Correspondence 0001683863-25-001637 from Victory Portfolios IV (CIK 0002042316)
Victory Portfolios IV (CIK 0002042316)
Date: Feb. 28, 2025 · CIK: 0002042316 · Accession: 0001683863-25-001637
AI Filing Summary & Sentiment
File numbers found in text: 333-282907, 811-24019
Letter
Division of Investment Management Washington, DC 20549 Re: Victory Portfolios IV Registration Statement on Form N-1A File Nos. 333-282907, 811-24019
Dear Ms. Rowland:
On behalf of Victory Portfolios IV (the “Registrant” and each individual series, a “Fund” and together, the “Funds”), we submit this response to the comments provided by the staff of the U.S. Securities and Exchange Commission (the “Commission”) on December 2, 2024, relating to the Registrant’s initial registration statement on Form N-1A filed on October 30, 2024 and November 1, 2024 (the “N-1A”) 1.
The Registrant has filed with the Commission a pre-effective amendment to the N-1A pursuant to Rule 472 under the Securities Act of 1933, as amended, incorporating the responses to the staff’s comments described below with respect to the Funds.
Below we identify in bold the staff’s comments, and note in regular type our responses. Capitalized terms used but not defined in this letter have the meanings assigned to them in N-1A. Page references correspond to the filed version of the N-1A.
When a comment specific to one section of the document would apply to similar disclosure elsewhere in the document, we will make the changes consistently throughout the document, as appropriate. All text changes described below will be implemented substantially as noted here, though some variation in the filing may be appropriate. The Registrant understands that the Registrant and management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action, or absence of action by the staff.
1We note that the Registrant filed an initial registration statement on October 30, 2024 to register twenty-five Funds. On November 1, 2024, the Registrant filed an amended registration statement to: (i) register shares of four additional Funds and (ii) include three Statements of Additional Information for the four Funds that also supplemented (and were intended to replace) the Statements of Additional Information filed on October 30, 2024 with respect to ten Funds.
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General
1.We note that substantial portions of the registration statement are incomplete. Please ensure all information is included in a pre-effective amendment, including the fee tables, expense examples, references to the auditor and auditor’s consent, and financial statements. A full financial review must be performed prior to declaring the registration statement effective. We may have additional comments on such portions when the Funds complete them in a pre-effective amendment, on disclosures made in response to this letter, on information supplied supplementally (including information about the predecessor funds), or on exhibits added in any amendment.
RESPONSE: The Registrant acknowledges the Staff’s comment. A pre-effective amendment has been filed, which includes the completed registration statement.
2.Please advise us if you have submitted or expect to submit any exemptive applications or no-action requests in connection with the registration statement.
RESPONSE: The Registrant does not expect to submit any exemptive applications or no- action letters in connection with the registration statement.
3.Please update each Fund’s ticker symbol in EDGAR. See Items 1(a)(2) and 14(a)(2); Regulation S-T, Rule 313(b)(1). In addition, please review and confirm that the Series names in the EDGAR system match the names of the Funds as they are listed in the prospectuses. Please also supplementally explain why, in the prospectuses, some of the classes for particular Series do not show ticker symbols or otherwise add these ticker symbols.
RESPONSE: The Registrant confirms that series names in the EDGAR system match the names of the Funds as they are listed in the prospectuses.
The Registrant notes that prospectuses for each Fund will include all ticker symbols for share classes offered by the prospectus. Consistent with other funds within the Victory Funds complex, share classes listed on the front cover page of a prospectus but without a ticker are not be offered through the prospectus and the Registrant discloses this in the prospectus.
PROSPECTUS
General
4.In the “Investment Performance” section, each Fund indicates that it has adopted the performance of the “predecessor fund” as the result of a reorganization of the
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predecessor fund into the Fund. Please supplementally provide the Staff with additional information and background on the predecessor fund, including the status of the reorganization and the timing of the reorganization in relation to effectiveness of the registration statement. Please confirm supplementally that the Fund will not sell shares using this registration statement until the reorganization is consummated.
RESPONSE: Subject to shareholder approval, each Fund will be reorganized into a corresponding Pioneer Fund. The Registrant notes that it filed a registration statement on Form N-14/A (SEC Accession No. 0001683863-25-000669) (Effectiveness Date: February 7, 2025, 5:15 pm), which describes the proposed reorganizations. Each Fund will be the performance and accounting survivor following each reorganization.
The Registrant confirms that that the Funds will not sell shares using this registration statement until the reorganizations are consummated.
Fees and Expenses
5.If Other Expenses of the Fund will not be estimates, but rather are incorporating the expenses of the predecessor fund, please delete footnote 3 to the fee table, which states that Other Expenses are based on estimated amounts for the current fiscal year.
RESPONSE: The Registrant notes that Other Expenses will be estimates and will include a footnote in each fee table describing them as such.
Portfolio Turnover
6.Please ensure that each Fund refers to the predecessor fund’s portfolio turnover rate, rather than the Fund’s portfolio turnover rate, in the last sentence of this section. In addition, please define predecessor fund the first time such term is used.
RESPONSE: The Registrant will revise the disclosure so that each Fund refers to its predecessor fund’s portfolio turnover rate in the last sentence of this section and to define predecessor fund the first time such term is used.
Principal Investment Strategy
7.Where a Fund’s principal investment strategy includes investments in other investment companies, please: (1) if acquired fund fees and expenses from such investments will exceed 0.01% of the average net assets of a series, please confirm that these fees and expenses will be included as a separate line item in the fee table, or; (2) if acquired fund fees and expenses are not expected to exceed one basis point,
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confirm supplementally that such expenses are included in the “Other Expenses” line in the fee table. See Instruction 3(f)(i) of Item 3.
RESPONSE: The Registrant so confirms.
8.Where it is stated that the Adviser “generally” will not invest Fund assets in companies “engaged in” (or, as alternately stated in some prospectuses, “significantly involved in”) the production, sale, storage of, or providing services for, certain controversial weapons, including chemical, biological and depleted uranium weapons and certain antipersonnel mines and cluster bombs, or other ESG-related categories of investments, please add disclosure in response to Item 9 clarifying, if accurate, that an investment could be made in a company that is engaged in or has significant involvement in the activities listed above, the circumstances under which the Adviser may make such investments and, where the disclosure includes “significantly involved,” please disclose what that means. This comment applies to the Funds listed in comment 10 in addition to any other Fund containing similar language.
RESPONSE: The Registrant will revise the disclosure to delete the above-referenced paragraph included in response to Item 4 of Form N-1A.
In response to Item 9 of Form N-1A, the Registrant will revise the disclosure as follows:
In addition, the Fund generally does not seeks not to invest in investments issued by companies significantly involved in the production of tobacco products and controversial military weapons, consisting of cluster weapons (a form of air- dropped or ground-launched explosive weapon that releases or ejects smaller submunitions), anti-personnel mines (a form of mine designed to be detonated by the presence or contact of a human), and biological and chemical weapons, and the operation of thermal coal mines. To the extent possible on the basis of information available to the Adviser, an issuer will be deemed to be significantly involved in an activity if it derives more than 10% of its gross revenues from such activities, with the exception of thermal coal mining, which has a threshold of 20% of its gross revenues.
9.For Funds that integrate environmental, social and corporate governance (“ESG”) considerations into their investment research processes, please provide, in response to Item 9, some examples of ESG criteria that it considers for the particular Fund.
We note, for example, that the Victory Pioneer CAT Bond Fund primarily invests in catastrophe bonds and other insurance-and reinsurance-related securities, but it is not clear from the ESG integration disclosure how the Fund integrates ESG into its investment process.
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RESPONSE:
In response to Item 9 of Form N-1A, the Registrant will disclose:
The Adviser integrates environmental, social and corporate governance (“ESG”) considerations into its investment research process by evaluating the business models and practices of issuers and their ESG-related risks. The Adviser believes ESG analysis can be a meaningful facet of fundamental research, the process of evaluating an issuer based on its financial position, business operations, competitive standing and management. This process considers ESG information, where available, in assessing an investment’s performance potential, including: evaluation of the business models and practices of issuers related to climate change, natural resource use and waste management; human capital considerations; product safety and social opportunities (e.g., access to health care, and nutritional, health-related, financial and educational programs); and corporate governance, business ethics, and government and public policy. The Adviser may consider ESG ratings provided by third parties, as well as issuer disclosures and public information, in evaluating issuers. ESG considerations are not a primary focus of the Fund, and the weight given by the Adviser to ESG considerations in making investment decisions will vary and, for any specific decision, they may be given little or no weight.
With respect to the Victory Pioneer CAT Bond Fund, in response to Item 9 of Form N- 1A, the Registrant will disclose:
The Adviser integrates environmental, social and corporate governance (“ESG”) considerations into its investment research process by evaluating the business models and practices of issuers and their ESG-related risks. The Adviser believes ESG analysis can be a meaningful facet of fundamental research, the process of evaluating an issuer based on its financial position, business operations, competitive standing and management. This process considers ESG information, where available, in assessing an investment’s performance potential, including: evaluation of the business models and practices of issuers related to climate change, natural resource use and waste management; human capital considerations; product safety and social opportunities (e.g., access to health care, and nutritional, health-related, financial and educational programs); and corporate governance, business ethics, and government and public policy (e.g., systematic catastrophic risk management). The Adviser may consider ESG ratings provided by third parties sources, as well as issuer disclosures and public information, in evaluating issuers. ESG considerations are not a primary focus of the Fund, and the weight given by the Adviser to ESG considerations in making investment
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decisions will vary and, for any specific decision, they may be given little or no weight.
10.Regarding Victory Pioneer Balanced Fund; Victory Pioneer Global Equity Fund; Victory Pioneer Global Growth Fund; Victory Pioneer Global Value Fund; and Victory Pioneer Fund, we note that the predecessor funds (except for Victory Pioneer Fund) are ESG-focused, however, the acquiring funds will not be ESG- focused. Please review the disclosure for these funds and revise where appropriate to better reflect the acquiring funds will integrate ESG policies, not focus on such policies. For example, please address the following, in addition to other applicable comments herein:
a.It is stated in response to Items 4 and 9 principal investment strategies, that the Fund “integrates ESG analysis into its investment process by focusing on companies with sustainable business models and evaluating ESG-related risks as part of its research recommendations.” Please consider replacing the word “focus,” so that the sentence no longer implies that the Fund’s focus is on ESG.
RESPONSE: The Registrant will revise its disclosure in response to Item 4 of Form N-1A to state:
In selecting securities to buy and sell, the Adviser considers ESG factors and associated risks along with the other investment-related factors discussed herein. In selecting securities, the Adviser focuses on assesses companies with sustainable business models. A company may demonstrate a sustainable business model by having a durable competitive and financial position expected to continue to create shareholder value, and offering products and services through ethical and sound business practices and the responsible use of resources.
The Registrant will revise its disclosure in response to Item 9 of Form N-1A to state:
In selecting securities to buy and sell, the Adviser considers ESG factors along with the other investment-related factors discussed herein, including: evaluation of the business models and practices of issuers related to climate change, natural resource use and waste management; human capital considerations; product safety and social opportunities (e.g., access to health care, and nutritional, health-related, financial and educational programs); and corporate governance, business ethics and government and public policy. In selecting securities, the Adviser focuses on The Adviser integrates ESG analysis into its investment process by
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assessing companies with sustainable business models and evaluating ESG-related risks. A company may demonstrate a sustainable business model by having a durable competitive and financial position expected to continue to create shareholder value, and offering products and services through ethical and sound business practices and the responsible use of resources.
b.Disclosure about the Fund’s ESG integration methodology in response to Item 4 should be a summary. Please revise the disclosure in light of the Fund’s ESG inte
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CORRESP
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filename1.htm
Response to SEC Comments on Pre Effective Amendment No. 1
SIDLEY AUSTIN LLP 787 SEVENTH AVENUE NEW YORK, NY 10019 +1 212 839 5300
+1 212 839 5599 FAX
AMERICA • ASIA PACIFIC • EUROPE
FILED VIA EDGAR
February 28, 2025
Emily Rowland
U.S. Securities and Exchange Commission
Division of Investment Management
100 F Street, N.E.
Washington, DC 20549
Re: Victory Portfolios IV
Registration Statement on Form N-1A
File Nos. 333-282907, 811-24019
Dear Ms. Rowland:
On behalf of Victory Portfolios IV (the “Registrant” and each individual series, a “Fund” and together, the “Funds”), we submit this response to the comments provided by the staff of the U.S. Securities and Exchange Commission (the “Commission”) on December 2, 2024, relating to the Registrant’s initial registration statement on Form N-1A filed on October 30, 2024 and November 1, 2024 (the “N-1A”) 1.
The Registrant has filed with the Commission a pre-effective amendment to the N-1A pursuant to Rule 472 under the Securities Act of 1933, as amended, incorporating the responses to the staff’s comments described below with respect to the Funds.
Below we identify in bold the staff’s comments, and note in regular type our responses. Capitalized terms used but not defined in this letter have the meanings assigned to them in N-1A. Page references correspond to the filed version of the N-1A.
When a comment specific to one section of the document would apply to similar disclosure elsewhere in the document, we will make the changes consistently throughout the document, as appropriate. All text changes described below will be implemented substantially as noted here, though some variation in the filing may be appropriate. The Registrant understands that the Registrant and management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action, or absence of action by the staff.
1We note that the Registrant filed an initial registration statement on October 30, 2024 to register twenty-five Funds. On November 1, 2024, the Registrant filed an amended registration statement to: (i) register shares of four additional Funds and (ii) include three Statements of Additional Information for the four Funds that also supplemented (and were intended to replace) the Statements of Additional Information filed on October 30, 2024 with respect to ten Funds.
Page 2
General
1.We note that substantial portions of the registration statement are incomplete. Please ensure all information is included in a pre-effective amendment, including the fee tables, expense examples, references to the auditor and auditor’s consent, and financial statements. A full financial review must be performed prior to declaring the registration statement effective. We may have additional comments on such portions when the Funds complete them in a pre-effective amendment, on disclosures made in response to this letter, on information supplied supplementally (including information about the predecessor funds), or on exhibits added in any amendment.
RESPONSE: The Registrant acknowledges the Staff’s comment. A pre-effective amendment has been filed, which includes the completed registration statement.
2.Please advise us if you have submitted or expect to submit any exemptive applications or no-action requests in connection with the registration statement.
RESPONSE: The Registrant does not expect to submit any exemptive applications or no- action letters in connection with the registration statement.
3.Please update each Fund’s ticker symbol in EDGAR. See Items 1(a)(2) and 14(a)(2); Regulation S-T, Rule 313(b)(1). In addition, please review and confirm that the Series names in the EDGAR system match the names of the Funds as they are listed in the prospectuses. Please also supplementally explain why, in the prospectuses, some of the classes for particular Series do not show ticker symbols or otherwise add these ticker symbols.
RESPONSE: The Registrant confirms that series names in the EDGAR system match the names of the Funds as they are listed in the prospectuses.
The Registrant notes that prospectuses for each Fund will include all ticker symbols for share classes offered by the prospectus. Consistent with other funds within the Victory Funds complex, share classes listed on the front cover page of a prospectus but without a ticker are not be offered through the prospectus and the Registrant discloses this in the prospectus.
PROSPECTUS
General
4.In the “Investment Performance” section, each Fund indicates that it has adopted the performance of the “predecessor fund” as the result of a reorganization of the
Page 3
predecessor fund into the Fund. Please supplementally provide the Staff with additional information and background on the predecessor fund, including the status of the reorganization and the timing of the reorganization in relation to effectiveness of the registration statement. Please confirm supplementally that the Fund will not sell shares using this registration statement until the reorganization is consummated.
RESPONSE: Subject to shareholder approval, each Fund will be reorganized into a corresponding Pioneer Fund. The Registrant notes that it filed a registration statement on Form N-14/A (SEC Accession No. 0001683863-25-000669) (Effectiveness Date: February 7, 2025, 5:15 pm), which describes the proposed reorganizations. Each Fund will be the performance and accounting survivor following each reorganization.
The Registrant confirms that that the Funds will not sell shares using this registration statement until the reorganizations are consummated.
Fees and Expenses
5.If Other Expenses of the Fund will not be estimates, but rather are incorporating the expenses of the predecessor fund, please delete footnote 3 to the fee table, which states that Other Expenses are based on estimated amounts for the current fiscal year.
RESPONSE: The Registrant notes that Other Expenses will be estimates and will include a footnote in each fee table describing them as such.
Portfolio Turnover
6.Please ensure that each Fund refers to the predecessor fund’s portfolio turnover rate, rather than the Fund’s portfolio turnover rate, in the last sentence of this section. In addition, please define predecessor fund the first time such term is used.
RESPONSE: The Registrant will revise the disclosure so that each Fund refers to its predecessor fund’s portfolio turnover rate in the last sentence of this section and to define predecessor fund the first time such term is used.
Principal Investment Strategy
7.Where a Fund’s principal investment strategy includes investments in other investment companies, please: (1) if acquired fund fees and expenses from such investments will exceed 0.01% of the average net assets of a series, please confirm that these fees and expenses will be included as a separate line item in the fee table, or; (2) if acquired fund fees and expenses are not expected to exceed one basis point,
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confirm supplementally that such expenses are included in the “Other Expenses” line in the fee table. See Instruction 3(f)(i) of Item 3.
RESPONSE: The Registrant so confirms.
8.Where it is stated that the Adviser “generally” will not invest Fund assets in companies “engaged in” (or, as alternately stated in some prospectuses, “significantly involved in”) the production, sale, storage of, or providing services for, certain controversial weapons, including chemical, biological and depleted uranium weapons and certain antipersonnel mines and cluster bombs, or other ESG-related categories of investments, please add disclosure in response to Item 9 clarifying, if accurate, that an investment could be made in a company that is engaged in or has significant involvement in the activities listed above, the circumstances under which the Adviser may make such investments and, where the disclosure includes “significantly involved,” please disclose what that means. This comment applies to the Funds listed in comment 10 in addition to any other Fund containing similar language.
RESPONSE: The Registrant will revise the disclosure to delete the above-referenced paragraph included in response to Item 4 of Form N-1A.
In response to Item 9 of Form N-1A, the Registrant will revise the disclosure as follows:
In addition, the Fund generally does not seeks not to invest in investments issued by companies significantly involved in the production of tobacco products and controversial military weapons, consisting of cluster weapons (a form of air- dropped or ground-launched explosive weapon that releases or ejects smaller submunitions), anti-personnel mines (a form of mine designed to be detonated by the presence or contact of a human), and biological and chemical weapons, and the operation of thermal coal mines. To the extent possible on the basis of information available to the Adviser, an issuer will be deemed to be significantly involved in an activity if it derives more than 10% of its gross revenues from such activities, with the exception of thermal coal mining, which has a threshold of 20% of its gross revenues.
9.For Funds that integrate environmental, social and corporate governance (“ESG”) considerations into their investment research processes, please provide, in response to Item 9, some examples of ESG criteria that it considers for the particular Fund.
We note, for example, that the Victory Pioneer CAT Bond Fund primarily invests in catastrophe bonds and other insurance-and reinsurance-related securities, but it is not clear from the ESG integration disclosure how the Fund integrates ESG into its investment process.
Page 5
RESPONSE:
In response to Item 9 of Form N-1A, the Registrant will disclose:
The Adviser integrates environmental, social and corporate governance (“ESG”) considerations into its investment research process by evaluating the business models and practices of issuers and their ESG-related risks. The Adviser believes ESG analysis can be a meaningful facet of fundamental research, the process of evaluating an issuer based on its financial position, business operations, competitive standing and management. This process considers ESG information, where available, in assessing an investment’s performance potential, including: evaluation of the business models and practices of issuers related to climate change, natural resource use and waste management; human capital considerations; product safety and social opportunities (e.g., access to health care, and nutritional, health-related, financial and educational programs); and corporate governance, business ethics, and government and public policy. The Adviser may consider ESG ratings provided by third parties, as well as issuer disclosures and public information, in evaluating issuers. ESG considerations are not a primary focus of the Fund, and the weight given by the Adviser to ESG considerations in making investment decisions will vary and, for any specific decision, they may be given little or no weight.
With respect to the Victory Pioneer CAT Bond Fund, in response to Item 9 of Form N- 1A, the Registrant will disclose:
The Adviser integrates environmental, social and corporate governance (“ESG”) considerations into its investment research process by evaluating the business models and practices of issuers and their ESG-related risks. The Adviser believes ESG analysis can be a meaningful facet of fundamental research, the process of evaluating an issuer based on its financial position, business operations, competitive standing and management. This process considers ESG information, where available, in assessing an investment’s performance potential, including: evaluation of the business models and practices of issuers related to climate change, natural resource use and waste management; human capital considerations; product safety and social opportunities (e.g., access to health care, and nutritional, health-related, financial and educational programs); and corporate governance, business ethics, and government and public policy (e.g., systematic catastrophic risk management). The Adviser may consider ESG ratings provided by third parties sources, as well as issuer disclosures and public information, in evaluating issuers. ESG considerations are not a primary focus of the Fund, and the weight given by the Adviser to ESG considerations in making investment
Page 6
decisions will vary and, for any specific decision, they may be given little or no weight.
10.Regarding Victory Pioneer Balanced Fund; Victory Pioneer Global Equity Fund; Victory Pioneer Global Growth Fund; Victory Pioneer Global Value Fund; and Victory Pioneer Fund, we note that the predecessor funds (except for Victory Pioneer Fund) are ESG-focused, however, the acquiring funds will not be ESG- focused. Please review the disclosure for these funds and revise where appropriate to better reflect the acquiring funds will integrate ESG policies, not focus on such policies. For example, please address the following, in addition to other applicable comments herein:
a.It is stated in response to Items 4 and 9 principal investment strategies, that the Fund “integrates ESG analysis into its investment process by focusing on companies with sustainable business models and evaluating ESG-related risks as part of its research recommendations.” Please consider replacing the word “focus,” so that the sentence no longer implies that the Fund’s focus is on ESG.
RESPONSE: The Registrant will revise its disclosure in response to Item 4 of Form N-1A to state:
In selecting securities to buy and sell, the Adviser considers ESG factors and associated risks along with the other investment-related factors discussed herein. In selecting securities, the Adviser focuses on assesses companies with sustainable business models. A company may demonstrate a sustainable business model by having a durable competitive and financial position expected to continue to create shareholder value, and offering products and services through ethical and sound business practices and the responsible use of resources.
The Registrant will revise its disclosure in response to Item 9 of Form N-1A to state:
In selecting securities to buy and sell, the Adviser considers ESG factors along with the other investment-related factors discussed herein, including: evaluation of the business models and practices of issuers related to climate change, natural resource use and waste management; human capital considerations; product safety and social opportunities (e.g., access to health care, and nutritional, health-related, financial and educational programs); and corporate governance, business ethics and government and public policy. In selecting securities, the Adviser focuses on The Adviser integrates ESG analysis into its investment process by
Page 7
assessing companies with sustainable business models and evaluating ESG-related risks. A company may demonstrate a sustainable business model by having a durable competitive and financial position expected to continue to create shareholder value, and offering products and services through ethical and sound business practices and the responsible use of resources.
b.Disclosure about the Fund’s ESG integration methodology in response to Item 4 should be a summary. Please revise the disclosure in light of the Fund’s ESG inte