UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-7852
Exact Name of Registrant as Specified in Charter: USAA MUTUAL FUNDS TRUST
Address of Principal Executive Offices and Zip Code: 9800 FREDERICKSBURG ROAD
SAN ANTONIO, TX 78288
Name and Address of Agent for Service: CHRISTOPHER P. LAIA
USAA MUTUAL FUNDS TRUST
9800 FREDERICKSBURG ROAD
SAN ANTONIO, TX 78288
Registrant's Telephone Number, Including Area Code: (210) 498-0226
Date of Fiscal Year End: JULY 31
|
Date of Reporting Period: OCTOBER 31, 2009
ITEM 1. SCHEDULE OF INVESTMENTS.
USAA MUTUAL FUNDS TRUST - 1ST QUARTER REPORT - PERIOD ENDED OCTOBER 31, 2009
[LOGO OF USAA]
USAA(R)
PORTFOLIO OF INVESTMENTS
1ST QUARTER
USAA INCOME FUND
OCTOBER 31, 2009
(Form N-Q)
48446-1209 (C)2009, USAA. All rights reserved.
PORTFOLIO OF INVESTMENTS
USAA INCOME FUND
October 31, 2009 (unaudited)
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS (33.7%)
CONSUMER DISCRETIONARY (2.1%)
-----------------------------
AUTOMOBILE MANUFACTURERS (1.0%)
$ 15,000 Daimler Finance N.A., LLC 8.00% 6/15/2010 $ 15,544
10,000 Toyota Motor Credit Corp. 4.85 2/27/2015 9,573
----------
25,117
----------
BROADCASTING (0.5%)
10,000 Time Warner Cable, Inc. 6.75 7/01/2018 11,027
----------
CASINOS & GAMING (0.1%)
3,000 International Game Technology 7.50 6/15/2019 3,321
----------
SPECIALTY STORES (0.5%)
5,000 Staples, Inc. 7.75 4/01/2011 5,375
5,000 Staples, Inc. 9.75 1/15/2014 6,065
----------
11,440
----------
Total Consumer Discretionary 50,905
----------
CONSUMER STAPLES (2.8%)
-----------------------
AGRICULTURAL PRODUCTS (0.2%)
4,000 Bunge Ltd. Finance Co. 8.50 6/15/2019 4,670
----------
DRUG RETAIL (0.4%)
9,324 CVS Caremark Corp. 6.04 12/10/2028 9,183
----------
FOOD RETAIL (0.2%)
5,000 Kroger Co. 5.50 2/01/2013 5,358
----------
HOUSEHOLD PRODUCTS (0.7%)
17,000 Clorox Co. 6.13 2/01/2011 17,986
----------
HYPERMARKETS & SUPER CENTERS (0.2%)
5,000 Costco Wholesale Corp. 5.30 3/15/2012 5,422
----------
PACKAGED FOODS & MEAT (0.7%)
15,000 Kellogg Co. 6.60 4/01/2011 16,139
----------
SOFT DRINKS (0.4%)
2,000 PepsiAmericas, Inc. 4.50 3/15/2013 2,114
5,000 PepsiCo, Inc. 7.90 11/01/2018 6,294
----------
8,408
----------
Total Consumer Staples 67,166
----------
ENERGY (5.2%)
-------------
INTEGRATED OIL & GAS (1.2%)
21,000 ConocoPhillips 8.75 5/25/2010 21,976
5,000 Hess Corp. 8.13 2/15/2019 6,080
----------
28,056
----------
----------------------------------------------------------------------------------------------------
1 | USAA Income Fund
|
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
OIL & GAS DRILLING (0.6%)
$ 3,000 Nabors Industries, Inc. 9.25% 1/15/2019 $ 3,630
5,000 Rowan Companies, Inc. 7.88 8/01/2019 5,383
5,000 Transocean, Inc. 5.25 3/15/2013 5,322
----------
14,335
----------
OIL & GAS EQUIPMENT & SERVICES (0.7%)
5,000 Baker Hughes, Inc. 7.50 11/15/2018 6,076
5,000 Smith International, Inc. 8.63 3/15/2014 5,742
5,000 Weatherford International Ltd. 9.63 3/01/2019 6,200
----------
18,018
----------
OIL & GAS EXPLORATION & PRODUCTION (0.3%)
5,000 Noble Energy, Inc. 8.25 3/01/2019 6,006
----------
OIL & GAS REFINING & MARKETING (0.6%)
5,000 Plains All American Pipeline, LP 6.50 5/01/2018 5,401
3,000 Plains All American Pipeline, LP 8.75 5/01/2019 3,648
5,000 Valero Energy Corp. 9.38 3/15/2019 5,927
----------
14,976
----------
OIL & GAS STORAGE & TRANSPORTATION (1.8%)
5,000 DCP Midstream, LLC (a) 9.70 12/01/2013 5,804
5,000 Enbridge Energy Partners, LP 5.35 12/15/2014 5,259
4,000 Enbridge Energy Partners, LP 8.05 10/01/2037 3,755
3,000 Energy Transfer Partners, LP 9.00 4/15/2019 3,631
10,000 Enterprise Products Operating, LLC 6.30 9/15/2017 10,994
5,000 Nustar Logistics, LP 7.65 4/15/2018 5,524
5,000 Sunoco Logistics Partners Operations, LP 8.75 2/15/2014 5,659
3,000 Transcontinental Gas Pipeline Corp. 8.88 7/15/2012 3,446
----------
44,072
----------
Total Energy 125,463
----------
FINANCIALS (9.3%)
-----------------
ASSET MANAGEMENT & CUSTODY BANKS (0.2%)
5,000 State Street Capital Trust III 8.25 -(b) 5,046
----------
CONSUMER FINANCE (1.7%)
10,000 American Honda Finance Corp. (a) 7.63 10/01/2018 11,511
3,000 ERAC USA Finance Co. (a) 6.38 10/15/2017 3,078
25,200 Household Finance Corp. 6.38 10/15/2011 26,985
----------
41,574
----------
DIVERSIFIED BANKS (0.6%)
5,000 Huntington National Bank 4.38 1/15/2010 5,004
5,000 Wells Fargo Capital XIII 7.70 -(b) 4,675
5,000 Wells Fargo Capital XV 9.75 -(b) 5,400
----------
15,079
----------
LIFE & HEALTH INSURANCE (0.2%)
5,000 Great-West Life & Annuity Insurance Co.
(a) 7.15 5/16/2046 4,225
----------
MULTI-LINE INSURANCE (0.3%)
5,000 AIG Sunamerica Global Financing (a) 6.30 5/10/2011 4,917
3,000 Oil Insurance Ltd. (a) 7.56 -(b) 2,124
----------
7,041
----------
OTHER DIVERSIFIED FINANCIAL SERVICES (1.0%)
6,000 Bank of America Corp. 8.00 -(b) 5,404
10,000 Bank One Corp. 7.88 8/01/2010 10,500
5,000 Countrywide Financial Corp. 5.80 6/07/2012 5,323
3,000 JPMorgan Chase & Co. 7.90 -(b) 3,026
----------
24,253
----------
----------------------------------------------------------------------------------------------------
Portfolio of Investments | 2
|
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
PROPERTY & CASUALTY INSURANCE (1.2%)
$ 15,000 Berkshire Hathaway Finance Corp. 4.85% 1/15/2015 $ 16,268
5,000 Progressive Corp. 6.70 6/15/2037 4,386
5,000 Travelers Companies, Inc. 6.25 3/15/2037 4,507
5,000 XL Capital Ltd. 6.50 -(b) 3,856
----------
29,017
----------
REGIONAL BANKS (0.6%)
5,000 Chittenden Corp. 5.80 2/14/2017 4,975
8,000 Hudson United Bank 7.00 5/15/2012 8,607
----------
13,582
----------
REITS - DIVERSIFIED (0.2%)
5,000 Liberty Property, LP 6.63 10/01/2017 4,915
----------
REITS - INDUSTRIAL (0.4%)
5,000 AMB Property, LP 6.30 6/01/2013 4,937
5,000 Prologis 7.38 10/30/2019 5,024
----------
9,961
----------
REITS - OFFICE (0.6%)
10,000 Boston Properties, Inc. 5.88 10/15/2019 10,107
3,000 Mack-Cali Realty Corp. 7.75 8/15/2019 3,175
1,681 Mack-Cali Realty, LP 5.80 1/15/2016 1,561
----------
14,843
----------
REITS - RESIDENTIAL (0.2%)
4,860 AvalonBay Communities, Inc. 5.50 1/15/2012 5,069
----------
REITS - RETAIL (1.8%)
9,000 Chelsea Property Group, LP 6.00 1/15/2013 9,079
5,000 National Retail Properties, Inc. 6.88 10/15/2017 4,925
15,000 Pan Pacific Retail Properties, Inc. 7.95 4/15/2011 15,700
3,000 Regency Centers, LP 8.45 9/01/2010 3,045
6,185 Regency Centers, LP 7.95 1/15/2011 6,418
5,000 Weingarten Realty Investors 4.86 1/15/2014 4,658
----------
43,825
----------
REITS - SPECIALIZED (0.2%)
5,000 Nationwide Health Properties, Inc. 6.25 2/01/2013 5,131
----------
SPECIALIZED FINANCE (0.1%)
1,000 Assured Guaranty U.S. Holdings, Inc. 6.40 12/15/2066 715
----------
Total Financials 224,276
----------
HEALTH CARE (1.2%)
------------------
BIOTECHNOLOGY (0.5%)
10,000 Genentech, Inc. 4.75 7/15/2015 10,795
----------
HEALTH CARE EQUIPMENT (0.2%)
4,000 Hospira, Inc. 6.40 5/15/2015 4,450
----------
LIFE SCIENCES TOOLS & SERVICES (0.1%)
2,500 Thermo Fisher Scientific, Inc. 5.00 6/01/2015 2,638
----------
MANAGED HEALTH CARE (0.2%)
5,000 Highmark, Inc. (a) 6.80 8/15/2013 5,241
----------
PHARMACEUTICALS (0.2%)
5,000 Roche Holdings, Inc. (a) 6.00 3/01/2019 5,588
----------
Total Health Care 28,712
----------
INDUSTRIALS (3.1%)
------------------
AIRLINES (0.4%)
2,500 American Airlines Pass-Through Trust 10.38 7/02/2019 2,778
----------------------------------------------------------------------------------------------------
3 | USAA Income Fund
|
----------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
$ 5,000 Continental Airlines, Inc. Pass-Through
Trust 9.00% 7/08/2016 $ 5,341
1,407 United Airlines Pass-Through Trust 7.73 7/01/2010 1,393
----------
9,512
----------
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS (0.7%)
10,000 John Deere Capital Corp. 5.10 1/15/2013 10,767
5,000 Paccar, Inc. 6.88 2/15/2014 5,715
----------
16,482
----------
ENVIRONMENTAL & FACILITIES SERVICES (0.4%)
10,000 Waste Management, Inc. 7.38 8/01/2010 10,441
----------
INDUSTRIAL MACHINERY (0.7%)
10,000 Danaher Corp. 5.63 1/15/2018 10,932
1,500 Ingersoll Rand Co. 9.00 8/15/2021 1,742
3,000 Ingersoll-Rand GL Holding Co. 9.50 4/15/2014 3,603
----------
16,277
----------
RAILROADS (0.9%)
2,058 CSX Transportation Inc. 9.75 6/15/2020 2,780
2,842 Norfolk Southern Railway Co. 9.75 6/15/2020 3,859
10,000 TTX Co. (a) 5.40 2/15/2016 8,989
5,000 Union Pacific Corp. 7.88 1/15/2019 6,176
----------
21,804
----------
Total Industrials 74,516
----------
INFORMATION TECHNOLOGY (0.5%)
-----------------------------
COMMUNICATIONS EQUIPMENT (0.2%)
5,000 Harris Corp. 5.95 12/01/2017 5,376
----------
COMPUTER HARDWARE (0.3%)
5,000 IBM Corp. 7.63 10/15/2018 6,196
----------
Total Information Technology 11,572
----------
MATERIALS (1.9%)
----------------
DIVERSIFIED CHEMICALS (0.5%)
5,000 Chevron Phillips Chemical Co., LP (a) 7.00 6/15/2014 5,534
5,000 Dow Chemical Co. 7.60 5/15/2014 5,560
----------
11,094
----------
PAPER PRODUCTS (0.5%)
10,000 International Paper Co. 7.40 6/15/2014 11,014
----------
SPECIALTY CHEMICALS (0.7%)
5,000 Cytec Industries, Inc. 8.95 7/01/2017 5,861
5,000 Lubrizol Corp. 8.88 2/01/2019 6,245
5,000 RPM International, Inc. 6.13 10/15/2019 5,029
----------
17,135
----------
STEEL (0.2%)
5,000 Allegheny Technologies, Inc. 9.38 6/01/2019 5,696
----------
Total Materials 44,939
----------
TELECOMMUNICATION SERVICES (0.5%)
---------------------------------
INTEGRATED TELECOMMUNICATION SERVICES (0.1%)
4,000 Qwest Communications International, Inc. 7.25 2/15/2011 4,020
----------
WIRELESS TELECOMMUNICATION SERVICES (0.4%)
3,000 AT&T Wireless Services, Inc. 7.88 3/01/2011 3,251
5,000 Verizon Wireless Capital, LLC (a) 8.50 11/15/2018 6,240
----------
9,491
----------
Total Telecommunication Services 13,511
----------
----------------------------------------------------------------------------------------------------
Portfolio of Investments | 4
|
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
UTILITIES (7.1%)
----------------
ELECTRIC UTILITIES (3.9%)
$ 5,000 Cleveland Electric Illuminating Co. 8.88% 11/15/2018 $ 6,304
1,500 FPL Energy American Wind (a) 6.64 6/20/2023 1,474
5,000 FPL Group Capital, Inc. 7.30 9/01/2067 4,945
5,000 Gulf Power Co. 4.90 10/01/2014 5,310
5,000 Illinois Power Co. 9.75 11/15/2018 6,266
5,000 Nevada Power Co. 7.13 3/15/2019 5,719
10,000 Northern States Power Co. 8.00 8/28/2012 11,611
5,000 Oglethorpe Power Corp. 6.10 3/15/2019 5,479
1,036 Power Contract Financing, LLC (a) 6.26 2/01/2010 1,043
5,000 PPL Energy Supply, LLC 6.20 5/15/2016 5,241
7,000 Southern Co. 0.68 (c) 10/21/2011 7,025
7,621 Tristate General & Transport Association
(a) 6.04 1/31/2018 7,695
9,000 Union Electric Co. 6.70 2/01/2019 10,122
4,915 UtiliCorp Canada Finance Corp. 7.75 6/15/2011 5,186
10,000 West Penn Power Co. 6.63 4/15/2012 10,908
----------
94,328
----------
GAS UTILITIES (1.8%)
8,000 AGL Capital Corp. 6.38 7/15/2016 8,708
4,000 Atmos Energy Corp. 8.50 3/15/2019 4,929
4,000 EQT Corp. 8.13 6/01/2019 4,591
8,000 Gulfstream Natural Gas Systems, LLC (a) 5.56 11/01/2015 8,078
5,000 Oneok Partners, LP 8.63 3/01/2019 5,999
5,000 Questar Pipeline Co. 5.83 2/01/2018 5,270
5,000 Southern Star Central Gas Pipeline, Inc.
(a) 6.00 6/01/2016 4,750
----------
42,325
----------
MULTI-UTILITIES (1.2%)
5,000 Black Hills Corp. 9.00 5/15/2014 5,766
5,000 CenterPoint Energy Houston Electric, LLC 7.00 3/01/2014 5,640
5,000 NiSource, Inc. 10.75 3/15/2016 5,962
5,000 Northwestern Corp. 6.34 4/01/2019 5,355
5,000 South Carolina Electric & Gas Co. 5.30 5/15/2033 4,993
----------
27,716
----------
WATER UTILITIES (0.2%)
5,475 American Water Capital Corp. 6.09 10/15/2017 5,751
----------
Total Utilities 170,120
----------
Total Corporate Obligations (cost: $748,794) 811,180
----------
EURODOLLAR AND YANKEE OBLIGATIONS (14.6%)
ENERGY (1.6%)
-------------
INTEGRATED OIL & GAS (0.2%)
4,000 Husky Energy, Inc. 7.25 12/15/2019 4,633
----------
OIL & GAS DRILLING (0.1%)
2,540 Delek & Avner-Yam Tethys Ltd. (a) 1.58 (c) 8/01/2013 2,538
----------
OIL & GAS EXPLORATION & PRODUCTION (0.9%)
5,000 Canadian Natural Resources Ltd. 5.70 5/15/2017 5,325
3,500 Talisman Energy, Inc. 7.75 6/01/2019 4,167
10,000 Woodside Finance Ltd. (a) 8.75 3/01/2019 11,888
----------
21,380
----------
OIL & GAS REFINING & MARKETING (0.4%)
5,000 GS Caltex Corp. 7.25 7/02/2013 5,382
----------------------------------------------------------------------------------------------------
5 | USAA Income Fund
|
----------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
$ 5,000 GS Caltex Corp. (a) 5.50% 10/15/2015 $ 4,940
----------
10,322
----------
Total Energy 38,873
----------
FINANCIALS (7.5%)
-----------------
DIVERSIFIED BANKS (5.7%)
5,000 ANZ Capital Trust I (a) 4.48 -(b) 4,955
6,000 Banco Santander (a) 5.38 12/09/2014 6,212
5,180 Barclays Bank plc (a) 7.38 -(b) 4,740
5,000 Barclays Bank plc (a) 6.05 12/04/2017 5,102
5,000 BNP Paribas (a) 7.20 -(b) 4,625
5,000 Canadian Imperial Bank Corp. (a) 7.26 4/10/2032 5,375
10,000 Commonwealth Bank Australia (a) 0.58 (c) 11/04/2011 10,000
10,000 Danske Bank A/S 0.76 (c) 5/24/2012 9,970
20,000 Landesbank Baden-Wuerttemberg 6.35 4/01/2012 21,610
10,000 Lloyds TSB Bank plc 0.49 (c) 6/17/2011 9,981
10,000 Lloyds TSB Group plc (a) 6.27 -(b) 6,508
5,000 Mizuho Capital Investment 1 Ltd. (a) 6.69 -(b) 4,176
10,000 MUFG Capital Finance 1 Ltd. 6.35 -(b) 9,251
15,000 Nordea Bank AB (a) 5.25 11/30/2012 15,434
5,000 Standard Chartered Bank (a) 6.40 9/26/2017 5,296
5,000 Sumitomo Mitsui Financial Group (a) 6.08 -(b) 4,344
10,000 Westpac Banking Corp. (a) 0.58 10/21/2011 9,996
----------
137,575
----------
INVESTMENT BANKING & BROKERAGE (0.5%)
5,000 Credit Suisse Group, AG 5.50 5/01/2014 5,428
7,000 Finance For Danish Industry A/S (a) 0.68 (c) 8/17/2012 7,074
----------
12,502
----------
OTHER DIVERSIFIED FINANCIAL SERVICES (0.2%)
5,000 ZFS Finance USA Trust II (a) 6.45 12/15/2065 4,550
----------
PROPERTY & CASUALTY INSURANCE (0.2%)
5,000 Catlin Insurance Co. Ltd. (a) 7.25 -(b) 3,875
----------
REGIONAL BANKS (0.5%)
10,000 Dexia Credit Local 0.94 (c) 9/23/2011 10,098
5,000 Glitnir Banki hf, acquired 9/20/2007;
cost $4,991(a),(d),(e) 6.38 9/25/2012 1,187
5,000 Kaupthing Bank hf(a),(e) 7.13 5/19/2016 3
----------
11,288
----------
REITS - RETAIL (0.4%)
10,000 Westfield Capital Corp. (a) 5.13 11/15/2014 9,965
----------
Total Financials 179,755
----------
GOVERNMENT (1.5%)
-----------------
FOREIGN GOVERNMENT (1.5%)
25,000 Region of Lombardy 5.80 10/25/2032 25,782
10,000 Republic of Poland 5.25 1/15/2014 10,623
----------
36,405
----------
Total Government 36,405
----------
INDUSTRIALS (0.9%)
------------------
BUILDING PRODUCTS (0.9%)
10,000 CRH America, Inc. 6.00 9/30/2016 10,365
10,000 Holcim US Finance 6.00 12/30/2019 10,332
----------
20,697
----------
Total Industrials 20,697
----------
----------------------------------------------------------------------------------------------------
Portfolio of Investments | 6
|
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
MATERIALS (2.3%)
----------------
DIVERSIFIED METALS & MINING (0.7%)
$ 5,000 Glencore Funding, LLC (a) 6.00% 4/15/2014 $ 4,909
3,000 Noranda, Inc. 6.00 10/15/2015 3,020
5,000 Rio Tinto Finance (USA) Ltd. 9.00 5/01/2019 6,232
2,034 Xstrata Canada Corp. 5.38 6/01/2015 2,030
----------
16,191
----------
FERTILIZERS & AGRICULTURAL CHEMICALS (0.9%)
10,000 Agrium, Inc. 8.25 2/15/2011 10,618
8,000 Yara International ASA (a) 5.25 12/15/2014 8,340
2,000 Yara International ASA (a) 7.88 6/11/2019 2,283
----------
21,241
----------
GOLD (0.5%)
10,000 Barrick NA Finance, LLC 6.80 9/15/2018 11,292
----------
STEEL (0.2%)
5,000 ArcelorMittal 9.00 2/15/2015 5,779
----------
Total Materials 54,503
----------
TELECOMMUNICATION SERVICES (0.2%)
---------------------------------
INTEGRATED TELECOMMUNICATION SERVICES (0.2%)
5,416 Deutsche Telekom International Finance 8.50 6/15/2010 5,659
----------
UTILITIES (0.6%)
----------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.4%)
10,200 Transalta Corp. 6.65 5/15/2018 10,421
----------
MULTI-UTILITIES (0.2%)
5,000 Veolia Environnement 6.00 6/01/2018 5,387
----------
Total Utilities 15,808
----------
Total Eurodollar and Yankee Obligations (cost: $352,175) 351,700
----------
ASSET-BACKED SECURITIES (4.7%)
FINANCIALS (4.7%)
-----------------
ASSET-BACKED FINANCING (4.7%)
6,000 AESOP Funding II, LLC 5.68 2/20/2013 6,237
10,000 AESOP Funding II, LLC (a) 9.31 10/20/2013 11,034
1,355 AmeriCredit Automobile Receivables Trust 1.99 (c) 1/12/2012 1,358
4,000 Banc of America Securities Auto Trust 5.51 2/19/2013 4,002
2,500 Bank of America Auto Trust (a) 2.13 9/16/2013 2,529
5,000 Bank One Issuance Trust 1.05 (c) 2/15/2017 4,591
1,476 Capital One Auto Finance Trust (INS) 4.71 6/15/2012 1,493
4,921 Capital One Auto Finance Trust 0.28 (c) 5/15/2013 4,844
5,000 Capital One Multi-Asset Execution Trust 6.00 8/15/2013 5,122
5,000 Chase Issuance Trust 5.12 10/15/2014 5,430
3,000 Citibank Credit Card Issuance Trust 5.70 5/15/2013 3,080
5,000 Citibank Credit Card Issuance Trust 5.10 11/20/2017 5,415
2,000 Citibank Credit Card Issuance Trust 5.35 2/07/2020 2,174
5,000 CPS Auto Receivables Trust (INS) 6.48 7/15/2013 5,059
3,000 Ford Credit Auto Owner Trust 2.00 (c) 4/15/2013 3,046
3,000 GE Capital Credit Card Master Note Trust 0.52 (c) 3/15/2013 2,953
5,000 Hertz Vehicle Financing, LLC (a) 5.08 11/25/2011 5,111
11,500 HSBC Private Label Credit Card Master
Note Trust 0.36 12/16/2013 11,448
5,000 Huntington Auto Trust (a) 5.64 2/15/2013 5,117
10,000 Rental Car Finance Corp. (a) 0.38 7/25/2013 8,595
4,698 SLM Student Loan Trust 0.83 (c) 10/25/2038 3,534
----------------------------------------------------------------------------------------------------
7 | USAA Income Fund
|
----------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
$ 5,250 SLM Student Loan Trust 0.51% (c) 1/25/2041 $ 2,685
973 USXL Funding, LLC (INS)(a) 5.38 4/15/2014 974
5,000 Volkswagen Auto Loan Enhanced Trust 6.24 7/20/2015 5,549
2,000 WFS Financial Owner Trust 4.76 5/17/2013 2,020
----------
113,400
----------
Total Financials 113,400
----------
Total Asset-Backed Securities (cost: $103,993) 113,400
----------
COMMERCIAL MORTGAGE SECURITIES (14.7%)
FINANCIALS (14.7%)
------------------
COMMERCIAL MORTGAGE-BACKED SECURITIES (14.7%)
8,852 Banc of America Commercial Mortgage,
Inc. 5.79 5/11/2035 9,009
10,000 Banc of America Commercial Mortgage,
Inc. 4.65 9/11/2036 10,325
5,125 Banc of America Commercial Mortgage,
Inc. 5.26 (c) 11/10/2042 3,394
8,145 Banc of America Commercial Mortgage,
Inc. 4.16 12/10/2042 8,119
10,000 Banc of America Commercial Mortgage,
Inc. 5.91 (c) 5/10/2045 10,356
11,000 Banc of America Commercial Mortgage,
Inc. 5.35 (c) 9/10/2047 10,988
5,008 Bear Stearns Commercial Mortgage
Securities, Inc. (a) 6.00 6/16/2030 3,657
11,545 Bear Stearns Commercial Mortgage
Securities, Inc. 5.62 (c) 3/11/2039 12,247
5,000 Citigroup Commercial Mortgage Trust (a) 4.83 9/20/2051 3,586
12,000 Commercial Mortgage Trust 5.12 6/10/2044 11,487
8,000 Credit Suisse First Boston Mortgage
Capital 5.71 (c) 2/15/2039 7,454
8,622 Credit Suisse First Boston Mortgage
Securities Corp. 6.38 12/18/2035 8,863
10,000 Credit Suisse First Boston Mortgage
Securities Corp. 4.81 2/15/2038 9,791
5,000 Credit Suisse First Boston Mortgage
Securities Corp. 5.10 8/15/2038 3,802
11,100 Credit Suisse First Boston Mortgage
Securities Corp. 5.23 12/15/2040 10,966
10,000 GE Commercial Mortgage Corp. 5.51 (c) 3/10/2044 10,325
3,000 GE Commercial Mortgage Corp. 4.86 7/10/2045 2,958
3,899 Greenwich Capital Commercial Funding
Corp. 4.31 8/10/2042 3,894
12,215 J.P. Morgan Chase Commercial Mortgage
Securities Corp. 4.82 9/12/2037 12,296
10,000 J.P. Morgan Chase Commercial Mortgage
Securities Corp. 4.99 9/12/2037 7,652
10,000 J.P. Morgan Chase Commercial Mortgage
Securities Corp. 5.49 4/15/2043 10,500
3,000 J.P. Morgan Chase Commercial Mortgage
Securities Corp. 5.81 6/12/2043 2,892
10,000 J.P. Morgan Chase Commercial Mortgage
Securities Corp. 5.34 (c) 12/15/2044 9,994
10,000 J.P. Morgan Chase Commercial Mortgage
Securities Corp. 5.88 (c) 4/15/2045 10,651
4,546 J.P. Morgan Chase Commercial Mortgage
Securities Corp. 4.63 3/15/2046 4,549
7,000 LB-UBS Commercial Mortgage Trust 4.58 8/15/2029 6,794
2,000 LB-UBS Commercial Mortgage Trust 4.51 12/15/2029 1,995
10,000 LB-UBS Commercial Mortgage Trust 4.95 9/15/2030 9,838
7,000 LB-UBS Commercial Mortgage Trust 5.34 9/15/2039 7,241
7,000 Merrill Lynch Mortgage Trust 5.62 7/12/2034 7,031
10,000 Merrill Lynch Mortgage Trust 5.02 7/12/2038 10,451
12,550 Morgan Stanley Capital I, Inc. 4.59 4/14/2040 12,114
7,000 Morgan Stanley Capital I, Inc. 5.97 (c) 8/12/2041 7,574
5,350 Morgan Stanley Capital I, Inc. 5.17 1/14/2042 5,601
10,000 Morgan Stanley Capital I, Inc. 5.69 7/12/2044 10,662
7,000 Morgan Stanley Capital I, Inc. 4.85 6/12/2047 7,282
11,425 Morgan Stanley Capital I, Inc. 5.17 10/12/2052 11,988
----------------------------------------------------------------------------------------------------
Portfolio of Investments | 8
|
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
$ 5,000 Morgan Stanley Capital I, Inc. 4.66% 7/15/2056 $ 4,864
5,000 Timberstar Trust (a) 5.88 10/15/2036 4,468
10,000 Wachovia Bank Commercial Mortgage Trust 5.08 3/15/2042 9,980
4,511 Wachovia Bank Commercial Mortgage Trust 4.66 4/15/2042 4,482
10,500 Wachovia Bank Commercial Mortgage Trust 4.81 4/15/2042 10,910
10,000 Wachovia Bank Commercial Mortgage Trust 4.61 5/15/2044 10,032
10,350 Wachovia Bank Commercial Mortgage Trust 5.35 (c) 10/15/2044 10,848
----------
353,910
----------
INTEREST-ONLY COMMERCIAL MORTGAGE-BACKED SECURITIES (0.0%)
49,076 Greenwich Capital Commercial Funding
Corp., acquired 8/13/2003; cost
$2,773(a),(d) 1.99 1/11/2035 104
22,651 Wachovia Bank Commercial Mortgage Trust,
acquired 8/06/2003; cost
$1,145(a),(d) 1.00 4/15/2035 312
----------
416
----------
Total Financials 354,326
----------
Total Commercial Mortgage Securities (cost: $350,969) 354,326
----------
U.S. GOVERNMENT AGENCY ISSUES (14.3%)(F)
MORTGAGE-BACKED PASS-THROUGH SECURITIES (13.3%)
19,610 Fannie Mae (+) 5.00 6/01/2033 20,445
9,447 Fannie Mae (+) 5.50 7/01/2021 10,074
15,646 Fannie Mae (+) 5.50 9/01/2035 16,529
7,905 Fannie Mae (+) 5.50 10/01/2035 8,351
11,364 Fannie Mae (+) 5.50 1/01/2036 12,005
15,337 Fannie Mae (+) 5.50 4/01/2036 16,202
14,047 Fannie Mae (+) 5.50 2/01/2037 14,816
17,092 Fannie Mae (+) 5.50 3/01/2037 18,022
11,059 Fannie Mae (+) 5.50 11/01/2037 11,661
20,040 Fannie Mae (+) 5.50 5/01/2038 21,127
17,024 Fannie Mae (+) 6.00 5/01/2036 18,140
14,203 Fannie Mae (+) 6.00 6/01/2036 15,134
17,629 Fannie Mae (+) 6.00 8/01/2037 18,767
1,650 Fannie Mae (+) 6.50 4/01/2031 1,789
25 Fannie Mae (+) 6.50 7/01/2031 28
2,975 Fannie Mae (+) 6.50 3/01/2032 3,224
78 Fannie Mae (+) 7.00 10/01/2022 87
53 Fannie Mae (+) 7.00 3/01/2023 58
295 Fannie Mae (+) 7.00 4/01/2023 326
4,269 Freddie Mac (+) 5.00 6/01/2020 4,546
11,592 Freddie Mac (+) 5.00 1/01/2021 12,342
10,769 Freddie Mac (+) 5.50 11/01/2020 11,505
5,381 Freddie Mac (+) 5.50 12/01/2020 5,749
7,869 Freddie Mac (+) 5.50 12/01/2035 8,313
14,098 Freddie Mac (+) 5.50 4/01/2036 14,873
11,153 Government National Mortgage Assn. I 5.00 8/15/2033 11,681
783 Government National Mortgage Assn. I 6.00 8/15/2028 840
710 Government National Mortgage Assn. I 6.00 9/15/2028 762
6,845 Government National Mortgage Assn. I 6.00 9/15/2028 7,347
1,173 Government National Mortgage Assn. I 6.00 9/15/2028 1,258
1,792 Government National Mortgage Assn. I 6.00 10/15/2028 1,923
883 Government National Mortgage Assn. I 6.00 1/15/2029 948
173 Government National Mortgage Assn. I 6.00 1/15/2029 185
903 Government National Mortgage Assn. I 6.00 1/15/2029 969
1,305 Government National Mortgage Assn. I 6.00 1/15/2033 1,399
30 Government National Mortgage Assn. I 6.50 6/15/2023 32
404 Government National Mortgage Assn. I 6.50 7/15/2023 430
69 Government National Mortgage Assn. I 6.50 7/15/2023 74
232 Government National Mortgage Assn. I 6.50 9/15/2023 247
476 Government National Mortgage Assn. I 6.50 10/15/2023 507
63 Government National Mortgage Assn. I 6.50 10/15/2023 67
321 Government National Mortgage Assn. I 6.50 10/15/2023 342
----------------------------------------------------------------------------------------------------
9 | USAA Income Fund
|
----------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
$ 491 Government National Mortgage Assn. I 6.50% 12/15/2023 $ 523
983 Government National Mortgage Assn. I 6.50 12/15/2023 1,047
226 Government National Mortgage Assn. I 6.50 1/15/2024 243
413 Government National Mortgage Assn. I 6.50 2/15/2024 442
210 Government National Mortgage Assn. I 6.50 4/15/2026 226
1,173 Government National Mortgage Assn. I 6.50 5/15/2028 1,269
2,583 Government National Mortgage Assn. I 6.50 10/15/2031 2,790
132 Government National Mortgage Assn. I 7.00 5/15/2023 145
98 Government National Mortgage Assn. I 7.00 5/15/2023 108
145 Government National Mortgage Assn. I 7.00 5/15/2023 159
124 Government National Mortgage Assn. I 7.00 5/15/2023 137
284 Government National Mortgage Assn. I 7.00 6/15/2023 313
76 Government National Mortgage Assn. I 7.00 6/15/2023 83
269 Government National Mortgage Assn. I 7.00 6/15/2023 296
73 Government National Mortgage Assn. I 7.00 8/15/2023 80
406 Government National Mortgage Assn. I 7.00 8/15/2023 447
115 Government National Mortgage Assn. I 7.00 8/15/2023 127
766 Government National Mortgage Assn. I 7.00 8/15/2023 843
224 Government National Mortgage Assn. I 7.00 9/15/2023 247
105 Government National Mortgage Assn. I 7.00 1/15/2026 116
38 Government National Mortgage Assn. I 7.00 3/15/2026 42
30 Government National Mortgage Assn. I 7.00 3/15/2026 33
719 Government National Mortgage Assn. I 7.00 10/15/2027 794
386 Government National Mortgage Assn. I 7.00 6/15/2029 427
589 Government National Mortgage Assn. I 7.00 6/15/2029 651
311 Government National Mortgage Assn. I 7.00 7/15/2029 344
634 Government National Mortgage Assn. I 7.00 8/15/2031 702
407 Government National Mortgage Assn. I 7.00 7/15/2032 448
588 Government National Mortgage Assn. I 7.50 7/15/2023 664
232 Government National Mortgage Assn. I 7.50 6/15/2026 263
533 Government National Mortgage Assn. I 7.50 6/15/2026 604
404 Government National Mortgage Assn. I 7.50 7/15/2026 458
336 Government National Mortgage Assn. I 7.50 5/15/2027 381
507 Government National Mortgage Assn. I 7.50 2/15/2028 575
473 Government National Mortgage Assn. I 7.50 12/15/2028 537
385 Government National Mortgage Assn. I 7.50 8/15/2029 438
3,019 Government National Mortgage Assn. II 5.50 4/20/2033 3,211
2,937 Government National Mortgage Assn. II 6.00 8/20/2032 3,157
2,013 Government National Mortgage Assn. II 6.00 9/20/2032 2,163
796 Government National Mortgage Assn. II 6.50 8/20/2031 863
----------
319,520
----------
OTHER U.S. GOVERNMENT GUARANTEED SECURITIES (1.0%)
5,000 Bank of America Corp., FDIC TLGP 0.67 (c) 6/22/2012 5,059
2,534 Perforadora Centrale S.A. de C.V. "A,"
Title XI 5.24 12/15/2018 2,758
5,000 SunTrust Banks, Inc., FDIC TLGP 0.95 (c) 12/16/2010 5,041
10,000 Totem Ocean Trailer Express, Inc., Title
XI 6.37 4/15/2028 11,795
----------
24,653
----------
Total U.S. Government Agency Issues (cost: $321,879) 344,173
----------
U.S. TREASURY SECURITIES (3.8%)
INFLATION-INDEXED NOTES (3.8%)
51,526 2.38%, 1/15/2025 54,880
36,059 1.75%, 1/15/2028 34,791
----------
89,671
----------
Total U.S. Treasury Securities (cost: $86,722) 89,671
----------
----------------------------------------------------------------------------------------------------
Portfolio of Investments | 10
|
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
MUNICIPAL BONDS (2.5%)
APPROPRIATED DEBT (0.1%)
$ 2,625 New Jersey EDA 5.18% 11/01/2015 $ 2,713
----------
CASINOS & GAMING (0.1%)
5,000 Mashantucket (Western) Pequot Tribe,
acquired 7/29/2005; cost
$5,000(a),(d) 5.91 9/01/2021 3,037
----------
ELECTRIC UTILITIES (0.4%)
5,000 Air Quality Dev. Auth. 4.75 8/01/2029 5,094
5,000 Maricopa County 5.50 5/01/2029 5,206
----------
Total Electric Utilities 10,300
----------
ELECTRIC/GAS UTILITIES (0.1%)
2,795 North Carolina Eastern Municipal Power
Agency 5.55 1/01/2013 2,804
----------
ENVIRONMENTAL & FACILITIES SERVICES (0.1%)
2,300 Okeechobee County 5.00 7/01/2039 2,305
----------
ESCROWED BONDS (0.1%)
1,000 New Jersey Turnpike Auth. (INS)(PRE) 4.25 1/01/2016 1,060
----------
GENERAL OBLIGATION (0.1%)
2,200 Marin County (INS) 4.89 8/01/2016 2,253
----------
OIL & GAS REFINING & MARKETING (0.6%)
13,500 Harris County 5.68 3/01/2023 13,509
----------
SPECIAL ASSESSMENT/TAX/FEE (0.1%)
2,000 New York Housing Finance Agency 5.18 9/15/2010 2,066
----------
TOLL ROADS (0.8%)
19,000 New Jersey Turnpike Auth. (INS) 4.25 1/01/2016 19,337
----------
Total Municipal Bonds (cost: $60,421) 59,384
----------
PRINCIPAL
AMOUNT MARKET
$(000)/ VALUE
SHARES SECURITY (000)
----------------------------------------------------------------------------------------------------
PREFERRED SECURITIES (4.2%)
CONSUMER STAPLES (0.2%)
-----------------------
AGRICULTURAL PRODUCTS (0.2%)
70,000 Dairy Farmers of America, Inc., 7.88%, cumulative redeemable, perpetual
(a) 4,957
----------
FINANCIALS (4.0%)
-----------------
REINSURANCE (0.1%)
$5,000 Swiss Re Capital I LP, 6.85%, perpetual (a) 3,855
----------
REITS - INDUSTRIAL (0.8%)
120,000 AMB Property Corp., Series C, 7.00%, cumulative redeemable, perpetual (g) 2,655
18,000 AMB Property Corp., Series P, 6.85%, cumulative redeemable, perpetual 372
----------------------------------------------------------------------------------------------------
11 | USAA Income Fund
|
----------------------------------------------------------------------------------------------------
MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
----------------------------------------------------------------------------------------------------
344,500 Prologis Trust, Inc., Series C, 8.54%, cumulative redeemable, perpetual $ 16,633
----------
19,660
----------
REITS - OFFICE (0.7%)
51,050 Duke Realty Corp. depositary shares, Series N, 7.25%, cumulative
redeemable, perpetual 1,032
614,000 Duke Realty Corp., Series M, 6.95%, cumulative redeemable, perpetual 11,764
200,000 HRPT Properties Trust, Series C, 7.13%, cumulative redeemable, perpetual
(g) 3,732
----------
16,528
----------
REITS - RESIDENTIAL (1.0%)
203,000 BRE Properties, Inc., Series C, 6.75%, cumulative redeemable, perpetual
(g) 4,225
142,500 Equity Residential Properties Trust, depositary shares, Series K, 8.29%,
cumulative redeemable, perpetual 7,806
250,000 Post Properties, Inc., Series A, 8.50%, cumulative redeemable, perpetual 11,500
----------
23,531
----------
REITS - RETAIL (1.1%)
200,000 Developers Diversified Realty Corp., Series I, 7.50%, cumulative
redeemable, perpetual 3,379
415,000 Kimco Realty Corp., depositary shares, Series F, 6.65%, cumulative
redeemable, perpetual (g) 8,600
400,000 Realty Income Corp., Class D, 7.38%, cumulative redeemable, perpetual 9,725
201,500 Weingarten Realty Investors, depositary shares, Series D, 6.75%,
cumulative redeemable, perpetual 4,084
----------
25,788
----------
REITS - SPECIALIZED (0.3%)
350,000 Public Storage, Inc., Series Z, 6.25%, cumulative redeemable, perpetual
(g) 7,547
----------
Total Financials 96,909
----------
U.S. GOVERNMENT (0.0%)
----------------------
80,000 Fannie Mae, 8.25%, perpetual 93
----------
Total Preferred Securities (cost: $117,912) 101,959
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
MONEY MARKET INSTRUMENTS (6.7%)
COMMERCIAL PAPER (4.2%)
CONSUMER DISCRETIONARY (1.0%)
-----------------------------
BROADCASTING (0.6%)
$ 4,500 Time Warner Cable, Inc.(a),(h) 0.33% 11/03/2009 4,500
10,784 Time Warner Cable, Inc.(a),(h) 0.35 11/16/2009 10,782
----------
15,282
----------
HOUSEHOLD APPLIANCES (0.4%)
10,000 Black & Decker Corp.(a),(h) 1.65 11/02/2009 10,000
----------
Total Consumer Discretionary 25,282
----------
FINANCIALS (1.4%)
-----------------
ASSET-BACKED FINANCING (1.4%)
12,143 Hannover Funding Co. LLC(a),(h) 0.55 11/05/2009 12,142
3,665 Hannover Funding Co. LLC(a),(h) 0.50 11/06/2009 3,665
----------------------------------------------------------------------------------------------------
Portfolio of Investments | 12
|
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
----------------------------------------------------------------------------------------------------
$ 17,879 Working Capital Management Co.(a),(h) 0.30% 11/09/2009 $ 17,878
----------
33,685
----------
Total Financials 33,685
----------
MUNICIPAL BONDS (1.0%)
----------------------
ELECTRIC/GAS UTILITIES (0.7%)
16,529 New York State Power Auth. 0.45 11/05/2009 16,528
----------
MUNICIPAL FINANCE (0.3%)
7,295 California 0.50 11/03/2009 7,295
----------
Total Municipal Bonds 23,823
----------
UTILITIES (0.8%)
----------------
GAS UTILITIES (0.8%)
10,000 AGL Capital Corp.(a),(h) 0.27 11/18/2009 9,999
9,257 Oneok, Inc.(a),(h) 0.27 11/10/2009 9,256
----------
19,255
----------
Total Utilities 19,255
----------
Total Commercial Paper 102,045
----------
VARIABLE-RATE DEMAND NOTES (2.5%)
FINANCIALS (0.5%)
-----------------
ASSET-BACKED FINANCING (0.4%)
10,000 Pennsylvania Higher Education Assistance
Agency (LIQ)(INS) 3.25 6/01/2025 10,000
----------
REAL ESTATE SERVICES (0.1%)
3,000 District of Columbia (LOC - SunTrust
Bank) 0.70 4/01/2024 3,000
----------
Total Financials 13,000
----------
MUNICIPAL BONDS (2.0%)
----------------------
COMMUNITY SERVICE (0.2%)
4,000 Caroline County IDA (LOC - Regions Bank) 1.20 12/01/2037 4,000
----------
GENERAL OBLIGATION (0.4%)
10,000 Southern Ute Indian Tribe (a) 1.05 1/01/2027 10,000
----------
HOSPITAL (0.7%)
15,000 Johnson City Health and Educational
Facilities Board (LOC - Regions
Bank) 3.10 7/01/2033 15,000
2,300 Russell County IDA (LOC - Regions Bank) 1.50 7/01/2038 2,300
----------
17,300
----------
NURSING/CCRC (0.7%)
8,300 Langhorne Manor (LOC - Citizens Bank of
Pennsylvania) 1.10 10/01/2032 8,300
7,320 Michigan Strategic Fund Ltd. (LOC - Fifth
Third Bank) 0.65 11/01/2028 7,320
----------
15,620
----------
Total Municipal Bonds 46,920
----------
Total Variable-Rate Demand Notes 59,920
----------
Total Money Market
Instruments
(cost: $161,965) 161,965
----------
----------------------------------------------------------------------------------------------------
13 | USAA Income Fund
|
----------------------------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES SECURITY VALUE (000)
----------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES LOANED (0.0%)
MONEY MARKET FUNDS (0.0%)
352,427 BlackRock Liquidity Funds TempFund,
0.18%(i) (cost: $352) $ 352
-----------
TOTAL INVESTMENTS (COST: $2,305,182) $ 2,388,110
===========
($ IN 000s) VALUATION HIERARCHY
-------------------
(LEVEL 1) (LEVEL 2) (LEVEL 3)
QUOTED PRICES OTHER SIGNIFICANT
IN ACTIVE SIGNIFICANT UNOBSERVABLE
MARKETS OBSERVABLE INPUTS
FOR IDENTICAL INPUTS
ASSETS TOTAL
----------------------------------------------------------------------------------------------------
FIXED INCOME SECURITIES:
CORPORATE OBLIGATIONS $ -- $ 811,180 $ -- $ 811,180
EURODOLLAR AND YANKEE OBLIGATIONS -- 351,700 -- 351,700
ASSET-BACKED SECURITIES -- 113,400 -- 113,400
COMMERCIAL MORTGAGE SECURITIES -- 354,326 -- 354,326
U.S. GOVERNMENT AGENCY ISSUES -- 344,173 -- 344,173
U.S. TREASURY SECURITIES -- 89,671 -- 89,671
MUNICIPAL BONDS -- 59,384 -- 59,384
EQUITY SECURITIES:
PREFERRED SECURITIES 15,496 86,463 -- 101,959
MONEY MARKET INSTRUMENTS:
COMMERCIAL PAPER -- 102,045 -- 102,045
VARIABLE-RATE DEMAND NOTES -- 59,920 -- 59,920
SHORT-TERM INVESTMENTS PURCHASED WITH
CASH COLLATERAL FROM SECURITIES LOANED:
MONEY MARKET FUNDS 352 -- -- 352
----------------------------------------------------------------------------------------------------
TOTAL $ 15,848 $ 2,372,262 $ -- $ 2,388,110
----------------------------------------------------------------------------------------------------
Reconciliation of assets in which significant unobservable inputs (Level 3) were
used in determining value:
ASSET-BACKED
SECURITIES
----------------------------------------------------------------------------------------------------
Balance as of July 31, 2009 $10,075
Net realized gain (loss) 958
Change in net unrealized appreciation/depreciation 1
Net purchases (sales) -
Transfers in and/or out of Level 3 (11,034)
----------------------------------------------------------------------------------------------------
BALANCE AS OF OCTOBER 31, 2009 $-
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Portfolio of Investments | 14
|
NOTES TO PORTFOLIO
OF INVESTMENTS
October 31, 2009 (unaudited)
GENERAL NOTES
USAA MUTUAL FUNDS TRUST (the Trust), registered under the Investment Company Act
of 1940 (the 1940 Act), as amended, is an open-end management investment company
organized as a Delaware statutory trust consisting of 45 separate funds. The
information presented in this quarterly report pertains only to the USAA Income
Fund (the Fund), which is classified as diversified under the 1940 Act.
The Fund has two classes of shares: Income Fund Shares and Income Fund
Institutional Shares. Each class of shares has equal rights to assets and
earnings, except that each class bears certain class-related expenses specific
to the particular class. These expenses include administration and servicing
fees, transfer agent fees, postage, shareholder reporting fees, and certain
registration and custodian fees. Expenses not attributable to a specific class,
income, and realized gains or losses on investments are allocated to each class
of shares based on each class's relative net assets. Each class has exclusive
voting rights on matters related solely to that class and separate voting rights
on matters that relate to both classes. The Institutional Shares are currently
only offered for sale to the USAA Target Retirement Funds (Target Funds) and not
to the general public. The Target Funds are managed by USAA Investment
Management Company (the Manager), an affiliate of the Fund.
A. SECURITY VALUATION - The value of each security is determined (as of the
close of trading on the New York Stock Exchange (NYSE) on each business day the
NYSE is open) as set forth below:
1. Debt securities with maturities greater than 60 days are valued each business
day by a pricing service (the Service) approved by the Trust's Board of
Trustees. The Service uses an evaluated mean between quoted bid and asked prices
or the last sales price to price securities when, in the Service's judgment,
these prices are readily available and are representative of the securities'
market values. For many securities, such prices are not readily available. The
Service generally prices these securities based on methods that include
consideration of yields or prices of securities of comparable quality, coupon,
maturity, and type; indications as to values from dealers in securities; and
general market conditions.
2. Equity securities, including exchange-traded funds (ETFs), except as
otherwise noted, traded primarily on a domestic securities exchange or the
Nasdaq over-the-counter markets are valued at the last sales price or official
closing price on the exchange or primary market on which they trade. Equity
securities traded primarily on foreign securities exchanges or markets are
valued at the last quoted sales price, or the most recently determined official
closing price calculated according to local market convention, available at the
time the Fund is valued. If no last sale or official closing price is reported
or available, the average of the bid and asked prices generally is used.
15 | USAA Income Fund
3. Investments in open-end investment companies, hedge, or other funds, other
than exchange-traded funds, are valued at their net asset value (NAV) at the end
of each business day.
4. Debt securities purchased with original or remaining maturities of 60 days or
less may be valued at amortized cost, which approximates market value.
5. Repurchase agreements are valued at cost, which approximates market value.
6. Futures are valued based upon the last sale price at the close of market on
the principal exchange on which they are traded.
7. Securities for which market quotations are not readily available or are
considered unreliable, or whose values have been materially affected by events
occurring after the close of their primary markets but before the pricing of the
Fund, are valued in good faith at fair value, using methods determined by the
Manager under valuation procedures approved by the Trust's Board of Trustees.
The effect of fair value pricing is that securities may not be priced on the
basis of quotations from the primary market in which they are traded and the
actual price realized from the sale of a security may differ materially from the
fair value price. Valuing these securities at fair value is intended to cause
the Fund's NAV to be more reliable than it otherwise would be.
Fair value methods used by the Manager include, but are not limited to,
obtaining market quotations from secondary pricing services, broker-dealers, or
widely used quotation systems. General factors considered in determining the
fair value of securities include fundamental analytical data, the nature and
duration of any restrictions on disposition of the securities, and an evaluation
of the forces that influenced the market in which the securities are purchased
and sold.
B. FAIR VALUE MEASUREMENTS - Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The three-level
valuation hierarchy disclosed in the portfolio of investments is based upon the
transparency of inputs to the valuation of an asset or liability as of the
measurement date. The three levels are defined as follows:
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) in
active markets for identical securities.
Level 2 - inputs to the valuation methodology are other significant observable
inputs, including quoted prices for similar securities, inputs that are
observable for the securities, either directly or indirectly, and
market-corroborated inputs such as market indices.
Level 3 - inputs to the valuation methodology are unobservable and significant
to the fair value measurement, including the Manager's own assumptions in
determining the fair value.
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risks associated with investing in those securities.
Notes to Portfolio of Investments | 16
C. REPURCHASE AGREEMENTS - The Fund may enter into repurchase agreements with
commercial banks or recognized security dealers. These agreements are
collateralized by underlying securities. The collateral obligations are
marked-to-market daily to ensure their value is equal to or in excess of the
repurchase agreement price plus accrued interest and are held by the Fund,
either through its regular custodian or through a special "tri-party" custodian
that maintains separate accounts for both the Fund and its counterparty, until
maturity of the repurchase agreement. Repurchase agreements are subject to
credit risk, and the Fund's Manager monitors the creditworthiness of sellers
with which the Fund may enter into repurchase agreements.
D. SECURITIES PURCHASED ON A DELAYED-DELIVERY OR WHEN-ISSUED BASIS - Delivery
and payment for securities that have been purchased by the Fund on a
delayed-delivery or when-issued basis can take place a month or more after the
trade date. During the period prior to settlement, these securities do not earn
interest, are subject to market fluctuation, and may increase or decrease in
value prior to their delivery. The Fund maintains segregated assets with a
market value equal to or greater than the amount of its purchase commitments.
The purchase of securities on a delayed-delivery or when-issued basis may
increase the volatility of the Fund's NAV to the extent that the Fund makes such
purchases while remaining substantially fully invested.
E. LENDING OF PORTFOLIO SECURITIES - The Fund, through its third-party
securities-lending agent, Wachovia Global Securities Lending, may lend its
securities to qualified financial institutions, such as certain broker-dealers,
to earn additional income. The borrowers are required to secure their loans
continuously with cash collateral in an amount at least equal to the fair value
of the securities loaned, initially in an amount at least equal to 102% of the
fair value of domestic securities loaned and 105% of the fair value of
international securities loaned. Cash collateral is invested in high-quality
short-term investments. Cash collateral requirements are determined daily based
on the prior business day's ending value of securities loaned. Imbalances in
cash collateral may occur on days where market volatility causes security prices
to change significantly, and are adjusted the next business day. Risks to the
Fund in securities-lending transactions are that the borrower may not provide
additional collateral when required or return the securities when due, and that
the value of the short-term investments will be less than the amount of cash
collateral required to be returned to the borrower. The aggregate fair market
value of the loaned portion of these securities as of October 31, 2009, was
approximately $250,000.
F. SUBSEQUENT EVENTS - Subsequent events are events or transactions that occur
after the balance sheet date but before the quarterly report is issued and are
categorized as recognized or non-recognized for quarterly report purposes. The
Manager has evaluated subsequent events through December 17, 2009, the date the
quarterly report was issued, and has determined there were no events that
required recognition or disclosure in the Fund's quarterly report.
G. As of October 31, 2009, the cost of securities, for federal income tax
purposes, was approximately the same as that reported in the portfolio of
investments. Gross unrealized appreciation and depreciation of investments as of
October 31, 2009, were $131,161,000 and $48,233,000, respectively, resulting in
net unrealized appreciation of $82,928,000.
H. The portfolio of investments category percentages shown represent the
percentages of the investments to net assets, which were $2,406,820,000 at
October 31, 2009, and, in total, may not
17 | USAA Income Fund
equal 100%. A category percentage of 0.0% represents less than 0.1% of net
assets. Investments in foreign securities were 14.8% of net assets at
October 31, 2009.
CATEGORIES AND DEFINITIONS
EURODOLLAR AND YANKEE OBLIGATIONS - Eurodollar obligations are dollar-
denominated instruments that are issued outside the U.S. capital markets by
foreign corporations and financial institutions and by foreign branches of U.S.
corporations and financial institutions. Yankee obligations are dollar-
denominated instruments that are issued by foreign issuers in the U.S. capital
markets.
INTEREST-ONLY COMMERCIAL MORTGAGE-BACKED SECURITIES (CMBS IOS) - represent the
right to receive only the interest payments on an underlying pool of commercial
mortgage loans. The purchase yield reflects an anticipated yield based upon
interest rates at the time of purchase and the estimated timing and amount of
future cash flows. Coupon rates after purchase vary from period to period. The
principal amount represents the notional amount of the underlying pool on which
current interest is calculated. CMBS IOs are backed by loans that have various
forms of prepayment protection, which include lock-out provisions, yield
maintenance provisions, and prepayment penalties. This serves to moderate their
prepayment risk. CMBS IOs are subject to default-related prepayments that may
have a negative impact on yield.
U.S. TREASURY INFLATION-INDEXED NOTES - designed to provide a real rate of
return after being adjusted over time to reflect the impact of inflation. Their
principal value periodically adjusts to the rate of inflation. They trade at the
prevailing real, or after-inflation, interest rates. The U.S. Treasury
guarantees repayment of these securities of at least their face value in the
event of sustained deflation or a drop in prices. Inflation adjustments to the
face value of these securities are included in interest income.
VARIABLE-RATE DEMAND NOTES (VRDNS) - provide the right to sell the security at
face value on either that day or within the rate-reset period. The interest rate
is adjusted at a stipulated daily, weekly, monthly, quarterly, or other
specified time interval to reflect current market conditions. VRDNs will
normally trade as if the maturity is the earlier put date, even though stated
maturity is longer.
PORTFOLIO ABBREVIATIONS AND DESCRIPTIONS
EDA Economic Development Authority
FDIC TLGP The FDIC Temporary Liquidity Guarantee Program provides a
guarantee of payment of principal and interest on certain
newly issued senior unsecured debt through the program's
expiration date on December 31, 2012. The guarantee carries
the full faith and credit of the U.S. government.
IDA Industrial Development Authority/Agency
PRE Prerefunded to a date prior to maturity
REIT Real estate investment trust
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CREDIT ENHANCEMENTS - add the financial strength of the provider of the
enhancement to support the issuer's ability to repay the principal and interest
payments when due. The enhancement may be
Notes to Portfolio of Investments | 18
provided by a high-quality bank, insurance company or other corporation, or a
collateral trust. The enhancements do not guarantee the market values of the
securities.
(INS) Principal and interest payments are insured by one of the
following: AMBAC Assurance Corp., Financial Guaranty Insurance
Co., Financial Security Assurance Holdings, Ltd., or National
Public Finance Guarantee Corp. Although bond insurance reduces
the risk of loss due to default by an issuer, such bonds remain
subject to the risk that value may fluctuate for other reasons,
and there is no assurance that the insurance company will meet
its obligations.
(LIQ) Liquidity enhancement that may, under certain circumstances,
provide for repayment of principal and interest upon demand from
one of the following: Bayerische Landesbank, Lloyds TSB Bank plc,
State Street Bank and Trust Co., or WestLB A.G.
(LOC) Principal and interest payments are guaranteed by a bank letter
of credit or other bank credit agreement.
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SPECIFIC NOTES
(a) Restricted security that is not registered under the Securities Act of
1933. A resale of this security in the United States may occur in an
exempt transaction to a qualified institutional buyer as defined by Rule
144A, and as such has been deemed liquid by the Manager under liquidity
guidelines approved by the Trust's Board of Trustees, unless otherwise
noted as illiquid.
(b) Security is perpetual and has no final maturity date but may be subject
to calls at various dates in the future.
(c) Variable-rate or floating-rate security - interest rate is adjusted
periodically. The interest rate disclosed represents the current rate at
October 31, 2009.
(d) Security deemed illiquid by the Manager, under liquidity guidelines
approved by the Trust's Board of Trustees. The aggregate market value of
these securities at October 31, 2009, was $4,640,000, which represented
0.2% of the Fund's net assets.
(e) Currently the issuer is in default with respect to interest and/or
principal payments.
(f) U.S. government agency issues - mortgage-backed securities issued by
Government National Mortgage Association (GNMA) and certain other U.S.
government guaranteed securities are supported by the full faith and
credit of the U.S. government. Securities issued by government-sponsored
enterprises, indicated with "+" are supported only by the right of the
government-sponsored enterprise to borrow from the U.S. Treasury, the
discretionary authority of the U.S. government to purchase the
government-sponsored enterprises' obligations, or by the credit of the
issuing agency, instrumentality, or corporation, and are neither issued
nor guaranteed by the U.S. Treasury.
(g) The security or a portion thereof was out on loan as of October
31, 2009.
19 | USAA Income Fund
(h) Commercial paper issued in reliance on the "private placement" exemption
from registration afforded by Section 4(2) of the Securities Act of
1933. Unless this commercial paper is subsequently registered, a resale
of this commercial paper in the United States must be effected in a
transaction exempt from registration under the Securities Act of 1933.
Section 4(2) commercial paper is normally resold to other investors
through or with the assistance of the issuer or an investment dealer who
makes a market in this security, and as such has been deemed liquid by
the Manager under liquidity guidelines approved by the Trust's Board of
Trustees, unless otherwise noted as illiquid.
(i) Rate represents the money market fund annualized seven-day yield at
October 31, 2009.
Notes to Portfolio of Investments | 20
ITEM 2. CONTROLS AND PROCEDURES
The principal executive officer and principal financial officer of USAA Mutual
Funds Trust (Trust) have concluded that the Trust's disclosure controls and
procedures are sufficient to ensure that information required to be disclosed by
the Trust in this Form N-Q was recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms, based upon such officers' evaluation of these controls and
procedures as of a date within 90 days of the filing date of the report.
There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Trust's internal controls
or in other factors that could significantly affect the Trust's internal
controls subsequent to the date of their evaluation.
ITEM 3. EXHIBITS.
Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940
(17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: USAA MUTUAL FUNDS TRUST - Period Ended October 31, 2009
By:* /s/ CHRISTOPHER P. LAIA
--------------------------------------------------------------
Signature and Title: Christopher P. Laia, Assistant Secretary
Date: 12-18-2009
-------------------------------
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By:* /s/ CHRISTOPHER W. CLAUS
-----------------------------------------------------
Signature and Title: Christopher W. Claus, President
Date: 12-21-2009
------------------------------
By:* /s/ ROBERTO GALINDO, JR.
-----------------------------------------------------
Signature and Title: Roberto Galindo, Jr., Treasurer
Date: 12-18-2009
------------------------------
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*PRINT THE NAME AND TITLE OF EACH SIGNING OFFICER UNDER HIS OR HER SIGNATURE.
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