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Victory Tax Exempt Short-Term Class A Overview

Victory Tax Exempt Short-Term Class A (UTESX) is an actively managed Municipal Bond Muni National Short fund. Victory Capital Management Inc. launched the fund in 2010.

The investment seeks interest income that is exempt from federal income tax. The fund invests primarily in investment-grade securities, the interest from which is excludable from gross income for federal income tax purposes (referred to herein as "tax-exempt securities"). During normal market conditions, at least 80% of its net assets will consist of tax-exempt securities. The fund's dollar-weighted average portfolio maturity is three years or less. At least 80% of the fund's annual net investment income dividends will be tax-exempt and excludable from the calculation of the federal alternative minimum tax for individual taxpayers.

About Victory Tax Exempt Short-Term Class A (UTESX)

There are 2 members of the management team with an average tenure of 6.34 years: Andrew Hattman (2019), Lauren Spalten (2021). Management tenure is more important for actively managed funds than passive index funds.

The fund has 2 primary benchmarks: Bloomberg Municipal TR USD index with a weighting of 100% and Bloomberg Municipal 1-5 Yr TR USD index with a weighting of 100%. Victory Tax Exempt Short-Term Class A has 351 securities in its portfolio. The top 10 holdings constitute 16.4% of the fund’s assets. The fund meets the SEC requirement of being classified as a diversified fund. The fund is not considered to have an ESG focus with its investment selection and management.

Victory Tax Exempt Short-Term Class A is part of the Fixed Income global asset class and is within the Municipal Bond fund group. Victory Tax Exempt Short-Term Class A has 0.0% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.0%. There is 0.0% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 96.4% (96.4% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Victory Tax Exempt Short-Term Class A has 3.6% of the portfolio in cash.

Assets Under Management

The fund has $6 million in total assets, which is below the $642 million average for the Muni National Short category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

UTESX Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Victory Tax Exempt Short-Term Class A expense ratio is above average compared to funds in the Muni National Short category. Victory Tax Exempt Short-Term Class A has an expense ratio of 0.78%, which is 34% higher than its category average, making the fund expense ratio grade a F. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. Victory Tax Exempt Short-Term Class A has a portfolio turnover rate of 31%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 51% for the Muni National Short category.

Recently, in the month of August 2026, Victory Tax Exempt Short-Term Class A returned 0.3%, which earned it a grade of C, as the Muni National Short category had an average return of 0.3%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all funds in that category.

Victory Tax Exempt Short-Term Class A has a trailing yield of 2.54%, which is below the 2.78% category average. The fund normally distributes its income monthly and its capital gains annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

Victory Tax Exempt Short-Term Class A Grades

Year to date, the fund has returned 1.2%, 0.1 percentage points better than the category, which translates into a grade of C. The fund has returned 2.2% over the past year (grade of D), 3.6% over the past three years (grade of B) and 1.6% per year over the past five years (grade of C) and 1.5% per year over the past 10 years (grade of C).

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