Victory Capital Holdings, Inc. Class A Common Stock · NASDAQ:VCTR
Victory Capital Holdings, Inc. Class A Common Stock — Q2 2025 Earnings Presentation
26 slides from Victory Capital Holdings, Inc. Class A Common Stock's earnings presentation, Apr 1, 2025
Slide 1: Macroeconomic Highlights Q2 2025
Macroeconomic Highlights Q2 2025 20250401-4370059
Slide 2: Table of Contents
Table of Contents WestEnd Outlook Highlights ………………………………………………………………………………………………… 2 U.S. Equity Sector Allocations ………………………………………………………………………………………………… 3 U.S. International and Fixed Income Allocations …………………………………………………………………………… 4 U.S. Economic & Market Backdrop Economic Cycle: Questions about
Slide 3: WestEnd Outlook Highlights
WestEnd Outlook Highlights • We still see late-cycle economic conditions in place in the U.S. While we believe some near-term economic deceleration is likely, tied in part to policy uncertainty, the duration and magnitude of a slowdown remain key questions for portfolio positioning. In the intermedi
Slide 4: U.S. Equity Sector Allocations
U.S. Equity Sector Allocations WESTEND ETF STRATEGIES Current large-cap U.S. equity sector allocation and avoidance* Sector Sector Allocations Avoidance • Financials • Energy • Health Care • Industrials • Consumer Staples • Materials • Communication Services • Real Estate • Consumer Discretionary •
Slide 5: International Equity and Fixed Income Allocations
International Equity and Fixed Income Allocations WESTEND GLOBAL ETF STRATEGIES Current regional equity allocation positioning in global portfolios* Regional Equity Overweights Regional Equity Underweights • U.S.A. • Europe • Japan/Developed Asia • Emerging Markets WESTEND BALANCED ETF STRATEGIES Cu
Slide 6: U.S. Economic & Market Backdrop
U.S. Economic & Market Backdrop westendadvisors.com | info@westendadvisors.com | 888.500.9025 Macroeconomic Highlights Q2 2025 | 5 20250401-4370059
Slide 7: Questions about Economic Growth to Persist
Questions about Economic Growth to Persist POST-ELECTION BOOST EVIDENT, BUT LONGEVITY IN QUESTION 1.0 0.8 Trump admin. CFNAI 3-Month Average Level takes office Portfolio Impact: Mixed data has raised questions 0.6 0.4 about the economic trajectory as the Trump 0.2 administration’s policies are imple
Slide 8: Private Sector Hiring Needed to Sustain Growth
Private Sector Hiring Needed to Sustain Growth KEY SUPPORTS OF RECENT JOB GAINS AT RISK 800 Total Payrolls ex. Educ & Health + Govt (3mma) Educ & Health + Govt (3mma) 600 Portfolio Impact: Softening employment trends have been 400 percolating under the surface for several quarters. In our 200 view,
Slide 9: Consumption Has Been Supported by Wealth Gains
Consumption Has Been Supported by Wealth Gains WEALTH GAINS CAN SUPPORT CONSUMER SPENDING 10.0% 20% Portfolio Impact: Wealth gains have Year-Over-Year Growth (4QMA) Year-Over-Year Growth (4QMA) Q1 estimate suggests 7.5% wealth effect is rolling over 15% supported consumer spending over the past 5.0%
Slide 10: Economic Cycle is Mature, But Sources of Economic Support Remain
Economic Cycle is Mature, But Sources of Economic Support Remain GDP OUTPACING POTENTIAL 105% Real GDP as a % of Potential GDP (CBO) 104% Portfolio Impact: Ongoing late-cycle risks in the U.S. warrant 103% 102% an avoidance of highly cyclical sectors, in our view. At the 101% same time, steady econo
Slide 11: Tariffs to Lift Goods Prices, But Services Disinflation Provides Offset
Tariffs to Lift Goods Prices, But Services Disinflation Provides Offset TARIFFS A RISK TO PRICES ON AFFECTED GOODS 104 103 Portfolio Impact: The base case for our inflation outlook Price Index = 100, 2017 102 continues to contemplate a path lower. Still, we don’t 101 expect core CPI inflation to rea
Slide 12: Economic Uncertainty Highlights Elevated Market Risk
Economic Uncertainty Highlights Elevated Market Risk MACRO UNCERTAINY HAS SURGED... 2000 500 Economic Policy Uncertainty Index (3MMA) Trade Policy Uncertainty Index (3MMA) 1800 450 Portfolio Impact: Despite trimming some exposure to 1600 400 1400 350 late-phase sectors over the past year amid resili
Slide 13: Sector and Market Leadership is Broadening Out
Sector and Market Leadership is Broadening Out NUMBER OF SECTORS OUTPERFORMING THE S&P 500 10 9 Portfolio Impact: U.S. Sector leadership is broadening out 8 7 following a period of unusual narrowness in which a Sector Count 6 substantial overweight of mid-phase sectors would have been 5 4 required t
Slide 14: U.S. Sector Outlook
U.S. Sector Outlook westendadvisors.com | info@westendadvisors.com | 888.500.9025 Macroeconomic Highlights Q2 2025 | 13 20250401-4370059
Slide 15: Finding Attractive Valuations in a Volatile Market
Finding Attractive Valuations in a Volatile Market HEADROOM FOR LATE-PHASE RELATIVE VALUATIONS 30% Portfolio Impact: Exposure to late-phase sectors, Phase Valuation Rel. to S&P 500 20% such as Health Care and Consumer Staples, has 10% provided stability for portfolios in 2025 and supported outperfor
Slide 16: Software Provides Stable Economic Sensitivity
Software Provides Stable Economic Sensitivity Portfolio Impact: The Information Technology sector was a dominant driver of market fundamentals through the end of 2024. Information Technology returns have suffered YTD as elevated valuations present risk. Valuations remain lofty and while we view the
Slide 17: Multiple Tailwinds for Financials Sector Fundamentals
Multiple Tailwinds for Financials Sector Fundamentals HEALTHY HOUSEHOLD AND CORPORATE BALANCE SHEETS... 1.30 Corporate Leverage Ratio (Assets/Equity) Household Leverage Ratio (Assets/Equity) 2.1 1.25 Portfolio Impact: We have maintained an overweight to the Financials sector in our U.S. large-cap al
Slide 18: Cyclical Industrial Areas Still Facing Rate Headwinds
Cyclical Industrial Areas Still Facing Rate Headwinds SLUGGISH ACTIVITY PERSISTS IN RATE-SENSITIVE AREAS 4.00 Portfolio Impact: Although broader 3.00 economic activity remains stable, the 2.00 manufacturing sector and other rate- 1.00 sensitive areas of the economy have Rolling 10-Yr Z-Score - exper
Slide 19: International Economic & Market Backdrop
International Economic & Market Backdrop westendadvisors.com | info@westendadvisors.com | 888.500.9025 Macroeconomic Highlights Q2 2025 | 18 20250401-4370059
Slide 20: U.S. Growth Still Outpacing Rest-of-World
U.S. Growth Still Outpacing Rest-of-World U.S. GROWTH EXPECTED TO OUTPACE PEERS 6.0 Year-Over-Year Real GDP Growth 4.0 Portfolio Impact: Economic growth in the U.S. has 2.0 continued to outpace the rest of the world and remains 0.0 on a slowing-but-healthy trajectory, in our view. In global portfoli
Slide 21: Few Fundamental Signs of an Inflection in China and Europe
Few Fundamental Signs of an Inflection in China and Europe CREDIT NOT SUPPORTIVE OF A SUSTAINED CHINA RECOVERY 120% 25 100% 20 80% Portfolio Impact: In global portfolios, we maintain 15 Year-Over-Year Change Year-Over-Year Growth 60% underweight positions in emerging markets and Europe. 40% 10 China
Slide 22: Interest Rates & Real Assets
Interest Rates & Real Assets westendadvisors.com | info@westendadvisors.com | 888.500.9025 Macroeconomic Highlights Q2 2025 | 21 20250401-4370059
Slide 23: Yield Curve Steepening Has Room to Run in 2025
Yield Curve Steepening Has Room to Run in 2025 YIELD CURVE RE-STEEPENING ON THE HORIZON 8.0 Cutting cycle looks like recalibration, 7.0 rather than cycle restart Portfolio Impact: With the Federal Reserve 6.0 on a path toward policy recalibration, we Interest Rate (%) believe the yield curve re-stee
Slide 24: Corporate Credit too Expensive for Slowdown Scenario
Corporate Credit too Expensive for Slowdown Scenario SLOWDOWN RISK COULD SEE CREDIT SPREADS TROUGH 104 0.0 Moody's BAA Credit Spread (PPT; inversed) OECD Composite Leading Index Credit spreads trough at CLI peaks 0.5 103 90th percentile 1.0 Portfolio Impact: The potential for economic growth to slow
Slide 25: Asset Class Returns Driven by Macro Environment
Asset Class Returns Driven by Macro Environment MACRO CONDITIONS DRIVE ASSET CLASS DISPERSION 17.5% Average Monthly Return (Annualized)* 15.0% 12.5% Portfolio Impact: Given our outlook for a late-cycle 10.0% 7.5% environment, we continue to avoid the most economically 5.0% sensitive real asset expos
Slide 26: Footnotes & Disclosures
Footnotes & Disclosures WestEnd Advisors, LLC (“WestEnd”), an SEC-registered investment adviser, operates as an autonomous Victory Capital® Investment Franchise. WestEnd’s active principals are responsible for managing the firm and its day-to-day operations. Registration of an investment adviser doe
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