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 AGGRESSIVE GROWTH FUND
APRIL 30, 2010
(Form N-Q)
48492-0610 (C)2010, USAA. All rights reserved.
<PAGE>
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PORTFOLIO OF INVESTMENTS
USAA AGGRESSIVE GROWTH FUND
April 30, 2010 (unaudited)
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
--------------------------------------------------------------------------------
EQUITY SECURITIES (94.5%)
COMMON STOCKS (94.2%)
CONSUMER DISCRETIONARY (18.9%)
------------------------------
APPAREL & ACCESSORIES & LUXURY GOODS (0.5%)
63,360 Polo Ralph Lauren Corp. $ 5,696
-----------
CABLE & SATELLITE (1.5%)
483,408 DIRECTV "A" * 17,514
-----------
CASINOS & GAMING (1.6%)
204,164 Wynn Resorts Ltd. (a) 18,015
-----------
DEPARTMENT STORES (1.5%)
416,653 Nordstrom, Inc. 17,220
-----------
FOOTWEAR (2.3%)
349,361 NIKE, Inc. "B" 26,520
-----------
INTERNET RETAIL (5.1%)
242,892 Amazon.com, Inc. * 33,291
96,182 Priceline.com, Inc. * 25,204
-----------
58,495
-----------
MOVIES & ENTERTAINMENT (2.0%)
632,222 Walt Disney Co. 23,291
-----------
RESTAURANTS (3.4%)
544,094 McDonald's Corp. 38,408
-----------
SPECIALTY STORES (1.0%)
236,796 Tiffany & Co. 11,480
-----------
Total Consumer Discretionary 216,639
-----------
ENERGY (4.5%)
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OIL & GAS DRILLING (0.7%)
107,778 Transocean Ltd. * 7,808
-----------
OIL & GAS EXPLORATION & PRODUCTION (3.8%)
307,758 EOG Resources, Inc. 34,506
247,888 Southwestern Energy Co. * 9,836
-----------
44,342
-----------
Total Energy 52,150
-----------
FINANCIALS (16.1%)
------------------
CONSUMER FINANCE (2.1%)
527,293 American Express Co. 24,319
-----------
DIVERSIFIED BANKS (6.9%)
1,271,517 U.S. Bancorp 34,038
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1 | USAA Aggressive Growth Fund
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MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
--------------------------------------------------------------------------------
1,356,384 Wells Fargo & Co. $ 44,910
-----------
78,948
-----------
INVESTMENT BANKING & BROKERAGE (1.4%)
108,819 Goldman Sachs Group, Inc. 15,801
-----------
OTHER DIVERSIFIED FINANCIAL SERVICES (2.9%)
786,885 JPMorgan Chase & Co. 33,506
-----------
REGIONAL BANKS (2.8%)
476,036 PNC Financial Services Group, Inc. 31,994
-----------
Total Financials 184,568
-----------
HEALTH CARE (2.8%)
------------------
PHARMACEUTICALS (2.8%)
262,672 Johnson & Johnson 16,890
432,471 Merck & Co., Inc. 15,154
-----------
32,044
-----------
Total Health Care 32,044
-----------
INDUSTRIALS (13.4%)
-------------------
AEROSPACE & DEFENSE (2.9%)
435,698 General Dynamics Corp. 33,270
-----------
AIR FREIGHT & LOGISTICS (2.7%)
347,375 FedEx Corp. 31,267
-----------
INDUSTRIAL MACHINERY (1.2%)
161,480 Danaher Corp. 13,610
-----------
RAILROADS (6.6%)
505,615 Norfolk Southern Corp. 29,998
599,694 Union Pacific Corp. 45,373
-----------
75,371
-----------
Total Industrials 153,518
-----------
INFORMATION TECHNOLOGY (23.2%)
------------------------------
COMMUNICATIONS EQUIPMENT (3.2%)
1,349,863 Cisco Systems, Inc. * 36,338
-----------
COMPUTER HARDWARE (6.3%)
278,903 Apple, Inc. * 72,827
-----------
COMPUTER STORAGE & PERIPHERALS (1.7%)
1,029,726 EMC Corp. * 19,575
-----------
DATA PROCESSING & OUTSOURCED SERVICES (5.3%)
130,024 MasterCard, Inc. "A" 32,251
318,579 Visa, Inc. "A" 28,746
-----------
60,997
-----------
INTERNET SOFTWARE & SERVICES (6.1%)
51,176 Baidu, Inc. ADR * 35,276
65,643 Google, Inc. "A" * 34,491
-----------
69,767
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SEMICONDUCTORS (0.6%)
91,519 Cree, Inc. * 6,700
-----------
Total Information Technology 266,204
-----------
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Portfolio of Investments | 2
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MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
--------------------------------------------------------------------------------
MATERIALS (13.4%)
-----------------
DIVERSIFIED CHEMICALS (5.6%)
1,521,161 Dow Chemical Co. $ 46,897
244,918 PPG Industries, Inc. 17,235
-----------
64,132
-----------
DIVERSIFIED METALS & MINING (2.8%)
534,232 BHP Billiton plc ADR 32,588
-----------
FERTILIZERS & AGRICULTURAL CHEMICALS (1.2%)
125,096 Potash Corp. of Saskatchewan, Inc. 13,823
-----------
INDUSTRIAL GASES (3.8%)
116,246 Air Products & Chemicals, Inc. 8,925
411,668 Praxair, Inc. 34,486
-----------
43,411
-----------
Total Materials 153,954
-----------
TELECOMMUNICATION SERVICES (1.9%)
---------------------------------
WIRELESS TELECOMMUNICATION SERVICES (1.9%)
382,835 American Tower Corp. "A" * 15,624
165,480 Crown Castle International Corp. * 6,263
-----------
Total Telecommunication Services 21,887
-----------
Total Common Stocks (cost: $894,924) 1,080,964
-----------
PREFERRED SECURITIES (0.3%)
FINANCIALS (0.3%)
-----------------
DIVERSIFIED BANKS (0.3%)
138,025 Wells Fargo & Co. (cost: $2,653) 3,782
-----------
Total Equity Securities (cost: $897,577) 1,084,746
-----------
MONEY MARKET INSTRUMENTS (4.5%)
MONEY MARKET FUNDS (4.5%)
51,524,690 State Street Institutional Liquid Reserve Fund,
0.16% (b)(cost: $51,525) 51,525
-----------
SHORT-TERM INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES LOANED (0.9%)
MONEY MARKET FUNDS (0.1%)
648 BlackRock Liquidity Funds TempFund Portfolio, 0.14%(b) 1
791,281 Fidelity Institutional Money Market Fund, 0.21%(b) 791
-----------
Total Money Market Funds 792
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3 | USAA Aggressive Growth Fund <PAGE>
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PRINCIPAL MARKET
AMOUNT VALUE
(000) SECURITY (000)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS (0.8%)
$ 4,900 Credit Suisse First Boston LLC, 0.19%,
acquired on 4/30/2010 and due 5/03/2010
at $4,900 (collateralized by $5,005 of
Fannie Mae(c), 0.26%(d), due 10/27/2010;
market value $4,999) $ 4,900
4,400 Deutsche Bank Securities, Inc., 0.19%,
acquired on 04/30/2010 and due 05/03/2010 at $4,400
(collateralized by $4,214 of U.S. Treasury, 3.38%,
due 06/30/2013; market value $4,488) 4,400
-----------
Total Repurchase Agreements 9,300
-----------
Total Short-term Investments Purchased With Cash
Collateral From Securities Loaned
(cost: $10,092) 10,092
-----------
TOTAL INVESTMENTS (COST: $959,194) $ 1,146,363
===========
($ IN 000s) VALUATION HIERARCHY
-------------------------------------------------------
(LEVEL 1)
QUOTED PRICES (LEVEL 2)
IN ACTIVE OTHER (LEVEL 3)
MARKETS SIGNIFICANT SIGNIFICANT
FOR IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS ASSETS INPUTS INPUTS TOTAL
----------------------------------------------------------------------------------------------------
EQUITY SECURITIES:
COMMON STOCKS $ 1,080,964 $ -- $ -- $ 1,080,964
PREFERRED SECURITIES 3,782 -- -- 3,782
MONEY MARKET INSTRUMENTS:
MONEY MARKET FUNDS 51,525 -- -- 51,525
SHORT-TERM INVESTMENTS PURCHASED
WITH CASH COLLATERAL FROM
SECURITIES LOANED:
MONEY MARKET FUNDS 792 -- -- 792
REPURCHASE AGREEMENTS -- 9,300 -- 9,300
----------------------------------------------------------------------------------------------------
Total $ 1,137,063 $ 9,300 $ -- $ 1,146,363
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Portfolio of Investments | 4
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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
Aggressive Growth Fund (the Fund), which is classified as diversified under the
1940 Act.
The Fund has two classes of shares: Aggressive Growth Fund Shares and Aggressive
Growth 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. 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.
2. Equity securities trading in various foreign markets may take place on days
when the NYSE is closed. Further, when the NYSE is open, the foreign markets may
be closed. Therefore, the calculation of the Fund's net asset value (NAV) may
not take place at the same time the prices of certain foreign securities held by
the Fund are determined. In most cases, events affecting the values of foreign
securities that occur between the time of their last quoted sales or official
closing prices and the close of normal trading on the NYSE on a day the Fund's
NAV is calculated will not be reflected in the value of the Fund's foreign
securities. However, the Manager and the Fund's subadviser, if applicable, will
monitor for events that would materially affect the value of the Fund's foreign
securities. The Fund's subadviser has agreed to notify the Manager of
significant events it
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5 | USAA Aggressive Growth Fund
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identifies that would materially affect the value of the Fund's foreign
securities. If the Manager determines that a particular event would materially
affect the value of the Fund's foreign securities, then the Manager, under
valuation procedures approved by the Trust's Board of Trustees, will consider
such available information that it deems relevant to determine a fair value for
the affected foreign securities. In addition, the Fund may use information from
an external vendor or other sources to adjust the foreign market closing prices
of foreign equity securities to reflect what the Fund believes to be the fair
value of the securities as of the close of the NYSE. Fair valuation of affected
foreign equity securities may occur frequently based on an assessment that
events that occur on a fairly regular basis (such as U.S. market movements) are
significant.
3. Investments in open-end investment companies, hedge, or other funds, other
than ETFs, are valued at their NAV at the end of each business day.
4. Debt securities purchased with original or remaining maturities of 60 days or
less may be valued at amortized cost, which approximates market value.
5. Repurchase agreements are valued at cost, which approximates market value.
6. Securities for which market quotations are not readily available or are
considered unreliable, or whose values have been materially affected by events
occurring after the close of their primary markets but before the pricing of the
Fund, are valued in good faith at fair value, using methods determined by the
Manager in consultation with the Fund's subadviser, if applicable, under
valuation procedures approved by the Trust's Board of Trustees. The effect of
fair value pricing is that securities may not be priced on the basis of
quotations from the primary market in which they are traded and the actual price
realized from the sale of a security may differ materially from the fair value
price. Valuing these securities at fair value is intended to cause the Fund's
NAV to be more reliable than it otherwise would be.
Fair value methods used by the Manager include, but are not limited to,
obtaining market quotations from secondary pricing services, broker-dealers, or
widely used quotation systems. General factors considered in determining the
fair value of securities include fundamental analytical data, the nature and
duration of any restrictions on disposition of the securities, and an evaluation
of the forces that influenced the market in which the securities are purchased
and sold.
B. FAIR VALUE MEASUREMENTS - Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The three-level
valuation hierarchy disclosed in the portfolio of investments is based upon the
transparency of inputs to the valuation of an asset or liability as of the
measurement date. The three levels are defined as follows:
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) in
active markets for identical securities.
Level 2 - inputs to the valuation methodology are other significant observable
inputs, including quoted prices for similar securities, inputs that are
observable for the securities, either directly or indirectly, and
market-corroborated inputs such as market indices.
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Notes to Portfolio of Investments | 6
<PAGE>
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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. 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. 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. The aggregate fair market
value of the loaned portion of these securities as of April 30, 2010, was
approximately $9,274,000.
E. 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.
F. 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
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7 | USAA Aggressive Growth Fund
<PAGE>
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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.
G. 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 $205,724,000 and $18,555,000, respectively, resulting in
net unrealized appreciation of $187,169,000.
H. The portfolio of investments category percentages shown represent the
percentages of the investments to net assets, which were $1,147,518,000 at April
30, 2010, and, in total, may not equal 100%. A category percentage of 0.0%
represents less than 0.1% of net assets. Investments in foreign securities were
7.1% of net assets at April 30, 2010.
PORTFOLIO DESCRIPTION ABBREVIATIONS
ADR American depositary receipts are receipts issued by a U.S. bank evidencing
ownership of foreign shares. Dividends are paid in U.S. dollars.
SPECIFIC NOTES
(a) The security or a portion thereof was out on loan as of April 30, 2010.
(b) Rate represents the money market fund annualized seven-day yield at April
30, 2010.
(c) Securities issued by government-sponsored enterprises are supported only by
the right of the government-sponsored enterprise to borrow from the U.S.
Treasury, the discretionary authority of the U.S. government to purchase
the government-sponsored enterprises' obligations, or by the credit of the
issuing agency, instrumentality, or corporation, and are neither issued nor
guaranteed by the U.S. Treasury.
(d) Zero-coupon security. Rate represents the effective yield at the date of
purchase.
* Non-income-producing security.
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Notes to Portfolio of Investments | 8
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
--------------------------------------------------------------
Signature and Title: Christopher P. Laia, Secretary
Date: 06/23/2010
-------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By:* /s/ CHRISTOPHER W. CLAUS
-----------------------------------------------------
Signature and Title: Christopher W. Claus, President
Date: 06/23/2010
------------------------------
By:* /s/ ROBERTO GALINDO, JR.
-----------------------------------------------------
Signature and Title: Roberto Galindo, Jr., Treasurer
Date: 06/23/2010
------------------------------
*PRINT THE NAME AND TITLE OF EACH SIGNING OFFICER UNDER HIS OR HER SIGNATURE.
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