PORTFOLIO
OF INVESTMENTS
December
31, 2009 (unaudited)
CATEGORIES
AND DEFINITIONS
Variable-rate demand notes
(VRDNs)
- provide the right to sell the security at face value on either
that day or within the rate-reset period. The interest rate is adjusted at a
stipulated daily, weekly, monthly, quarterly, or other specified time interval
to reflect current market conditions. The effective maturity of these
instruments is deemed to be less than 397 days in accordance with detailed
regulatory requirements.
Put bonds
- provide the right
to sell the bond at face value at specific tender dates prior to final maturity.
The put feature shortens the effective maturity of the security.
Credit enhancements
- add the
financial strength of the provider of the enhancement to support the issuer’s
ability to repay the principal and interest payments when due. The enhancement
may be provided by a high-quality bank, insurance company or other corporation,
or a collateral trust. The enhancements do not guarantee the values
of the securities.
The
Fund’s investments consist of securities meeting the requirements to
qualify
at the time
of purchase as “eligible securities” under the Securities and Exchange
Commission (SEC) rules applicable to money market funds. With respect to
quality, eligible securities generally consist of securities rated in one of the
two highest categories for short-term securities or, if not rated, of comparable
quality at the time of purchase. USAA Investment Management Company (the
Manager) also attempts to minimize credit risk in the Fund through rigorous
internal credit research.
|
(INS)
|
Principal
and interest payments are insured by Assured Guaranty Corp. or Assured
Guaranty Municipal Corp. Although bond insurance reduces the
risk of loss due to default by an issuer, such bonds remain subject to the
risk that value may fluctuate for other reasons, and there is no assurance
that the insurance company will meet its obligations.
|
|
(LIQ)
|
Liquidity
enhancement that may, under certain circumstances, provide for repayment
of principal and interest upon demand from one of the
following: Bank of America, N.A., Branch Banking & Trust
Co., Citibank, N.A., Citigroup, Inc., Deutsche Postbank, Dexia Credit
Local, Freddie Mac, JPMorgan Chase Bank, N.A., Merrill Lynch
& Co., Inc., Morgan Stanley, Suntrust Bank, U.S. Bank, N.A., or Wells
Fargo & Co.
|
|
(LOC)
|
Principal
and interest payments are guaranteed by a bank letter of credit or other
bank credit agreement.
|
|
(NBGA)
|
Principal
and interest payments or, under certain circumstances, underlying
mortgages are guaranteed by a nonbank guarantee agreement from Freddie
Mac, Merrill Lynch & Co., Inc or National Rural Utility
Corp.
|
|
|
Principal
Amount
(000)
|
|
Security
|
|
Coupon
Rate
|
|
Final
Maturity
|
|
Value
(000)
|
|
|
|
|
|
|
|
|
|
|
|
|
2,800
|
|
Virginia
Beach Dev. Auth. (LOC - Bank of America, N.A.)
|
0.25
|
|
7/01/2033
|
|
|
2,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
198,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Puerto
Rico (15.9%)
|
|
|
|
|
|
|
$
|
300
|
|
Aqueduct
and Sewer Auth. (INS)(LIQ) (a)
|
0.30
|
%
|
7/01/2039
|
|
$
|
300
|
|
|
|
|
|
|
|
20,500
|
|
Commonwealth
(LIQ)(LOC - Bank of America, N.A.) (a)
|
0.40
|
|
7/01/2011
|
|
|
20,500
|
|
|
|
|
|
|
|
6,995
|
|
Electric
Power Auth. (LIQ)(LOC - Dexia Credit Local) (a)
|
0.50
|
|
7/01/2033
|
|
|
6,995
|
|
|
|
|
|
|
|
6,000
|
|
Highway
and Transportation Auth. (LIQ)(LOC - Dexia Credit Local)
(a)
|
0.50
|
|
7/01/2041
|
|
|
6,000
|
|
|
|
|
|
|
|
4,000
|
|
Highway
and Transportation Auth. (INS)(LIQ) (a)
|
0.60
|
|
7/01/2041
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Variable-Rate Demand Notes (cost: $235,935)
|
|
235,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PUT
BONDS (1.1%)
|
|
|
|
|
|
|
|
Puerto
Rico (1.1%)
|
|
|
|
|
|
|
|
2,500
|
|
Industrial,
Medical and Environmental Pollution Control Facilities Financing
Auth. (cost: $2,500)
|
2.00
|
|
3/01/2023
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Investments (cost: $238,435)
|
$
|
238,435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($
in 000s)
|
VALUATION HIERARCHY
|
|
|
|
|
|
|
|
|
|
|
|
|
(LEVEL
1)
Quoted
Prices in Active Markets
for
Identical Assets
|
|
(LEVEL
2)
Other
Significant
Observable
Inputs
|
|
(LEVEL
3)
Significant
Unobservable
Inputs
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
VARIABLE-RATE
DEMAND NOTES
|
$
|
—
|
$
|
235,935
|
$
|
—
|
$
|
235,935
|
|
|
|
|
PUT
BONDS
|
|
—
|
|
2,500
|
|
—
|
|
2,500
|
|
|
|
Total
|
$
|
—
|
$
|
238,435
|
$
|
—
|
$
|
238,435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio of Investments | 4
NOTES
TO PORTFOLIO
OF
INVESTMENTS
December
31, 2009 (unaudited)
GENERAL
NOTES
USAA
MUTUAL FUNDS TRUST (the Trust), registered under the Investment Company Act of
1940 (the 1940 Act), as amended, is an open-end management investment company
organized as a Delaware statutory trust consisting of 46 separate funds. The
information presented in this quarterly report pertains only to the USAA
Virginia Money Market Fund (the Fund), which is classified as diversified under
the 1940 Act.
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.
Pursuant to Rule 2a-7 under the 1940 Act, securities in the Fund are valued at
amortized cost, which approximates market value. This method values a security
at its cost on the date of purchase and, thereafter, assumes a constant
amortization to maturity of any premiums or discounts.
2.
Securities for which amortized cost valuations are considered unreliable or
whose values have been materially affected by a significant event are valued in
good faith at fair value, using methods determined by the Manager, an affiliate
of the Fund, under valuation procedures and procedures to stabilize net asset
value (NAV) approved by the Trust’s Board of Trustees.
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. For example, money market securities are valued using
amortized cost, in accordance with rules under the 1940
Act. Generally, amortized cost
5 | USAA
Virginia Money Market Fund
approximates
the current fair value of a security, but since the value is not obtained from a
quoted price in an active market, such securities are reflected as Level
2.
C.
Securities
purchased on a delayed-delivery or when-issued basis
– Delivery and payment
for securities that have been purchased by the Fund on a delayed-delivery or
when-issued basis can take place a month or more after the trade date. During
the period prior to settlement, these securities do not earn interest, are
subject to market fluctuation, and may increase or decrease in value prior to
their delivery. The Fund maintains segregated assets with a market value equal
to or greater than the amount of its purchase commitments.
D.
Guarantee
program
–
Subject to certain terms and conditions, the U.S. Department of the Treasury's
Temporary Guarantee Program for Money Market Funds (the Program) provided
coverage to shareholders for amounts held in participating money market funds as
of the close of business on September 19, 2008, for the term of the Program of
September 19, 2008, through September 18, 2009 (Program Term). The Fund was
responsible for payment of fees required to continue its participation in the
Program without regard to any waivers or expense limitations in effect for the
Fund. The participation fee for the Program Term was 0.04% of the number of
shares outstanding of the Fund as of September 19, 2008. Effective September 18,
2009, the Program has expired.
E.
Subsequent
events
–
Subsequent events are events or transactions that occur after the balance
sheet date but before the quarterly report is issued and are categorized as
recognized or non-recognized for financial statement purposes. The Manager has
evaluated subsequent events through February 22, 2010, the date the quarterly
report was issued, and has determined there were no events that required
recognition or disclosure in the Fund's quarterly report.
F. As of
December 31, 2009, the cost of securities, for federal income tax purposes, was
approximately the same as that reported in the portfolio of
investments.
G. The
portfolio of investments category percentages shown represent the percentages of
the investments to net assets, which were $238,279,000 at December 31, 2009,
and, in total, may not equal 100%. A category percentage of 0.0%
represents less than 0.1% of net assets.
SPECIFIC
NOTES
|
(a)
|
|
Restricted
security that is not registered under the Securities Act of 1933. A resale
of this security in the United States may occur in an exempt transaction
to a qualified institutional buyer as defined by Rule 144A, and as such
has been deemed liquid by the Manager under liquidity guidelines approved
by the Trust's Board of Trustees, unless otherwise noted as
illiquid.
|