Q2 2026 Strategy Commentaries • Fixed Income & Convertibles
Fixed Income Franchise
During the second quarter, fixed income markets were forced to navigate persistent elevated inflation readings and a decisive shift to a more hawkish monetary policy outlook. The 10-year Treasury yield ended the quarter at 4.47%, up from 4.32% at the close of the first quarter. Beyond the change in expectations for rates and inflation, the other notable story was the acceleration of debt issuance for artificial intelligence computing needs. How do these developments color the fixed income outlook for the second half of 2026? Read the full commentary from Victory Income Investors.
- Victory Income
- Victory High Income
- Victory Core Plus Fixed Income
- Victory Short-Term Fixed Income
- Victory Ultra Short-Term Fixed Income
- Victory Investment Grade Convertible Securities
- Victory Short Government
Fixed Income Franchise
Three interacting themes drove financial markets in the second quarter: a sharp decline in oil prices; continued corporate earnings strength, and a hawkish repricing of the Fed's expected rate path, culminating in new Chair Kevin Warsh's inaugural FOMC meeting in June. The key takeaway from this meeting was a decisive shift in the FOMC's consensus away from rate cuts and toward possible hikes. Learn how this influenced the Treasury yield curve during the quarter and what the ramifications might be for fixed income portfolios going forward.
- Pioneer US Core Plus Fixed Income
- Pioneer US Investment Grade Corporate Credit
- Pioneer US Long Duration Credit
- Pioneer Global Corporate High Yield
- Pioneer Multi-Sector Fixed Income
- Pioneer US Multi-Asset Ultrashort Income
- Pioneer US Securitized Credit Opportunities
- Pioneer US Short Term Income
- Pioneer US Core Fixed Income
- Pioneer Multi-Asset Credit
- Pioneer US Agency MBS
- Pioneer US Agency MBS Short Duration
Q2 2026 Strategy Commentaries • U.S. and Non-U.S. Equity
U.S. and Global Equity Franchise
The second quarter of 2026 delivered one of the strongest performances for US equities in recent memory, with the S&P® 500 and Nasdaq Composite both surging to their best quarterly showings since the pandemic-era recovery of 2020. The rally was anchored by a de-escalation in the US-Iran conflict, robust earnings growth, and sustained enthusiasm for AI infrastructure. While resilient corporate earnings provide a fundamental underpinning, the speed and concentration of the rebound may warrant caution. Get more insights from Pioneer Investments.
- Pioneer US Large Cap Core
- Pioneer US Large Cap Growth
- Pioneer International Equity
- Pioneer Global Equity
- Pioneer US Dividend Equity
Global Equity Franchise
Global Equities (as measured by the MSCI All Country World Index) surged nearly 15% in the second quarter of 2026 as the conflict in the Middle East began to de-escalate and investor enthusiasm around artificial intelligence accelerated. Technology-driven gains in Korea and Taiwan were standout performers among emerging markets, while Japan, North America and Europe also registered double-digit returns.
Value-Oriented Equity Franchise
At the tail end of 2025, Integrity Asset Management commented that the setup for small caps and value was improving, citing relatively cheap valuations and earnings growth that might signal an inflection point. Although small caps and value may not be capturing the headlines, they have been leading the pack through the first half of the year. The Russell 2000® Value Index was up 23% during the first half of the year, while the Russell 2500™ Value Index and the Russell Midcap® Value were up 24% and 17%, respectively, during the same period. The Russell Microcap® Value Index was up over 30%. Read more about value investing and learn how Integrity is positioning.
- Integrity Micro-Cap Value
- Integrity Small-Cap Value
- Integrity Mid-Cap Value
- Integrity Small/Mid-Cap Value
Value-Oriented Equity Franchise
The major U.S. indices ended the second quarter notably higher fueled by continued AI-linked momentum. Small-cap equities, as measured by the Russell 2000® Index, posted a return of 21.5%, marking the best quarter for the often-forgotten small-cap stocks since the fourth quarter of 2020. While second quarter returns were impressive by any measure, the anatomy of the rally told a different story. Dig deeper into the current market dynamics and find out how Sycamore Capital sees the second half of 2026 unfolding. Read the full market commentary.
International Equity Franchise
After a tough start to the year, international equities staged a meaningful recovery in the second quarter of 2026 as the arc of the US-Iran conflict shifted from disruption toward resolution. Looking ahead, geopolitics and technology look to remain dominant forces shaping markets. Sustained de-escalation would help ease inflationary pressures and support consumer-facing sectors. Conversely, re-escalation may revitalize energy price volatility and further complicate the monetary policy landscape. Learn more about the regional and sector outlooks from Trivalent Asset Management.
- Trivalent International Developed Equity
- Trivalent International Equity
- Trivalent International Small Cap
- Trivalent Emerging Markets Small Cap
Value-Oriented Equity Franchise
The on-again, off-again nature of the Iran conflict, elevated inflation readings, and a shifting interest rate outlook have been ongoing concerns for equities. Yet despite those and other potential headwinds, the market continued to rally. The second quarter was also notable for investors’ increasing willingness to move down the cap spectrum, perhaps reflecting both the potential of many smaller companies, as well as their relative valuations. What’s the outlook going forward, and how is the Value Team at RS Investments positioning? Read the full market commentary:
Growth-Oriented Equity Franchise
The second quarter was characterized by strong economic growth and robust equity market gains. For the moment, investors seemed content to look past the risks, including the conflict in Iran, elevated inflation readings, questions about global growth, and a regime change at the Federal Reserve that appears ready to keep interest rates higher for longer. Importantly, as fundamental growth investors, we were pleased to see a broadening of the market action beyond the headline gains and new all-time highs of popular indexes. Read our market commentary to learn more about the outlook for growth-oriented strategies.
Macroeconomic Core Strategy Franchise
The second quarter 2026 saw continued inflationary pressures and some labor market stabilization in the U.S., along with a strong stock market rally as investors looked past the Iran conflict and refocused on AI and tech-related investment. Looking ahead, WestEnd Advisors believes trend-like economic growth can continue as ongoing investment and a pickup in related cyclical activity help offset a softening of consumer activity in the U.S. Get more macro insights from WestEnd Advisors.
Economic and Market Commentary
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This material has been prepared by Victory Capital Management Inc. The comments should not be construed as a recommendation of individual holdings or market sectors, but as an illustration of broader themes. This material is for information purposes only and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security. There is no guarantee that the information supplied is accurate, complete, or timely, nor does Victory Capital make any warranties with regards to the results obtained from its use. Past performance is no guarantee of future results.
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Advisory services offered by Victory Capital Management Inc. or its affiliate, WestEnd Advisors, both SEC-registered investment advisers. WestEnd Advisors provides the day-to-day management of portfolios for which it serves as the investment adviser.
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