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 WORLD GROWTH FUND - SEMIANNUAL REPORT FOR PERIOD ENDED NOVEMBER 30, 2009
[LOGO OF USAA]
USAA(R)
[GRAPHIC OF USAA WORLD GROWTH FUND]
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SEMIANNUAL REPORT
USAA WORLD GROWTH FUND
NOVEMBER 30, 2009
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FUND OBJECTIVE
CAPITAL APPRECIATION.
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TYPES OF INVESTMENTS
Invests principally in a mix of foreign (including emerging market) and domestic
equity securities.
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.
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TABLE OF CONTENTS
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PRESIDENT'S MESSAGE 2
MANAGER'S COMMENTARY 4
FUND RECOGNITION 7
INVESTMENT OVERVIEW 10
FINANCIAL INFORMATION
Portfolio of Investments 14
Notes to Portfolio of Investments 21
Financial Statements 23
Notes to Financial Statements 26
EXPENSE EXAMPLE 39
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.
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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."
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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%.
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2 | USAA WORLD GROWTH FUND
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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.
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PRESIDENT'S MESSAGE | 3
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MANAGERS' COMMENTARY ON THE FUND
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[PHOTO OF DAVID R. MANNHEIM] [PHOTO OF ROGER MORLEY]
DAVID R. MANNHEIM ROGER MORLEY
MFS Investment MFS Investment
Management Management*
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o HOW DID THE USAA WORLD GROWTH FUND (THE FUND) PERFORM?
For the six-month period ended November 30, 2009, the Fund had a total
return of 22.60%. This compares to a return of 18.58% for the Lipper Global
Funds Index and 19.53% for the MSCI World Index(SM) (the Index).
o WHAT FACTORS LED TO THE SOLID PERFORMANCE?
During the reporting period, stock selection was the primary driver of
performance relative to the the Index, particularly within the consumer
staples, basic materials, and industrial goods and services sectors. At
MFS, we look to invest in companies with sustainable earnings growth,
strong balance sheets, and strong competitive positions within their
industries. This high-quality bias held back relative performance early in
the period, when lower-quality companies led the initial stages of the
rally. As the period progressed, however, we believe that investors
recognized the strong characteristics of the companies we owned.
Refer to page 11 for benchmark definitions.
Foreign investing is subject to additional risks, such as currency
fluctuations, market illiquidity, and political instability.
Past performance is no guarantee of future results.
*Effective October 1, 2009, Roger Morley is a co-manager of the Fund.
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4 | USAA WORLD GROWTH FUND
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Within consumer staples, our best-performing stocks relative to the Index
were brewer Heineken N.V., food companies J.M. Smucker Co. and Nestle
S.A., German industrial gases company Linde A.G., and diversified
technology company 3M Co. In industrial goods and services, our overweight
position in the strong-performing electrical distribution equipment
provider Schneider Electric S.A. boosted relative returns.
Stocks in other sectors that were among the Fund's top relative
contributors included postal system operator TNT N.V., retailers Compagnie
Financiere Richemont S.A. and Burberry Group plc, and financial services
company American Express Co.
o DO YOU ANTICIPATE REMAINING UNDERWEIGHT FINANCIAL SERVICES?
As of the date of this writing, we intend to remain underweight in
financial services, especially in banks. However, as we think about issues
such as leverage, stability, and sustainability of earnings, it is hard to
find many banks that meet our criteria. There are plenty of other
opportunities in today's global stock markets. Retail, technology, and
health care are three areas where we are finding attractive opportunities
that do meet our criteria.
o HOW WAS THE FUND ALLOCATED ON A REGIONAL/COUNTRY BASIS?
It is important to note that our regional and country exposures are a
direct result of our individual stock selection, not from macro-economic
views. Further, where a company is headquartered is becoming increasingly
less relevant as compared to where it derives its revenues. For instance,
long-time holding Nestle S.A. is classified as Swiss and European
(excluding the United Kingdom), but only a portion of its sales are in
Switzerland, and a portion are in the eurozone. The company conducts a
significant portion of its business in emerging markets, as do many of the
companies we hold in the Fund.
You will find a complete list of securities that the Fund owns on pages
14-20.
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MANAGERS' COMMENTARY ON THE FUND | 5
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As of November 30, 2009, the Fund was overweight in Europe (excluding the
United Kingdom) relative to the Index. We were underweight in Japan and the
United States, although we increased our U.S. holdings during the period.
We had a relatively neutral weighting in United Kingdom, and had a small
position in emerging markets, which are not part of the Index.
o WHAT'S YOUR OUTLOOK?
At MFS, we anticipate a somewhat muted global economic recovery. For
companies and their earnings, there is a big difference between 2.5%
economic growth and 3.5% to 4% economic growth. Our contention is that
there will be no free ride in a moderate growth environment because
competition will be more severe. We believe this will be a positive
environment for a process such as ours that focuses on companies with
defendable, competitive positions because of their brand or industry
structure. We think certain stocks in consumer staples, health care and
higher-end retail companies are better positioned to deliver above-average
earnings growth than stocks in areas such as utilities, communications, and
banking.
On behalf of our colleagues at USAA, we thank you for your continued
investment in the Fund.
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6 | USAA WORLD GROWTH FUND
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FUND RECOGNITION
USAA WORLD GROWTH FUND
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OVERALL MORNINGSTAR RATING(TM)
out of 528 world stock funds for the
period ended November 30, 2009:
OVERALL RATING
* * * *
3-YEAR
* * * *
out of 528 funds
5-YEAR
* * * *
out of 430 funds
10-YEAR
* * *
out of 250 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.
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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.
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FUND RECOGNITION | 7
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TOP FUNDS OVER 5 YEARS
The American Association of Individual Investors included the USAA World Growth
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.
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8 | USAA WORLD GROWTH FUND
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LIPPER LEADER (OVERALL)
[5]
PRESERVATION
The Fund is listed as a Lipper Leader for Preservation among 9,246 equity funds
for the overall period ended November 30, 2009. The Fund received a Lipper
Leader rating for Preservation among 9,246, 7,392, and 3,781 equity funds for
the three-, five-, and 10-year periods, respectively. Lipper ratings for
Preservation reflect funds' historical loss avoidance relative to other funds
within the same asset class, as of November 30, 2009. Preservation ratings are
relative, rather than absolute, measures, and funds named Lipper Leaders for
Preservation may still experience losses periodically; those losses may be
larger for equity and mixed equity funds than for fixed-income funds.
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Ratings are subject to change every month and are based on an equal-weighted
average of percentile ranks for the Preservation metric 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 2009, Reuters, All Rights
Reserved.
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FUND RECOGNITION | 9
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INVESTMENT OVERVIEW
USAA WORLD GROWTH FUND (Ticker Symbol: USAWX)
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11/30/09 5/31/09
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Net Assets $448.5 Million $364.1 Million
Net Asset Value Per Share $16.49 $13.47
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AVERAGE ANNUAL TOTAL RETURNS AS OF 11/30/09
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5/31/09 to 11/30/09* 1 Year 5 Years 10 Years
22.60% 34.50% 5.19% 2.26%
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EXPENSE RATIO**
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1.42%
*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 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.
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10 | USAA WORLD GROWTH FUND
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o CUMULATIVE PERFORMANCE COMPARISON o
[CHART OF CUMULATIVE PERFORMANCE COMPARISON]
USAA WORLD GROWTH FUND LIPPER GLOBAL FUNDS INDEX MSCI WORLD INDEX
---------------------- ------------------------- ----------------
11/30/1999 $10,000.00 $10,000.00 $10,000.00
12/31/1999 10,876.28 11,111.19 10,808.17
1/31/2000 10,419.64 10,677.16 10,187.99
2/29/2000 10,876.28 11,337.48 10,214.24
3/31/2000 11,322.54 11,619.81 10,918.97
4/30/2000 10,948.93 11,040.02 10,456.04
5/31/2000 10,694.66 10,711.85 10,190.08
6/30/2000 11,151.30 11,135.98 10,531.93
7/31/2000 10,777.05 10,910.32 10,234.19
8/31/2000 11,181.05 11,353.31 10,565.82
9/30/2000 10,438.56 10,749.81 10,002.77
10/31/2000 10,034.55 10,487.97 9,833.95
11/30/2000 9,313.90 9,876.71 9,235.65
12/31/2000 9,657.85 10,166.43 9,383.83
1/31/2001 9,925.36 10,334.78 9,564.54
2/28/2001 8,915.36 9,577.47 8,755.16
3/31/2001 8,178.33 8,912.21 8,178.62
4/30/2001 8,898.98 9,523.02 8,781.50
5/31/2001 8,680.60 9,465.00 8,667.07
6/30/2001 8,413.08 9,198.95 8,394.30
7/31/2001 8,276.60 8,970.89 8,282.10
8/31/2001 7,970.87 8,614.60 7,883.35
9/30/2001 7,179.24 7,809.84 7,187.65
10/31/2001 7,424.92 8,004.34 7,324.90
11/30/2001 7,867.13 8,440.89 7,757.13
12/31/2001 7,967.30 8,563.70 7,805.10
1/31/2002 7,731.19 8,304.20 7,567.85
2/28/2002 7,720.21 8,255.16 7,501.29
3/31/2002 8,110.06 8,646.24 7,846.75
4/30/2002 7,895.92 8,436.53 7,565.52
5/31/2002 7,917.88 8,455.64 7,578.14
6/30/2002 7,451.15 7,964.59 7,117.03
7/31/2002 6,759.30 7,260.24 6,516.51
8/31/2002 6,825.19 7,293.65 6,527.64
9/30/2002 6,287.08 6,568.66 5,808.95
10/31/2002 6,643.99 6,943.92 6,236.97
11/30/2002 6,869.12 7,283.80 6,572.30
12/31/2002 6,694.83 6,966.34 6,252.97
1/31/2003 6,435.64 6,743.01 6,062.42
2/28/2003 6,248.14 6,577.07 5,956.32
3/31/2003 6,270.20 6,504.39 5,936.66
4/30/2003 6,816.15 7,062.78 6,462.75
5/31/2003 7,180.12 7,497.76 6,830.71
6/30/2003 7,262.84 7,641.73 6,948.06
7/31/2003 7,340.05 7,803.26 7,088.34
8/31/2003 7,417.25 8,009.83 7,240.62
9/30/2003 7,499.97 8,053.61 7,284.19
10/31/2003 7,874.97 8,511.66 7,715.73
11/30/2003 8,067.98 8,669.66 7,832.34
12/31/2003 8,551.48 9,192.65 8,323.12
1/31/2004 8,706.25 9,385.53 8,456.67
2/29/2004 8,916.31 9,585.95 8,598.28
3/31/2004 8,883.14 9,544.99 8,541.23
4/30/2004 8,822.34 9,298.24 8,366.29
5/31/2004 8,894.20 9,329.72 8,436.10
6/30/2004 9,082.14 9,486.72 8,615.83
7/31/2004 8,794.70 9,132.22 8,334.53
8/31/2004 8,783.64 9,137.47 8,371.16
9/30/2004 8,982.64 9,381.72 8,529.52
10/31/2004 9,225.87 9,605.92 8,738.24
11/30/2004 9,706.78 10,141.62 9,197.27
12/31/2004 10,118.03 10,514.10 9,548.36
1/31/2005 9,965.41 10,314.22 9,333.38
2/28/2005 10,214.12 10,643.32 9,629.05
3/31/2005 10,021.94 10,421.76 9,442.94
4/30/2005 9,795.84 10,188.33 9,236.40
5/31/2005 9,920.19 10,361.38 9,400.50
6/30/2005 9,869.32 10,472.12 9,481.84
7/31/2005 10,276.30 10,885.96 9,813.06
8/31/2005 10,400.66 11,020.24 9,887.00
9/30/2005 10,570.23 11,313.98 10,143.80
10/31/2005 10,395.00 11,058.46 9,897.71
11/30/2005 10,609.80 11,409.40 10,227.49
12/31/2005 10,900.37 11,764.19 10,454.08
1/31/2006 11,395.57 12,368.79 10,920.89
2/28/2006 11,426.13 12,282.29 10,904.63
3/31/2006 11,676.79 12,596.65 11,144.41
4/30/2006 12,049.71 12,941.10 11,482.76
5/31/2006 11,805.17 12,462.27 11,090.52
6/30/2006 11,884.65 12,435.11 11,087.27
7/31/2006 12,068.05 12,437.15 11,156.47
8/31/2006 12,404.29 12,764.02 11,446.06
9/30/2006 12,612.15 12,938.80 11,582.54
10/31/2006 12,948.39 13,352.63 12,007.65
11/30/2006 13,266.30 13,734.46 12,301.69
12/31/2006 13,511.86 14,034.26 12,551.80
1/31/2007 13,782.63 14,250.64 12,699.98
2/28/2007 13,626.94 14,106.94 12,633.89
3/31/2007 13,775.87 14,390.77 12,865.16
4/30/2007 14,358.04 14,941.08 13,432.53
5/31/2007 14,601.74 15,402.53 13,808.91
6/30/2007 14,534.05 15,380.12 13,702.40
7/31/2007 14,229.42 15,068.98 13,398.94
8/31/2007 14,310.65 15,043.62 13,388.77
9/30/2007 14,886.06 15,656.97 14,025.48
10/31/2007 15,238.07 16,190.61 14,455.66
11/30/2007 14,967.29 15,478.05 13,864.78
12/31/2007 14,770.60 15,336.00 13,685.90
1/31/2008 13,752.44 14,254.43 12,640.04
2/29/2008 13,774.26 14,127.23 12,566.88
3/31/2008 13,985.16 14,038.93 12,446.42
4/30/2008 14,414.24 14,653.55 13,100.58
5/31/2008 14,646.97 14,856.17 13,300.34
6/30/2008 13,410.63 13,627.58 12,239.55
7/31/2008 13,221.54 13,309.92 11,940.48
8/31/2008 13,061.55 13,163.58 11,772.76
9/30/2008 11,919.75 11,771.87 10,372.53
10/31/2008 9,992.52 9,656.61 8,405.89
11/30/2008 9,294.35 9,009.35 7,861.78
12/31/2008 9,748.83 9,389.42 8,114.02
1/31/2009 8,778.50 8,686.17 7,403.18
2/28/2009 7,929.45 7,946.35 6,645.40
3/31/2009 8,581.40 8,473.71 7,146.52
4/30/2009 9,407.70 9,272.36 7,948.21
5/31/2009 10,196.10 10,110.02 8,668.37
6/30/2009 10,226.42 10,090.04 8,629.26
7/31/2009 11,227.08 10,932.59 9,360.13
8/31/2009 11,575.79 11,367.20 9,746.29
9/30/2009 12,129.18 11,782.16 10,134.76
10/31/2009 11,901.76 11,539.62 9,954.45
11/30/2009 12,500.64 11,988.62 10,361.22
[END CHART]
Data from 11/30/99 to 11/30/09.
The graph illustrates the comparison of a $10,000 hypothetical investment in the
USAA World Growth Fund to the following benchmarks:
o The unmanaged Lipper Global Funds Index tracks the total return performance
of the 30 largest funds within the Lipper Global Funds category.
o The unmanaged Morgan Stanley Capital International (MSCI) World Index
reflects the movements of world stock markets by representing a broad
selection of domestically listed companies within each market.
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.
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INVESTMENT OVERVIEW | 11
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TOP 10 INDUSTRIES
AS OF 11/30/09
(% of Net Assets)
Pharmaceuticals ................................................... 7.0%
Packaged Foods & Meat ............................................. 6.7%
Health Care Equipment ............................................. 5.1%
Industrial Gases .................................................. 4.8%
Apparel & Accessories & Luxury Goods .............................. 4.5%
Household Products ................................................ 4.4%
Asset Management & Custody Banks .................................. 3.6%
Integrated Oil & Gas .............................................. 3.6%
Electrical Components & Equipment ................................. 3.4%
Distillers & Vintners ............................................. 3.1%
TOP 10 EQUITY HOLDINGS
AS OF 11/30/09
(% of Net Assets)
Nestle S.A. ....................................................... 3.3%
Linde AG .......................................................... 2.9%
Heineken N.V. ..................................................... 2.7%
Roche Holdings AG ................................................. 2.6%
LVMH Moet Hennessy Louis Vuitton S.A. ............................. 2.3%
Reckitt Benckiser Group plc ....................................... 2.1%
3M Co. ............................................................ 2.0%
Diageo plc ........................................................ 2.0%
NIKE, Inc. "B" .................................................... 2.0%
Oracle Corp. ...................................................... 2.0%
You will find a complete list of securities that the Fund owns on pages 14-20.
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12 | USAA WORLD GROWTH FUND
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o ASSET ALLOCATION -- 11/30/2009* o
[PIE CHART OF ASSET ALLOCATION]
UNITED STATES 37.6%
FRANCE 12.9%
SWITZERLAND 12.0%
UNITED KINGDOM 10.3%
GERMANY 7.7%
JAPAN 6.2%
NETHERLANDS 4.9%
OTHER** 8.3%
[END CHART]
* Excludes short-term investments purchased with cash collateral from
securities loaned.
** Includes countries with less than 3% of portfolio and money market
instruments (0.9%).
Percentages are of the net assets of the Fund and may not equal 100%.
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INVESTMENT OVERVIEW | 13
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PORTFOLIO OF INVESTMENTS
November 30, 2009 (unaudited)
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
EQUITY SECURITIES (99.0%)
COMMON STOCKS (99.0%)
CONSUMER DISCRETIONARY (14.8%)
------------------------------
ADVERTISING (2.5%)
170,890 Omnicom Group, Inc. $ 6,275
543,387 WPP plc 5,078
--------
11,353
--------
APPAREL & ACCESSORIES & LUXURY GOODS (4.5%)
417,970 Burberry Group plc 3,919
183,645 Compagnie Financiere Richemont S.A. 5,939
98,420 LVMH Moet Hennessy Louis Vuitton S.A.(a) 10,250
--------
20,108
--------
APPAREL RETAIL (0.5%)
55,200 Abercrombie & Fitch Co. "A" 2,204
--------
CASINOS & GAMING (0.9%)
708,645 Ladbrokes plc 1,574
796,020 William Hill plc 2,342
--------
3,916
--------
FOOTWEAR (2.0%)
134,330 NIKE, Inc. "B" 8,717
--------
HOME IMPROVEMENT RETAIL (0.4%)
30,000 Sherwin-Williams Co. 1,825
--------
MOTORCYCLE MANUFACTURERS (0.4%)
64,790 Harley-Davidson, Inc. 1,888
--------
MOVIES & ENTERTAINMENT (2.6%)
106,752 Vivendi S.A. 3,076
284,700 Walt Disney Co. 8,604
--------
11,680
--------
PUBLISHING (0.8%)
172,700 Wolters Kluwer N.V. 3,760
--------
================================================================================
14 | USAA WORLD GROWTH FUND
<PAGE>
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
SPECIALTY STORES (0.2%)
96,390 Sally Beauty Holdings, Inc.* $ 673
--------
Total Consumer Discretionary 66,124
--------
CONSUMER STAPLES (21.3%)
------------------------
BREWERS (3.0%)
237,500 Grupo Modelo S.A. de C.V. "C"* 1,245
257,460 Heineken N.V. 12,108
--------
13,353
--------
DISTILLERS & VINTNERS (3.1%)
536,665 Diageo plc 9,049
55,802 Pernod Ricard SA 4,759
--------
13,808
--------
DRUG RETAIL (1.7%)
192,300 Walgreen Co. 7,479
--------
FOOD RETAIL (0.8%)
25,100 Lawson, Inc. 1,243
351,639 Tesco plc 2,447
--------
3,690
--------
HOUSEHOLD PRODUCTS (4.4%)
196,300 Kao Corp. 4,814
87,675 Procter & Gamble Co. 5,467
184,070 Reckitt Benckiser Group plc 9,387
--------
19,668
--------
PACKAGED FOODS & MEAT (6.7%)
73,204 DANONE S.A. 4,376
82,490 General Mills, Inc. 5,609
88,607 J.M. Smucker Co. 5,235
314,566 Nestle S.A. 14,869
--------
30,089
--------
PERSONAL PRODUCTS (0.4%)
26,800 Beiersdorf AG 1,743
--------
SOFT DRINKS (1.2%)
89,560 PepsiCo, Inc. 5,572
--------
Total Consumer Staples 95,402
--------
ENERGY (5.0%)
-------------
INTEGRATED OIL & GAS (3.6%)
55,250 Chevron Corp. 4,311
32,580 Exxon Mobil Corp. 2,446
================================================================================
PORTFOLIO OF INVESTMENTS | 15
<PAGE>
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
152,070 Royal Dutch Shell plc "A" $ 4,519
77,040 Total S.A. 4,767
--------
16,043
--------
OIL & GAS EQUIPMENT & SERVICES (0.5%)
47,900 National-Oilwell Varco, Inc. 2,061
--------
OIL & GAS EXPLORATION & PRODUCTION (0.9%)
528 INPEX Holdings, Inc. 4,117
--------
Total Energy 22,221
--------
FINANCIALS (11.6%)
------------------
ASSET MANAGEMENT & CUSTODY BANKS (3.6%)
235,481 Bank of New York Mellon Corp. 6,273
105,833 Julius Baer Group Ltd. 3,493
147,170 State Street Corp. 6,078
--------
15,844
--------
CONSUMER FINANCE (1.2%)
106,400 Aeon Credit Service Co. Ltd. 1,081
97,800 American Express Co. 4,091
--------
5,172
--------
DIVERSIFIED BANKS (2.2%)
409,408 Banca Intesa S.p.A.* 1,773
54,566 Erste Bank der Oesterreichischen Sparkassen AG(a) 2,219
8,301 Komercni Banka A.S. 1,814
172,339 Standard Chartered plc 4,207
--------
10,013
--------
DIVERSIFIED CAPITAL MARKETS (0.9%)
268,043 UBS AG* 4,157
--------
INVESTMENT BANKING & BROKERAGE (0.9%)
24,500 Goldman Sachs Group, Inc. 4,157
--------
MULTI-LINE INSURANCE (1.1%)
212,410 AXA S.A. 5,062
--------
REINSURANCE (0.7%)
67,058 Swiss Re 3,189
--------
SPECIALIZED FINANCE (1.0%)
54,200 Deutsche Boerse AG 4,516
--------
Total Financials 52,110
--------
================================================================================
16 | USAA WORLD GROWTH FUND
<PAGE>
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
HEALTH CARE (16.5%)
-------------------
BIOTECHNOLOGY (0.3%)
22,059 Actelion Ltd.* $ 1,298
--------
HEALTH CARE EQUIPMENT (5.1%)
187,750 Medtronic, Inc. 7,968
10,558 Sonova Holding AG 1,254
84,000 St. Jude Medical, Inc.* 3,084
37,980 Synthes, Inc. 4,995
96,570 Zimmer Holdings, Inc.* 5,714
--------
23,015
--------
HEALTH CARE SUPPLIES (1.8%)
18,840 Alcon, Inc. 2,786
106,800 DENTSPLY International, Inc. 3,559
32,700 Essilor International SA 1,897
--------
8,242
--------
LIFE SCIENCES TOOLS & SERVICES (2.3%)
100,160 Thermo Fisher Scientific, Inc.* 4,731
91,110 Waters Corp.* 5,355
--------
10,086
--------
PHARMACEUTICALS (7.0%)
94,350 Bayer AG 7,224
78,100 GlaxoSmithKline plc 1,615
84,050 Johnson & Johnson 5,281
62,230 Merck KGaA 5,869
70,200 Roche Holdings AG 11,483
--------
31,472
--------
Total Health Care 74,113
--------
INDUSTRIALS (10.4%)
-------------------
AIR FREIGHT & LOGISTICS (2.6%)
216,225 TNT N.V. 6,273
90,590 United Parcel Service, Inc. "B" 5,206
--------
11,479
--------
ELECTRICAL COMPONENTS & EQUIPMENT (3.4%)
163,630 Legrand S.A. 4,495
71,360 Rockwell Automation, Inc. 3,103
69,865 Schneider Electric S.A. 7,647
--------
15,245
--------
================================================================================
PORTFOLIO OF INVESTMENTS | 17
<PAGE>
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (2.6%)
114,150 3M Co. $ 8,840
183,998 Smiths Group plc 2,887
--------
11,727
--------
INDUSTRIAL MACHINERY (0.4%)
23,200 FANUC Ltd. 1,916
--------
RAILROADS (1.4%)
121,876 Canadian National Railway Co. 6,411
--------
Total Industrials 46,778
--------
INFORMATION TECHNOLOGY (10.1%)
------------------------------
COMMUNICATIONS EQUIPMENT (1.6%)
308,040 Cisco Systems, Inc.* 7,208
--------
DATA PROCESSING & OUTSOURCED SERVICES (0.4%)
37,310 DST Systems, Inc.* 1,585
--------
ELECTRONIC COMPONENTS (1.5%)
12,700 Hirose Electric Co. Ltd. 1,343
208,600 HOYA Corp. 5,321
--------
6,664
--------
IT CONSULTING & OTHER SERVICES (1.3%)
145,290 Accenture plc "A" 5,963
--------
OFFICE ELECTRONICS (1.2%)
142,100 Canon, Inc. 5,474
--------
SEMICONDUCTORS (2.1%)
219,440 Intel Corp. 4,213
8,724 Samsung Electronics Co. Ltd. 5,402
--------
9,615
--------
SYSTEMS SOFTWARE (2.0%)
404,560 Oracle Corp. 8,933
--------
Total Information Technology 45,442
--------
MATERIALS (7.0%)
----------------
INDUSTRIAL GASES (4.8%)
51,273 Air Liquide S.A. 5,959
103,800 Linde AG 12,762
31,760 Praxair, Inc. 2,605
--------
21,326
--------
================================================================================
18 | USAA WORLD GROWTH FUND
<PAGE>
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
SPECIALTY CHEMICALS (2.2%)
8,058 Givaudan S.A. $ 6,378
33,890 International Flavors & Fragrances, Inc. 1,380
37,800 Shin-Etsu Chemical Co. Ltd. 2,051
--------
9,809
--------
Total Materials 31,135
--------
TELECOMMUNICATION SERVICES (0.6%)
---------------------------------
INTEGRATED TELECOMMUNICATION SERVICES (0.6%)
1,344,650 Singapore Telecommunications Ltd. 2,847
--------
Total Telecommunication Services 2,847
--------
UTILITIES (1.7%)
----------------
ELECTRIC UTILITIES (0.5%)
57,335 E.ON AG 2,268
--------
MULTI-UTILITIES (1.2%)
125,277 Gaz de France S.A. 5,231
--------
Total Utilities 7,499
--------
Total Common Stocks (cost: $406,143) 443,671
--------
RIGHTS (0.0%)
CONSUMER STAPLES (0.0%)
-----------------------
DISTILLERS & VINTNERS (0.0%)
55,802 Pernod Ricard S.A.*(b) (cost: $72) 95
--------
Total Consumer Staples 95
--------
Total Rights (cost: $72) 95
--------
Total Equity Securities (cost: $406,215) 443,766
--------
MONEY MARKET INSTRUMENTS (0.9%)
MONEY MARKET FUNDS (0.9%)
4,133,622 State Street Institutional Liquid Reserve Fund, 0.19%(c)
(cost: $4,134) 4,134
--------
SHORT-TERM INVESTMENTS PURCHASED WITH CASH
COLLATERAL FROM SECURITIES LOANED (2.6%)
MONEY MARKET FUNDS (1.3%)
7 AIM Short-Term Investment Co. Liquid Assets Portfolio, 0.20%(c) -
5,705,571 BlackRock Liquidity Funds TempFund, 0.15%(c) 5,705
--------
Total Money Market Funds 5,705
--------
================================================================================
PORTFOLIO OF INVESTMENTS | 19
<PAGE>
================================================================================
---------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
(000) SECURITY (000)
---------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS (1.3%)
$6,100 Credit Suisse First Boston LLC, 0.16%, acquired on
11/30/2009 and due 12/01/2009 at $6,100 (collateralized
by $6,230 of Fannie Mae(e), 0.10%(d), due 5/12/2010;
market value $6,227) $ 6,100
--------
Total Repurchase Agreements 6,100
--------
Total Short-term Investments Purchased With Cash Collateral
From Securities Loaned (cost: $11,805) 11,805
--------
TOTAL INVESTMENTS (COST: $422,154) $459,705
========
----------------------------------------------------------------------------------------------------
($ 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 $443,671 $ - $- $443,671
Rights - 95 - 95
Money Market Instruments:
Money Market Funds 4,134 - - 4,134
Short-Term Investments
Purchased with Cash
Collateral from Securities Loaned:
Money Market Funds 5,705 - - 5,705
Repurchase Agreements - 6,100 - 6,100
----------------------------------------------------------------------------------------------------
Total $453,510 $6,195 $- $459,705
----------------------------------------------------------------------------------------------------
================================================================================
20 | USAA WORLD GROWTH 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 61.5% of net assets at November 30,
2009.
o CATEGORIES AND DEFINITIONS
RIGHTS -- enable the holder to buy a specified number of shares of new
issues of a common stock before it is offered to the public.
o SPECIFIC NOTES
(a) The security or a portion thereof was out on loan as of November 30,
2009.
(b) Security was fair valued at November 30, 2009, by USAA Investment
Management Company (the Manager) in accordance with valuation procedures
approved by the Board of Trustees.
(c) Rate represents the money market fund annualized seven-day yield at
November 30, 2009.
(d) Zero-coupon security. Rate represents the effective yield at the date of
purchase.
================================================================================
NOTES TO PORTFOLIO OF INVESTMENTS | 21
<PAGE>
================================================================================
(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.
* Non-income-producing security.
See accompanying notes to financial statements.
================================================================================
22 | USAA WORLD GROWTH 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 $11,004) (cost of $422,154) $459,705
Cash 2
Cash denominated in foreign currencies (identified cost of $66) 69
Receivables:
Capital shares sold 365
Dividends and interest 882
Other 15
--------
Total assets 461,038
--------
LIABILITIES
Payables:
Upon return of securities loaned 11,807
Capital shares redeemed 345
Accrued management fees 291
Accrued transfer agent's fees 11
Other accrued expenses and payables 89
--------
Total liabilities 12,543
--------
Net assets applicable to capital shares outstanding $448,495
========
NET ASSETS CONSIST OF:
Paid-in capital $425,000
Accumulated undistributed net investment income 3,383
Accumulated net realized loss on investments (17,471)
Net unrealized appreciation of investments 37,551
Net unrealized appreciation of foreign currency translations 32
--------
Net assets applicable to capital shares outstanding $448,495
========
Capital shares outstanding, unlimited number of shares
authorized, no par value 27,198
========
Net asset value, redemption price, and offering price per share $ 16.49
========
See accompanying notes to financial statements.
================================================================================
FINANCIAL STATEMENTS | 23
<PAGE>
================================================================================
STATEMENT OF OPERATIONS
(IN THOUSANDS)
Six-month period ended November 30, 2009 (unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $135) $ 2,899
Interest 7
Securities lending (net) 21
-------
Total income 2,927
-------
EXPENSES
Management fees 1,635
Administration and servicing fees 308
Transfer agent's fees 668
Custody and accounting fees 79
Postage 38
Shareholder reporting fees 15
Trustees' fees 5
Registration fees 17
Professional fees 40
Other 10
-------
Total expenses 2,815
-------
NET INVESTMENT INCOME 112
-------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on:
Investments (3,000)
Foreign currency transactions 33
Change in net unrealized appreciation/depreciation of:
Investments 84,802
Foreign currency translations (61)
-------
Net realized and unrealized gain 81,774
-------
Increase in net assets resulting from operations $81,886
=======
See accompanying notes to financial statements.
================================================================================
24 | USAA WORLD GROWTH 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 income $ 112 $ 5,034
Net realized loss on investments (3,000) (14,254)
Net realized gain (loss) on foreign currency transactions 33 (188)
Change in net unrealized appreciation/depreciation of:
Investments 84,802 (156,246)
Foreign currency translations (61) 178
-----------------------
Increase (decrease) in net assets resulting
from operations 81,886 (165,476)
-----------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income - (5,774)
Net realized gains - (8,025)
-----------------------
Distributions to shareholders - (13,799)
-----------------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 34,150 52,535
Reinvested dividends - 13,600
Cost of shares redeemed (31,659) (71,976)
-----------------------
Increase (decrease) in net assets from capital
share transactions 2,491 (5,841)
-----------------------
Net increase (decrease) in net assets 84,377 (185,116)
NET ASSETS
Beginning of period 364,118 549,234
-----------------------
End of period $448,495 $ 364,118
=======================
Accumulated undistributed net investment income:
End of period $ 3,383 $ 3,271
=======================
CHANGE IN SHARES OUTSTANDING
Shares sold 2,253 3,775
Shares issued for dividends reinvested - 1,096
Shares redeemed (2,086) (5,101)
-----------------------
Increase (decrease) in shares outstanding 167 (230)
=======================
See accompanying notes to financial statements.
================================================================================
FINANCIAL STATEMENTS | 25
<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 World
Growth Fund (the Fund), which is classified as diversified under the 1940 Act.
The Fund's investment objective is capital appreciation.
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
================================================================================
26 | USAA WORLD GROWTH FUND
<PAGE>
================================================================================
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 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, USAA Investment
Management Company (the Manager), an affiliate of the Fund, and the
Fund's subadvisers, if applicable, will monitor for events that would
materially affect the value of the Fund's foreign securities. The Fund's
subadvisers have agreed to notify the Manager of significant events they
identify that would materially affect the value of the Fund's foreign
securities. If the Manager determines that a particular event would
materially affect the value of the Fund's foreign securities, then the
Manager, under valuation procedures approved by the Trust's Board of
Trustees, will consider such available information that it deems
relevant to determine a fair value for the affected foreign securities.
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.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 27
<PAGE>
================================================================================
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 in consultation with the Fund's
subadvisers, if applicable, under valuation procedures approved by the
Trust's Board of Trustees. The effect of fair value pricing is that
securities may not be priced on the basis of quotations from the primary
market in which they are traded and the actual price realized from the
sale of a security may differ materially from the fair value price.
Valuing these securities at fair value is intended to cause the Fund's
NAV to be more reliable than it otherwise would be.
Fair value methods used by the Manager include, but are not limited to,
obtaining market quotations from secondary pricing services,
broker-dealers, or widely used quotation systems. General factors
considered in determining the fair value of securities include
fundamental analytical data, the nature and duration of any restrictions
on disposition of the securities, and an evaluation of the forces that
influenced the market in which the securities are purchased and sold.
B. FAIR VALUE MEASUREMENTS -- Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The
three-level valuation hierarchy disclosed in the portfolio of investments
is based upon the transparency of inputs to the valuation of an asset or
liability as of the measurement date. The three levels are defined as
follows:
Level 1 -- inputs to the valuation methodology are quoted prices
(unadjusted) in active markets for identical securities.
Level 2 -- inputs to the valuation methodology are other significant
observable inputs, including quoted prices for similar securities, inputs
that are observable for the securities, either directly or indirectly, and
market-corroborated inputs such as market indices.
================================================================================
28 | USAA WORLD GROWTH FUND
<PAGE>
================================================================================
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 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.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 29
<PAGE>
================================================================================
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.
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.
================================================================================
30 | USAA WORLD GROWTH FUND
<PAGE>
================================================================================
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 the Fund's
expenses by less than $500. For the six-month period ended November 30,
2009, the Fund 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 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
================================================================================
NOTES TO FINANCIAL STATEMENTS | 31
<PAGE>
================================================================================
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 $1,000, which represents 1.0% 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.
(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. At
May 31, 2009, the Fund had capital loss carryovers of $3,282,000, for federal
income tax purposes, which, if not offset by subsequent capital gains, will
expire in 2017. It is unlikely that the Trust's Board of Trustees will authorize
a distribution of capital gains realized in the future until the capital loss
carryovers have been used or expire.
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
================================================================================
32 | USAA WORLD GROWTH FUND
<PAGE>
================================================================================
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
$24,597,000 and $20,501,000, 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 $80,162,000 and $42,611,000, respectively, resulting in net
unrealized appreciation of $37,551,000.
(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
================================================================================
NOTES TO FINANCIAL STATEMENTS | 33
<PAGE>
================================================================================
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 $21,000, 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 $11,004,000 and received cash collateral of
$11,807,000 for the loans. Of this amount, $11,805,000 was invested in
short-term investments, as noted in the Fund's portfolio of investments, and
$2,000 remained in cash.
(6) TRANSACTIONS WITH MANAGER
A. MANAGEMENT FEES -- The Manager provides investment management services to
the Fund pursuant to an Advisory Agreement. Under this agreement, the
Manager is responsible for managing the business and affairs of the Fund,
subject to the authority of and supervision by the Trust's Board of
Trustees. The Manager is authorized to select (with approval of the Trust's
Board of Trustees and without shareholder approval) one or more subadvisers
to manage the actual day-to-day investment of the Fund's assets. The
Manager monitors each subadviser's performance through quantitative and
qualitative analysis, and periodically recommends to the Trust's Board of
Trustees as to whether each subadviser's agreement should be renewed,
terminated, or modified. The Manager also is responsible for allocating
assets to the subadvisers. The allocation for each subadviser can range
from 0% to 100% of the Fund's assets, and the Manager can change the
allocations without shareholder approval.
The investment management fee for the Fund is composed of a base fee and a
performance adjustment. The Fund's base fee is accrued
================================================================================
34 | USAA WORLD GROWTH FUND
<PAGE>
================================================================================
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 monthly by comparing the Fund's
performance to that of the Lipper Global Funds Index over the performance
period. The Lipper Global Funds Index tracks the total return performance
of the 30 largest funds in the Lipper Global Funds category. The
performance period for the Fund consists of the current month plus the
previous 35 months. 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.
The annual performance adjustment rate is multiplied by the average net
assets of the Fund 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, the Fund will pay a positive
performance fee adjustment for a performance period whenever the Fund
outperforms the Lipper Global Funds Index over that period, even if the
Fund 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 $1,635,000, which
included a 0.05% performance adjustment of $94,000.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 35
<PAGE>
================================================================================
B. SUBADVISORY ARRANGEMENTS -- The Manager has entered into an investment
subadvisory agreement with MFS Investment Management (MFS), under which MFS
directs the investment and reinvestment of the Fund's assets (as allocated
from time to time by the Manager). The Manager (not the Fund) pays MFS a
subadvisory fee in the annual amount of 0.29% of the Fund's average net
assets that MFS manages. For the six-month period ended November 30, 2009,
the Manager incurred subadvisory fees, paid or payable to MFS, of $596,000.
C. 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% of the Fund's average net assets. For the
six-month period ended November 30, 2009, the Fund incurred administration
and servicing fees, paid or payable to the Manager, of $308,000.
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 $10,000 for these compliance and legal services.
These expenses are included in the professional fees on the Fund's
statement of operations.
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 based on an annual charge of $23 per
shareholder account plus out-of-pocket expenses. The Fund also pays SAS
fees that are related to the administration and servicing of accounts that
are traded on an omnibus basis. For the six-month period ended November 30,
2009, the Fund incurred transfer agent's fees, paid or payable to SAS, of
$668,000.
================================================================================
36 | USAA WORLD GROWTH FUND
<PAGE>
================================================================================
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.
(7) TRANSACTIONS WITH AFFILIATES
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.
(8) 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 received a reimbursement from SAS in the amount of
$116,000 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.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 37
<PAGE>
================================================================================
(9) FINANCIAL HIGHLIGHTS
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 $ 13.47 $ 20.15 $ 21.57 $ 19.31 $ 17.55 $ 16.09
------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .00(a) .18 .19 .19 .37 .08
Net realized and
unrealized gain (loss) 3.02 (6.34) (.08) 4.20 2.84 1.78
------------------------------------------------------------------------------
Total from investment
operations 3.02 (6.16) .11 4.39 3.21 1.86
------------------------------------------------------------------------------
Less distributions from:
Net investment income - (.21) (.18) (.42) (.08) (.08)
Realized capital gains - (.31) (1.35) (1.71) (1.37) (.32)
------------------------------------------------------------------------------
Total distributions - (.52) (1.53) (2.13) (1.45) (.40)
------------------------------------------------------------------------------
Net asset value at end
of period $ 16.49 $ 13.47 $ 20.15 $ 21.57 $ 19.31 $ 17.55
==============================================================================
Total return (%)* 22.42 (30.32) .36 23.69(b) 19.00 11.54
Net assets at end
of period (000) $448,495 $364,118 $549,234 $566,673 $408,659 $330,792
Ratios to average
net assets:**
Expenses (%)(c) 1.37(d) 1.42 1.24 1.30(b) 1.26 1.31
Net investment
income (%) .05(d) 1.31 1.01 1.31 2.15 .50
Portfolio turnover (%) 5 20 28 29 44 36
* 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 $409,809,000.
(a) Represents less than $0.01 per share.
(b) For the year ended May 31, 2007, SAS voluntarily reimbursed the Fund for a portion of the transfer agent's
fees incurred. The reimbursement had no effect on the Fund's total return or ratio of expenses to average
net assets.
(c) Reflects total operating expenses of the Fund before reductions of any expenses paid indirectly. The Fund's
expenses paid indirectly decreased the expense ratios as follows:
(.00%)(+) (.00%)(+) (.00%)(+) (.00%)(+) (.01%) (.01%)
(+) Represents less than 0.01% of average net assets.
(d) Annualized. The ratio is not necessarily indicative of 12 months of operations.
================================================================================
38 | USAA WORLD GROWTH FUND
<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 second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio 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 not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may
================================================================================
EXPENSE EXAMPLE | 39
<PAGE>
================================================================================
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
-------------------------------------------------------------
Actual $1,000.00 $1,224.20 $7.64
Hypothetical
(5% return before expenses) 1,000.00 1,018.20 6.93
* Expenses are equal to the Fund's annualized expense ratio of 1.37%, which is
net of any 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 ending account value on the first line in the table is
based on its actual total return of 22.42% for the six-month period of
June 1, 2009, through November 30, 2009.
================================================================================
40 | USAA WORLD GROWTH FUND
<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)
=============================================================================
23412-0110 (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.
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