UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-7852
Exact Name of Registrant as Specified in Charter: USAA MUTUAL FUNDS TRUST
Address of Principal Executive Offices and Zip Code: 9800 FREDERICKSBURG ROAD
SAN ANTONIO, TX 78288
Name and Address of Agent for Service: CHRISTOPHER P. LAIA
USAA MUTUAL FUNDS TRUST
9800 FREDERICKSBURG ROAD
SAN ANTONIO, TX 78288
Registrant's Telephone Number, Including Area Code: (210) 498-0226
Date of Fiscal Year End: JULY 31
Date of Reporting Period: APRIL 30, 2010
ITEM 1. SCHEDULE OF INVESTMENTS.
USAA MUTUAL FUNDS TRUST 3RD QUARTER REPORT - PERIOD ENDED APRIL 30, 2010
[LOGO OF USAA]
USAA (R)
PORTFOLIO OF INVESTMENTS
3(RD) QUARTER
USAA HIGH-YIELD OPPORTUNITIES FUND
APRIL 30, 2010
(Form N-Q)
48486-0610 (C)2010, USAA. All rights reserved.
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PORTFOLIO OF INVESTMENTS
USAA HIGH-YIELD OPPORTUNITIES FUND
April 30, 2010 (unaudited)
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS (73.0%)
CONSUMER DISCRETIONARY (9.5%)
-----------------------------
APPAREL & ACCESSORIES & LUXURY GOODS (0.8%)
$ 1,000 Jostens IH Corp. 7.63% 10/01/2012 $ 1,008
3,840 Kellwood Co. (a) 7.88 7/15/2011 2,793
3,000 Kellwood Co. 7.63 10/15/2017 1,410
3,000 Levi Strauss & Co. 9.75 1/15/2015 3,165
1,000 Levi Strauss & Co. (b),(c) 7.63 5/15/2020 1,016
2,000 Quiksilver, Inc. 6.88 4/15/2015 1,843
----------
11,235
----------
APPAREL RETAIL (0.1%)
1,000 Limited Brands, Inc. 8.50 6/15/2019 1,114
----------
AUTO PARTS & EQUIPMENT (0.5%)
1,000 American Axle & Manufacturing Holdings, Inc. (b) 9.25 1/15/2017 1,070
2,000 ArvinMeritor, Inc. 8.13 9/15/2015 1,965
1,311 Federal-Mogul Corp. (d) 2.19 (e) 12/27/2014 1,202
669 Federal-Mogul Corp. (d) 2.19 (e) 12/27/2015 613
997 Metaldyne Co., LLC (d) 5.46 (e) 1/11/2014 85
1,029 Tenneco Automotive, Inc. 10.25 7/15/2013 1,057
200 Tenneco Automotive, Inc. 8.63 11/15/2014 206
500 Tenneco Automotive, Inc. 8.13 11/15/2015 522
----------
6,720
----------
AUTOMOBILE MANUFACTURERS (0.2%)
3,000 Ford Motor Credit Co., LLC 7.00 4/15/2015 3,053
----------
BROADCASTING (1.8%)
1,320 CCH II, LLC (b) 13.50 11/30/2016 1,607
8,000 Charter Communications Operating LLC (b) 10.00 (e) 4/30/2012 8,520
400 Clear Channel Worldwide Holdings, Inc. (b) 9.25 12/15/2017 429
1,600 Clear Channel Worldwide Holdings, Inc. (b) 9.25 12/15/2017 1,720
3,000 LBI Media, Inc. (b) 8.50 8/01/2017 2,595
2,000 Liberty Media Corp., LLC 5.70 5/15/2013 2,020
1,000 Nexstar Broadcasting Group, Inc. (b) 8.88 4/15/2017 1,025
1,000 Sinclair Television Group, Inc. (b) 9.25 11/01/2017 1,070
978 Telesat Canada (d) 3.28 (e) 9/01/2014 964
4,000 Univision Communications, Inc. (d) 2.54 (e) 9/29/2014 3,653
1,000 XM Satellite Radio, Inc. 11.25 6/15/2013 1,097
----------
24,700
----------
CABLE & SATELLITE (0.6%)
1,000 Cablevision Systems Corp. 7.75 4/15/2018 1,014
1,000 Cablevision Systems Corp. 8.00 4/15/2020 1,021
500 CCO Holdings, LLC (b) 7.88 4/30/2018 515
1,000 Cequel Communications Holdings I, LLC and
Cequel Capital Corp. (b) 8.63 11/15/2017 1,025
3,000 Mediacom Broadband, LLC 8.50 10/15/2015 3,105
1,000 Virgin Media Finance plc 8.38 10/15/2019 1,051
----------
7,731
----------
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1 | USAA High-Yield Opportunities Fund
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PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
CASINOS & GAMING (2.9%)
$ 1,000 Ameristar Casinos, Inc. 9.25% 6/01/2014 $ 1,055
3,235 Harrah's Operating Co., Inc. (d) 3.32 (e) 1/28/2015 2,856
172 Harrah's Operating Co., Inc. 10.00 2/01/2016 150
3,000 Harrah's Operating Co., Inc. 11.25 6/01/2017 3,289
4,927 Harrah's Operating Co., Inc. 10.00 12/15/2018 4,305
3,200 Inn of the Mountain Gods (f) 12.00 11/15/2010 1,520
3,000 Jacobs Entertainment, Inc. 9.75 6/15/2014 2,835
1,030 MGM Mirage 6.75 9/01/2012 1,002
3,000 MGM Mirage 13.00 11/15/2013 3,532
1,695 MGM Mirage (d) 7.00 2/21/2014 1,664
1,000 MGM Mirage (b) 10.38 5/15/2014 1,100
1,000 MGM Mirage (b) 11.13 11/15/2017 1,136
1,500 MGM Mirage (b) 9.00 3/15/2020 1,579
1,000 Pinnacle Entertainment, Inc. (b) 8.63 8/01/2017 1,053
1,000 Pinnacle Entertainment, Inc. (b),(c) 8.75 5/15/2020 1,005
3,734 Pokagon Gaming Auth. (b) 10.38 6/15/2014 3,921
2,000 Shingle Springs Tribal Gaming Auth. (b) 9.38 6/15/2015 1,760
3,000 Snoqualmie Entertainment Auth. (b) 4.14 (e) 2/01/2014 2,467
1,000 Snoqualmie Entertainment Auth. (b) 9.13 2/01/2015 870
2,000 Turning Stone Resort Casino (b) 9.13 9/15/2014 2,000
----------
39,099
----------
CATALOG RETAIL (0.3%)
3,500 Harry & David Operations Corp. 9.00 3/01/2013 2,634
1,000 QVC, Inc. (b) 7.13 4/15/2017 1,017
1,000 QVC, Inc. (b) 7.38 10/15/2020 1,018
----------
4,669
----------
DEPARTMENT STORES (0.5%)
3,200 Dillard's, Inc. 7.13 8/01/2018 3,072
1,000 Federated Department Stores, Inc. 6.90 4/01/2029 990
2,100 May Dept Stores Co. 7.88 8/15/2036 2,016
----------
6,078
----------
HOMEBUILDING (0.2%)
2,000 D. R. Horton, Inc. 5.63 1/15/2016 1,940
1,000 Lennar Corp. 12.25 5/15/2017 1,227
----------
3,167
----------
HOTELS, RESORTS, & CRUISE LINES (0.3%)
1,000 NCL Corp. Ltd. (b) 11.75 11/15/2016 1,105
2,000 Royal Caribbean Cruises Ltd. 7.25 6/15/2016 2,035
1,000 Starwood Hotels & Resorts Worldwide, Inc. 7.88 10/15/2014 1,102
----------
4,242
----------
HOUSEHOLD APPLIANCES (0.1%)
1,000 Stanley Works Capital Trust I 5.90 12/01/2045 985
----------
HOUSEWARES & SPECIALTIES (0.0%)
500 Libbey Glass, Inc. (b) 10.00 2/15/2015 530
----------
LEISURE FACILITIES (0.2%)
3,475 Town Sports International Holdings, Inc. (e) 11.00 2/01/2014 3,232
----------
MOVIES & ENTERTAINMENT (0.3%)
1,500 AMC Entertainment, Inc. 8.75 6/01/2019 1,590
1,000 Cinemark USA, Inc. 8.63 6/15/2019 1,066
1,000 Live Nation Entertainment, Inc. (b),(c) 8.13 5/15/2018 1,035
250 WMG Acquisition Corp. 9.50 6/15/2016 271
----------
3,962
----------
PUBLISHING (0.4%)
178 American Media Operations, Inc. (b) 9.00 5/01/2013 117
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Portfolio of Investments | 2
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PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
$ 1,906 American Media Operations, Inc. (b) 14.00% 11/01/2013 $ 1,248
2,000 McClatchy Co. (b) 11.50 2/15/2017 2,145
2,000 Network Communications, Inc. 10.75 12/01/2013 1,085
1,000 Quebecor Media, Inc. 7.75 3/15/2016 1,008
4,000 Reader's Digest Association, Inc. (e),(f),(h) 9.00 2/15/2017 -
----------
5,603
----------
SPECIALIZED CONSUMER SERVICES (0.1%)
600 Mac-Gray Corp. 7.63 8/15/2015 587
1,000 Service Corp. International 7.63 10/01/2018 1,045
----------
1,632
----------
TIRES & RUBBER (0.2%)
1,000 Goodyear Tire & Rubber Co. 9.00 7/01/2015 1,050
1,000 Goodyear Tire & Rubber Co. 10.50 5/15/2016 1,120
----------
2,170
----------
Total Consumer Discretionary 129,922
----------
CONSUMER STAPLES (3.1%)
-----------------------
AGRICULTURAL PRODUCTS (0.1%)
1,000 Southern States Cooperative, Inc. 11.00 11/01/2010 995
----------
DISTILLERS & VINTNERS (0.1%)
1,000 Constellation Brands, Inc. 7.25 5/15/2017 1,025
----------
DRUG RETAIL (1.6%)
15,100 CVS Caremark Corp. 6.30 6/01/2037 14,578
1,000 Rite Aid Corp. 8.63 3/01/2015 890
1,250 Rite Aid Corp. (d) 9.50 6/05/2015 1,308
1,000 Rite Aid Corp. 9.38 12/15/2015 900
2,000 Rite Aid Corp. 9.75 6/12/2016 2,210
2,000 Rite Aid Corp. 10.38 7/15/2016 2,155
----------
22,041
----------
FOOD DISTRIBUTORS (0.1%)
1,000 C&S Group Enterprises, LLC (b) 8.38 5/01/2017 1,005
----------
FOOD RETAIL (0.3%)
1,000 American Stores Co. 8.00 6/01/2026 887
3,000 ARAMARK Corp. (i) 8.50 2/01/2015 3,094
1,000 Susser Holdings, LLC (b),(c) 8.50 5/15/2016 1,010
----------
4,991
----------
HOUSEHOLD PRODUCTS (0.2%)
2,250 JohnsonDiversey Holdings, Inc. (b) 8.25 11/15/2019 2,365
----------
PACKAGED FOODS & MEAT (0.7%)
1,000 Bumble Bee Foods, LLC (b) 7.75 12/15/2015 1,025
1,000 Dean Foods Co. 7.00 6/01/2016 978
1,000 Michael Foods, Inc. 8.00 11/15/2013 1,025
3,400 Reddy Ice Corp. (b) 11.25 3/15/2015 3,698
2,175 Reddy Ice Holdings, Inc. (e) 10.50 11/01/2012 2,251
1,000 Smithfield Foods, Inc. (b) 10.00 7/15/2014 1,126
----------
10,103
----------
Total Consumer Staples 42,525
----------
ENERGY (10.4%)
--------------
COAL & CONSUMABLE FUELS (0.7%)
1,000 Arch Coal, Inc. 8.75 8/01/2016 1,075
2,000 Cloud Peak Energy Resources, LLC/ Cloud
Peak Energy Finance Corp. (b) 8.25 12/15/2017 2,065
1,500 CONSOL Energy, Inc. (b) 8.00 4/01/2017 1,590
1,000 CONSOL Energy, Inc. (b) 8.25 4/01/2020 1,065
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3 | USAA High-Yield Opportunities Fund
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PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
$ 1,500 Murray Energy Corp. (b) 10.25% 10/15/2015 $ 1,567
2,000 Peabody Energy Corp. 7.88 11/01/2026 2,090
----------
9,452
----------
OIL & GAS DRILLING (0.4%)
2,000 Hercules Offshore, LLC (b) 10.50 10/15/2017 2,070
1,000 Parker Drilling Co. (b) 9.13 4/01/2018 1,033
2,000 Stallion Oilfield Holdings, Ltd. (b) 10.50 2/15/2015 2,010
----------
5,113
----------
OIL & GAS EQUIPMENT & SERVICES (0.8%)
2,500 Basic Energy Services, Inc. 7.13 4/15/2016 2,231
3,000 Edgen Murray Corp. (b) 12.25 1/15/2015 2,985
1,000 Global Geophysical Services, Inc. (b) 10.50 5/01/2017 986
1,500 Helix Energy Solutions Group, Inc. (b) 9.50 1/15/2016 1,568
2,000 Mcjunkin Red Man Corp. (b) 9.50 12/15/2016 2,090
1,700 Seitel, Inc. 9.75 2/15/2014 1,424
----------
11,284
----------
OIL & GAS EXPLORATION & PRODUCTION (3.0%)
2,000 Berry Petroleum Co. 8.25 11/01/2016 2,050
1,000 Bill Barrett Corp. 9.88 7/15/2016 1,080
3,000 Chaparral Energy, Inc. 8.50 12/01/2015 2,940
3,000 Chesapeake Energy Corp. 9.50 2/15/2015 3,311
1,000 Chesapeake Energy Corp. 6.50 8/15/2017 974
1,000 Cimarex Energy Co. 7.13 5/01/2017 1,036
1,000 Denbury Resources, Inc. 9.75 3/01/2016 1,110
996 Denbury Resources, Inc. 8.25 2/15/2020 1,073
1,000 Encore Acquisition Co. 9.50 5/01/2016 1,099
4,000 Hilcorp Energy I, LP (b) 8.00 2/15/2020 3,950
2,000 Linn Energy LLC (b) 8.63 4/15/2020 2,080
2,000 Mariner Energy, Inc. 11.75 6/30/2016 2,560
3,000 NFR Energy, LLC (b) 9.75 2/15/2017 2,989
2,000 Petrohawk Energy Corp. 10.50 8/01/2014 2,227
1,000 Plains Exploration & Production Co. 7.75 6/15/2015 1,023
3,000 Plains Exploration & Production Co. 7.00 3/15/2017 2,977
1,000 Plains Exploration & Production Co. 7.63 6/01/2018 1,014
1,000 Plains Exploration & Production Co. 7.63 4/01/2020 1,000
1,000 Quicksilver Resources, Inc. 8.25 8/01/2015 1,037
1,000 Quicksilver Resources, Inc. 11.75 1/01/2016 1,165
1,000 Quicksilver Resources, Inc. 7.13 4/01/2016 970
2,000 Rosetta Resources, Inc. (b) 9.50 4/15/2018 2,075
1,000 SandRidge Energy, Inc. (b) 9.88 5/15/2016 1,055
1,000 SandRidge Energy, Inc. (b) 8.00 6/01/2018 988
----------
41,783
----------
OIL & GAS REFINING & MARKETING (0.3%)
1,133 Amerigas Partners, LP 7.25 5/20/2015 1,164
1,000 Coffeyville Resources (b) 10.88 4/01/2017 1,025
1,000 Tesoro Corp. 6.63 11/01/2015 976
1,000 Tesoro Corp. 9.75 6/01/2019 1,078
----------
4,243
----------
OIL & GAS STORAGE & TRANSPORTATION (5.2%)
2,000 Crosstex Energy, LP (b) 8.88 2/15/2018 2,080
1,000 El Paso Corp. 12.00 12/12/2013 1,195
2,000 El Paso Corp. 7.80 8/01/2031 1,997
3,000 El Paso Energy Corp. 7.75 1/15/2032 3,019
13,400 Enbridge Energy Partners, LP 8.05 10/01/2037 13,632
4,000 Enterprise Products Operating, LP (i) 8.38 8/01/2066 4,165
9,250 Enterprise Products Operating, LP 7.00 6/01/2067 8,724
9,000 Enterprise Products Operating, LP 7.03 1/15/2068 8,709
1,000 MarkWest Energy Partners LP 6.88 11/01/2014 990
2,980 MarkWest Energy Partners LP 8.50 7/15/2016 3,099
250 MarkWest Energy Partners LP 8.75 4/15/2018 261
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Portfolio of Investments | 4
<PAGE>
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PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
$ 1,000 Martin Midstream Partners, LP (b) 8.88% 4/01/2018 $ 1,023
2,000 Niska Gas Storage (b) 8.88 3/15/2018 2,120
2,000 Regency Energy Partners, LP (b) 9.38 6/01/2016 2,157
2,000 Sabine Pass LNG, LP 7.25 11/30/2013 1,932
2,000 Sabine Pass LNG, LP 7.50 11/30/2016 1,840
2,000 SourceGas, LLC (b) 5.90 4/01/2017 1,898
13,000 Southern Union Co. 7.20 (e) 11/01/2066 12,220
241 Targa Resources Partners LP (d) 6.00 6/04/2017 242
----------
71,303
----------
Total Energy 143,178
----------
FINANCIALS (23.8%)
------------------
ASSET MANAGEMENT & CUSTODY BANKS (0.2%)
2,000 Nuveen Investments, Inc. 10.50 11/15/2015 2,015
----------
CONSUMER FINANCE (4.0%)
4,000 Capital One Financial Corp. 7.69 8/15/2036 3,960
358 Chrysler Financial Services (d) 4.26 (e) 8/03/2012 359
5,000 Credit Acceptance Corp. (b) 9.13 2/01/2017 5,250
2,000 Ford Motor Credit Co., LLC 7.50 8/01/2012 2,068
8,000 Ford Motor Credit Co., LLC 7.00 10/01/2013 8,261
7,000 Ford Motor Credit Co., LLC 8.00 6/01/2014 7,333
2,000 Ford Motor Credit Co., LLC 8.70 10/01/2014 2,150
2,000 Ford Motor Credit Co., LLC 12.00 5/15/2015 2,420
2,000 General Motors Acceptance Corp. 6.88 9/15/2011 2,045
3,000 General Motors Acceptance Corp. 6.88 8/28/2012 3,071
9,000 General Motors Acceptance Corp. 6.88 8/28/2012 9,160
7,000 General Motors Acceptance Corp. 6.75 12/01/2014 7,000
2,000 General Motors Acceptance Corp. 6.75 12/01/2014 2,012
----------
55,089
----------
DIVERSIFIED BANKS (1.7%)
2,000 Comerica Capital Trust II 6.58 2/20/2037 1,800
3,000 First Tennessee Bank, N.A. 5.65 4/01/2016 3,008
8,000 USB Capital IX 6.19 -(j) 7,030
7,500 USB Realty Corp. (b) 6.09 -(j) 6,356
4,000 Wachovia Capital Trust III 5.80 -(j) 3,500
2,000 Wells Fargo Capital XV 9.75 -(j) 2,250
----------
23,944
----------
INVESTMENT BANKING & BROKERAGE (0.1%)
2,000 Lehman Brothers Holdings, Inc. (f) 5.75 4/25/2011 430
2,000 Lehman Brothers Holdings, Inc. (f) 6.88 5/02/2018 450
----------
880
----------
LIFE & HEALTH INSURANCE (3.3%)
1,000 Americo Life, Inc. (b) 7.88 5/01/2013 1,000
2,000 Great-West Life & Annuity Insurance Co. (b) 7.15 5/16/2046 1,940
15,000 Lincoln National Corp. 7.00 5/17/2066 14,025
2,000 MetLife, Inc. 10.75 8/01/2069 2,583
10,500 Nationwide Mutual Insurance Co. (b) 5.81 12/15/2024 9,746
2,000 Prudential Financial, Inc. 8.88 6/15/2038 2,270
16,000 StanCorp Financial Group, Inc. 6.90 6/01/2067 14,280
----------
45,844
----------
MULTI-LINE INSURANCE (3.1%)
1,000 Farmers Exchange Capital (b) 7.05 7/15/2028 946
1,700 Farmers Insurance Exchange (b) 8.63 5/01/2024 1,926
16,200 Genworth Financial, Inc. 6.15 11/15/2066 13,081
15,000 Glen Meadow (b) 6.51 2/12/2067 12,675
3,780 Hanover Insurance Group, Inc. 8.21 2/03/2027 3,532
12,125 Oil Insurance Ltd. (b) 7.56 -(j) 10,617
----------
42,777
----------
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5 | USAA High-Yield Opportunities Fund
<PAGE>
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PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
MULTI-SECTOR HOLDINGS (0.8%)
$ 2,750 Leucadia National Corp. 7.13% 3/15/2017 $ 2,736
9,025 Leucadia National Corp. 8.65 1/15/2027 8,709
----------
11,445
----------
OTHER DIVERSIFIED FINANCIAL SERVICES (2.0%)
5,000 BankAmerica Institutional Capital (b) 8.07 12/31/2026 5,012
3,000 General Electric Capital Corp. 6.38 11/15/2067 2,891
4,000 General Electric Capital Corp. 6.38 11/15/2067 3,855
5,500 ILFC E-Capital Trust I (b) 5.90 12/21/2065 4,208
13,000 ILFC E-Capital Trust II (b) 6.25 12/21/2065 9,945
2,000 NB Capital Trust IV 8.25 4/15/2027 2,020
----------
27,931
----------
PROPERTY & CASUALTY INSURANCE (1.1%)
1,000 Financial Security Assurance Holdings Ltd. (b) 6.40 12/15/2066 695
2,000 First American Capital Trust I 8.50 4/15/2012 2,021
1,500 Kingsway America, Inc. 7.50 2/01/2014 1,252
2,000 Liberty Mutual Group, Inc. (b) 7.00 3/15/2037 1,775
8,000 Progressive Corp. 6.70 6/15/2037 7,939
2,000 Zenith National Insurance Capital Trust (b),(i) 8.55 8/01/2028 1,750
----------
15,432
----------
REGIONAL BANKS (2.6%)
2,000 AgFirst Farm Credit Bank 6.59 -(j) 1,667
1,500 AmSouth Bank, N.A. 5.20 4/01/2015 1,461
3,000 City National Capital Trust I 9.63 2/01/2040 3,373
12,000 Fifth Third Capital Trust IV 6.50 4/15/2037 10,350
1,500 First Empire Capital Trust I 8.23 2/01/2027 1,391
2,500 Huntington Capital III 6.65 5/15/2037 1,817
750 KeyCorp Capital II 6.88 3/17/2029 654
4,000 Manufacturers & Traders Trust Co. 5.63 12/01/2021 3,720
2,000 National City Preferred Capital Trust I 12.00 -(j) 2,320
3,000 Susquehanna Capital II 11.00 3/23/2040 3,195
2,500 Union Planters Corp. 7.75 3/01/2011 2,554
4,000 Webster Capital Trust IV 7.65 6/15/2037 2,920
----------
35,422
----------
REINSURANCE (1.1%)
5,000 Max USA Holdings Ltd. (b),(i) 7.20 4/14/2017 5,218
2,000 Platinum Underwriters Finance, Inc. 7.50 6/01/2017 2,180
9,000 PXRE Capital Trust I 8.85 2/01/2027 7,762
----------
15,160
----------
REITs - INDUSTRIAL (0.3%)
1,500 DuPont Fabros Technology, LP (b) 8.50 12/15/2017 1,564
2,000 ProLogis 6.88 3/15/2020 1,984
----------
3,548
----------
REITs - MORTGAGE (0.2%)
1,000 iStar Financial, Inc. (b) 8.00 3/15/2011 1,007
1,000 iStar Financial, Inc. (b) 10.00 6/15/2014 1,005
----------
2,012
----------
REITs - OFFICE (0.9%)
1,000 Brandywine Operating Partnership, LP 6.00 4/01/2016 1,020
2,000 Brandywine Operating Partnership, LP 5.70 5/01/2017 1,977
2,000 HRPT Properties Trust 6.25 8/15/2016 2,037
1,700 HRPT Properties Trust 6.25 6/15/2017 1,700
3,055 Reckson Operating Partnership, LP 6.00 3/31/2016 3,049
2,000 Reckson Operating Partnership, LP (b) 7.75 3/16/2020 2,081
----------
11,864
----------
REITs - RETAIL (1.4%)
2,500 New Plan Excel Realty Trust, Inc. 4.50 2/01/2011 2,381
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Portfolio of Investments | 6
<PAGE>
================================================================================
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
$ 7,000 New Plan Excel Realty Trust, Inc. 5.13% 9/15/2012 $ 6,353
3,000 New Plan Excel Realty Trust, Inc. 5.30 1/15/2015 2,430
2,675 New Plan Excel Realty Trust, Inc. 5.25 9/15/2015 2,163
1,550 New Plan Excel Realty Trust, Inc. 7.50 7/30/2029 1,093
2,000 Rouse Co. (f) 8.00 4/30/2009 2,250
2,000 Rouse Co., LP (b),(f) 6.75 5/01/2013 2,230
----------
18,900
----------
REITs - SPECIALIZED (0.6%)
2,000 Host Hotels & Resorts, LP 6.75 6/01/2016 2,030
1,000 Host Hotels & Resorts, LP (b) 9.00 5/15/2017 1,091
2,500 Senior Housing Properties Trust 6.75 4/15/2020 2,488
1,000 Strategic Hotels & Resorts, Inc. (b) 3.50 4/01/2012 929
2,000 Ventas Realty, LP 6.75 4/01/2017 2,060
----------
8,598
----------
SPECIALIZED FINANCE (0.3%)
2,300 Assured Guaranty U.S. Holdings, Inc. 6.40 12/15/2066 1,777
2,500 MBIA Insurance Co. (b) 14.00 1/15/2033 1,950
1,000 Petroplus Finance Ltd. (b) 7.00 5/01/2017 912
----------
4,639
----------
THRIFTS & MORTGAGE FINANCE (0.1%)
1,000 Provident Funding Associations, LP (b) 10.25 4/15/2017 1,040
1,000 Washington Mutual Bank 5.55 6/16/2010 491
----------
1,531
----------
Total Financials 327,031
----------
HEALTH CARE (4.1%)
------------------
HEALTH CARE EQUIPMENT (0.5%)
1,000 Accellent, Inc. 10.50 12/01/2013 1,010
500 Accellent, Inc. (b) 8.38 2/01/2017 504
985 Biomet, Inc. (d) 3.28 (e) 3/25/2015 974
1,000 Biomet, Inc. 10.00 10/15/2017 1,105
1,000 Insight Health Services Corp. 5.50 (e) 11/01/2011 455
2,500 Universal Hospital Services, Inc. 3.86 (e) 6/01/2015 2,162
----------
6,210
----------
HEALTH CARE FACILITIES (2.8%)
2,876 Community Health Systems, Inc. (c),(d) 2.50 (e) 7/24/2014 2,798
1,000 Community Health Systems, Inc. 8.88 7/15/2015 1,045
1,914 HCA, Inc. (d) 3.54 (e) 11/18/2013 1,866
4,000 HCA, Inc. 5.75 3/15/2014 3,910
3,000 HCA, Inc. 9.25 11/15/2016 3,240
4,207 HCA, Inc. 9.63 11/15/2016 4,586
2,000 HCA, Inc. (b) 8.50 4/15/2019 2,217
1,500 HCA, Inc. (b) 7.25 9/15/2020 1,573
954 HealthSouth Corp. (d) 6.04 3/10/2013 937
2,000 HealthSouth Corp. 10.75 6/15/2016 2,190
2,000 IASIS Healthcare, LLC 8.75 6/15/2014 2,060
1,000 LifePoint Hospitals, Inc. 3.50 5/15/2014 1,047
2,000 Psychiatric Solutions, Inc. 7.75 7/15/2015 2,050
3,000 Select Medical Corp. 7.63 2/01/2015 2,880
1,000 Sun Healthcare Group, Inc. 9.13 4/15/2015 1,042
2,000 Tenet Healthcare Corp. 7.38 2/01/2013 2,055
2,000 Tenet Healthcare Corp. (b) 9.00 5/01/2015 2,190
1,000 United Surgical Partners International, Inc. 8.88 5/01/2017 1,038
----------
38,724
----------
HEALTH CARE SERVICES (0.5%)
2,000 Alliance Healthcare Services, Inc. (b) 8.00 12/01/2016 1,875
1,750 AMR Holdco, Inc. 10.00 2/15/2015 1,837
500 Omnicare, Inc. 6.88 12/15/2015 503
================================================================================
7 | USAA High-Yield Opportunities Fund
<PAGE>
================================================================================
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
$ 1,000 Radiation Therapy Services, Inc. (b) 9.88% 4/15/2017 $ 1,040
1,071 US Oncology, Inc. 5.40 (e) 3/15/2012 1,017
1,000 US Oncology, Inc. 10.75 8/15/2014 1,044
----------
7,316
----------
HEALTH CARE SUPPLIES (0.3%)
1,000 Bausch & Lomb, Inc. 9.88 11/01/2015 1,060
1,000 DJO Finance LLC 10.88 11/15/2014 1,100
1,056 VWR Funding, Inc. 10.25 7/15/2015 1,114
----------
3,274
----------
Total Health Care 55,524
----------
INDUSTRIALS (7.3%)
------------------
AEROSPACE & DEFENSE (0.2%)
2,000 Bombardier, Inc. (b) 7.50 3/15/2018 2,135
----------
AIR FREIGHT & LOGISTICS (0.2%)
3,000 Park Ohio Industries, Inc. 8.38 11/15/2014 2,812
----------
AIRLINES (2.0%)
112 Airplanes Pass-Through Trust 0.61 (e) 3/15/2019 107
1,237 America West Airlines, Inc. Pass-Through Trust 6.87 1/02/2017 1,166
565 America West Airlines, Inc. Pass-Through Trust 7.12 1/02/2017 511
3,000 American Airlines, Inc. Pass-Through Trust 6.82 5/23/2011 3,000
2,000 Continental Airlines, Inc. 8.75 12/01/2011 2,040
135 Continental Airlines, Inc. Pass-Through Trust 8.50 5/01/2011 136
372 Continental Airlines, Inc. Pass-Through Trust 7.03 6/15/2011 369
1,960 Continental Airlines, Inc. Pass-Through Trust 9.00 7/08/2016 2,156
7,000 United Air Lines, Inc. (b) 12.00 1/15/2016 7,455
3,000 United Air Lines, Inc. 9.75 1/15/2017 3,293
4,652 United Airlines, Inc. Pass-Through Trust (i) 8.03 7/01/2011 6,955
721 United Airlines, Inc. Pass-Through Trust 7.78 1/01/2014 744
----------
27,932
----------
BUILDING PRODUCTS (0.4%)
1,000 Building Materials Corp. of America (b) 7.50 3/15/2020 1,003
2,000 Esco Corp. (b) 4.13 (e) 12/15/2013 1,855
250 Esco Corp. (b) 8.63 12/15/2013 256
500 Ply Gem Industries, Inc. 11.75 6/15/2013 535
750 USG Corp. (b) 9.75 8/01/2014 819
1,000 USG Corp. 6.30 11/15/2016 930
----------
5,398
----------
COMMERCIAL PRINTING (0.5%)
2,000 Cenveo Corp. 8.88 2/01/2018 2,065
3,000 Deluxe Corp. 5.00 12/15/2012 2,974
2,000 Harland Clarke Holdings Corp. 6.00 (e) 5/15/2015 1,710
----------
6,749
----------
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS (0.4%)
500 Case New Holland, Inc. (b) 7.75 9/01/2013 523
1,000 Case New Holland, Inc. 7.13 3/01/2014 1,030
1,389 Manitowoc Co., Inc. (d) 7.08 4/14/2014 1,391
1,000 Navistar International Corp. 8.25 11/01/2021 1,057
2,000 Titan International, Inc. 8.00 1/15/2012 2,030
----------
6,031
----------
DIVERSIFIED SUPPORT SERVICES (0.4%)
1,000 Iron Mountain, Inc. 7.75 1/15/2015 1,016
4,030 Mobile Services Group, Inc. 9.75 8/01/2014 4,222
----------
5,238
----------
ELECTRICAL COMPONENTS & EQUIPMENT (0.2%)
1,500 Baldor Electric Co. 8.63 2/15/2017 1,598
================================================================================
Portfolio of Investments | 8
<PAGE>
================================================================================
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
$ 1,000 International Wire Group, Inc. (b) 9.75% 4/15/2015 $ 1,005
----------
2,603
----------
ENVIRONMENTAL & FACILITIES SERVICES (0.1%)
1,000 Casella Waste Systems, Inc. (b) 11.00 7/15/2014 1,078
----------
HIGHWAYS & RAILTRACKS (0.3%)
2,100 American Railcar Industries, Inc. 7.50 3/01/2014 2,058
1,800 RailAmerica, Inc. 9.25 7/01/2017 1,948
----------
4,006
----------
INDUSTRIAL CONGLOMERATES (0.9%)
15,000 Textron Financial Corp. (b) 6.00 2/15/2067 12,412
----------
INDUSTRIAL MACHINERY (0.0%)
500 Mueller Water Products, Inc. 7.38 6/01/2017 458
----------
MARINE (0.1%)
1,000 General Maritime Corp. 12.00 11/15/2017 1,085
500 United Maritime Group LLC (b) 11.75 6/15/2015 523
----------
1,608
----------
OFFICE SERVICES & SUPPLIES (0.2%)
1,000 ACCO Brands Corp. 10.63 3/15/2015 1,116
1,473 West Corp. (d) 2.63 (e) 10/24/2013 1,440
500 West Corp. 9.50 10/15/2014 523
----------
3,079
----------
RAILROADS (0.3%)
5,784 Southern Capital Corp. (b) 5.70 6/30/2023 3,878
----------
SECURITY & ALARM SERVICES (0.2%)
2,000 Geo Group, Inc. (b) 7.75 10/15/2017 2,055
----------
TRADING COMPANIES & DISTRIBUTORS (0.2%)
2,500 United Rentals North America, Inc. 9.25 12/15/2019 2,687
----------
TRUCKING (0.7%)
2,000 Avis Budget Car Rental, LLC 7.63 5/15/2014 2,040
2,000 Avis Budget Group, Inc. (b) 9.63 3/15/2018 2,165
1,975 Hertz Corp. (d) 5.26 12/21/2012 1,952
2,000 Hertz Corp. 8.88 1/01/2014 2,075
1,000 Western Express, Inc. (b) 12.50 4/15/2015 985
----------
9,217
----------
Total Industrials 99,376
----------
INFORMATION TECHNOLOGY (2.0%)
-----------------------------
COMMUNICATIONS EQUIPMENT (0.2%)
3,000 Clearwire Corp. (b) 12.00 12/01/2015 3,135
----------
DATA PROCESSING & OUTSOURCED SERVICES (1.3%)
12,000 First Data Corp. 9.88 9/24/2015 11,010
7,000 SunGard Data Systems, Inc. 10.25 8/15/2015 7,412
----------
18,422
----------
INTERNET SOFTWARE & SERVICES (0.1%)
1,000 Equinix, Inc. 8.13 3/01/2018 1,045
----------
SEMICONDUCTORS (0.4%)
500 Advanced Micro Devices (b) 8.13 12/15/2017 516
1,000 Freescale Semiconductor, Inc. (b) 10.13 3/15/2018 1,085
3,000 Freescale Semiconductor, Inc. (b) 9.25 4/15/2018 3,135
----------
4,736
----------
Total Information Technology 27,338
----------
================================================================================
9 | USAA High-Yield Opportunities Fund
<PAGE>
================================================================================
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
MATERIALS (2.4%)
----------------
COMMODITY CHEMICALS (0.5%)
$ 1,000 ARCO Chemical Co. (f),(h) 9.80% 2/21/2020 $ 915
1,000 Georgia Gulf Corp. (b) 9.00 1/15/2017 1,051
3,000 Hexion Finance Escrow LLC/Hexion Escrow
Corp. (b) 8.88 2/01/2018 2,955
1,500 LBI Escrow Corp. (b) 8.00 11/01/2017 1,562
----------
6,483
----------
CONSTRUCTION MATERIALS (0.0%)
500 Headwaters, Inc. 11.38 11/01/2014 534
----------
DIVERSIFIED CHEMICALS (0.3%)
2,500 Huntsman International, LLC 7.38 1/01/2015 2,459
1,000 Huntsman International, LLC (b) 8.63 3/15/2020 1,009
----------
3,468
----------
FERTILIZERS & AGRICULTURAL CHEMICALS (0.1%)
1,250 Scotts Miracle-Gro Co. 7.25 1/15/2018 1,284
----------
METAL & GLASS CONTAINERS (0.3%)
1,000 Crown Americas, LLC 7.75 11/15/2015 1,048
3,000 Graham Pack Co. LP/ GPC Capital Corp. (b) 8.25 1/01/2017 3,045
----------
4,093
----------
PAPER PACKAGING (0.2%)
250 Graphic Packaging Corp. 8.63 2/15/2012 255
3,000 Graphic Packaging International, Inc. 9.50 8/15/2013 3,094
----------
3,349
----------
PAPER PRODUCTS (0.4%)
597 Boise Cascade, LLC 7.13 10/15/2014 589
1,000 Cascades, Inc. (b) 7.75 12/15/2017 1,024
1,100 Georgia Pacific, LLC (b) 8.25 5/01/2016 1,215
1,000 NewPage Corp. 10.00 5/01/2012 725
2,000 Verso Paper Holdings, LLC (b) 11.50 7/01/2014 2,200
----------
5,753
----------
SPECIALTY CHEMICALS (0.3%)
2,000 Momentive Performance Materials, Inc. 9.75 12/01/2014 2,042
1,000 Nalco Co. 8.88 11/15/2013 1,034
1,000 Tronox Worldwide, LLC (f) 9.50 12/01/2012 1,195
----------
4,271
----------
STEEL (0.3%)
1,500 AK Steel Holding Corp. 7.75 6/15/2012 1,507
1,250 Metals USA, Inc. 11.13 12/01/2015 1,344
1,000 Severstal Columbus, LLC (b) 10.25 2/15/2018 1,063
----------
3,914
----------
Total Materials 33,149
----------
TELECOMMUNICATION SERVICES (4.2%)
---------------------------------
ALTERNATIVE CARRIERS (0.1%)
1,000 Level 3 Communications, Inc. (d) 9.52 3/13/2014 1,095
1,000 Level 3 Communications, Inc. (b) 10.00 2/01/2018 993
----------
2,088
----------
INTEGRATED TELECOMMUNICATION SERVICES (2.5%)
3,000 Cincinnati Bell, Inc. 8.25 10/15/2017 3,037
500 Cincinnati Bell, Inc. 8.75 3/15/2018 509
2,000 Citizens Communications Co. 7.88 1/15/2027 1,890
3,000 GCI, Inc. 8.63 11/15/2019 3,067
2,052 Hawaiian Telcom Communications, Inc. (d) 6.26 6/01/2014 1,570
================================================================================
Portfolio of Investments | 10
<PAGE>
================================================================================
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
$ 2,000 Hawaiian Telcom Communications, Inc. (f) 12.50% 5/01/2015 $ -
1,000 New Communications Holdings (b) 8.25 4/15/2017 1,039
1,000 New Communications Holdings (b) 8.75 4/15/2022 1,030
5,000 Qwest Communications International, Inc. 7.50 2/15/2014 5,112
12,000 Qwest Communications International, Inc. 7.50 2/15/2014 12,330
1,000 Windstream Corp. 8.13 8/01/2013 1,053
4,000 Windstream Corp. 7.88 11/01/2017 3,990
----------
34,627
----------
WIRELESS TELECOMMUNICATION SERVICES (1.6%)
1,000 Crown Castle International Corp. 9.00 1/15/2015 1,082
1,969 MetroPCS Communications, Inc. (d) 2.56(e) 2/20/2014 1,928
1,000 MetroPCS Communications, Inc. 9.25 11/01/2014 1,039
3,000 Nextel Communications, Inc. 6.88 10/31/2013 2,966
4,000 Nextel Communications, Inc. 5.95 3/15/2014 3,840
2,000 NII Capital Corp. (b) 8.88 12/15/2019 2,080
6,000 Sprint Capital Corp. 8.38 3/15/2012 6,390
2,000 Sprint Nextel Corp. 8.38 8/15/2017 2,075
----------
21,400
----------
Total Telecommunication Services 58,115
----------
UTILITIES (6.2%)
----------------
ELECTRIC UTILITIES (2.7%)
627 FPL Energy National Wind Portfolio, LLC (b) 6.13 3/25/2019 608
529 FPL Energy Wind Funding, LLC (b) 6.88 6/27/2017 521
2,000 FPL Group Capital, Inc. 7.30 9/01/2067 2,053
3,000 Otter Tail Corp. 9.00 12/15/2016 3,315
3,000 PNM Resources, Inc. 9.25 5/15/2015 3,244
15,630 PPL Capital Funding, Inc. 6.70 3/30/2067 14,321
697 Sierra Pacific Resources 8.63 3/15/2014 718
1,995 Texas Competitive Electric Holdings Co., LLC (d) 3.25 10/10/2014 1,640
5,930 Texas Competitive Electric Holdings Co., LLC (d) 3.75(e) 10/10/2014 4,878
2,965 Texas Competitive Electric Holdings Co., LLC (d) 3.75(e) 10/10/2014 2,423
5,000 Texas Competitive Electric Holdings Co., LLC 10.25 11/01/2015 3,750
----------
37,471
----------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (1.4%)
2,000 AES Corp. 7.75 3/01/2014 2,053
3,000 AES Corp. 8.00 6/01/2020 3,097
2,000 Calpine Construction Finance Co., LP (b) 8.00 6/01/2016 2,080
3,000 Dynegy Holdings, Inc. 7.50 6/01/2015 2,670
2,000 Dynegy Holdings, Inc. 8.38 5/01/2016 1,778
1,000 Mirant Americas Generation, Inc. 8.30 5/01/2011 1,034
1,000 NRG Energy, Inc. 7.38 1/15/2017 995
3,000 Reliant Energy, Inc. 7.63 6/15/2014 3,007
2,000 Reliant Energy, Inc. 7.88 6/15/2017 1,935
----------
18,649
----------
MULTI-UTILITIES (2.1%)
1,900 CMS Energy Corp. 6.30 2/01/2012 1,995
1,500 CMS Energy Corp. 8.75 6/15/2019 1,712
3,000 Dominion Resources, Inc. 6.30 9/30/2066 2,874
6,790 Integrys Energy Group, Inc. 6.11 12/01/2066 6,357
13,000 Puget Sound Energy, Inc. 6.97 6/01/2067 12,398
1,128 Tenaska Oklahoma, LP (b) 6.53 12/30/2014 1,105
3,000 Wisconsin Energy Corp. 6.25 5/15/2067 2,895
----------
29,336
----------
Total Utilities 85,456
----------
Total Corporate Obligations (cost: $920,170) 1,001,614
----------
================================================================================
11 | USAA High-Yield Opportunities Fund
<PAGE>
================================================================================
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
EURODOLLAR AND YANKEE OBLIGATIONS (8.1%)
CONSUMER DISCRETIONARY (0.3%)
-----------------------------
CABLE & SATELLITE (0.1%)
$ 1,051 NTL Cable plc 8.75% 4/15/2014 $ 1,081
500 UPC Holding B.V. (b) 9.88 4/15/2018 531
----------
1,612
----------
PUBLISHING (0.2%)
500 Nielsen Finance, LLC 11.50 5/01/2016 573
2,000 Nielsen Finance, LLC and Nielsen Finance Co. 11.63 2/01/2014 2,280
----------
2,853
----------
Total Consumer Discretionary 4,465
----------
CONSUMER STAPLES (0.8%)
-----------------------
PACKAGED FOODS & MEAT (0.8%)
5,000 Bracol Holdings Ltd. 10.25(e) 10/05/2016 5,525
5,000 Marfrig Overseas Ltd. 9.50 5/04/2020 4,921
----------
Total Consumer Staples 10,446
----------
ENERGY (0.5%)
-------------
OIL & GAS DRILLING (0.1%)
359 Delek & Avner-Yam Tethys Ltd. (b) 5.33 8/01/2013 365
2,000 Gibson Energy ULC (b) 11.75 5/27/2014 2,225
----------
2,590
----------
OIL & GAS EQUIPMENT & SERVICES (0.3%)
2,000 Expro Finance Luxembourg SCA 8.50 12/15/2016 2,049
2,000 TRICO Marine Services, Inc. (b) 11.88 11/01/2014 2,044
----------
4,093
----------
OIL & GAS EXPLORATION & PRODUCTION (0.1%)
1,000 Compton Petroleum Finance Corp. 7.63 12/01/2013 860
----------
Total Energy 7,543
----------
FINANCIALS (2.8%)
-----------------
DIVERSIFIED BANKS (1.4%)
3,000 BOI Capital Funding Number 2, LP (b),(k) 5.57 - 2,160
6,000 Credit Agricole S.A. (b) 6.64 - 5,115
786 Groupe BPCE 10.00 -(j) 935
5,986 ING Groep N.V. 5.78 -(j) 5,172
1,500 Natixis (b) 10.00 - 1,473
4,000 Royal Bank of Scotland Group plc 7.64 -(j) 2,610
2,000 Standard Chartered plc (b) 6.41 - 1,842
----------
19,307
----------
DIVERSIFIED CAPITAL MARKETS (0.3%)
4,000 UBS Preferred Funding Trust II 7.25 -(j) 3,883
1,000 UBS Preferred Funding Trust V 6.24 -(j) 924
----------
4,807
----------
MULTI-LINE INSURANCE (0.3%)
2,000 AXA S.A. (b) 6.46 -(j) 1,800
2,000 ING Capital Funding Trust III 8.44 -(j) 1,905
----------
3,705
----------
OTHER DIVERSIFIED FINANCIAL SERVICES (0.3%)
2,210 ZFS Finance USA Trust I (b) 6.15 12/15/2065 2,144
================================================================================
Portfolio of Investments | 12
<PAGE>
================================================================================
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
$ 2,000 ZFS Finance USA Trust II (b) 6.45% 12/15/2065 $ 1,950
----------
4,094
----------
PROPERTY & CASUALTY INSURANCE (0.2%)
3,000 Catlin Insurance Co. Ltd. (b) 7.25 -(j) 2,715
----------
REGIONAL BANKS (0.1%)
2,000 Glitnir Banki hf, acquired 1/25/2008; cost
$1,830(b),(f),(g) 4.75 10/15/2010 622
1,000 Kaupthing Bank hf, acquired 1/25/2008; cost
$888(b),(f),(g) 5.75 10/04/2011 285
----------
907
----------
SPECIALIZED FINANCE (0.2%)
3,000 XL Capital Ltd. 6.50 -(j) 2,490
----------
Total Financials 38,025
----------
HEALTH CARE (0.2%)
------------------
LIFE SCIENCES TOOLS & SERVICES (0.2%)
2,000 Novasep Holding SAS (b) 9.75 12/15/2016 2,064
----------
INDUSTRIALS (0.6%)
------------------
MARINE (0.2%)
1,000 Navios Maritime Holdings, Inc. 9.50 12/15/2014 1,041
500 Navios Maritime Holdings, Inc. (b) 8.88 11/01/2017 526
1,000 Stena AB 7.00 12/01/2016 990
----------
2,557
----------
MARINE PORTS & SERVICES (0.1%)
1,000 Teekay Corp. 8.50 1/15/2020 1,064
----------
RAILROADS (0.3%)
3,942 Kansas City Southern de Mexico, S.A. de C.V. (i) 9.38 5/01/2012 4,052
1,000 Kansas City Southern de Mexico, S.A. de C.V. (b) 8.00 2/01/2018 1,049
----------
5,101
----------
Total Industrials 8,722
----------
INFORMATION TECHNOLOGY (0.7%)
-----------------------------
COMMUNICATIONS EQUIPMENT (0.6%)
5,000 Intelsat Bermuda Ltd. 11.25 6/15/2016 5,425
3,000 Intelsat Jackson Holdings, Ltd. (d) 3.29(e) 2/01/2014 2,842
----------
8,267
----------
SEMICONDUCTORS (0.1%)
1,750 New Asat Finance Ltd. (f) 9.25 2/01/2011 319
320 NXP B.V./ NXP Funding LLC 10.00 7/15/2013 358
----------
677
----------
Total Information Technology 8,944
----------
MATERIALS (2.1%)
----------------
ALUMINUM (0.2%)
2,500 Novelis, Inc. 7.25 2/15/2015 2,462
500 Novelis, Inc. 11.50 2/15/2015 553
----------
3,015
----------
COMMODITY CHEMICALS (0.1%)
1,000 Nova Chemicals Corp. 8.38 11/01/2016 1,044
----------
================================================================================
13 | USAA High-Yield Opportunities Fund
<PAGE>
================================================================================
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS (0.2%)
$ 3,000 Cemex Finance, LLC (b) 9.50% 12/14/2016 $ 3,093
----------
DIVERSIFIED CHEMICALS (0.2%)
3,000 INEOS Group Holdings plc (b) 8.50 2/15/2016 2,685
----------
DIVERSIFIED METALS & MINING (0.2%)
1,000 Teck Resources Ltd. 9.75 5/15/2014 1,218
1,000 Teck Resources Ltd. 10.75 5/15/2019 1,252
----------
2,470
----------
FOREST PRODUCTS (0.1%)
684 Ainsworth Lumber Co. Ltd. (b) 11.00 7/29/2015 663
----------
PAPER PACKAGING (0.2%)
3,000 JSG Funding plc 7.75 4/01/2015 2,974
----------
PAPER PRODUCTS (0.9%)
3,638 Abitibi-Consolidated Co. of Canada (b) 13.75 4/01/2011 3,892
3,000 Abitibi-Consolidated Co. of Canada (f) 6.00 6/20/2013 645
500 PE Paper Escrow GmbH (b) 12.00 8/01/2014 575
4,250 Sappi Papier Holding AG (b) 6.75 6/15/2012 4,254
4,115 Sappi Papier Holding AG (b) 7.50 6/15/2032 3,247
----------
12,613
----------
Total Materials 28,557
----------
TELECOMMUNICATION SERVICES (0.1%)
---------------------------------
ALTERNATIVE CARRIERS (0.1%)
1,500 Global Crossing Ltd. (b) 12.00 9/15/2015 1,691
----------
Total Eurodollar and Yankee Obligations (cost: $100,950) 110,457
----------
ASSET-BACKED SECURITIES (0.6%)
FINANCIALS (0.6%)
-----------------
ASSET-BACKED FINANCING (0.6%)
3,000 AESOP Funding II, LLC (b),(e) 0.48 3/20/2012 2,952
2,000 Banc of America Securities Auto Trust 5.51 2/19/2013 2,005
2,236 GE Equipment Midticket, LLC 0.57 (e) 9/15/2017 2,160
852 USXL Funding, LLC (INS)(b),(e) 5.38 4/15/2014 852
----------
7,969
----------
Total Asset-Backed Securities (cost: $7,111) 7,969
----------
COMMERCIAL MORTGAGE SECURITIES (4.7%)
FINANCIALS (4.7%)
-----------------
COMMERCIAL MORTGAGE-BACKED SECURITIES (4.7%)
1,500 Banc of America Commercial Mortgage, Inc. 4.77 7/10/2043 1,143
2,400 Banc of America Commercial Mortgage, Inc. 4.95 7/10/2043 1,902
2,560 Banc of America Commercial Mortgage, Inc. 5.81 7/10/2044 2,303
1,435 Banc of America Commercial Mortgage, Inc. (b) 5.10 9/10/2047 1,252
5,000 Banc of America Commercial Mortgage, Inc. 5.35 9/10/2047 4,605
7,610 Banc of America Commercial Mortgage, Inc. (b) 6.14 9/10/2047 6,561
4,000 BCRR Trust (b) 5.86 7/17/2040 3,458
2,000 Citigroup Commercial Mortgage Trust 6.10 12/10/2049 1,650
3,000 Commercial Mortgage 5.54 2/11/2017 2,222
1,000 Commercial Mortgage Loan Trust 6.02 12/10/2049 760
1,000 Credit Suisse First Boston Mortgage Securities
Corp. (b) 5.78 12/15/2035 845
3,213 Credit Suisse First Boston Mortgage Securities
Corp. (b) 5.02 1/15/2037 2,574
================================================================================
Portfolio of Investments | 14
<PAGE>
================================================================================
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------
$ 5,000 GE Capital Commercial Mortgage Corp. 5.61% 12/10/2049 $ 3,218
2,000 GMAC Commercial Mortgage Securities, Inc. 4.75 5/10/2043 1,910
1,000 GS Mortgage Securities Corp. II 5.53 8/10/2038 704
2,151 J.P. Morgan Chase Commercial Mortgage
Securities Corp. 5.32 1/12/2043 2,085
3,378 J.P. Morgan Chase Commercial Mortgage
Securities Corp. 5.33 12/15/2044 2,249
6,000 LB-UBS Commercial Mortgage Trust 5.21 4/15/2030 4,830
1,700 LB-UBS Commercial Mortgage Trust 5.46 2/15/2040 1,478
6,400 Merrill Lynch Mortgage Trust 5.14 7/12/2038 5,680
2,000 Merrill Lynch Mortgage Trust 4.92 10/12/2041 1,604
3,000 Merrill Lynch Mortgage Trust 5.38 8/12/2048 2,732
1,755 Morgan Stanley Capital I, Inc. 5.15 8/13/2042 1,174
1,445 Morgan Stanley Capital I, Inc. 5.17 8/13/2042 928
7,000 Morgan Stanley Capital I, Inc. 4.77 7/15/2056 6,137
----------
64,004
----------
INTEREST-ONLY COMMERCIAL MORTGAGE-BACKED SECURITIES (0.0%)
1,186 Credit-Suisse First Boston Corp., acquired
6/13/2003; cost $58(g) 1.54 5/17/2040 76
----------
Total Financials 64,080
----------
Total Commercial Mortgage Securities (cost: $56,857) 64,080
----------
MUNICIPAL BONDS (0.3%)
CASINOS & GAMING (0.3%)
2,000 Mashantucket (Western) Pequot Tribe, acquired
10/05/2009; cost $1,410(b),(f),(l) 5.91 9/01/2021 1,067
3,225 Seneca Nation of Indians Capital Improvements
Auth. 6.75 12/01/2013 3,075
----------
4,142
----------
SPECIAL ASSESSMENT/TAX/FEE (0.0%)
710 Erie County Tobacco Asset Securitization Corp. 6.00 6/01/2028 606
----------
Total Municipal Bonds (cost: $5,331) 4,748
----------
NUMBER
OF SHARES
-----------------------------------------------------------------------------------------------------
EQUITY SECURITIES (11.6%)
COMMON STOCKS (1.5%)
CONSUMER DISCRETIONARY (0.5%)
-----------------------------
AUTO PARTS & EQUIPMENT (0.2%)
28,222 Lear Corp.* 2,291
----------
BROADCASTING (0.2%)
69,330 Charter Communications, Inc. "A"* 2,627
30,000 Sinclair Broadcast Group, Inc. "A"* 207
----------
2,834
----------
CABLE & SATELLITE (0.1%)
50,000 Comcast Corp. "A" 987
6,666 Time Warner Cable, Inc. 375
----------
1,362
----------
================================================================================
15 | USAA High-Yield Opportunities Fund
<PAGE>
================================================================================
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
-----------------------------------------------------------------------------------------------------
PUBLISHING (0.0%)
32,656 American Media, Inc., acquired 2/02/2009; cost $723*(g),(h) $ -
----------
Total Consumer Discretionary 6,487
----------
CONSUMER STAPLES (0.1%)
-----------------------
TOBACCO (0.1%)
20,171 Philip Morris International, Inc. 990
----------
ENERGY (0.3%)
-------------
INTEGRATED OIL & GAS (0.1%)
13,590 Chevron Corp. 1,107
8,506 Royal Dutch Shell plc 533
----------
1,640
----------
OIL & GAS EXPLORATION & PRODUCTION (0.2%)
169,107 Energy Partners Ltd.* 2,312
----------
OIL & GAS REFINING & MARKETING (0.0%)
15,000 Valero Energy Corp. 312
----------
Total Energy 4,264
----------
FINANCIALS (0.0%)
-----------------
REITs - OFFICE (0.0%)
10,000 Maguire Properties, Inc. 37
----------
REITs - SPECIALIZED (0.0%)
10,000 Entertainment Properties Trust 437
10,000 Strategic Hotel Capital, Inc. 64
10,951 Sunstone Hotel Investors, Inc.* 140
----------
641
----------
Total Financials 678
----------
HEALTH CARE (0.1%)
------------------
HEALTH CARE FACILITIES (0.0%)
20,000 Community Health Systems, Inc.* 817
----------
PHARMACEUTICALS (0.1%)
29,000 Eli Lilly and Co. 1,014
10,000 Merck & Co., Inc. 351
----------
1,365
----------
Total Health Care 2,182
----------
INDUSTRIALS (0.2%)
------------------
BUILDING PRODUCTS (0.2%)
20,000 Masco Corp. 324
32,962 Nortek, Inc., acquired 6/20/2005; cost $1,440* 1,566
----------
1,890
----------
COMMERCIAL PRINTING (0.0%)
39,632 World Color Press, Inc.* 480
----------
Total Industrials 2,370
----------
MATERIALS (0.2%)
----------------
COMMODITY CHEMICALS (0.1%)
27,438 LyondellBasell Industries 757
----------
CONSTRUCTION MATERIALS (0.0%)
596 Panolam Holdings Co., acquired 1/20/2010; cost $315*(g),(h) 315
----------
================================================================================
Portfolio of Investments | 16
<PAGE>
================================================================================
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
-----------------------------------------------------------------------------------------------------
FOREST PRODUCTS (0.1%)
195,497 Ainsworth Lumber Co. Ltd.* $ 866
----------
STEEL (0.0%)
20,000 Worthington Industries, Inc. 320
----------
Total Materials 2,258
----------
TELECOMMUNICATION SERVICES (0.1%)
---------------------------------
INTEGRATED TELECOMMUNICATION SERVICES (0.1%)
30,000 Iowa Telecommunication Services, Inc. 505
60,000 Windstream Corp. 663
----------
1,168
----------
Total Telecommunication Services 1,168
----------
UTILITIES (0.0%)
----------------
ELECTRIC UTILITIES (0.0%)
10,000 Progress Energy, Inc. 399
----------
Total Common Stocks (cost: $23,534) 20,796
----------
PRINCIPAL
AMOUNT
$(000)/
SHARES
-----------------------------------------------------------------------------------------------------
PREFERRED SECURITIES (1.6%)
CONSUMER STAPLES (0.7%)
-----------------------
AGRICULTURAL PRODUCTS (0.7%)
120,000 Dairy Farmers of America, Inc., 7.88%, cumulative redeemable, perpetual (b) 9,697
----------
FINANCIALS (0.6%)
-----------------
LIFE & HEALTH INSURANCE (0.2%)
120,000 Delphi Financial Group, Inc., 7.38%, perpetual 2,563
----------
PROPERTY & CASUALTY INSURANCE (0.0%)
$2,000 Security Capital Assurance Ltd., 6.88%, perpetual*(g) -
----------
REINSURANCE (0.1%)
3,000 Ram Holdings Ltd., 7.50%, non-cumulative, perpetual,
acquired 1/23/2007 - 3/02/07; cost $3,109*(g) 600
$1,000 Swiss Re Capital I LP, 6.85%, perpetual (b) 929
----------
1,529
----------
REITs - OFFICE (0.1%)
20,000 Maguire Properties, Inc., Series A, 7.63%, cumulative redeemable, perpetual 286
20,000 Parkway Properties, Inc., Series D, 8.00%, cumulative redeemable, perpetual 492
----------
778
----------
REITs - RETAIL (0.0%)
20,000 Tanger Factory Outlet Centers, Inc., Class C, 7.50%, perpetual 502
----------
REITs - SPECIALIZED (0.1%)
70,000 Felcor Lodging Trust, Inc., Series C, 8.00%, perpetual 1,365
20,000 Sunstone Hotel Investors, Inc., Series A, 8.00%, perpetual 485
----------
1,850
----------
================================================================================
17 | USAA High-Yield Opportunities Fund
<PAGE>
================================================================================
PRINCIPAL
AMOUNT MARKET
$(000)/ VALUE
SHARES SECURITY (000)
-----------------------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.1%)
40,000 Sovereign Capital Trust V, 7.75%, Capital Securities, perpetual $ 1,005
----------
Total Financials 8,227
----------
GOVERNMENT (0.0%)
-----------------
15,000 Fannie Mae, 8.25%, perpetual* 21
----------
TELECOMMUNICATION SERVICES (0.3%)
---------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.3%)
2,000 Centaur Funding Corp., 9.08% (b) 2,206
30,000 Crown Castle International Corp., 6.25%, cumulative redeemable,
perpetual (a) * 1,749
----------
3,955
----------
Total Telecommunication Services 3,955
----------
Total Preferred Securities (cost: $27,416) 21,900
----------
NUMBER
OF SHARES
-----------------------------------------------------------------------------------------------------
EXCHANGE-TRADED FUNDS (8.5%)
842,070 iShares iBoxx High Yield Corporate Bond Fund 75,281
1,018,109 SPDR Barclay Capital High Yield Bond Fund 40,918
----------
Total Exchange-Traded Funds (cost: $105,862) 116,199
----------
WARRANTS (0.0%)
CONSUMER DISCRETIONARY (0.0%)
-----------------------------
BROADCASTING (0.0%)
5,016 Charter Communications Inc. "A" 33
250 Ono Finance plc, acquired 7/16/2001-1/24/2002; cost $0(b),(g),(h) -
----------
33
----------
PUBLISHING (0.0%)
12,745 Reader's Digest Association, Inc. (h) -
----------
Total Consumer Discretionary 33
----------
INDUSTRIALS (0.0%)
------------------
COMMERCIAL PRINTING (0.0%)
22,461 World Color Press, Inc. 180
22,461 World Color Press, Inc. 70
----------
Total Commercial Printing 250
----------
Total Industrials 250
----------
INFORMATION TECHNOLOGY (0.0%)
-----------------------------
SEMICONDUCTORS (0.0%)
1 New Asat Finance Ltd., acquired 12/03/2007; cost $0(b),(g),(h) -
----------
Total Warrants (cost: $520) 283
----------
RIGHTS (0.0%)
MATERIALS (0.0%)
----------------
30 ARCO Chemical Co. (h) (cost: $0) 9.80 2/01/2020 321
----------
================================================================================
Portfolio of Investments | 18
<PAGE>
================================================================================
MARKET
NUMBER VALUE
OF SHARES (000)
-----------------------------------------------------------------------------------------------------
Total Equity Securities
(cost: $157,332) $ 159,499
----------
PRINCIPAL
AMOUNT COUPON
(000) SECURITY RATE MATURITY
-----------------------------------------------------------------------------------------------------
MONEY MARKET INSTRUMENTS (0.4%)
VARIABLE-RATE DEMAND NOTES (0.4%)
MATERIALS (0.4%)
----------------
INDUSTRIAL GASES (0.4%)
$ 5,000 Louisiana Public Facilities Auth. (e) (cost:
$5,000) 0.50% 12/01/2043 5,000
----------
TOTAL INVESTMENTS (COST: $1,251,332) $1,353,367
==========
VALUATION HIERARCHY
($ IN 000s) -------------------
(LEVEL 1)
QUOTED PRICES (LEVEL 2)
IN ACTIVE OTHER (LEVEL 3)
MARKETS SIGNIFICANT SIGNIFICANT
FOR IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS TOTAL
---------------------------------------------------------------------------------------------------------------
BONDS:
CORPORATE OBLIGATIONS $ - $ 1,001,614 $ - $ 1,001,614
EURODOLLAR AND YANKEE
OBLIGATIONS - 110,457 - 110,457
ASSET-BACKED SECURITIES - 7,969 - 7,969
COMMERCIAL MORTGAGE SECURITIES - 64,080 - 64,080
MUNICIPAL BONDS - 4,748 - 4,748
EQUITY SECURITIES:
COMMON STOCKS 20,481 - 315 20,796
PREFERRED SECURITIES - 21,900 - 21,900
EXCHANGE-TRADED FUNDS 116,199 - - 116,199
WARRANTS 213 70 - 283
RIGHTS - 321 - 321
MONEY MARKET INSTRUMENTS:
VARIABLE-RATE DEMAND NOTES - 5,000 - 5,000
---------------------------------------------------------------------------------------------------------------
Total $ 136,893 $ 1,216,159 $ 315 $ 1,353,367
---------------------------------------------------------------------------------------------------------------
Reconciliation of investments in which significant unobservable inputs (Level 3)
were used in determining value:
Common Corporate Asset-Backed
Stocks Obligations Securities
------------------------------------------------------------------------------------------------------------
Balance as of July 31, 2009 $ - $ 2,582 $ 1,007
Net realized gain (loss) - (117) 96
Change in net unrealized appreciation/depreciation - 2,713 (7)
Net purchases (sales) 315 (2,385) (1,096)
Transfers in and/or out of Level 3 - (2,793) -
------------------------------------------------------------------------------------------------------------
Balance as of April 30, 2010 $315 $ - $ -
------------------------------------------------------------------------------------------------------------
================================================================================
19 | USAA High-Yield Opportunities Fund
<PAGE>
================================================================================
NOTES TO PORTFOLIO OF INVESTMENTS
April 30, 2010 (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
High-Yield Opportunities Fund (the Fund), which is classified as diversified
under the 1940 Act.
The Fund has two classes of shares: High-Yield Opportunities Fund Shares and
High-Yield Opportunities Fund Institutional Shares. Each class of shares has
equal rights to assets and earnings, except that each class bears certain
class-related expenses specific to the particular class. These expenses include
administration and servicing fees, transfer agent fees, postage, shareholder
reporting fees, and certain registration and custodian fees. Expenses not
attributable to a specific class, income, and realized gains or losses on
investments are allocated to each class of shares based on each class's relative
net assets. Each class has exclusive voting rights on matters related solely to
that class and separate voting rights on matters that relate to both classes.
The Institutional Shares are currently only offered for sale to the USAA Target
Retirement Funds (Target Funds) and not to the general public. The Target Funds
are managed by USAA Investment Management Company (the Manager), an affiliate of
the Fund.
A. SECURITY VALUATION - The value of each security is determined (as of the
close of trading on the New York Stock Exchange (NYSE) on each business day the
NYSE is open) as set forth below:
1. Debt securities with maturities greater than 60 days are valued each business
day by a pricing service (the Service) approved by the Trust's Board of
Trustees. The Service uses an evaluated mean between quoted bid and asked prices
or the last sales price to price securities when, in the Service's judgment,
these prices are readily available and are representative of the securities'
market values. For many securities, such prices are not readily available. The
Service generally prices these securities based on methods that include
consideration of yields or prices of securities of comparable quality, coupon,
maturity, and type; indications as to values from dealers in securities; and
general market conditions.
2. Equity securities, including exchange-traded funds (ETFs), except as
otherwise noted, traded primarily on a domestic securities exchange or the
Nasdaq over-the-counter markets, are valued at the last sales price or official
closing price on the exchange or primary market on which they trade. Equity
securities traded primarily on foreign securities exchanges or markets are
valued at the last quoted sales price, or the most recently determined official
closing price calculated according to local market convention, available at the
time the Fund is valued. If no last sale or official closing price is reported
or available, the average of the bid and asked prices is generally used.
================================================================================
20 | USAA High-Yield Opportunities Fund
<PAGE>
================================================================================
3. Investments in open-end investment companies, hedge, or other funds, other
than exchange-traded funds, are valued at their net asset value (NAV) at the end
of each business day.
4. Debt securities purchased with original or remaining maturities of 60 days or
less may be valued at amortized cost, which approximates market value.
5. Repurchase agreements are valued at cost, which approximates market value.
6. Securities for which market quotations are not readily available or are
considered unreliable, or whose values have been materially affected by events
occurring after the close of their primary markets but before the pricing of the
Fund, are valued in good faith at fair value, using methods determined by the
Manager under valuation procedures approved by the Trust's Board of Trustees.
The effect of fair value pricing is that securities may not be priced on the
basis of quotations from the primary market in which they are traded and the
actual price realized from the sale of a security may differ materially from the
fair value price. Valuing these securities at fair value is intended to cause
the Fund's NAV to be more reliable than it otherwise would be.
Fair value methods used by the Manager include, but are not limited to,
obtaining market quotations from secondary pricing services, broker-dealers, or
widely used quotation systems. General factors considered in determining the
fair value of securities include fundamental analytical data, the nature and
duration of any restrictions on disposition of the securities, and an evaluation
of the forces that influenced the market in which the securities are purchased
and sold.
B. FAIR VALUE MEASUREMENTS - Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The
three-level valuation hierarchy disclosed in the portfolio of investments is
based upon the transparency of inputs to the valuation of an asset or liability
as of the measurement date. The three levels are defined as follows:
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) in
active markets for identical securities.
Level 2 - inputs to the valuation methodology are other significant observable
inputs, including quoted prices for similar securities, inputs that are
observable for the securities, either directly or indirectly, and
market-corroborated inputs such as market indices.
Level 3 - inputs to the valuation methodology are unobservable and significant
to the fair value measurement, including the Manager's own assumptions in
determining the fair value.
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risks associated with investing in those securities.
For the securities valued using significant unobservable inputs at the end of
the period, market quotations were not available from the pricing services. As
such, the securities were valued in good faith using methods determined by the
Manager, under valuation procedures approved by the Trust's Board of Trustees.
The Fund received unlisted common stock in exchange for notes held by the
================================================================================
21 | USAA High-Yield Opportunities Fund
<PAGE>
================================================================================
Fund. The fair value methods included using inputs such as the last available
quotations for the original notes from which the common stock was exchanged.
Refer to the portfolio of investments for a reconciliation of investments in
which significant unobservable inputs (Level 3) were used in determining value.
C. REPURCHASE AGREEMENTS - The Fund may enter into repurchase agreements with
commercial banks or recognized security dealers. These agreements are
collateralized by underlying securities. The collateral obligations are
marked-to-market daily to ensure their value is equal to or in excess of the
repurchase agreement price plus accrued interest and are held by the Fund,
either through its regular custodian or through a special "tri-party" custodian
that maintains separate accounts for both the Fund and its counterparty, until
maturity of the repurchase agreement. Repurchase agreements are subject to
credit risk, and the Fund's Manager monitors the creditworthiness of sellers
with which the Fund may enter into repurchase agreements.
D. SECURITIES PURCHASED ON A DELAYED-DELIVERY OR WHEN-ISSUED BASIS - Delivery
and payment for securities that have been purchased by the Fund on a
delayed-delivery or when-issued basis or for delayed draws on loans 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 receives a commitment fee for delayed draws on loans. 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 and delayed-draw loan commitments may increase the volatility of
the Fund's NAV to the extent that the Fund makes such purchases and commitments
while remaining substantially fully invested.
E. LENDING OF PORTFOLIO SECURITIES - The Fund, through its third-party
securities-lending agent, Wachovia Global Securities Lending, may lend its
securities to qualified financial institutions, such as certain broker-dealers,
to earn additional income. The borrowers are required to secure their loans
continuously with cash collateral in an amount at least equal to the fair value
of the securities loaned, initially in an amount at least equal to 102% of the
fair value of domestic securities loaned and 105% of the fair value of
international securities loaned. Cash collateral is invested in high-quality
short-term investments. Cash collateral requirements are determined daily based
on the prior business day's ending value of securities loaned. Imbalances in
cash collateral may occur on days where market volatility causes security prices
to change significantly, and are adjusted the next business day. Risks to the
Fund in securities-lending transactions are that the borrower may not provide
additional collateral when required or return the securities when due, and that
the value of the short-term investments will be less than the amount of cash
collateral required to be returned to the borrower. As of April 30, the Fund had
no securities out on loan.
F. SUBSEQUENT EVENTS - Events or transactions that occur after the quarterly
report date, but before the quarterly report is issued are categorized as
recognized or non-recognized for quarterly report purposes. The Manager has
evaluated subsequent events through the date the quarterly report was issued,
and has determined there were no events that require recognition or disclosure
in the Fund's quarterly report.
================================================================================
Notes to Portfolio of Investments | 22
<PAGE>
================================================================================
G. NEW ACCOUNTING PRONOUNCEMENT - In January 2010, the Financial Accounting
Standards Board issued amended guidance for improving disclosures about fair
value measurements that adds new disclosure requirements about significant
transfers between Level 1, Level 2, and Level 3, and separate disclosures about
purchases, sales, issuances, and settlements in the reconciliation for fair
value measurements using significant unobservable inputs (Level 3). It also
clarifies existing disclosure requirements relating to the levels of
disaggregation for fair value measurement and inputs and valuation techniques
used to measure fair value. The amended guidance is effective for financial
statements for fiscal years and interim periods beginning after December 15,
2009, except for disclosures about purchases, sales, issuances and settlements
in the rollforward of activity in Level 3 fair value measurements, which are
effective for fiscal years beginning after December 15, 2010, and for interim
periods within those fiscal years. The Manager is in the process of evaluating
the impact of this guidance on the Fund's financial statement disclosures.
H. As of April 30, 2010, 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
April 30, 2010, were $145,288,000 and $43,253,000, respectively, resulting in
net unrealized depreciation of $102,035,000.
I. The portfolio of investments category percentages shown represent the
percentages of the investments to net assets, which were $1,371,598,000 at April
30, 2010, and, in total, may not equal 100%. Investments in foreign securities
were 7.2% on net assets at April 30, 2010. A category percentage of 0.0%
represents less than 0.1% of net assets.
J. The Fund may rely on certain Securities and Exchange Commission (SEC)
exemptive orders or rules that permit funds meeting various conditions to invest
in an exchange-traded fund (ETF) in amounts exceeding limits set forth in the
Investment Company Act of 1940 that would otherwise be applicable.
CATEGORIES AND DEFINITIONS
ASSET-BACKED AND COMMERCIAL MORTGAGE-BACKED SECURITIES - Asset-backed securities
represent a participation in, or are secured by and payable from, a stream of
payments generated by particular assets. Commercial mortgage-backed securities
reflect an interest in, and are secured by, mortgage loans on commercial real
property. The weighted average life is likely to be substantially shorter than
the stated final maturity as a result of scheduled and unscheduled principal
repayments. Rates on commercial mortgage-backed securities may change slightly
over time as underlying mortgages pay down.
EURODOLLAR AND YANKEE OBLIGATIONS - Eurodollar obligations are dollar-
denominated instruments that are issued outside the U.S. capital markets by
foreign corporations and financial institutions and by foreign branches of U.S.
corporations and financial institutions. Yankee obligations are dollar-
denominated instruments that are issued by foreign issuers in the U.S. capital
markets.
INTEREST-ONLY COMMERCIAL MORTGAGE-BACKED SECURITIES (CMBS IOs) - represent the
right to receive only the interest payments on an underlying pool of commercial
mortgage loans. The purchase yield reflects an anticipated yield based upon
interest rates at the time of purchase and the estimated timing and amount of
future cash flows. Coupon rates after purchase vary from period to
================================================================================
23 | USAA High-Yield Opportunities Fund
<PAGE>
================================================================================
period. The principal amount represents the notional amount of the underlying
pool on which current interest is calculated. CMBS IOs are backed by loans that
have various forms of prepayment protection, which include lock-out provisions,
yield maintenance provisions, and prepayment penalties. This serves to moderate
their prepayment risk. CMBS IOs are subject to default-related prepayments that
may have a negative impact on yield.
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.
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.
WARRANTS - entitle the holder to buy a proportionate amount of common stock at a
specified price for a stated period.
PORTFOLIO ABBREVIATIONS AND DESCRIPTIONS
iShares Exchange-traded funds, managed by Barclays Global Fund Advisors, that
represent a portfolio of stocks designed to closely track a specific
market index. iShares are traded on securities exchanges.
REIT Real estate investment trust
SPDR Exchange-traded funds, managed by State Street Global Advisers, that
represent a portfolio of stocks designed to closely track a specific
market index. SPDR is an acronym for the first member of the fund
family, Standard & Poor's Depositary Receipts, which tracks the
S&P 500 Index. SPDRs are traded on securities exchanges.
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 Financial Guaranty
Insurance Co. 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.
SPECIFIC NOTES
(a) Pay-in-kind (PIK) - security in which the issuer has the option to make
interest or dividend payments in cash or in additional securities. The
security issued with the interest or dividend payment option usually has
the same terms, including maturity date, as the PIK securities.
================================================================================
Notes to Portfolio of Investments | 24
<PAGE>
================================================================================
(b) 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.
(c) At April 30, 2010, the aggregate market value of securities purchased on a
delayed-delivery basis was $7,214,000, which included when-issued
securities of $7,184,000.
(d) Senior loan (loan) - is not registered under the Securities Act of 1933.
The loan contains certain restrictions on resale and cannot be sold
publicly. The interest rate is adjusted periodically, and the rate
disclosed represents the current rate at April 30, 2010. The weighted
average life of the loan is likely to be substantially shorter than the
stated final maturity date due to mandatory or optional prepayments.
Security deemed liquid by the Manager, under liquidity guidelines approved
by the Trust's Board of Trustees, unless otherwise noted as illiquid.
(e) Variable-rate or floating-rate security - interest rate is adjusted
periodically. The interest rate disclosed represents the current rate at
April 30, 2010.
(f) Currently the issuer is in default with respect to interest and/or
principal payments.
(g) Security deemed illiquid by the Manager, under liquidity guidelines
approved by the Trust's Board of Trustees. The aggregate market value of
these securities at April 30, 2010, was $2,964,000, which represented 0.2%
of the Fund's net assets.
(h) Security was fair valued at April 30, 2010, by the Manager in accordance
with valuation procedures approved by the Trust's Board of Trustees.
(i) At April 30, 2010, portions of these securities were segregated to cover
delayed-delivery and/or when-issued purchases.
(j) Security is perpetual and has no final maturity date but may be subject to
calls at various dates in the future.
(k) Security is currently trading without accrued interest.
* Non-income-producing security.
================================================================================
25 | USAA High-Yield Opportunities Fund
ITEM 2. CONTROLS AND PROCEDURES
The principal executive officer and principal financial officer of USAA Mutual
Funds Trust (Trust) have concluded that the Trust's disclosure controls and
procedures are sufficient to ensure that information required to be disclosed by
the Trust in this Form N-Q was recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms, based upon such officers' evaluation of these controls and
procedures as of a date within 90 days of the filing date of the report.
There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Trust's internal controls
or in other factors that could significantly affect the Trust's internal
controls subsequent to the date of their evaluation.
ITEM 3. EXHIBITS.
Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940
(17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: USAA MUTUAL FUNDS TRUST - Period Ended April 30, 2010
By:* /s/ CHRISTOPHER P. LAIA
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Signature and Title: Christopher P. Laia, Secretary
Date: 06/23/2010
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By:* /s/ CHRISTOPHER W. CLAUS
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Signature and Title: Christopher W. Claus, President
Date: 06/23/2010
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By:* /s/ ROBERTO GALINDO, JR.
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Signature and Title: Roberto Galindo, Jr., Treasurer
Date: 06/23/2010
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*PRINT THE NAME AND TITLE OF EACH SIGNING OFFICER UNDER HIS OR HER SIGNATURE.
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