Navigating Global Markets: A Deep Dive into International Fund Performance
Fourth Quarter 2025 Market Landscape and Equity Trends
In the final quarter of 2025, global equities, as measured by the MSCI EAFE Index, saw a notable increase of 4.86%. This positive movement was largely propelled by robust gains in the Financials sector across the United Kingdom and continental Europe. Japan also demonstrated a strong performance, contributing to the overall market uplift.
The Victory RS Global Team's QVS Model Insights
An interesting trend observed during this period was the superior performance of value-oriented stocks compared to their growth counterparts within the MSCI EAFE Index. Additionally, large-capitalization stocks outshone small-capitalization shares. The proprietary QVS Model of the Victory RS Global team further highlighted this, with stocks in its highest-ranked quintile delivering better returns than those in the lowest quintile.
Victory RS International Fund's Performance Review
During the same quarter, the Victory RS International Fund recorded a return of +3.85%. This figure, however, trailed its benchmark, the MSCI EAFE Index (net), which posted a return of +4.86%. This indicates that while the fund delivered positive returns, it underperformed relative to the broader international market index.
Impact of Sector-Specific Stock Selection on Fund Performance
The fund's overall stock selection proved to be a drag on its performance. Negative contributions primarily stemmed from holdings in the Industrials, Information Technology, and Communication Services sectors. These detractions largely overshadowed the positive selection effects seen in other sectors, leading to a net negative impact on the fund's returns.
Strategic Portfolio Positioning at Quarter-End
As the quarter concluded, the Victory RS International Fund maintained a balanced and neutral stance in its portfolio. The allocations to various sectors and geographical regions remained within a tight range of +/-2.5% relative to the benchmark. This neutral positioning suggests a strategy focused on stock-specific opportunities rather than making significant tactical shifts in asset allocation.