    

Meridian Bioscience, Inc. (a)

    

21,800

      

558

    

Mesa Laboratories, Inc.

    

2,463

      

526

    

ModivCare, Inc. (a)

    

5,452

      

567

    

Organogenesis Holdings, Inc. (a)

    

55,000

      

354

    

Orthofix Medical, Inc. (a)

    

36,626

      

1,135

    

Retractable Technologies, Inc. (a) (b)

    

64,170

      

246

    

The Joint Corp. (a)

    

10,657

      

325

    

Vanda Pharmaceuticals, Inc. (a)

    

24,930

      

247

    

Vericel Corp. (a)

    

25,020

      

713

    
     

10,765

    

Industrials (22.7%):

  

Allied Motion Technologies, Inc.

    

33,337

      

811

    

ARC Document Solutions, Inc.

    

233,850

      

889

    

Bowman Consulting Group Ltd. (a)

    

44,030

      

735

    

CIRCOR International, Inc. (a) (b)

    

34,080

      

670

    

Concrete Pumping Holdings, Inc. (a)

    

92,450

      

516

    

Energy Recovery, Inc. (a)

    

20,500

      

380

    

Graham Corp.

    

52,040

      

379

    

Great Lakes Dredge & Dock Corp. (a)

    

27,380

      

378

    

Harsco Corp. (a)

    

56,420

      

577

    

Hydrofarm Holdings Group, Inc. (a) (b)

    

16,120

      

154

    

Hyster-Yale Materials Handling, Inc.

    

27,610

      

848

    

IES Holdings, Inc. (a)

    

10,300

      

302

    

Insteel Industries, Inc.

    

35,925

      

1,524

    

Karat Packaging, Inc. (a)

    

34,000

      

624

    

Limbach Holdings, Inc. (a)

    

53,160

      

335

    

MYR Group, Inc. (a)

    

4,851

      

384

    

NN, Inc. (a)

    

134,130

      

406

    

Northwest Pipe Co. (a)

    

21,420

      

572

    

Preformed Line Products Co.

    

11,290

      

672

    

Quest Resource Holding Corp. (a)

    

65,050

      

356

    

The Greenbrier Cos., Inc.

    

37,000

      

1,580

    

The Shyft Group, Inc.

    

17,216

      

438

    

Transcat, Inc. (a)

    

29,961

      

2,187

    

Twin Disc, Inc. (a)

    

44,300

      

620

    

Willdan Group, Inc. (a)

    

16,780

      

451

    
     

16,788

    

Information Technology (15.0%):

  

CEVA, Inc. (a)

    

13,800

      

501

    

ePlus, Inc. (a)

    

37,722

      

2,130

    

Grid Dynamics Holdings, Inc. (a)

    

84,820

      

1,181

    

Ichor Holdings Ltd. (a)

    

36,570

      

1,065

    

Immersion Corp. (a)

    

89,360

      

417

    

See notes to financial statements.

 


19

 
Victory Portfolios
Victory THB US Small Opportunities Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Iteris, Inc. (a)

    

137,160

    

$

354

    

Luna Innovations, Inc. (a)

    

140,270

      

774

    

Napco Security Technologies, Inc. (a)

    

59,180

      

1,036

    

PAR Technology Corp. (a) (b)

    

25,316

      

836

    

Perficient, Inc. (a)

    

9,240

      

919

    

Ultra Clean Holdings, Inc. (a)

    

28,733

      

896

    

Upland Software, Inc. (a)

    

24,790

      

370

    

Wayside Technology Group, Inc.

    

18,010

      

617

    
     

11,096

    

Materials (3.2%):

  

Hawkins, Inc.

    

8,860

      

330

    

Koppers Holdings, Inc.

    

45,237

      

1,098

    

UFP Technologies, Inc. (a)

    

12,900

      

886

    
     

2,314

    

Real Estate (1.9%):

  

Gladstone Land Corp.

    

28,080

      

1,022

    

Postal Realty Trust, Inc., Class A

    

21,350

      

359

    
     

1,381

    

Utilities (1.0%):

  

The York Water Co.

    

18,790

      

727

    

Total Common Stocks (Cost $64,974)

    

72,342

    

Collateral for Securities Loaned (1.9%)^

  

BlackRock Liquidity Funds TempFund, Institutional Shares, 0.31% (c)

    

28,204

      

28

    
Fidelity Investments Money Market Government Portfolio, Institutional Shares,
0.19% (c)		    

780,997

      

781

    
Goldman Sachs Financial Square Prime Obligations Fund, Institutional Shares,
0.45% (c)		    

14,075

      

14

    

JPMorgan Prime Money Market Fund, Capital Shares, 0.40% (c)

    

112,231

      

112

    
Morgan Stanley Institutional Liquidity Prime Portfolio, Institutional Shares,
0.37% (c)		    

504,614

      

505

    

Total Collateral for Securities Loaned (Cost $1,440)

    

1,440

    

Total Investments (Cost $66,414) — 99.9%

    

73,782

    

Other assets in excess of liabilities — 0.1%

    

95

    

NET ASSETS — 100.00%

  

$

73,877

    

^  Purchased with cash collateral from securities on loan.

(a)  Non-income producing security.

(b)  All or a portion of this security is on loan.

(c)  Rate disclosed is the daily yield on April 30, 2022.

See notes to financial statements.

 


20

 
Victory Portfolios
Victory Strategic Allocation Fund		   Schedule of Portfolio Investments
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Affiliated Exchange-Traded Funds (7.4%)

  

VictoryShares U.S. Multi-Factor Minimum Volatility ETF

    

50,160

    

$

1,976

    

Total Affiliated Exchange-Traded Funds (Cost $1,273)

    

1,976

    

Affiliated Mutual Funds (91.9%)

  

Victory Global Energy Transition Fund, Class Y

    

49,394

      

1,578

    

Victory INCORE Investment Grade Convertible Fund, Class I

    

96,168

      

1,679

    

Victory INCORE Total Return Bond Fund, Class R6

    

299,534

      

2,648

    

Victory Integrity Discovery Fund, Class Y

    

23,542

      

1,043

    

Victory Market Neutral Income Fund, Class I

    

576,422

      

5,505

    

Victory RS Global Fund, Class Y

    

409,071

      

7,159

    

Victory RS Partners Fund, Class Y

    

37,452

      

1,039

    

Victory Sophus Emerging Markets Fund, Class R6

    

115,473

      

2,342

    

Victory Trivalent International Small-Cap Fund, Class I

    

110,274

      

1,558

    

Total Affiliated Mutual Funds (Cost $22,372)

    

24,551

    

Total Investments (Cost $23,645) — 99.3%

    

26,527

    

Other assets in excess of liabilities — 0.7%

    

192

    

NET ASSETS — 100.00%

  

$

26,719

    

ETF — Exchange-Traded Fund

See notes to financial statements.

 


21

 
Victory Portfolios
Victory INCORE Fund for Income		   Schedule of Portfolio Investments
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

   Principal
Amount		  

Value

  

Government National Mortgage Association (80.2%)

  

Multi-family (0.3%):

  

Pass-throughs (0.3%):

  

Government National Mortgage Assoc.

  

7.92%, 7/1/23

  

$

94

    

$

94

    

8.00%, 1/15/31 – 11/15/33

    

1,002

      

1,003

    

7.75%, 9/15/33

    

371

      

371

    
     

1,468

    

Single Family (79.9%):

  

Collateralized Mortgage Obligations (3.1%):

  

Government National Mortgage Assoc.

  

Series 1999-4, Class ZB, 6.00%, 2/20/29

    

128

      

128

    

Series 2001-10, Class PE, 6.50%, 3/16/31

    

106

      

106

    

Series 2005-74, Class HB, 7.50%, 9/16/35

    

7

      

7

    

Series 2005-74, Class HC, 7.50%, 9/16/35

    

41

      

45

    

Series 2011-166, Class NT, 7.73%, 11/20/31 (a)

    

640

      

692

    

Series 2012-106, Class JM, 7.35%, 10/20/34 (a)

    

468

      

513

    

Series 2012-30, Class WB, 7.01%, 11/20/39 (a)

    

1,662

      

1,794

    

Series 2013-190, Class KT, 8.10%, 9/20/30 (a)

    

189

      

206

    

Series 2013-51, Class BL, 6.07%, 4/20/34 (a)

    

1,376

      

1,482

    

Series 2013-64, Class KY, 6.74%, 12/20/38 (a)

    

717

      

768

    

Series 2013-70, Class KP, 7.03%, 2/20/39 (a)

    

668

      

727

    

Series 2014-69, Class W, 7.21%, 11/20/34 (a)

    

93

      

101

    

Series 2014-74, Class PT, 7.86%, 5/16/44 (a)

    

131

      

140

    

Series 2015-77, Class PT, 7.24%, 6/20/39 (a)

    

256

      

278

    

Series 2019-22, Class PT, 7.93%, 2/20/49 (a)

    

4,659

      

5,057

    

Series 2021-1, Class WT, 7.82%, 1/20/51 (a)

    

4,976

      

5,456

    
     

17,500

    

Pass-throughs (76.8%):

  

Government National Mortgage Assoc.

  

8.00%, 6/15/22 – 5/15/49

    

28,245

      

31,015

    

7.50%, 9/15/22 – 5/15/49

    

47,510

      

51,501

    

7.00%, 12/20/22 – 9/20/50

    

73,183

      

79,842

    

8.50%, 2/15/23 – 7/15/32

    

3,799

      

4,113

    

7.13%, 3/15/23 – 7/15/25

    

49

      

49

    

6.50%, 6/15/23 – 2/20/41

    

112,362

      

121,688

    

5.50%, 7/15/23 – 11/15/45

    

24,717

      

27,060

    

6.00%, 9/20/23 – 9/20/50

    

69,792

      

76,394

    

9.00%, 4/15/25 – 9/15/30

    

1,043

      

1,128

    

10.00%, 4/15/25

    

—

(b)

    

—

(b)

  

6.13%, 6/20/28 – 11/20/28

    

253

      

257

    

6.28%, 10/20/28 – 9/20/29

    

506

      

525

    

6.10%, 5/20/29 – 7/20/31

    

414

      

427

    

7.30%, 4/20/30 – 2/20/31

    

169

      

173

    

6.49%, 5/20/31 – 3/20/32

    

720

      

751

    

4.50%, 12/15/33 – 5/15/41

    

8,731

      

9,277

    

5.00%, 1/20/34 – 2/20/42

    

20,006

      

21,071

    

See notes to financial statements.

 


22

 
Victory Portfolios
Victory INCORE Fund for Income		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

   Shares or
Principal
Amount		  

Value

  

4.00%, 8/15/41

  

$

567

    

$

595

    
     

425,866

    

Total Government National Mortgage Association (Cost $467,604)

    

444,834

    

U.S. Treasury Obligations (19.1%)

  

U.S. Treasury Bills, 1.01%, 8/11/22 (c)

    

24,069

      

24,003

    

U.S. Treasury Bonds, 7.50%, 11/15/24

    

73,386

      

81,759

    

Total U.S. Treasury Obligations (Cost $108,709)

    

105,762

    

Investment Companies (0.0%) (d)

  

BlackRock Liquidity Funds Fedfund Portfolio, 0.23% (c)

    

99,710

      

100

    

Total Investment Companies (Cost $100)

    

100

    

Total Investments (Cost $576,413) — 99.3%

    

550,696

    

Other assets in excess of liabilities — 0.7%

    

3,910

    

NET ASSETS — 100.00%

  

$

554,606

    

(a)  The rate for certain asset-backed and mortgage-backed securities may vary based on factors relating to the pool of assets underlying the security. The rate disclosed is the rate in effect at April 30, 2022.

(b)  Rounds to less than $1 thousand.

(c)  Rate represents the effective yield at April 30, 2022.

(d)  Amount represents less than 0.05% of net assets.

See notes to financial statements.

 


23

 
Victory Portfolios
Victory INCORE Investment Grade Convertible Fund		   Schedule of Portfolio Investments
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description   Principal
Amount		  

Value

  

Convertible Corporate Bonds (64.9%)

  

Communication Services (0.5%):

  

Snap, Inc., 0.75%, 8/1/26

  

$

1,595

    

$

2,345

    

Consumer Discretionary (11.4%):

  

Booking Holdings, Inc., 0.75%, 5/1/25 (a)

    

17,060

      

23,880

    

Expedia Group, Inc., 2/15/26 (a) (b)

    

14,881

      

17,689

    

Ford Motor Co., 3/15/26 (b)

    

9,175

      

9,795

    

 

    

51,364

    

Energy (5.4%):

  

EQT Corp., 1.75%, 5/1/26

    

705

      

1,922

    

Pioneer Natural Resources Co., 0.25%, 5/15/25

    

10,101

      

22,317

    

 

    

24,239

    

Financials (14.8%):

  

Ares Capital Corp., 4.63%, 3/1/24

    

12,453

      

13,625

    

Barclays Bank PLC

  

2/4/25 (b)

    

7,120

      

10,367

    

2/18/25 (b)

    

4,330

      

4,756

    

BlackRock Capital Investment Corp., 5.00%, 6/15/22

    

3,712

      

3,721

    

GSK Finance NO 3 PLC, 3.32%, 6/22/23 (c)

    

4,418

      

4,256

    

Hannon Armstrong Sustainable Infrastructure Capital, Inc., 8/15/23 (b)

    

2,435

      

2,458

    

JPMorgan Chase Financial Co. LLC, 0.25%, 5/1/23 (c)

    

12,505

      

13,295

    

MGIC Investment Corp., Convertible Subordinated Notes, 9.00%, 4/1/63

    

4,342

      

5,790

    

TPG Specialty Lending, Inc., 4.50%, 8/1/22

    

7,062

      

8,614

    

 

    

66,882

    

Health Care (11.0%):

  

Anthem, Inc., 2.75%, 10/15/42

    

3,415

      

24,421

    
Bristol-Myers Squibb Co., 0.33% (LIBOR03M-50bps), 9/15/23,
Callable 6/6/22 @ 100 (d)		    

2,466

      

4,994

    

Illumina, Inc., 8/15/23 (a) (b)

    

19,617

      

20,207

    

 

    

49,622

    

Industrials (6.3%):

  

Parsons Corp., 0.25%, 8/15/25

    

5,270

      

5,464

    

Southwest Airlines Co., 1.25%, 5/1/25

    

16,930

      

23,126

    

 

    

28,590

    

Information Technology (13.6%):

  

Akamai Technologies, Inc., 0.13%, 5/1/25

    

3,024

      

3,809

    

Block, Inc., 0.25%, 11/1/27 (a)

    

7,625

      

6,306

    

Euronet Worldwide, Inc., 0.75%, 3/15/49, Callable 3/20/25 @ 100 (a)

    

19,715

      

22,041

    

Vishay Intertechnology, Inc., 2.25%, 6/15/25

    

6,655

      

6,525

    

Western Digital Corp., 1.50%, 2/1/24

    

24,003

      

23,025

    

 

    

61,706

    

Real Estate (1.9%):

  

Kite Realty Group LP, 0.75%, 4/1/27 (c)

    

8,280

      

8,460

    

Total Convertible Corporate Bonds (Cost $267,623)

    

293,208

    

See notes to financial statements.

 


24

 
Victory Portfolios
Victory INCORE Investment Grade Convertible Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description  

Shares

  

Value

  

Convertible Preferred Stocks (34.4%)

  

Financials (14.4%):

  

AMG Capital Trust II, 4.73%, 10/15/37

    

172,005

    

$

9,367

    

Bank of America Corp., Series L, 5.96% (e)

    

15,010

      

18,264

    

KKR & Co., Inc., Series C, 0.22%, 9/15/23

    

247,895

      

16,252

    

New York Community Capital Trust, 6.19%, 11/1/51

    

53,619

      

2,601

    

Wells Fargo & Co., Series L, 0.02% (e)

    

15,384

      

18,638

    

 

    

65,122

    

Industrials (3.7%):

  

Stanley Black & Decker, Inc., 1.01%, 11/15/22 (a)

    

211,840

      

16,649

    

Utilities (16.3%):

  

American Electric Power Co., Inc., 6.13%, 8/15/23 (a)

    

116,330

      

6,514

    

CenterPoint Energy, Inc., 4.57%, 9/15/29

    

55,000

      

2,529

    

Dominion Energy, Inc., Series A, 1.80%, 6/1/22

    

130,978

      

13,214

    

DTE Energy Co., 1.49%, 11/1/22

    

267,298

      

14,006

    

NextEra Energy, Inc., 0.65%, 9/1/22

    

127,545

      

6,817

    

NextEra Energy, Inc., 0.91%, 3/1/23

    

274,805

      

12,891

    

NiSource, Inc., 0.07%, 3/1/24

    

42,090

      

4,787

    

The Southern Co., Series 2019, 1.20%, 8/1/22

    

229,220

      

12,577

    

 

    

73,335

    

Total Convertible Preferred Stocks (Cost $164,301)

    

155,106

    

Collateral for Securities Loaned (19.3%)^

  

BlackRock Liquidity Funds TempFund, Institutional Class, 0.31% (f)

    

1,703,859

      

1,704

    
Fidelity Investments Money Market Government Portfolio, Institutional
Shares, 0.19% (f)		    

47,181,526

      

47,181

    
Goldman Sachs Financial Square Prime Obligations Fund, Institutional
Class, 0.45% (f)		    

850,310

      

850

    

JPMorgan Prime Money Market Fund, Capital Class, 0.40% (f)

    

6,780,106

      

6,780

    
Morgan Stanley Institutional Liquidity Prime Portfolio, Institutional
Class, 0.37% (f)		    

30,484,680

      

30,485

    

Total Collateral for Securities Loaned (Cost $87,000)

    

87,000

    

Total Investments (Cost $518,924) — 118.6%

    

535,314

    

Liabilities in excess of other assets — (18.6)%

    

(83,778

)

  

NET ASSETS — 100.00%

  

$

451,536

    

^  Purchased with cash collateral from securities on loan.

(a)  All or a portion of this security is on loan.

(b)  Zero-coupon bond.

(c)  Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of April 30, 2022, the fair value of these securities was $26,011 (thousands) and amounted to 5.8% of net assets.

(d)  Variable or Floating-Rate Security. Rate disclosed is as of April 30, 2022.

(e)  Security is perpetual and has no final maturity date but may be subject to calls at various dates in the future.

See notes to financial statements.

 


25

 
Victory Portfolios
Victory INCORE Investment Grade Convertible Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

  (Unaudited)

(f)  Rate disclosed is the daily yield on April 30, 2022.

bps — Basis points

LIBOR — London Interbank Offered Rate

LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of April 30, 2022, based on the last reset date of the security

LLC — Limited Liability Company

LP — Limited Partnership

PLC — Public Limited Company

See notes to financial statements.

 


26

 

Victory Portfolios

   Statements of Assets and Liabilities
April 30, 2022		  

(Amounts in Thousands, Except Per Share Amounts)  (Unaudited)

    Victory
Diversified
Stock Fund		   Victory
NewBridge
Large Cap
Growth Fund		   Victory
Special
Value Fund		  

Assets:

  
Investments, at value (Cost $217,547, $7,093 and
$32,706)		  

$

284,420

(a)

  

$

10,046

    

$

42,096

    

Cash

    

3,211

      

152

      

946

    

Receivables:

  

Interest and dividends

    

119

      

4

      

18

    

Capital shares issued

    

20

      

—

(b)

    

5

    

Investments sold

    

1,103

      

—

      

167

    

From Adviser

    

5

      

14

      

7

    

Prepaid expenses

    

43

      

23

      

32

    

Total Assets

    

288,921

      

10,239

      

43,271

    

Liabilities:

  

Payables:

  

Collateral received on loaned securities

    

5,362

      

—

      

—

    

Capital shares redeemed

    

261

      

1

      

—

(b)

  

Accrued expenses and other payables:

  

Investment advisory fees

    

160

      

7

      

28

    

Administration fees

    

15

      

1

      

2

    

Custodian fees

    

3

      

—

(b)

    

1

    

Transfer agent fees

    

38

      

4

      

12

    

Compliance fees

    

—

(b)

    

—

(b)

    

—

(b)

  
12b-1 fees    

32

      

1

      

6

    

Other accrued expenses

    

17

      

5

      

6

    

Total Liabilities

    

5,888

      

19

      

55

    

Net Assets:

  

Capital

    

193,295

      

5,595

      

29,742

    

Total accumulated earnings/(loss)

    

89,738

      

4,625

      

13,474

    

Net Assets

  

$

283,033

    

$

10,220

    

$

43,216

    

Net Assets

  

Class A

  

$

211,232

    

$

5,315

    

$

25,068

    

Class C

    

1,840

      

405

      

870

    

Class I

    

24,177

      

3,727

      

3,056

    

Class R

    

40,351

      

—

      

13,523

    

Class R6

    

941

      

—

      

—

    

Class Y

    

4,492

      

773

      

699

    

Total

  

$

283,033

    

$

10,220

    

$

43,216

    
Shares (unlimited number of shares authorized with
a par value of $0.001 per share):		  

Class A

    

10,902

      

1,432

      

889

    

Class C

    

106

      

92

      

37

    

Class I

    

1,248

      

821

      

106

    

Class R

    

2,147

      

—

      

512

    

Class R6

    

49

      

—

      

—

    

Class Y

    

231

      

185

      

24

    

Total

    

14,683

      

2,530

      

1,568

    

(continues on next page)

See notes to financial statements.

 


27

 

Victory Portfolios

   Statements of Assets and Liabilities
April 30, 2022		  

(Amounts in Thousands, Except Per Share Amounts)  (Unaudited) (continued)

    Victory
Diversified
Stock Fund		   Victory
NewBridge
Large Cap
Growth Fund		   Victory
Special
Value Fund		  
Net asset value, offering (except Class A) and
redemption price per share: (c)		  

Class A

  

$

19.38

    

$

3.71

    

$

28.24

    

Class C (d)

    

17.34

      

4.39

      

23.27

    

Class I

    

19.37

      

4.54

      

28.75

    

Class R

    

18.79

      

—

      

26.39

    

Class R6

    

19.39

      

—

      

—

    

Class Y

    

19.41

      

4.18

      

28.55

    

Maximum Sales Charge — Class A

    

5.75

%

    

5.75

%

    

5.75

%

  
Maximum offering price
(100%/(100%-maximum sales charge) of net asset
value adjusted to the nearest cent) per share —
Class A		  

$

20.56

    

$

3.94

    

$

29.96

    

(a)  Includes $5,073 of securities on loan.

(b)  Rounds to less than $1 thousand.

(c)  Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.

(d)  Redemption price per share varies by the length of time shares are held.

See notes to financial statements.

 


28

 

Victory Portfolios

   Statements of Assets and Liabilities
April 30, 2022		  

(Amounts in Thousands, Except Per Share Amounts)  (Unaudited)

    Victory
THB US
Small
Opportunities
Fund		   Victory
Strategic
Allocation
Fund		   Victory
INCORE
Fund for
Income		  

Assets:

  
Affiliated investments, at value (Cost $—,
$23,645 and $—)		  

$

—

    

$

26,527

    

$

—

    
Unaffiliated investments, at value (Cost $66,414,
$— and $576,413)		    

73,782

(a)

    

—

      

550,696

    

Cash

    

1,558

      

—

      

—

    

Receivables:

  

Interest and dividends

    

27

      

—

      

4,796

    

Capital shares issued

    

3

      

169

      

196

    

Investments sold

    

—

      

54

      

—

    

From Adviser

    

25

      

22

      

46

    

Prepaid expenses

    

24

      

29

      

56

    

Total Assets

    

75,419

      

26,801

      

555,790

    

Liabilities:

  

Payables:

  

Collateral received on loaned securities

    

1,440

      

—

      

—

    

To custodian

    

—

      

13

      

—

    

Capital shares redeemed

    

15

      

48

      

712

    

Accrued expenses and other payables:

  

Investment advisory fees

    

74

      

2

      

224

    

Administration fees

    

3

      

1

      

32

    

Custodian fees

    

—

(b)

    

—

(b)

    

4

    

Transfer agent fees

    

9

      

7

      

128

    

Compliance fees

    

—

(b)

    

—

(b)

    

—

(b)

  

Trustees' fees

    

—

      

—

      

—

(b)

  
12b-1 fees    

—

(b)

    

3

      

16

    

Other accrued expenses

    

1

      

8

      

68

    

Total Liabilities

    

1,542

      

82

      

1,184

    

Net Assets:

  

Capital

    

62,614

      

23,261

      

970,235

    

Total accumulated earnings/(loss)

    

11,263

      

3,458

      

(415,629

)

  

Net Assets

  

$

73,877

    

$

26,719

    

$

554,606

    

Net Assets

  

Class A

  

$

1,318

    

$

14,715

    

$

106,953

    

Class C

    

—

      

2,202

      

7,669

    

Class I

    

72,559

      

8,651

      

300,973

    

Class R

    

—

      

1,151

      

19,099

    

Class R6

    

—

      

—

      

27,504

    

Class Y

    

—

      

—

      

91,196

    

Member Class

    

—

      

—

      

1,212

    

Total

  

$

73,877

    

$

26,719

    

$

554,606

    

(continues on next page)

See notes to financial statements.

 


29

 

Victory Portfolios

   Statements of Assets and Liabilities
April 30, 2022		  

(Amounts in Thousands, Except Per Share Amounts)  (Unaudited) (continued)

    Victory
THB US
Small
Opportunities
Fund		   Victory
Strategic
Allocation
Fund		   Victory
INCORE
Fund for
Income		  
Shares (unlimited number of shares authorized with
a par value of $0.001 per share):		  

Class A

    

73

      

808

      

14,496

    

Class C

    

—

      

123

      

1,051

    

Class I

    

3,806

      

472

      

40,801

    

Class R

    

—

      

63

      

2,586

    

Class R6

    

—

      

—

      

3,734

    

Class Y

    

—

      

—

      

12,366

    

Member Class

    

—

      

—

      

164

    

Total

    

3,879

      

1,466

      

75,198

    
Net asset value, offering (except Class A)
and redemption price per share: (c)		  

Class A

  

$

18.09

    

$

18.22

    

$

7.38

    

Class C (d)

    

—

      

17.86

      

7.30

    

Class I

    

19.07

      

18.33

      

7.38

    

Class R

    

—

      

18.17

      

7.39

    

Class R6

    

—

      

—

      

7.36

    

Class Y

    

—

      

—

      

7.37

    

Member Class

    

—

      

—

      

7.40

    

Maximum Sales Charge — Class A

    

5.75

%

    

2.25

%

    

2.25

%

  
Maximum offering price
(100%/(100%-maximum sales charge) of net asset
value adjusted to the nearest cent) per share —
Class A		  

$

19.19

    

$

18.64

    

$

7.55

    

(a)  Includes $1,372 of securities on loan.

(b)  Rounds to less than $1 thousand.

(c)  Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.

(d)  Redemption price per share varies by the length of time shares are held.

See notes to financial statements.

 


30

 

Victory Portfolios

   Statements of Assets and Liabilities
April 30, 2022		  

(Amounts in Thousands, Except Per Share Amounts)  (Unaudited)

    Victory INCORE
Investment Grade
Convertible Fund		  

Assets:

  

Investments, at value (Cost $518,924)

  

$

535,314

(a)

  

Cash

    

3,921

    

Receivables:

  

Interest and dividends

    

1,463

    

Capital shares issued

    

569

    

Investments sold

    

736

    

From Adviser

    

4

    

Prepaid expenses

    

30

    

Total Assets

    

542,037

    

Liabilities:

  

Payables:

  

Collateral received on loaned securities

    

87,000

    

Investments purchased

    

1,245

    

Capital shares redeemed

    

1,859

    

Accrued expenses and other payables:

  

Investment advisory fees

    

282

    

Administration fees

    

23

    

Custodian fees

    

3

    

Transfer agent fees

    

61

    

Compliance fees

    

—

(b)

  
12b-1 fees    

2

    

Other accrued expenses

    

26

    

Total Liabilities

    

90,501

    

Net Assets:

  

Capital

    

433,448

    

Total accumulated earnings/(loss)

    

18,088

    

Net Assets

  

$

451,536

    

Net Assets

  

Class A

  

$

20,295

    

Class I

    

430,245

    

Member Class

    

996

    

Total

  

$

451,536

    
Shares (unlimited number of shares authorized with
a par value of $0.001 per share):		  

Class A

    

1,163

    

Class I

    

24,646

    

Member Class

    

55

    

Total

    

25,864

    
Net asset value, offering (except Class A)
and redemption price per share: (c)		  

Class A

  

$

17.46

    

Class I

    

17.46

    

Member Class

    

18.16

    

Maximum Sales Charge — Class A

    

2.25

%

  
Maximum offering price
(100%/(100%-maximum sales charge) of net asset
value adjusted to the nearest cent) per share —
Class A		  

$

17.86

    

(a)  Includes $84,020 of securities on loan.

(b)  Rounds to less than $1 thousand.

(c)  Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.

See notes to financial statements.

 


31

 

Victory Portfolios

   Statements of Operations
For the Six Months Ended April 30, 2022		  

(Amounts in Thousands)  (Unaudited)

    Victory
Diversified
Stock Fund		   Victory
NewBridge
Large Cap
Growth Fund		   Victory
Special
Value Fund		  

Investment Income:

      

Dividends

  

$

2,027

    

$

15

    

$

308

    

Interest

    

1

      

—

(a)

    

—

    

Securities lending (net of fees)

    

2

      

—

(a)

    

—

(a)

  

Total Income

    

2,030

      

15

      

308

    

Expenses:

      

Investment advisory fees

    

1,043

      

51

      

183

    

Administration fees

    

87

      

4

      

13

    

Sub-Administration fees

    

8

      

7

      

8

    
12b-1 fees — Class A    

297

      

9

      

35

    
12b-1 fees — Class C    

11

      

3

      

5

    
12b-1 fees — Class R    

115

      

—

      

39

    

Custodian fees

    

8

      

1

      

2

    

Transfer agent fees — Class A

    

77

      

4

      

15

    

Transfer agent fees — Class C

    

2

      

—

(a)

    

—

(a)

  

Transfer agent fees — Class I

    

8

      

2

      

1

    

Transfer agent fees — Class R

    

16

      

—

      

11

    

Transfer agent fees — Class R6

    

—

(a)

    

—

      

—

    

Transfer agent fees — Class Y

    

3

      

1

      

—

(a)

  

Trustees' fees

    

10

      

1

      

2

    

Compliance fees

    

1

      

—

(a)

    

—

(a)

  

Legal and audit fees

    

10

      

5

      

6

    

State registration and filing fees

    

40

      

26

      

31

    

Other expenses

    

22

      

6

      

8

    

Total Expenses

    

1,758

      

120

      

359

    

Expenses waived/reimbursed by Adviser

    

(13

)

    

(37

)

    

(34

)

  

Net Expenses

    

1,745

      

83

      

325

    

Net Investment Income (Loss)

    

285

      

(68

)

    

(17

)

  

Realized/Unrealized Gains (Losses) from Investments:

      

Net realized gains (losses) from investment securities

    

23,757

      

1,935

      

4,256

    
Net change in unrealized appreciation/depreciation on
investment securities		    

(56,395

)

    

(6,785

)

    

(9,048

)

  

Net realized/unrealized gains (losses) on investments

    

(32,638

)

    

(4,850

)

    

(4,792

)

  

Change in net assets resulting from operations

  

$

(32,353

)

  

$

(4,918

)

  

$

(4,809

)

  

(a)  Rounds to less than $1 thousand.

See notes to financial statements.

 


32

 

Victory Portfolios

   Statements of Operations
For the Six Months Ended April 30, 2022		  

(Amounts in Thousands)  (Unaudited)

    Victory
THB US
Small
Opportunities
Fund		   Victory
Strategic
Allocation
Fund		   Victory
INCORE
Fund for
Income		  

Investment Income:

      

Income distributions from affiliated funds

  

$

—

    

$

629

    

$

—

    

Dividends from unaffiliated investments

    

496

      

—

      

—

(a)

  

Interest from unaffiliated investments

    

—

      

—

      

4,250

    

Securities lending (net of fees)

    

3

      

—

      

—

    

Total Income

    

499

      

629

      

4,250

    

Expenses:

      

Investment advisory fees

    

460

      

14

      

1,496

    

Administration fees

    

22

      

8

      

167

    

Sub-Administration fees

    

8

      

6

      

11

    
12b-1 fees — Class A    

2

      

20

      

148

    
12b-1 fees — Class C    

—

      

12

      

44

    
12b-1 fees — Class R    

—

      

3

      

26

    

Custodian fees

    

2

      

1

      

15

    

Transfer agent fees — Class A

    

2

      

9

      

56

    

Transfer agent fees — Class C

    

—

      

2

      

5

    

Transfer agent fees — Class I

    

36

      

4

      

173

    

Transfer agent fees — Class R

    

—

      

1

      

9

    

Transfer agent fees — Class R6

    

—

      

—

      

1

    

Transfer agent fees — Class Y

    

—

      

—

      

57

    

Transfer agent fees — Member Class

    

—

      

—

      

1

    

Trustees' fees

    

3

      

2

      

18

    

Compliance fees

    

—

(a)

    

—

(a)

    

2

    

Legal and audit fees

    

7

      

5

      

7

    

State registration and filing fees

    

26

      

29

      

67

    

Line of credit fees

    

—

(a)

    

—

      

—

    

Interfund lending fees

    

—

      

—

      

—

(a)

  

Other expenses

    

7

      

7

      

77

    

Recoupment of prior expenses waived/reimbursed by Adviser

    

—

      

—

      

1

    

Total Expenses

    

575

      

123

      

2,381

    

Expenses waived/reimbursed by Adviser

    

(71

)

    

(67

)

    

(129

)

  

Net Expenses

    

504

      

56

      

2,252

    

Net Investment Income (Loss)

    

(5

)

    

573

      

1,998

    

Realized/Unrealized Gains (Losses) from Investments:

      

Net realized gains (losses) from sales of affiliated funds

    

—

      

313

      

—

    
Net realized gains (losses) from unaffiliated investment
securities		    

4,536

      

6

      

(1,221

)

  

Capital gain distributions received from affiliated funds

    

—

      

447

      

—

    
Net change in unrealized appreciation/depreciation on
affiliated funds		    

—

      

(3,298

)

    

—

    
Net change in unrealized appreciation/depreciation on
unaffiliated investment securities		    

(18,999

)

    

—

      

(28,390

)

  

Net realized/unrealized gains (losses) on investments

    

(14,463

)

    

(2,532

)

    

(29,611

)

  

Change in net assets resulting from operations

  

$

(14,468

)

  

$

(1,959

)

  

$

(27,613

)

  

(a)  Rounds to less than $1 thousand.

See notes to financial statements.

 


33

 

Victory Portfolios

   Statements of Operations
For the Six Months Ended April 30, 2022		  

(Amounts in Thousands)  (Unaudited)

    Victory INCORE
Investment Grade
Convertible Fund		  

Investment Income:

  

Dividends

  

$

4,055

    

Interest

    

1,355

    

Securities lending (net of fees)

    

424

    

Total Income

    

5,834

    

Expenses:

  

Investment advisory fees

    

1,652

    

Administration fees

    

121

    

Sub-Administration fees

    

8

    
12b-1 fees — Class A    

26

    

Custodian fees

    

9

    

Transfer agent fees — Class A

    

8

    

Transfer agent fees — Class I

    

139

    

Transfer agent fees — Member Class

    

1

    

Trustees' fees

    

13

    

Compliance fees

    

2

    

Legal and audit fees

    

13

    

State registration and filing fees

    

33

    

Interfund lending fees

    

—

(a)

  

Recoupment of prior expenses waived/reimbursed by Adviser

    

5

    

Other expenses

    

24

    

Total Expenses

    

2,054

    

Expenses waived/reimbursed by Adviser

    

(10

)

  

Net Expenses

    

2,044

    

Net Investment Income (Loss)

    

3,790

    

Realized/Unrealized Gains (Losses) from Investments:

  

Net realized gains (losses) from investment securities

    

4,965

    

Net change in unrealized appreciation/depreciation on investment securities

    

(29,606

)

  

Net realized/unrealized gains (losses) on investments

    

(24,641

)

  

Change in net assets resulting from operations

  

$

(20,851

)

  

(a)  Rounds to less than $1 thousand.

See notes to financial statements.

 


34

 

Victory Portfolios

  

Statements of Changes in Net Assets

  

(Amounts in Thousands)  

    Victory
Diversified Stock Fund		   Victory
NewBridge Large Cap
Growth Fund		   Victory
Special Value Fund		  
    Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		  

From Investment Activities:

  

Operations:

  

Net Investment Income (Loss)

  

$

285

    

$

(66

)

  

$

(68

)

  

$

(185

)

  

$

(17

)

  

$

(125

)

  

Net realized gains (losses)

    

23,757

      

48,095

      

1,935

      

4,481

      

4,256

      

9,190

    
Net change in unrealized
appreciation/depreciation		    

(56,395

)

    

64,146

      

(6,785

)

    

660

      

(9,048

)

    

8,963

    
Change in net assets resulting from
operations		    

(32,353

)

    

112,175

      

(4,918

)

    

4,956

      

(4,809

)

    

18,028

    

Distributions to Shareholders:

  

Class A

    

(33,219

)

    

(4,846

)

    

(2,162

)

    

(924

)

    

(4,420

)

    

(913

)

  

Class C

    

(349

)

    

(83

)

    

(149

)

    

(429

)

    

(178

)

    

(36

)

  

Class I

    

(4,092

)

    

(570

)

    

(1,267

)

    

(641

)

    

(565

)

    

(121

)

  

Class R

    

(6,603

)

    

(1,037

)

    

—

      

—

      

(2,680

)

    

(543

)

  

Class R6

    

(552

)

    

(85

)

    

—

      

—

      

—

      

—

    

Class Y

    

(679

)

    

(99

)

    

(277

)

    

(148

)

    

(126

)

    

(23

)

  
Change in net assets resulting from
distributions to shareholders		    

(45,494

)

    

(6,720

)

    

(3,855

)

    

(2,142

)

    

(7,969

)

    

(1,636

)

  
Change in net assets resulting from
capital transactions		    

26,541

      

(25,722

)

    

1,151

      

(1,834

)

    

4,789

      

(8,094

)

  

Change in net assets

    

(51,306

)

    

79,733

      

(7,622

)

    

980

      

(7,989

)

    

8,298

    

Net Assets:

  

Beginning of period

    

334,339

      

254,606

      

17,842

      

16,862

      

51,205

      

42,907

    

End of period

  

$

283,033

    

$

334,339

    

$

10,220

    

$

17,842

    

$

43,216

    

$

51,205

    

(continues on next page)

See notes to financial statements.

 


35

 

Victory Portfolios

  

Statements of Changes in Net Assets

  

(Amounts in Thousands)  (continued)

    Victory
Diversified Stock Fund		   Victory
NewBridge Large Cap
Growth Fund		   Victory
Special Value Fund		  
    Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		  

Capital Transactions:

  

Class A

  

Proceeds from shares issued

  

$

5,800

    

$

7,876

    

$

377

    

$

701

    

$

2,454

    

$

1,518

    

Distributions reinvested

    

30,579

      

4,436

      

1,813

      

740

      

4,020

      

831

    

Cost of shares redeemed

    

(13,893

)

    

(27,454

)

    

(902

)

    

(1,851

)

    

(3,145

)

    

(7,055

)

  

Total Class A

  

$

22,486

    

$

(15,142

)

  

$

1,288

    

$

(410

)

  

$

3,329

    

$

(4,706

)

  

Class C

  

Proceeds from shares issued

  

$

95

    

$

80

    

$

42

    

$

93

    

$

2

    

$

36

    

Distributions reinvested

    

349

      

82

      

106

      

338

      

178

      

36

    

Cost of shares redeemed

    

(396

)

    

(1,782

)

    

(80

)

    

(752

)

    

(9

)

    

(249

)

  

Total Class C

  

$

48

    

$

(1,620

)

  

$

68

    

$

(321

)

  

$

171

    

$

(177

)

  

Class I

  

Proceeds from shares issued

  

$

3,885

    

$

1,886

    

$

187

    

$

1,047

    

$

2

    

$

406

    

Distributions reinvested

    

3,926

      

537

      

1,213

      

624

      

503

      

101

    

Cost of shares redeemed

    

(4,512

)

    

(4,406

)

    

(1,712

)

    

(2,047

)

    

(413

)

    

(1,187

)

  

Total Class I

  

$

3,299

    

$

(1,983

)

  

$

(312

)

  

$

(376

)

  

$

92

    

$

(680

)

  

Class R

  

Proceeds from shares issued

  

$

539

    

$

721

    

$

—

    

$

—

    

$

1,176

    

$

1,962

    

Distributions reinvested

    

6,442

      

1,016

      

—

      

—

      

2,661

      

530

    

Cost of shares redeemed

    

(4,356

)

    

(8,082

)

    

—

      

—

      

(2,725

)

    

(5,022

)

  

Total Class R

  

$

2,625

    

$

(6,345

)

  

$

—

    

$

—

    

$

1,112

    

$

(2,530

)

  

Class R6

  

Proceeds from shares issued

  

$

82

    

$

183

    

$

—

    

$

—

    

$

—

    

$

—

    

Distributions reinvested

    

552

      

85

      

—

      

—

      

—

      

—

    

Cost of shares redeemed

    

(3,190

)

    

(618

)

    

—

      

—

      

—

      

—

    

Total Class R6

  

$

(2,556

)

  

$

(350

)

  

$

—

    

$

—

    

$

—

    

$

—

    

Class Y

  

Proceeds from shares issued

  

$

265

    

$

284

    

$

37

    

$

266

    

$

20

    

$

82

    

Distributions reinvested

    

570

      

83

      

251

      

131

      

99

      

18

    

Cost of shares redeemed

    

(196

)

    

(649

)

    

(181

)

    

(1,124

)

    

(34

)

    

(101

)

  

Total Class Y

  

$

639

    

$

(282

)

  

$

107

    

$

(727

)

  

$

85

    

$

(1

)

  
Change in net assets resulting from
capital transactions		  

$

26,541

    

$

(25,722

)

  

$

1,151

    

$

(1,834

)

  

$

4,789

    

$

(8,094

)

  

  (continues on next page)

See notes to financial statements.

 


36

 

Victory Portfolios

  

Statements of Changes in Net Assets

  

(Amounts in Thousands)  (continued)

    Victory
Diversified Stock Fund		   Victory
NewBridge Large Cap
Growth Fund		   Victory
Special Value Fund		  
    Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		  

Share Transactions:

  

Class A

  

Issued

    

258

      

378

      

76

      

110

      

78

      

48

    

Reinvested

    

1,382

      

231

      

356

      

118

      

125

      

29

    

Redeemed

    

(623

)

    

(1,303

)

    

(181

)

    

(277

)

    

(96

)

    

(222

)

  

Total Class A

    

1,017

      

(694

)

    

251

      

(49

)

    

107

      

(145

)

  

Class C (a)

  

Issued

    

5

      

3

      

7

      

13

      

—

(b)

    

2

    

Reinvested

    

18

      

5

      

18

      

47

      

6

      

1

    

Redeemed

    

(21

)

    

(94

)

    

(15

)

    

(99

)

    

—

(b)

    

(10

)

  

Total Class C

    

2

      

(86

)

    

10

      

(39

)

    

6

      

(7

)

  

Class I

  

Issued

    

163

      

86

      

36

      

139

      

—

(b)

    

13

    

Reinvested

    

177

      

28

      

195

      

86

      

16

      

3

    

Redeemed

    

(211

)

    

(208

)

    

(234

)

    

(260

)

    

(12

)

    

(37

)

  

Total Class I

    

129

      

(94

)

    

(3

)

    

(35

)

    

4

      

(21

)

  

Class R

  

Issued

    

23

      

35

      

—

      

—

      

39

      

65

    

Reinvested

    

300

      

54

      

—

      

—

      

88

      

20

    

Redeemed

    

(196

)

    

(387

)

    

—

      

—

      

(90

)

    

(167

)

  

Total Class R

    

127

      

(298

)

    

—

      

—

      

37

      

(82

)

  

Class R6

  

Issued

    

5

      

8

      

—

      

—

      

—

      

—

    

Reinvested

    

25

      

4

      

—

      

—

      

—

      

—

    

Redeemed

    

(143

)

    

(29

)

    

—

      

—

      

—

      

—

    

Total Class R6

    

(113

)

    

(17

)

    

—

      

—

      

—

      

—

    

Class Y

  

Issued

    

11

      

14

      

8

      

38

      

1

      

2

    

Reinvested

    

26

      

4

      

44

      

19

      

2

      

1

    

Redeemed

    

(8

)

    

(31

)

    

(29

)

    

(152

)

    

(1

)

    

(3

)

  

Total Class Y

    

29

      

(13

)

    

23

      

(95

)

    

2

      

—

(b)

  

Change in Shares

    

1,191

      

(1,202

)

    

281

      

(218

)

    

156

      

(255

)

  

(a)  As described in Note 9 in the Notes to Financial Statements, Victory NewBridge Large Cap Growth Fund Class C share amounts have been adjusted for a 1:5 reverse stock split.

(b)  Rounds to less than 1 thousand.

See notes to financial statements.

 


37

 

Victory Portfolios

  

Statements of Changes in Net Assets

  

(Amounts in Thousands)  

    Victory
THB US Small
Opportunities Fund(a)		   Victory
Strategic
Allocation Fund		   Victory INCORE
Fund for Income		  
    Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		  

From Investment Activities:

  

Operations:

  
Net Investment
Income (Loss)		  

$

(5

)

  

$

(624

)

  

$

573

    

$

823

    

$

1,998

    

$

3,362

    

Net realized gains (losses)

    

4,536

      

12,921

      

766

      

128

      

(1,221

)

    

(1,300

)

  
Net change in unrealized
appreciation/
depreciation		    

(18,999

)

    

17,176

      

(3,298

)

    

5,000

      

(28,390

)

    

(8,573

)

  
Change in net assets resulting
from operations		    

(14,468

)

    

29,473

      

(1,959

)

    

5,951

      

(27,613

)

    

(6,511

)

  

Distributions to Shareholders:

  

Class A

    

(192

)

    

—

      

(318

)

    

(464

)

    

(2,919

)

    

(6,501

)

  

Class C

    

—

      

—

      

(39

)

    

(54

)

    

(185

)

    

(542

)

  

Class I

    

(8,253

)

    

—

      

(193

)

    

(264

)

    

(8,815

)

    

(23,178

)

  

Class R

    

—

      

—

      

(23

)

    

(34

)

    

(510

)

    

(1,747

)

  

Class R6

    

—

      

—

      

—

      

—

      

(749

)

    

(1,851

)

  

Class Y

    

—

      

—

      

—

      

—

      

(2,679

)

    

(7,361

)

  

Member Class

    

—

      

—

      

—

      

—

      

(25

)

    

(33

)(b)

  
Change in net assets resulting
from distributions to
shareholders		    

(8,445

)

    

—

      

(573

)

    

(816

)

    

(15,882

)

    

(41,213

)

  
Change in net assets resulting
from capital transactions		    

7,406

      

9,212

      

(181

)

    

(341

)

    

(100,868

)

    

(295,207

)

  

Change in net assets

    

(15,507

)

    

38,685

      

(2,713

)

    

4,794

      

(144,363

)

    

(342,931

)

  

Net Assets:

  

Beginning of period

    

89,384

      

50,699

      

29,432

      

24,638

      

698,969

      

1,041,900

    

End of period

  

$

73,877

    

$

89,384

    

$

26,719

    

$

29,432

    

$

554,606

    

$

698,969

    

(a)  On May 3, 2021, the THB Asset Management Microcap Fund (the "Predecessor Fund") was reorganized into the Victory THB US Small Opportunities Fund (the "Victory THB Fund"). Investor Class and Institutional Class shares of the Predecessor Fund were exchanged on a tax-free basis for Class A and Class I shares, respectively, of the Victory THB Fund. Information presented prior to May 3, 2021, is that of the Predecessor Fund. See Note 1 in the Notes to Financial Statements.

(b)  Member Class activity is for the period November 3, 2020 (commencement of operations) to October 31, 2021.

(continues on next page)

See notes to financial statements.

 


38

 

Victory Portfolios

  

Statements of Changes in Net Assets

  

(Amounts in Thousands)  (continued)

    Victory
THB US Small
Opportunities Fund(a)		   Victory
Strategic
Allocation Fund		  
Victory INCORE
Fund for Income		  
    Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		  

Capital Transactions:

  

Class A

  

Proceeds from shares issued

  

$

168

    

$

5,749

    

$

790

    

$

1,793

    

$

9,502

    

$

43,381

    

Distributions reinvested

    

190

      

—

      

306

      

448

      

2,604

      

5,738

    

Redemption fees (b)

    

—

      

1

      

—

      

—

      

—

      

—

    

Cost of shares redeemed

    

(1,023

)

    

(3,959

)

    

(1,348

)

    

(3,213

)

    

(25,635

)

    

(63,627

)

  

Total Class A

  

$

(665

)

  

$

1,791

    

$

(252

)

  

$

(972

)

  

$

(13,529

)

  

$

(14,508

)

  

Class C

  

Proceeds from shares issued

  

$

—

    

$

—

    

$

268

    

$

650

    

$

328

    

$

1,685

    

Distributions reinvested

    

—

      

—

      

39

      

53

      

175

      

505

    

Cost of shares redeemed

    

—

      

—

      

(406

)

    

(623

)

    

(2,280

)

    

(12,166

)

  

Total Class C

  

$

—

    

$

—

    

$

(99

)

  

$

80

    

$

(1,777

)

  

$

(9,976

)

  

Class I

  

Proceeds from shares issued

  

$

10,187

    

$

15,429

    

$

825

    

$

1,842

    

$

43,105

    

$

163,315

    

Distributions reinvested

    

7,418

      

—

      

191

      

261

      

7,469

      

20,000

    

Redemption fees (b)

    

—

      

2

      

—

      

—

      

—

      

—

    

Cost of shares redeemed

    

(9,534

)

    

(8,010

)

    

(842

)

    

(1,305

)

    

(111,167

)

    

(362,435

)

  

Total Class I

  

$

8,071

    

$

7,421

    

$

174

    

$

798

    

$

(60,593

)

  

$

(179,120

)

  

Class R

  

Proceeds from shares issued

  

$

—

    

$

—

    

$

9

    

$

93

    

$

735

    

$

4,576

    

Distributions reinvested

    

—

      

—

      

23

      

34

      

497

      

1,705

    

Cost of shares redeemed

    

—

      

—

      

(36

)

    

(374

)

    

(4,291

)

    

(24,238

)

  

Total Class R

  

$

—

    

$

—

    

$

(4

)

  

$

(247

)

  

$

(3,059

)

  

$

(17,957

)

  

Class R6

  

Proceeds from shares issued

  

$

—

    

$

—

    

$

—

    

$

—

    

$

5,251

    

$

11,111

    

Distributions reinvested

    

—

      

—

      

—

      

—

      

740

      

1,831

    

Cost of shares redeemed

    

—

      

—

      

—

      

—

      

(6,126

)

    

(30,159

)

  

Total Class R6

  

$

—

    

$

—

    

$

—

    

$

—

    

$

(135

)

  

$

(17,217

)

  

Class Y

  

Proceeds from shares issued

  

$

—

    

$

—

    

$

—

    

$

—

    

$

16,399

    

$

94,608

    

Distributions reinvested

    

—

      

—

      

—

      

—

      

2,676

      

7,353

    

Cost of shares redeemed

    

—

      

—

      

—

      

—

      

(41,254

)

    

(159,309

)

  

Total Class Y

  

$

—

    

$

—

    

$

—

    

$

—

    

$

(22,179

)

  

$

(57,348

)

  

Member Class

  

Proceeds from shares issued

  

$

—

    

$

—

    

$

—

    

$

—

    

$

754

    

$

1,372

(c)

  

Distributions reinvested

    

—

      

—

      

—

      

—

      

25

      

33

(c)

  

Cost of shares redeemed

    

—

      

—

      

—

      

—

      

(375

)

    

(486

)(c)

  

Total Member Class

  

$

—

    

$

—

    

$

—

    

$

—

    

$

404

    

$

919

    
Change in net assets resulting
from capital transactions		  

$

7,406

    

$

9,212

    

$

(181

)

  

$

(341

)

  

$

(100,868

)

  

$

(295,207

)

  

(a)  On May 3, 2021, the THB Asset Management Microcap Fund (the "Predecessor Fund") was reorganized into the Victory THB US Small Opportunities Fund (the "Victory THB Fund"). Investor Class and Institutional Class shares of the Predecessor Fund were exchanged on a tax-free basis for Class A and Class I shares, respectively, of the Victory THB Fund. Information presented prior to May 3, 2021, is that of the Predecessor Fund. See Note 1 in the Notes to Financial Statements.

(b)  Redemptions Fees — see Note 2 in the Notes to Financial Statements

(c) Member Class activity is for the period November 3, 2020 (commencement of operations) to October 31, 2021.

(continues on next page)

See notes to financial statements.

 


39

 

Victory Portfolios

  

Statements of Changes in Net Assets

  

(Amounts in Thousands)  (continued)

    Victory
THB US Small
Opportunities Fund(a)		   Victory
Strategic
Allocation Fund		  
Victory INCORE
Fund for Income		  
    Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		  

Share Transactions:

  

Class A

  

Issued

    

7

      

227

      

41

      

95

      

1,235

      

5,258

    

Reinvested

    

9

      

—

      

16

      

23

      

340

      

703

    

Redeemed

    

(43

)

    

(159

)

    

(70

)

    

(168

)

    

(3,333

)

    

(7,717

)

  

Total Class A

    

(27

)

    

68

      

(13

)

    

(50

)

    

(1,758

)

    

(1,756

)

  

Class C

  

Issued

    

—

      

—

      

14

      

35

      

43

      

206

    

Reinvested

    

—

      

—

      

2

      

3

      

23

      

62

    

Redeemed

    

—

      

—

      

(21

)

    

(34

)

    

(299

)

    

(1,486

)

  

Total Class C

    

—

      

—

      

(5

)

    

4

      

(233

)

    

(1,218

)

  

Class I

  

Issued

    

482

      

639

      

42

      

96

      

5,608

      

19,802

    

Reinvested

    

342

      

—

      

10

      

13

      

974

      

2,447

    

Redeemed

    

(438

)

    

(319

)

    

(43

)

    

(69

)

    

(14,424

)

    

(43,989

)

  

Total Class I

    

386

      

320

      

9

      

40

      

(7,842

)

    

(21,740

)

  

Class R

  

Issued

    

—

      

—

      

—

(b)

    

5

      

95

      

552

    

Reinvested

    

—

      

—

      

1

      

2

      

65

      

208

    

Redeemed

    

—

      

—

      

(2

)

    

(20

)

    

(551

)

    

(2,981

)

  

Total Class R

    

—

      

—

      

(1

)

    

(13

)

    

(391

)

    

(2,221

)

  

Class R6

  

Issued

    

—

      

—

      

—

      

—

      

680

      

1,349

    

Reinvested

    

—

      

—

      

—

      

—

      

97

      

224

    

Redeemed

    

—

      

—

      

—

      

—

      

(797

)

    

(3,665

)

  

Total Class R6

    

—

      

—

      

—

      

—

      

(20

)

    

(2,092

)

  

Class Y

  

Issued

    

—

      

—

      

—

      

—

      

2,129

      

11,518

    

Reinvested

    

—

      

—

      

—

      

—

      

349

      

900

    

Redeemed

    

—

      

—

      

—

      

—

      

(5,333

)

    

(19,398

)

  

Total Class Y

    

—

      

—

      

—

      

—

      

(2,855

)

    

(6,980

)

  

Member Class

  

Issued

    

—

      

—

      

—

      

—

      

99

      

166

(c)

  

Reinvested

    

—

      

—

      

—

      

—

      

3

      

4

(c)

  

Redeemed

    

—

      

—

      

—

      

—

      

(48

)

    

(60

)(c)

  

Total Member Class

    

—

      

—

      

—

      

—

      

54

      

110

    

Change in Shares

    

359

      

388

      

(10

)

    

(19

)

    

(13,045

)

    

(35,897

)

  

(a)  On May 3, 2021, the THB Asset Management Microcap Fund (the "Predecessor Fund") was reorganized into the Victory THB US Small Opportunities Fund (the "Victory THB Fund"). Investor Class and Institutional Class shares of the Predecessor Fund were exchanged on a tax-free basis for Class A and Class I shares, respectively, of the Victory THB Fund. Information presented prior to May 3, 2021, is that of the Predecessor Fund. See Note 1 in the Notes to Financial Statements.

(b)  Rounds to less than 1 thousand.

(c)  Member Class activity is for the period November 3, 2020 (commencement of operations) to October 31, 2021.

See notes to financial statements.

 


40

 

Victory Portfolios

  

Statements of Changes in Net Assets

  

(Amounts in Thousands)  

    Victory
INCORE Investment Grade
Convertible Fund		  
    Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		  

From Investment Activities:

  

Operations:

  

Net Investment Income (Loss)

  

$

3,790

    

$

5,579

    

Net realized gains (losses)

    

4,965

      

35,138

    

Net change in unrealized appreciation/depreciation

    

(29,606

)

    

21,029

    

Change in net assets resulting from operations

    

(20,851

)

    

61,746

    

Distributions to Shareholders:

  

Class A

    

(1,893

)

    

(820

)

  

Class I

    

(35,608

)

    

(14,821

)

  

Member Class

    

(54

)

    

(3

)(a)

  

Change in net assets resulting from distributions to shareholders

    

(37,555

)

    

(15,644

)

  

Change in net assets resulting from capital transactions

    

84,664

      

85,682

    

Change in net assets

    

26,258

      

131,784

    

Net Assets:

  

Beginning of period

    

425,278

      

293,494

    

End of period

  

$

451,536

    

$

425,278

    

(a)  Member Class activity is for the period November 3, 2020 (commencement of operations) to October 31, 2021.

(continues on next page)

See notes to financial statements.

 


41

 

Victory Portfolios

  

Statements of Changes in Net Assets

  

(Amounts in Thousands)  (continued)

    Victory
INCORE Investment Grade
Convertible Fund		  
    Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		  

Capital Transactions:

  

Class A

  

Proceeds from shares issued

  

$

2,214

    

$

8,473

    

Distributions reinvested

    

1,647

      

711

    

Cost of shares redeemed

    

(2,413

)

    

(6,798

)

  

Total Class A

  

$

1,448

    

$

2,386

    

Class I

  

Proceeds from shares issued

  

$

165,522

    

$

174,838

    

Distributions reinvested

    

34,273

      

14,661

    

Cost of shares redeemed

    

(117,156

)

    

(106,697

)

  

Total Class I

  

$

82,639

    

$

82,802

    

Member Class

  

Proceeds from shares issued

  

$

746

    

$

657

(a)

  

Distributions reinvested

    

54

      

3

(a)

  

Cost of shares redeemed

    

(223

)

    

(166

)(a)

  

Total Member Class

  

$

577

    

$

494

    

Change in net assets resulting from capital transactions

  

$

84,664

    

$

85,682

    

Share Transactions:

  

Class A

  

Issued

    

121

      

441

    

Reinvested

    

89

      

39

    

Redeemed

    

(131

)

    

(353

)

  

Total Class A

    

79

      

127

    

Class I

  

Issued

    

8,946

      

8,995

    

Reinvested

    

1,855

      

797

    

Redeemed

    

(6,335

)

    

(5,604

)

  

Total Class I

    

4,466

      

4,188

    

Member Class

  

Issued

    

38

      

33

(a)

  

Reinvested

    

3

      

—

(a)(b)

  

Redeemed

    

(11

)

    

(8

)(a)

  

Total Member Class

    

30

      

25

    

Change in Shares

    

4,575

      

4,340

    

(a)  Member Class activity is for the period November 3, 2020 (commencement of operations) to October 31, 2021.

(b)  Rounds to less than 1 thousand.

See notes to financial statements.

 


42

 

This page is intentionally left blank.

 


43

 

Victory Portfolios

  

Financial Highlights

  

For a Share Outstanding Throughout Each Period

       

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains (Losses)		   Total from
Investment
Activities		   Net
Investment
Income		   Net Realized
Gains from
Investments		  

Victory Diversified Stock Fund

      

Class A

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

24.89

      

0.02

      

(2.14

)

    

(2.12

)

    

(0.03

)

    

(3.36

)

  
Year Ended October 31:
2021		  

$

17.41

      

—

(e)

    

7.95

      

7.95

      

(0.01

)

    

(0.46

)

  

2020

  

$

17.65

      

0.05

      

0.90

      

0.95

      

(0.04

)

    

(1.15

)

  

2019

  

$

17.90

      

0.09

      

1.65

      

1.74

      

(0.08

)

    

(1.91

)

  

2018

  

$

22.03

      

0.06

      

0.17

      

0.23

      

(0.06

)

    

(4.30

)

  

2017

  

$

18.01

      

0.13

      

4.28

      

4.41

      

(0.17

)

    

(0.22

)

  

Class C

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

22.70

      

(0.07

)

    

(1.93

)

    

(2.00

)

    

—

      

(3.36

)

  
Year Ended October 31:
2021		  

$

16.05

      

(0.18

)

    

7.29

      

7.11

      

—

      

(0.46

)

  

2020

  

$

16.46

      

(0.10

)

    

0.84

      

0.74

      

—

      

(1.15

)

  

2019

  

$

16.90

      

(0.05

)

    

1.52

      

1.47

      

—

      

(1.91

)

  

2018

  

$

21.12

      

(0.10

)

    

0.18

      

0.08

      

—

      

(4.30

)

  

2017

  

$

17.30

      

(0.02

)

    

4.10

      

4.08

      

(0.04

)

    

(0.22

)

  

Class I

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

24.88

      

0.05

      

(2.15

)

    

(2.10

)

    

(0.05

)

    

(3.36

)

  
Year Ended October 31:
2021		  

$

17.37

      

0.05

      

7.94

      

7.99

      

(0.02

)

    

(0.46

)

  

2020

  

$

17.61

      

0.09

      

0.90

      

0.99

      

(0.08

)

    

(1.15

)

  

2019

  

$

17.87

      

0.13

      

1.65

      

1.78

      

(0.13

)

    

(1.91

)

  

2018

  

$

22.00

      

0.11

      

0.16

      

0.27

      

(0.10

)

    

(4.30

)

  

2017

  

$

17.98

      

0.19

      

4.27

      

4.46

      

(0.22

)

    

(0.22

)

  

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

(e)  Amount is less than $0.005 per share.

(f)  Amount is less than 0.005%.

See notes to financial statements.

 


44

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Total
Distributions		   Net Asset
Value,
End of
Period		   Total
Return
(Excludes
Sales
Charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory Diversified Stock Fund

  

Class A

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(3.39

)

  

$

19.38

      

(10.23

)%

    

1.07

%

    

0.20

%

    

1.07

%

  

$

211,232

      

38

%

  
Year Ended October 31:
2021		    

(0.47

)

  

$

24.89

      

46.50

%

    

1.07

%

    

0.00

%(f)

    

1.07

%

  

$

246,063

      

61

%

  

2020

    

(1.19

)

  

$

17.41

      

5.47

%

    

1.09

%

    

0.29

%

    

1.09

%

  

$

184,217

      

95

%

  

2019

    

(1.99

)

  

$

17.65

      

12.27

%

    

1.08

%

    

0.55

%

    

1.08

%

  

$

204,945

      

132

%

  

2018

    

(4.36

)

  

$

17.90

      

(0.20

)%

    

1.05

%

    

0.32

%

    

1.05

%

  

$

264,297

      

112

%

  

2017

    

(0.39

)

  

$

22.03

      

24.85

%

    

1.05

%

    

0.66

%

    

1.05

%

  

$

311,255

      

133

%

  

Class C

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(3.36

)

  

$

17.34

      

(10.67

)%

    

2.02

%

    

(0.75

)%

    

2.41

%

  

$

1,840

      

38

%

  
Year Ended October 31:
2021		    

(0.46

)

  

$

22.70

      

45.01

%

    

2.02

%

    

(0.93

)%

    

2.32

%

  

$

2,371

      

61

%

  

2020

    

(1.15

)

  

$

16.05

      

4.53

%

    

2.05

%

    

(0.64

)%

    

2.14

%

  

$

3,046

      

95

%

  

2019

    

(1.91

)

  

$

16.46

      

11.19

%

    

2.02

%

    

(0.35

)%

    

2.02

%

  

$

5,909

      

132

%

  

2018

    

(4.30

)

  

$

16.90

      

(1.02

)%

    

1.89

%

    

(0.53

)%

    

1.89

%

  

$

11,586

      

112

%

  

2017

    

(0.26

)

  

$

21.12

      

23.82

%

    

1.87

%

    

(0.12

)%

    

1.87

%

  

$

36,001

      

133

%

  

Class I

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(3.41

)

  

$

19.37

      

(10.14

)%

    

0.83

%

    

0.43

%

    

0.84

%

  

$

24,177

      

38

%

  
Year Ended October 31:
2021		    

(0.48

)

  

$

24.88

      

46.79

%

    

0.83

%

    

0.24

%

    

0.85

%

  

$

27,856

      

61

%

  

2020

    

(1.23

)

  

$

17.37

      

5.81

%

    

0.84

%

    

0.56

%

    

0.86

%

  

$

21,071

      

95

%

  

2019

    

(2.04

)

  

$

17.61

      

12.52

%

    

0.84

%

    

0.81

%

    

0.84

%

  

$

31,619

      

132

%

  

2018

    

(4.40

)

  

$

17.87

      

0.05

%

    

0.79

%

    

0.58

%

    

0.79

%

  

$

46,122

      

112

%

  

2017

    

(0.44

)

  

$

22.00

      

25.21

%

    

0.80

%

    

0.99

%

    

0.80

%

  

$

74,466

      

133

%

  

(continues on next page)

See notes to financial statements.

 


45

 

Victory Portfolios

  

Financial Highlights

  

For a Share Outstanding Throughout Each Period

       

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains (Losses)		   Total from
Investment
Activities		   Net
Investment
Income		   Net Realized
Gains from
Investments		  

Victory Diversified Stock Fund

      

Class R

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

24.25

      

(0.01

)

    

(2.08

)

    

(2.09

)

    

(0.01

)

    

(3.36

)

  
Year Ended October 31:
2021		  

$

17.01

      

(0.06

)

    

7.76

      

7.70

      

—

      

(0.46

)

  

2020

  

$

17.29

      

—

(e)

    

0.88

      

0.88

      

(0.01

)

    

(1.15

)

  

2019

  

$

17.58

      

0.04

      

1.62

      

1.66

      

(0.04

)

    

(1.91

)

  

2018

  

$

21.71

      

0.01

      

0.16

      

0.17

      

—

(e)

    

(4.30

)

  

2017

  

$

17.75

      

0.07

      

4.23

      

4.30

      

(0.12

)

    

(0.22

)

  

Class R6

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

24.91

      

0.06

      

(2.16

)

    

(2.10

)

    

(0.06

)

    

(3.36

)

  
Year Ended October 31:
2021		  

$

17.38

      

0.06

      

7.95

      

8.01

      

(0.02

)

    

(0.46

)

  

2020

  

$

17.62

      

0.08

      

0.92

      

1.00

      

(0.09

)

    

(1.15

)

  

2019

  

$

17.88

      

0.14

      

1.64

      

1.78

      

(0.13

)

    

(1.91

)

  

2018

  

$

22.00

      

0.11

      

0.17

      

0.28

      

(0.10

)

    

(4.30

)

  

2017

  

$

17.98

      

0.18

      

4.29

      

4.47

      

(0.23

)

    

(0.22

)

  

Class Y

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

24.93

      

0.04

      

(2.15

)

    

(2.11

)

    

(0.05

)

    

(3.36

)

  
Year Ended October 31:
2021		  

$

17.41

      

0.05

      

7.95

      

8.00

      

(0.02

)

    

(0.46

)

  

2020

  

$

17.65

      

0.09

      

0.90

      

0.99

      

(0.08

)

    

(1.15

)

  

2019

  

$

17.90

      

0.12

      

1.66

      

1.78

      

(0.12

)

    

(1.91

)

  

2018

  

$

22.02

      

0.11

      

0.16

      

0.27

      

(0.09

)

    

(4.30

)

  

2017

  

$

18.00

      

0.17

      

4.28

      

4.45

      

(0.21

)

    

(0.22

)

  

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

(e)  Amount is less than $0.005 per share.

See notes to financial statements.

 


46

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period  (continued)

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Total
Distributions		   Net Asset
Value,
End of
Period		   Total
Return
(Excludes
Sales
Charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory Diversified Stock Fund

  

Class R

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(3.37

)

  

$

18.79

      

(10.37

)%

    

1.35

%

    

(0.08

)%

    

1.35

%

  

$

40,351

      

38

%

  
Year Ended October 31:
2021		    

(0.46

)

  

$

24.25

      

46.02

%

    

1.35

%

    

(0.28

)%

    

1.35

%

  

$

48,980

      

61

%

  

2020

    

(1.16

)

  

$

17.01

      

5.25

%

    

1.37

%

    

0.01

%

    

1.37

%

  

$

39,432

      

95

%

  

2019

    

(1.95

)

  

$

17.29

      

11.90

%

    

1.37

%

    

0.26

%

    

1.37

%

  

$

47,981

      

132

%

  

2018

    

(4.30

)

  

$

17.58

      

(0.47

)%

    

1.34

%

    

0.03

%

    

1.34

%

  

$

54,776

      

112

%

  

2017

    

(0.34

)

  

$

21.71

      

24.56

%

    

1.33

%

    

0.38

%

    

1.33

%

  

$

66,310

      

133

%

  

Class R6

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(3.42

)

  

$

19.39

      

(10.11

)%

    

0.78

%

    

0.56

%

    

1.27

%

  

$

941

      

38

%

  
Year Ended October 31:
2021		    

(0.48

)

  

$

24.91

      

46.89

%

    

0.78

%

    

0.29

%

    

1.10

%

  

$

4,040

      

61

%

  

2020

    

(1.24

)

  

$

17.38

      

5.86

%

    

0.78

%

    

0.49

%

    

1.34

%

  

$

3,103

      

95

%

  

2019

    

(2.04

)

  

$

17.62

      

12.58

%

    

0.78

%

    

0.83

%

    

1.24

%

  

$

2,313

      

132

%

  

2018

    

(4.40

)

  

$

17.88

      

0.10

%

    

0.78

%

    

0.58

%

    

1.21

%

  

$

2,189

      

112

%

  

2017

    

(0.45

)

  

$

22.00

      

25.24

%

    

0.78

%

    

0.94

%

    

1.29

%

  

$

2,427

      

133

%

  

Class Y

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(3.41

)

  

$

19.41

      

(10.14

)%

    

0.86

%

    

0.40

%

    

0.94

%

  

$

4,492

      

38

%

  
Year Ended October 31:
2021		    

(0.48

)

  

$

24.93

      

46.75

%

    

0.86

%

    

0.21

%

    

0.96

%

  

$

5,029

      

61

%

  

2020

    

(1.23

)

  

$

17.41

      

5.72

%

    

0.86

%

    

0.52

%

    

1.31

%

  

$

3,737

      

95

%

  

2019

    

(2.03

)

  

$

17.65

      

12.53

%

    

0.86

%

    

0.76

%

    

1.33

%

  

$

4,249

      

132

%

  

2018

    

(4.39

)

  

$

17.90

      

0.01

%

    

0.86

%

    

0.54

%

    

1.13

%

  

$

4,373

      

112

%

  

2017

    

(0.43

)

  

$

22.02

      

25.11

%

    

0.86

%

    

0.88

%

    

0.94

%

  

$

8,843

      

133

%

  

See notes to financial statements.

 


47

 

Victory Portfolios

  

Financial Highlights

  

For a Share Outstanding Throughout Each Period

       

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains (Losses)		   Total from
Investment
Activities		   Net Realized
Gains from
Investments		   Total
Distributions		  

Victory NewBridge Large Cap Growth Fund

      

Class A

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.41

      

(0.03

)

    

(1.82

)

    

(1.85

)

    

(1.85

)

    

(1.85

)

  
Year Ended October 31:
2021		  

$

6.31

      

(0.08

)

    

1.94

      

1.86

      

(0.76

)

    

(0.76

)

  

2020

  

$

5.52

      

(0.06

)

    

1.91

      

1.85

      

(1.06

)

    

(1.06

)

  

2019

  

$

7.94

      

(0.05

)

    

0.05

      

—

(e)

    

(2.42

)

    

(2.42

)

  

2018

  

$

10.23

      

(0.09

)

    

0.85

      

0.76

      

(3.05

)

    

(3.05

)

  

2017

  

$

12.79

      

(0.09

)

    

1.82

      

1.73

      

(4.29

)

    

(4.29

)

  

Class C

      
Six Months Ended
April 30, 2022
(Unaudited) (f)		  

$

8.43

      

(0.06

)

    

(2.13

)

    

(2.19

)

    

(1.85

)

    

(1.85

)

  
Year Ended October 31:
2021 (f)		  

$

9.87

      

(0.15

)

    

2.51

      

2.36

      

(3.80

)

    

(3.80

)

  
2020 (f)  

$

12.15

      

(0.15

)

    

3.17

      

3.02

      

(5.30

)

    

(5.30

)

  
2019 (f)  

$

25.00

      

(0.30

)

    

(0.45

)

    

(0.75

)

    

(12.10

)

    

(12.10

)

  
2018 (f)  

$

37.93

      

(0.50

)

    

2.82

      

2.32

      

(15.25

)

    

(15.25

)

  
2017 (f)  

$

53.25

      

(0.60

)

    

6.73

      

6.13

      

(21.45

)

    

(21.45

)

  

Class I

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

8.60

      

(0.02

)

    

(2.19

)

    

(2.21

)

    

(1.85

)

    

(1.85

)

  
Year Ended October 31:
2021		  

$

7.18

      

(0.06

)

    

2.24

      

2.18

      

(0.76

)

    

(0.76

)

  

2020

  

$

6.13

      

(0.04

)

    

2.15

      

2.11

      

(1.06

)

    

(1.06

)

  

2019

  

$

8.49

      

(0.04

)

    

0.10

      

0.06

      

(2.42

)

    

(2.42

)

  

2018

  

$

10.71

      

(0.06

)

    

0.89

      

0.83

      

(3.05

)

    

(3.05

)

  

2017

  

$

13.13

      

(0.05

)

    

1.92

      

1.87

      

(4.29

)

    

(4.29

)

  

Class Y

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

8.08

      

(0.02

)

    

(2.03

)

    

(2.05

)

    

(1.85

)

    

(1.85

)

  
Year Ended October 31:
2021		  

$

6.79

      

(0.06

)

    

2.11

      

2.05

      

(0.76

)

    

(0.76

)

  

2020

  

$

5.86

      

(0.04

)

    

2.03

      

1.99

      

(1.06

)

    

(1.06

)

  

2019

  

$

8.24

      

(0.04

)

    

0.08

      

0.04

      

(2.42

)

    

(2.42

)

  

2018

  

$

10.48

      

(0.06

)

    

0.87

      

0.81

      

(3.05

)

    

(3.05

)

  

2017

  

$

12.96

      

(0.06

)

    

1.87

      

1.81

      

(4.29

)

    

(4.29

)

  

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

See notes to financial statements.

 


48

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Net Asset
Value,
End of
Period		   Total
Return
(Excludes
Sales
Charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory NewBridge Large Cap Growth Fund

  

Class A

  
Six Months Ended
April 30, 2022
(Unaudited)		  

$

3.71

      

(31.71

)%

    

1.36

%

    

(1.14

)%

    

1.72

%

  

$

5,315

      

23

%

  
Year Ended October 31:
2021		  

$

7.41

      

31.73

%

    

1.36

%

    

(1.20

)%

    

1.56

%

  

$

8,749

      

39

%

  

2020

  

$

6.31

      

39.61

%

    

1.36

%

    

(1.08

)%

    

1.52

%

  

$

7,757

      

39

%

  

2019

  

$

5.52

      

4.56

%

    

1.36

%

    

(0.97

)%

    

1.60

%

  

$

5,732

      

62

%

  

2018

  

$

7.94

      

9.41

%

    

1.36

%

    

(1.05

)%

    

1.47

%

  

$

5,546

      

41

%

  

2017

  

$

10.23

      

20.84

%

    

1.40

%

    

(0.94

)%

    

1.40

%

  

$

7,639

      

60

%

  

Class C

  
Six Months Ended
April 30, 2022
(Unaudited) (f)		  

$

4.39

      

(32.08

)%

    

2.10

%

    

(1.88

)%

    

4.49

%

  

$

405

      

23

%

  
Year Ended October 31:
2021 (f)		  

$

8.43

      

31.44

%

    

2.10

%

    

(1.93

)%

    

3.58

%

  

$

695

      

39

%

  
2020 (f)  

$

9.87

      

37.97

%

    

2.10

%

    

(1.79

)%

    

2.67

%

  

$

1,190

      

39

%

  
2019 (f)  

$

12.15

      

3.92

%

    

2.10

%

    

(1.71

)%

    

2.70

%

  

$

1,768

      

62

%

  
2018 (f)  

$

25.00

      

8.47

%

    

2.10

%

    

(1.78

)%

    

2.40

%

  

$

3,042

      

41

%

  
2017 (f)  

$

37.93

      

20.06

%

    

2.10

%

    

(1.64

)%

    

2.27

%

  

$

4,201

      

60

%

  

Class I

  
Six Months Ended
April 30, 2022
(Unaudited)		  

$

4.54

      

(31.46

)%

    

0.95

%

    

(0.73

)%

    

1.49

%

  

$

3,727

      

23

%

  
Year Ended October 31:
2021		  

$

8.60

      

32.38

%

    

0.95

%

    

(0.79

)%

    

1.34

%

  

$

7,085

      

39

%

  

2020

  

$

7.18

      

39.95

%

    

0.95

%

    

(0.66

)%

    

1.31

%

  

$

6,171

      

39

%

  

2019

  

$

6.13

      

5.11

%

    

0.95

%

    

(0.56

)%

    

1.26

%

  

$

6,043

      

62

%

  

2018

  

$

8.49

      

9.74

%

    

0.95

%

    

(0.63

)%

    

1.09

%

  

$

10,633

      

41

%

  

2017

  

$

10.71

      

21.52

%

    

0.95

%

    

(0.47

)%

    

1.01

%

  

$

16,103

      

60

%

  

Class Y

  
Six Months Ended
April 30, 2022
(Unaudited)		  

$

4.18

      

(31.51

)%

    

1.02

%

    

(0.80

)%

    

1.78

%

  

$

773

      

23

%

  
Year Ended October 31:
2021		  

$

8.08

      

32.32

%

    

1.02

%

    

(0.86

)%

    

1.49

%

  

$

1,313

      

39

%

  

2020

  

$

6.79

      

39.72

%

    

1.02

%

    

(0.73

)%

    

1.78

%

  

$

1,744

      

39

%

  

2019

  

$

5.86

      

5.06

%

    

1.02

%

    

(0.63

)%

    

1.69

%

  

$

2,498

      

62

%

  

2018

  

$

8.24

      

9.75

%

    

1.02

%

    

(0.72

)%

    

1.48

%

  

$

3,411

      

41

%

  

2017

  

$

10.48

      

21.30

%

    

1.02

%

    

(0.55

)%

    

1.42

%

  

$

2,128

      

60

%

  

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

(e)  Amount is less than $0.005 per share.

(f)  As described in Note 9 in the Notes to Financial Statements, per share amounts adjusted for a 1:5 reverse stock split.

See notes to financial statements.

 


49

 

Victory Portfolios

  

Financial Highlights

  

For a Share Outstanding Throughout Each Period

       

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains (Losses)		   Total from
Investment
Activities		   Net
Investment
Income		   Net Realized
Gains from
Investments		  

Victory Special Value Fund

      

Class A

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

37.00

      

—

(e)

    

(3.04

)

    

(3.04

)

    

—

      

(5.72

)

  
Year Ended October 31:
2021		  

$

26.23

      

(0.05

)

    

11.82

      

11.77

      

—

(e)

    

(1.00

)

  

2020

  

$

25.78

      

0.04

      

1.29

      

1.33

      

(0.09

)

    

(0.79

)

  

2019

  

$

26.10

      

0.10

      

2.26

      

2.36

      

(0.03

)

    

(2.65

)

  

2018

  

$

26.31

      

0.05

      

(0.15

)

    

(0.10

)

    

(0.11

)

    

—

    

2017

  

$

21.48

      

0.13

      

4.95

      

5.08

      

(0.25

)

    

—

    

Class C

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

31.59

      

(0.11

)

    

(2.49

)

    

(2.60

)

    

—

      

(5.72

)

  
Year Ended October 31:
2021		  

$

22.72

      

(0.28

)

    

10.15

      

9.87

      

—

      

(1.00

)

  

2020

  

$

22.54

      

(0.16

)

    

1.13

      

0.97

      

—

      

(0.79

)

  

2019

  

$

23.34

      

(0.09

)

    

1.94

      

1.85

      

—

      

(2.65

)

  

2018

  

$

23.66

      

(0.18

)

    

(0.14

)

    

(0.32

)

    

—

      

—

    

2017

  

$

19.34

      

(0.08

)

    

4.45

      

4.37

      

(0.05

)

    

—

    

Class I

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

37.54

      

0.04

      

(3.11

)

    

(3.07

)

    

—

      

(5.72

)

  
Year Ended October 31:
2021		  

$

26.59

      

0.01

      

11.99

      

12.00

      

(0.05

)

    

(1.00

)

  

2020

  

$

26.13

      

0.08

      

1.31

      

1.39

      

(0.14

)

    

(0.79

)

  

2019

  

$

26.39

      

0.14

      

2.30

      

2.44

      

(0.05

)

    

(2.65

)

  

2018

  

$

26.62

      

0.09

      

(0.15

)

    

(0.06

)

    

(0.17

)

    

—

    

2017

  

$

21.76

      

0.13

      

5.01

      

5.14

      

(0.28

)

    

—

    

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

(e)  Amount is less than $0.005 per share.

(f)  During the year, additional fees were voluntarily waived or reimbursed. Had these fees not been waived or reimbursed, the net expense ratio for each class would have been 0.10% higher.

See notes to financial statements.

 


50

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Total
Distributions		   Net Asset
Value,
End of
Period		   Total
Return
(Excludes
Sales
Charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory Special Value Fund

  

Class A

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(5.72

)

  

$

28.24

      

(10.12

)%

    

1.23

%(f)

    

0.03

%

    

1.33

%

  

$

25,068

      

41

%

  
Year Ended October 31:
2021		    

(1.00

)

  

$

37.00

      

46.06

%

    

1.23

%(f)

    

(0.16

)%

    

1.33

%

  

$

28,945

      

70

%

  

2020

    

(0.88

)

  

$

26.23

      

5.15

%

    

1.23

%(f)

    

0.14

%

    

1.33

%

  

$

24,302

      

102

%

  

2019

    

(2.68

)

  

$

25.78

      

11.32

%

    

1.21

%

    

0.41

%

    

1.31

%

  

$

27,818

      

126

%

  

2018

    

(0.11

)

  

$

26.10

      

(0.42

)%

    

1.17

%

    

0.19

%

    

1.27

%

  

$

32,565

      

113

%

  

2017

    

(0.25

)

  

$

26.31

      

23.84

%

    

1.17

%

    

0.53

%

    

1.27

%

  

$

35,223

      

135

%

  

Class C

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(5.72

)

  

$

23.27

      

(10.55

)%

    

2.10

%(f)

    

(0.84

)%

    

3.18

%

  

$

870

      

41

%

  
Year Ended October 31:
2021		    

(1.00

)

  

$

31.59

      

44.81

%

    

2.10

%f)

    

(1.02

)%

    

3.53

%

  

$

978

      

70

%

  

2020

    

(0.79

)

  

$

22.72

      

4.26

%

    

2.10

%(f)

    

(0.72

)%

    

2.99

%

  

$

863

      

102

%

  

2019

    

(2.65

)

  

$

22.54

      

10.34

%

    

2.10

%

    

(0.44

)%

    

2.79

%

  

$

1,241

      

126

%

  

2018

    

—

    

$

23.34

      

(1.35

)%

    

2.10

%

    

(0.75

)%

    

2.27

%

  

$

2,145

      

113

%

  

2017

    

(0.05

)

  

$

23.66

      

22.65

%

    

2.10

%

    

(0.38

)%

    

2.21

%

  

$

7,296

      

135

%

  

Class I

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(5.72

)

  

$

28.75

      

(10.05

)%

    

1.05

%(f)

    

0.22

%

    

1.33

%

  

$

3,056

      

41

%

  
Year Ended October 31:
2021		    

(1.05

)

  

$

37.54

      

46.29

%

    

1.05

%(f)

    

0.02

%

    

1.33

%

  

$

3,861

      

70

%

  

2020

    

(0.93

)

  

$

26.59

      

5.35

%

    

1.05

%(f)

    

0.32

%

    

1.31

%

  

$

3,283

      

102

%

  

2019

    

(2.70

)

  

$

26.13

      

11.52

%

    

1.05

%

    

0.58

%

    

1.34

%

  

$

3,274

      

126

%

  

2018

    

(0.17

)

  

$

26.39

      

(0.28

)%

    

1.02

%

    

0.31

%

    

1.16

%

  

$

3,678

      

113

%

  

2017

    

(0.28

)

  

$

26.62

      

23.86

%

    

1.15

%

    

0.56

%

    

1.25

%

  

$

3,703

      

135

%

  

(continues on next page)

See notes to financial statements.

 


51

 

Victory Portfolios

  

Financial Highlights

  

For a Share Outstanding Throughout Each Period

 

      

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains (Losses)		   Total from
Investment
Activities		   Net
Investment
Income		   Net Realized
Gains from
Investments		  

Victory Special Value Fund

      

Class R

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

34.99

      

(0.04

)

    

(2.84

)

    

(2.88

)

    

—

      

(5.72

)

  
Year Ended October 31:
2021		  

$

24.93

      

(0.14

)

    

11.20

      

11.06

      

—

      

(1.00

)

  

2020

  

$

24.55

      

(0.04

)

    

1.23

      

1.19

      

(0.02

)

    

(0.79

)

  

2019

  

$

25.02

      

0.03

      

2.15

      

2.18

      

—

      

(2.65

)

  

2018

  

$

25.24

      

(0.03

)

    

(0.15

)

    

(0.18

)

    

(0.04

)

    

—

    

2017

  

$

20.63

      

0.05

      

4.75

      

4.80

      

(0.19

)

    

—

    

Class Y

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

37.31

      

0.04

      

(3.08

)

    

(3.04

)

    

—

      

(5.72

)

  
Year Ended October 31:
2021		  

$

26.44

      

0.02

      

11.92

      

11.94

      

(0.07

)

    

(1.00

)

  

2020

  

$

25.98

      

0.09

      

1.32

      

1.41

      

(0.16

)

    

(0.79

)

  

2019

  

$

26.25

      

0.15

      

2.28

      

2.43

      

(0.05

)

    

(2.65

)

  

2018

  

$

26.47

      

0.12

      

(0.17

)

    

(0.05

)

    

(0.17

)

    

—

    

2017

  

$

21.62

      

0.18

      

4.98

      

5.16

      

(0.31

)

    

—

    

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

(e)  During the year, additional fees were voluntarily waived or reimbursed. Had these fees not been waived or reimbursed, the net expense ratio for each class would have been 0.10% higher.

See notes to financial statements.

 


52

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period  (continued)

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Total
Distributions		   Net Asset
Value,
End of
Period		   Total
Return
(Excludes
Sales
Charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory Special Value Fund

  

Class R

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(5.72

)

  

$

26.39

      

(10.27

)%

    

1.55

%(e)

    

(0.28

)%

    

1.65

%

  

$

13,523

      

41

%

  
Year Ended October 31:
2021		    

(1.00

)

  

$

34.99

      

45.59

%

    

1.54

%(e)

    

(0.47

)%

    

1.64

%

  

$

16,605

      

70

%

  

2020

    

(0.81

)

  

$

24.93

      

4.82

%

    

1.54

%(e)

    

(0.16

)%

    

1.64

%

  

$

13,875

      

102

%

  

2019

    

(2.65

)

  

$

24.55

      

11.03

%

    

1.50

%

    

0.13

%

    

1.60

%

  

$

21,084

      

126

%

  

2018

    

(0.04

)

  

$

25.02

      

(0.71

)%

    

1.46

%

    

(0.10

)%

    

1.56

%

  

$

26,532

      

113

%

  

2017

    

(0.19

)

  

$

25.24

      

23.43

%

    

1.47

%

    

0.24

%

    

1.57

%

  

$

36,688

      

135

%

  

Class Y

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(5.72

)

  

$

28.55

      

(10.03

)%

    

1.00

%(e)

    

0.27

%

    

1.55

%

  

$

699

      

41

%

  
Year Ended October 31:
2021		    

(1.07

)

  

$

37.31

      

46.39

%

    

1.00

%(e)

    

0.07

%

    

1.77

%

  

$

816

      

70

%

  

2020

    

(0.95

)

  

$

26.44

      

5.40

%

    

1.00

%(e)

    

0.36

%

    

3.68

%

  

$

584

      

102

%

  

2019

    

(2.70

)

  

$

25.98

      

11.57

%

    

1.00

%

    

0.60

%

    

4.50

%

  

$

520

      

126

%

  

2018

    

(0.17

)

  

$

26.25

      

(0.21

)%

    

0.97

%

    

0.42

%

    

2.82

%

  

$

436

      

113

%

  

2017

    

(0.31

)

  

$

26.47

      

24.12

%

    

0.93

%

    

0.77

%

    

2.07

%

  

$

1,219

      

135

%

  

See notes to financial statements.

 


53

 

Victory Portfolios

  

Financial Highlights

  

For a Share Outstanding Throughout Each Period

       

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains (Losses)		   Total from
Investment
Activities		   Net Realized
Gains from
Investments		   Total
Distributions		  

Victory THB US Small Opportunities Fund (e)

      

Class A

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

24.30

      

(0.05

)

    

(3.76

)

    

(3.81

)

    

(2.40

)

    

(2.40

)

  
Year Ended October 31:
2021		  

$

15.55

      

(0.20

)

    

8.95

      

8.75

      

—

      

—

    

2020

  

$

15.00

      

(0.17

)

    

0.81

(f)

    

0.64

      

(0.09

)

    

(0.09

)

  

2019

  

$

16.08

      

(0.14

)

    

(0.44

)

    

(0.58

)

    

(0.50

)

    

(0.50

)

  

2018

  

$

18.14

      

(0.15

)

    

0.24

      

0.09

      

(2.15

)

    

(2.15

)

  

2017

  

$

13.49

      

(0.16

)

    

4.81

      

4.65

      

—

      

—

    

Class I

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

25.42

      

—

(f)

    

(3.95

)

    

(3.95

)

    

(2.40

)

    

(2.40

)

  
Year Ended October 31:
2021		  

$

16.20

      

(0.18

)

    

9.40

      

9.22

      

—

      

—

    

2020

  

$

15.56

      

(0.10

)

    

0.83

(f)

    

0.73

      

(0.09

)

    

(0.09

)

  

2019

  

$

16.58

      

(0.08

)

    

(0.44

)

    

(0.52

)

    

(0.50

)

    

(0.50

)

  

2018

  

$

18.59

      

(0.10

)

    

0.24

      

0.14

      

(2.15

)

    

(2.15

)

  

2017

  

$

13.75

      

(0.08

)

    

4.92

      

4.84

      

—

      

—

    

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

(e)  On May 3, 2021, the THB Asset Management Microcap Fund (the "Predecessor Fund") was reorganized into the Victory THB US Small Opportunities Fund (the "Victory THB Fund"). Investor Class and Institutional Class shares of the Predecessor Fund were exchanged on a tax-free basis for Class A and Class I shares, respectively, of the Victory THB Fund. Information presented prior to May 3, 2021, is that of the Predecessor Fund. See Note 1 in the Notes to Financial Statements.

(f)  Amount is less than $0.005 per share.

(g)  Amount is less than 0.005%.

See notes to financial statements.

 


54

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Redemption
Fees		   Net Asset
Value,
End of
Period		   Total
Return
(Excludes
Sales
Charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory THB US Small Opportunities Fund (e)

  

Class A

  
Six Months Ended
April 30, 2022
(Unaudited)		    

—

    

$

18.09

      

(16.88

)%

    

1.70

%

    

(0.48

)%

    

2.70

%

  

$

1,318

      

31

%

  
Year Ended October 31:
2021		    

—

    

$

24.30

      

56.27

%

    

1.70

%

    

(1.20

)%

    

2.45

%

  

$

2,437

      

50

%

  

2020

    

—

    

$

15.55

      

4.25

%

    

1.70

%

    

(1.17

)%

    

2.45

%

  

$

493

      

62

%

  

2019

    

—

    

$

15.00

      

(3.34

)%

    

1.70

%

    

(0.92

)%

    

2.20

%

  

$

627

      

31

%

  

2018

    

—

    

$

16.08

      

0.45

%

    

1.55

%

    

(0.86

)%

    

2.00

%

  

$

1,041

      

35

%

  

2017

    

—

    

$

18.14

      

34.47

%

    

1.75

%

    

(0.97

)%

    

2.29

%

  

$

679

      

58

%

  

Class I

  
Six Months Ended
April 30, 2022
(Unaudited)		    

—

    

$

19.07

      

(16.70

)%

    

1.25

%

    

0.00

%(g)

    

1.41

%

  

$

72,559

      

31

%

  
Year Ended October 31:
2021		    

—

(f)

  

$

25.42

      

56.98

%

    

1.25

%

    

(0.73

)%

    

1.67

%

  

$

86,947

      

50

%

  

2020

    

—

    

$

16.20

      

4.68

%

    

1.25

%

    

(0.70

)%

    

1.98

%

  

$

50,206

      

62

%

  

2019

    

—

    

$

15.56

      

(2.86

)%

    

1.25

%

    

(0.48

)%

    

1.75

%

  

$

73,403

      

31

%

  

2018

    

—

    

$

16.58

      

0.73

%

    

1.25

%

    

(0.55

)%

    

1.70

%

  

$

89,159

      

35

%

  

2017

    

—

    

$

18.59

      

35.20

%

    

1.25

%

    

(0.48

)%

    

1.78

%

  

$

81,076

      

58

%

  

See notes to financial statements.

 


55

 

Victory Portfolios

  

Financial Highlights

  

For a Share Outstanding Throughout Each Period

       

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains (Losses)		   Total from
Investment
Activities		   Net
Investment
Income		   Net Realized
Gains from
Investments		  

Victory Strategic Allocation Fund

      

Class A

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

19.94

      

0.39

      

(1.72

)

    

(1.33

)

    

(0.39

)

    

—

    
Year Ended October 31:
2021		  

$

16.48

      

0.56

      

3.46

      

4.02

      

(0.56

)

    

—

    

2020

  

$

16.47

      

0.23

      

0.41

      

0.64

      

(0.23

)

    

(0.40

)

  

2019

  

$

15.44

      

0.43

      

1.12

      

1.55

      

(0.39

)

    

(0.13

)

  

2018

  

$

16.41

      

0.29

      

(0.68

)

    

(0.39

)

    

(0.39

)

    

(0.19

)

  

2017

  

$

14.80

      

0.50

      

1.51

      

2.01

      

(0.40

)

    

—

    

Class C

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

19.56

      

0.31

      

(1.69

)

    

(1.38

)

    

(0.32

)

    

—

    
Year Ended October 31:
2021		  

$

16.19

      

0.40

      

3.40

      

3.80

      

(0.43

)

    

—

    

2020

  

$

16.18

      

0.13

      

0.39

      

0.52

      

(0.11

)

    

(0.40

)

  

2019

  

$

15.19

      

0.30

      

1.10

      

1.40

      

(0.28

)

    

(0.13

)

  

2018

  

$

16.19

      

0.21

      

(0.71

)

    

(0.50

)

    

(0.31

)

    

(0.19

)

  

2017

  

$

14.65

      

0.43

      

1.44

      

1.87

      

(0.33

)

    

—

    

Class I

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

20.06

      

0.42

      

(1.73

)

    

(1.31

)

    

(0.42

)

    

—

    
Year Ended October 31:
2021		  

$

16.57

      

0.61

      

3.48

      

4.09

      

(0.60

)

    

—

    

2020

  

$

16.56

      

0.27

      

0.41

      

0.68

      

(0.27

)

    

(0.40

)

  

2019

  

$

15.52

      

0.46

      

1.13

      

1.59

      

(0.42

)

    

(0.13

)

  

2018

  

$

16.48

      

0.35

      

(0.70

)

    

(0.35

)

    

(0.42

)

    

(0.19

)

  

2017

  

$

14.86

      

0.55

      

1.50

      

2.05

      

(0.43

)

    

—

    

Class R

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

19.89

      

0.36

      

(1.71

)

    

(1.35

)

    

(0.37

)

    

—

    
Year Ended October 31:
2021		  

$

16.44

      

0.51

      

3.45

      

3.96

      

(0.51

)

    

—

    

2020

  

$

16.43

      

0.19

      

0.42

      

0.61

      

(0.20

)

    

(0.40

)

  

2019

  

$

15.41

      

0.36

      

1.14

      

1.50

      

(0.35

)

    

(0.13

)

  

2018

  

$

16.38

      

0.27

      

(0.70

)

    

(0.43

)

    

(0.35

)

    

(0.19

)

  

2017

  

$

14.79

      

0.46

      

1.49

      

1.95

      

(0.36

)

    

—

    

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

See notes to financial statements.

 


56

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Total
Distributions		   Net Asset
Value,
End of
Period		   Total
Return
(Excludes
Sales
Charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory Strategic Allocation Fund

  

Class A

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(0.39

)

  

$

18.22

      

(6.79

)%

    

0.40

%

    

4.05

%

    

0.79

%

  

$

14,715

      

8

%

  
Year Ended October 31:
2021		    

(0.56

)

  

$

19.94

      

24.51

%

    

0.40

%

    

2.92

%

    

0.80

%

  

$

16,378

      

22

%

  

2020

    

(0.63

)

  

$

16.48

      

3.99

%

    

0.40

%

    

1.45

%

    

0.81

%

  

$

14,364

      

13

%

  

2019

    

(0.52

)

  

$

16.47

      

10.37

%

    

0.40

%

    

2.69

%

    

0.77

%

  

$

15,365

      

5

%

  

2018

    

(0.58

)

  

$

15.44

      

(2.56

)%

    

0.40

%

    

1.77

%

    

0.28

%(e)

  

$

18,747

      

40

%

  

2017

    

(0.40

)

  

$

16.41

      

13.72

%

    

0.30

%

    

3.19

%

    

0.79

%

  

$

14,820

      

51

%

  

Class C

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(0.32

)

  

$

17.86

      

(7.16

)%

    

1.15

%

    

3.28

%

    

1.97

%

  

$

2,202

      

8

%

  
Year Ended October 31:
2021		    

(0.43

)

  

$

19.56

      

23.57

%

    

1.15

%

    

2.10

%

    

2.02

%

  

$

2,507

      

22

%

  

2020

    

(0.51

)

  

$

16.19

      

3.23

%

    

1.15

%

    

0.82

%

    

1.90

%

  

$

2,009

      

13

%

  

2019

    

(0.41

)

  

$

16.18

      

9.53

%

    

1.15

%

    

1.94

%

    

1.72

%

  

$

3,193

      

5

%

  

2018

    

(0.50

)

  

$

15.19

      

(3.26

)%

    

1.15

%

    

1.30

%

    

1.08

%(e)

  

$

4,445

      

40

%

  

2017

    

(0.33

)

  

$

16.19

      

12.88

%

    

1.03

%

    

2.78

%

    

1.58

%

  

$

8,814

      

51

%

  

Class I

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(0.42

)

  

$

18.33

      

(6.69

)%

    

0.15

%

    

4.30

%

    

0.58

%

  

$

8,651

      

8

%

  
Year Ended October 31:
2021		    

(0.60

)

  

$

20.06

      

24.86

%

    

0.15

%

    

3.13

%

    

0.56

%

  

$

9,283

      

22

%

  

2020

    

(0.67

)

  

$

16.57

      

4.22

%

    

0.15

%

    

1.66

%

    

0.59

%

  

$

7,006

      

13

%

  

2019

    

(0.55

)

  

$

16.56

      

10.63

%

    

0.15

%

    

2.90

%

    

0.59

%

  

$

5,743

      

5

%

  

2018

    

(0.61

)

  

$

15.52

      

(2.29

)%

    

0.15

%

    

2.11

%

    

0.01

%(e)

  

$

8,811

      

40

%

  

2017

    

(0.43

)

  

$

16.48

      

13.95

%

    

0.10

%

    

3.48

%

    

0.61

%

  

$

9,153

      

51

%

  

Class R

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(0.37

)

  

$

18.17

      

(6.92

)%

    

0.65

%

    

3.81

%

    

1.90

%

  

$

1,151

      

8

%

  
Year Ended October 31:
2021		    

(0.51

)

  

$

19.89

      

24.20

%

    

0.65

%

    

2.69

%

    

1.82

%

  

$

1,264

      

22

%

  

2020

    

(0.60

)

  

$

16.44

      

3.74

%

    

0.65

%

    

1.18

%

    

1.76

%

  

$

1,259

      

13

%

  

2019

    

(0.48

)

  

$

16.43

      

10.08

%

    

0.65

%

    

2.30

%

    

1.87

%

  

$

1,308

      

5

%

  

2018

    

(0.54

)

  

$

15.41

      

(2.77

)%

    

0.65

%

    

1.63

%

    

1.01

%(e)

  

$

1,529

      

40

%

  

2017

    

(0.36

)

  

$

16.38

      

13.36

%

    

0.56

%

    

2.96

%

    

1.80

%

  

$

1,892

      

51

%

  

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

(e)  The amount includes a change in accounting estimate. Without this change in accounting estimate, the gross expense ratio would have been 0.67%, 1.54%, 0.42% and 1.43% for Class A, C, I and R, respectively.

See notes to financial statements.

 


57

 

Victory Portfolios

  

Financial Highlights

  

For a Share Outstanding Throughout Each Period

 

      

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains (Losses)		   Total from
Investment
Activities		   Net
Investment
Income		   Total
Distributions		  

Victory INCORE Fund for Income

      

Class A

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.92

      

0.02

      

(0.37

)

    

(0.35

)

    

(0.19

)

    

(0.19

)

  
Year Ended October 31:
2021		  

$

8.40

      

0.02

      

(0.11

)

    

(0.09

)

    

(0.39

)

    

(0.39

)

  

2020

  

$

8.56

      

0.06

      

0.17

      

0.23

      

(0.39

)

    

(0.39

)

  

2019

  

$

8.56

      

0.18

      

0.28

      

0.46

      

(0.46

)

    

(0.46

)

  

2018

  

$

9.09

      

0.15

(e)

    

(0.23

)(e)

    

(0.08

)

    

(0.45

)

    

(0.45

)

  

2017

  

$

9.63

      

0.10

      

(0.15

)

    

(0.05

)

    

(0.49

)

    

(0.49

)

  

Class C

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.84

      

(0.01

)

    

(0.37

)

    

(0.38

)

    

(0.16

)

    

(0.16

)

  
Year Ended October 31:
2021		  

$

8.31

      

(0.05

)

    

(0.10

)

    

(0.15

)

    

(0.32

)

    

(0.32

)

  

2020

  

$

8.48

      

—

(f)

    

0.16

      

0.16

      

(0.33

)

    

(0.33

)

  

2019

  

$

8.48

      

0.13

      

0.26

      

0.39

      

(0.39

)

    

(0.39

)

  

2018

  

$

9.01

      

0.08

(e)

    

(0.23

)(e)

    

(0.15

)

    

(0.38

)

    

(0.38

)

  

2017

  

$

9.56

      

0.03

      

(0.16

)

    

(0.13

)

    

(0.42

)

    

(0.42

)

  

Class I

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.92

      

0.03

      

(0.37

)

    

(0.34

)

    

(0.20

)

    

(0.20

)

  
Year Ended October 31:
2021		  

$

8.39

      

0.04

      

(0.10

)

    

(0.06

)

    

(0.41

)

    

(0.41

)

  

2020

  

$

8.55

      

0.08

      

0.17

      

0.25

      

(0.41

)

    

(0.41

)

  

2019

  

$

8.55

      

0.16

      

0.32

      

0.48

      

(0.48

)

    

(0.48

)

  

2018

  

$

9.08

      

0.15

(e)

    

(0.21

)(e)

    

(0.06

)

    

(0.47

)

    

(0.47

)

  

2017

  

$

9.63

      

0.13

      

(0.16

)

    

(0.03

)

    

(0.52

)

    

(0.52

)

  

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

(e)  The Fund restated certain elements of its 2018 financial statements resulting from the identification of a GAAP reclassification error for the Fund's paydown gain (loss) transactions. However, this reclassification had no impact on the Fund's net assets, NAV, performance, or taxable distributions paid and reported to shareholders for the fiscal and tax years ended 2018.

(f)  Amount is less than $0.005 per share.

See notes to financial statements.

 


58

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Net Asset
Value,
End of
Period		   Total
Return
(Excludes
Sales
Charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory INCORE Fund for Income

  

Class A

  
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.38

      

(4.49

)%

    

0.91

%

    

0.47

%

    

0.94

%

  

$

106,953

      

19

%

  
Year Ended October 31:
2021		  

$

7.92

      

(1.14

)%

    

0.91

%

    

0.25

%

    

0.92

%

  

$

128,802

      

27

%

  

2020

  

$

8.40

      

2.75

%

    

0.91

%

    

0.75

%

    

0.92

%

  

$

151,236

      

55

%

  

2019

  

$

8.56

      

5.50

%

    

0.92

%

    

2.12

%

    

0.94

%

  

$

136,570

      

29

%

  

2018

  

$

8.56

      

(0.91

)%

    

0.92

%

    

1.64

%(e)

    

0.93

%

  

$

153,574

      

27

%

  

2017

  

$

9.09

      

(0.51

)%

    

0.88

%

    

1.08

%

    

0.88

%

  

$

224,822

      

30

%

  

Class C

  
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.30

      

(5.02

)%

    

1.71

%

    

(0.34

)%

    

1.84

%

  

$

7,669

      

19

%

  
Year Ended October 31:
2021		  

$

7.84

      

(1.81

)%

    

1.71

%

    

(0.62

)%

    

1.79

%

  

$

10,066

      

27

%

  

2020

  

$

8.31

      

1.85

%

    

1.71

%

    

(0.01

)%

    

1.74

%

  

$

20,801

      

55

%

  

2019

  

$

8.48

      

4.72

%

    

1.72

%

    

1.53

%

    

1.73

%

  

$

22,541

      

29

%

  

2018

  

$

8.48

      

(1.69

)%

    

1.70

%

    

0.94

%(e)

    

1.71

%

  

$

31,976

      

27

%

  

2017

  

$

9.01

      

(1.41

)%

    

1.67

%

    

0.29

%

    

1.67

%

  

$

50,316

      

30

%

  

Class I

  
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.38

      

(4.37

)%

    

0.64

%

    

0.73

%

    

0.69

%

  

$

300,973

      

19

%

  
Year Ended October 31:
2021		  

$

7.92

      

(0.77

)%

    

0.64

%

    

0.48

%

    

0.67

%

  

$

385,332

      

27

%

  

2020

  

$

8.39

      

3.01

%

    

0.64

%

    

0.95

%

    

0.66

%

  

$

590,749

      

55

%

  

2019

  

$

8.55

      

5.79

%

    

0.64

%

    

1.84

%

    

0.65

%

  

$

447,735

      

29

%

  

2018

  

$

8.55

      

(0.64

)%

    

0.63

%

    

1.69

%(e)

    

0.63

%

  

$

331,338

      

27

%

  

2017

  

$

9.08

      

(0.34

)%

    

0.61

%

    

1.34

%

    

0.61

%

  

$

520,056

      

30

%

  

(continues on next page)

See notes to financial statements.

 


59

 

Victory Portfolios

  

Financial Highlights

  

For a Share Outstanding Throughout Each Period

       

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains (Losses)		   Total from
Investment
Activities		   Net
Investment
Income		   Total
Distributions		  

Victory INCORE Fund for Income

      

Class R

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.93

      

0.02

      

(0.37

)

    

(0.35

)

    

(0.19

)

    

(0.19

)

  
Year Ended October 31:
2021		  

$

8.40

      

0.02

      

(0.10

)

    

(0.08

)

    

(0.39

)

    

(0.39

)

  

2020

  

$

8.56

      

0.06

      

0.17

      

0.23

      

(0.39

)

    

(0.39

)

  

2019

  

$

8.57

      

0.18

      

0.27

      

0.45

      

(0.46

)

    

(0.46

)

  

2018

  

$

9.09

      

0.15

(e)

    

(0.22

)(e)

    

(0.07

)

    

(0.45

)

    

(0.45

)

  

2017

  

$

9.64

      

0.10

      

(0.16

)

    

(0.06

)

    

(0.49

)

    

(0.49

)

  

Class R6

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.91

      

0.03

      

(0.38

)

    

(0.35

)

    

(0.20

)

    

(0.20

)

  
Year Ended October 31:
2021		  

$

8.38

      

0.04

      

(0.10

)

    

(0.06

)

    

(0.41

)

    

(0.41

)

  

2020

  

$

8.54

      

0.08

      

0.18

      

0.26

      

(0.42

)

    

(0.42

)

  

2019

  

$

8.55

      

0.17

      

0.30

      

0.47

      

(0.48

)

    

(0.48

)

  

2018

  

$

9.07

      

0.13

(e)

    

(0.18

)(e)

    

(0.05

)

    

(0.47

)

    

(0.47

)

  

2017

  

$

9.62

      

0.12

      

(0.16

)

    

(0.04

)

    

(0.51

)

    

(0.51

)

  

Class Y

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.92

      

0.03

      

(0.38

)

    

(0.35

)

    

(0.20

)

    

(0.20

)

  
Year Ended October 31:
2021		  

$

8.40

      

0.03

      

(0.11

)

    

(0.08

)

    

(0.40

)

    

(0.40

)

  

2020

  

$

8.56

      

0.06

      

0.19

      

0.25

      

(0.41

)

    

(0.41

)

  

2019

  

$

8.56

      

0.13

      

0.35

      

0.48

      

(0.48

)

    

(0.48

)

  

2018

  

$

9.08

      

0.19

(e)

    

(0.25

)(e)

    

(0.06

)

    

(0.46

)

    

(0.46

)

  

2017

  

$

9.64

      

0.10

      

(0.15

)

    

(0.05

)

    

(0.51

)

    

(0.51

)

  

Member Class

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.95

      

0.02

      

(0.37

)

    

(0.35

)

    

(0.20

)

    

(0.20

)

  
November 3, 2020 (f)
through
October 31, 2021		  

$

8.41

      

0.04

      

(0.13

)

    

(0.09

)

    

(0.37

)

    

(0.37

)

  

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

See notes to financial statements.

 


60

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period  (continued)

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Net Asset
Value,
End of
Period		   Total
Return
(Excludes
Sales
Charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory INCORE Fund for Income

  

Class R

  
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.39

      

(4.49

)%

    

0.91

%

    

0.47

%

    

0.98

%

  

$

19,099

      

19

%

  
Year Ended October 31:
2021		  

$

7.93

      

(1.03

)%

    

0.91

%

    

0.23

%

    

0.93

%

  

$

23,613

      

27

%

  

2020

  

$

8.40

      

2.74

%

    

0.91

%

    

0.76

%

    

0.92

%

  

$

43,684

      

55

%

  

2019

  

$

8.56

      

5.37

%

    

0.92

%

    

2.04

%

    

0.94

%

  

$

38,596

      

29

%

  

2018

  

$

8.57

      

(0.79

)%

    

0.91

%

    

1.67

%(e)

    

0.91

%

  

$

43,405

      

27

%

  

2017

  

$

9.09

      

(0.62

)%

    

0.88

%

    

1.08

%

    

0.88

%

  

$

58,783

      

30

%

  

Class R6

  
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.36

      

(4.50

)%

    

0.63

%

    

0.76

%

    

0.63

%

  

$

27,504

      

19

%

  
Year Ended October 31:
2021		  

$

7.91

      

(0.77

)%

    

0.63

%

    

0.46

%

    

0.64

%

  

$

29,691

      

27

%

  

2020

  

$

8.38

      

3.06

%

    

0.63

%

    

0.88

%

    

0.64

%

  

$

49,009

      

55

%

  

2019

  

$

8.54

      

5.68

%

    

0.63

%

    

2.00

%

    

0.66

%

  

$

15,864

      

29

%

  

2018

  

$

8.55

      

(0.52

)%

    

0.63

%

    

1.43

%(e)

    

0.69

%

  

$

13,741

      

27

%

  

2017

  

$

9.07

      

(0.36

)%

    

0.63

%

    

1.31

%

    

0.73

%

  

$

9,407

      

30

%

  

Class Y

  
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.37

      

(4.49

)%

    

0.71

%

    

0.66

%

    

0.72

%

  

$

91,196

      

19

%

  
Year Ended October 31:
2021		  

$

7.92

      

(0.94

)%

    

0.71

%

    

0.40

%

    

0.71

%

  

$

120,588

      

27

%

  

2020

  

$

8.40

      

2.95

%

    

0.71

%

    

0.67

%

    

0.74

%

  

$

186,421

      

55

%

  

2019

  

$

8.56

      

5.72

%

    

0.71

%

    

1.48

%

    

0.79

%

  

$

54,950

      

29

%

  

2018

  

$

8.56

      

(0.61

)%

    

0.71

%

    

2.14

%(e)

    

0.79

%

  

$

31,975

      

27

%

  

2017

  

$

9.08

      

(0.53

)%

    

0.68

%

    

1.09

%

    

0.68

%

  

$

62,408

      

30

%

  

Member Class

  
Six Months Ended
April 30, 2022
(Unaudited)		  

$

7.40

      

(4.52

)%

    

0.75

%

    

0.64

%

    

2.97

%

  

$

1,212

      

19

%

  
November 3, 2020 (f)
through
October 31, 2021		  

$

7.95

      

(1.08

)%

    

0.75

%

    

0.52

%

    

4.45

%

  

$

877

      

27

%

  

(e)  The Fund restated certain elements of its 2018 financial statements resulting from the identification of a GAAP reclassification error for the Fund's paydown gain (loss) transactions. However, this reclassification had no impact on the Fund's net assets, NAV, performance, or taxable distributions paid and reported to shareholders for the fiscal and tax years ended 2018.

(f)  Commencement of operations.

See notes to financial statements.

 


61

 

Victory Portfolios

  

Financial Highlights

  

For a Share Outstanding Throughout Each Period

       

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains (Losses)		   Total from
Investment
Activities		   Net
Investment
Income		   Net Realized
Gains from
Investments		  

Victory INCORE Investment Grade Convertible Fund

      

Class A

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

19.97

      

0.12

      

(0.89

)

    

(0.77

)

    

(1.41

)

    

(0.33

)

  
Year Ended October 31:
2021		  

$

17.31

      

0.22

      

3.27

      

3.49

      

(0.83

)

    

—

    

2020

  

$

17.51

      

0.27

      

0.47

      

0.74

      

(0.35

)

    

(0.59

)

  

2019

  

$

16.22

      

0.21

      

1.84

      

2.05

      

(0.28

)

    

(0.48

)

  

2018

  

$

16.53

      

0.30

      

0.01

      

0.31

      

(0.53

)

    

(0.09

)

  

2017

  

$

13.72

      

0.17

      

2.89

      

3.06

      

(0.25

)

    

—

    

Class I

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

19.98

      

0.16

      

(0.91

)

    

(0.75

)

    

(1.44

)

    

(0.33

)

  
Year Ended October 31:
2021		  

$

17.32

      

0.31

      

3.27

      

3.58

      

(0.92

)

    

—

    

2020

  

$

17.50

      

0.33

      

0.49

      

0.82

      

(0.41

)

    

(0.59

)

  

2019

  

$

16.21

      

0.31

      

1.83

      

2.14

      

(0.37

)

    

(0.48

)

  

2018

  

$

16.53

      

0.36

      

(0.01

)

    

0.35

      

(0.58

)

    

(0.09

)

  

2017

  

$

13.71

      

0.22

      

2.90

      

3.12

      

(0.30

)

    

—

    

Member Class

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

20.71

      

0.14

      

(0.93

)

    

(0.79

)

    

(1.43

)

    

(0.33

)

  
November 3, 2020 (e)
through
October 31, 2021		  

$

17.36

      

0.26

      

3.31

      

3.57

      

(0.22

)

    

—

    

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

(e)  Commencement of operations.

See notes to financial statements.

 


62

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Total
Distributions		   Net Asset
Value,
End of
Period		   Total
Return
(Excludes
Sales
Charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c) 		  Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory INCORE Investment Grade Convertible Fund

  

Class A

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(1.74

)

  

$

17.46

      

(4.23

)%

    

1.24

%

    

1.34

%

    

1.24

%

  

$

20,295

      

10

%

  
Year Ended October 31:
2021		    

(0.83

)

  

$

19.97

      

20.62

%

    

1.39

%

    

1.12

%

    

1.41

%

  

$

21,644

      

28

%

  

2020

    

(0.94

)

  

$

17.31

      

4.43

%

    

1.38

%

    

1.63

%

    

1.38

%

  

$

16,571

      

34

%

  

2019

    

(0.76

)

  

$

17.51

      

13.35

%

    

1.49

%

    

1.31

%

    

1.49

%

  

$

16,349

      

35

%

  

2018

    

(0.62

)

  

$

16.22

      

1.87

%

    

1.27

%

    

1.79

%

    

1.27

%

  

$

14,268

      

41

%

  

2017

    

(0.25

)

  

$

16.53

      

22.57

%

    

1.30

%

    

1.12

%

    

1.30

%

  

$

33,040

      

39

%

  

Class I

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(1.77

)

  

$

17.46

      

(4.09

)%

    

0.90

%

    

1.71

%

    

0.90

%

  

$

430,245

      

10

%

  
Year Ended October 31:
2021		    

(0.92

)

  

$

19.98

      

21.19

%

    

0.93

%

    

1.59

%

    

0.93

%

  

$

403,122

      

28

%

  

2020

    

(1.00

)

  

$

17.32

      

4.91

%

    

0.96

%

    

1.98

%

    

0.96

%

  

$

276,923

      

34

%

  

2019

    

(0.85

)

  

$

17.50

      

13.99

%

    

0.96

%

    

1.87

%

    

0.96

%

  

$

263,981

      

35

%

  

2018

    

(0.67

)

  

$

16.21

      

2.16

%

    

0.94

%

    

2.17

%

    

0.94

%

  

$

126,871

      

41

%

  

2017

    

(0.30

)

  

$

16.53

      

23.07

%

    

0.94

%

    

1.47

%

    

0.94

%

  

$

78,879

      

39

%

  

Member Class

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(1.76

)

  

$

18.16

      

(4.16

)%

    

1.10

%

    

1.51

%

    

3.92

%

  

$

996

      

10

%

  
November 3, 2020 (e)
through
October 31, 2021		    

(0.22

)

  

$

20.71

      

20.63

%

    

1.10

%

    

1.30

%

    

9.99

%

  

$

512

      

28

%

  

See notes to financial statements.

 


63

 

Victory Portfolios

   Notes to Financial Statements
April 30, 2022		  

  (Unaudited)

1. Organization:

Victory Portfolios (the "Trust") is organized as a Delaware statutory trust and the Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 40 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with a par value of $0.001 per share.

The accompanying financial statements are those of the following seven Funds (collectively, the "Funds" and individually, a "Fund"). Each Fund is classified as diversified under the 1940 Act.

Funds (Legal Name)

  

Funds (Short Name)

   Investment Share
Classes Offered		  

Victory Diversified Stock Fund

  

Diversified Stock Fund

  

A, C, I, R, R6, and Y

  
Victory NewBridge Large Cap
Growth Fund		   NewBridge Large Cap
   Growth Fund		   A, C, I, and Y
 		  

Victory Special Value Fund

  

Special Value Fund

  

A, C, I, R, and Y

  
Victory THB US Small
Opportunities Fund		   THB US Small Opportunities Fund
 		   A and I
 		  

Victory Strategic Allocation Fund

  

Strategic Allocation Fund

  

A, C, I, and R

  
Victory INCORE Fund for Income
 		   INCORE Fund for Income
 		   A, C, I, R, R6, Y, and
Member Class		  
Victory INCORE Investment Grade
Convertible Fund		   INCORE Investment Grade
   Convertible Fund		   A, I, and
Member Class		  

On February 2, 2021, the Board of Trustees (the "Board") of the Trust approved an Agreement and Plan of Reorganization ("Reorganization"), dated February 26, 2021, which provided for the newly formed Victory THB US Small Opportunities Fund ("Acquiring Fund") and its tax-free exchange of shares of the THB Asset Management Microcap Fund's ("Predecessor Fund") shares, valued at the Predecessor Fund's net assets for the exact same shares and value of the Acquiring Fund's shares. Investor Class and Institutional Class shares of the Predecessor Fund were exchanged for Class A and Class I shares, respectively, of the Acquiring Fund. The Acquiring Fund commenced operations on May 3, 2021, upon the completion of the Reorganization, which occurred as of the close of business on April 30, 2021.

Each class of shares of a Fund has substantially identical rights and privileges except with respect to sales charges, fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.

Strategic Allocation Fund is a "fund of funds" in that it invests in a selection of affiliated mutual funds and exchange-traded funds ("ETFs") managed by Victory Capital Management Inc. ("VCM" or the Adviser), an affiliate of the Fund.

Strategic Allocation Fund may rely on various exemptions contained in 1940 Act and in exemptive rules or orders thereunder issued by the Securities and Exchange Commission ("SEC") that permit funds, subject to certain conditions, to invest in one or more ETFs and certain other types of investment companies in amounts that exceed limits set forth in the 1940 Act that would otherwise be applicable.

Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts with their vendors and others that provide for general indemnifications. The Funds' maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds. However, based on experience, the Funds expect that risk of loss to be remote.

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with U.S. Generally Accepted Accounting Principles ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and

 


64

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Funds follow the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.

Investment Valuation:

The Funds record investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Funds' investments are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical securities

• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)

• Level 3 — significant unobservable inputs (including the Funds' own assumptions in determining the fair value of investments)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.

The Adviser has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Board's oversight, the Committee administers and oversees the Funds' valuation policies and procedures, which are approved by the Board.

Portfolio securities listed or traded on securities exchanges, including ETFs, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.

Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.

Investments in the underlying affiliated Funds of the Strategic Allocation Fund, and other open-end investment companies, other than ETFs, are valued at their NAV at the end of each business day and are typically categorized in Level 1 of the fair value hierarchy.

The underlying affiliated Funds of the Strategic Allocation Fund, have specific valuation procedures. In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.

Debt securities are valued each business day by a pricing service approved by the Board. The approved pricing service uses the evaluated bid or the last sale price to value securities. Debt obligations maturing within 60 days may be valued at amortized cost, provided that the amortized cost represents the fair value of such securities. These valuations are typically categorized as Level 2 in the fair value hierarchy.

In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market

 


65

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.

A summary of the valuations as of April 30, 2022, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedules of Portfolio Investments (amounts in thousands):

   

Level 1

  

Level 2

  

Level 3

  

Total

  

Diversified Stock Fund

  

Common Stocks

  

$

272,613

    

$

—

    

$

—

    

$

272,613

    

Exchange-Traded Funds

    

6,445

      

—

      

—

      

6,445

    

Collateral for Securities Loaned

    

5,362

      

—

      

—

      

5,362

    

Total

  

$

284,420

    

$

—

    

$

—

    

$

284,420

    

NewBridge Large Cap Growth Fund

  

Common Stocks

  

$

10,046

    

$

—

    

$

—

    

$

10,046

    

Total

  

$

10,046

    

$

—

    

$

—

    

$

10,046

    

Special Value Fund

  

Common Stocks

  

$

41,001

    

$

—

    

$

—

    

$

41,001

    

Exchange-Traded Funds

    

1,095

      

—

      

—

      

1,095

    

Total

  

$

42,096

    

$

—

    

$

—

    

$

42,096

    

THB US Small Opportunities Fund

  

Common Stocks

  

$

72,342

    

$

—

    

$

—

    

$

72,342

    

Collateral for Securities Loaned

    

1,440

      

—

      

—

      

1,440

    

Total

  

$

73,782

    

$

—

    

$

—

    

$

73,782

    

Strategic Allocation Fund

  

Affiliated Exchange-Traded Funds

  

$

1,976

    

$

—

    

$

—

    

$

1,976

    

Affiliated Mutual Funds

    

24,551

      

—

      

—

      

24,551

    

Total

  

$

26,527

    

$

—

    

$

—

    

$

26,527

    

INCORE Fund for Income

  

Government National Mortgage Association

  

$

—

    

$

444,834

    

$

—

    

$

444,834

    

U.S. Treasury Obligations

    

—

      

105,762

      

—

      

105,762

    

Investment Companies

    

100

      

—

      

—

      

100

    

Total

  

$

100

    

$

550,596

    

$

—

    

$

550,696

    

INCORE Investment Grade Convertible Fund

  

Convertible Corporate Bonds

  

$

—

    

$

293,208

    

$

—

    

$

293,208

    
Convertible Preferred Stocks    

152,577

      

2,529

      

—

      

155,106

    

Collateral for Securities Loaned

    

87,000

      

—

      

—

      

87,000

    

Total

  

$

239,577

    

$

295,737

    

$

—

    

$

535,314

    

For the six months ended April 30, 2022, there were no transfers in or out of Level 3 in the fair value hierarchy.

Real Estate Investment Trusts ("REITs"):

The Funds may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income-producing real estate or real-estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Funds or when such information becomes known.

 


66

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

Investment Companies:

Exchange-Traded Funds:

The Funds may invest in ETFs, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities often designed to track the performance and dividend yield of a particular domestic or foreign market index. The Funds may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.

Open-End Funds:

The Funds may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.

Investment Transactions and Related Income:

Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis. Paydown gains or losses on applicable securities, if any, are recorded as components of Interest income on the Statements of Operations.

Securities Lending:

The Funds, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend their securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by SEC guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Funds' Schedules of Portfolio Investments. The Funds effectively do not have control of the non-cash collateral and therefore it is not disclosed on the Funds' Schedules of Portfolio Investments. Collateral requirements are determined daily based on the value of the Funds' securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Funds any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Funds also earn a return from the collateral. The Funds pay Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statements of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, a Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.

 


67

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

The Funds' agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Funds may not be sold or repledged, except to satisfy borrower default.

The following table (amounts in thousands) is a summary of the Funds' securities lending transactions as of April 30, 2022.

    Value of
Securities on Loan		  

Non-Cash Collateral

  

Cash Collateral

  

Diversified Stock Fund

  

$

5,073

    

$

—

    

$

5,362

    

THB US Small Opportunities Fund

    

1,372

      

—

      

1,440

    
INCORE Investment Grade
Convertible Fund		    

84,020

      

—

      

87,000

    

Federal Income Taxes:

Each Fund intends to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Funds have a tax year end of October 31.

For the six months ended April 30, 2022, the Funds did not incur any income tax, interest, or penalties, and have recorded no liability for net unrecognized tax benefits relating to uncertain tax positions.

Management of the Funds has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.

Allocations:

Expenses directly attributable to a Fund are charged to that Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.

Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, printing fees, and 12b-1 fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.

Redemption Fees:

The Funds currently do not receive a redemption fee. Prior to acquisition, the Predecessor Fund retained redemption fees of 2.00% on redemptions of fund shares held for less than 30 days. Class I (formerly Institutional Class shares) and Class A (formerly Investor Class shares) had approximately $2 thousand and $1 thousand in redemptions fees, respectively, as presented on the Statements of Changes in Net Assets.

3. Purchases and Sales:

Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended April 30, 2022, were as follows (amounts in thousands):

    Excluding
U.S. Government Securities		  

U.S. Government Securities

  
   

Purchases

  

Sales

  

Purchases

  

Sales

  

Diversified Stock Fund

  

$

119,045

    

$

136,008

    

$

—

    

$

—

    

NewBridge Large Cap Growth Fund

    

3,156

      

5,947

      

—

      

—

    

Special Value Fund

    

19,691

      

23,264

      

—

      

—

    

THB US Small Opportunities Fund

    

24,645

      

26,162

      

—

      

—

    
 


68

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

    Excluding
U.S. Government Securities		  

U.S. Government Securities

  
   

Purchases

  

Sales

  

Purchases

  

Sales

  

Strategic Allocation Fund

  

$

2,389

    

$

2,234

    

$

—

    

$

—

    

INCORE Fund for Income

    

—

      

—

      

111,832

      

229,590

    
INCORE Investment Grade
Convertible Fund		    

109,037

      

42,958

      

—

      

—

    

4. Fees and Transactions with Affiliates and Related Parties:

Investment Advisory Fees:

Investment advisory services are provided to the Funds by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.

Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive fees based on a percentage of the average daily net assets of each Fund. The rates at which the Adviser is paid by each Fund are included in the table below.

   

Adviser Fee Tier Rates

  
   

Up to $800 million

  

$800 million – $2.4 billion

  

Over $2.4 billion

  

Diversified Stock Fund

    

0.65

%

    

0.60

%

    

0.55

%

  
   

Up to $400 million

  

$400 million – $800 million

  

Over $800 million

  
NewBridge Large Cap Growth
Fund		    

0.75

%

    

0.65

%

    

0.60

%

  

Special Value Fund

    

0.75

%

    

0.65

%

    

0.60

%

  
   

Flat Rate

          

THB US Small Opportunities Fund

    

1.15

%

                  

Strategic Allocation Fund

    

0.10

%

                  
   

Up to $400 million

  

$400 million – $800 million

  

Over $800 million

  

INCORE Fund for Income

    

0.50

%

    

0.45

%

    

0.40

%

  
INCORE Investment Grade
Convertible Fund		    

0.75

%

    

0.65

%

    

0.60

%

  

Amounts incurred and paid to VCM for the six months ended April 30, 2022, are reflected on the Statements of Operations as Investment advisory fees.

Administration and Servicing Fees:

VCM also serves as the Funds' administrator and fund accountant. Under the Administration and Fund Accounting Agreement, VCM is entitled to receive fees based on a percentage of the average daily net assets of the Trust, Victory Variable Insurance Funds and Victory Portfolios II. The tiered rates at which VCM is paid by the Funds are shown in the table below:

  Net Assets

  

Up to $15 billion

  

$15 billion – $30 billion

  

Over $30 billion

  
 

0.08

%, plus

    

0.05

%, plus

    

0.04

%

  

Amounts incurred for the six months ended April 30, 2022, are reflected on the Statements of Operations as Administration fees.

Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Funds pursuant to the Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses

 


69

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

specifically allocated to the Funds. Amounts incurred for the six months ended April 30, 2022, are reflected on the Statements of Operations as Sub-Administration fees.

The Funds (as part of the Trust) have entered into an agreement with the Adviser to provide compliance services, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. The funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios II and USAA Mutual Funds (collectively, the "Victory Funds Complex"), in aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended April 30, 2022, are reflected on the Statements of Operations as Compliance fees.

Transfer Agency Fees:

FIS Investor Services, LLC ("FIS") serves as the Funds' transfer agent. Under the Transfer Agent Agreement, the Trust pays FIS a fee for its services and reimburses FIS for all of their reasonable out-of-pocket expenses incurred in providing these services. Amounts incurred for the six months ended April 30, 2022, are reflected on the Statements of Operations as Transfer agent fees.

Victory Capital Transfer Agency, Inc., an affiliate of the Adviser, serves as sub-transfer agent for the Member Class. Victory Capital Transfer Agency, Inc. receives no fee or other compensation for these services.

Distributor/Underwriting Services:

Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Funds pursuant to a Distribution Agreement between the Distributor and the Trust.

Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee up to the annual rate shown in the table below:

   

Class A

  

Class C

  

Class R

  

Diversified Stock Fund

    

0.25

%

    

1.00

%

    

0.50

%

  

NewBridge Large Cap Growth Fund

    

0.25

%

    

1.00

%

    

N/A

    

Special Value Fund

    

0.25

%

    

1.00

%

    

0.50

%

  

THB US Small Opportunities Fund

    

0.25

%

    

N/A

      

N/A

    

Strategic Allocation Fund

    

0.25

%

    

1.00

%

    

0.50

%

  

INCORE Fund for Income

    

0.25

%

    

1.00

%

    

0.25

%

  

INCORE Investment Grade Convertible Fund

    

0.25

%

    

N/A

      

N/A

    

The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activities primarily intended to result in the sale of Class A, Class C, and Class R. Amounts incurred for the six months ended April 30, 2022, are reflected on the Statements of Operations as 12b-1 fees.

In addition, the Distributor is entitled to receive commissions in connection with sales of Class A. For the six months ended April 30, 2022, the Distributor received approximately $10 thousand from commissions earned in connection with sales of Class A.

Other Fees:

Citibank serves as the Funds' custodian. The Funds pay Citibank a fee for providing these services. Amounts incurred for the six months ended April 30, 2022, are reflected on the Statements of Operations as Custodian fees.

Sidley Austin LLP provides legal services to the Trust.

The Adviser has entered into expense limitation agreements with certain Funds. Under the terms of the agreements, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that

 


70

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

ordinary operating expenses incurred by certain classes of a Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of a Fund's business are excluded from the expense limits. As of April 30, 2022, the expense limits (excluding voluntary waivers) are as follows:

   

In Effect Until February 28, 2023

  
   

Class A

  

Class C

  

Class I

  

Class R

  

Class R6

  

Class Y

   Member
Class		  

Diversified Stock Fund

    

N/A

      

2.02

%

    

0.83

%

    

N/A

      

0.78

%

    

0.86

%

    

N/A

    
NewBridge Large Cap
Growth Fund		    

1.36

%

    

2.10

%

    

0.95

%

    

N/A

      

N/A

      

1.02

%

    

N/A

    

Special Value Fund

    

N/A

      

2.20

%

    

1.15

%

    

N/A

      

N/A

      

1.10

%

    

N/A

    
THB US Small
Opportunities Fund		    

1.70

%(a)

    

N/A

      

1.25

%(a)

    

N/A

      

N/A

      

N/A

      

N/A

    

Strategic Allocation Fund

    

0.40

%

    

1.15

%

    

0.15

%

    

0.65

%

    

N/A

      

N/A

      

N/A

    

INCORE Fund for Income

    

0.91

%

    

1.71

%

    

0.64

%

    

0.91

%

    

0.63

%

    

0.71

%

    

0.75

%

  
INCORE Investment Grade
Convertible Fund		    

1.39

%

    

N/A

      

N/A

      

N/A

      

N/A

      

N/A

      

1.10

%

  

(a) In effect until May 3, 2023.

Under the terms of the expense limitation agreements, as amended May 1, 2021, the Funds (except Strategic Allocation Fund) have agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Funds were permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.

As of April 30, 2022, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Funds have not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at April 30, 2022.

    Expires
2022		   Expires
2023		   Expires
2024		   Expires
2025		  

Total

  

Diversified Stock Fund

  

$

15

    

$

36

    

$

28

    

$

13

    

$

92

    

NewBridge Large Cap Growth Fund

    

40

      

58

      

63

      

37

      

198

    

Special Value Fund

    

17

      

28

      

23

      

10

      

78

    
THB US Small Opportunities Fund    

—

      

—

      

13

      

71

      

84

    

INCORE Fund for Income

    

37

      

105

      

197

      

129

      

468

    
INCORE Investment Grade
Convertible Fund		    

—

      

—

      

23

      

10

      

33

    

The Adviser may voluntarily waive or reimburse additional fees to assist the Funds in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Funds are not available to be recouped at a future time. For the six months ended April 30, 2022, the Adviser voluntarily waived the following amounts (amounts in thousands):

Special Value Fund

  

$

24

    

Certain officers and/or interested trustees of the Funds are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, legal counsel, and Distributor.

 


71

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

5. Risks:

The Funds may be subject to other risks in addition to these identified risks.

Convertible Securities Risk — Convertible securities rank senior to the issuer's common stock, but may be subordinate to senior debt obligations. In part, the total return for a convertible security may depend upon the performance of the underlying stock into which it can be converted. Synthetic convertibles may respond differently to market fluctuations than traditional convertible securities. They are also subject to counterparty risk.

Equity Risk — The value of the equity securities in which a Fund invests may decline in response to developments affecting individual companies and/or general economic conditions in the United States or abroad. A company's earnings or dividends may not increase as expected (or may decline) because of poor management, competitive pressures, reliance on particular suppliers or geographical regions, labor problems or shortages, corporate restructurings, fraudulent disclosures, man-made or natural disasters, military confrontations or wars, terrorism, public health crises, or other events, conditions and factors. Price changes may be temporary or last for extended periods.

Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods, or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.

Micro-Capitalization Stock Risk — Micro-capitalization companies tend to be less seasoned and may lose market share or profits to a greater extent than larger, more established companies. Since micro-capitalization company stocks typically have narrower markets and are traded in lower volumes than larger company stocks, they may be more difficult to purchase and sell. Micro-capitalization companies may have limited markets, product lines, or financial resources and lack management experience and may experience higher failure rates than larger companies.

Debt Securities and Interest Rate Risk — The INCORE Fund for Income and the INCORE Investment Grade Convertible Bond Fund are subject to debt securities and interest rate risk. The value of a debt security or other income-producing security changes in response to various factors including, for example, market-related factors (such as changes in interest rates or changes in the risk appetite of investors generally) and changes in the actual or perceived ability of the issuer (or of issuers generally) to meet its (or their) obligations. Interest rates may rise or the rate of inflation may increase, impacting the value of investments in fixed income securities. A debt issuer's credit quality may be downgraded or an issuer may default. Interest rates may fluctuate due to changes in governmental fiscal policy initiatives and resulting market reaction to those initiatives.

High-Yield/Junk Bond Risk — Lower-quality debt securities can involve a substantially greater risk of default than higher quality debt securities, and their values can decline significantly over short and longer periods of time. Lower-quality debt securities tend to be more sensitive to adverse news about the issuer, or the market or economy in general.

LIBOR Discontinuation Risk — The London Interbank Offered Rate ("LIBOR") discontinuation may adversely affect the financial markets generally and the Funds' operations, finances and investments specifically. LIBOR has been the principal floating-rate benchmark in the financial markets, and a large portion of the Funds' assets are tied to LIBOR. However, LIBOR has been or will be discontinued as a floating rate benchmark. The date of discontinuation depends on the LIBOR currency and tenor. With limited exceptions, no new LIBOR obligations will be entered into after December 31, 2021. Existing LIBOR obligations have transitioned or will transition to another benchmark, depending on the LIBOR currency and tenor. For some existing LIBOR-based obligations, the contractual consequences of the discontinuation of LIBOR may not be clear.

Non-LIBOR floating-rate obligations, including Secured Overnight Financing Rate ("SOFR")-based obligations, may have returns and values that fluctuate more than those of floating-rate debt obligations

 


72

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

that are based on LIBOR or other rates. Also, because SOFR and some alternative floating rates are relatively new market indexes, markets for certain non-LIBOR obligations may never develop or may not be liquid. Market terms for non-LIBOR floating rate obligations, such as the spread over the index reflected in interest-rate provisions, may evolve over time, and prices of non-LIBOR floating rate obligations may be different depending on when they are issued and changing views about correct spread levels.

Various SOFR-based rates, including SOFR-based term rates, and various non-SOFR-based rates are expected to develop in response to the discontinuation of U.S. dollar LIBOR, which may create various risks for the Funds and the financial markets more generally. There are non-LIBOR forward-looking floating rates that are not based on SOFR and that may be considered by participants in the financial markets as LIBOR alternatives. Such rates include AMERIBOR (American Interbank Offered Rate), BSBY (Bloomberg Short-Term Bank Yield Index) and BYI (Bank Yield Index). Unlike forward-looking SOFR-based term rates, such rates are intended to reflect a bank credit spread component.

It is not clear how replacement rates for LIBOR — including SOFR-based rates and non-SOFR-based rates — will develop and to what extent they will be used. There is no assurance that these replacement rates will be suitable substitutes for LIBOR, and thus the substitution of such rates for LIBOR could have an adverse effect on the Funds and the financial markets more generally. Concerns about market depth and stability could affect the development of non-SOFR-based term rates, and such rates may create various risks, which may or may not be similar to the risks relating to SOFR.

6. Borrowing and Interfund Lending:

Line of Credit:

The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended April 30, 2022, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Effective with the June 27, 2022, agreement renewal, the interest rate formal on amounts borrowed based on the published 1-month LIBOR rate plus one percent was changed to an interest rate based on the published 1-month SOFR plus 1.10 percent. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statements of Operations under Line of credit fees.

The average borrowing for the days outstanding and average interest rate for each Fund that utilized the Line of Credit during the period ended April 30, 2022, were as follows (amounts in thousands):

    Amount
Outstanding at
April 30, 2022		   Average
Borrowing*		   Days
Borrowings
Outstanding		   Average
Interest
Rate		   Maximum
Borrowing
During the
Period		  
THB US Small Opportunities
Fund		  

$

—

    

$

4,463

      

8

      

1.21

%

  

$

5,600

    

*  For the period ended April 30, 2022, based on the number of days borrowings were outstanding.

 


73

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

Interfund Lending:

The Trust and the Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows each Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to each Fund, if any, during the period, is reflected on the Statements of Operations under Interfund lending fees. As a Lender, interest earned by each Fund, if any, during the period, is reflected on the Statements of Operations under Interfund lending.

The average borrowing or lending for the days outstanding and average interest rate for each Fund during the six months ended April 30, 2022, were as follows (amounts in thousands):

    Borrower or
Lender		   Amount
Outstanding at
April 30, 2022		   Average
Borrowing*		   Days
Borrowing
Outstanding		   Average
Interest
Rate*		   Maximum
Borrowing
During the
Period		  

INCORE Fund for Income

  

Borrower

  

$

—

    

$

4,065

      

4

      

0.83

%

  

$

10,000

    
INCORE Investment Grade
Convertible Fund		  

Borrower

    

—

      

1,670

      

4

      

0.58

%

    

1,670

    

*  For the six months ended April 30, 2022, based on the number of days borrowings were outstanding.

7. Federal Income Tax Information:

Distributable net realized gains, if any, are declared and distributed at least annually from each Fund. Dividends from net investment income, if any, are declared and paid as noted in the table below.

   

Declared

  

Paid

  

Diversified Stock Fund

  

Quarterly

  

Quarterly

  

NewBridge Large Cap Growth Fund

  

Annually

  

Annually

  

Special Value Fund

  

Annually

  

Annually

  

THB US Small Opportunities Fund

  

Quarterly

  

Quarterly

  

Strategic Allocation Fund

  

Quarterly

  

Quarterly

  

INCORE Fund for Income

  

Monthly

  

Monthly

  

INCORE Investment Grade Convertible Fund

  

Quarterly

  

Quarterly

  

The amounts of dividends from net investment income and distributions from net realized gains (collectively, distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Funds may be reclassified as an offset to capital on the accompanying Statements of Assets and Liabilities.

The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (loss) will be determined at the end of the current tax year ending October 31, 2022.

 


74

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

At the tax year ended October 31, 2021, the Funds had net capital loss carryforwards as shown in the table below (amounts in thousands). It is unlikely that the Board will authorize a distribution of capital gains realized in the future until the capital loss carryforwards have been used.

    Short-Term
Amount		   Long-Term
Amount		  

Total

  

Strategic Allocation Fund

  

$

—

    

$

(122

)

  

$

(122

)

  

INCORE Fund for Income

    

(127,550

)

    

(223,983

)

    

(351,533

)

  

8. Affiliated Securities:

An affiliated security is a security in which a Fund has ownership of at least 5% of the security's outstanding voting shares, or an investment company managed by VCM. The Funds do not invest in affiliated underlying funds for the purpose of exercising management or control. These underlying funds are noted as affiliated on the Funds' Schedules of Portfolio Investments. The affiliated underlying funds' annual or semiannual reports may be viewed at www.vcm.com. Transactions in affiliated securities during the six months ended April 30, 2022, were as follows (amounts in thousands):

    Fair
Value
10/31/2021		   Purchases
at Cost		   Proceeds
from
Sales		   Realized
Gains
(Losses)		   Capital Gain
Distribution		   Net
Change
in Unrealized
Appreciation/
Depreciation		   Fair
Value
4/30/22		   Dividend
Income		  

Strategic Allocation Fund

  
Victory INCORE Total
Return Bond Fund
Class R6		  

$

3,201

    

$

37

    

$

(277

)

  

$

(16

)

  

$

—

    

$

(297

)

  

$

2,648

    

$

37

    
Victory Integrity Discovery
Fund Class Y		    

1,178

      

48

      

(28

)

    

8

      

48

      

(163

)

    

1,043

      

—

    
Victory Market
Neutral Income
Fund Class I		    

5,661

      

67

      

(274

)

    

(1

)

    

—

      

52

      

5,505

      

67

    
Victory RS Global
Fund Class Y		    

9,197

      

303

      

(1,076

)

    

274

      

88

      

(1,540

)

    

7,159

      

214

    
Victory RS Partners
Fund Class Y		    

1,130

      

151

      

(41

)

    

—

      

89

      

(201

)

    

1,039

      

62

    
Victory INCORE
Investment Grade
Convertible Fund		    

1,849

      

166

      

(96

)

    

(11

)

    

26

      

(229

)

    

1,679

      

141

    
Victory Sophus
Emerging Markets
Fund Class R6		    

2,770

      

114

      

—

      

—

      

59

      

(542

)

    

2,342

      

55

    
Victory Global Energy
Transition Fund		    

—

      

1,330

      

—

      

—

      

—

      

248

      

1,578

      

—

    
Victory Trivalent
International
Small-Cap Fund
Class I		    

2,200

      

174

      

(276

)

    

19

      

137

      

(559

)

    

1,558

      

37

    
VictoryShares
U.S. Multi-Factor
Minimum
Volatility ETF		    

2,171

      

—

      

(168

)

    

40

      

—

      

(67

)

    

1,976

      

16

    
   

$

29,357

    

$

2,390

    

$

(2,236

)

  

$

313

    

$

447

    

$

(3,298

)

  

$

26,527

    

$

629

    
 


75

 

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   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

9. Stock Split:

Effective December 3, 2021, the Victory NewBridge Large Cap Growth Fund underwent a 1-for-5 reverse stock split of the issued and outstanding Class C shares of the Fund. The reverse stock split was not a taxable event, nor did it have an impact on the Fund's holdings or performance. No changes are contemplated at this time for the other share classes offered by the Fund.

10. Subsequent Event

The Board approved a change in fiscal year-end from October 31 to June 30. This change in fiscal year-end is effective May 19, 2022.

 


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   Supplemental Information
April 30, 2022		  

  (Unaudited)

Proxy Voting and Portfolio Holdings Information

Proxy Voting:

Information regarding the policies and procedures each Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 800-539-3863. The information is also included in the Funds' Statement of Additional Information, which is available on the SEC's website at www.sec.gov.

Information relating to how the Funds voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.

Availability of Schedules of Portfolio Investments:

The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's website at www.sec.gov.

Expense Examples

As a shareholder of a Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from November 1, 2021, through April 30, 2022.

The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

    Beginning
Account
Value
11/1/21		   Actual
Ending
Account
Value
4/30/22		   Hypothetical
Ending
Account
Value
4/30/22		   Actual
Expenses Paid
During Period
11/1/21-
4/30/22*		   Hypothetical
Expenses Paid
During Period
11/1/21-
4/30/22*		   Annualized
Expense Ratio
During Period
11/1/21-
4/30/22		  

Diversified Stock Fund

  

Class A

  

$

1,000.00

    

$

897.70

    

$

1,019.49

    

$

5.03

    

$

5.36

      

1.07

%

  

Class C

    

1,000.00

      

893.30

      

1,014.78

      

9.48

      

10.09

      

2.02

%

  

Class I

    

1,000.00

      

898.60

      

1,020.68

      

3.91

      

4.16

      

0.83

%

  

Class R

    

1,000.00

      

896.30

      

1,018.10

      

6.35

      

6.76

      

1.35

%

  

Class R6

    

1,000.00

      

898.90

      

1,020.93

      

3.67

      

3.91

      

0.78

%

  

Class Y

    

1,000.00

      

898.60

      

1,020.53

      

4.05

      

4.31

      

0.86

%

  
 


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   Supplemental Information — continued
April 30, 2022		  

  (Unaudited)

    Beginning
Account
Value
11/1/21		   Actual
Ending
Account
Value
4/30/22		   Hypothetical
Ending
Account
Value
4/30/22		   Actual
Expenses Paid
During Period
11/1/21-
4/30/22*		   Hypothetical
Expenses Paid
During Period
11/1/21-
4/30/22*		   Annualized
Expense Ratio
During Period
11/1/21-
4/30/22		  

NewBridge Large Cap Growth Fund

  

Class A

  

$

1,000.00

    

$

682.90

    

$

1,018.05

    

$

5.67

    

$

6.80

      

1.36

%

  

Class C

    

1,000.00

      

679.20

      

1,014.38

      

8.74

      

10.49

      

2.10

%

  

Class I

    

1,000.00

      

685.40

      

1,020.08

      

3.97

      

4.76

      

0.95

%

  

Class Y

    

1,000.00

      

684.90

      

1,019.74

      

4.26

      

5.11

      

1.02

%

  

Special Value Fund

  

Class A

  

$

1,000.00

    

$

898.80

    

$

1,018.70

    

$

5.79

    

$

6.16

      

1.23

%

  

Class C

    

1,000.00

      

894.50

      

1,014.38

      

9.86

      

10.49

      

2.10

%

  

Class I

    

1,000.00

      

899.50

      

1,019.59

      

4.95

      

5.26

      

1.05

%

  

Class R

    

1,000.00

      

897.30

      

1,017.11

      

7.29

      

7.75

      

1.55

%

  

Class Y

    

1,000.00

      

899.70

      

1,019.84

      

4.71

      

5.01

      

1.00

%

  

THB US Small Opportunities Fund

  

Class A

  

$

1,000.00

    

$

831.20

    

$

1,016.36

    

$

7.72

    

$

8.50

      

1.70

%

  

Class I

    

1,000.00

      

833.00

      

1,018.60

      

5.68

      

6.26

      

1.25

%

  

Strategic Allocation Fund

  

Class A

  

$

1,000.00

    

$

932.10

    

$

1,022.81

    

$

1.92

    

$

2.01

      

0.40

%

  

Class C

    

1,000.00

      

928.40

      

1,019.09

      

5.50

      

5.76

      

1.15

%

  

Class I

    

1,000.00

      

933.10

      

1,024.05

      

0.72

      

0.75

      

0.15

%

  

Class R

    

1,000.00

      

930.80

      

1,021.57

      

3.11

      

3.26

      

0.65

%

  

INCORE Fund for Income

  

Class A

  

$

1,000.00

    

$

955.10

    

$

1,020.28

    

$

4.41

    

$

4.56

      

0.91

%

  

Class C

    

1,000.00

      

949.80

      

1,016.31

      

8.27

      

8.55

      

1.71

%

  

Class I

    

1,000.00

      

956.30

      

1,021.62

      

3.10

      

3.21

      

0.64

%

  

Class R

    

1,000.00

      

955.10

      

1,020.28

      

4.41

      

4.56

      

0.91

%

  

Class R6

    

1,000.00

      

955.00

      

1,021.67

      

3.05

      

3.16

      

0.63

%

  

Class Y

    

1,000.00

      

955.10

      

1,021.27

      

3.44

      

3.56

      

0.71

%

  

Member Class

    

1,000.00

      

954.80

      

1,021.08

      

3.64

      

3.76

      

0.75

%

  

INCORE Investment Grade Convertible Fund

  

Class A

  

$

1,000.00

    

$

957.70

    

$

1,018.65

    

$

6.02

    

$

6.21

      

1.24

%

  

Class I

    

1,000.00

      

959.10

      

1,020.33

      

4.37

      

4.51

      

0.90

%

  

Member Class

    

1,000.00

      

958.40

      

1,019.34

      

5.34

      

5.51

      

1.10

%

  

*  Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 181/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).

 


78

 

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   Supplemental Information — continued
April 30, 2022		  

  (Unaudited)

Considerations of the Board in Continuing the Investment Advisory Agreement (the "Agreement")

The Board approved the Agreement on behalf of each of the Funds at a meeting, which was called for that purpose, on November 30, 2021. The Board also considered information relating to the Funds and the Agreement provided throughout the year and, more specifically, at the meetings on October 19, 2021, and November 30, 2021. In considering whether to approve the Agreement, the Board requested, and the Adviser provided, information that the Board believed to be reasonably necessary to reach its conclusions.

The Board, including the Independent Trustees, evaluated this information along with other information obtained throughout the year and was advised by legal counsel to the Funds and independent legal counsel to the Independent Trustees. In addition, the Independent Trustees considered a past review of their overall process for conducting the annual review of the Funds' advisory arrangements by a consultant retained through their counsel.

The Board took into consideration regular reports from the Adviser throughout the COVID-19 pandemic public health crisis concerning how the ongoing pandemic has affected market volatility, investment risk, liquidity and valuation of portfolio securities, and the implementation and effectiveness of business continuity plans. These reports also had confirmed that the pandemic had no material impact on the Adviser's operations.

The Board considered each Fund's advisory fee, expense ratio and investment performance as significant factors in determining whether the Agreement should be continued. In considering whether the compensation paid to the Adviser was fair and reasonable, the Board also evaluated, among other things, the following factors:

•  The requirements of the Funds for the services provided by the Adviser;

•  The nature, quality and extent of the services provided and expected to be provided;

•  The performance of the Funds as compared to comparable funds;

•  The fees payable for the services and whether the fee arrangements provided for economies of scale that would benefit Fund shareholders as the Funds grow (acknowledging that economies of scale can be complex to assess and typically are not directly measurable);

•  Whether the fee would be sufficient to enable the Adviser to attract and retain experienced personnel and continue to provide quality services to the Funds;

•  The fees paid by other clients of the Adviser whose accounts are managed in a similar investment style and any differences in the services provided to the other clients compared to those provided to the Funds;

•  The total expenses of each Fund;

•  Management's commitment to operating the Funds at competitive expense levels;

•  The profitability of the Adviser (as reflected by comparing fees earned against an estimate of the Adviser's costs) with respect to the Adviser's relationship with the Funds;

•  Research and other service benefits received by the Adviser obtained through payment of client commissions for securities transactions;

•  Other indirect benefits received by the Adviser, and its affiliates, including revenues paid to the Adviser, or its affiliates, by the Funds for administration and fund accounting services, and distribution;

•  The capabilities and financial condition of the Adviser;

•  Current economic and industry trends; and

•  The historical relationship between each Fund and the Adviser.

For Funds with total net expense ratios that ranked within the fourth quartile (most expensive) in relation to their peers as evaluated by a consultant, the Board also considered a memorandum that it requested the Adviser to prepare. The Adviser reviewed additional relevant circumstances, which included, among other things, specialized strategies, small or decreasing assets, or rapid or recent changes in peer expense ratios.

The Board reviewed each Fund's current management fee, comprised of the advisory fee plus the administrative services fee paid to the Adviser, in the context of the Adviser's profitability with respect to each Fund individually.

 


79

 

Victory Portfolios

   Supplemental Information — continued
April 30, 2022		  

  (Unaudited)

The Board retained a consultant to provide comparative information about fees and performance. The Board met with the consultant to review its inputs and methodologies, among other things. The Board compared each Fund's gross management fees and total operating expense ratio on a net and gross basis with the median gross management fee and median expense ratio of a universe of comparable mutual funds compiled by the consultant and a peer group of funds with similar investment strategies selected by that consultant from the universe. The Board reviewed the factors and methodology used by the consultant in the selection of each Fund's peer group, including the consultant's selection of a broad universe of funds, the more specific universe of comparable funds, and peer groups of funds with comparable investment strategies and asset levels, among other factors. The Board also reviewed any changes to the consultant's methodology as compared to the prior year, including those resulting from the Adviser's input, if any. With respect to certain Funds, the Board also reviewed fees and other information related to the Adviser's management of similarly managed institutional or private accounts, and the differences in the services provided to these other accounts. The Board also noted that the breakpoints in the advisory fee schedule for some of the Funds evidenced one way in which the Adviser has shown a willingness to share in its economies of scale.

The Board also reviewed the compliance and administrative services provided to the Funds by the Adviser and its affiliates, including the Adviser's oversight of the Funds' day-to-day operations and oversight of Fund accounting, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Funds and the Trust.

The Board found that the gross annual management fee paid by each Fund was within the range of management fees paid by each Fund's respective peer group. The Board noted that, except for the Strategic Allocation Fund, each Fund's advisory fee structure contained at least one breakpoint. The Board also noted that the Adviser contractually agreed to waive the advisory fee payable by the Strategic Allocation Fund through February 28, 2023, and that any advisory fees charged under the Agreement are based on services provided that will be in addition to, rather than duplicative of, the services provided under the advisory contract of any fund in which the Strategic Allocation Fund invests. The Board also found that each Fund's Class A net annual expense ratio, taking into account any shareholder servicing or distribution fees, was reasonable as compared with each Fund's respective peer group. The Board considered the Adviser's contractual agreement with each Fund to waive its fees and reimburse expenses of certain classes for a specified period of time, as described in the Fund's prospectus.

The Board reviewed each Fund's performance over one-, three-, five- and ten-year periods (as applicable) against the performance of the Fund's selected peer group and benchmark index. The Board recognized that the performance of the Funds and the peer group funds are net of expenses, while the performance of the benchmark index reflects gross returns.

The Board reviewed various other specific factors with respect to each Fund, as described below. In their deliberations, the Trustees did not rank the importance of any particular information or factor considered and each Trustee may have attributed different weights to various factors.

Victory Diversified Stock Fund

The Board compared the Fund's Class A performance for the one-, three-, five- and ten-year periods ended June 30, 2021, to that of the median performance of the Fund's peer group and benchmark index for the same periods and considered the fact that the Fund outperformed both the benchmark index and the peer group median for the one-year period, and underperformed both the benchmark index and the peer group median for the three-, five- and ten-year periods. The Board noted that the Fund's portfolio management team changed in May 2017. The Board discussed the Fund's investment strategy, the Adviser's implementation of the strategy, and related market conditions, together with relevant fee and expense considerations. The Board also discussed the steps that had been or could be taken by the Adviser to enhance performance in the future, and the Board's continued monitoring of the Fund's performance.

Having considered, among other things: (1) the Fund's management fee compared to comparable mutual funds; (2) the Fund's total expense ratio compared to comparable mutual funds; (3) that the Adviser's willingness to limit the expenses of certain classes for a period of time would provide stability to the Fund's expenses for those

 


80

 

Victory Portfolios

   Supplemental Information — continued
April 30, 2022		  

  (Unaudited)

share classes during that period; and (4) the Fund's performance during the periods reviewed, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

NewBridge Large Cap Growth Fund

The Board compared the Fund's Class A performance for the one-, three-, five- and ten-year periods ended June 30, 2021, to that of the median performance of the Fund's peer group and benchmark index for the same periods and considered the fact that the Fund underperformed both the benchmark index and the peer group median for all of the periods reviewed. The Adviser discussed the Fund's performance in the context of the Fund's investment strategy. The Board discussed the Fund's investment strategy, the Adviser's implementation of the strategy, and related market conditions, together with relevant fee and expense considerations. The Board also discussed the steps that had been or could be taken by the Adviser to enhance performance in the future, and the Board's continued monitoring of the Fund's performance.

Having considered, among other things: (1) the Fund's management fee compared to comparable mutual funds; (2) the Fund's total expense ratio compared to comparable mutual funds; (3) that the Adviser's willingness to limit the expenses of certain classes for a period of time would provide stability to the Fund's expenses for those share classes during that period; and (4) the Fund's performance during the periods reviewed, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

Special Value Fund

The Board compared the Fund's Class A performance for the one-, three-, five- and ten-year periods ended June 30, 2021, to that of the median performance of the Fund's peer group and benchmark index for the same periods and considered the fact that the Fund underperformed the benchmark index for all of the periods reviewed, matched the peer group median for the one-year period, and underperformed the peer group median for the three-, five- and ten-year periods. The Board noted that the Fund's portfolio management team changed in May 2017. The Board discussed the Fund's investment strategy, the Adviser's implementation of the strategy, and related market conditions, together with relevant fee and expense considerations. The Board also discussed the steps that had been or could be taken by the Adviser to enhance performance in the future, and the Board's continued monitoring of the Fund's performance.

Having considered, among other things: (1) the Fund's management fee compared to comparable mutual funds; (2) the Fund's total expense ratio compared to comparable mutual funds; (3) that one way the Adviser is addressing the Fund's underperformance is through its change of the Fund's portfolio management team; (4) that the Adviser's willingness to limit the expenses of certain classes for a period of time would provide stability to the Fund's expenses for those share classes during that period; and (5) the Fund's performance during the periods reviewed, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

Strategic Allocation Fund

The Board compared the Fund's Class A performance for the one-, three-, five- and ten-year periods ended June 30, 2021, to that of the median performance of the Fund's peer group and benchmark index for the same periods and considered the fact that the Fund underperformed the benchmark index for all of the periods reviewed, and outperformed the peer group median for all of the periods reviewed. The Board noted that the Fund changed its investment strategy and its benchmark index in December 2015.

Having considered, among other things: (1) the Fund's management fee compared to comparable mutual funds; (2) the Fund's total expense ratio compared to comparable mutual funds; (3) that the Adviser's willingness to limit the expenses of certain classes for a period of time would provide stability to the Fund's expenses for those share classes during that period; and (4) the Fund's performance during the periods reviewed, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

INCORE Fund for Income

The Board compared the Fund's Class A performance for the one-, three-, five- and ten-year periods ended June 30, 2021, to that of the median performance of the Fund's peer group and benchmark index for the same

 


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April 30, 2022		  

  (Unaudited)

periods and considered the fact that the Fund underperformed the benchmark index for all of the periods reviewed, underperformed the peer group median for the one- and five-year periods, and outperformed the peer group median for the three- and ten-year periods. The Board discussed the Fund's investment strategy, the Adviser's implementation of the strategy, and related market conditions, together with relevant fee and expense considerations. The Board also discussed the steps that had been or could be taken by the Adviser to enhance performance in the future, and the Board's continued monitoring of the Fund's performance.

Having considered, among other things: (1) the Fund's management fee compared to comparable mutual funds; (2) the Fund's total expense ratio compared to comparable mutual funds; (3) that the Adviser's willingness to limit the expenses of certain classes for a period of time would provide stability to the Fund's expenses for those share classes during that period; and (4) the Fund's performance during the periods reviewed, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

INCORE Investment Grade Convertible Fund

The Board compared the Fund's Class A performance for the one-, three-, five- and ten-year periods ended June 30, 2021, to that of the median performance of the Fund's peer group and benchmark index for the same periods and considered the fact that the Fund outperformed the benchmark index for the one- and three-year periods, underperformed the benchmark index for the five- and ten-year periods, and underperformed the peer group median for all of the periods reviewed. The Board noted that the Fund changed its benchmark index in August 2017. The Board discussed with the Adviser how market conditions affected the Fund given the Fund's investment strategy, benchmark index, and fee and expense profile.

Having considered, among other things: (1) the Fund's management fee compared to comparable mutual funds; (2) the Fund's total expense ratio compared to comparable mutual funds; (3) that the Adviser's willingness to limit the expenses of certain classes for a period of time would provide stability to the Fund's expenses for those share classes during that period; and (4) the Fund's performance during the periods reviewed, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

Conclusion

Based on its review of the information requested and provided, and following extended discussions, the Board determined that the Agreement, on behalf of the Funds discussed above, was consistent with the best interests of each Fund and its shareholders, and the Board unanimously approved the Agreement, on behalf of each Fund, for an additional annual period on the basis of the foregoing review and discussions and the following considerations, among others:

•  The fairness and reasonableness of the investment advisory fee payable to the Adviser under the Agreement in light of the investment advisory services provided, the costs of these services, the profitability of the Adviser's relationship with the Fund and the comparability of the fee paid to the fees paid by other investment companies;

•  The nature, quality and extent of the investment advisory services provided by the Adviser;

•  The Adviser's entrepreneurial commitment to the management of the Funds and the creation of a broad-based family of funds, which could entail a substantial commitment of the Adviser's resources to the successful operation of the Funds;

•  The Adviser's representations regarding its staffing and capabilities to manage the Funds, including the retention of personnel with relevant portfolio management experience;

•  The Adviser's efforts to enhance investment results by, among other things, developing quality portfolio management teams; and

•  The overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies and performance of the Adviser.

 


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Liquidity Risk Management Program:

The Victory Funds have adopted and implemented a written liquidity risk management program (the "LRMP") as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The LRMP is reasonably designed to assess and manage each Fund's liquidity risk, taking into consideration each Fund's investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed market conditions; its short- and long-term cash flow projections; and its cash holdings and access to other liquidity management tools such as available funding sources including the Victory Funds Complex Interfund Lending Facility and Line of Credit (discussed in the Notes to Financial Statements). The Victory Funds' Board of Trustees approved the appointment of the Funds' investment adviser, Victory Capital Management Inc. ("Victory Capital"), as the administrator of the LRMP.

Victory Capital manages liquidity risks associated with the Funds' investments by monitoring, among other things, cash and cash equivalents, any use of derivatives, the concentration of investments, the appropriateness of each Fund's investment strategy, and by classifying every Fund investment as either highly liquid, moderately liquid, less liquid, or illiquid on at least a monthly basis. To assist with the classification of Fund investments, Victory Capital has retained a third-party provider of liquidity evaluation services. This provider determines preliminary liquidity classifications for all portfolio holdings based upon portfolio-level data and certain assumptions provided by Victory Capital. Victory Capital reviews the preliminary liquidity classifications and, when appropriate, considers other information including input from the Funds' portfolio managers (including the portfolio managers employed by any investment sub-advisers) in determining final liquidity classifications.

At a meeting held on February 24, 2022, Victory Capital provided an oral and written report to the Trustees on the operation and effectiveness of the LRMP during the previous year. The report from Victory Capital concluded that the Funds did not experience any significant liquidity challenges during the covered period, and the Funds' LRMP is reasonably designed to assess and manage its liquidity risk. The report also concluded that the LRMP continues to operate adequately and effectively to enable Victory Capital to oversee and manage liquidity risk and ensure each Fund is able to meet redemption requests without significant dilution to the remaining investors' interest in each Fund. During the review period, each Fund's portfolio consisted primarily of highly liquid investments, which are defined as cash and any investments that each Fund reasonably expects to be converted to cash in current market conditions in three business days or less without significantly changing the market value of the investment. Therefore, the Funds have not adopted a highly liquid investment minimum. The Funds' investments were below the limitation on illiquid investments during the review period. Additionally, Victory Capital indicated that no events occurred that would require the filing of Form N-LIQUID and recommended no material changes to the LRMP.

 


83

 

Privacy Policy

Protecting the Privacy of Information

The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.

We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.

To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*

*  You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.

 

Victory Funds
P.O. Box 182593
Columbus, Ohio 43218-2593

Visit our website at:

  

Call Victory at:

  

www.vcm.com

   800-539-FUND (800-539-3863)  
        800-235-8396 for Member Class  

VP-SAR (4/22)

 

April 30, 2022

Semi Annual Report

Victory Sycamore Established Value Fund

Victory Sycamore Small Company Opportunity Fund

 

www.vcm.com

News, Information And Education 24 Hours A Day, 7 Days A Week

The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:

•  Detailed performance records

•  Daily share prices

•  The latest fund news

•  Investment resources to help you become a better investor

•  A section dedicated to investment professionals

Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.

 

Victory Portfolios

TABLE OF CONTENTS

Investment Objective and Portfolio
Holdings (Unaudited)		    

4

    

Schedule of Portfolio Investments

  

Victory Sycamore Established Value Fund

    

6

    

Victory Sycamore Small Company Opportunity Fund

    

9

    

Financial Statements

  

Statements of Assets and Liabilities

    

13

    

Statements of Operations

    

15

    

Statements of Changes in Net Assets

    

16

    

Financial Highlights

    

20

    

Notes to Financial Statements

    

28

    

Supplemental Information (Unaudited)

    

37

    

Proxy Voting and Portfolio Holdings Information

     37    

Expense Examples

     37    

Advisory Contract Approval

     39    

Liquidity Risk Management Program

     42    

Privacy Policy (inside back cover)

      
 


1

 

IRA DISTRIBUTION WITHHOLDING DISCLOSURE

We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call 800-539-3863 and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.

If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.

For more specific information, please consult your tax adviser.

The Funds are distributed by Victory Capital Services, Inc. Victory Capital Management Inc. is the investment adviser to the Funds and receives fees from the Funds for performing services for the Funds.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus of the Victory Funds.

For additional information about any Victory Fund, including fees, expenses, and risks, view our prospectus online at vcm.com or call 800-539-3863. Read it carefully before you invest or send money.

The information in this report is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections, or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Past investment performance of the Funds, markets or securities mentioned herein should not be considered to be indicative of future results.

• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

Call Victory at:

800-539-FUND (800-539-3863)

Visit our website at:

www.vcm.com

 


2

 

This page is intentionally left blank.

 


3

 
Victory Portfolios
Victory Sycamore Established Value Fund		  

April 30, 2022

  

  (Unaudited)

Investment Objective and Portfolio Holdings:

The Fund seeks to provide long-term capital growth by investing primarily in common stocks.

Top 10 Holdings*:

April 30, 2022

(% of Net Assets)

Alleghany Corp.

    

2.5

%

  

Sysco Corp.

    

2.2

%

  

Packaging Corp. of America

    

2.0

%

  

Westlake Corp.

    

1.9

%

  

Valero Energy Corp.

    

1.9

%

  

Coterra Energy, Inc.

    

1.9

%

  

American Financial Group, Inc.

    

1.9

%

  

W.R. Berkley Corp.

    

1.9

%

  

Zions Bancorp NA

    

1.7

%

  

Xcel Energy, Inc.

    

1.7

%

  

Sector Allocation*:

April 30, 2022

(% of Net Assets)

*  Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.

Percentages are of the net assets of the Fund and may not equal 100%.

Refer to the Schedule of Portfolio Investments for a complete list of securities.

 


4

 
Victory Portfolios
Victory Sycamore Small Company Opportunity Fund		  

April 30, 2022

  

  (Unaudited)

Investment Objective and Portfolio Holdings:

The Fund seeks to provide capital appreciation.

Top 10 Holdings*:

April 30, 2022

(% of Net Assets)

PDC Energy, Inc.

    

2.0

%

  

Independent Bank Corp.

    

1.7

%

  

Applied Industrial Technologies, Inc.

    

1.6

%

  

SouthState Corp.

    

1.6

%

  

Rayonier, Inc.

    

1.5

%

  

EMCOR Group, Inc.

    

1.5

%

  

UMB Financial Corp.

    

1.4

%

  

Verint Systems, Inc.

    

1.4

%

  

Performance Food Group Co.

    

1.4

%

  

Apple Hospitality REIT, Inc.

    

1.4

%

  

Sector Allocation*:

April 30, 2022

(% of Net Assets)

*  Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.

Percentages are of the net assets of the Fund and may not equal 100%.

Refer to the Schedule of Portfolio Investments for a complete list of securities.

 


5

 
Victory Portfolios
Victory Sycamore Established Value Fund		   Schedule of Portfolio Investments
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Common Stocks (96.4%)

  

Communication Services (0.9%):

  

Live Nation Entertainment, Inc. (a)

    

1,400,000

    

$

146,832

    

Consumer Discretionary (9.0%):

  

Aptiv PLC (a)

    

1,395,000

      

148,428

    

BorgWarner, Inc.

    

7,175,000

      

264,255

    

Hilton Worldwide Holdings, Inc. (a)

    

1,485,000

      

230,606

    

Newell Brands, Inc.

    

9,575,000

      

221,661

    

Ross Stores, Inc.

    

2,363,500

      

235,806

    

VF Corp.

    

2,428,200

      

126,267

    

Yum! Brands, Inc.

    

2,215,000

      

259,177

    
     

1,486,200

    

Consumer Staples (6.0%):

  

Archer-Daniels-Midland Co.

    

1,850,000

      

165,686

    

Sysco Corp.

    

4,220,000

      

360,725

    

The Hershey Co.

    

880,000

      

198,678

    

Tyson Foods, Inc., Class A

    

2,910,000

      

271,096

    
     

996,185

    

Energy (5.3%):

  

Coterra Energy, Inc.

    

10,875,000

      

313,091

    

Devon Energy Corp.

    

4,220,000

      

245,477

    

Valero Energy Corp.

    

2,810,000

      

313,259

    
     

871,827

    

Financials (14.6%):

  

Alleghany Corp. (a)

    

500,000

      

418,250

    

American Financial Group, Inc.

    

2,227,300

      

308,437

    

Everest Re Group Ltd.

    

615,000

      

168,947

    

Huntington Bancshares, Inc.

    

13,800,000

      

181,470

    

Old Republic International Corp.

    

5,811,100

      

127,902

    

Prosperity Bancshares, Inc.

    

2,725,000

      

178,160

    

The Bank of New York Mellon Corp.

    

5,157,200

      

216,912

    

The Progressive Corp.

    

2,025,000

      

217,404

    

W.R. Berkley Corp.

    

4,625,000

      

307,516

    

Zions Bancorp NA

    

5,100,000

      

288,201

    
     

2,413,199

    

Health Care (4.5%):

  

Hologic, Inc. (a)

    

1,865,000

      

134,261

    

Molina Healthcare, Inc. (a)

    

446,700

      

140,018

    

Quest Diagnostics, Inc.

    

1,900,000

      

254,296

    

The Cooper Cos., Inc.

    

615,000

      

222,040

    
     

750,615

    

Industrials (20.6%):

  

AGCO Corp.

    

1,790,000

      

228,046

    

Alaska Air Group, Inc. (a)

    

4,370,000

      

237,684

    

Hubbell, Inc.

    

1,400,000

      

273,504

    

See notes to financial statements.

 


6

 
Victory Portfolios
Victory Sycamore Established Value Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

J.B. Hunt Transport Services, Inc.

    

845,000

    

$

144,368

    

Landstar System, Inc.

    

1,130,000

      

175,037

    

Leidos Holdings, Inc.

    

2,450,000

      

253,600

    

Lincoln Electric Holdings, Inc.

    

1,230,000

      

165,718

    

ManpowerGroup, Inc.

    

1,730,000

      

156,046

    

Oshkosh Corp.

    

1,725,000

      

159,459

    

Owens Corning

    

1,845,000

      

167,766

    

Parker-Hannifin Corp.

    

830,000

      

224,781

    

Republic Services, Inc.

    

1,335,000

      

179,250

    

Textron, Inc.

    

4,120,000

      

285,310

    

The Middleby Corp. (a)

    

1,554,300

      

239,191

    

The Toro Co.

    

2,960,000

      

237,185

    

United Rentals, Inc. (a)

    

520,000

      

164,590

    

Xylem, Inc.

    

1,515,000

      

121,958

    
     

3,413,493

    

Information Technology (10.8%):

  

Amphenol Corp., Class A

    

3,037,500

      

217,181

    

DXC Technology Co. (a)

    

5,520,000

      

158,424

    

Flex Ltd. (a)

    

14,650,000

      

241,579

    

Genpact Ltd.

    

5,770,000

      

232,358

    

Global Payments, Inc.

    

1,745,000

      

239,030

    

Hewlett Packard Enterprise Co.

    

11,195,600

      

172,524

    

Maximus, Inc. (b)

    

3,455,000

      

251,800

    

MKS Instruments, Inc.

    

1,315,000

      

149,884

    

Motorola Solutions, Inc.

    

610,000

      

130,351

    
     

1,793,131

    

Materials (12.4%):

  

AptarGroup, Inc.

    

1,510,000

      

173,393

    

Avery Dennison Corp.

    

1,455,000

      

262,773

    

Corteva, Inc.

    

3,280,000

      

189,223

    

International Flavors & Fragrances, Inc.

    

1,150,000

      

139,495

    

Packaging Corp. of America

    

2,005,000

      

323,146

    

Reliance Steel & Aluminum Co.

    

1,285,000

      

254,751

    

RPM International, Inc.

    

1,975,000

      

163,728

    

Steel Dynamics, Inc.

    

2,585,000

      

221,664

    

Westlake Corp.

    

2,480,000

      

313,844

    
     

2,042,017

    

Real Estate (9.0%):

  

Alexandria Real Estate Equities, Inc.

    

1,310,000

      

238,630

    

American Homes 4 Rent, Class A

    

4,975,000

      

197,060

    

Camden Property Trust

    

1,205,000

      

189,052

    

Duke Realty Corp.

    

2,483,300

      

135,961

    

Equity LifeStyle Properties, Inc.

    

3,000,000

      

231,840

    

Lamar Advertising Co., Class A

    

2,240,000

      

247,318

    

National Retail Properties, Inc. (c)

    

5,525,000

      

242,216

    
     

1,482,077

    

See notes to financial statements.

 


7

 
Victory Portfolios
Victory Sycamore Established Value Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Utilities (3.3%):

  

Alliant Energy Corp.

    

4,520,000

    

$

265,821

    

Xcel Energy, Inc.

    

3,900,000

      

285,714

    
     

551,535

    

Total Common Stocks (Cost $12,272,815)

    

15,947,111

    

Exchange-Traded Funds (1.2%)

  

iShares Russell Mid-Cap Value ETF (c)

    

1,800,000

      

202,338

    

Total Exchange-Traded Funds (Cost $140,770)

    

202,338

    

Collateral for Securities Loaned (0.2%)^

  

BlackRock Liquidity Funds TempFund, Institutional Shares, 0.31% (d)

    

525,486

      

525

    
Fidelity Investments Money Market Government Portfolio, Institutional
Shares, 0.19% (d)		    

14,551,230

      

14,551

    
Goldman Sachs Financial Square Prime Obligations Fund, Institutional
Shares, 0.45% (d)		    

262,244

      

262

    

JPMorgan Prime Money Market Fund, Capital Shares, 0.40% (d)

    

2,091,049

      

2,092

    
Morgan Stanley Institutional Liquidity Prime Portfolio, Institutional
Shares, 0.37% (d)		    

9,401,764

      

9,402

    

Total Collateral for Securities Loaned (Cost $26,832)

    

26,832

    

Total Investments (Cost $12,440,417) — 97.8%

    

16,176,281

    

Other assets in excess of liabilities — 2.2%

    

357,715

    

NET ASSETS — 100.00%

  

$

16,533,996

    

^  Purchased with cash collateral from securities on loan.

(a)  Non-income producing security.

(b)  Affiliated security (See Note 8 in the Notes to Financial Statements).

(c)  All or a portion of this security is on loan.

(d)  Rate disclosed is the daily yield on April 30, 2022.

ETF — Exchange-Traded Fund

PLC — Public Limited Company

See notes to financial statements.

 


8

 
Victory Portfolios
Victory Sycamore Small Company Opportunity Fund		   Schedule of Portfolio Investments
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Common Stocks (96.4%)

  

Aerospace & Defense (1.2%):

  

Hexcel Corp.

    

1,400,000

    

$

76,104

    

Air Freight & Logistics (1.3%):

  

Forward Air Corp.

    

330,000

      

32,000

    

Hub Group, Inc., Class A (a)

    

780,000

      

52,385

    
     

84,385

    

Airlines (0.3%):

  

Frontier Group Holdings, Inc. (a) (b)

    

1,700,000

      

18,037

    

Building Products (1.9%):

  

Gibraltar Industries, Inc. (a)

    

775,000

      

29,326

    

UFP Industries, Inc.

    

1,140,000

      

88,202

    
     

117,528

    

Commercial Services & Supplies (3.7%):

  

ABM Industries, Inc.

    

1,207,000

      

58,262

    

McGrath RentCorp

    

805,000

      

67,185

    

UniFirst Corp.

    

305,000

      

52,552

    

Viad Corp. (a) (c)

    

1,720,000

      

56,330

    
     

234,329

    

Communication Services (1.0%):

  

The E.W. Scripps Co., Class A (a) (c)

    

3,640,000

      

59,914

    

Construction & Engineering (3.2%):

  

Comfort Systems USA, Inc.

    

505,000

      

42,632

    

EMCOR Group, Inc.

    

860,000

      

91,573

    

MYR Group, Inc. (a)

    

315,000

      

24,913

    

Valmont Industries, Inc.

    

182,000

      

45,284

    
     

204,402

    

Consumer Discretionary (8.4%):

  

Carter's, Inc. (b)

    

540,000

      

45,490

    

Choice Hotels International, Inc.

    

218,000

      

30,620

    

Citi Trends, Inc. (a) (b) (c)

    

515,500

      

14,418

    

Columbia Sportswear Co.

    

490,000

      

40,258

    

Helen of Troy Ltd. (a)

    

210,000

      

45,047

    

Hyatt Hotels Corp., Class A (a)

    

620,000

      

58,875

    

LCI Industries (b)

    

380,000

      

36,982

    

Mattel, Inc. (a)

    

3,535,000

      

85,936

    

Murphy USA, Inc.

    

251,400

      

58,727

    

Signet Jewelers Ltd. (b)

    

580,000

      

40,716

    

Visteon Corp. (a)

    

656,000

      

68,690

    
     

525,759

    

Consumer Staples (5.5%):

  

Central Garden & Pet Co., Class A (a)

    

742,800

      

30,737

    

Edgewell Personal Care Co. (b)

    

886,500

      

33,811

    

Ingredion, Inc.

    

835,000

      

71,067

    

Lancaster Colony Corp.

    

260,000

      

40,347

    

See notes to financial statements.

 


9

 
Victory Portfolios
Victory Sycamore Small Company Opportunity Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Performance Food Group Co. (a)

    

1,810,000

    

$

89,143

    

Spectrum Brands Holdings, Inc.

    

635,000

      

54,019

    

The Hain Celestial Group, Inc. (a)

    

819,500

      

27,486

    
     

346,610

    

Energy (4.8%):

  

Delek U.S. Holdings, Inc. (a) (c)

    

3,670,000

      

88,814

    

Helix Energy Solutions Group, Inc. (a)

    

5,568,000

      

22,885

    

Magnolia Oil & Gas Corp., Class A

    

2,794,500

      

64,944

    

PDC Energy, Inc.

    

1,815,000

      

126,578

    
     

303,221

    

Financials (15.6%):

  

AMERISAFE, Inc. (c)

    

985,000

      

45,655

    

Bank of Hawaii Corp.

    

1,125,000

      

83,632

    

Cohen & Steers, Inc.

    

736,200

      

57,195

    

Eagle Bancorp, Inc.

    

1,105,000

      

55,637

    

First American Financial Corp.

    

871,400

      

50,811

    

Independent Bank Corp.

    

1,370,000

      

105,709

    

Lakeland Financial Corp. (b)

    

610,000

      

44,420

    

Pinnacle Financial Partners, Inc.

    

505,000

      

39,163

    

RenaissanceRe Holdings Ltd.

    

158,300

      

22,719

    

Renasant Corp.

    

2,000,000

      

59,580

    

Ryan Specialty Group Holdings, Inc., Class A (a) (b)

    

1,180,000

      

43,648

    

Selective Insurance Group, Inc.

    

725,000

      

59,711

    

SouthState Corp.

    

1,270,000

      

98,349

    

Stewart Information Services Corp.

    

715,000

      

36,894

    

The Hanover Insurance Group, Inc.

    

159,200

      

23,374

    

UMB Financial Corp.

    

1,000,000

      

90,180

    

Wintrust Financial Corp.

    

780,000

      

68,110

    
     

984,787

    

Health Care (3.5%):

  

AngioDynamics, Inc. (a) (c)

    

1,970,000

      

41,468

    

Chemed Corp.

    

109,000

      

53,562

    

Hanger, Inc. (a) (c)

    

2,570,000

      

42,251

    

Integer Holdings Corp. (a)

    

470,000

      

35,330

    

Natus Medical, Inc. (a)

    

1,361,000

      

45,280

    
     

217,891

    

Industrial Conglomerates (0.5%):

  

Carlisle Cos., Inc.

    

130,000

      

33,717

    

Information Technology (11.0%):

  

ADTRAN, Inc.

    

811,600

      

14,114

    

Advanced Energy Industries, Inc.

    

657,000

      

50,274

    

Avnet, Inc.

    

2,005,000

      

87,538

    

Belden, Inc.

    

1,100,000

      

56,793

    

Cognyte Software Ltd. (a)

    

3,179,800

      

21,559

    

Cohu, Inc. (a)

    

1,760,000

      

46,746

    

Fabrinet (a)

    

490,000

      

48,113

    

Kulicke & Soffa Industries, Inc. (b)

    

990,000

      

45,946

    

See notes to financial statements.

 


10

 
Victory Portfolios
Victory Sycamore Small Company Opportunity Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Littelfuse, Inc.

    

206,400

    

$

47,317

    

Maximus, Inc.

    

520,000

      

37,898

    

NETGEAR, Inc. (a) (c)

    

2,100,000

      

45,570

    

Plexus Corp. (a) (b)

    

585,000

      

47,467

    

ScanSource, Inc. (a) (c)

    

1,535,000

      

52,558

    

Verint Systems, Inc. (a)

    

1,645,000

      

89,751

    
     

691,644

    

Machinery (6.7%):

  

Alamo Group, Inc.

    

435,000

      

55,002

    

Altra Industrial Motion Corp.

    

1,290,000

      

50,310

    

Astec Industries, Inc.

    

1,050,000

      

41,055

    

Columbus McKinnon Corp. (b)

    

940,000

      

33,323

    

Crane Co. (b)

    

610,000

      

58,700

    

Hillenbrand, Inc.

    

1,010,000

      

41,228

    

Kennametal, Inc.

    

1,614,000

      

41,528

    

Mueller Industries, Inc.

    

1,000,000

      

54,150

    

The Manitowoc Co., Inc. (a)

    

1,400,000

      

18,536

    

Watts Water Technologies, Inc., Class A

    

226,400

      

28,857

    
     

422,689

    

Materials (8.3%):

  

Cabot Corp.

    

745,000

      

49,058

    

Eagle Materials, Inc.

    

255,000

      

31,447

    

Innospec, Inc.

    

646,100

      

61,580

    

Kaiser Aluminum Corp.

    

735,000

      

70,928

    

Minerals Technologies, Inc.

    

796,100

      

50,640

    

Silgan Holdings, Inc.

    

1,834,400

      

81,392

    

Sonoco Products Co.

    

1,395,000

      

86,364

    

TriMas Corp.

    

1,800,000

      

53,172

    

Worthington Industries, Inc.

    

800,000

      

38,056

    
     

522,637

    

Professional Services (3.2%):

  

CBIZ, Inc. (a)

    

1,150,000

      

48,174

    

ICF International, Inc.

    

740,000

      

73,119

    

Korn Ferry

    

487,600

      

29,958

    

ManTech International Corp., Class A

    

660,000

      

53,024

    
     

204,275

    

Real Estate (8.3%):

  

Apple Hospitality REIT, Inc.

    

5,029,600

      

88,974

    

Colliers International Group, Inc.

    

394,000

      

43,438

    

Corporate Office Properties Trust

    

3,110,000

      

83,006

    

Cushman & Wakefield PLC (a)

    

3,125,000

      

55,938

    

First Industrial Realty Trust, Inc.

    

1,320,000

      

76,560

    

Four Corners Property Trust, Inc. (b)

    

2,828,500

      

77,671

    

Rayonier, Inc.

    

2,187,000

      

94,478

    
     

520,065

    

See notes to financial statements.

 


11

 
Victory Portfolios
Victory Sycamore Small Company Opportunity Fund		   Schedule of Portfolio Investments — continued
April 30, 2022		  

(Amounts in Thousands, Except for Shares)  (Unaudited)

Security Description

  

Shares

  

Value

  

Road & Rail (2.4%):

  

Marten Transport Ltd.

    

4,090,000

    

$

71,084

    

Werner Enterprises, Inc.

    

2,000,000

      

79,260

    
     

150,344

    

Trading Companies & Distributors (2.5%):

  

Applied Industrial Technologies, Inc.

    

985,000

      

103,120

    

Core & Main, Inc., Class A (a) (b)

    

2,240,000

      

53,222

    
     

156,342

    

Utilities (3.1%):

  

ALLETE, Inc.

    

785,000

      

46,582

    

MGE Energy, Inc.

    

601,700

      

46,854

    

NorthWestern Corp.

    

885,000

      

50,171

    

ONE Gas, Inc.

    

595,000

      

50,200

    
     

193,807

    

Total Common Stocks (Cost $5,121,659)

    

6,068,487

    

Exchange-Traded Funds (0.8%)

  

iShares Russell 2000 Value ETF (b)

    

340,600

      

50,688

    

Total Exchange-Traded Funds (Cost $38,751)

    

50,688

    

Collateral for Securities Loaned (1.9%)^

  

BlackRock Liquidity Funds TempFund, Institutional Shares, 0.31% (d)

    

2,360,965

      

2,361

    
Fidelity Investments Money Market Government Portfolio, Institutional
Shares, 0.19% (d)		    

65,377,433

      

65,378

    
Goldman Sachs Financial Square Prime Obligations Fund, Institutional
Shares, 0.45% (d)		    

1,178,238

      

1,178

    

JPMorgan Prime Money Market Fund, Capital Shares, 0.40% (d)

    

9,394,905

      

9,395

    
Morgan Stanley Institutional Liquidity Prime Portfolio, Institutional
Shares, 0.37% (d)		    

42,241,325

      

42,241

    

Total Collateral for Securities Loaned (Cost $120,553)

    

120,553

    

Total Investments (Cost $5,280,963) — 99.1%

    

6,239,728

    

Other assets in excess of liabilities — 0.9%

    

55,603

    

NET ASSETS — 100.00%

  

$

6,295,331

    

^  Purchased with cash collateral from securities on loan.

(a)  Non-income producing security.

(b)  All or a portion of this security is on loan.

(c)  Affiliated security (See Note 8 in the Notes to Financial Statements).

(d)  Rate disclosed is the daily yield on April 30, 2022.

ETF — Exchange-Traded Fund

PLC — Public Limited Company

REIT — Real Estate Investment Trust

See notes to financial statements.

 


12

 

Victory Portfolios

   Statements of Assets and Liabilities
April 30, 2022		  

(Amounts in Thousands, Except Per Share Amounts)  (Unaudited)

    Victory
Sycamore
Established
Value Fund		   Victory
Sycamore
Small Company
Opportunity
Fund		  

Assets:

  

Affiliated investments, at value (Cost $222,456 and $495,136)

  

$

251,800

    

$

446,978

    
Unaffiliated investments, at value (Cost $12,217,961 and
$4,785,827)		    

15,924,481

(a)

    

5,792,750

(b)

  

Cash

    

385,273

      

166,602

    

Receivables:

  

Interest and dividends

    

7,172

      

1,487

    

From affiliate on interfund lending

    

34,798

      

—

    

Capital shares issued

    

23,580

      

4,281

    

Investments sold

    

25,111

      

28,860

    

Prepaid expenses

    

243

      

113

    

Total Assets

    

16,652,458

      

6,441,071

    

Liabilities:

  

Payables:

  

Collateral received on loaned securities

    

26,832

      

120,553

    

Investments purchased

    

24,147

      

13,477

    

Capital shares redeemed

    

58,030

      

6,315

    

Accrued expenses and other payables:

  

Investment advisory fees

    

6,306

      

4,080

    

Administration fees

    

846

      

334

    

Custodian fees

    

119

      

52

    

Transfer agent fees

    

1,117

      

415

    

Compliance fees

    

9

      

4

    

Trustees' fees

    

6

      

2

    
12b-1 fees    

390

      

87

    

Other accrued expenses

    

660

      

421

    

Total Liabilities

    

118,462

      

145,740

    

Net Assets:

  

Capital

    

12,291,732

      

5,106,775

    

Total accumulated earnings/(loss)

    

4,242,264

      

1,188,556

    

Net Assets

  

$

16,533,996

    

$

6,295,331

    

Net Assets

  

Class A

  

$

1,717,386

    

$

361,104

    

Class C

    

62,368

      

—

    

Class I

    

5,283,133

      

3,457,789

    

Class R

    

863,670

      

226,564

    

Class R6

    

7,890,628

      

2,224,247

    

Class Y

    

716,811

      

25,627

    

Total

  

$

16,533,996

    

$

6,295,331

    
Shares (unlimited number of shares authorized with a
par value of $0.001 per share):		  

Class A

    

35,734

      

7,643

    

Class C

    

1,335

      

—

    

Class I

    

109,811

      

72,174

    

Class R

    

18,280

      

5,228

    

Class R6

    

163,929

      

46,507

    

Class Y

    

14,901

      

539

    

Total

    

343,990

      

132,091

    

(continues on next page)

See notes to financial statements.

 


13

 

Victory Portfolios

   Statements of Assets and Liabilities
April 30, 2022		  

(Amounts in Thousands, Except Per Share Amounts)  (Unaudited) (continued)

    Victory
Sycamore
Established
Value Fund		   Victory
Sycamore
Small Company
Opportunity
Fund		  
Net asset value, offering (except Class A)
and redemption price per share: (c)		  

Class A

  

$

48.06

    

$

47.25

    

Class C

    

46.70

      

—

    

Class I

    

48.11

      

47.91

    

Class R

    

47.25

      

43.34

    

Class R6

    

48.13

      

47.83

    

Class Y

    

48.10

      

47.53

    

Maximum Sales Charge — Class A

    

5.75

%

    

5.75

%

  
Maximum offering price
(100%/(100%-maximum sales charge) of net asset value
adjusted to the nearest cent) per share — Class A		  

$

50.99

    

$

50.13

    

(a)  Includes $25,189 of securities on loan.

(b)  Includes $112,733 of securities on loan.

(c)  Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.

See notes to financial statements.

 


14

 

Victory Portfolios

   Statements of Operations
For the Six Months Ended April 30, 2022		  

(Amounts in Thousands, Except Per Share Amounts)  (Unaudited)

    Victory
Sycamore
Established
Value Fund		   Victory
Sycamore
Small Company
Opportunity
Fund		  

Investment Income:

      

Dividends from affiliated investments

  

$

1,746

    

$

4,669

    

Dividends from unaffiliated investments

    

177,935

      

45,508

    

Interest from unaffiliated investments

    

49

      

19

    

Interfund lending

    

12

      

—

    

Securities lending (net of fees)

    

1

      

76

    

Foreign tax withholding

    

—

      

(9

)

  

Total Income

    

179,743

      

50,263

    

Expenses:

      

Investment advisory fees

    

37,596

      

26,295

    

Administration fees

    

4,491

      

1,874

    

Sub-Administration fees

    

8

      

8

    
12b-1 fees — Class A    

2,188

      

499

    
12b-1 fees — Class C    

328

      

—

    
12b-1 fees — Class R    

2,265

      

623

    

Custodian fees

    

352

      

152

    

Transfer agent fees — Class A

    

972

      

309

    

Transfer agent fees — Class C

    

34

      

—

    

Transfer agent fees — Class I

    

1,363

      

987

    

Transfer agent fees — Class R

    

350

      

103

    

Transfer agent fees — Class R6

    

121

      

20

    

Transfer agent fees — Class Y

    

364

      

14

    

Trustees' fees

    

449

      

191

    

Compliance fees

    

58

      

24

    

Legal and audit fees

    

289

      

125

    

State registration and filing fees

    

164

      

91

    

Other expenses

    

816

      

496

    

Total Expenses

    

52,208

      

31,811

    

Net Investment Income (Loss)

    

127,535

      

18,452

    

Realized/Unrealized Gains (Losses) from Investments:

      

Net realized gains (losses) from affiliated investment securities

    

—

      

(7,909

)

  

Net realized gains (losses) from unaffiliated investment securities

    

520,208

      

250,282

    
Net change in unrealized appreciation/depreciation on
affiliated investment securities		    

(37,068

)

    

(73,782

)

  
Net change in unrealized appreciation/depreciation on
unaffiliated investment securities		    

(538,694

)

    

(565,532

)

  

Net realized/unrealized gains (losses) on investments

    

(55,554

)

    

(396,941

)

  

Change in net assets resulting from operations

  

$

71,981

    

$

(378,489

)

  

See notes to financial statements.

 


15

 

Victory Portfolios

  

Statements of Change in Net Assets

  

(Amounts in Thousands)

    Victory Sycamore
Established
Value Fund		   Victory Sycamore
Small Company
Opportunity Fund		  
    Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		  

From Investment Activities:

  

Operations:

  

Net Investment Income (Loss)

  

$

127,535

    

$

230,697

    

$

18,452

    

$

25,280

    

Net realized gains (losses)

    

520,208

      

1,200,711

      

242,373

      

891,810

    
Net change in unrealized appreciation/
depreciation		    

(575,762

)

    

4,048,780

      

(639,314

)

    

1,501,409

    
Change in net assets resulting from
operations		    

71,981

      

5,480,188

      

(378,489

)

    

2,418,499

    

Distributions to Shareholders:

  

Class A

    

(128,008

)

    

(82,155

)

    

(47,738

)

    

(2,698

)

  

Class C

    

(4,754

)

    

(2,825

)

    

—

      

—

    

Class I

    

(395,148

)

    

(215,656

)

    

(441,800

)

    

(30,516

)

  

Class R

    

(68,057

)

    

(38,781

)

    

(31,189

)

    

(1,442

)

  

Class R6

    

(570,373

)

    

(304,092

)

    

(301,384

)

    

(20,349

)

  

Class Y

    

(63,130

)

    

(38,108

)

    

(3,832

)

    

(228

)

  
Change in net assets resulting from
distributions to shareholders		    

(1,229,470

)

    

(681,617

)

    

(825,943

)

    

(55,233

)

  
Change in net assets resulting from capital
transactions		    

1,161,043

      

1,258,292

      

426,314

      

(135,276

)

  

Change in net assets

    

3,554

      

6,056,863

      

(778,118

)

    

2,227,990

    

Net Assets:

  

Beginning of period

    

16,530,442

      

10,473,579

      

7,073,449

      

4,845,459

    

End of period

  

$

16,533,996

    

$

16,530,442

    

$

6,295,331

    

$

7,073,449

    

(continues on next page)

See notes to financial statements.

 


16

 

Victory Portfolios

  

Statements of Change in Net Assets

  

(Amounts in Thousands)  (continued)

    Victory Sycamore
Established
Value Fund		   Victory Sycamore
Small Company
Opportunity Fund		  
    Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		  

Capital Transactions:

  

Class A

  

Proceeds from shares issued

  

$

198,207

    

$

316,369

    

$

36,818

    

$

91,245

    

Distributions reinvested

    

108,796

      

69,394

      

39,941

      

2,255

    

Cost of shares redeemed

    

(255,149

)

    

(578,155

)

    

(71,404

)

    

(161,535

)

  

Total Class A

  

$

51,854

    

$

(192,392

)

  

$

5,355

    

$

(68,035

)

  

Class C

  

Proceeds from shares issued

  

$

466

    

$

1,691

    

$

—

    

$

—

    

Distributions reinvested

    

4,625

      

2,735

      

—

      

—

    

Cost of shares redeemed

    

(5,713

)

    

(14,289

)

    

—

      

—

    

Total Class C

  

$

(622

)

  

$

(9,863

)

  

$

—

    

$

—

    

Class I

  

Proceeds from shares issued

  

$

606,782

    

$

1,448,698

    

$

292,789

    

$

753,269

    

Distributions reinvested

    

334,784

      

184,882

      

415,540

      

28,267

    

Cost of shares redeemed

    

(602,946

)

    

(1,151,120

)

    

(447,140

)

    

(917,576

)

  

Total Class I

  

$

338,620

    

$

482,460

    

$

261,189

    

$

(136,040

)

  

Class R

  

Proceeds from shares issued

  

$

89,216

    

$

184,333

    

$

21,200

    

$

45,316

    

Distributions reinvested

    

67,190

      

38,246

      

30,913

      

1,426

    

Cost of shares redeemed

    

(164,023

)

    

(206,480

)

    

(37,622

)

    

(83,973

)

  

Total Class R

  

$

(7,617

)

  

$

16,099

    

$

14,491

    

$

(37,231

)

  

Class R6

  

Proceeds from shares issued

  

$

1,193,216

    

$

2,058,418

    

$

369,806

    

$

696,838

    

Distributions reinvested

    

559,414

      

298,880

      

289,072

      

19,320

    

Cost of shares redeemed

    

(874,119

)

    

(1,400,472

)

    

(511,388

)

    

(617,635

)

  

Total Class R6

  

$

878,511

    

$

956,826

    

$

147,490

    

$

98,523

    

Class Y

  

Proceeds from shares issued

  

$

150,903

    

$

367,701

    

$

3,112

    

$

15,804

    

Distributions reinvested

    

59,336

      

36,208

      

3,515

      

207

    

Cost of shares redeemed

    

(309,942

)

    

(398,747

)

    

(8,838

)

    

(8,504

)

  

Total Class Y

  

$

(99,703

)

  

$

5,162

    

$

(2,211

)

  

$

7,507

    
Change in net assets resulting from
capital transactions		  

$

1,161,043

    

$

1,258,292

    

$

426,314

    

$

(135,276

)

  

(continues on next page)

See notes to financial statements.

 


17

 

Victory Portfolios

  

Statements of Change in Net Assets

  

(Amounts in Thousands)  (continued)

    Victory Sycamore
Established
Value Fund		   Victory Sycamore
Small Company
Opportunity Fund		  
    Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		   Six
Months
Ended
April 30,
2022
(Unaudited)		   Year
Ended
October 31,
2021		  

Share Transactions:

  

Class A

  

Issued

    

4,010

      

6,696

      

719

      

1,750

    

Reinvested

    

2,237

      

1,666

      

797

      

49

    

Redeemed

    

(5,153

)

    

(12,340

)

    

(1,384

)

    

(3,154

)

  

Total Class A

    

1,094

      

(3,978

)

    

132

      

(1,355

)

  

Class C

  

Issued

    

9

      

37

      

—

      

—

    

Reinvested

    

98

      

69

      

—

      

—

    

Redeemed

    

(119

)

    

(315

)

    

—

      

—

    

Total Class C

    

(12

)

    

(209

)

    

—

      

—

    

Class I

  

Issued

    

12,263

      

30,624

      

5,625

      

14,282

    

Reinvested

    

6,875

      

4,393

      

8,163

      

605

    

Redeemed

    

(12,212

)

    

(24,567

)

    

(8,622

)

    

(17,329

)

  

Total Class I

    

6,926

      

10,450

      

5,166

      

(2,442

)

  

Class R

  

Issued

    

1,829

      

4,046

      

453

      

918

    

Reinvested

    

1,405

      

935

      

673

      

33

    

Redeemed

    

(3,386

)

    

(4,524

)

    

(804

)

    

(1,751

)

  

Total Class R

    

(152

)

    

457

      

322

      

(800

)

  

Class R6

  

Issued

    

24,098

      

43,452

      

6,940

      

12,955

    

Reinvested

    

11,482

      

7,091

      

5,687

      

414

    

Redeemed

    

(17,699

)

    

(30,224

)

    

(10,135

)

    

(11,730

)

  

Total Class R6

    

17,881

      

20,319

      

2,492

      

1,639

    

Class Y

  

Issued

    

3,037

      

7,724

      

61

      

320

    

Reinvested

    

1,219

      

861

      

70

      

4

    

Redeemed

    

(6,270

)

    

(8,452

)

    

(177

)

    

(160

)

  

Total Class Y

    

(2,014

)

    

133

      

(46

)

    

164

    

Change in Shares

    

23,723

      

27,172

      

8,066

      

(2,794

)

  

See notes to financial statements.

 


18

 

This page is intentionally left blank.

 


19

 

Victory Portfolios

  

Financial Highlights

  

For a Share Outstanding Throughout Each Period

 

      

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains (Losses)		   Total from
Investment
Activities		   Net
Investment
Income		   Net Realized
Gains from
Investments		  

Victory Sycamore Established Value Fund

      

Class A

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

51.62

      

0.31

      

(0.13

)

    

0.18

      

(0.43

)

    

(3.31

)

  

Year Ended October 31:

  

2021

  

$

35.75

      

0.62

      

17.44

      

18.06

      

(0.52

)

    

(1.67

)

  

2020

  

$

40.09

      

0.48

      

(2.44

)

    

(1.96

)

    

(0.48

)

    

(1.90

)

  

2019

  

$

39.52

      

0.40

      

3.61

      

4.01

      

(0.39

)

    

(3.05

)

  

2018

  

$

40.01

      

0.35

      

0.48

      

0.83

      

(0.33

)

    

(0.99

)

  

2017

  

$

33.82

      

0.22

      

6.53

      

6.75

      

(0.21

)

    

(0.35

)

  

Class C

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

50.28

      

0.12

      

(0.12

)

    

—

(e)

    

(0.27

)

    

(3.31

)

  

Year Ended October 31:

  

2021

  

$

34.89

      

0.26

      

17.00

      

17.26

      

(0.20

)

    

(1.67

)

  

2020

  

$

39.16

      

0.20

      

(2.35

)

    

(2.15

)

    

(0.22

)

    

(1.90

)

  

2019

  

$

38.69

      

0.11

      

3.53

      

3.64

      

(0.12

)

    

(3.05

)

  

2018

  

$

39.22

      

0.03

      

0.46

      

0.49

      

(0.03

)

    

(0.99

)

  

2017

  

$

33.26

      

(0.09

)

    

6.44

      

6.35

      

(0.04

)

    

(0.35

)

  

Class I

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

51.66

      

0.39

      

(0.13

)

    

0.26

      

(0.50

)

    

(3.31

)

  

Year Ended October 31:

  

2021

  

$

35.77

      

0.77

      

17.44

      

18.21

      

(0.65

)

    

(1.67

)

  

2020

  

$

40.12

      

0.59

      

(2.45

)

    

(1.86

)

    

(0.59

)

    

(1.90

)

  

2019

  

$

39.55

      

0.52

      

3.62

      

4.14

      

(0.52

)

    

(3.05

)

  

2018

  

$

40.04

      

0.47

      

0.48

      

0.95

      

(0.45

)

    

(0.99

)

  

2017

  

$

33.83

      

0.32

      

6.56

      

6.88

      

(0.32

)

    

(0.35

)

  

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

(e)  Amount is less than $0.005 per share.

See notes to financial statements.

 


20

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period  

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Total
Distributions		   Net Asset
Value,
End of
Period		   Total
Return
(Excludes
Sales
Charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory Sycamore Established Value Fund

  

Class A

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(3.74

)

  

$

48.06

      

0.32

%

    

0.89

%

    

1.27

%

    

0.89

%

  

$

1,717,386

      

17

%

  

Year Ended October 31:

  

2021

    

(2.19

)

  

$

51.62

      

52.05

%

    

0.90

%

    

1.32

%

    

0.90

%

  

$

1,788,115

      

32

%

  

2020

    

(2.38

)

  

$

35.75

      

(5.22

)%

    

0.92

%

    

1.34

%

    

0.92

%

  

$

1,380,509

      

44

%

  

2019

    

(3.44

)

  

$

40.09

      

11.96

%

    

0.92

%

    

1.06

%

    

0.92

%

  

$

1,802,034

      

34

%

  

2018

    

(1.32

)

  

$

39.52

      

2.01

%

    

0.89

%

    

0.85

%

    

0.89

%

  

$

2,008,143

      

36

%

  

2017

    

(0.56

)

  

$

40.01

      

20.12

%

    

0.90

%

    

0.58

%

    

0.90

%

  

$

2,386,049

      

32

%

  

Class C

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(3.58

)

  

$

46.70

      

(0.07

)%

    

1.65

%

    

0.51

%

    

1.65

%

  

$

62,368

      

17

%

  

Year Ended October 31:

  

2021

    

(1.87

)

  

$

50.28

      

50.91

%

    

1.66

%

    

0.56

%

    

1.66

%

  

$

67,718

      

32

%

  

2020

    

(2.12

)

  

$

34.89

      

(5.93

)%

    

1.69

%

    

0.58

%

    

1.69

%

  

$

54,271

      

44

%

  

2019

    

(3.17

)

  

$

39.16

      

11.10

%

    

1.68

%

    

0.30

%

    

1.68

%

  

$

79,066

      

34

%

  

2018

    

(1.02

)

  

$

38.69

      

1.19

%

    

1.68

%

    

0.07

%

    

1.68

%

  

$

90,128

      

36

%

  

2017

    

(0.39

)

  

$

39.22

      

19.20

%

    

1.70

%

    

(0.24

)%

    

1.70

%

  

$

101,506

      

32

%

  

Class I

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(3.81

)

  

$

48.11

      

0.47

%

    

0.58

%

    

1.58

%

    

0.58

%

  

$

5,283,133

      

17

%

  

Year Ended October 31:

  

2021

    

(2.32

)

  

$

51.66

      

52.54

%

    

0.58

%

    

1.63

%

    

0.58

%

  

$

5,315,482

      

32

%

  

2020

    

(2.49

)

  

$

35.77

      

(4.92

)%

    

0.60

%

    

1.64

%

    

0.60

%

  

$

3,306,226

      

44

%

  

2019

    

(3.57

)

  

$

40.12

      

12.31

%

    

0.60

%

    

1.37

%

    

0.60

%

  

$

3,501,630

      

34

%

  

2018

    

(1.44

)

  

$

39.55

      

2.30

%

    

0.59

%

    

1.14

%

    

0.59

%

  

$

3,509,093

      

36

%

  

2017

    

(0.67

)

  

$

40.04

      

20.50

%

    

0.62

%

    

0.85

%

    

0.62

%

  

$

5,263,053

      

32

%

  

(continues on next page)

See notes to financial statements.

 


21

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period  

 

      

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains (Losses)		   Total from
Investment
Activities		   Net
Investment
Income		   Net Realized
Gains from
Investments		  

Victory Sycamore Established Value Fund

      

Class R

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

50.81

      

0.26

      

(0.13

)

    

0.13

      

(0.38

)

    

(3.31

)

  

Year Ended October 31:

  

2021

  

$

35.23

      

0.52

      

17.16

      

17.68

      

(0.43

)

    

(1.67

)

  

2020

  

$

39.54

      

0.40

      

(2.40

)

    

(2.00

)

    

(0.41

)

    

(1.90

)

  

2019

  

$

39.03

      

0.31

      

3.57

      

3.88

      

(0.32

)

    

(3.05

)

  

2018

  

$

39.54

      

0.26

      

0.48

      

0.74

      

(0.26

)

    

(0.99

)

  

2017

  

$

33.43

      

0.14

      

6.46

      

6.60

      

(0.14

)

    

(0.35

)

  

Class R6

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

51.69

      

0.40

      

(0.14

)

    

0.26

      

(0.51

)

    

(3.31

)

  

Year Ended October 31:

  

2021

  

$

35.78

      

0.80

      

17.45

      

18.25

      

(0.67

)

    

(1.67

)

  

2020

  

$

40.13

      

0.60

      

(2.45

)

    

(1.85

)

    

(0.60

)

    

(1.90

)

  

2019

  

$

39.55

      

0.52

      

3.63

      

4.15

      

(0.52

)

    

(3.05

)

  

2018

  

$

40.05

      

0.49

      

0.48

      

0.97

      

(0.48

)

    

(0.99

)

  

2017

  

$

33.85

      

0.35

      

6.54

      

6.89

      

(0.34

)

    

(0.35

)

  

Class Y

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

51.66

      

0.39

      

(0.15

)

    

0.24

      

(0.49

)

    

(3.31

)

  

Year Ended October 31:

  

2021

  

$

35.76

      

0.77

      

17.45

      

18.22

      

(0.65

)

    

(1.67

)

  

2020

  

$

40.11

      

0.58

      

(2.45

)

    

(1.87

)

    

(0.58

)

    

(1.90

)

  

2019

  

$

39.54

      

0.50

      

3.63

      

4.13

      

(0.51

)

    

(3.05

)

  

2018

  

$

40.04

      

0.46

      

0.48

      

0.94

      

(0.45

)

    

(0.99

)

  

2017

  

$

33.83

      

0.31

      

6.57

      

6.88

      

(0.32

)

    

(0.35

)

  

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

See notes to financial statements.

 


22

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period  (continued)

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Total
Distributions		   Net Asset
Value,
End of
Period		   Total
Return(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory Sycamore Established Value Fund

  

Class R

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(3.69

)

  

$

47.25

      

0.21

%

    

1.11

%

    

1.06

%

    

1.11

%

  

$

863,670

      

17

%

  

Year Ended October 31:

  

2021

    

(2.10

)

  

$

50.81

      

51.74

%

    

1.11

%

    

1.11

%

    

1.11

%

  

$

936,593

      

32

%

  

2020

    

(2.31

)

  

$

35.23

      

(5.41

)%

    

1.12

%

    

1.14

%

    

1.12

%

  

$

633,244

      

44

%

  

2019

    

(3.37

)

  

$

39.54

      

11.72

%

    

1.13

%

    

0.84

%

    

1.13

%

  

$

823,796

      

34

%

  

2018

    

(1.25

)

  

$

39.03

      

1.80

%

    

1.10

%

    

0.65

%

    

1.10

%

  

$

897,277

      

36

%

  

2017

    

(0.49

)

  

$

39.54

      

19.89

%

    

1.10

%

    

0.38

%

    

1.10

%

  

$

1,005,561

      

32

%

  

Class R6

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(3.82

)

  

$

48.13

      

0.51

%

    

0.54

%

    

1.62

%

    

0.54

%

  

$

7,890,628

      

17

%

  

Year Ended October 31:

  

2021

    

(2.34

)

  

$

51.69

      

52.62

%

    

0.54

%

    

1.68

%

    

0.54

%

  

$

7,548,781

      

32

%

  

2020

    

(2.50

)

  

$

35.78

      

(4.89

)%

    

0.57

%

    

1.68

%

    

0.57

%

  

$

4,499,129

      

44

%

  

2019

    

(3.57

)

  

$

40.13

      

12.35

%

    

0.58

%

    

1.38

%

    

0.58

%

  

$

4,762,844

      

34

%

  

2018

    

(1.47

)

  

$

39.55

      

2.34

%

    

0.57

%

    

1.19

%

    

0.57

%

  

$

3,822,378

      

36

%

  

2017

    

(0.69

)

  

$

40.05

      

20.54

%

    

0.54

%

    

0.91

%

    

0.54

%

  

$

1,314,843

      

32

%

  

Class Y

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(3.80

)

  

$

48.10

      

0.45

%

    

0.61

%

    

1.57

%

    

0.61

%

  

$

716,811

      

17

%

  

Year Ended October 31:

  

2021

    

(2.32

)

  

$

51.66

      

52.49

%

    

0.61

%

    

1.62

%

    

0.61

%

  

$

873,753

      

32

%

  

2020

    

(2.48

)

  

$

35.76

      

(4.92

)%

    

0.63

%

    

1.63

%

    

0.63

%

  

$

600,200

      

44

%

  

2019

    

(3.56

)

  

$

40.11

      

12.28

%

    

0.63

%

    

1.32

%

    

0.63

%

  

$

659,111

      

34

%

  

2018

    

(1.44

)

  

$

39.54

      

2.27

%

    

0.62

%

    

1.13

%

    

0.62

%

  

$

448,543

      

36

%

  

2017

    

(0.67

)

  

$

40.04

      

20.51

%

    

0.60

%

    

0.81

%

    

0.60

%

  

$

487,044

      

32

%

  

See notes to financial statements.

 


23

 

Victory Portfolios

  

Financial Highlights

  

For a Share Outstanding Throughout Each Period

       

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains
(Losses)		   Total from
Investment
Activities		   Net
Investment
Income		   Net Realized
Gains from
Investments		  

Victory Sycamore Small Company Opportunity Fund

      

Class A

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

56.52

      

0.05

      

(2.85

)

    

(2.80

)

    

(0.05

)

    

(6.42

)

  

Year Ended October 31:

  

2021

  

$

37.91

      

0.04

      

18.89

      

18.93

      

(0.17

)

    

(0.15

)

  

2020

  

$

45.16

      

0.17

      

(5.14

)

    

(4.97

)

    

(0.20

)

    

(2.08

)

  

2019

  

$

45.91

      

0.22

      

4.22

      

4.44

      

(0.10

)

    

(5.09

)

  

2018

  

$

48.23

      

0.22

      

(0.09

)

    

0.13

      

(0.21

)

    

(2.24

)

  

2017

  

$

39.74

      

0.11

      

10.44

      

10.55

      

(0.12

)

    

(1.94

)

  

Class I

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

57.31

      

0.14

      

(2.89

)

    

(2.75

)

    

(0.23

)

    

(6.42

)

  

Year Ended October 31:

  

2021

  

$

38.40

      

0.22

      

19.13

      

19.35

      

(0.29

)

    

(0.15

)

  

2020

  

$

45.71

      

0.31

      

(5.20

)

    

(4.89

)

    

(0.34

)

    

(2.08

)

  

2019

  

$

46.43

      

0.35

      

4.28

      

4.63

      

(0.26

)

    

(5.09

)

  

2018

  

$

48.75

      

0.37

      

(0.09

)

    

0.28

      

(0.36

)

    

(2.24

)

  

2017

  

$

40.12

      

0.25

      

10.55

      

10.80

      

(0.23

)

    

(1.94

)

  

Class R

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

52.37

      

0.01

      

(2.62

)

    

(2.61

)

    

—

      

(6.42

)

  

Year Ended October 31:

  

2021

  

$

35.16

      

(0.05

)

    

17.52

      

17.47

      

(0.11

)

    

(0.15

)

  

2020

  

$

42.05

      

0.09

      

(4.76

)

    

(4.67

)

    

(0.14

)

    

(2.08

)

  

2019

  

$

43.13

      

0.13

      

3.91

      

4.04

      

(0.03

)

    

(5.09

)

  

2018

  

$

45.47

      

0.10

      

(0.08

)

    

0.02

      

(0.12

)

    

(2.24

)

  

2017

  

$

37.59

      

0.01

      

9.86

      

9.87

      

(0.05

)

    

(1.94

)

  

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

See notes to financial statements.

 


24

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period  

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Total
Distributions		   Net Asset
Value,
End of
Period		   Total
Return
(Excludes
sales
charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory Sycamore Small Company Opportunity Fund

  

Class A

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(6.47

)

  

$

47.25

      

(5.60

)%

    

1.24

%

    

0.21

%

    

1.24

%

  

$

361,104

      

16

%

  

Year Ended October 31:

  

2021

    

(0.32

)

  

$

56.52

      

50.11

%

    

1.24

%

    

0.07

%

    

1.24

%

  

$

424,496

      

41

%

  

2020

    

(2.28

)

  

$

37.91

      

(11.80

)%

    

1.26

%

    

0.43

%

    

1.26

%

  

$

336,083

      

37

%

  

2019

    

(5.19

)

  

$

45.16

      

12.10

%

    

1.25

%

    

0.51

%

    

1.25

%

  

$

451,310

      

34

%

  

2018

    

(2.45

)

  

$

45.91

      

0.17

%

    

1.22

%

    

0.46

%

    

1.22

%

  

$

486,622

      

43

%

  

2017

    

(2.06

)

  

$

48.23

      

27.02

%

    

1.23

%

    

0.25

%

    

1.23

%

  

$

603,851

      

36

%

  

Class I

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(6.65

)

  

$

47.91

      

(5.44

)%

    

0.89

%

    

0.56

%

    

0.89

%

  

$

3,457,789

      

16

%

  

Year Ended October 31:

  

2021

    

(0.44

)

  

$

57.31

      

50.66

%

    

0.89

%

    

0.41

%

    

0.89

%

  

$

3,840,013

      

41

%

  

2020

    

(2.42

)

  

$

38.40

      

(11.51

)%

    

0.93

%

    

0.78

%

    

0.93

%

  

$

2,666,852

      

37

%

  

2019

    

(5.35

)

  

$

45.71

      

12.49

%

    

0.92

%

    

0.82

%

    

0.92

%

  

$

4,584,086

      

34

%

  

2018

    

(2.60

)

  

$

46.43

      

0.49

%

    

0.88

%

    

0.76

%

    

0.88

%

  

$

4,127,411

      

43

%

  

2017

    

(2.17

)

  

$

48.75

      

27.44

%

    

0.90

%

    

0.56

%

    

0.90

%

  

$

4,003,419

      

36

%

  

Class R

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(6.42

)

  

$

43.34

      

(5.68

)%

    

1.42

%

    

0.02

%

    

1.42

%

  

$

226,564

      

16

%

  

Year Ended October 31:

  

2021

    

(0.26

)

  

$

52.37

      

49.85

%

    

1.42

%

    

(0.11

)%

    

1.42

%

  

$

256,938

      

41

%

  

2020

    

(2.22

)

  

$

35.16

      

(11.94

)%

    

1.44

%

    

0.25

%

    

1.44

%

  

$

200,617

      

37

%

  

2019

    

(5.12

)

  

$

42.05

      

11.89

%

    

1.44

%

    

0.32

%

    

1.44

%

  

$

279,090

      

34

%

  

2018

    

(2.36

)

  

$

43.13

      

(0.06

)%

    

1.44

%

    

0.23

%

    

1.44

%

  

$

286,480

      

43

%

  

2017

    

(1.99

)

  

$

45.47

      

26.73

%

    

1.45

%

    

0.03

%

    

1.45

%

  

$

333,944

      

36

%

  

(continues on next page)

See notes to financial statements.

 


25

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period

       

Investment Activities

   Distributions to
Shareholders From		  
    Net Asset
Value,
Beginning of
Period		   Net
Investment
Income
(Loss)(a)		   Net Realized
and Unrealized
Gains
(Losses)		   Total from
Investment
Activities		   Net
Investment
Income		   Net Realized
Gains from
Investments		  

Victory Sycamore Small Company Opportunity Fund

      

Class R6

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

57.22

      

0.15

      

(2.88

)

    

(2.73

)

    

(0.24

)

    

(6.42

)

  

Year Ended October 31:

  

2021

  

$

38.37

      

0.24

      

19.10

      

19.34

      

(0.34

)

    

(0.15

)

  

2020

  

$

45.66

      

0.19

      

(5.03

)

    

(4.84

)

    

(0.37

)

    

(2.08

)

  

2019

  

$

46.38

      

0.36

      

4.28

      

4.64

      

(0.27

)

    

(5.09

)

  

2018

  

$

48.69

      

0.30

      

—

(e)

    

0.30

      

(0.37

)

    

(2.24

)

  

2017

  

$

40.08

      

0.21

      

10.58

      

10.79

      

(0.24

)

    

(1.94

)

  

Class Y

      
Six Months Ended
April 30, 2022
(Unaudited)		  

$

56.88

      

0.14

      

(2.88

)

    

(2.74

)

    

(0.19

)

    

(6.42

)

  

Year Ended October 31:

  

2021

  

$

38.10

      

0.16

      

19.00

      

19.16

      

(0.23

)

    

(0.15

)

  

2020

  

$

45.39

      

0.24

      

(5.16

)

    

(4.92

)

    

(0.29

)

    

(2.08

)

  

2019

  

$

46.13

      

0.30

      

4.24

      

4.54

      

(0.19

)

    

(5.09

)

  

2018

  

$

48.33

      

0.29

      

(0.09

)

    

0.20

      

(0.16

)

    

(2.24

)

  

2017

  

$

39.84

      

0.20

      

10.40

      

10.60

      

(0.17

)

    

(1.94

)

  

*  Does not include acquired fund fees and expenses, if any.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Not annualized for periods less than one year.

(c)  Annualized for periods less than one year.

(d)  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

(e)  Amount is less than $0.005 per share.

See notes to financial statements.

 


26

 

Victory Portfolios

   Financial Highlights — continued  

For a Share Outstanding Throughout Each Period  (continued)

       

Ratios to Average Net Assets

  

Supplemental Data

  
    Total
Distributions		   Net Asset
Value,
End of
Period		   Total
Return
(Excludes
sales
charge)(b)		   Net
Expenses*(c)		   Net
Investment
Income
(Loss)(c)		   Gross
Expenses*(c)		   Net Assets,
End of
Period
(000's)		   Portfolio
Turnover(b)(d)		  

Victory Sycamore Small Company Opportunity Fund

  

Class R6

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(6.66

)

  

$

47.83

      

(5.42

)%

    

0.85

%

    

0.60

%

    

0.85

%

  

$

2,224,247

      

16

%

  

Year Ended October 31:

  

2021

    

(0.49

)

  

$

57.22

      

50.71

%

    

0.85

%

    

0.44

%

    

0.85

%

  

$

2,518,726

      

41

%

  

2020

    

(2.45

)

  

$

38.37

      

(11.43

)%

    

0.86

%

    

0.48

%

    

0.86

%

  

$

1,625,853

      

37

%

  

2019

    

(5.36

)

  

$

45.66

      

12.52

%

    

0.87

%

    

0.84

%

    

0.87

%

  

$

277,218

      

34

%

  

2018

    

(2.61

)

  

$

46.38

      

0.52

%

    

0.87

%

    

0.62

%

    

0.87

%

  

$

195,360

      

43

%

  

2017

    

(2.18

)

  

$

48.69

      

27.44

%

    

0.90

%

    

0.46

%

    

0.90

%

  

$

85,307

      

36

%

  

Class Y

  
Six Months Ended
April 30, 2022
(Unaudited)		    

(6.61

)

  

$

47.53

      

(5.47

)%

    

0.95

%

    

0.53

%

    

0.95

%

  

$

25,627

      

16

%

  

Year Ended October 31:

  

2021

    

(0.38

)

  

$

56.88

      

50.55

%

    

0.95

%

    

0.31

%

    

0.95

%

  

$

33,276

      

41

%

  

2020

    

(2.37

)

  

$

38.10

      

(11.65

)%

    

1.08

%

    

0.62

%

    

1.08

%

  

$

16,054

      

37

%

  

2019

    

(5.28

)

  

$

45.39

      

12.31

%

    

1.07

%

    

0.69

%

    

1.07

%

  

$

31,016

      

34

%

  

2018

    

(2.40

)

  

$

46.13

      

0.33

%

    

1.06

%

    

0.61

%

    

1.06

%

  

$

32,592

      

43

%

  

2017

    

(2.11

)

  

$

48.33

      

27.10

%

    

1.15

%

    

0.45

%

    

1.25

%

  

$

35,416

      

36

%

  

See notes to financial statements.

 


27

 

Victory Portfolios

   Notes to Financial Statements
April 30, 2022		  

  (Unaudited)

1. Organization:

Victory Portfolios (the "Trust") is organized as a Delaware statutory trust and the Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 40 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with a par value of $0.001 per share.

The accompanying financial statements are those of the following two Funds (collectively, the "Funds" and individually, a "Fund"). Each Fund is classified as diversified under the 1940 Act.

Funds (Legal Name)*

  

Funds (Short Name)

   Investment Share
Classes Offered		  
Victory Sycamore Established
Value Fund		  

Sycamore Established Value Fund

  

A, C, I, R, R6, and Y

  
Victory Sycamore Small Company
Opportunity Fund		   Sycamore Small Company
Opportunity Fund		  

A, I, R, R6, and Y

  

*  The Funds are generally closed to new investors. The Funds will continue to be available for investment (by direct purchase or exchange) by the following: existing shareholders, investors that purchase shares through certain intermediaries, retirement plans that purchase shares through certain record keepers, and current and retired Fund trustees, officers, employees of Victory Capital Management Inc. ("VCM" or the "Adviser") and affiliated providers, and their family members.

Each class of shares of a Fund has substantially identical rights and privileges except with respect to sales charges, fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.

Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts with their vendors and others that provide for general indemnifications. The Funds' maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds. However, based on experience, the Funds expect that risk of loss to be remote.

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with U.S. Generally Accepted Accounting Principles ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Funds follow the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.

Investment Valuation:

The Funds record investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Funds' investments are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical securities

• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)

 


28

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

• Level 3 — significant unobservable inputs (including the Funds' own assumptions in determining the fair value of investments)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.

The Adviser has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Funds' valuation policies and procedures, which are approved by the Board.

Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs"), and American Depositary Receipts ("ADRs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.

Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.

In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.

A summary of the valuations as of April 30, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedules of Portfolio Investments (amounts in thousands):

   

Level 1

  

Level 2

  

Level 3

  

Total

  

Sycamore Established Value Fund

  

Common Stocks

  

$

15,947,111

    

$

—

    

$

—

    

$

15,947,111

    

Exchange-Traded Funds

    

202,338

      

—

      

—

      

202,338

    

Collateral for Securities Loaned

    

26,832

      

—

      

—

      

26,832

    

Total

  

$

16,176,281

    

$

—

    

$

—

    

$

16,176,281

    

Sycamore Small Company Opportunity Fund

  

Common Stocks

  

$

6,068,487

    

$

—

    

$

—

    

$

6,068,487

    

Exchange-Traded Funds

    

50,688

      

—

      

—

      

50,688

    

Collateral for Securities Loaned

    

120,553

      

—

      

—

      

120,553

    

Total

  

$

6,239,728

    

$

—

    

$

—

    

$

6,239,728

    

For the six months ended April 30, 2022, there were no transfers in or out of Level 3 in the fair value hierarchy.

Real Estate Investment Trusts ("REITs"):

The Funds may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income-producing real estate or real-estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Funds or when such information becomes known.

 


29

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

Investment Companies:

Exchange-Traded Funds:

The Funds may invest in ETFs, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities often designed to track the performance and dividend yield of a particular domestic or foreign market index. The Funds may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.

Open-End Funds:

The Funds may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.

Investment Transactions and Related Income:

Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.

Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Funds have been provided for in accordance with each investment's applicable country's tax rules and rates.

Securities Lending:

The Funds, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend their securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Funds' Schedules of Portfolio Investments. The Funds effectively do not have control of the non-cash collateral and therefore it is not disclosed on the Funds' Schedules of Portfolio Investments. Collateral requirements are determined daily based on the value of the Funds' securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Funds any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Funds also earn a return from the collateral. The Funds pay Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statements of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, a Fund could experience a delay in recovering its securities and possible loss of income

 


30

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.

The Funds' agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Funds may not be sold or repledged, except to satisfy borrower default.

The following table (amounts in thousands) is a summary of the Funds' securities lending transactions as of April 30, 2022.

    Value of
Securities on Loan		   Non-Cash
Collateral		   Cash
Collateral		  

Sycamore Established Value Fund

  

$

25,189

    

$

—

    

$

26,832

    

Sycamore Small Company Opportunity Fund

    

112,733

      

—

      

120,553

    

Federal Income Taxes:

Each Fund intends to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Funds have a tax year end of October 31.

For the six months ended April 30, 2022, the Funds did not incur any income tax, interest, or penalties, and have recorded no liability for net unrecognized tax benefits relating to uncertain tax positions.

Management of the Funds has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.

Allocations:

Expenses directly attributable to a Fund are charged to that Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.

Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, printing fees, and 12b-1 fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.

3. Purchases and Sales:

Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended April 30, 2022, were as follows (amounts in thousands):

    Excluding
U.S. Government Securities		  
   

Purchases

  

Sales

  

Sycamore Established Value Fund

  

$

2,747,796

    

$

2,828,846

    

Sycamore Small Company Opportunity Fund

    

1,076,333

      

1,518,747

    

4. Fees and Transactions with Affiliates and Related Parties:

Investment Advisory Fees:

Investment advisory services are provided to the Funds by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary

 


31

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.

Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive fees based on a percentage of the average daily net assets of each Fund. The rates at which the Adviser is paid by each Fund are included in the table below.

   

Adviser Fee Tier Rates

  
   

Up to $100 million

  

$100 million – $200 million

  

Over $200 million

  

Sycamore Established Value Fund

    

0.65

%

    

0.55

%

    

0.45

%

  
   

Up to $500 million

      

Over $500 million

  
Sycamore Small Company
Opportunity Fund		    

0.85

%

            

0.75

%

  

Amounts incurred and paid to VCM for the six months ended April 30, 2022, are reflected on the Statements of Operations as Investment advisory fees.

Administration and Servicing Fees:

VCM also serves as the Funds' administrator and fund accountant. Under the Administration and Fund Accounting Agreement, VCM is entitled to receive fees based on a percentage of the average daily net assets of the Trust, Victory Variable Insurance Funds and Victory Portfolios II. The tiered rates at which VCM is paid by the Funds are shown in the table below:

  Net Assets

  

Up to $15 billion

  

$15 billion – $30 billion

  

Over $30 billion

  
 

0.08

%, plus

    

0.05

%, plus

    

0.04

%

  

Amounts incurred for the six months ended April 30, 2022, are reflected on the Statements of Operations as Administration fees.

Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Funds pursuant to the Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds. Amounts incurred for the six months ended April 30, 2022, are reflected on the Statements of Operations as Sub-Administration fees.

The Funds (as part of the Trust) have entered into an agreement with the Adviser to provide compliance services, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. The funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios II and USAA Mutual Funds (collectively, the "Victory Funds Complex"), in aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended April 30, 2022, are reflected on the Statements of Operations as Compliance fees.

Transfer Agency Fees:

FIS Investor Services, LLC ("FIS") serves as the Funds' transfer agent. Under the Transfer Agent Agreement, the Trust pays FIS a fee for its services and reimburses FIS for all of their reasonable out-of-pocket expenses incurred in providing these services. Amounts incurred for the six months ended April 30, 2022, are reflected on the Statements of Operations as Transfer agent fees.

 


32

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

Distributor/Underwriting Services:

Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Funds pursuant to a Distribution Agreement between the Distributor and the Trust.

Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee up to the annual rate shown in the table below:

   

Class A

  

Class C

  

Class R

  

Sycamore Established Value Fund

    

0.25

%

    

1.00

%

    

0.50

%

  

Sycamore Small Company Opportunity Fund

    

0.25

%

    

N/A

      

0.50

%

  

The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activities primarily intended to result in the sale of Class A, Class C, and Class R. Amounts incurred for the six months ended April 30, 2022, are reflected on the Statements of Operations as 12b-1 fees.

In addition, the Distributor is entitled to receive commissions in connection with sales of Class A. For the six months ended April 30, 2022, the Distributor received approximately $10 thousand from commissions earned in connection with sales of Class A.

Other Fees:

Citibank serves as the Funds' custodian. The Funds pay Citibank a fee for providing these services. Amounts incurred for the six months ended April 30, 2022, are reflected on the Statements of Operations as Custodian fees.

Sidley Austin LLP provides legal services to the Trust.

The Adviser has entered into expense limitation agreements with the Funds. Under the terms of the agreements, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of a Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of a Fund's business are excluded from the expense limits. As of April 30, 2022, the expense limits (excluding voluntary waivers) are as follows:

   

In effect until February 28, 2023

  
   

Class C

  

Class Y

  

Sycamore Established Value Fund

    

1.84

%

    

N/A

    

Sycamore Small Company Opportunity Fund

    

N/A

      

1.15

%

  

Under the terms of the expense limitation agreements, as amended May 1, 2021, the Funds have agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Funds were permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.

As of April 30, 2022, the Funds had no amounts available to be repaid to the Adviser. The Funds have not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at April 30, 2022.

The Adviser may voluntarily waive or reimburse additional fees to assist the Funds in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Funds are not

 


33

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six months ended April 30, 2022.

Certain officers and/or interested trustees of the Funds are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, legal counsel, and Distributor.

5. Risks:

The Funds may be subject to other risks in addition to these identified risks.

Equity Risk — The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions in the United States or abroad. A company's earnings or dividends may not increase as expected (or may decline) because of poor management, competitive pressures, reliance on particular suppliers or geographical regions, labor problems or shortages, corporate restructurings, fraudulent disclosures, man-made or natural disasters, military confrontations or wars, terrorism, public health crises, or other events, conditions and factors. Price changes may be temporary or last for extended periods.

Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods, or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.

Small-Capitalization Stock Risk — Small-capitalization companies are subject to a number of risks not associated with larger, more established companies, potentially making their stock prices more volatile and increasing the risk of loss. Smaller companies may have limited markets, product lines, or financial resources and lack management experience and may experience higher failure rates than larger companies.

Mid-Capitalization Stock Risk — Mid-sized companies may be subject to a number of risks not associated with larger, more established companies, potentially making their stock prices more volatile and increasing the risk of loss.

6. Borrowing and Interfund Lending:

Line of Credit:

The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended April 30, 2022, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month London Interbank Offered Rate ("LIBOR") plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Effective with the June 27, 2022 agreement renewal, the interest rate formal on amounts borrowed based on the published 1-month LIBOR rate plus one percent was changed to an interest rate based on the published 1-month Secured Overnight Financing Rate ("SOFR")

 


34

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

plus 1.10 percent. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statements of Operations under Line of credit fees.

The Funds had no borrowings under the Line of Credit agreement during the six months ended April 30, 2022.

Interfund Lending:

The Trust and the Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows each Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to each Fund, if any, during the period, is reflected on the Statements of Operations under Interfund lending fees. As a Lender, interest earned by each Fund, if any, during the period, is reflected on the Statements of Operations under Interfund lending.

The average borrowing or lending for the days outstanding and average interest rate for the Funds that utilized this Facility during the period ended April 30, 2022, were as follows (amounts in thousands):

    Borrower or
Lender		   Amount
Outstanding at
April 30, 2022		   Average
Lending*		   Days
Lending
Outstanding		   Average
Interest
Rate		   Maximum
Lending
During the
Period		  
Sycamore Established
Value Fund		  

Lender

  

$

34,798

    

$

12,162

      

54

      

0.71

%

  

$

55,786

    

*  For the six months ended April 30, 2022, based on the number of days borrowings were outstanding.

7. Federal Income Tax Information:

Distributable net realized gains, if any, are declared and distributed at least annually from each Fund. Dividends from net investment income, if any, are declared and paid as noted in the table below.

   

Declared

  

Paid

  

Sycamore Established Value Fund

  

Quarterly

  

Quarterly

  

Sycamore Small Company Opportunity Fund

  

Annually

  

Annually

  

The amounts of dividends from net investment income and distributions from net realized gains (collectively, distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Funds may be reclassified as an offset to capital on the accompanying Statements of Assets and Liabilities.

The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending October 31, 2022.

As of the tax year ended October 31, 2021, the Funds had no capital loss carryforwards for federal income tax purposes.

 


35

 

Victory Portfolios

   Notes to Financial Statements — continued
April 30, 2022		  

  (Unaudited)

8. Affiliated Securities:

An affiliated security is a security in which a Fund has ownership of at least 5% of the security's outstanding voting shares, an investment company managed by VCM, or an issuer under common control with a Fund or VCM as of the six months ended April 30, 2022. The Funds do not invest in affiliated securities for the purpose of exercising management or control. These securities are noted as affiliated on a Fund's Schedule of Portfolio Investments. Transactions in affiliated securities during the six months ended April 30, 2022, were as follows (amounts in thousands):

    Fair Value
10/31/21		   Purchases
at Cost		   Proceeds
from
Sales		   Realized
Gains
(Losses)		   Capital
Gain
Distribution		   Net
Change in
Unrealized
Appreciation/
Depreciation		   Fair
Value
4/30/22		   Dividend
Income		  

Sycamore Established Value Fund

  

Maximus, Inc.

  

$

251,165

    

$

37,703

    

$

—

    

$

—

    

$

—

    

$

(37,068

)

  

$

251,800

    

$

1,746

    

Sycamore Small Company Opportunity Fund

  

AMERISAFE, Inc.

  

$

60,179

    

$

—

    

$

(1,433

)

  

$

(594

)

  

$

—

    

$

(12,497

)

  

$

45,655

    

$

4,669

    

AngioDynamics, Inc.

    

46,378

      

10,858

      

(3,040

)

    

(172

)

    

—

      

(12,556

)

    

41,468

      

—

    

Citi Trends, Inc.

    

39,879

      

—

      

—

      

—

      

—

      

(25,461

)

    

14,418

      

—

    

Delek U.S. Holdings, Inc.

    

56,835

      

17,059

      

(6,081

)

    

(5,098

)

    

—

      

26,099

      

88,814

      

—

    

Hanger, Inc.

    

48,101

      

820

      

(921

)

    

(352

)

    

—

      

(5,397

)

    

42,251

      

—

    

NETGEAR, Inc.

    

56,939

      

4,518

      

(769

)

    

(585

)

    

—

      

(14,533

)

    

45,570

      

—

    

ScanSource, Inc.

    

57,248

      

—

      

(2,185

)

    

(15

)

    

—

      

(2,490

)

    

52,558

      

—

    
The E.W. Scripps Co.,
Class A		    

60,822

      

10,214

      

(2,888

)

    

(159

)

    

—

      

(8,075

)

    

59,914

      

—

    

Viad Corp.

    

61,416

      

16,308

      

(1,588

)

    

(934

)

    

—

      

(18,872

)

    

56,330

      

—

    
   

$

487,797

    

$

59,777

    

$

(18,905

)

  

$

(7,909

)

  

$

—

    

$

(73,782

)

  

$

446,978

    

$

4,669

    

9. Subsequent Event

The Board approved a change in fiscal year-end from October 31 to June 30. This change in fiscal year-end is effective May 19, 2022.

 


36

 

Victory Portfolios

   Supplemental Information
April 30, 2022		  

  (Unaudited)

Proxy Voting and Portfolio Holdings Information

Proxy Voting:

Information regarding the policies and procedures each Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 800-539-3863. The information is also included in the Funds' Statement of Additional Information, which is available on the SEC's website at www.sec.gov.

Information relating to how the Funds voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.

Availability of Schedules of Portfolio Investments:

The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's website at www.sec.gov.

Expense Examples

As a shareholder of a Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from November 1, 2021, through April 30, 2022.

The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

    Beginning
Account
Value
11/1/21		   Actual
Ending
Account
Value
4/30/22		   Hypothetical
Ending
Account
Value
4/30/22		   Actual
Expenses
Paid During
Period
11/1/21-4/30/22*		   Hypothetical
Expenses
Paid During
Period
11/1/21-4/30/22*		   Annualized
Expense Ratio
During Period
11/1/21-4/30/22		  

Sycamore Established Value Fund

  

Class A

  

$

1,000.00

    

$

1,003.20

    

$

1,020.38

    

$

4.42

    

$

4.46

      

0.89

%

  

Class C

    

1,000.00

      

999.30

      

1,016.61

      

8.18

      

8.25

      

1.65

%

  

Class I

    

1,000.00

      

1,004.70

      

1,021.92

      

2.88

      

2.91

      

0.58

%

  

Class R

    

1,000.00

      

1,002.10

      

1,019.29

      

5.51

      

5.56

      

1.11

%

  

Class R6

    

1,000.00

      

1,005.10

      

1,022.12

      

2.68

      

2.71

      

0.54

%

  

Class Y

    

1,000.00

      

1,004.50

      

1,021.77

      

3.03

      

3.06

      

0.61

%

  
 


37

 

Victory Portfolios

   Supplemental Information — continued
April 30, 2022		  

  (Unaudited)

    Beginning
Account
Value
11/1/21		   Actual
Ending
Account
Value
4/30/22		   Hypothetical
Ending
Account
Value
4/30/22		   Actual
Expenses
Paid During
Period
11/1/21-4/30/22*		   Hypothetical
Expenses
Paid During
Period
11/1/21-4/30/22*		   Annualized
Expense Ratio
During Period
11/1/21-4/30/22		  

Sycamore Small Company Opportunity Fund

  

Class A

  

$

1,000.00

    

$

944.00

    

$

1,018.65

    

$

5.98

    

$

6.21

      

1.24

%

  

Class I

    

1,000.00

      

945.60

      

1,020.38

      

4.29

      

4.46

      

0.89

%

  

Class R

    

1,000.00

      

943.20

      

1,017.75

      

6.84

      

7.10

      

1.42

%

  

Class R6

    

1,000.00

      

945.80

      

1,020.58

      

4.10

      

4.26

      

0.85

%

  

Class Y

    

1,000.00

      

945.30

      

1,020.08

      

4.58

      

4.76

      

0.95

%

  

*  Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 181/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).

 


38

 

Victory Portfolios

   Supplemental Information — continued
April 30, 2022		  

  (Unaudited)

Considerations of the Board in Continuing the Investment Advisory Agreement (the "Agreement")

The Board approved the Agreement on behalf of each of the Funds at a meeting, which was called for that purpose, on November 30, 2021. The Board also considered information relating to the Funds and the Agreement provided throughout the year and, more specifically, at the meetings on October 19, 2021, and November 30, 2021. In considering whether to approve the Agreement, the Board requested, and the Adviser provided, information that the Board believed to be reasonably necessary to reach its conclusions.

The Board, including the Independent Trustees, evaluated this information along with other information obtained throughout the year and was advised by legal counsel to the Funds and independent legal counsel to the Independent Trustees. In addition, the Independent Trustees considered a past review of their overall process for conducting the annual review of the Funds' advisory arrangements by a consultant retained through their counsel.

The Board took into consideration regular reports from the Adviser throughout the COVID-19 pandemic public health crisis concerning how the ongoing pandemic has affected market volatility, investment risk, liquidity and valuation of portfolio securities, and the implementation and effectiveness of business continuity plans. These reports also had confirmed that the pandemic had no material impact on the Adviser's operations.

The Board considered each Fund's advisory fee, expense ratio and investment performance as significant factors in determining whether the Agreement should be continued. In considering whether the compensation paid to the Adviser was fair and reasonable, the Board also evaluated, among other things, the following factors:

•  The requirements of the Funds for the services provided by the Adviser;

•  The nature, quality and extent of the services provided and expected to be provided;

•  The performance of the Funds as compared to comparable funds;

•  The fees payable for the services and whether the fee arrangements provided for economies of scale that would benefit Fund shareholders as the Funds grow (acknowledging that economies of scale can be complex to assess and typically are not directly measurable);

•  Whether the fee would be sufficient to enable the Adviser to attract and retain experienced personnel and continue to provide quality services to the Funds;

•  The fees paid by other clients of the Adviser whose accounts are managed in a similar investment style and any differences in the services provided to the other clients compared to those provided to the Funds;

•  The total expenses of each Fund;

•  Management's commitment to operating the Funds at competitive expense levels;

•  The profitability of the Adviser (as reflected by comparing fees earned against an estimate of the Adviser's costs) with respect to the Adviser's relationship with the Funds;

•  Research and other service benefits received by the Adviser obtained through payment of client commissions for securities transactions;

•  Other indirect benefits received by the Adviser, and its affiliates, including revenues paid to the Adviser, or its affiliates, by the Funds for administration and fund accounting services, and distribution;

•  The capabilities and financial condition of the Adviser;

•  Current economic and industry trends; and

•  The historical relationship between each Fund and the Adviser.

For Funds with total net expense ratios that ranked within the fourth quartile (most expensive) in relation to their peers as evaluated by a consultant, the Board also considered a memorandum that it requested the Adviser to prepare. The Adviser reviewed additional relevant circumstances, which included, among other things, specialized strategies, small or decreasing assets, or rapid or recent changes in peer expense ratios.

The Board reviewed each Fund's current management fee, comprised of the advisory fee plus the administrative services fee paid to the Adviser, in the context of the Adviser's profitability with respect to each Fund individually.

 


39

 

Victory Portfolios

   Supplemental Information — continued
April 30, 2022		  

  (Unaudited)

The Board retained a consultant to provide comparative information about fees and performance. The Board met with the consultant to review its inputs and methodologies, among other things. The Board compared each Fund's gross management fees and total operating expense ratio on a net and gross basis with the median gross management fee and median expense ratio of a universe of comparable mutual funds compiled by the consultant and a peer group of funds with similar investment strategies selected by that consultant from the universe. The Board reviewed the factors and methodology used by the consultant in the selection of each Fund's peer group, including the consultant's selection of a broad universe of funds, the more specific universe of comparable funds, and peer groups of funds with comparable investment strategies and asset levels, among other factors. The Board also reviewed any changes to the consultant's methodology as compared to the prior year, including those resulting from the Adviser's input, if any. With respect to certain Funds, the Board also reviewed fees and other information related to the Adviser's management of similarly managed institutional or private accounts, and the differences in the services provided to these other accounts. The Board also noted that the breakpoints in the advisory fee schedule for the Funds evidenced one way in which the Adviser has shown a willingness to share in its economies of scale.

The Board also reviewed the compliance and administrative services provided to the Funds by the Adviser and its affiliates, including the Adviser's oversight of the Funds' day-to-day operations and oversight of Fund accounting, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Funds and the Trust.

The Board found that the gross annual management fee paid by each Fund was within the range of management fees paid by each Fund's respective peer group. The Board noted that each Fund's advisory fee structure contained at least one breakpoint. The Board also found that each Fund's Class A net annual expense ratio, taking into account any shareholder servicing or distribution fees, was reasonable as compared with each Fund's respective peer group. The Board considered the Adviser's contractual agreement with each Fund to waive its fees and reimburse expenses of certain classes for a specified period of time, as described in the Fund's prospectus.

The Board reviewed each Fund's performance over one-, three-, five- and ten-year periods against the performance of the Fund's selected peer group and benchmark index. The Board recognized that the performance of the Funds and the peer group funds are net of expenses, while the performance of the benchmark index reflects gross returns.

The Board reviewed various other specific factors with respect to each Fund, as described below. In their deliberations, the Trustees did not rank the importance of any particular information or factor considered and each Trustee may have attributed different weights to various factors.

Sycamore Established Value Fund

The Board compared the Fund's Class A performance for the one-, three-, five- and ten-year periods ended June 30, 2021, to that of the median performance of the Fund's peer group and benchmark index for the same periods and considered the fact that the Fund outperformed both the benchmark index and the peer group median for all of the periods reviewed.

Having considered, among other things: (1) the Fund's management fee compared to comparable mutual funds; (2) the Fund's total expense ratio compared to comparable mutual funds; (3) that the Adviser's willingness to limit the expenses of certain classes for a period of time would provide stability to the Fund's expenses for those share classes during that period; and (4) the Fund's performance during the periods reviewed, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

Sycamore Small Company Opportunity Fund

The Board compared the Fund's Class A performance for the one-, three-, five- and ten-year periods ended June 30, 2021, to that of the median performance of the Fund's peer group and benchmark index for the same periods and considered the fact that the Fund underperformed both the benchmark index and the peer group median for the one-year period, and outperformed both the benchmark index and the peer group median for the three-, five- and ten-year periods.

 


40

 

Victory Portfolios

   Supplemental Information — continued
April 30, 2022		  

  (Unaudited)

Having considered, among other things: (1) the Fund's management fee compared to comparable mutual funds; (2) the Fund's total expense ratio compared to comparable mutual funds; (3) that the Adviser's willingness to limit the expenses of certain classes for a period of time would provide stability to the Fund's expenses for those share classes during that period; and (4) the Fund's performance during the periods reviewed, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

Conclusion

Based on its review of the information requested and provided, and following extended discussions, the Board determined that the Agreement, on behalf of the Funds discussed above, was consistent with the best interests of each Fund and its shareholders, and the Board unanimously approved the Agreement, on behalf of each Fund, for an additional annual period on the basis of the foregoing review and discussions and the following considerations, among others:

•  The fairness and reasonableness of the investment advisory fee payable to the Adviser under the Agreement in light of the investment advisory services provided, the costs of these services, the profitability of the Adviser's relationship with the Fund and the comparability of the fee paid to the fees paid by other investment companies;

•  The nature, quality and extent of the investment advisory services provided by the Adviser;

•  The Adviser's entrepreneurial commitment to the management of the Funds and the creation of a broad-based family of funds, which could entail a substantial commitment of the Adviser's resources to the successful operation of the Funds;

•  The Adviser's representations regarding its staffing and capabilities to manage the Funds, including the retention of personnel with relevant portfolio management experience;

•  The Adviser's efforts to enhance investment results by, among other things, developing quality portfolio management teams; and

•  The overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies and performance of the Adviser.

 


41

 

Victory Portfolios

   Supplemental Information — continued
April 30, 2022		  

  (Unaudited)

Liquidity Risk Management Program:

The Victory Funds have adopted and implemented a written liquidity risk management program (the "LRMP") as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The LRMP is reasonably designed to assess and manage each Fund's liquidity risk, taking into consideration each Fund's investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed market conditions; its short- and long-term cash flow projections; and its cash holdings and access to other liquidity management tools such as available funding sources including the Victory Funds Complex Interfund Lending Facility and Line of Credit (discussed in the Notes to Financial Statements). The Victory Funds' Board of Trustees approved the appointment of the Funds' investment adviser, Victory Capital Management Inc. ("Victory Capital"), as the administrator of the LRMP.

Victory Capital manages liquidity risks associated with the Funds' investments by monitoring, among other things, cash and cash equivalents, any use of derivatives, the concentration of investments, the appropriateness of each Fund's investment strategy, and by classifying every Fund investment as either highly liquid, moderately liquid, less liquid, or illiquid on at least a monthly basis. To assist with the classification of Fund investments, Victory Capital has retained a third-party provider of liquidity evaluation services. This provider determines preliminary liquidity classifications for all portfolio holdings based upon portfolio-level data and certain assumptions provided by Victory Capital. Victory Capital reviews the preliminary liquidity classifications and, when appropriate, considers other information including input from the Funds' portfolio managers (including the portfolio managers employed by any investment sub-advisers) in determining final liquidity classifications.

At a meeting held on February 24, 2022, Victory Capital provided an oral and written report to the Trustees on the operation and effectiveness of the LRMP during the previous year. The report from Victory Capital concluded that the Funds did not experience any significant liquidity challenges during the covered period, and the Funds' LRMP is reasonably designed to assess and manage its liquidity risk. The report also concluded that the LRMP continues to operate adequately and effectively to enable Victory Capital to oversee and manage liquidity risk and ensure each Fund is able to meet redemption requests without significant dilution to the remaining investors' interest in each Fund. During the review period, each Fund's portfolio consisted primarily of highly liquid investments, which are defined as cash and any investments that each Fund reasonably expects to be converted to cash in current market conditions in three business days or less without significantly changing the market value of the investment. Therefore, the Funds have not adopted a highly liquid investment minimum. The Funds' investments were below the limitation on illiquid investments during the review period. Additionally, Victory Capital indicated that no events occurred that would require the filing of Form N-LIQUID and recommended no material changes to the LRMP.

 


42

 

Privacy Policy

Protecting the Privacy of Information

The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.

We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.

To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*

*  You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.

 

Victory Funds
P.O. Box 182593
Columbus, Ohio 43218-2593

Visit our website at:

  

Call Victory at:

  

www.vcm.com

   800-539-FUND (800-539-3863)  

VP-SMF-SAR (4/22)

 

 

Item 2. Code of Ethics.

 

Not applicable – only for annual reports.

 

Item 3. Audit Committee Financial Expert.

 

Not applicable – only for annual reports.

 

Item 4. Principal Accountant Fees and Services.

 

Not applicable – only for annual reports.

 

Item 5. Audit Committee of Listed Registrants.

 

Not applicable.

 

Item 6. Investments.

 

(a) Not applicable.

(b) Not applicable.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

 

Not applicable.

 

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

 

Not applicable.

 

 

 

 

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

Not applicable.

 

Item 10. Submission of Matters to a Vote of Security Holders.

 

Not applicable.

 

Item 11. Controls and Procedures.

 

(a)The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

 

(b)There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

 

(a)(1) Not applicable.

(a)(2) Not applicable.

(a)(3) Not applicable.

(a)(4) Not applicable.

(b)     Not applicable.

 

Item 13. Exhibits.

 

(a)(1) Not applicable.

(a)(2) Certifications pursuant to Rule 30a-2(a) are attached hereto.

(a)(3) Not applicable.

(b)     Certifications pursuant to Rule 30a-2(b) are furnished herewith.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant) Victory Portfolios

 

   
By (Signature and Title)* /s/ Allan Shaer
  Allan Shaer, Principal Financial Officer  

 

Date June 27, 2022  

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)* /s/ Christopher K. Dyer  
  Christopher K. Dyer, Principal Executive Officer  

 

Date June 27, 2022  

 

     
By (Signature and Title)* /s/ Allan Shaer  
  Allan Shaer, Principal Financial Officer  

 

Date June 27, 2022  

 

 

 

 

Exhibit 99.CERT

 

CERTIFICATIONS

 

I, Christopher K. Dyer, certify that:

 

1.I have reviewed this report on Form N-CSR of Victory Portfolios (the “registrant”);

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

 

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

June 27, 2022  /s/ Christopher K Dyer
Date  Christopher K. Dyer
   Principal Executive Officer

 

 

 

 

CERTIFICATIONS

 

I, Allan Shaer, certify that:

 

1.I have reviewed this report on Form N-CSR of Victory Portfolios (the “registrant”);

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

 

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

June 27, 2022  /s/ Allan Shaer
Date  Allan Shaer
   Principal Financial Officer

 

 

 

 

Exhibit 99.906CERT

 

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, and accompanies the report on Form N-CSR for the period ended April 30, 2022 of Victory Portfolios (the “Registrant”).

 

I, Christopher K. Dyer, the Principal Executive Officer of the Registrant, certify that, to the best of my knowledge:

 

1.the Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

 

2.The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

June 27, 2022  

Date

 

/s/ Christopher K. Dyer  
Christopher K. Dyer  
Principal Executive Officer  

 

This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of Form N-CSR or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

 

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, and accompanies the report on Form N-CSR for the period ended April 30, 2022 of Victory Portfolios (the “Registrant”).

 

I, Allan Shaer, the Principal Financial Officer of the Registrant, certify that, to the best of my knowledge:

 

1.the Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

 

2.The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

June 27, 2022  

Date

 

/s/ Allan Shaer  
Allan Shaer  
Principal Financial Officer  

 

This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of Form N-CSR or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.