December 31, 2020

Annual Report

Victory INCORE Investment Quality Bond Fund

Victory INCORE Low Duration Bond Fund

Victory High Yield Fund

Victory Tax-Exempt Fund

Victory High Income Municipal Bond Fund

Victory Floating Rate Fund

Victory Strategic Income Fund

As permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Victory Funds' shareholder reports may no longer be sent by mail, unless you specifically request paper copies of the reports from the Victory Funds or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on www.VictoryFunds.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change, and you need not take any action.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your reports. If you invest directly with the Victory Funds, you can call 800-539-3863 (800-235-8396 for Member Class) or send an e-mail request to TA.Processing@FISGlobal.com. Your election to receive reports in paper will apply to all Victory Funds you hold directly or through your financial intermediary.

www.vcm.com

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The Victory Funds site 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

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•  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.

Table of Contents (continued)

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 www.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 annual 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

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Victory Funds Letter to Shareholders
(Unaudited)

Dear Shareholder,

When we look back on 2020, we will undoubtedly remember it as an extraordinary year. A year ago, no one could have imagined the unusual events that would challenge us personally, professionally, and collectively as a nation. But in retrospect, the trajectory of financial markets over the past year was nothing short of extraordinary.

The year began with rudimentary worries, such as economic growth rates, trade deals, and interest rates. But a novel coronavirus and the subsequent worldwide spread of COVID-19 became an unprecedented event. To combat the pandemic, governments everywhere issued austere shelter-in-place orders, and the global economy slowed markedly. Equity markets sold off sharply in March and April, and second quarter U.S. GDP contracted by an alarming annual rate of 31.4%.

It's no surprise that so many investors flocked to the perceived safety of U.S. Treasurys. Meanwhile, liquidity evaporated (for a short spell) in many other segments of the fixed income market, including higher-yielding credits and municipal bonds. The outlook was tenuous, and credit spreads widened while prices declined for most securities perceived to be higher risk.

A response, however, came swiftly. The U.S. Federal Reserve (the "Fed") and other monetary authorities worldwide leapt into action — cutting interest rates, (re)starting quantitative easing and, in the case of the Fed, launching an array of programs to provide liquidity to stabilize fixed-income markets. The U.S. government also stepped up to provide fiscal stimulus in the form of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

It was impressive how quickly those actions helped end the stock market's freefall and restore order across much of the fixed-income universe. The rebound was almost as robust as the drawdown, and third-quarter GDP (the most recent finalized data available) grew at a 33.4% annualized rate.

Late in the year, markets were alternately fueled and roiled by a contentious election season, growing optimism for an effective vaccine, and a fluid debate regarding the need for additional fiscal stimulus. Ultimately, stocks were propelled higher in the fourth quarter when it became clear the United States Congress would provide another dose of fiscal stimulus in the form of direct payments, more unemployment insurance, and additional aid to businesses.

Through all the unprecedented events and extreme volatility, the S&P 500^® Index registered an impressive annual return of 18.40% for the 12-month period ended December 31, 2020. Meanwhile, the yield on 10-year U.S. Treasurys declined 95 basis points over the same period, reflecting both the Fed's interest rate cuts and its pledge to keep rates low longer. The yield on 10-Year U.S. Treasurys was 0.93% as of December 31, 2020.

While markets endured and performed admirably during 2020, perhaps the key takeaway is that the unexpected can and will happen. That's why it's important to

remain focused on your long-term investment goals and avoid making emotional decisions. Moreover, we continue to have confidence in all of Victory Capital's autonomous Investment Franchises and their ability to navigate the ups and downs.

On the following pages, you will find information relating to your Victory Funds investment. If you have any questions, we encourage you to contact your financial advisor. Or, if you invest with us directly, you may call 800-539-3863 (800-235-8396 for Member Class), or visit our website at www.vcm.com.

My colleagues and I sincerely appreciate the confidence you have placed in the Victory Funds, and we value the opportunity to help meet your investment goals.

Christopher K. Dyer, CFA

President,

Victory Funds

Victory Fixed Income Funds

Victory INCORE Investment Quality Bond Fund

Managers' Commentary

(Unaudited)

What were the market conditions during the reporting period?

As we end one of the most turbulent years in economic history, markets remain near all-time highs, driven by unprecedented levels of monetary and fiscal stimulus. The U.S. economy experienced its single largest economic loss in the nation's history, contracting by 31.4% during the second quarter of 2020. The dramatic second-quarter collapse in economic activity has been followed by consecutive quarters of robust economic growth. Specifically, third-quarter U.S. gross domestic product ("GDP") rebounded by a robust 33.4%, and the Atlanta Fed's GDPNow forecasting model predicts fourth-quarter growth to print around 8.6%. While the GDPNow forecast will likely vary from the final U.S. GDP growth figure, what we can take away from the estimate is that the recovery has been quicker than anticipated.

Despite a better-than-expected economic recovery, much has hinged on the overwhelming amount of fiscal and monetary stimulus injected into the economy. Since March, the U.S. Federal Reserve (the "Fed") has provided trillions in monetary stimulus. Monetary policy has helped stabilize and buoy financial markets, but it is the fiscal stimulus that has supported the rebound in actual economic activity. The U.S. Congress has passed three rounds of fiscal stimulus since March totaling an additional $4 trillion, which is equivalent to nearly 20% of U.S. GDP in 2019.

It is difficult to estimate the long-term consequences of unprecedented fiscal and monetary stimulus. The Fed, U.S. Treasury, and the U.S. Congress are embarking upon a grand experiment in Modern Monetary Theory ("MMT"), where massive fiscal deficits purportedly do not matter for countries that control their own currency. In the short run, we believe monetary and fiscal stimulus is likely to be supportive of economic growth and market valuations. We worry that early success with MMT may lead to long-term unintended economic consequences later in the decade.

We remain concerned about the possible long-term inflationary effects of continued MMT, but thus far the Fed's preferred measure of inflation, core personal consumption expenditures (PCE), remains below their long-term 2% objective. Furthermore, the Fed seems intent on anchoring front-end interest rates near zero for the foreseeable future in order to meet, or exceed, their target. As a result, we do not expect much movement in short-term interest rates; however, we remain concerned about the impact continued stimulus combined with the Fed's newly announced inflation-targeting policy could have on intermediate- and long-end interest rates. These concerns are motivating us to position accounts relatively short duration versus benchmarks going into 2021.

How did Victory INCORE Investment Quality Bond Fund (the "Fund") perform during the reporting period?

The Fund seeks to provide a high level of current income and capital appreciation without undue risk to principal. The Fund returned 7.94% (Class A Shares at net asset value) for the year ended December 31, 2020, outperforming the Bloomberg Barclays U.S. Aggregate Bond Index (the "Index"), which returned 7.51% during the reporting period.

Victory Fixed Income Funds

Victory INCORE Investment Quality Bond Fund (continued)

Managers' Commentary (continued)

What strategies did you employ during the reporting period?

The Fund came into 2020 overweight agency mortgages and relatively light corporate credit exposure, with only a modest overweight to 0-3-year BBB corporate credit. During the late part of the first quarter and beginning part of the second quarter, during the worst of the market rout, we moved to a large overweight position in corporate credit across the curve. We maintained this corporate credit overweight as we ended the year. The Fund greatly benefited from this positioning during the year.

We believe that with yields on short- and intermediate-term U.S. Treasurys near historic lows, investors have no other reasonable alternative but to invest in high-quality corporate and consumer credit. We do not believe investors are receiving enough yield or duration benefit from owning U.S. Treasurys at current levels. As a result, we added a significant overweight to corporate credit at discounted valuations late in the first quarter and beginning part of the second quarter. We maintained this overweight at year-end and continue to selectively add high-grade corporates across the curve as opportunities present themselves. This positioning has been additive to performance over the year, helping the Fund outpace the Index for 2020.

As we enter a new year, we believe massive monetary and fiscal stimulus will continue to buoy markets as both the incoming Biden administration and the Fed seem interested in continuing the MMT experiment in the near term. However, it is likely to be a volatile and uncertain time as the long-term effects of MMT are unknown. The key attributes we strive for when positioning client portfolios for an uncertain outlook are quality, balance and diversification. We believe we are well positioned across our portfolios for this uncertain environment, and we believe being overweight credit and underweight duration versus the Index should be additive to performance as we enter the coming year.