UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR/S
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
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: MAY 31,
Date of reporting period: NOVEMBER 30, 2009
ITEM 1. SEMIANNUAL REPORT TO STOCKHOLDERS.
USAA MUTUAL FUNDS TRUST - SEMIANNUAL REPORT FOR PERIOD ENDED NOVEMBER 30, 2009
USAA PRECIOUS METALS AND MINERALS FUND
[LOGO OF USAA]
USAA(R)
[GRAPHIC OF USAA PRECIOUS METALS AND MINERALS FUND]
===============================================
SEMIANNUAL REPORT
USAA PRECIOUS METALS AND MINERALS FUND
FUND SHARES o INSTITUTIONAL SHARES
NOVEMBER 30, 2009
===============================================
================================================================================
<PAGE>
================================================================================
FUND OBJECTIVE
LONG-TERM CAPITAL APPRECIATION AND TO PROTECT THE PURCHASING POWER OF
SHAREHOLDERS' CAPITAL AGAINST INFLATION.
--------------------------------------------------------------------------------
TYPES OF INVESTMENTS
Normally invests at least 80% of the Fund's assets in equity securities of
domestic and foreign companies principally engaged in the exploration, mining,
or processing of gold and other precious metals and minerals.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable
portion of your distribution and, if you live in a state that requires state
income tax withholding, at your state's set rate. However, you may elect not to
have withholding apply or to have income tax withheld at a higher rate. If you
wish to make such an election, please call USAA Investment Management Company at
(800) 531-USAA (8722).
If you must pay estimated taxes, you may be subject to estimated tax penalties
if your estimated tax payments are not sufficient and sufficient tax is not
withheld from your distribution.
For more specific information, please consult your tax adviser.
================================================================================
<PAGE>
================================================================================
TABLE OF CONTENTS
--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE 2
MANAGERS' COMMENTARY 4
FUND RECOGNITION 7
INVESTMENT OVERVIEW 11
FINANCIAL INFORMATION
Portfolio of Investments 19
Notes to Portfolio of Investments 23
Financial Statements 25
Notes to Financial Statements 28
EXPENSE EXAMPLE 44
THIS REPORT IS FOR THE INFORMATION OF THE SHAREHOLDERS AND OTHERS WHO HAVE
RECEIVED A COPY OF THE CURRENTLY EFFECTIVE PROSPECTUS OF THE FUND, MANAGED BY
USAA INVESTMENT MANAGEMENT COMPANY. IT MAY BE USED AS SALES LITERATURE ONLY WHEN
PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS, WHICH PROVIDES FURTHER DETAILS
ABOUT THE FUND.
(C)2010, USAA. All rights reserved.
================================================================================
<PAGE>
================================================================================
PRESIDENT'S MESSAGE
"IN MY OPINION, THOSE WHO WERE DIVERSIFIED
WEATHERED THE STORM BETTER THAN THOSE [PHOTO OF DANIEL S. McNAMARA]
WHO WERE AGGRESSIVELY POSITIONED."
--------------------------------------------------------------------------------
DECEMBER 2009
As we head into 2010, I wish you a healthy and prosperous new year. I am
honored to be the new president of the USAA Investment Management Company, an
organization with a rich history of service and accomplishment.
At the time of this writing, the financial markets appear to be back on track --
an excellent time, in my opinion, to take stock of the past year. At the
beginning of 2009, stocks seemed priced for extinction. In the fixed income
market, credit spreads (or, the difference in bond yields) had widened to record
levels as investors fled to the safety of U.S. Treasury securities. The U.S.
economy was in a deep recession. Home prices continued to fall and unemployment
steadily increased, leading to a sharp decline in consumer spending.
In March 2009, however, world stock prices reversed course. For example, the S&P
500 Index rose 64% between the market bottom on March 6, 2009, and November 30,
2009. The fixed income market experienced record price appreciation, and the
prices of oil and other commodities such as gold and precious metals increased.
The dollar weakened, making U.S. goods and services less expensive to buyers
around the world. Meanwhile, the federal government's fiscal stimulus spending,
including its "cash for clunkers" program, seemed to help stabilize the economy.
In the third quarter, the U.S. gross domestic product grew at 2.2%.
================================================================================
2 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
I believe the worst of the crisis appears to be over. Nevertheless, risk
remains. And no one knows exactly what will happen next. This makes it an
opportune time for all of us to take stock of our investment portfolios.
Looking back at the market decline, many investors were not appropriately
positioned relative to their risk tolerance. In my opinion, those who were
diversified weathered the storm better than those who were aggressively
positioned.
With this in mind, I have undertaken a review of my own investment portfolio.
Like a medical exam helps me to take care of my physical health, a portfolio
checkup helps me to monitor my financial health. The process gives me the
opportunity to reflect on my goals, re-evaluate my risk tolerance, consider
changes in my investment strategy, and reposition my portfolio accordingly. I
urge you to do the same. Our trained service representatives are standing ready
to assist you -- free of charge.
At USAA Investment Management Company, we stand ready to help you with your
investment needs. We continue to offer what we consider an excellent value --
some of the industry's top investment talent, first-class service, and no-load
mutual funds. On behalf of all us, thank you for your business and the trust you
have placed in us.
Sincerely,
/S/ DANIEL S. MCNAMARA
Daniel S. McNamara
President
USAA Investment Management Company
Diversification does not guarantee a profit or prevent a loss. o Mutual fund
operating expenses apply and continue throughout the life of the Fund. o Past
performance is no guarantee of future results.
================================================================================
PRESIDENT'S MESSAGE | 3
<PAGE>
================================================================================
MANAGERS' COMMENTARY ON THE FUND
--------------------------------------------------------------------------------
[PHOTO OF MARK JOHNSON] [PHOTO OF DAN DENBOW]
MARK JOHNSON, CFA DAN DENBOW, CFA
USAA Investment USAA Investment
Management Company Management Company
--------------------------------------------------------------------------------
o HOW DID THE USAA PRECIOUS METALS AND MINERALS FUND (THE FUND SHARES)
PERFORM?
For the six-month period ended November 30, 2009, the Fund Shares had a
total return of 22.04%. This compares to returns of 23.43% for the Lipper
Gold-Oriented Funds Index, 20.50% for the S&P 500 Index, 20.53% for London
Gold, and 15.03% for the Philadelphia Gold & Silver Index (XAU).
The Fund's long-term track record is outstanding. Its performance ranks
first among 51 and 29 gold-oriented funds tracked by Lipper for the five-
and ten-year periods ended November 30, 2009, respectively, and fourth
among 54 funds for the three-year period. This ranking is based on total
return amongst all funds within the Fund's universe.
o WHAT IS YOUR CURRENT VIEW ON GOLD PRICES?
When we last reported to shareholders at the end of May, we were bullish on
gold prices over any time horizon, with the caveat that gold is a highly
volatile asset class. Gold began the period priced at
Refer to pages 13 and 16 for benchmark definitions.
Foreign and precious metals and minerals investing are subject to
additional risks, such as currency fluctuations, market illiquidity, and
political instability.
Past performance is no guarantee of future results.
================================================================================
4 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
$979.15 per ounce, hit a period low of $909.50 per ounce on July 8, 2009,
then traded in a range through August 31, 2009, before spiking to end the
six months at $1,179.60 per ounce. The net effect of these moves was a
20.47% increase in the gold price.
Gold during the six-month period traded against the U.S. dollar, with gold
moving up sharply as investors grew increasingly concerned about the impact
of so much government spending and borrowing on the dollar. There have been
some worrying speculative signs within the gold market, however. We believe
speculative interest is up, with many new investors entering the market who
don't necessarily understand how the market works. As a result, we are more
cautious over the short term than we were six months ago.
o WHY HAS GOLD BEEN TRADING IN REVERSE LOCKSTEP TO THE U.S. DOLLAR?
Gold and the dollar tend to trade in opposite directions because they are
polar extremes. Gold is the supreme hard currency while the dollar is the
supreme paper currency. This relationship is important today because people
are worried about inflation, which is more paper money chasing fewer goods.
Inflation erodes the value of the paper currency versus the hard currency.
o IS THERE ANY EVIDENCE OF INFLATION TODAY?
Very little. In fact, what the Federal Reserve Board (the Fed) and U.S.
Treasury are fighting is the potential for deflation in light of too much
capacity and not enough spending. There are three reasons why we expect
inflation coming out of the recession. First, the Fed wants to avoid a
double dip recession, so they will be slow to remove the stimulus, allowing
inflation to get established. Second, of the four options for addressing
the structural U.S. budget deficit -- tax increases, spending cuts,
reneging on entitlements, and inflation -- we believe that inflation is the
most politically attractive option. Third, it may actually be in the
country's best interest to allow some inflation as it
================================================================================
MANAGERS' COMMENTARY ON THE FUND | 5
<PAGE>
================================================================================
transfers some of the costs to foreign creditors. Given these views, we are
still quite bearish on the dollar -- and bullish on gold -- over the
medium- to long-term period.
o DID YOU MAKE ANY MAJOR CHANGES IN ALLOCATION AMONG PRECIOUS METALS AND
MINERALS DURING THE REPORTING PERIOD?
Related to our concerns about speculation, the biggest change was that we
allowed cash equivalents to build, from 4.6% of net assets at the beginning
of the period to 6.3% at the end of the reporting period. Gold exposure
held steady at about 79.6% of net assets, silver rose slightly to 7.1%, and
platinum was slightly reduced to 6.9%. We continued to have zero exposure
to base metals.
Our exposure to these precious metals is through mining companies.
Holdings that had a particularly positive impact on performance during the
period were Silver Wheaton Corp., which made a shrewd acquisition that
solidifies its growth profile for the next several years; IAMGOLD Corp.,
which increased production estimates at a mine under construction and had
good exploration results, and; Red Back Mining, Inc., which reduced
operating costs and had strong exploration results.
o WHAT'S YOUR MESSAGE TO SHAREHOLDERS IN THESE EXTRAORDINARY TIMES?
Investors must understand that gold and other precious metals and minerals
are extremely volatile investments. The Fund is an excellent way to attempt
to capture the benefits of the asset class through active management within
a diversified portfolio. In fact, diversification is its major benefit
because the Fund's returns tend to be uncorrelated over time with other
USAA funds. Thank you for your investment in the Fund. We will continue to
work hard to keep your trust.
Foreign and precious metals and minerals investing are subject to
additional risks, such as currency fluctuations, market illiquidity, and
political instability o Diversification does not guarantee a profit or
prevent a loss.
================================================================================
6 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
FUND RECOGNITION
USAA PRECIOUS METALS AND MINERALS FUND SHARES
--------------------------------------------------------------------------------
OVERALL MORNINGSTAR RATING(TM)
out of 61 specialty - precious metals funds
for the period ended November 30, 2009:
OVERALL RATING
* * * *
3-YEAR
* * *
out of 61 funds
5-YEAR
* * * *
out of 60 funds
10-YEAR
* * * *
out of 35 funds
The Overall Morningstar Rating for a fund is derived from a weighted average of
the performance figures associated with its three-, five-, and 10-year (if
applicable) Morningstar Rating metrics. Ratings are based on risk-adjusted
returns.
--------------------------------------------------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. For each fund with at least
a three-year history, Morningstar calculates a Morningstar Rating(TM) based on a
Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's
monthly performance (including the effects of sales charges, loads, and
redemption fees), placing more emphasis on downward variations and rewarding
consistent performance. The top 10% of the funds in each broad asset class
receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars,
the next 22.5% receive 2 stars, and the bottom 10% receive 1 star.
================================================================================
FUND RECOGNITION | 7
<PAGE>
================================================================================
TOP FUNDS OVER 5 YEARS
The American Association of Individual Investors included the USAA Precious
Metals & Minerals Fund among "The Top Funds Over 5 Years: Surviving the Claws of
a Bear Market." The Fund was among five USAA funds recognized in the AAII
Journal April 2009 issue for beating their peer groups based on five-year
annualized total returns over a five-year period ended December 31, 2008.
The American Association of Individual Investors (AAII) is an independent
nonprofit association whose purpose is to help its members become effective
managers of their own assets through programs of education, information, and
research. In its 28th Edition, 2009, of The Individual Investor's Guide to the
Top Mutual Funds, AAII ranked mutual funds during the period 2004-2008. To be
rated a top fund, no-load and low-load mutual funds open to new investors must
have beaten their peer group benchmarks on a five-year annualized total return
basis. Past performance is no guarantee of future results. Go to www.AAII.com
for more information.
================================================================================
8 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
[LOGO OF LIPPER [LOGO OF LIPPER [LOGO OF LIPPER [LOGO OF LIPPER [LOGO OF LIPPER
FUND AWARDS] FUND AWARDS] FUND AWARDS] FUND AWARDS] FUND AWARDS]
US 2009 US 2008 US 2007 US 2006 USA 2005
FOR THE FIFTH YEAR IN A ROW, LIPPER INC. HAS RECOGNIZED THE USAA PRECIOUS METALS
AND MINERALS FUND AS BEST IN ITS CATEGORY FOR CONSISTENT RETURN:
LIPPER FUND AWARDS 2005-2009
Lipper named the Fund "Best Fund Over 10 Years" for Consistent Return in the
Gold Oriented Funds category for the 10-year periods ended December 31, 2008,
2007, 2006, 2005, and 2004. The Precious Metals and Minerals Fund was chosen
among 28 Gold Oriented Funds for the 10-year period ended December 31, 2008,
among 24 Gold Oriented Funds for the 10-year period ended December 31, 2007,
among 23 Gold Oriented Funds for the 10-year period ended December 31, 2006,
among 21 Gold Oriented funds for the 10-year period ended 2005, and among 19
Gold Oriented Funds for the 10-year period ended 2004.
--------------------------------------------------------------------------------
For the three- and five-year periods ended December 31, 2008, the Fund was
ranked 3 of 52 and 1 of 48 Gold Oriented funds, respectively. For the three- and
five-year periods ended December 31, 2007, the Fund was ranked 6 of 50 and 2 of
44 Gold Oriented funds, respectively. For the three- and five-year periods ended
December 31, 2006, the Fund was ranked 3 of 49 and 4 of 38 Gold Oriented funds,
respectively. For the three- and five-year periods ended December 31, 2005, the
Fund was ranked 2 of 46 and 1 of 34 Gold Oriented funds, respectively. For the
three- and five-year periods ended December 31, 2004, the Fund was ranked 8 of
39 and 2 of 30 Gold Oriented funds, respectively. The Lipper Fund Awards program
highlights funds that have excelled in delivering consistently strong
risk-adjusted performance, relative to peers. The Lipper Fund Awards are awarded
to funds in 21 countries in Asia, Europe, and the Americas. Lipper designates
award-winning funds in most individual classifications for the three-, five-,
and 10-year periods. In addition, the Lipper Fund Awards program spotlights fund
families with high average scores for all funds within a particular asset class
or overall. Past performance is no guarantee of future results.
================================================================================
FUND RECOGNITION | 9
<PAGE>
================================================================================
LIPPER LEADER (OVERALL)
[5]
TOTAL RETURN
The Precious Metals and Minerals Fund Shares are listed as a Lipper Leader for
Total Return among 54 funds within the Lipper Gold Oriented Funds category for
the overall period ended November 30, 2009. The Fund received a Lipper Leader
rating for Total Return among 54, 51, and 29 funds for the three-, five-, and
10-year periods, respectively. Lipper ratings for Total Return reflect funds'
historical total return performance relative to peers as of November 30, 2009.
--------------------------------------------------------------------------------
Ratings are subject to change every month and are based on an equal-weighted
average of percentile ranks for the Total Return and Consistent Return metrics
over three-, five-, and 10-year periods (if applicable). The highest 20% of
funds in each peer group are named Lipper Leaders, the next 20% receive a score
of 4, the middle 20% are scored 3, the next 20% are scored 2, and the lowest 20%
are scored 1. Lipper ratings are not intended to predict future results, and
Lipper does not guarantee the accuracy of this information. More information is
available at WWW.LIPPERLEADERS.COM. Lipper Leader Copyright 2010, Reuters, All
Rights Reserved.
================================================================================
10 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
INVESTMENT OVERVIEW
USAA PRECIOUS METALS AND MINERALS FUND SHARES (Ticker Symbol: USAGX)
--------------------------------------------------------------------------------
11/30/09 5/31/09
--------------------------------------------------------------------------------
Net Assets $1,596.9 Million $1,261.0 Million
Net Asset Value Per Share $35.99 $29.49
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 11/30/09
--------------------------------------------------------------------------------
5/31/09 to 11/30/09* 1 Year 5 Years 10 Years
22.04% 121.11% 25.04% 25.27%
--------------------------------------------------------------------------------
EXPENSE RATIO**
--------------------------------------------------------------------------------
1.31%
*Total returns for periods of less than one year are not annualized. This
six-month return is cumulative.
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF
FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE
DATA QUOTED. THE RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE, SO
THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, VISIT
USAA.COM.
**THE EXPENSE RATIO REPRESENTS THE TOTAL ANNUAL OPERATING EXPENSES, INCLUDING
ANY ACQUIRED FUND FEES AND EXPENSES, BEFORE REDUCTIONS OF ANY EXPENSES PAID
INDIRECTLY, AS REPORTED IN THE FUND'S PROSPECTUS DATED OCTOBER 1, 2009, AND IS
CALCULATED AS A PERCENTAGE OF AVERAGE NET ASSETS. THIS EXPENSE RATIO MAY DIFFER
FROM THE EXPENSE RATIO DISCLOSED IN THE FINANCIAL HIGHLIGHTS.
Total return measures the price change in a share assuming the reinvestment of
all net investment income and realized capital gain distributions. The total
returns quoted do not reflect adjustments made to the enclosed financial
statements in accordance with U.S. generally accepted accounting principles or
the deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares.
================================================================================
INVESTMENT OVERVIEW | 11
<PAGE>
================================================================================
o CUMULATIVE PERFORMANCE COMPARISON o
[CHART OF CUMULATIVE PERFORMANCE COMPARISON]
USAA PRECIOUS METALS PHILADELPHIA
AND MINERALS LIPPER GOLD GOLD & SILVER
FUND SHARES FUNDS INDEX INDEX (XAU) LONDON GOLD S&P 500 INDEX
11/30/99 $10,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00
12/31/99 10,257.29 10,162.86 10,138.72 9,962.24 10,588.96
01/31/00 9,228.13 9,157.85 8,946.91 9,723.70 10,056.95
02/29/00 9,296.74 9,143.76 8,979.48 10,078.94 9,866.57
03/31/00 8,782.16 8,635.63 8,497.99 9,498.88 10,831.81
04/30/00 8,250.43 8,172.60 8,234.78 9,440.54 10,505.92
05/31/00 8,353.34 8,278.30 8,498.95 9,344.43 10,290.38
06/30/00 8,987.99 8,741.21 8,731.98 9,890.17 10,544.06
07/31/00 8,336.19 8,134.60 7,680.74 9,498.88 10,379.26
08/31/00 8,936.54 8,671.62 7,959.89 9,507.47 11,023.92
09/30/00 8,284.73 8,083.45 7,593.56 9,392.48 10,441.93
10/31/00 7,495.71 7,364.82 6,673.30 9,078.43 10,397.78
11/30/00 7,941.68 7,684.26 7,191.93 9,236.31 9,578.03
12/31/00 8,721.09 8,400.27 7,855.10 9,419.94 9,624.90
01/31/01 8,600.44 8,389.48 7,465.47 9,078.43 9,966.39
02/28/01 8,979.62 8,733.81 8,069.13 9,153.94 9,057.63
03/31/01 8,238.50 7,936.72 7,312.32 8,845.03 8,483.83
04/30/01 9,582.85 9,111.90 8,474.42 9,032.09 9,143.11
05/31/01 10,065.44 9,531.55 8,799.84 9,181.40 9,204.37
06/30/01 10,410.15 9,594.32 8,204.15 9,287.80 8,980.35
07/31/01 9,824.15 9,083.75 8,174.87 9,126.48 8,891.94
08/31/01 10,479.09 9,600.49 8,750.95 9,370.17 8,335.29
09/30/01 10,944.45 9,914.29 8,943.24 10,060.07 7,662.20
10/31/01 10,720.39 9,707.22 8,440.96 9,567.53 7,808.31
11/30/01 10,806.56 9,710.40 8,156.65 9,455.98 8,407.25
12/31/01 11,421.86 10,184.60 8,448.61 9,490.30 8,480.90
01/31/02 12,932.04 11,336.81 9,519.63 9,689.38 8,357.14
02/28/02 14,390.15 12,481.80 10,150.02 10,188.78 8,195.97
03/31/02 15,865.62 13,688.56 11,048.81 10,344.95 8,504.22
04/30/02 16,820.34 14,510.20 11,527.30 10,578.34 7,988.62
05/31/02 20,326.74 17,199.73 13,163.50 11,209.89 7,929.77
06/30/02 17,566.75 15,095.88 11,171.07 10,931.87 7,364.94
07/31/02 14,581.10 12,514.32 9,464.02 10,456.50 6,790.96
08/31/02 17,150.15 14,533.21 10,940.73 10,736.23 6,835.39
09/30/02 17,184.86 14,650.92 10,986.21 11,110.35 6,092.52
10/31/02 15,778.83 13,430.11 9,993.76 10,876.95 6,628.76
11/30/02 15,848.26 13,452.93 9,984.30 10,950.75 7,018.93
12/31/02 19,144.11 16,370.40 12,111.02 11,916.94 6,606.58
01/31/03 19,666.88 16,528.27 12,148.89 12,613.69 6,433.51
02/28/03 18,134.63 15,524.02 11,431.85 11,925.52 6,336.98
03/31/03 17,143.17 14,381.11 10,635.88 11,493.05 6,398.51
04/30/03 17,197.25 14,339.30 10,382.68 11,558.26 6,925.56
05/31/03 19,288.32 15,980.90 11,695.69 12,404.32 7,290.45
06/30/03 20,063.46 16,455.09 12,525.91 11,875.75 7,383.45
07/31/03 21,523.61 17,369.64 12,922.47 12,176.08 7,513.63
08/31/03 24,840.48 19,858.50 14,547.74 12,891.71 7,660.16
09/30/03 26,030.22 20,565.77 14,575.54 13,317.32 7,578.82
10/31/03 29,689.60 23,014.39 15,694.00 13,257.25 8,007.55
11/30/03 33,763.58 24,951.88 17,560.28 13,672.56 8,078.00
12/31/03 32,818.43 25,269.67 17,434.44 14,286.94 8,501.65
01/31/04 29,489.30 22,905.45 15,323.83 13,720.61 8,657.70
02/29/04 29,886.52 23,350.94 16,030.53 13,586.75 8,778.03
03/31/04 31,910.48 24,747.97 16,871.54 14,542.65 8,645.61
04/30/04 25,384.63 19,590.58 13,180.72 13,334.48 8,509.88
05/31/04 27,465.34 21,065.87 14,467.45 13,497.51 8,626.66
06/30/04 26,614.14 20,415.12 13,901.05 13,585.04 8,794.41
07/31/04 25,706.19 20,045.67 14,019.00 13,434.01 8,503.34
08/31/04 27,295.10 21,355.81 15,305.15 13,978.03 8,537.74
09/30/04 29,205.56 23,341.49 16,472.44 14,266.35 8,630.21
10/31/04 29,867.61 23,803.84 16,719.94 14,606.14 8,762.05
11/30/04 31,134.95 25,090.33 17,281.56 15,562.04 9,116.58
12/31/04 29,290.03 23,713.00 16,093.09 10,000.00 9,426.80
01/31/05 27,685.10 22,471.17 14,815.40 10,000.00 9,197.02
02/28/05 29,576.63 24,220.38 16,065.49 10,315.05 9,390.57
03/31/05 28,239.18 22,948.63 15,247.84 10,126.73 9,224.28
04/30/05 25,602.51 20,759.89 13,594.97 10,320.98 9,049.34
05/31/05 25,984.63 21,052.55 14,066.01 9,817.60 9,337.27
06/30/05 28,640.42 22,814.03 15,165.52 10,354.14 9,350.52
07/31/05 28,372.93 22,821.60 14,808.60 10,162.26 9,698.26
08/31/05 30,111.60 23,878.75 15,651.15 10,262.94 9,609.77
09/30/05 34,678.02 27,679.15 18,481.72 11,210.47 9,687.60
10/31/05 32,347.05 25,885.88 17,421.21 11,151.25 9,526.10
11/30/05 35,824.40 28,516.93 18,790.72 11,741.09 9,886.40
12/31/05 40,787.16 31,639.58 21,009.78 12,152.08 9,889.79
01/31/06 47,392.45 37,587.76 25,315.12 13,472.70 10,151.70
02/28/06 45,139.33 35,120.77 21,901.38 13,170.67 10,179.25
03/31/06 50,261.80 38,596.55 23,292.29 13,786.57 10,305.96
04/30/06 56,520.45 43,260.93 26,016.76 15,255.24 10,444.34
05/31/06 51,552.04 39,525.54 23,483.36 15,468.44 10,143.74
06/30/06 52,071.99 39,289.95 23,679.16 14,532.75 10,157.49
07/31/06 52,187.54 39,308.31 23,407.84 14,982.83 10,220.15
08/31/06 54,825.80 40,634.92 24,243.39 14,769.63 10,463.32
09/30/06 49,587.79 36,963.15 21,255.87 14,195.19 10,732.96
10/31/06 53,439.27 39,721.46 22,740.15 14,301.79 11,082.70
11/30/06 59,659.41 43,627.95 24,741.88 15,319.20 11,293.45
12/31/06 58,404.89 42,691.80 23,640.96 14,970.98 11,451.87
01/31/07 58,888.44 42,423.27 23,264.81 15,409.21 11,625.06
02/28/07 60,086.81 43,254.70 23,242.08 15,733.74 11,397.69
03/31/07 60,276.03 43,672.17 22,827.67 15,675.71 11,525.17
04/30/07 60,297.05 44,476.59 22,856.64 16,036.95 12,035.68
05/31/07 60,675.49 44,702.82 23,329.32 15,612.93 12,455.67
06/30/07 59,687.35 44,097.84 22,702.78 15,409.21 12,248.74
07/31/07 60,717.53 45,220.30 24,854.26 15,764.54 11,868.97
08/31/07 58,446.93 42,634.29 23,547.70 15,918.51 12,046.89
09/30/07 70,703.97 51,629.32 28,237.55 17,600.38 12,497.43
10/31/07 80,669.38 58,067.85 31,496.36 18,701.88 12,696.22
11/30/07 72,238.73 52,407.76 28,667.04 18,559.75 12,165.43
12/31/07 74,569.94 53,147.89 29,053.62 19,750.09 12,081.04
01/31/08 81,150.99 56,804.71 31,257.25 21,870.19 11,356.39
02/29/08 88,213.58 61,667.86 32,987.99 23,013.15 10,987.47
03/31/08 80,921.68 56,134.14 29,677.32 22,112.99 10,940.03
04/30/08 75,739.39 53,000.59 28,778.15 20,632.48 11,472.84
05/31/08 81,449.08 56,577.56 30,531.09 20,981.88 11,621.45
06/30/08 84,452.98 57,575.42 32,866.41 22,036.01 10,641.72
07/31/08 75,211.99 50,679.71 28,445.88 21,745.82 10,552.26
08/31/08 66,635.99 44,807.02 25,166.07 19,732.32 10,704.90
09/30/08 58,816.69 39,279.53 22,142.11 20,952.27 9,751.01
10/31/08 34,854.34 24,335.80 13,711.06 17,310.20 8,113.35
11/30/08 43,040.52 28,632.88 17,215.58 19,294.09 7,531.18
12/31/08 56,243.88 35,827.11 20,997.55 20,602.87 7,611.31
01/31/09 55,662.14 35,907.72 21,026.30 21,781.36 6,969.78
02/28/09 56,005.89 35,804.91 20,203.16 22,551.23 6,227.66
03/31/09 63,542.10 40,151.82 22,830.08 21,710.29 6,773.17
04/30/09 59,152.59 37,837.96 20,376.53 20,922.66 7,421.42
05/31/09 77,979.88 49,151.41 27,217.99 23,107.90 7,836.53
06/30/09 67,746.50 43,634.23 23,635.37 22,136.68 7,852.07
07/31/09 72,823.53 46,649.09 25,269.07 22,243.28 8,445.98
08/31/09 73,352.38 47,065.36 25,016.22 22,634.13 8,750.92
09/30/09 82,686.70 52,909.74 28,160.21 23,587.59 9,077.46
10/31/09 79,830.87 51,190.38 26,668.68 24,635.79 8,908.83
11/30/09 95,167.71 60,668.39 31,311.22 27,851.47 9,443.21
[END CHART]
Data from 11/30/99 to 11/30/09.
See next page for benchmark definitions.
Past performance is no guarantee of future results, and the cumulative
performance quoted does not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
================================================================================
12 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
The graph on page 12 illustrates the comparison of a $10,000 hypothetical
investment in the USAA Precious Metals and Minerals Fund Shares to the following
benchmarks:
o The unmanaged Lipper Gold Funds Index tracks the total return performance of
the 10 largest funds within the Lipper Gold Oriented Funds category.
o The Philadelphia Gold & Silver Index, typically referred to as the XAU, is
an unmanaged capitalization-weighted index composed of 16 companies in the
gold and silver mining industry.
o London Gold represents the performance of gold bullion by tracking the price
of gold set in London.
o The unmanaged S&P 500 Index represents the weighted average performance of a
group of 500 widely held, publicly traded stocks.
================================================================================
INVESTMENT OVERVIEW | 13
<PAGE>
================================================================================
USAA PRECIOUS METALS AND MINERALS FUND INSTITUTIONAL SHARES*
--------------------------------------------------------------------------------
11/30/09 5/31/09
--------------------------------------------------------------------------------
Net Assets $16.8 Million $10.0 Million
Net Asset Value Per Share $36.11 $29.54
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF 11/30/09
--------------------------------------------------------------------------------
5/31/09 to 11/30/09** 1 Year Since Inception 8/01/08
22.24% 121.85% 21.58%
--------------------------------------------------------------------------------
EXPENSE RATIO***
--------------------------------------------------------------------------------
Before Reimbursement 0.90% After Reimbursement 0.90%
*The USAA Precious Metals and Minerals Fund Institutional Shares (Institutional
Shares) commenced operations on August 1, 2008, and are not offered for sale
directly to the general public. The Institutional Shares are available only to
the USAA Target Retirement Funds.
**Total returns for periods of less than one year are not annualized. This
six-month return is cumulative.
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF
FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE
DATA QUOTED. THE RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE, SO
THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
***THE BEFORE REIMBURSEMENT EXPENSE RATIO REPRESENTS THE TOTAL ANNUAL OPERATING
EXPENSES, BEFORE REDUCTIONS OF ANY EXPENSES PAID INDIRECTLY AND INCLUDING ANY
ACQUIRED FUND FEES AND EXPENSES, AND IS CALCULATED AS A PERCENTAGE OF AVERAGE
NET ASSETS. THE AFTER REIMBURSEMENT EXPENSE RATIO REPRESENTS TOTAL ANNUAL
OPERATING EXPENSES, BEFORE REDUCTIONS OF ANY EXPENSES PAID INDIRECTLY AND
EXCLUDING ANY ACQUIRED FUND FEES AND EXPENSES, AFTER REIMBURSEMENT FROM USAA
INVESTMENT MANAGEMENT COMPANY (IMCO). BEFORE AND AFTER REIMBURSEMENT EXPENSE
RATIOS ARE REPORTED IN THE INSTITUTIONAL SHARES' PROSPECTUS DATED OCTOBER 1,
2009. FOR THE FIRST TWO FISCAL YEARS, IMCO HAS VOLUNTARILY AGREED TO LIMIT THE
INSTITUTIONAL SHARES' TOTAL ANNUAL OPERATING EXPENSES TO 0.94%, BEFORE
REDUCTIONS OF ANY EXPENSES PAID INDIRECTLY AND EXCLUDING ANY ACQUIRED FUND FEES
AND EXPENSES, AND TO REIMBURSE THE INSTITUTIONAL SHARES FOR EXPENSES IN EXCESS
OF THIS AMOUNT. IMCO CAN MODIFY OR TERMINATE THIS ARRANGEMENT AT ANY TIME. IF
THE INSTITUTIONAL SHARES' TOTAL ANNUAL OPERATING EXPENSE RATIO IS LOWER THAN
0.94%, THE INSTITUTIONAL SHARES WILL OPERATE AT THE LOWER EXPENSE RATIO. THESE
EXPENSE RATIOS MAY DIFFER FROM THE EXPENSE RATIOS DISCLOSED IN THE FINANCIAL
HIGHLIGHTS.
Total return measures the price change in a share assuming the reinvestment of
all net investment income and realized capital gain distributions. The total
returns quoted do not reflect adjustments made to the enclosed financial
statements in accordance with U.S. generally accepted accounting principles or
the deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares.
================================================================================
14 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
o CUMULATIVE PERFORMANCE COMPARISON o
[CHART OF CUMULATIVE PERFORMANCE COMPARISON]
USAA PRECIOUS METALS
AND MINERALS FUND LIPPER GOLD PHILADELPHIA GOLD &
INSTITUTIONAL SHARES LONDON GOLD FUNDS INDEX SILVER INDEX (XAU) S&P 500 INDEX
07/31/08 $10,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00
08/31/08 9,184.58 9,074.07 8,841.22 8,847.00 10,144.65
09/30/08 8,106.83 9,635.08 7,750.54 7,783.94 9,240.68
10/31/08 4,804.05 7,960.24 4,801.88 4,820.05 7,688.73
11/30/08 5,932.36 8,872.55 5,649.77 6,052.05 7,137.03
12/31/08 7,755.86 9,474.40 7,069.32 7,381.58 7,212.97
01/31/09 7,675.68 10,016.34 7,085.23 7,391.68 6,605.01
02/28/09 7,726.70 10,370.37 7,064.94 7,102.32 5,901.73
03/31/09 8,769.08 9,983.66 7,922.66 8,025.79 6,418.69
04/30/09 8,167.71 9,621.46 7,466.10 7,163.26 7,033.02
05/31/09 10,766.36 10,626.36 9,698.44 9,568.34 7,426.40
06/30/09 9,359.51 10,179.74 8,609.80 8,308.89 7,441.13
07/31/09 10,062.93 10,228.76 9,204.69 8,883.21 8,003.96
08/31/09 10,135.83 10,408.50 9,286.83 8,794.32 8,292.93
09/30/09 11,429.69 10,846.95 10,440.02 9,899.58 8,602.38
10/31/09 11,036.06 11,328.98 10,100.77 9,375.23 8,442.58
11/30/09 13,160.90 12,807.73 11,970.94 11,007.29 8,948.99
[END CHART]
*Data from 7/31/08 to 11/30/09.
See next page for benchmark definitions.
Past performance is no guarantee of future results, and the cumulative
performance quoted does not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
*The performance of London Gold, the S&P 500 Index, the Philadelphia Gold &
Silver Index, and the Lipper Gold Funds Index is calculated from the end of the
month, July 31, 2008, while the Institutional Shares' inception date is August
1, 2008. There may be a slight variation of performance numbers because of this
difference.
================================================================================
INVESTMENT OVERVIEW | 15
<PAGE>
================================================================================
The graph on page 15 illustrates the comparison of a $10,000 hypothetical
investment in the USAA Precious Metals and Minerals Fund Institutional Shares to
the following benchmarks:
o London Gold represents the performance of gold bullion by tracking the price
of gold set in London.
o The unmanaged Lipper Gold Funds Index tracks the total return performance of
the 10 largest funds within the Lipper Gold Oriented Funds category.
o The Philadelphia Gold & Silver Index, typically referred to as the XAU, is
an unmanaged capitalization-weighted index composed of 16 companies in the
gold and silver mining industry.
o The unmanaged S&P 500 Index represents the weighted average performance of a
group of 500 widely held, publicly traded stocks.
================================================================================
16 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
TOP 10 EQUITY HOLDINGS
AS OF 11/30/09
(% of Net Assets)
Randgold Resources Ltd. ADR ....................................... 5.0%
Silver Wheaton Corp. .............................................. 4.9%
AngloGold Ashanti Ltd. ADR ........................................ 4.6%
Agnico-Eagle Mines Ltd. ........................................... 4.5%
Red Back Mining, Inc. ............................................. 4.4%
Newcrest Mining Ltd. .............................................. 4.4%
Eldorado Gold Corp. ............................................... 4.0%
Royal Gold, Inc. .................................................. 4.0%
Impala Platinum Holdings Ltd. ..................................... 3.9%
Compania de Minas Buenaventura S.A. ADR ........................... 3.6%
You will find a complete list of securities that the Fund owns on pages 19-22.
================================================================================
INVESTMENT OVERVIEW | 17
<PAGE>
================================================================================
o ASSET ALLOCATION -- 11/30/2009 o
[PIE CHART OF ASSET ALLOCATION]
GOLD 79.6%
SILVER 7.1%
PLATINUM GROUP METALS 6.9%
MONEY MARKET INSTRUMENTS* 6.3%
[END CHART]
* Excludes short-term investments purchased with cash collateral from securities
loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
================================================================================
18 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
November 30, 2009 (unaudited)
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
EQUITY SECURITIES (93.6%)
COMMON STOCKS (93.3%)
---------------------
GOLD (79.3%)
AFRICAN GOLD COMPANIES (7.4%)
1,700,000 AngloGold Ashanti Ltd. ADR $ 74,868
3,000,000 Gold Fields Ltd. ADR 44,340
----------
119,208
----------
AUSTRALIAN GOLD COMPANIES (10.3%)
600,000 Australian Solomons Gold Ltd., acquired 8/23/2006; cost $707(a) 168
1,300,000 Kingsgate Consolidated Ltd. 11,597
13,000,000 Lihir Gold Ltd. 42,864
2,100,000 Newcrest Mining Ltd. 70,762
5,700,000 Sino Gold Ltd.*(b) 40,677
----------
166,068
----------
EUROPEAN GOLD COMPANIES (5.0%)
950,000 Randgold Resources Ltd. ADR 80,503
----------
NORTH AMERICAN GOLD COMPANIES (53.0%)
800,000 Agnico-Eagle Mines Ltd. 50,128
300,000 Agnico-Eagle Mines Ltd.* 18,798
2,600,000 Allied Nevada Gold Corp.* 33,800
750,000 American Bonanza Gold Corp., acquired 10/07/2003; cost $632*(a) 128
5,700,000 Aurizon Mines Ltd.* 27,868
2,400,000 Axmin, Inc., acquired 12/06/2006-06/03/2008; cost $1,806*(a) 273
930,000 Barrick Gold Corp.(c) 39,702
13,000,000 Centamin Egypt Ltd.*(c) 28,454
1,125,000 Centerra Gold, Inc.* 13,857
4,900,000 Eldorado Gold Corp.*(c) 64,876
4,700,000 Gammon Gold, Inc.* 54,285
1,300,000 Goldcorp, Inc. 54,600
7,400,000 Great Basin Gold Ltd.*(c) 11,322
5,000,000 Great Basin Gold Ltd.* 7,580
2,949,900 IAMGOLD Corp. 55,900
900,000 Jinshan Gold Mines, Inc., acquired 12/07/2005; cost $470*(a) 2,548
2,000,000 Kinross Gold Corp. 40,040
200,000 Metallic Ventures Gold, Inc., acquired 12/10/2002; cost $385*(a) 208
================================================================================
PORTFOLIO OF INVESTMENTS | 19
<PAGE>
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
2,600,000 Minefinders Corp. Ltd.*(c) $ 27,898
1,872,100 Nautilus Minerals, Inc., acquired 2/02/2007-3/11/2009; cost $3,817*(a) 2,732
4,900,000 New Gold, Inc.* 17,178
650,000 Newmont Mining Corp. 34,866
375,000 Northern Star Mining Corp., acquired 5/05/2006; cost $373*(a) 188
6,024,397 Northgate Minerals Corp.*(c) 19,222
4,000,000 Osisko Mining Corp.* 29,107
4,900,000 Red Back Mining, Inc.* 71,035
1,200,000 Royal Gold, Inc. 64,584
6,800,000 San Gold Corp.* 24,355
2,000,000 Semafo, Inc., acquired 10/31/2006; cost $3,134*(a) 8,414
1,100,000 Semafo, Inc.* 4,628
3,500,000 Yamana Gold, Inc. 46,655
----------
855,229
----------
SOUTH AMERICAN GOLD COMPANIES (3.6%)
1,460,000 Compania de Minas Buenaventura S.A. ADR 58,619
----------
Total Gold (cost: $650,914) 1,279,627
----------
PLATINUM GROUP METALS (6.9%)
2,700,000 Impala Platinum Holdings Ltd. 62,623
1,700,000 Lonmin plc* 49,641
----------
Total Platinum Group Metals (cost: $67,051) 112,264
----------
SILVER (7.1%)
915,300 Aquiline Resources, Inc.* 6,071
1,170,822 Pan American Silver Corp.* 29,552
4,900,000 Silver Wheaton Corp.* 78,743
----------
Total Silver (cost: $84,291) 114,366
----------
Total Common Stocks (cost: $802,256) 1,506,257
----------
WARRANTS (0.3%)
---------------
GOLD (0.3%)
NORTH AMERICAN GOLD COMPANIES (0.3%)
150,000 Agnico-Eagle Mines Ltd.* 4,050
200,000 Axmin, Inc., acquired 6/12/2008; cost $0*(a),(b) -
930,000 Gold Wheaton Gold Corp., acquired 6/19/2008; cost $128*(a) 71
2,500,000 Great Basin Gold Ltd.* 782
85,250 New Gold, Inc., acquired 1/19/2007; cost $0*(a),(b) -
930,000 New Gold, Inc.* 26
----------
Total Gold (cost: $363) 4,929
----------
================================================================================
20 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
SILVER (0.0%)
150,000 Mines Management, Inc.* (cost $0) $ 36
----------
Total Warrants (cost: $363) 4,965
----------
Total Equity Securities (cost: $802,619) 1,511,222
----------
MONEY MARKET INSTRUMENTS (6.3%)
MONEY MARKET FUNDS (6.3%)
101,089,138 State Street Institutional Liquid Reserve Fund, 0.19%(d) 101,089
----------
Total Money Market Instruments (cost: $101,089) 101,089
----------
---------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
(000)
---------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS PURCHASED WITH
CASH COLLATERAL FROM SECURITIES LOANED (3.0%)
REPURCHASE AGREEMENTS (1.6%)
$15,000 Credit Suisse First Boston LLC, 0.16%, acquired on
11/30/2009 and due 12/01/2009 at $15,000 (collateralized by
$15,310 of Fannie Mae(e), 0.10%(f), due 5/12/2010; market
value $15,302) 15,000
10,300 Deutsche Bank Securities, Inc., 0.16%, acquired on 11/30/2009
and due 12/01/2009 at $10,300 (collateralized by $21,415 of
U.S. Treasury, 4.34%(f), due 5/26/2026; market value $10,506) 10,300
----------
Total Repurchase Agreements 25,300
----------
---------------------------------------------------------------------------------------------------
NUMBER
OF SHARES
---------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS (1.4%)
22,932,363 BlackRock Liquidity Funds TempFund, 0.15%(d) 22,932
----------
Total Short-term Investments Purchased With
Cash Collateral From Securities Loaned (cost: $48,232) 48,232
----------
TOTAL INVESTMENTS (COST: $951,940) $1,660,543
==========
================================================================================
PORTFOLIO OF INVESTMENTS | 21
<PAGE>
================================================================================
----------------------------------------------------------------------------------------------------
($ IN 000s) VALUATION HIERARCHY
----------------------------------------------------------------------------------------------------
(LEVEL 1) (LEVEL 2) (LEVEL 3)
QUOTED PRICES OTHER SIGNIFICANT SIGNIFICANT
IN ACTIVE MARKETS OBSERVABLE UNOBSERVABLE
FOR IDENTICAL ASSETS INPUTS INPUTS TOTAL
----------------------------------------------------------------------------------------------------
Equity Securities:
Common Stocks $1,465,580 $40,677 $- $1,506,257
Warrants 4,965 - - 4,965
Money Market Instruments:
Money Market Funds 101,089 - - 101,089
Short-Term Investments
Purchased with Cash
Collateral from Securities
Loaned:
Repurchase Agreements - 25,300 - 25,300
Money Market Funds 22,932 - - 22,932
----------------------------------------------------------------------------------------------------
Total $1,594,566 $65,977 $- $1,660,543
----------------------------------------------------------------------------------------------------
================================================================================
22 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
NOTES TO PORTFOLIO OF INVESTMENTS
November 30, 2009 (unaudited)
--------------------------------------------------------------------------------
o GENERAL NOTES
Market values of securities are determined by procedures and practices
discussed in Note 1 to the financial statements.
The portfolio of investments category percentages shown represent the
percentages of the investments to net assets, and, in total, may not equal
100%. A category percentage of 0.0% represents less than 0.1% of net
assets. Investments in foreign securities were 85.4% of net assets at
November 30, 2009.
o CATEGORIES AND DEFINITIONS
WARRANTS -- entitle the holder to buy a proportionate amount of common
stock at a specified price for a stated period.
o PORTFOLIO ABBREVIATIONS AND DESCRIPTIONS
ADR American depositary receipts are receipts issued by a U.S. bank
evidencing ownership of foreign shares. Dividends are paid in U.S.
dollars.
o SPECIFIC NOTES
(a) Security deemed illiquid by USAA Investment Management Company (the
Manager), under liquidity guidelines approved by the Board of Trustees.
The aggregate market value of these securities at November 30, 2009,
was $14,730,000, which represented 0.9% of the Fund's net assets.
================================================================================
NOTES TO PORTFOLIO OF INVESTMENTS | 23
<PAGE>
================================================================================
(b) Security was fair valued at November 30, 2009, by the Manager in
accordance with valuation procedures approved by the Board of Trustees.
(c) The security or a portion thereof was out on loan as of November 30,
2009.
(d) Rate represents the money market fund annualized seven-day yield at
November 30, 2009.
(e) Securities issued by government-sponsored enterprises 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.
(f) Zero-coupon security. Rate represents the effective yield at the date of
purchase.
* Non-income-producing security.
See accompanying notes to financial statements.
================================================================================
24 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
(IN THOUSANDS)
November 30, 2009 (unaudited)
--------------------------------------------------------------------------------
ASSETS
Investments in securities, at market value (including
securities on loan of $35,693) (cost of $951,940) $1,660,543
Cash 1
Cash denominated in foreign currencies (identified cost of $5,699) 6,026
Receivables:
Capital shares sold:
Affiliated transactions (Note 8) 33
Nonaffiliated transactions 3,376
Dividends and interest 369
Securities sold 931
Other 55
----------
Total assets 1,671,334
----------
LIABILITIES
Payables:
Upon return of securities loaned 48,233
Securities purchased 6,350
Capital shares redeemed 1,820
Unrealized depreciation on foreign currency contracts held, at value 11
Accrued management fees 992
Accrued transfer agent's fees 113
Other accrued expenses and payables 118
----------
Total liabilities 57,637
----------
Net assets applicable to capital shares outstanding $1,613,697
==========
NET ASSETS CONSIST OF:
Paid-in capital $ 933,323
Overdistribution of net investment income (40,817)
Accumulated net realized gain on investments 12,255
Net unrealized appreciation of investments 708,603
Net unrealized appreciation of foreign currency translations 333
----------
Net assets applicable to capital shares outstanding $1,613,697
==========
Net asset value, redemption price, and offering price per share:
Fund Shares (net assets of $1,596,884/44,372 shares outstanding) $ 35.99
==========
Institutional Shares (net assets of $16,813/466 shares outstanding) $ 36.11
==========
See accompanying notes to financial statements.
================================================================================
FINANCIAL STATEMENTS | 25
<PAGE>
================================================================================
STATEMENT OF OPERATIONS
(IN THOUSANDS)
Six-month period ended November 30, 2009 (unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $125) $ 2,512
Interest 95
Securities lending (net) 182
--------
Total income 2,789
--------
EXPENSES
Management fees 5,140
Administration and servicing fees:
Fund Shares 972
Institutional Shares 3
Transfer agent's fees:
Fund Shares 1,487
Institutional Shares 3
Custody and accounting fees:
Fund Shares 149
Institutional Shares 1
Postage:
Fund Shares 67
Shareholder reporting fees:
Fund Shares 29
Trustees' fees 5
Registration fees:
Fund Shares 35
Professional fees 64
Other 13
--------
Net expenses 7,968
--------
NET INVESTMENT LOSS (5,179)
--------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain on:
Investments 30,191
Foreign currency transactions 438
Change in net unrealized appreciation/depreciation of:
Investments 264,217
Foreign currency translations 13
--------
Net realized and unrealized gain 294,859
--------
Increase in net assets resulting from operations $289,680
========
See accompanying notes to financial statements.
================================================================================
26 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
(IN THOUSANDS)
Six-month period ended November 30, 2009 (unaudited), and year ended
May 31, 2009
--------------------------------------------------------------------------------
11/30/2009 5/31/2009
-------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment loss $ (5,179) $ (2,885)
Net realized gain on investments 30,191 30,051
Net realized gain (loss) on foreign currency transactions 438 (328)
Change in net unrealized appreciation/depreciation of:
Investments 264,217 (62,413)
Foreign currency translations 13 259
-----------------------
Increase (decrease) in net assets resulting from
operations 289,680 (35,316)
-----------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Fund Shares - (515)
Institutional Shares* - (3)
-----------------------
Total distributions of net investment income - (518)
-----------------------
Net realized gains:
Fund Shares - (93,518)
Institutional Shares* - (573)
-----------------------
Total distributions of net realized gains - (94,091)
-----------------------
Distributions to shareholders - (94,609)
-----------------------
NET INCREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS (NOTE 6)
Fund Shares 49,481 180,374
Institutional Shares* 3,457 6,452
-----------------------
Total net increase in net assets from capital
share transactions 52,938 186,826
-----------------------
Capital contribution from USAA Transfer Agency Company:
Fund Shares - 142
Institutional Shares* - 4
-----------------------
Net increase in net assets 342,618 57,047
NET ASSETS
Beginning of period 1,271,079 1,214,032
-----------------------
End of period $1,613,697 $1,271,079
=======================
Overdistribution of net investment income:
End of period $ (40,817) $ (35,638)
=======================
* Institutional shares were initiated on August 1, 2008.
See accompanying notes to financial statements.
================================================================================
FINANCIAL STATEMENTS | 27
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
November 30, 2009 (unaudited)
--------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 46 separate funds. The
information presented in this semiannual report pertains only to the USAA
Precious Metals and Minerals Fund (the Fund), which is classified as
nondiversified under the 1940 Act. The Fund's investment objective is to seek
long-term capital appreciation and to protect the purchasing power of
shareholders' capital against inflation.
The Fund concentrates its investments in equity securities of domestic and
foreign companies engaged in the exploration, mining, or processing of gold and
other precious metals and minerals, such as platinum, silver, and diamonds. As
such, the Fund may be exposed to more risk than portfolios with a broader
industry diversification. As a nondiversified fund, the Fund may invest a
greater percentage of its assets in a single issuer. Because a relatively high
percentage of the Fund's total assets may be invested in the securities of a
single issuer or a limited number of issuers, the securities of the Fund may be
more sensitive to changes in the market value of a single issuer, a limited
number of issuers, or large companies generally. Such a focused investment
strategy may increase the volatility of the Fund's investment results because
this Fund may be more susceptible to risk associated with a single economic,
political, or regulatory event than a diversified fund.
The Fund has two classes of shares: Precious Metals and Minerals Fund Shares
(Fund Shares) and Precious Metals and Minerals Fund Institutional Shares
(Institutional Shares). Each class of shares has equal rights to
================================================================================
28 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
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 offered for sale only 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. 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.
2. Equity securities trading in various foreign markets may take place on
days when the NYSE is closed. Further, when the NYSE is open, the
foreign markets may be closed. Therefore, the calculation of the Fund's
net asset value (NAV) may not take place at the same time the prices of
certain foreign securities held by the Fund are determined. In most
cases, events affecting the values of foreign securities that occur
between the time of their last quoted sales or official closing prices
and the close of
================================================================================
NOTES TO FINANCIAL STATEMENTS | 29
<PAGE>
================================================================================
normal trading on the NYSE on a day the Fund's NAV is calculated will
not be reflected in the value of the Fund's foreign securities.
However, the Manager, will monitor for events that would materially
affect the value of the Fund's foreign securities and, if necessary,
the Manager will value the foreign securities in good faith,
considering such available information that the Manager deems relevant,
under valuation procedures approved by the Trust's Board of Trustees.
In addition, the Fund may use information from an external vendor or
other sources to adjust the foreign market closing prices of foreign
equity securities to reflect what the Fund believes to be the fair
value of the securities as of the close of the NYSE. Fair valuation of
affected foreign equity securities may occur frequently based on an
assessment that events that occur on a fairly regular basis (such as
U.S. market movements) are significant.
3. Investments in open-end investment companies, hedge, or other funds,
other than ETFs, are valued at their 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. 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
================================================================================
30 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
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.
C. FEDERAL TAXES -- The Fund's policy is to comply with the requirements of the
Internal Revenue Code applicable to regulated investment
================================================================================
NOTES TO FINANCIAL STATEMENTS | 31
<PAGE>
================================================================================
companies and to distribute substantially all of its income to its
shareholders. Therefore, no federal income tax provision is required.
D. INVESTMENTS IN SECURITIES -- Security transactions are accounted for on the
date the securities are purchased or sold (trade date). Gains or losses
from sales of investment securities are computed on the identified cost
basis. Dividend income, less foreign taxes, if any, is recorded on the
ex-dividend date. If the ex-dividend date has passed, certain dividends
from foreign securities are recorded upon notification. Interest income is
recorded daily on the accrual basis. Discounts and premiums on short-term
securities are amortized on a straight-line basis over the life of the
respective securities.
E. 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.
F. FOREIGN CURRENCY TRANSLATIONS -- The Fund's assets may be invested in the
securities of foreign issuers and may be traded in foreign currency. Since
the Fund's accounting records are maintained in U.S. dollars, foreign
currency amounts are translated into U.S. dollars on the following bases:
1. Purchases and sales of securities, income, and expenses at the exchange
rate obtained from an independent pricing service on the respective
dates of such transactions.
2. Market value of securities, other assets, and liabilities at the
exchange rate obtained from an independent pricing service on a daily
basis.
================================================================================
32 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Separately, net realized foreign currency gains/losses may arise from sales
of foreign currency, currency gains/losses realized between the trade and
settlement dates on security transactions, and from the difference between
amounts of dividends, interest, and foreign withholding taxes recorded on
the Fund's books and the U.S. dollar equivalent of the amounts received. At
the end of the Fund's fiscal year, these net realized foreign currency
gains/losses are reclassified from accumulated net realized gain/loss to
accumulated undistributed net investment income on the statement of assets
and liabilities as such amounts are treated as ordinary income/loss for tax
purposes. Net unrealized foreign currency exchange gains/losses arise from
changes in the value of assets and liabilities, other than investments in
securities, resulting from changes in the exchange rate.
G. EXPENSES PAID INDIRECTLY -- A portion of the brokerage commissions that the
Fund pays may be recaptured as a credit that is tracked and used by the
custodian to directly reduce expenses paid by the Fund. In addition,
through arrangements with the Fund's custodian and other banks utilized by
the Fund for cash management purposes, realized credits, if any, generated
from cash balances in the Fund's bank accounts may be used to directly
reduce the Fund's expenses. For the six-month period ended November 30,
2009, custodian and other bank credits reduced expenses of the Fund Shares
and Institutional Shares by less than $500. For the period ended November
30, 2009, the Fund Shares and Institutional Shares did not incur any
brokerage commission recapture credits.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, its officers
and trustees are indemnified against certain liabilities arising out of the
performance of their duties to the Trust. In addition, in the normal course
of business the Trust enters into contracts that
================================================================================
NOTES TO FINANCIAL STATEMENTS | 33
<PAGE>
================================================================================
contain a variety of representations and warranties that provide general
indemnifications. The Trust's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the
Trust that have not yet occurred. However, the Trust expects the risk of
loss to be remote.
I. USE OF ESTIMATES -- The preparation of financial statements in conformity
with U.S. generally accepted accounting principles requires management to
make estimates and assumptions that may affect the reported amounts in the
financial statements.
(2) LINE OF CREDIT
The Fund participates in a joint, short-term, revolving, committed loan
agreement of $750 million with USAA Capital Corporation (CAPCO), an affiliate of
the Manager. The purpose of the agreement is to meet temporary or emergency cash
needs, including redemption requests that might otherwise require the untimely
disposition of securities. Subject to availability, the Fund may borrow from
CAPCO an amount up to 5% of the Fund's total assets at a rate per annum equal to
the rate at which CAPCO obtains funding in the capital markets, with no markup.
The USAA funds that are party to the loan agreement are assessed facility fees
by CAPCO based on the funds' assessed proportionate share of CAPCO's operating
expenses related to obtaining and maintaining CAPCO's funding programs in total
(in no event to exceed 0.13% annually of the amount of the committed loan
agreement). Prior to September 25, 2009, the maximum annual facility fee was
0.07% of the amount of the committed loan agreement. The facility fees are
allocated among the funds based on their respective average net assets for the
period.
For the six-month period ended November 30, 2009, the Fund paid CAPCO facility
fees of $3,000, which represents 3.0% of the total fees paid to CAPCO by the
USAA funds. The Fund had no borrowings under this agreement during the six-month
period ended November 30, 2009.
================================================================================
34 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
(3) DISTRIBUTIONS
The tax basis of distributions and accumulated undistributed net investment
income will be determined based upon the Fund's tax year-end of May 31, 2010, in
accordance with applicable tax law.
Distributions of net investment income and realized gains from security
transactions not offset by capital losses are made annually in the succeeding
fiscal year or as otherwise required to avoid the payment of federal taxes.
The Fund is required to evaluate tax positions taken or expected to be taken in
the course of preparing the Fund's tax returns to determine whether the tax
positions are "more-likely-than-not" of being sustained by the applicable tax
authority. Income tax and related interest and penalties would be recognized by
the Fund as tax expense in the statement of operations if the tax positions were
deemed to not meet the more-likely-than-not threshold. For the six-month period
ended November 30, 2009, the Fund did not incur any income tax, interest, or
penalties. As of November 30, 2009, the Manager has reviewed all open tax years
and concluded that there was no impact to the Fund's net assets or results of
operations. Tax years ended May 31, 2006, through May 31, 2009, remain subject
to examination by the Internal Revenue Service and state taxing authorities. On
an ongoing basis, the Manager will monitor its tax positions to determine if
adjustments to this conclusion are necessary.
(4) INVESTMENT TRANSACTIONS
Cost of purchases and proceeds from sales/maturities of securities, excluding
short-term securities, for the six-month period ended November 30, 2009, were
$179,386,000 and $163,224,000, respectively.
As of November 30, 2009, the cost of securities, including short-term
securities, for federal income tax purposes, was approximately the same as that
reported in the financial statements.
Gross unrealized appreciation and depreciation of investments as of November 30,
2009, were $722,319,000 and $13,716,000, respectively, resulting in net
unrealized appreciation of $708,603,000.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 35
<PAGE>
================================================================================
(5) LENDING OF PORTFOLIO SECURITIES
The Fund, through its third-party securities-lending agent, Wachovia Global
Securities Lending (Wachovia), 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. The Fund and Wachovia retain 80% and 20%,
respectively, of the income earned from the investment of cash received as
collateral, net of any expenses associated with the lending transaction.
Wachovia receives no other fees from the Fund for its services as
securities-lending agent. 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. Wachovia Bank, N.A., parent company of Wachovia, has agreed to
indemnify the Fund against any losses due to counterparty default in
securities-lending transactions. For the six-month period ended November 30,
2009, the Fund received securities-lending income of $182,000, which is net of
the 20% income retained by Wachovia. As of November 30, 2009, the Fund loaned
securities having a fair market value of approximately $35,693,000, which
excluded $7,582,000 of securities on loan that were sold prior to November 30,
2009. The Fund received cash collateral of $48,233,000 for the loans. Of this
amount, $48,232,000 was invested in short-term investments, as noted in the
Fund's portfolio of investments, and $1,000 remained in cash.
================================================================================
36 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
(6) CAPITAL SHARE TRANSACTIONS
At November 30, 2009, there were an unlimited number of shares of capital stock
at no par value authorized for the Fund.
Capital share transactions for the Institutional Shares resulted from purchases
and sales by the affiliated Target Funds. Capital share transactions were as
follows, in thousands:
SIX-MONTH PERIOD ENDED YEAR ENDED
11/30/2009 5/31/2009
----------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------
FUND SHARES:
Shares sold 8,005 $ 243,648 16,207 $ 391,513
Shares issued from reinvested
dividends - - 5,348 90,649
Shares redeemed (6,399) (194,167) (12,968) (301,788)
--------------------------------------------
Net increase from capital
share transactions 1,606 $ 49,481 8,587 $ 180,374
============================================
INSTITUTIONAL SHARES:
(INITIATED ON AUGUST 1, 2008)
Shares sold 243 $ 7,106 465 $ 9,620
Shares issued from reinvested
dividends - - 34 576
Shares redeemed (117) (3,649) (159) (3,744)
--------------------------------------------
Net increase from capital
share transactions 126 $ 3,457 340 $ 6,452
============================================
(7) TRANSACTIONS WITH MANAGER
A. MANAGEMENT FEES -- The Manager carries out the Fund's investment policies
and manages the Fund's portfolio pursuant to an Advisory Agreement. The
investment management fee for the Fund is composed of a base fee and a
performance adjustment. The Fund's base fee is accrued daily and paid
monthly at an annualized rate of 0.75% of the Fund's average net assets for
the fiscal year.
The performance adjustment is calculated separately for each share class on
a monthly basis by comparing each class's performance to
================================================================================
NOTES TO FINANCIAL STATEMENTS | 37
<PAGE>
================================================================================
that of the Lipper Gold Funds Index over the performance period. The
Lipper Gold Funds Index tracks the total return performance of the 10
largest funds in the Lipper Gold Oriented Funds category. The performance
period for each class consists of the current month plus the previous 35
months. The performance adjustment for the Institutional Shares includes
the performance of the Fund Shares for periods prior to August 1, 2008. The
following table is utilized to determine the extent of the performance
adjustment:
OVER/UNDER PERFORMANCE ANNUAL ADJUSTMENT RATE
RELATIVE TO INDEX(1) AS A % OF THE FUND'S AVERAGE NET ASSETS(1)
----------------------------------------------------------------------------
+/- 1.00% to 4.00% +/- 0.04%
+/- 4.01% to 7.00% +/- 0.05%
+/- 7.01% and greater +/- 0.06%
(1)Based on the difference between average annual performance of the Fund
and its relevant index, rounded to the nearest 0.01%. Average net assets
are calculated over a rolling 36-month period.
Each class's annual performance adjustment rate is multiplied by the
average net assets of each respective class over the entire performance
period, which is then multiplied by a fraction, the numerator of which is
the number of days in the month and the denominator of which is 365 (366 in
leap years). The resulting amount is the performance adjustment; a positive
adjustment in the case of overperformance, or a negative adjustment in the
case of underperformance.
Under the performance fee arrangement, each class will pay a positive
performance fee adjustment for a performance period whenever the class
outperforms the Lipper Gold Funds Index over that period, even if the class
had overall negative returns during the performance period.
For the six-month period ended November 30, 2009, the Fund incurred total
management fees, paid or payable to the Manager, of $5,140,000, which
included a performance adjustment for the Fund shares and Institutional
Shares of $233,000 and $1,000, respectively. For the
================================================================================
38 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
Fund Shares and Institutional Shares, the performance adjustments were 0.02%
and less than 0.01%, respectively.
B. ADMINISTRATION AND SERVICING FEES -- The Manager provides certain
administration and shareholder servicing functions for the Fund. For such
services, the Manager receives a fee accrued daily and paid monthly at an
annualized rate of 0.15% and 0.05% of average net assets of the Fund Shares
and Institutional Shares, respectively. For the six-month period ended
November 30, 2009, the Fund Shares and Institutional Shares incurred
administration and servicing fees, paid or payable to the Manager, of
$972,000 and $3,000, respectively.
In addition to the services provided under its Administration and Servicing
Agreement with the Fund, the Manager also provides certain compliance and
legal services for the benefit of the Fund. The Trust's Board of Trustees
has approved the reimbursement of a portion of these expenses incurred by
the Manager. For the six-month period ended November 30, 2009, the Fund
reimbursed the Manager $29,000 for these compliance and legal services.
These expenses are included in the professional fees on the Fund's
statement of operations.
C. EXPENSE LIMITATION -- The Manager has voluntarily agreed to limit the annual
expenses of the Institutional Shares for its first two fiscal years to
0.94% of its average annual net assets, excluding extraordinary expenses
and before reductions of any expenses paid indirectly, and will reimburse
the Institutional Shares for all expenses in excess of that amount. The
Manager may modify or terminate this voluntary agreement at any time. For
the six-month period ended November 30, 2009, the Institutional Shares did
not incur any reimbursable expenses.
D. TRANSFER AGENT'S FEES -- USAA Transfer Agency Company, d/b/a USAA
Shareholder Account Services (SAS), an affiliate of the Manager, provides
transfer agent services to the Fund. Transfer agent's fees for Fund Shares
are paid monthly based on an annual charge of
================================================================================
NOTES TO FINANCIAL STATEMENTS | 39
<PAGE>
================================================================================
$23 per shareholder account plus out-of-pocket expenses. The Fund Shares
also pay SAS fees that are related to the administration and servicing of
accounts that are traded on an omnibus basis. Transfer agent's fees for
Institutional Shares are paid monthly based on a fee accrued daily at an
annualized rate of 0.05% of the Institutional Shares' average net assets,
plus out-of-pocket expenses. For the six-month period ended November 30,
2009, the Fund Shares and Institutional Shares incurred transfer agent's
fees, paid or payable to SAS, of $1,487,000 and $3,000, respectively.
E. UNDERWRITING SERVICES -- The Manager provides exclusive underwriting and
distribution of the Fund's shares on a continuing best-efforts basis. The
Manager receives no commissions or fees for this service.
(8) TRANSACTIONS WITH AFFILIATES
The Fund is one of 13 USAA mutual funds in which the affiliated Target Funds may
invest. The Target Funds do not invest in the Fund for the purpose of exercising
management or control. As of November 30, 2009, the Fund recorded a receivable
for capital shares sold of $33,000 for the Target Funds' purchases of
Institutional Shares. As of November 30, 2009, the Target Funds owned the
following percent of the total outstanding shares of the Fund:
OWNERSHIP %
--------------------------------------------------------------------------------
USAA Target Retirement Income Fund 0.1%
USAA Target Retirement 2020 Fund 0.2
USAA Target Retirement 2030 Fund 0.3
USAA Target Retirement 2040 Fund 0.4
USAA Target Retirement 2050 Fund 0.2
Certain trustees and officers of the Fund are also directors, officers, and/or
employees of the Manager. None of the affiliated trustees or Fund officers
received any compensation from the Fund.
================================================================================
40 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
(9) SUBSEQUENT EVENTS
Events or transactions that occur after the balance sheet date but before the
financial statements are issued are categorized as recognized or non-recognized
for financial statement purposes. The Manager has evaluated subsequent events
through January 19, 2010, the date the financial statements were issued, and has
determined there were no events that required recognition or disclosure in the
Fund's financial statements. Subsequent events that will affect future financial
statements are as follows:
On December 4, 2009, the Fund Shares received a reimbursement from SAS in the
amount of $188,000 related to corrections in fees paid for the administration
and servicing of certain accounts. This amount will be reflected on the
statement of operations as a reduction of expenses.
On December 11, 2009, the Fund received a litigation settlement in the amount of
approximately $2,300,000. The amount will be included as a capital gain
adjustment in the Fund's statement of operations.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 41
<PAGE>
================================================================================
(10) FINANCIAL HIGHLIGHTS -- FUND SHARES
Per share operating performance for a share outstanding throughout each period
is as follows:
SIX-MONTH
PERIOD ENDED
NOVEMBER 30, YEAR ENDED MAY 31,
--------------------------------------------------------------------------------------
2009 2009 2008 2007 2006 2005
--------------------------------------------------------------------------------------
Net asset value at
beginning of period $ 29.49 $ 35.52 $ 28.86 $ 26.77 $ 13.60 $ 14.52
--------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income
(loss)(a) (.12) (.07) (.08) .07 .07 .01
Net realized and
unrealized gain (loss)(a) 6.62 (3.37) 9.59 4.56 13.26 (.78)
--------------------------------------------------------------------------------------
Total from investment
operations(a) 6.50 (3.44) 9.51 4.63 13.33 (.77)
--------------------------------------------------------------------------------------
Less distributions from:
Net investment income - (.01) (.59) (.76) - -
Realized capital gains - (2.58) (2.26) (1.78) (.16) (.15)
--------------------------------------------------------------------------------------
Total distributions - (2.59) (2.85) (2.54) (.16) (.15)
--------------------------------------------------------------------------------------
Net asset value at end
of period $ 35.99 $ 29.49 $ 35.52 $ 28.86 $ 26.77 $ 13.60
======================================================================================
Total return (%)* 22.04 (4.26) 34.24 17.70(b) 98.39 (5.39)
Net assets at end
of period (000) $1,596,884 $1,261,040 $1,214,032 $816,468 $580,539 $275,768
Ratios to average
net assets:**
Expenses (%)(c) 1.22(d) 1.31 1.19 1.21(b) 1.21 1.26
Net investment income
(loss) (%) (.79)(d) (.31) (.24) .27 .33 .06
Portfolio turnover (%) 13 28 28 12 29 27
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the
period. Includes adjustments in accordance with U.S. generally accepted accounting principles and could differ
from the Lipper reported return.
** For the six-month period ended November 30, 2009, average net assets were $1,293,504,000.
(a) Calculated using average shares. For the six-month period ended November 30, 2009, average shares were 43,468,000.
(b) For the year ended May 31, 2007, SAS voluntarily reimbursed the Fund Shares for a portion of the transfer agent's
fees incurred. The reimbursement had no effect on the Fund Shares' total return or ratio of expenses to average
net assets.
(c) Reflects total operating expenses of the Fund Shares before reductions of any expenses paid indirectly. The Fund
Shares' expenses paid indirectly decreased the expense ratios as follows:
(.00%)(+) (.01%) (.01%) (.00%)(+) (.01%) (.03%)
(+) Represents less than 0.01% of average net assets.
(d) Annualized. The ratio is not necessarily indicative of 12 months of operations.
================================================================================
42 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
(10) FINANCIAL HIGHLIGHTS (CONTINUED) -- INSTITUTIONAL SHARES
Per share operating performance for a share outstanding throughout each period
is as follows:
SIX-MONTH
PERIOD ENDED PERIOD ENDED
NOVEMBER 30, MAY 31,
2009 2009***
-------------------------------
Net asset value at beginning of period $ 29.54 $ 31.64
---------------------------
Income (loss) from investment operations:
Net investment loss(a) (.07) (.05)
Net realized and unrealized gain(a) 6.64 .54(d)
---------------------------
Total from investment operations(a) 6.57 .49
---------------------------
Less distributions from:
Net investment income - (.01)
Realized capital gains - (2.58)
---------------------------
Total distributions - (2.59)
---------------------------
Net asset value at end of period $ 36.11 $ 29.54
===========================
Total return (%)* 22.24 7.66
Net assets at end of period (000) $16,813 $10,039
Ratios to average net assets:**
Expenses (%)(b),(c) .92 .90
Net investment loss (%)(c) (.48) (.28)
Portfolio turnover (%) 13 28
* Assumes reinvestment of all net investment income and realized capital gain
distributions, if any, during the period. Includes adjustments in accordance
with U.S. generally accepted accounting principles and could differ from the
Lipper reported return.
** For the six-month period ended November 30, 2009, average net assets were
$11,953,000.
*** Institutional Shares were initiated on August 1, 2008.
(a) Calculated using average shares. For the six-month period ended November 30,
2009, average shares were 402,000.
(b) Reflects total operating expenses of the Institutional Shares before
reductions of any expenses paid indirectly. The Institutional Shares'
expenses paid indirectly decreased the expense ratios by less than 0.01%.
(c) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
(d) Reflected a net realized and unrealized gain per share, whereas the
statement of operations reflected a net realized and unrealized loss for the
period for the Fund in total. The difference in realized and unrealized
gains and losses for the Fund versus the Institutional Shares is due to the
timing of sales and repurchases of the Institutional Shares in relation to
fluctuating market values for the portfolio.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 43
<PAGE>
================================================================================
EXPENSE EXAMPLE
November 30, 2009 (unaudited)
--------------------------------------------------------------------------------
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: direct costs, such
as wire fees, redemption fees, and low balance fees; and indirect costs,
including management fees, transfer agency fees, and other Fund operating
expenses. This example is intended to help you understand your indirect costs,
also referred to as "ongoing costs" (in dollars), of investing in the Fund and
to compare these costs with the ongoing costs of investing in other mutual
funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire six-month period of June 1, 2009, through
November 30, 2009.
ACTUAL EXPENSES
The first line of the table on the next page provides information about actual
account values and actual expenses. You may use the information in this line,
together with the amount you invested at the beginning of the period, to
estimate the expenses that you paid over the period. Simply divide your account
value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6),
then multiply the result by the number in the first line under the heading
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The line labeled "hypothetical" under each share class in the table provides
information about hypothetical account values and hypothetical expenses based on
the Fund's actual expense ratios for each class and an assumed rate of return of
5% per year before expenses, which is not the Fund's actual return. The
hypothetical account values and expenses may
================================================================================
44 | USAA PRECIOUS METALS AND MINERALS FUND
<PAGE>
================================================================================
not be used to estimate the actual ending account balance or expenses you paid
for the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any direct costs, such as wire fees,
redemption fees, or low balance fees. Therefore, the second line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these direct
costs were included, your costs would have been higher.
EXPENSES PAID
BEGINNING ENDING DURING PERIOD*
ACCOUNT VALUE ACCOUNT VALUE JUNE 1, 2009 -
JUNE 1, 2009 NOVEMBER 30, 2009 NOVEMBER 30, 2009
-------------------------------------------------------------
FUND SHARES
Actual $1,000.00 $1,220.40 $6.79
Hypothetical
(5% return before expenses) 1,000.00 1,018.95 6.17
INSTITUTIONAL SHARES
Actual 1,000.00 1,222.40 5.13
Hypothetical
(5% return before expenses) 1,000.00 1,020.46 4.66
* Expenses are equal to the annualized expense ratio of 1.22% for Fund Shares
and 0.92% for Institutional Shares, which are net of any reimbursements and
expenses paid indirectly, multiplied by the average account value over the
period, multiplied by 183 days/365 days (to reflect the one-half-year period).
The Fund's actual ending account values are based on its actual total returns
of 22.04% for Fund Shares and 22.24% for Institutional Shares for the six-
month period of June 1, 2009, through November 30, 2009.
================================================================================
EXPENSE EXAMPLE | 45
<PAGE>
================================================================================
TRUSTEES Christopher W. Claus
Barbara B. Dreeben
Robert L. Mason, Ph.D.
Barbara B. Ostdiek, Ph.D.
Michael F. Reimherr
Richard A. Zucker
--------------------------------------------------------------------------------
ADMINISTRATOR, USAA Investment Management Company
INVESTMENT ADVISER, P.O. Box 659453
UNDERWRITER, AND San Antonio, Texas 78265-9825
DISTRIBUTOR
--------------------------------------------------------------------------------
TRANSFER AGENT USAA Shareholder Account Services
9800 Fredericksburg Road
San Antonio, Texas 78288
--------------------------------------------------------------------------------
CUSTODIAN AND State Street Bank and Trust Company
ACCOUNTING AGENT P.O. Box 1713
Boston, Massachusetts 02105
--------------------------------------------------------------------------------
INDEPENDENT Ernst & Young LLP
REGISTERED PUBLIC 100 West Houston St., Suite 1800
ACCOUNTING FIRM San Antonio, Texas 78205
--------------------------------------------------------------------------------
MUTUAL FUND Under "Products & Services"
SELF-SERVICE 24/7 click "Investments," then
AT USAA.COM "Mutual Funds"
OR CALL Under "My Accounts" go to
(800) 531-USAA "Investments." View account balances,
(8722) or click "I want to...," and select
the desired action.
--------------------------------------------------------------------------------
Copies of the Manager's proxy voting policies and procedures, approved by the
Trust's Board of Trustees for use in voting proxies on behalf of the Fund, are
available without charge (i) by calling (800) 531-USAA (8722); (ii) at USAA.COM;
and (iii) on the SEC's Web site at HTTP://WWW.SEC.GOV. Information regarding
how the Fund voted proxies relating to portfolio securities during the most
recent 12-month period ended June 30 is available (i) at usaa.com; and (ii) on
the SEC's Web site at HTTP://WWW.SEC.GOV.
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. These Forms N-Q are
available at no charge (i) by calling (800) 531-USAA (8722); (ii) at USAA.COM;
and (iii) on the SEC's Web site at HTTP://WWW.SEC.GOV. These Forms N-Q also may
be reviewed and copied at the SEC's Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be obtained by
calling (800) 732-0330.
================================================================================
<PAGE>
USAA
9800 Fredericksburg Road --------------
San Antonio, TX 78288 PRSRT STD
U.S. Postage
PAID
USAA
--------------
>> SAVE PAPER AND FUND COSTS
At USAA.COM click: MY DOCUMENTS
Set preferences to USAA DOCUMENTS ONLINE.
[LOGO OF USAA]
USAA WE KNOW WHAT IT MEANS TO SERVE.(R)
=============================================================================
23408-0110 (C)2010, USAA. All rights reserved.
ITEM 2. CODE OF ETHICS.
NOT APPLICABLE. This item must be disclosed only in annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
NOT APPLICABLE. This item must be disclosed only in annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
NOT APPLICABLE. This item must be disclosed only in annual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not Applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Filed as part of the report to shareholders.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not Applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not Applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not Applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Corporate Governance Committee selects and nominates candidates for
membership on the Board as independent directors. Currently, there is no
procedure for shareholders to recommend candidates to serve on the Board.
ITEM 11. 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-CSR/S 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. The only change to the
procedures was to document the annual disclosure controls and procedures
established for the new section of the shareholder reports detailing the factors
considered by the Funds' Board in approving the Funds' advisory agreements.
ITEM 12. EXHIBITS.
(a)(1). NOT APPLICABLE. This item must be disclosed only in annual reports.
(a)(2). 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.
(a)(3). Not Applicable.
(b). Certification pursuant to Rule 30a-2(b) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(b))is filed and attached hereto as Exhibit
99.906CERT.
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 November 30, 2009
By:* CHRISTOPHER P. LAIA
-----------------------------------------------------------
Signature and Title: Christopher P. Laia, Assistant Secretary
Date: 01/26/2010
------------------------------
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:* CHRISTOPHER W. CLAUS
-----------------------------------------------------
Signature and Title: Christopher W. Claus, President
Date: 01/27/2010
------------------------------
By:* ROBERTO GALINDO, JR.
-----------------------------------------------------
Signature and Title: Roberto Galindo, Jr., Treasurer
Date: 01/27/2010
------------------------------
*Print the name and title of each signing officer under his or her signature.
Usaa Treasury Money Market Trust (NASDAQ:UATXX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Usaa Treasury Money Market Trust (NASDAQ:UATXX)
Historical Stock Chart
From Jul 2023 to Jul 2024
