UATXX Usaa Treasury Money Market Trust (MM)

                                                   UNITED STATES

                            SECURITIES AND EXCHANGE COMMISSION

                                             WASHINGTON, D.C. 20549

                                                          FORM N-Q

                  QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF

                    REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-7852

Exact Name of Registrant as Specified in Charter:  USAA MUTUAL FUNDS TRUST

Address of Principal Executive Offices and Zip Code: 9800 FREDERICKSBURG ROAD

                                                                                               SAN ANTONIO, TX  78288

Name and Address of Agent for Service:               CHRISTOPHER P. LAIA

                                                                                       USAA MUTUAL FUNDS TRUST

                                                                                       9800 FREDERICKSBURG ROAD

                                                                                       SAN ANTONIO, TX  78288

Registrant's Telephone Number, Including Area Code:  (210) 498-0226

Date of Fiscal Year End:   MARCH 31

Date of Reporting Period:  DECEMBER 31, 2009

ITEM 1.  SCHEDULE OF INVESTMENTS.

USAA VIRGINIA BOND FUND - 3RD QUARTER REPORT - PERIOD ENDED DECEMBER 31, 2009

[Graphic of USAA logo]

PORTFOLIO OF INVESTMENTS

3 RD QUARTER

USAA VIRGINIA BOND FUND

DECEMBER 31, 2009

                                                                                                                                                               (Form N-Q)

48464 -0210                                                                                                   ©2010, USAA. All rights reserved.

CATEGORIES AND DEFINITIONS

Fixed-rate instruments - consist of municipal bonds, notes, and commercial paper. The interest rate is constant to maturity. Prior to maturity, the market price of a fixed-rate instrument generally varies inversely to the movement of interest rates.

 
 

Variable-rate demand notes (VRDNs) - provide the right to sell the security at face value on either that day or within the rate-reset period. The interest rate is adjusted at a stipulated daily, weekly, monthly, quarterly, or other specified time interval to reflect current market conditions. VRDNs will normally trade as if the maturity is the earlier put date, even though stated maturity is longer.

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 market values of the securities.

(INS)	Principal and interest payments are insured by one of the following: AMBAC Assurance Corp., Assured Guaranty Corp., Assured Guaranty Municipal Corp., National Public Finance Guarantee Corp., or Radian Asset Assurance, Inc.  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 Dexia Credit Local.
(LOC)	Principal and interest payments are guaranteed by a bank letter of credit or other bank credit agreement.

PORTFOLIO ABBREVIATIONS AND DESCRIPTIONS

EDA	Economic Development Authority
IDA	Industrial Development Authority/Agency
PRE	Prerefunded to a date prior to maturity

 

 

 

1|  USAA Virginia Bond Fund

Principal Amount (000)						Security                                                                                                                                   Coupon Rate							Final   Maturity				Market                                Value                                 (000)
						FIXED-RATE INSTRUMENTS (96.0%)
						Virginia (91.1%)
			$	3,305		Abingdon Town IDA				5.25	%		7/01/2016							$	3,326
				1,360		Abingdon Town IDA				5.38			7/01/2028								1,361
				2,500		Albemarle County IDA				5.00			1/01/2031								2,220
				5,755		Alexandria IDA (INS) (PRE)				5.90			10/01/2020								6,057
				12,480		Alexandria IDA (INS) (PRE)				5.90			10/01/2030								13,134
				1,000		Amherst IDA				5.00			9/01/2026								975
				2,000		Amherst IDA				4.75			9/01/2030								1,811
				5,310		Bedford County EDA (INS)				5.25			5/01/2031								5,494
				8,065		Biotechnology Research Park Auth. (PRE)				5.00			9/01/2021								8,657
				2,615		Capital Region Airport Commission (INS)				5.00			7/01/2031								2,720
				1,390		College Building Auth. (PRE)				5.80			4/01/2016								1,423
				6,215		College Building Auth. (PRE)				5.00			9/01/2019								6,408
				1,000		College Building Auth. (PRE)				6.00			4/01/2020								1,024
				6,530		College Building Auth.				5.00			9/01/2020								6,688
				5,000		College Building Auth.				5.00			6/01/2029								4,343
				11,710		College Building Auth.				5.00			6/01/2036								9,895
				3,290		College Building Auth. (PRE)				5.00			6/01/2036								3,828
				5,400		Commonwealth Housing Dev. Auth.				4.60			4/01/2028								5,339
				4,005		Commonwealth Port Auth.				5.00			7/01/2030								4,208
				3,715		Dinwiddie County IDA (INS)				5.00			2/15/2034								3,679
				11,145		Fairfax (INS)				4.75			1/15/2035								11,449
				1,255		Fairfax				4.75			1/15/2036								1,289
				7,100		Fairfax County EDA				5.00			10/01/2027								6,624
				12,700		Fairfax County EDA (INS)				5.00			4/01/2029								13,269
				7,980		Fairfax County EDA				5.00			1/15/2030								8,354
				6,150		Fairfax County EDA				5.00			4/01/2032								6,309
				5,750		Fairfax County EDA				4.88			10/01/2036								4,748
				7,500		Fairfax County EDA				5.13			10/01/2037								6,664
				1,000		Fairfax County IDA				5.25			5/15/2026								1,074
				2,000		Fairfax County Redevelopment and Housing Auth.				6.00			12/15/2028								2,002
				5,235		Fairfax County Water Auth. (PRE)				5.63			4/01/2025								5,358
				1,000		Fairfax County Water Auth. (PRE)				5.75			4/01/2030								1,024
				5,770		Farms of New Kent Community Dev. Auth.				5.45			3/01/2036								3,791
				12,275		Fauquier County IDA (INS)				5.25			10/01/2025								12,300
				1,000		Fauquier County IDA				5.00			10/01/2027								965
				8,825		Fauquier County IDA				5.25			10/01/2037								8,500
				6,195		Frederick County IDA (INS)				4.75			6/15/2036								6,167
				2,500		Fredericksburg City EDA				5.25			6/15/2023								2,651
				7,500		Front Royal & Warren County IDA (INS)				5.00			4/01/2029								7,690
				7,085		Galax IDA (INS)				5.75			9/01/2020								7,087
				9,030		Hampton (INS)				5.25			1/15/2023								9,151
				9,000		Hampton Roads Sanitation District				5.00			4/01/2033								9,565
				12,185		Hanover County IDA (INS)				6.38			8/15/2018								13,572
				10,000		Harrisonburg IDA (INS)				4.50			8/15/2039								8,124
				10,000		Henrico County				5.00			5/01/2036								10,488
				3,200		Henrico County EDA				5.00			10/01/2027								2,828
				9,350		Henrico County EDA				5.60			11/15/2030								9,428
				400		Henrico County EDA (PRE)				5.60			11/15/2030								453

Principal Amount (000)							Security                                                                                                                                                        Coupon Rate								Final Maturity			Market           Value            (000)
		$	5,170				Henrico County EDA			5.00			%		10/01/2035					$	4,273
			4,105				Housing Dev. Auth.			4.50					1/01/2039						3,787
			3,500				Isle of Wight County IDA			5.85					1/01/2018						3,536
			1,000				King George County IDA (INS)			5.00					3/01/2032						1,016
			5,000				Lewistown Commerce Center Community Dev. Auth.			5.75					3/01/2017						4,506
			1,545				Lynchburg  (PRE)			5.75					6/01/2030						1,596
			5,000				Marquis Community Dev. Auth.			5.63					9/01/2018						4,061
			2,440				Montgomery County IDA (INS) (PRE)			5.50					1/15/2022						2,593
			5,500				Montgomery County IDA			5.00					2/01/2029						5,768
			3,170				Newport News  (PRE)			5.75					5/01/2018						3,291
			6,750				Newport News  (PRE)			5.75					5/01/2020						7,009
			5,245				Newport News EDA			5.00					7/01/2031						5,529
			1,850				Norfolk Redevelopment and Housing Auth.			5.50					11/01/2019						1,893
			5,000				Peninsula Town Center Community Dev. Auth.			6.45					9/01/2037						4,170
			2,815				Powhatan County EDA (INS)			5.00					3/15/2032						2,869
			1,620				Prince William County (INS)			5.00					9/01/2024						1,713
			1,210				Prince William County IDA			5.50					10/01/2017						1,239
			1,695				Prince William County IDA			5.00					10/01/2018						1,762
			1,350				Prince William County IDA			5.50					10/01/2019						1,367
			3,370				Prince William County IDA			4.88					1/01/2020						2,967
			3,985				Prince William County IDA			5.38					10/01/2023						4,120
			8,000				Prince William County IDA			5.13					1/01/2026						5,974
			7,500				Prince William County IDA			5.50					10/01/2033						7,543
			10,585				Public School Auth.  (PRE)			5.50					8/01/2020						11,015
			5,310				Rappahannock Regional Jail Auth. (INS)			4.75					12/01/2031						5,347
			6,280				Rappahannock Regional Jail Auth. (INS)			4.50					12/01/2036						6,222
			1,790				Resources Auth.  (PRE)			5.63					10/01/2022						1,862
			3,945				Resources Auth.			4.75					11/01/2035						4,024
			2,000				Resources Auth.			4.38					11/01/2036						1,959
			2,150				Reynolds Crossing Community Dev. Auth.			5.10					3/01/2021						2,001
			2,500				Richmond (INS)			4.50					1/15/2033						2,519
			2,000				Richmond			5.00					1/15/2035						2,118
			6,295				Richmond Convention Center Auth.  (PRE)			6.13					6/15/2020						6,526
			14,750				Richmond Convention Center Auth.  (PRE)			6.13					6/15/2025						15,292
			5,120				Roanoke County EDA (INS)			5.00					10/15/2027						5,469
			2,850				Roanoke County EDA (INS)			5.00					10/15/2032						2,954
			4,285				Roanoke County EDA (INS)			5.13					10/15/2037						4,440
			1,500				Small Business Financing Auth.			5.25					9/01/2027						1,377
			15,000				Small Business Financing Auth.			5.25					9/01/2037						12,844
			6,345				Spotsylvania County EDA (INS)			5.00					2/01/2031						6,482
			7,400				Stafford County and City of Stauton IDA (INS)			5.25					8/01/2031						7,628
			16,155				Stafford County and City of Stauton IDA (INS)			5.25					8/01/2036						16,396
			10,000				Tobacco Settlement Financing Corp.			5.00					6/01/2047						6,878
			10,850				Univ. of Virginia			5.00					6/01/2027						11,353
			10,395				Virginia Beach  (PRE)			5.50					8/01/2025						10,714
			1,000				Virginia Beach Dev. Auth.			6.15					7/01/2027						901
			5,000				Watkins Centre Community Dev. Auth.			5.40					3/01/2020						4,741
			3,000				Winchester IDA			5.63					1/01/2044						3,052
510,210
							District of Columbia (3.6%)
			2,825				Metropolitan Airports Auth.			5.00					10/01/2029						2,976
			12,465				Metropolitan Airports Auth.			5.00					10/01/2030						13,021
			3,000				Metropolitan Airports Auth.			5.00					10/01/2039						3,011
			1,000				Metropolitan Area Transit Auth.			5.13					7/01/2032						1,061
20,069
							Puerto Rico (1.3%)
			6,180				Commonwealth  (PRE)			5.25					7/01/2032						7,326
							Total Fixed-Rate Instruments (cost: $544,797)                                                                                                                                                                                           537,605

Principal Amount (000)						Security                                                                                                            Coupon Rate						Final Maturity                                         Market Value (000)
						VARIABLE-RATE DEMAND NOTES (2.7%)
						Virginia (1.8%)
	$	10,000				Russell County IDA (LOC - Regions Bank)			0.90		%					7/01/2038						$	10,000
						Puerto Rico (0.9%)
		5,000				Electric Power Auth. (LIQ)(LOC - Dexia Credit Local) (a)			0.40							7/01/2026							5,000
						Total Variable-Rate Demand Notes (cost: $15,000)                                                                                                                                             15,000
						Total Investments (cost: $559,797)														$			552,605
($ 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
FIXED-RATE INSTRUMENTS							$—									$537,605		$—					$	537,605
VARIABLE-RATE DEMAND NOTES							—									15,000		—						15,000
Total							$—									$552,605		$—					$	552,605

 

 

 

                                                                                                                                                                                                                                                                              Portfolio of Investments |  4

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 Bond 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. Debt securities with maturities greater than 60 days are valued each business day by a pricing service (the Service) approved by the Trust’s Board of Trustees. The Service uses an evaluated mean between quoted bid and asked prices or the last sales price to price securities when, in the Service’s judgment, these prices are readily available and are representative of the securities’ market values. For many securities, such prices are not readily available. The Service generally prices these securities based on methods that include consideration of yields or prices of tax-exempt securities of comparable quality, coupon, maturity, and type; indications as to values from dealers in securities; and general market conditions.

2. Debt securities purchased with original or remaining maturities of 60 days or less may be valued at amortized cost, which approximates market value.

3. 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 USAA Investment Management Company (the Manager), an affiliate of the Fund, 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 net asset value (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.

 

 

 

5|  USAA Virginia Bond Fund

B. Fair value measurements   – Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  The three-level valuation hierarchy disclosed in the portfolio of investments is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.  The three levels are defined as follows:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) in active markets for identical securities.

Level 2 – inputs to the valuation methodology are other significant observable inputs, including quoted prices for similar securities, inputs that are observable for the securities, either directly or indirectly, and market-corroborated inputs such as market indices.

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement, including the Manager’s own assumptions in determining the fair value.

The inputs or methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those securities.

C. Securities purchased on a delayed-delivery or when-issued basis   – Delivery and payment for securities that have been purchased by the Fund on a delayed-delivery or when-issued basis can take place a month or more after the trade date. During the period prior to settlement, these securities do not earn interest, are subject to market fluctuation, and may increase or decrease in value prior to their delivery. The Fund maintains segregated assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a delayed-delivery or when-issued basis may increase the volatility of the Fund’s NAV to the extent that the Fund makes such purchases while remaining substantially fully invested.

D. 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.

E. 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. Gross unrealized appreciation and depreciation of investments as of December 31, 2009, were $15,064,000 and $22,256,000, respectively, resulting in net unrealized depreciation of $7,192,000.

F. The portfolio of investments category percentages shown represent the percentages of the investments to net assets, which were $559,898,000 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

 

 

 

                                                                                                                                                                                                                                                            Notes to Portfolio of Investments |  6

 

(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.

  

 

7  |  USAA Virginia Bond Fund