- Certified annual shareholder report for management investment companies (N-CSR)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number: 811-7852

Exact name of registrant as specified in charter: USAA MUTUAL FUNDS TRUST

Address of principal executive offices and zip code: 9800 FREDERICKSBURG ROAD

SAN ANTONIO, TX 78288

Name and address of agent for service: CHRISTOPHER P. LAIA
 USAA MUTUAL FUNDS TRUST
 9800 FREDERICKSBURG ROAD
 SAN ANTONIO, TX 78288

Registrant's telephone number, including area code: (210) 498-0226

Date of fiscal year end: MAY 31

Date of reporting period: MAY 31, 2010

ITEM 1. REPORT TO STOCKHOLDERS.
USAA MUTUAL FUNDS TRUST - ANNUAL REPORT FOR PERIOD ENDING MAY 31, 2010

[LOGO OF USAA]
USAA(R)

[GRAPHIC OF USAA CORNERSTONE STRATEGY FUND]

ANNUAL REPORT
USAA CORNERSTONE STRATEGY FUND
MAY 31, 2010

FUND OBJECTIVE

ACHIEVE A POSITIVE, INFLATION-ADJUSTED RATE OF RETURN OVER THE LONG TERM.

TYPES OF INVESTMENTS

Using preset target ranges, the Fund's strategy is to invest its assets mostly in stocks (divided into the categories of U.S., international, real estate, precious metals and minerals, and other alternative investment strategies) and to a much lesser extent in bonds and money market instruments. The Fund may at times implement an equity hedging strategy and a global tactical asset allocation strategy.

IRA DISTRIBUTION WITHHOLDING DISCLOSURE

We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's set rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. If you wish to make such an election, please call USAA Investment Management Company at
(800) 531-USAA (8722).

If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.

For more specific information, please consult your tax adviser.

TABLE OF CONTENTS

PRESIDENT'S MESSAGE 2

MANAGERS' COMMENTARY 4

FUND RECOGNITION 11

INVESTMENT OVERVIEW 12

FINANCIAL INFORMATION

 Distributions to Shareholders 17

 Report of Independent Registered
 Public Accounting Firm 18

 Portfolio of Investments 19

 Notes to Portfolio of Investments 84

 Financial Statements 89

 Notes to Financial Statements 92

EXPENSE EXAMPLE 114

ADVISORY AGREEMENTS 116

TRUSTEES' AND OFFICERS' INFORMATION 123

THIS REPORT IS FOR THE INFORMATION OF THE SHAREHOLDERS AND OTHERS WHO HAVE RECEIVED A COPY OF THE CURRENTLY EFFECTIVE PROSPECTUS OF THE FUND, MANAGED BY USAA INVESTMENT MANAGEMENT COMPANY. IT MAY BE USED AS SALES LITERATURE ONLY WHEN PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS, WHICH PROVIDES FURTHER DETAILS ABOUT THE FUND.

PRESIDENT'S MESSAGE

"WHILE IT IS STILL TOO EARLY TO DECLARE THAT
A SELF-SUSTAINING RECOVERY IS UNDERWAY, WE [PHOTO OF DANIEL S. McNAMARA]
THINK MOST ECONOMIC INDICATORS ARE POINTED
IN THE RIGHT DIRECTION."

JUNE 2010

As it turned out, the fiscal year ended May 31, 2010, was kind to patient, long-term investors. With some zigs and zags along the way, the U.S. stock market, as represented by the S&P 500 Index, was up nearly 21% for the period. At the same time, high-quality bonds generated attractive returns (the U.S. 10-year Treasury returned 4.65% during the fiscal year) as investors continued to search for income. Corporate and municipal bonds did even better.

However, investors suffered some setbacks in April and May of this year as Greece's debt crisis unsettled the markets. As fears of contagion spread, many of them abandoned stocks for the safety of Treasury securities and other liquid, high-quality investments. The S&P 500 Index experienced its worst May since 1962.

Although the European Union (EU) crafted a rescue plan for Greece, a number of troubling problems remain. Some European countries continue to live beyond their means, threatening the EU's sustainability. What's more, no one knows how a default or a debt restructuring by one of these countries would affect major European banks, which are believed to be heavily invested in the debt securities of the weaker nations. This uncertainty caused the euro to fall during the fiscal year to a four-year low versus the U.S. dollar. At the time of this writing, the dollar is once again the world's undisputed reserve currency.

Commodity prices, which had been rising for most of the fiscal year, dropped in response to the turmoil in Europe and fears about its impact on the global economy. The one exception -- gold, widely considered a safe haven.

Meanwhile, the U.S. economy seems to be improving. While it is still too early to declare that a self-sustaining recovery is underway, we think most economic indicators are pointed in the right direction. Corporate earnings, fueled by surprisingly strong top-line revenue growth, have been better than expected. At the same time, inflation has remained benign, giving the Federal Reserve Board (the Fed) latitude to hold short-term rates in a range between zero and 0.25%.

There is no doubt that investor confidence was badly shaken by Greece's debt problems, and at the time of this writing, market sentiment seems driven more by headlines than by investment fundamentals. Perhaps as a result, many

2 | USAA CORNERSTONE STRATEGY FUND

people are keeping large amounts of money in low-yielding money market funds. We see no relief from these low yields until at least the fourth quarter of 2010. In fact, we think the debt crisis in Europe could extend the time the Fed can maintain its "easy money" stance.

Under the circumstances, investors may want to review how much they have in their money market accounts. Inflation may be muted but as of this writing, it is higher than money market yields. That isn't to say that investors should take risks with their immediate or emergency spending needs. In such cases, we believe a money market fund, a savings account or short-term certificate of deposit should be considered. However, if the money isn't required for two or three years, it could be earning higher yields in short- and intermediate-term bond funds. For longer-term, future needs such as retirement, a diversified portfolio of stock and bond funds might be most appropriate.

If timing is a concern, we recommend making gradual changes. However, this is based on your individual immediate needs. Our USAA service representatives would be happy to assist. They are available -- free of charge -- to help you update your financial plan and answer any questions you might have.

At USAA Investment Management Company, we are proud of the long-term performance we have provided to shareholders. In the months ahead, we will continue working hard on your behalf. From all of us here, thank you for the opportunity to help you with your investment needs.

Sincerely,

/S/ DANIEL S. MCNAMARA

Daniel S. McNamara
President
USAA Investment Management Company

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.

INVESTMENT/INSURANCE: NOT FDIC INSURED O NOT BANK ISSUED, GUARANTEED OR UNDERWRITTEN O MAY LOSE VALUE

INVESTMENT AND INSURANCE PRODUCTS ARE NOT DEPOSITS, NOT INSURED BY FDIC OR ANY GOVERNMENT AGENCY, NOT GUARANTEED BY THE BANK. INVESTMENTS AND CERTAIN INSURANCE PRODUCTS MAY LOSE VALUE.

Diversification does not guarantee a profit or prevent a loss.

Gold is a volatile asset class and is subject to additional risks, such as currency fluctuation, market liquidity, political instability and increased price volatility. It may be more volatile than other asset classes that diversify across many industries and companies.

Financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as USAA Financial Insurance Agency in California, License # 0E36312), and USAA Financial Advisors, Inc., a registered broker dealer.

As interest rates rise, bond prices fall.

PRESIDENT'S MESSAGE | 3

MANAGERS' COMMENTARY ON THE FUND

USAA Investment Management Company Credit Suisse Asset Management, LLC*

 ARNOLD J. ESPE, CFA MIKA TOIKKA, CFA
 Bonds and Money Market Instruments U.S. Equity Securities

 MARK W. JOHNSON, CFA Quantitative Management Associates LLC
 DAN DENBOW, CFA
 Precious Metals and Minerals, MARGARET S. STUMPP, Ph.D.
 Real Estate Securities TED LOCKWOOD
 JOHN VAN BELLE, Ph.D.
 JOHN P. TOOHEY, CFA International Equity Securities
 WASIF A. LATIF
 U.S. Equity Securities and Credit Suisse Securities (USA) LLC's
 International Equity Securities Volaris Volatility Management Group

Batterymarch Financial Management, Inc. YIRONG LI, CFA
 DEFINA MALUKI, CFA
 ADAM J. PETRYK, CFA Index Options
 MICHAEL P. McELROY, CFA
 U.S. and International Equity
 Securities

o HOW DID THE USAA CORNERSTONE STRATEGY FUND (THE FUND) PERFORM DURING THE REPORTING PERIOD?

For the one-year period ended May 31, 2010, the Fund had a total return of 22.25%. This compares to a return of 16.94% for the Lipper Global Flexible Portfolio Funds Index and 20.99% for the S&P 500 Index.

USAA Investment Management Company (IMCO) serves as the Fund's overall adviser and manages certain portions of the Fund. Credit Suisse Asset Management, LLC (Credit Suisse) serves as a U.S. stock portfolio

Refer to page 13 for benchmark definitions.

Past performance is no guarantee of future results.

*Effective May 3, 2010, Jordan Low no longer is a co-manager of the Fund.

4 | USAA CORNERSTONE STRATEGY FUND

manager for the Fund, and Credit Suisse Securities (USA) LLC's Volaris Volatility Management Group (Volaris Group) is responsible for managing a strategy that involves purchasing index put options or corresponding exchange-traded fund (ETF) options or put spread options and selling index call or corresponding ETF options against a highly-correlated stock portfolio in an attempt to reduce the Fund's volatility. This strategy is also referred to as an "equity hedging strategy." Qualitative Management Associates LLC (QMA) manages a non-U.S. developed market stocks portfolio and Batterymarch Financial Management, Inc. (Batterymarch) manages a global stock portfolio for the Fund.

o WHAT LED TO THE FUND'S STRONG PERFORMANCE DURING THE REPORTING YEAR?

Asset allocation, the equity hedging strategy and individual manager performance are the Fund's major performance factors. By far the most instrumental of these during the reporting year was the outstanding performance by USAA's bond portion manager. Allocation among the various asset classes was a mildly positive performance factor, led by our overweight positions in emerging markets, precious metals and minerals, and U.S. large-cap stocks as well as our underweight position in international developed market stocks. Our underweight positions in U.S. small-cap stocks and real estate investment trusts (REITs) detracted from performance.

The equity hedging strategy moderately detracted from performance for the full reporting year as global equity markets generally rallied sharply, but proved its worth by helping offset the volatility late in the reporting year. Given the high degree of uncertainty that has existed in global financial markets for several years, and is expected to persist, the equity hedging strategy remains an essential element of the Fund's ability to achieve its objectives.

Precious metals and minerals is a volatile asset class and is subject to additional risks, such as currency fluctuation, market liquidity, political instability and increased price volatility. It may be more volatile than other asset classes that diversify across many industries and companies.

MANAGERS' COMMENTARY ON THE FUND | 5

 Individual manager performance outside of the bond portion was mixed.

 Our U.S. equity manager, Credit Suisse, implemented our U.S. stock market
 allocation using a diversified, quantitative approach. Their stock
 selection had a mildly negative impact on performance.

 The Fund continued to have a small exposure to Deutsche iGAP Investment
 Trust "B" (iGAP), a global macro hedge fund as an additional risk
 management tool. Our iGAP exposure had a slightly positive total return for
 the reporting year. The Fund also was exposed to a managed commodities
 mutual fund in an attempt to further diversify the Fund and build-in
 protections against the longer-term potential for inflation and a falling
 U.S. dollar.

o WHAT LED TO THE STRONG PERFORMANCE BY THE FUND'S U.S. BOND PORTION?

 For the reporting year, the bond portion had a total return of 45.99%,
 compared to 12.59% for the Lipper Intermediate Investment Grade Debt Funds
 Average. This performance reflected a continuation of the trends that
 started to take hold in March 2009, when bonds with any credit risk at all
 were trading at what we believed were extremely oversold levels. We
 maintained and added to our positions back then when there was virtually no
 confidence in the credit markets, and subsequently have benefited as the
 markets normalized and many investors re-embraced risk assets.

 While our best absolute and relative performance came in the first half of
 the reporting year, it's important to note that we continued to outperform
 our peers in the second half, with a total return of 11.57% for the six
 months ended May 31, 2010.

 Past performance is no guarantee of future results.

 High double digit returns are attributable, in part, to unusually favorable
 market conditions and may not be repeated or consistently achieved in the
 future.

================================================================================

6 | USAA CORNERSTONE STRATEGY FUND

o ISN'T THERE SUBSTANTIALLY MORE RISK IN THE BOND MARKET TODAY?

Compared to a year ago, yes. We're in a low absolute-yield environment and there is a significant risk of inflation longer term. That's why we continually adjust the portfolio to reflect both the opportunities and the risks. As the reporting year progressed, we gradually reduced our exposure to riskier assets while still maintaining a significant yield advantage over the peer group.

Specifically, we reduced exposure to asset-backed securities when they achieved full value, but are maintaining substantial holdings of commercial mortgage-backed securities as well as subordinated financial debt, both of which have played a large role in our strong performance.

Investing based on inflation fears is not a straightforward proposition. Longer term, we believe that the unprecedented government spending will very likely result in significant inflation. However, there is little evidence of inflation today, and so far in 2010 the risk of deflation has grown with the eurozone debt crisis and its potential to slow the global economic recovery. We have recently been adding Treasury Inflation-Protected Securities (TIPS), which tend to perform adequately in both deflationary and inflationary periods. We remain vigilant for any signs of inflationary pressure.

o HOW DID THE GLOBAL STOCK MARKET PORTFOLIO MANAGED BY BATTERYMARCH PERFORM?

Batterymarch uses a disciplined framework to compare global stocks across multiple perspectives. This framework includes reviewing valuations, cash flow, growth, expectations, and technical factors. After having gone through an extended period of extreme market volatility

Mortgage-backed securities have prepayment, credit, interest rate, and extension risks. Generally, when interest rates decline, prepayments accelerate beyond the initial pricing assumptions and may cause the average life of the securities to shorten. Also the market value may decline when interest rates rise because prepayments decrease beyond the initial pricing assumptions and may cause the average life of the securities to extend.

MANAGERS' COMMENTARY ON THE FUND | 7

in which our multi-factor process struggled, relative performance improved substantially as the period progressed and investors once again focused on fundamental factors. For the full year, we underperformed the MSCI World Index.

We manage risk in the portfolio by remaining relatively neutral in terms of industry sectors, putting the emphasis on individual stock selection. During the reporting period, major detractors from Index-relative performance included Lockheed Martin Corp. and other U.S. industrials. Additionally, our overall positioning was defensive at a time when stocks leveraged to the recovery led the market. Other individual stocks, including the National Bank of Greece S.A., detracted from relative results.

At the end of the reporting year, our largest holdings were in the United States, led by Microsoft Corp., Google, Inc. "A", and Exxon Mobil Corp., followed by Swiss pharmaceutical giant Novartis AG and BHP Billiton Ltd., the Australian mining company. We continue to have significant exposure to emerging markets, at roughly 12% of the Batterymarch-managed portion of the portfolio, led by holdings in Brazilian bank Unibanco S.A. and Russian telecom provider Sistema JSFC GDR. We continue to find interesting opportunities across the emerging markets.

As we move into the new reporting year, we're seeing balanced contributions from the different dimensions of our multi-factor process in line with historical averages.

o HOW DID THE INTERNATIONAL DEVELOPED MARKETS PORTFOLIO MANAGED BY QMA PERFORM?

The QMA portion underperformed the MSCI-EAFE Index for the full reporting year, with relative performance improving substantially in the second half. Our quantitative process results in a highly-diversified portfolio of both growth and value stocks, but we emphasize different

National Bank of Greece S.A. and Unibanco S.A. were sold out of the Fund prior to May 31, 2010.

8 | USAA CORNERSTONE STRATEGY FUND

inputs depending on whether a stock is classified as growth or value. For growth stocks, we believe the most important input is analyst earnings revisions; we want to own growth stocks whose earnings are being revised higher. For value stocks, the most important input is price; we want to hold stocks with the lowest relative valuations.

In the first half of the reporting year there was a disconnect between earnings and security returns, which made it difficult for the growth part of our process to gain traction. This improved as the year progressed and analyst earning expectations more accurately reflected changing company fundamentals. Toward the end of the reporting year, the eurozone debt crisis drove down the valuation of many lower-priced stocks, but these historically have tended to bounce back when the market recovers.

The portfolio is focused entirely on individual security selection, maintaining broadly neutral sector and country exposures. Every day we re-rank all of the stocks we follow and rebalance the portfolio approximately every two weeks. We expect a slower-growth environment moving forward that will support both the growth and value elements of our process.

o WHAT'S USAA's OUTLOOK?

Well before U.S. economic growth (as measured by gross domestic product) turned positive, we took the view that the lingering effects of the financial crisis would make this recovery muted by historical standards, with trend economic growth more volatile and lower than we've enjoyed in recent decades. Unprecedented monetary and fiscal stimulus has been the primary driver of the economic recovery, while very strong corporate profit growth from the depressed levels of the market drove stock prices much higher off the market low of March 9, 2009.

Some of our macroeconomic themes, however, have remained remarkably stable over the past year. Bank lending continues to contract as banks work to heal their balance sheets and some

MANAGERS' COMMENTARY ON THE FUND | 9

 borrowers remain hesitant to incur additional debt. Households are also
 slowly rebuilding their balance sheets, choosing saving over borrowing and
 spending. Unemployment remains structurally higher. The process of higher
 taxes and re-regulation is moving ahead. The good news is at the corporate
 level, where corporate treasurers took advantage of a period of extremely
 cheap credit to prepare their balance sheets for an uncertain future.

 The question now is whether the economy can move from a now waning
 stimulus-driven recovery to one that depends on consumer and corporate
 spending. Both corporations and consumers appear hesitant to embrace the
 recovery, and headwinds are increasing. The most recent news comes from the
 eurozone, where the sovereign debt crisis is most likely to lead to a new
 period of austerity that will further weigh on the global recovery.

 We have adjusted the strategic allocations in your Fund, putting more
 emphasis on non-U.S. developed markets and emerging markets, while reducing
 our base allocations to U.S. small-cap stocks. On a tactical level, we have
 increased exposure to U.S. large-cap stocks given their stronger balance
 sheets. We are significantly underweight non-U.S. developed markets given
 that Europe and Japan that they share many of the problems we have in the
 United States, but with less positive demographics and less flexible labor
 markets. In addition, the European banking system is more highly leveraged
 than the U.S. banking system and holds significant amount of sovereign debt
 of the economically weak and highly-indebted eurozone countries.

 As the managers of your assets, we continue to focus on inflation adjusted
 total returns, risk management and tactical asset allocation in these
 volatile markets. We are pleased that our efforts provided outstanding
 returns during the reporting year, and we are committed to redoubling our
 efforts given the uncertainty ahead.

 Foreign investing is subject to additional risks, such as currency
 fluctuations, market illiquidity, and political instability.

 The USAA Cornerstone Fund is subject to various risks including Real Estate
 Investment Trusts (REIT) investment risk. Investing in REITs may subject
 the Fund to many of the same risks associated with direct ownership of real
 estate.

================================================================================

10 | USAA CORNERSTONE STRATEGY FUND

FUND RECOGNITION

USAA CORNERSTONE STRATEGY FUND

LIPPER LEADER (OVERALL)

[5]

EXPENSE

The Fund is listed as a Lipper Leader for Expense among 28 mixed-asset funds within the Lipper Global Flexible Portfolio Funds category for the overall period ended May 31, 2010. The Fund received a Lipper Leader rating for Expense among 28, 14, and 11 mixed-asset funds for the three-, five-, and 10-year periods, respectively. Lipper ratings for Expense reflect funds' expense minimization relative to peers with similar load structures as of May 31, 2010.

Ratings are subject to change every month and are based on an equal-weighted average of percentile ranks for the Expense metrics over three-, five-, and 10-year periods (if applicable). The highest 20% of funds in each peer group are named Lipper Leaders, the next 20% receive a score of 4, the middle 20% are scored 3, the next 20% are scored 2, and the lowest 20% are scored 1. Lipper ratings are not intended to predict future results, and Lipper does not guarantee the accuracy of this information. More information is available at www.lipperleaders.com. Lipper Leader Copyright 2010, Reuters, All Rights Reserved.

FUND RECOGNITION | 11

INVESTMENT OVERVIEW

USAA CORNERSTONE STRATEGY FUND (Ticker Symbol: USCRX)

--------------------------------------------------------------------------------

 5/31/10 5/31/09
--------------------------------------------------------------------------------
Net Assets $1,924.2 Million $1,604.0 Million
Net Asset Value Per Share $20.43 $17.21
--------------------------------------------------------------------------------
 AVERAGE ANNUAL TOTAL RETURNS AS OF 5/31/10
--------------------------------------------------------------------------------
 1 Year 5 Years 10 Years
 22.25% 2.47% 3.24%

--------------------------------------------------------------------------------
 EXPENSE RATIO*
--------------------------------------------------------------------------------
 Before Reimbursement 1.46% After Reimbursement 1.19%

High double digit returns are attributable, in part, to unusually favorable market conditions and may not be repeated or consistently achieved in the future.

THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE DATA QUOTED. THE RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, VISIT USAA.COM.

*THE BEFORE REIMBURSEMENT EXPENSE RATIO REPRESENTS THE TOTAL ANNUAL OPERATING EXPENSES, BEFORE REDUCTIONS OF ANY EXPENSES PAID INDIRECTLY AND INCLUDING ANY ACQUIRED FUND FEES AND EXPENSES, AND IS CALCULATED AS A PERCENTAGE OF AVERAGE NET ASSETS. THE AFTER REIMBURSEMENT EXPENSE RATIO REPRESENTS TOTAL ANNUAL OPERATING EXPENSES, BEFORE REDUCTIONS OF ANY EXPENSES PAID INDIRECTLY AND EXCLUDING ANY ACQUIRED FUND FEES AND EXPENSES, AFTER REIMBURSEMENT FROM USAA INVESTMENT MANAGEMENT COMPANY (IMCO). BEFORE AND AFTER REIMBURSEMENT EXPENSE RATIOS ARE REPORTED IN THE FUND'S PROSPECTUS DATED OCTOBER 1, 2009. IMCO HAS VOLUNTARILY AGREED TO LIMIT THE FUND'S TOTAL ANNUAL OPERATING EXPENSES TO 1.19%, BEFORE REDUCTIONS OF ANY EXPENSES PAID INDIRECTLY AND EXCLUDING ANY ACQUIRED FUND FEES AND EXPENSES, AND TO REIMBURSE THE FUND FOR EXPENSES IN EXCESS OF THIS AMOUNT. IMCO CAN MODIFY OR TERMINATE THIS ARRANGEMENT AT ANY TIME. THESE EXPENSE RATIOS MAY DIFFER FROM THE EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS.

Total return measures the price change in a share assuming the reinvestment of all net investment income and realized capital gain distributions. The total returns quoted do not reflect adjustments made to the enclosed financial statements in accordance with U.S. generally accepted accounting principles or the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

12 | USAA CORNERSTONE STRATEGY FUND

o CUMULATIVE PERFORMANCE COMPARISON o

[CHART OF CUMULATIVE PERFORMANCE COMPARISON]

 USAA CORNERSTONE LIPPER GLOBAL FLEXIBLE
 STRATEGY FUND FUNDS INDEX S&P 500 INDEX
05/31/00 $10,000.00 $10,000.00 $10,000.00
06/30/00 10,205.56 10,358.46 10,246.53
07/31/00 10,123.65 10,230.54 10,086.34
08/31/00 10,336.29 10,579.47 10,712.84
09/30/00 10,060.65 10,267.34 10,147.28
10/31/00 9,970.09 10,068.37 10,104.38
11/30/00 9,788.95 9,679.34 9,307.75
12/31/00 10,161.19 10,071.17 9,353.31
01/31/01 10,340.29 10,201.37 9,685.16
02/28/01 9,954.22 9,686.93 8,802.05
03/31/01 9,619.90 9,209.09 8,244.43
04/30/01 10,093.53 9,678.66 8,885.11
05/31/01 10,057.71 9,604.62 8,944.64
06/30/01 9,902.48 9,464.25 8,726.94
07/31/01 9,926.36 9,330.26 8,641.03
08/31/01 9,695.52 9,099.85 8,100.09
09/30/01 9,022.88 8,499.89 7,445.98
10/31/01 9,110.44 8,700.74 7,587.97
11/30/01 9,548.25 9,015.09 8,170.02
12/31/01 9,681.68 9,026.19 8,241.59
01/31/02 9,524.32 8,967.80 8,121.32
02/28/02 9,578.15 8,894.24 7,964.70
03/31/02 9,901.15 9,141.30 8,264.24
04/30/02 9,768.64 9,018.14 7,763.20
05/31/02 9,760.35 9,124.21 7,706.01
06/30/02 9,412.51 8,780.59 7,157.11
07/31/02 8,878.32 8,260.83 6,599.18
08/31/02 8,948.72 8,301.92 6,642.51
09/30/02 8,439.37 7,791.25 5,920.60
10/31/02 8,749.95 8,119.27 6,441.71
11/30/02 9,114.36 8,445.10 6,820.87
12/31/02 8,882.41 8,230.30 6,420.16
01/31/03 8,634.25 8,099.84 6,251.97
02/28/03 8,514.45 8,015.09 6,158.17
03/31/03 8,510.17 8,006.59 6,217.96
04/30/03 9,049.28 8,472.19 6,730.13
05/31/03 9,507.09 8,925.54 7,084.72
06/30/03 9,644.01 9,033.46 7,175.10
07/31/03 9,716.74 9,104.01 7,301.61
08/31/03 9,922.12 9,296.20 7,444.01
09/30/03 9,926.39 9,438.34 7,364.96
10/31/03 10,384.21 9,799.44 7,781.59
11/30/03 10,546.79 9,956.63 7,850.06
12/31/03 10,988.56 10,290.16 8,261.75
01/31/04 11,126.62 10,522.80 8,413.39
02/29/04 11,325.08 10,670.75 8,530.34
03/31/04 11,230.16 10,718.72 8,401.65
04/30/04 11,036.02 10,409.61 8,269.75
05/31/04 11,130.93 10,457.73 8,383.24
06/30/04 11,350.96 10,603.45 8,546.25
07/31/04 11,018.76 10,333.17 8,263.39
08/31/04 11,023.08 10,373.75 8,296.82
09/30/04 11,217.22 10,622.92 8,386.68
10/31/04 11,381.16 10,817.74 8,514.80
11/30/04 11,851.42 11,318.60 8,859.33
12/31/04 12,253.13 11,640.80 9,160.80
01/31/05 12,046.54 11,434.16 8,937.50
02/28/05 12,331.18 11,702.50 9,125.59
03/31/05 12,120.00 11,484.71 8,963.99
04/30/05 11,936.36 11,364.46 8,793.98
05/31/05 12,179.68 11,582.24 9,073.79
06/30/05 12,221.00 11,708.52 9,086.67
07/31/05 12,579.09 11,987.69 9,424.59
08/31/05 12,666.32 12,056.60 9,338.60
09/30/05 12,744.36 12,278.30 9,414.24
10/31/05 12,464.32 12,043.21 9,257.30
11/30/05 12,730.59 12,340.10 9,607.43
12/31/05 12,930.62 12,666.41 9,610.77
01/31/06 13,275.23 13,179.97 9,865.24
02/28/06 13,245.27 13,170.19 9,892.01
03/31/06 13,415.08 13,353.79 10,015.14
04/30/06 13,659.81 13,634.82 10,149.62
05/31/06 13,235.28 13,297.44 9,857.50
06/30/06 13,255.26 13,194.88 9,870.87
07/31/06 13,365.13 13,207.42 9,931.76
08/31/06 13,664.80 13,488.88 10,168.06
09/30/06 13,779.67 13,648.78 10,430.10
10/31/06 14,139.27 13,956.14 10,769.97
11/30/06 14,498.87 14,289.56 10,974.77
12/31/06 14,716.88 14,441.70 11,128.72
01/31/07 14,898.91 14,573.49 11,297.03
02/28/07 14,843.75 14,502.74 11,076.07
03/31/07 15,009.24 14,618.88 11,199.95
04/30/07 15,400.88 14,975.07 11,696.06
05/31/07 15,726.33 15,280.91 12,104.19
06/30/07 15,577.39 15,253.05 11,903.10
07/31/07 15,307.10 15,180.84 11,534.05
08/31/07 15,312.62 15,127.75 11,706.95
09/30/07 15,913.87 15,663.00 12,144.77
10/31/07 16,355.16 16,024.05 12,337.95
11/30/07 15,698.74 15,569.38 11,822.15
12/31/07 15,604.22 15,414.19 11,740.13
01/31/08 14,838.88 14,870.25 11,035.94
02/29/08 14,725.02 14,820.55 10,677.43
03/31/08 14,490.99 14,742.26 10,631.32
04/30/08 14,959.05 15,209.03 11,149.10
05/31/08 15,287.96 15,365.20 11,293.51
06/30/08 14,415.09 14,541.20 10,341.43
07/31/08 14,098.83 14,248.34 10,254.49
08/31/08 13,909.07 14,121.64 10,402.83
09/30/08 12,555.48 12,803.66 9,475.86
10/31/08 10,436.55 10,785.01 7,884.41
11/30/08 9,841.98 10,186.36 7,318.66
12/31/08 10,226.18 10,424.53 7,396.53
01/31/09 9,552.72 9,843.39 6,773.11
02/28/09 8,826.95 9,139.36 6,051.92
03/31/09 9,310.79 9,663.07 6,582.04
04/30/09 10,160.80 10,387.51 7,212.01
05/31/09 11,252.72 11,198.59 7,615.40
06/30/09 11,370.41 11,260.17 7,630.50
07/31/09 12,050.42 11,992.61 8,207.65
08/31/09 12,429.65 12,395.90 8,503.98
09/30/09 13,083.50 12,819.84 8,821.31
10/31/09 13,103.11 12,630.87 8,657.44
11/30/09 13,515.04 13,063.39 9,176.74
12/31/09 13,770.12 13,241.57 9,353.99
01/31/10 13,588.23 12,984.83 9,017.50
02/28/10 13,797.07 13,173.61 9,296.83
03/31/10 14,376.44 13,761.40 9,857.85
04/30/10 14,511.17 13,917.67 10,013.48
05/31/10 13,756.65 13,096.02 9,213.90

[END OF CHART]

Data from 5/31/00 to 5/31/10.

The graph illustrates the comparison of a $10,000 hypothetical investment in the USAA Cornerstone Strategy Fund to the following benchmarks:

o The unmanaged Lipper Global Flexible Funds Index tracks the total return performance of the 30 largest funds within the Lipper Global Flexible Portfolio Funds category.

o The unmanaged S&P 500 Index represents the weighted average performance of a group of 500 widely held, publicly traded stocks.

Past performance is no guarantee of future results, and the cumulative performance quoted does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

INVESTMENT OVERVIEW | 13

TOP 3 HOLDINGS IN EACH CATEGORY* -- 5/31/2010
(% of Net Assets)

--------------------------------------------------------------------------------

INTERNATIONAL EQUITY SECURITIES
 iShares MSCI Emerging Markets Index ETF** 5.04%
 iShares MSCI EAFE Index ETF** 0.86%
 Novartis AG 0.37%

BONDS
 U.S. Treasury Inflation-Indexed Notes 2.13%, 2/15/2040 2.9%
 U.S. Treasury Inflation-Indexed Notes 2.50%, 1/15/2029 0.7%
 CVS Caremark Corp. 0.5%

U.S. EQUITY SECURITIES
 SPDR Trust Series 1 ETF** 6.9%
 Microsoft Corp. 0.8%
 Intel Corp. 0.6%

OTHER ALTERNATIVE INVESTMENT STRATEGIES
 Deutsche iGAP Investment Trust "B" 2.5%
 PIMCO Commodity Real Return Strategy Fund 0.7%

PRECIOUS METALS AND MINERALS SECURITIES
 Newmont Mining Corp. 0.3%
 Eldorado Gold Corp. 0.2%
 IAMGOLD Corp. 0.2%

GLOBAL REAL ESTATE EQUITY SECURITIES
 ING International Real Estate Fund 0.6%
 Annaly Capital Management, Inc. 0.2%
 SPDR DJ Wilshire International Real Estate ETF 0.1%

* Excludes money market instruments.

** Pursuant to a Securities and Exchange Commission (SEC) exemptive order, the Fund may invest in an amount that exceeds the Fund's limitations as set forth in the Investment Company Act of 1940 that would otherwise be applicable.

You will find a complete list of securities that the Fund owns on pages 19-83.

Foreign and precious metals and minerals investing is subject to additional risks, such as currency fluctuations, market illiquidity, and political instability.

14 | USAA CORNERSTONE STRATEGY FUND

TOP 10 INDUSTRIES*
AS OF 5/31/2010
(% of Net Assets)

Commercial Mortgage-Backed Securities ............................... 8.2%
Diversified Banks ................................................... 4.7%
Regional Banks ...................................................... 3.6%
Gold ................................................................ 3.2%
Life & Health Insurance ............................................. 2.9%
Multi-Line Insurance ................................................ 2.5%
Integrated Oil & Gas ................................................ 2.4%
Other Diversified Financial Services ................................ 2.4%
Property & Casualty Insurance ....................................... 2.4%
Pharmaceuticals ..................................................... 2.2%

* Excludes U.S. government and exchange-traded funds.

INVESTMENT OVERVIEW | 15

 o ASSET ALLOCATION -- 5/31/2010* o

 [PIE CHART OF ASSET ALLOCATION]

U.S. EQUITY SECURITIES 34.9%**
BONDS 34.9%
INTERNATIONAL EQUITY SECURITIES 23.0%
PRECIOUS METALS AND MINERALS SECURITIES 3.9%
GLOBAL REAL ESTATE EQUITY SECURITIES 2.3%
MONEY MARKET INSTRUMENTS* 0.8%

[END CHART]

* Excludes futures, options, and short-term investments purchased with cash collateral from securities loaned.

** Includes Other Alternative Investment Strategies: Investment Companies (0.7%) and Hedge Funds (2.5%).

Percentages are of the net assets of the Fund and may not equal 100%.

16 | USAA CORNERSTONE STRATEGY FUND

DISTRIBUTIONS TO SHAREHOLDERS

The following federal tax information related to the Fund's fiscal year ended May 31, 2010, is provided for information purposes only and should not be used for reporting to federal or state revenue agencies. Federal tax information for the calendar year will be reported to you on Form 1099-DIV in January 2011.

24.98% of ordinary income distributions qualify for the dividends-received deductions eligible to corporations.

For the fiscal year ended May 31, 2010, the Fund hereby designates 100%, or the maximum amount allowable, of its net taxable income as qualified dividends taxed at individual net capital gain rates.

For the fiscal year ended May 31, 2010, certain dividends paid by the Fund qualify as interest-related dividends. The Fund designates $8,431,000 as qualifying interest income.

DISTRIBUTIONS TO SHAREHOLDERS | 17

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

THE SHAREHOLDERS AND BOARD OF TRUSTEES OF USAA CORNERSTONE STRATEGY FUND:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the USAA Cornerstone Strategy Fund (one of the portfolios constituting USAA Mutual Funds Trust) (the "Fund") as of May 31, 2010, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of May 31, 2010, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the USAA Cornerstone Strategy Fund at May 31, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

 /s/ Ernst & Young LLP

San Antonio, Texas
July 23, 2010

18 | USAA CORNERSTONE STRATEGY FUND

PORTFOLIO OF INVESTMENTS

May 31, 2010

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

U.S. EQUITY SECURITIES (34.9%)

COMMON STOCKS (23.8%)

CONSUMER DISCRETIONARY (4.0%)
ADVERTISING (0.0%)

 500 Arbitron, Inc. $ 15
 1,100 Clear Channel Outdoor Holdings, Inc. "A"* 10
 300 Harte Hanks, Inc. 4
 3,700 Interpublic Group of Companies, Inc.* 31
 300 Lamar Advertising Co. "A"* 9
 7,400 National Cinemedia, Inc. 130
 2,500 Omnicom Group, Inc. 95
 ----------
 294
 ----------
APPAREL & ACCESSORIES & LUXURY GOODS (0.2%)
 500 American Apparel, Inc.* 1
 700 Carter's, Inc.* 21
 55,165 Coach, Inc. 2,268
 80 Columbia Sportswear Co. 4
 693 Fossil, Inc.* 26
 100 Fuqi International, Inc.* 1
 440 G-III Apparel Group, Ltd.* 13
 600 Hanesbrands, Inc.* 16
 12,000 Jones Apparel Group, Inc. 236
 1,920 Liz Claiborne, Inc.* 12
 589 Maidenform Brands, Inc.* 14
 520 Movado Group, Inc.* 6
 400 Oxford Industries, Inc. 8
 280 Perry Ellis International, Inc.* 7
 12,600 Phillips-Van Heusen Corp. 689
 600 Polo Ralph Lauren Corp. 52
 4,100 Quiksilver, Inc.* 19
 500 True Religion Apparel, Inc.* 14
 500 Under Armour, Inc. "A"* 17
 80 UniFirst Corp. 3
 500 VF Corp. 39
 640 Volcom, Inc.* 13
 26,400 Warnaco Group, Inc.* 1,124
 ----------
 4,603
 ----------
APPAREL RETAIL (0.6%)
 600 Abercrombie & Fitch Co. "A" 22
 70,450 Aeropostale, Inc.* 1,952
 1,100 American Eagle Outfitters, Inc. 14
 1,940 AnnTaylor Stores Corp.* 42
 100 Bebe Stores, Inc. 1
 1,360 Brown Shoe Co., Inc. 23
 500 Buckle, Inc. 18
 1,200 Cato Corp. "A" 28
 3,880 Charming Shoppes, Inc.* 18
 1,200 Chico's FAS, Inc. 15
 400 Children's Place Retail Stores, Inc.* 19
 1,160 Christopher & Banks Corp. 11
 480 Citi Trends, Inc.* 16
 1,440 Coldwater Creek, Inc.* 9
 4,500 Collective Brands, Inc.* 101
 840 Dress Barn, Inc.* 23
 400 DSW, Inc. "A"* 12
 1,440 Finish Line, Inc. "A" 24
 1,300 Foot Locker, Inc. 19
 56,140 Gap, Inc. 1,224

PORTFOLIO OF INVESTMENTS | 19

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 720 Genesco, Inc.* $ 22
 1,000 Guess?, Inc. 38
 700 Gymboree Corp.* 31
 400 Hot Topic, Inc. 2
 900 J. Crew Group, Inc.* 41
 400 Jos. A. Bank Clothiers, Inc.* 24
 2,300 Limited Brands, Inc. 57
 700 Men's Wearhouse, Inc. 15
 2,120 Pacific Sunwear of California, Inc.* 9
 68,135 Ross Stores, Inc. 3,570
 280 Shoe Carnival, Inc.* 7
 1,280 Stage Stores, Inc. 18
 800 Stein Mart, Inc.* 6
 858 Talbots, Inc.* 13
 70,326 TJX Companies, Inc. 3,197
 900 Urban Outfitters, Inc.* 33
 3,160 Wet Seal, Inc. "A"* 13
 640 Zumiez, Inc.* 11
 ----------
 10,698
 ----------
AUTO PARTS & EQUIPMENT (0.3%)
 400 American Axle & Manufacturing Holdings, Inc.* 4
 720 Amerigon, Inc.* 6
 780 ArvinMeritor, Inc.* 11
 77,398 Autoliv, Inc.* 3,676
 800 BorgWarner, Inc.* 30
 1,240 Dana Holding Corp.* 13
 386 Dorman Products, Inc.* 9
 100 Drew Industries, Inc.* 2
 1,914 Exide Technologies* 8
 80 Fuel Systems Solutions, Inc.* 2
 1,200 Gentex Corp. 24
 36,000 Johnson Controls, Inc. 1,027
 1,560 Modine Manufacturing Co.* 18
 1,200 Spartan Motors, Inc. 6
 1,400 Superior Industries International, Inc. 21
 700 Tenneco, Inc.* 16
 1,300 TRW Automotive Holdings Corp.* 39
 ----------
 4,912
 ----------
AUTOMOBILE MANUFACTURERS (0.1%)
 75,100 Ford Motor Co.* 881
 100 Thor Industries, Inc. 3
 12,600 Winnebago Industries, Inc.* 153
 ----------
 1,037
 ----------
AUTOMOTIVE RETAIL (0.1%)
 7,830 Advance Auto Parts, Inc. 405
 320 Americas Car Mart, Inc.* 8
 7,700 Asbury Automotive Group, Inc.* 102
 900 AutoNation, Inc.* 18
 100 AutoZone, Inc.* 19
 1,600 CarMax, Inc.* 35
 13,800 Group 1 Automotive, Inc.* 392
 560 Midas, Inc.* 6
 160 Monro Muffler Brake, Inc. 6
 1,000 O'Reilly Automotive, Inc.* 51
 600 Penske Automotive Group, Inc.* 8
 1,600 Pep Boys-Manny, Moe & Jack 20
 920 Sonic Automotive, Inc. "A"* 9
 ----------
 1,079
 ----------
BROADCASTING (0.0%)
 1,640 Belo Corp. "A"* 12
 4,800 CBS Corp. "B" 70
 740 Liberty Media-Starz "A"* 39
 1,400 Sinclair Broadcast Group, Inc. "A"* 9
 ----------
 130
 ----------

20 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

CABLE & SATELLITE (0.2%)
 21,300 Cablevision Systems Corp. "A" $ 528
 23,200 Comcast Corp. "A" 420
 28,900 DIRECTV "A"* 1,089
 50,860 DISH Network Corp. "A" 1,060
 560 Knology, Inc.* 7
 2,000 Liberty Global, Inc. "A"* 52
 1,800 Mediacom Communications Corp. "A"* 10
 2,400 Outdoor Channel Holdings, Inc.* 14
 700 Scripps Networks Interactive "A" 32
 2,800 Time Warner Cable, Inc. 153
 8,800 Virgin Media, Inc. 142
 ----------
 3,507
 ----------
CASINOS & GAMING (0.0%)
 600 Ameristar Casinos, Inc. 11
 700 Bally Technologies, Inc.* 30
 200 Boyd Gaming Corp.* 3
 1,300 Churchill Downs, Inc. 44
 2,400 International Game Technology 47
 100 Isle Capri Casinos, Inc.* 1
 2,400 Las Vegas Sands Corp.* 56
 1,600 MGM Mirage* 20
 400 Penn National Gaming, Inc.* 10
 400 Pinnacle Entertainment, Inc.* 5
 300 Scientific Games Corp. "A"* 3
 1,720 Shuffle Master, Inc.* 14
 600 WMS Industries, Inc.* 28
 400 Wynn Resorts Ltd. 33
 ----------
 305
 ----------
CATALOG RETAIL (0.0%)
 1,700 HSN, Inc.* 46
 5,100 Liberty Media Corp. Interactive "A"* 66
 ----------
 112
 ----------
COMPUTER & ELECTRONICS RETAIL (0.0%)
 4,100 Best Buy Co., Inc. 173
 1,500 GameStop Corp. "A"* 34
 100 hhgregg, Inc.* 3
 1,100 RadioShack Corp. 23
 1,900 Rent-A-Center, Inc.* 46
 900 Rex Stores Corp.* 16
 ----------
 295
 ----------
CONSUMER ELECTRONICS (0.0%)
 3,400 Garmin Ltd.(a) 114
 3,000 Harman International Industries, Inc.* 97
 600 Universal Electronics, Inc.* 12
 ----------
 223
 ----------
DEPARTMENT STORES (0.4%)
 1,200 Dillard's, Inc. "A" 35
 1,900 J.C. Penney Co., Inc. 52
 37,000 Kohl's Corp.* 1,878
 175,700 Macy's, Inc. 3,902
 20,700 Nordstrom, Inc. 822
 840 Retail Ventures, Inc.* 9
 1,020 Saks, Inc.*(a) 9
 300 Sears Holdings Corp.* 26
 ----------
 6,733
 ----------
DISTRIBUTORS (0.0%)
 100 Audiovox Corp. "A"* 1
 320 Core-Mark Holding Co., Inc.* 9
 1,100 Genuine Parts Co. 45
 900 LKQ Corp.* 16
 ----------
 71
 ----------
EDUCATION SERVICES (0.3%)
 120 American Public Education, Inc.* 5
 18,000 Apollo Group, Inc. "A"* 957
 440 Bridgepoint Education, Inc.* 9
 300 Capella Education Co.* 26
 32,500 Career Education Corp.* 910
 116,200 Corinthian Colleges, Inc.*(a) 1,556
 23,900 DeVry, Inc. 1,374

PORTFOLIO OF INVESTMENTS | 21

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 600 Education Management Corp.* $ 13
 500 Grand Canyon Education, Inc.* 12
 4,500 ITT Educational Services, Inc.* 454
 100 K12, Inc.* 2
 100 Strayer Education, Inc. 24
 640 Universal Technical Institute, Inc.* 16
 ----------
 5,358
 ----------
FOOTWEAR (0.1%)
 1,200 Crocs, Inc.* 12
 200 Deckers Outdoor Corp.* 29
 900 Iconix Brand Group, Inc.* 15
 200 K-Swiss, Inc. "A"* 2
 17,783 NIKE, Inc. "B" 1,287
 17,600 Skechers U.S.A., Inc. "A"* 663
 650 Steven Madden Ltd.* 22
 17,000 Timberland Co. "A"* 327
 700 Wolverine World Wide, Inc. 20
 ----------
 2,377
 ----------
GENERAL MERCHANDISE STORES (0.4%)
 2,004 99 Cents Only Stores* 31
 27,059 Big Lots, Inc.* 956
 900 Dollar General Corp.* 27
 42,406 Dollar Tree, Inc.* 2,654
 34,129 Family Dollar Stores, Inc. 1,391
 4,100 Fred's, Inc. "A" 56
 59,800 Target Corp. 3,261
 920 Tuesday Morning Corp.* 5
 ----------
 8,381
 ----------
HOME FURNISHINGS (0.0%)
 100 Ethan Allen Interiors, Inc. 2
 1,520 Furniture Brands International, Inc.* 12
 24,000 La-Z-Boy, Inc.* 285
 1,439 Leggett & Platt, Inc. 34
 400 Mohawk Industries, Inc.* 22
 3,700 Sealy Corp.* 12
 900 Tempur-Pedic International, Inc.* 30
 ----------
 397
 ----------
HOME IMPROVEMENT RETAIL (0.0%)
 13,500 Home Depot, Inc. 457
 11,700 Lowe's Companies, Inc. 289
 440 Lumber Liquidators Holdings, Inc.* 13
 700 Sherwin-Williams Co. 54
 ----------
 813
 ----------
HOMEBUILDING (0.0%)
 1,240 Beazer Homes USA, Inc.* 6
 240 Cavco Industries, Inc.* 9
 2,100 D.R. Horton, Inc. 25
 1,720 Hovnanian Enterprises, Inc. "A"* 11
 400 KB Home 6
 1,200 Lennar Corp. "A" 21
 100 M.D.C. Holdings, Inc. 3
 600 M/I Homes, Inc.* 7
 200 Meritage Homes Corp.* 4
 2,700 Pulte Homes, Inc.* 30
 600 Ryland Group, Inc. 11
 3,360 Standard Pacific Corp.* 17
 900 Toll Brothers, Inc.* 19
 ----------
 169
 ----------
HOMEFURNISHING RETAIL (0.0%)
 900 Aaron's, Inc. 18
 2,000 Bed Bath & Beyond, Inc.* 90
 600 Haverty Furniture Companies, Inc. 10
 2,960 Pier 1 Imports, Inc.* 23
 15,500 Williams-Sonoma, Inc. 463
 ----------
 604
 ----------
HOTELS, RESORTS, & CRUISE LINES (0.0%)
 660 Ambassadors Group, Inc. 8
 3,400 Carnival Corp. 123
 100 Choice Hotels International, Inc. 3

22 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 600 Gaylord Entertainment Co.* $ 16
 1,200 Hyatt Hotels Corp. "A"* 48
 1,700 Interval Leisure Group, Inc.* 23
 440 Marcus Corp. 5
 2,100 Marriott International, Inc. "A" 70
 100 Morgans Hotel Group Co.* 1
 4,000 Royal Caribbean Cruises Ltd.* 116
 1,400 Starwood Hotels & Resorts Worldwide, Inc. 65
 1,400 Wyndham Worldwide Corp. 33
 ----------
 511
 ----------
HOUSEHOLD APPLIANCES (0.2%)
 920 Helen of Troy Ltd.* 24
 1,833 iRobot Corp.* 39
 1,082 Stanley Black & Decker, Inc. 60
 30,572 Whirlpool Corp. 3,193
 ----------
 3,316
 ----------
HOUSEWARES & SPECIALTIES (0.1%)
 800 American Greetings Corp. "A" 19
 1,700 Blyth, Inc. 84
 1,000 Fortune Brands, Inc. 48
 835 Jarden Corp. 24
 100 National Presto Industries, Inc. 10
 36,300 Newell Rubbermaid, Inc. 605
 2,100 Tupperware Brands Corp. 89
 ----------
 879
 ----------
INTERNET RETAIL (0.1%)
 5,100 Amazon.com, Inc.* 640
 280 Blue Nile, Inc.* 13
 2,960 drugstore.com, Inc.* 10
 28,900 Expedia, Inc. 623
 200 GSI Commerce, Inc.* 6
 500 Netflix, Inc.* 56
 200 NutriSystem, Inc. 4
 1,200 Orbitz Worldwide, Inc.* 6
 496 Overstock.com, Inc.* 11
 760 PetMed Express, Inc. 15
 1,200 Priceline.com, Inc.* 229
 680 Shutterfly, Inc.* 16
 ----------
 1,629
 ----------
LEISURE FACILITIES (0.0%)
 100 International Speedway Corp. "A" 3
 500 Life Time Fitness, Inc.* 18
 500 Vail Resorts, Inc.* 21
 ----------
 42
 ----------
LEISURE PRODUCTS (0.1%)
 1,200 Brunswick Corp. 21
 1,300 Callaway Golf Co. 11
 1,500 Hasbro, Inc. 60
 100 JAKKS Pacific, Inc.* 1
 89,200 Mattel, Inc. 1,932
 1,200 Polaris Industries, Inc. 70
 700 Pool Corp. 17
 680 Rc2 Corp.* 13
 1,960 Smith & Wesson Holding Corp.* 9
 640 Sturm Ruger & Co., Inc. 10
 ----------
 2,144
 ----------

MOTORCYCLE MANUFACTURERS (0.0%)
1,900 Harley-Davidson, Inc. 57 MOVIES & ENTERTAINMENT (0.3%)

 700 Ascent Media Corp.* 19
 200 Cinemark Holdings, Inc. 3
 1,900 CKX, Inc.* 10
 700 DreamWorks Animation SKG, Inc. "A"* 21
13,700 Liberty Media Corp.-Capital "A"* 576
10,897 Live Nation, Inc.* 133
 760 LodgeNet Interactive Corp.* 4
 450 Madison Square Garden, Inc. "A"* 9

PORTFOLIO OF INVESTMENTS | 23

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 183,600 News Corp. "A" $ 2,424
 45,000 News Corp. "B"(a) 691
 500 Regal Entertainment Group "A" 8
 10,700 Viacom, Inc. "A"*(a) 396
 4,400 Viacom, Inc. "B"* 148
 15,070 Walt Disney Co. 504
 200 Warner Music Group Corp.* 1
 1,400 World Wrestling Entertainment, Inc. "A" 23
 ----------
 4,970
 ----------

PHOTOGRAPHIC PRODUCTS (0.0%)
2,420 Eastman Kodak Co.* 14 PUBLISHING (0.2%)

 200 Dolan Co.* 2
 200 E.W. Scripps Co. "A"* 2
 56,900 Gannett Co., Inc. 884
 500 Interactive Data Corp. 16
 654 John Wiley & Sons, Inc. "A" 26
 1,280 Journal Communications, Inc. "A"* 6
 100 Martha Stewart Living Omnimedia, Inc. "A"* 1
 85,856 McGraw-Hill Companies, Inc. 2,387
 500 Meredith Corp. 17
 700 Morningstar, Inc.* 34
 700 New York Times Co. "A"* 6
 100 Scholastic Corp. 3
 700 Valassis Communications, Inc.* 26
 100 Washington Post Co. "B" 47
 ----------
 3,457
 ----------
RESTAURANTS (0.1%)
 880 AFC Enterprises, Inc.* 9
 640 BJ's Restaurants, Inc.* 15
 1,400 Bob Evans Farms, Inc. 41
 600 Brinker International, Inc. 11
 495 Buffalo Wild Wings, Inc.* 18
 700 Burger King Holdings, Inc. 13
 600 California Pizza Kitchen, Inc.* 11
 100 CEC Entertainment, Inc.* 4
 800 Cheesecake Factory, Inc.* 20
 400 Chipotle Mexican Grill, Inc. "A"* 57
 400 Cracker Barrel Old Country Store, Inc. 20
 1,319 Darden Restaurants, Inc. 57
 3,000 Denny's Corp.* 9
 2,620 DineEquity, Inc.* 88
 200 Dominos Pizza, Inc.* 3
 700 Jack in the Box, Inc.* 16
 1,920 Krispy Kreme Doughnuts, Inc.* 7
 8,700 McDonald's Corp. 582
 600 P.F. Chang's China Bistro, Inc. 26
 374 Panera Bread Co. "A"* 30
 200 Papa John's International, Inc.* 5
 400 Peet's Coffee & Tea, Inc.* 16
 480 Red Robin Gourmet Burgers, Inc.* 10
 2,120 Ruby Tuesday, Inc.* 23
 400 Sonic Corp.* 4
 14,100 Starbucks Corp. 365
 360 Texas Roadhouse, Inc. "A"* 5
 9,800 Wendy's/Arby's Group, Inc. "A" 44
 3,800 Yum! Brands, Inc. 156
 ----------
 1,665
 ----------
SPECIALIZED CONSUMER SERVICES (0.2%)
 500 Coinstar, Inc.* 27
 260,200 H&R Block, Inc. 4,184
 1,200 Hillenbrand, Inc. 29
 500 Matthews International Corp. "A" 16

24 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 240 Pre-Paid Legal Services, Inc.* $ 11
 900 Regis Corp. 17
 1,500 Service Corp. International 13
 2,600 Sotheby's Holdings, Inc. "A" 84
 2,720 Stewart Enterprises, Inc. "A" 16
 100 Weight Watchers International, Inc. 3
 ----------
 4,400
 ----------
SPECIALTY STORES (0.0%)
 100 Barnes & Noble, Inc. 2
 680 Big 5 Sporting Goods Corp. 10
 200 Cabela's, Inc.* 4
 15,000 Dick's Sporting Goods, Inc.* 428
 200 Hibbett Sports, Inc.* 5
 500 Jo-Ann Stores, Inc.* 23
 2,000 Office Depot, Inc.* 12
 4,900 OfficeMax, Inc.* 87
 1,100 PetSmart, Inc. 35
 840 Sally Beauty Holdings, Inc.* 8
 5,500 Staples, Inc. 118
 800 Tiffany & Co. 36
 550 Tractor Supply Co. 37
 200 Ulta Salon, Cosmetics & Fragrance, Inc.* 5
 ----------
 810
 ----------

TEXTILES (0.0%)
3,600 Unifi, Inc.* 14 TIRES & RUBBER (0.0%)

9,100 Cooper Tire & Rubber Co. 172
7,900 Goodyear Tire & Rubber Co.* 94
 ----------
 266
 ----------
 Total Consumer Discretionary 76,272
 ----------

CONSUMER STAPLES (2.1%)
AGRICULTURAL PRODUCTS (0.0%)

4,941 Archer-Daniels-Midland Co. 125
4,100 Bunge Ltd. 200
 400 Corn Products International, Inc. 13
 800 Darling International, Inc.* 6
1,320 Fresh Del Monte Produce, Inc.* 27
 ----------
 371
 ----------

BREWERS (0.0%)
1,000 Molson Coors Brewing Co. "B" 41 DISTILLERS & VINTNERS (0.0%)

 1,059 Brown-Forman Corp. "B" 59
 400 Central European Distribution Corp.* 10
 1,400 Constellation Brands, Inc. "A"* 23
 ----------
 92
 ----------
DRUG RETAIL (0.0%)
 11,300 CVS Caremark Corp. 391
 11,500 Rite Aid Corp.* 13
 7,700 Walgreen Co. 247
 ----------
 651
 ----------
FOOD DISTRIBUTORS (0.0%)
 622 Andersons, Inc. 20
 547 Nash Finch Co. 20
 100 Spartan Stores, Inc. 1
 4,600 Sysco Corp. 137
 500 United Natural Foods,
 Inc.* 16
 ----------
 194
 ----------
FOOD RETAIL (0.0%)
 200 Arden Group, Inc. "A" 18
 800 Casey's General Stores, Inc. 29
 200 Great Atlantic & Pacific Tea Company, Inc.* 1

PORTFOLIO OF INVESTMENTS | 25

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 100 Ingles Markets, Inc."A" $ 2
 5,000 Kroger Co. 101
 1,120 Pantry, Inc.* 17
 700 Ruddick Corp. 23
 3,047 Safeway, Inc. 67
 7,700 SUPERVALU, Inc. 104
 880 Susser Holdings Corp.* 9
 200 Village Super Market, Inc."A" 5
 590 Weis Markets, Inc. 20
 1,200 Whole Foods Market, Inc.* 49
 16,000 Winn Dixie Stores, Inc.* 179
 ----------
 624
 ----------
HOUSEHOLD PRODUCTS (0.3%)
 2,040 Central Garden & Pet Co."A"* 19
 400 Church & Dwight Co., Inc. 26
 1,100 Clorox Co. 69
 12,300 Colgate-Palmolive Co. 961
 400 Energizer Holdings, Inc.* 23
 52,781 Kimberly-Clark Corp. 3,204
 24,200 Procter & Gamble Co. 1,478
 500 WD-40 Co. 16
 ----------
 5,796
 ----------
HYPERMARKETS & SUPER CENTERS (0.1%)
 300 BJ's Wholesale Club, Inc.* 12
 3,300 Costco Wholesale Corp. 192
 100 PriceSmart, Inc. 2
 16,900 Wal-Mart Stores, Inc. 855
 ----------
 1,061
 ----------
PACKAGED FOODS & MEAT (0.6%)
 280 American Dairy, Inc.* 5
 400 American Italian Pasta Co.* 16
 920 B&G Foods, Inc."A" 10
 100 Cal-Maine Foods, Inc. 3
 360 Calavo Growers, Inc. 6
 1,400 Campbell Soup Co. 50
 900 Chiquita Brands International, Inc.* 11
 44,600 ConAgra Foods, Inc. 1,078
 1,700 Dean Foods Co.* 18
 62,488 Del Monte Foods Co. 911
 520 Diamond Foods, Inc. 22
 1,160 Dole Food Co., Inc.* 11
 400 Flowers Foods, Inc. 10
 2,800 General Mills, Inc. 199
 1,200 Green Mountain Coffee Roasters, Inc.* 28
 2,650 H.J.Heinz Co. 117
 300 Hain Celestial Group, Inc.* 6
 68,040 Hershey Co. 3,184
 800 Hormel Foods Corp. 32
 400 Imperial Sugar Co. 4
 1,200 J & J Snack Foods Corp. 53
 800 J.M.Smucker Co. 44
 2,200 Kellogg Co. 118
 13,300 Kraft Foods, Inc."A" 380
 1,400 Lancaster Colony Corp. 77
 1,100 Lance, Inc. 21
 900 McCormick & Co., Inc. 35
 43,470 Mead Johnson Nutrition Co. 2,144
 300 Ralcorp Holdings, Inc.* 18
 400 Sanderson Farms, Inc. 22
 81,200 Sara Lee Corp. 1,151
 2,120 Smart Balance, Inc.* 13
 1,300 Smithfield Foods, Inc.* 22
 100 Synutra International, Inc.* 2
 460 Tootsie Roll Industries, Inc. 12
 500 TreeHouse Foods, Inc.* 23
 50,800 Tyson Foods, Inc."A" 893
 720 Zhongpin, Inc.* 9
 ----------
 10,758
 ----------
PERSONAL PRODUCTS (0.6%)
 1,000 Alberto-Culver Co. 28
 2,120 American Oriental Bioengineering, Inc.* 7
 3,300 Avon Products, Inc. 87

26 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 800 China Sky One Medical, Inc.* $ 10
 639 Elizabeth Arden, Inc.* 11
 146,500 Estee Lauder Companies, Inc. "A" 8,537
 1,737 Herbalife Ltd. 78
 47,900 NBTY, Inc.* 1,640
 700 Nu Skin Enterprises, Inc. "A" 20
 1,120 Prestige Brands Holdings, Inc.* 9
 1,100 Revlon, Inc. "A"* 15
 ----------
 10,442
 ----------
SOFT DRINKS (0.3%)
 120 Coca-Cola Bottling Co. Consolidated 6
 61,900 Coca-Cola Co. 3,182
 50,300 Coca-Cola Enterprises, Inc. 1,313
 2,100 Dr. Pepper Snapple Group, Inc. 79
 700 Hansen Natural Corp.* 27
 21,986 PepsiCo, Inc. 1,383
 ----------
 5,990
 ----------
TOBACCO (0.2%)
 3,500 Alliance One International, Inc.* 15
 16,200 Altria Group, Inc. 329
 32,960 Lorillard, Inc. 2,356
 36,300 Philip Morris International, Inc. 1,601
 1,300 Reynolds American, Inc. 68
 500 Universal Corp. 20
 300 Vector Group Ltd. 5
 ----------
 4,394
 ----------
 Total Consumer Staples 40,414
 ----------

ENERGY (2.0%)
COAL & CONSUMABLE FUELS (0.0%)

 990 Alpha Natural Resources, Inc.* 38
 1,200 Arch Coal, Inc. 26
 2,100 CONSOL Energy, Inc. 77
 3,000 International Coal Group, Inc.* 13
 1,000 James River Coal Co.* 16
 1,000 Massey Energy Co. 33
 900 Patriot Coal Corp.* 15
 2,200 Peabody Energy Corp. 86
 3,480 USEC, Inc.* 18
 ----------
 322
 ----------
INTEGRATED OIL & GAS (1.4%)
 44,017 Chevron Corp. 3,251
 87,960 ConocoPhillips 4,561
 147,400 Exxon Mobil Corp. 8,912
 108,400 Hess Corp. 5,767
 75,460 Marathon Oil Corp. 2,346
 1,345 Murphy Oil Corp. 72
 19,400 Occidental Petroleum Corp. 1,601
 ----------
 26,510
 ----------
OIL & GAS DRILLING (0.1%)
 300 Atwood Oceanics, Inc.* 8
 6,600 Diamond Offshore Drilling, Inc.(a) 417
 700 Helmerich & Payne, Inc. 26
 3,600 Hercules Offshore, Inc.* 11
 2,200 Nabors Industries Ltd.* 42
 36,029 Noble Corp.* 1,047
 3,080 Parker Drilling Co.* 15
 900 Patterson-UTI Energy, Inc. 13
 2,928 Pioneer Drilling Co.* 17
 1,300 Pride International, Inc.* 32
 5,200 Rowan Companies, Inc.* 129
 200 Unit Corp.* 8
 ----------
 1,765
 ----------
OIL & GAS EQUIPMENT & SERVICES (0.1%)
 1,920 Allis-Chalmers Energy, Inc.* 6
 3,280 Baker Hughes, Inc. 125
 500 Bristow Group, Inc.* 16
 300 Cal Dive International, Inc.* 2

PORTFOLIO OF INVESTMENTS | 27

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 1,800 Cameron International Corp.* $ 65
 400 CARBO Ceramics, Inc. 26
 1,780 Complete Production Services, Inc.* 23
 240 Dawson Geophysical Co.* 5
 1,504 Dresser-Rand Group, Inc.* 48
 500 Dril-Quip, Inc.* 24
 300 Exterran Holdings, Inc.* 8
 6,800 FMC Technologies, Inc.* 395
 2,969 Global Industries Ltd.* 16
 440 Gulf Island Fabrication, Inc. 8
 700 Gulfmark Offshore, Inc.* 18
 7,100 Halliburton Co. 176
 8,400 Helix Energy Solutions Group, Inc.* 92
 100 Hornbeck Offshore Services, Inc.* 2
 3,280 ION Geophysical Corp.* 18
 4,000 Key Energy Services, Inc.* 38
 300 Lufkin Industries, Inc. 24
 840 Matrix Service Co.* 8
 6,600 National-Oilwell Varco, Inc. 252
 520 Natural Gas Services Group, Inc.* 8
 2,920 Newpark Resources, Inc.* 19
 500 Oceaneering International, Inc.* 23
 300 Oil States International, Inc.* 12
 160 OYO Geospace Corp.* 7
 418 PHI, Inc.* 7
 100 RPC, Inc. 1
 8,500 Schlumberger Ltd. 477
 205 Seacor Holdings, Inc.* 15
 1,700 Smith International, Inc. 64
 500 Superior Energy Services, Inc.* 11
 480 Superior Well Services, Inc.* 7
 400 T-3 Energy Services, Inc.* 11
 600 TETRA Technologies, Inc.* 6
 500 Tidewater, Inc. 21
 200 Willbros Group, Inc.* 2
 ----------
 2,086
 ----------
OIL & GAS EXPLORATION & PRODUCTION (0.3%)
 4,000 Anadarko Petroleum Corp. 209
 2,700 Apache Corp. 242
 320 Apco Oil and Gas International, Inc. 9
 600 Arena Resources, Inc.* 20
 2,000 Atlas Energy, Inc.* 62
 1,300 ATP Oil & Gas Corp.* 14
 600 Berry Petroleum Co. "A" 18
 600 Bill Barrett Corp.* 20
 3,160 BPZ Resources, Inc.* 16
 6,900 Brigham Exploration Co.* 119
 700 Cabot Oil & Gas Corp. 24
 100 Carrizo Oil & Gas, Inc.* 2
 4,900 Chesapeake Energy Corp. 110
 34,200 Cimarex Energy Co. 2,513
 400 Clayton Williams Energy, Inc.* 18
 2,100 Cobalt International Energy, Inc.* 15
 400 Comstock Resources, Inc.* 12
 500 Concho Resources, Inc.* 26
 700 Contango Oil & Gas Co.* 35
 6,600 Continental Resources, Inc.* 311
 3,072 Denbury Resources, Inc.* 51
 3,500 Devon Energy Corp. 224
 2,100 EOG Resources, Inc. 220
 900 EXCO Resources, Inc. 16
 800 Forest Oil Corp.* 21

28 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 1,120 GMX Resources, Inc.* $ 8
 6,600 Gran Tierra Energy, Inc.* 35
 880 Gulfport Energy Corp.* 12
 1,080 Harvest Natural Resources, Inc.* 8
 1,000 Mariner Energy, Inc.* 21
 660 McMoRan Exploration Co.* 7
 1,100 Newfield Exploration Co.* 57
 1,200 Noble Energy, Inc. 71
 1,240 Northern Oil and Gas, Inc.* 18
 360 Panhandle Oil & Gas, Inc. "A" 9
 600 Penn Virginia Corp. 13
 2,400 Petrohawk Energy Corp.* 46
 600 Petroleum Development Corp.* 12
 1,200 PetroQuest Energy, Inc.* 8
 1,000 Pioneer Natural Resources Co. 64
 1,000 Plains Exploration & Production Co.* 22
 800 Quicksilver Resources, Inc.* 10
 1,300 Range Resources Corp. 58
 680 Rex Energy Corp.* 7
 700 Rosetta Resources, Inc.* 15
 1,000 SandRidge Energy, Inc.*(a) 6
 2,800 Southwestern Energy Co.* 105
 300 St. Mary Land & Exploration, Co. 13
 320 Stone Energy Corp.* 4
 600 Swift Energy Co.* 17
 720 Toreador Resources Corp.* 5
 1,920 VAALCO Energy, Inc. 10
 100 Venoco, Inc.* 1
 200 W&T Offshore, Inc. 2
 300 Whiting Petroleum Corp.* 25
 4,300 XTO Energy, Inc. 184
 ----------
 5,200
 ----------
OIL & GAS REFINING & MARKETING (0.0%)
 600 Clean Energy Fuels Corp.* 9
 100 CVR Energy, Inc.* 1
 600 Frontier Oil Corp. 8
 200 Holly Corp. 5
 800 Sunoco, Inc. 24
 4,100 Tesoro Corp. 48
 4,500 Valero Energy Corp. 84
 1,280 Western Refining, Inc.* 7
 1,000 World Fuel Services Corp. 26
 ----------
 212
 ----------
OIL & GAS STORAGE & TRANSPORTATION (0.1%)
 25,345 Crosstex Energy, Inc.* 171
 5,700 El Paso Corp. 65
 11,500 Enterprise Products Partners, LP 386
 1,086 Golar LNG Ltd.* 13
 560 Knightsbridge Tankers Ltd. 10
 300 Overseas Shipholding Group, Inc. 12
 700 Southern Union Co. 15
 5,000 Spectra Energy Corp. 100
 93,981 Williams Companies, Inc. 1,856
 ----------
 2,628
 ----------
 Total Energy 38,723
 ----------

FINANCIALS (3.0%)
ASSET MANAGEMENT & CUSTODY BANKS (0.2%)

 200 Affiliated Managers Group, Inc.* 14
9,054 American Capital Ltd.* 48
2,000 Ameriprise Financial, Inc. 80
5,478 Apollo Investment Corp. 57
6,093 Ares Capital Corp. 83
9,200 Bank of New York Mellon Corp. 250

PORTFOLIO OF INVESTMENTS | 29

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 700 BlackRock, Inc. "A" $ 118
 37,300 Blackstone Group LP 397
 640 Calamos Asset Management, Inc. "A" 7
 120 Capital Southwest Corp. 11
 100 Cohen & Steers, Inc. 2
 200 Diamond Hill Investment Group, Inc. 13
 6,300 Eaton Vance Corp. 188
 5,400 Federated Investors, Inc. "B" 120
 9,700 Franklin Resources, Inc. 951
 200 GAMCO Investors, Inc. "A" 8
 680 Gladstone Capital Corp. 8
 5,000 GLG Partners, Inc.*(a) 21
 1,251 Hercules Technology Growth Capital, Inc. 11
 3,500 Invesco Ltd. ADR 65
 1,300 Janus Capital Group, Inc. 14
 1,100 Legg Mason, Inc. 33
 2,160 MCG Capital Corp. 12
 680 MVC Capital, Inc. 9
 1,723 NGP Capital Resources Co. 13
 1,800 Northern Trust Corp. 91
 772 PennantPark Investment Corp. 8
 680 Penson Worldwide, Inc.* 5
 1,720 Prospect Capital Corp. 18
 640 Safeguard Scientifics, Inc.* 7
 800 SEI Investments Co. 17
 3,860 State Street Corp. 147
 9,900 T. Rowe Price Group, Inc. 490
 475 Virtus Investments Partners, Inc.* 11
 9,100 Waddell & Reed Financial, Inc. "A" 244
 240 Westwood Holdings Group, Inc. 9
 ----------
 3,580
 ----------
CONSUMER FINANCE (0.4%)
 1,560 Advance America, Cash Advance Centers, Inc. 8
 155,087 American Express Co. 6,183
 900 AmeriCredit Corp.* 19
 21,600 Capital One Financial Corp. 892
 800 Cash America International, Inc. 30
 200 Credit Acceptance Corp.* 10
 4,200 Discover Financial Services 56
 760 Dollar Financial Corp.* 15
 600 EZCORP, Inc. "A"* 11
 800 First Cash Financial Services, Inc.* 17
 100 Nelnet, Inc. "A" 2
 3,800 SLM Corp.* 42
 520 World Acceptance Corp.* 19
 ----------
 7,304
 ----------
DIVERSIFIED BANKS (0.6%)
 1,200 Comerica, Inc. 46
 38,800 U.S. Bancorp 929
 347,894 Wells Fargo & Co. 9,981
 ----------
 10,956
 ----------
INSURANCE BROKERS (0.0%)
 2,300 Aon Corp. 91
 913 Arthur J. Gallagher & Co. 23
 800 Brown & Brown, Inc. 16
 700 eHealth, Inc.* 9
 4,000 Marsh & McLennan Companies, Inc. 87
 1,240 National Financial Partners Corp.* 17
 ----------
 243
 ----------
INVESTMENT BANKING & BROKERAGE (0.2%)
 1,520 BGC Partners, Inc. "A" 9
 7,600 Charles Schwab Corp. 124
 520 Duff & Phelps Corp. "A" 7
 344 Evercore Partners, Inc. "A" 11

30 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 2,040 GFI Group, Inc. $ 12
 2,080 Gleacher & Co., Inc.* 8
 26,728 Goldman Sachs Group, Inc. 3,856
 400 Greenhill & Co., Inc. 28
 408 International Assets Holding Corp.* 7
 800 Investment Technology Group, Inc.* 14
 800 Jefferies Group, Inc. 19
 535 KBW, Inc.* 13
 1,600 Knight Capital Group, Inc. "A"* 23
 1,880 LaBranche & Co., Inc.* 8
 2,960 MF Global Holdings Ltd.* 23
 10,800 Morgan Stanley 293
 300 optionsXpress Holdings, Inc.* 5
 1,000 Piper Jaffray Co., Inc.* 33
 800 Raymond James Financial, Inc. 23
 500 Stifel Financial Corp.* 25
 800 SWS Group, Inc. 8
 2,000 TD Ameritrade Holding Corp.* 35
 1,080 TradeStation Group, Inc.* 8
 ----------
 4,592
 ----------
LIFE & HEALTH INSURANCE (0.4%)
 86,658 AFLAC, Inc. 3,839
 1,040 American Equity Investment Life Insurance Co. 10
 938 Citizens, Inc.* 6
 840 CNO Financial Group, Inc.* 5
 700 Delphi Financial Group, Inc. "A" 18
 2,400 Lincoln National Corp. 63
 4,600 MetLife, Inc. 186
 200 National Western Life Insurance Co. "A" 33
 3,760 Phoenix Companies, Inc.* 11
 526 Presidential Life Corp. 6
 34,700 Principal Financial Group, Inc. 943
 800 Protective Life Corp. 17
 45,890 Prudential Financial, Inc. 2,648
 505 StanCorp Financial Group, Inc. 22
 1,200 Torchmark Corp. 62
 3,800 Unum Group 88
 ----------
 7,957
 ----------
MULTI-LINE INSURANCE (0.3%)
 500 American Financial Group, Inc. 14
 10,695 American International Group, Inc.*(a) 379
 1,900 American National Insurance Co. 198
 40,000 Assurant, Inc. 1,388
 208,000 Genworth Financial, Inc. "A"* 3,243
 5,400 Hartford Financial Services Group, Inc. 135
 1,100 HCC Insurance Holdings, Inc. 28
 1,320 Horace Mann Educators Corp. 20
 2,410 Loews Corp. 78
 600 Unitrin, Inc. 16
 ----------
 5,499
 ----------
MULTI-SECTOR HOLDINGS (0.0%)
 3,000 Compass Diversified Holdings 43
 1,300 Leucadia National Corp.* 29
 600 PICO Holdings, Inc.* 20
 ----------
 92
 ----------
OTHER DIVERSIFIED FINANCIAL SERVICES (0.4%)
 117,596 Bank of America Corp. 1,851
 537,000 Citigroup, Inc.* 2,127
 80,726 JPMorgan Chase & Co. 3,195
 ----------
 7,173
 ----------

PORTFOLIO OF INVESTMENTS | 31

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

PROPERTY & CASUALTY INSURANCE (0.1%)
 23,600 Allstate Corp. $ 723
 8,000 Ambac Financial Group, Inc.*(a) 10
 292 American Physicians Capital, Inc. 9
 520 American Safety Insurance Holdings Ltd.* 8
 600 Amerisafe, Inc.* 10
 4,900 Assured Guaranty Ltd. 82
 4,300 AXIS Capital Holdings Ltd. 131
 618 Baldwin & Lyons, Inc."B" 14
 2,900 Chubb Corp. 146
 1,200 Cincinnati Financial Corp. 33
 500 CNA Financial Corp.* 13
 900 Donegal Group, Inc."A" 12
 1,482 Employers Holdings, Inc. 24
 2,800 Erie Indemnity Co."A" 128
 1,600 Fidelity National Financial, Inc."A" 23
 1,493 First American Corp. 51
 1,100 First Mercury Financial Corp. 13
 420 FPIC Insurance Group, Inc.* 11
 800 Hanover Insurance Group, Inc. 35
 500 Harleysville Group, Inc. 16
 200 Hilltop Holdings, Inc.* 2
 500 Infinity Property & Casualty Corp. 23
 4,500 MBIA, Inc.* 34
 1,876 Meadowbrook Insurance Group, Inc. 16
 100 Mercury General Corp. 4
 1,200 Navigators Group, Inc.* 49
 280 NYMAGIC, Inc. 6
 1,700 Old Republic International Corp. 24
 700 OneBeacon Insurance Group Ltd."A" 10
 1,040 PMA Capital Corp. "A"* 7
 500 ProAssurance Corp.* 29
 5,400 Progressive Corp. 106
 400 RLI Corp. 22
 601 Safety Insurance Group, Inc. 22
 720 SeaBright Insurance Holdings, Inc. 7
 4,850 Selective Insurance Group, Inc. 76
 1,457 State Auto Financial Corp. 26
 560 Stewart Information Services Corp. 6
 302 Tower Group, Inc. 7
 15,200 Travelers Companies, Inc. 752
 800 United Fire & Casualty Co. 17
 1,200 W.R. Berkley Corp. 33
 200 White Mountains Insurance Group Ltd. 65
 ----------
 2,835
 ----------
 REGIONAL BANKS (0.2%)
 900 1st Source Corp. 17
 288 Arrow Financial Corp. 7
 1,200 Associated Banc Corp. 16
 700 BancFirst Corp. 28
 1,037 BancorpSouth, Inc. 20
 500 Bank of Hawaii Corp. 24
 500 Bank of the Ozarks, Inc. 18
 5,300 BB&T Corp. 160
 400 BOK Financial Corp. 20
 2,200 Boston Private Financial Holdings, Inc. 16
 240 Camden National Corp. 8
 388 Capital City Bank Group, Inc. 6
 7,300 CapitalSource, Inc. 33
 960 Cardinal Financial Corp. 10
 618 Cathay General Bancorp 7
 590 CenterState Banks of Florida, Inc. 7

32 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 1,300 Chemical Financial Corp. $ 32
 500 City Holding Co. 16
 200 City National Corp. 12
 960 Cobiz Financial, Inc. 6
 880 Columbia Banking System, Inc. 20
 300 Commerce Bancshares, Inc. 11
 600 Community Bank System, Inc. 14
 600 Community Trust Bancorp, Inc. 16
 705 Cullen/Frost Bankers, Inc. 39
 1,500 CVB Financial Corp. 15
 680 Danvers Bancorp, Inc. 11
 1,435 East West Bancorp, Inc. 24
 7,600 F.N.B. Corp. 62
 21,500 Fifth Third Bancorp 279
 458 First Bancorp 7
 1,280 First Busey Corp. 6
 1,056 First Citizens BancShares, Inc. "A" 211
 2,734 First Commonwealth Financial Corp. 14
 458 First Community Bancshares, Inc. 7
 3,500 First Financial Bancorp 56
 1,150 First Financial Bankshares, Inc. 58
 1,100 First Financial Corp. 31
 1,440 First Horizon National Corp.* 18
 1,915 First Midwest Bancorp, Inc. 27
 920 Firstmerit Corp. 17
 14,700 Fulton Financial Corp. 146
 800 Glacier Bancorp, Inc. 13
 600 Great Southern Bancorp, Inc. 15
 500 Hancock Holding Co. 19
 411 Heartland Financial USA, Inc. 7
 1,426 Home BancShares, Inc. 34
 9,000 Huntington Bancshares, Inc. 55
 400 IBERIABANK Corp. 22
 680 Independent Bank Corp. 16
 1,900 International Bancshares Corp. 38
 300 Investors Bancorp, Inc.* 4
 7,100 KeyCorp 57
 1,000 Lakeland Bancorp, Inc. 10
 440 Lakeland Financial Corp. 9
 800 M&T Bank Corp. 63
 1,200 MainSource Financial Group, Inc. 10
 3,900 Marshall & Ilsley Corp. 32
 2,000 MB Financial, Inc. 44
 1,040 Nara Bancorp, Inc.* 8
 3,000 National Penn Bancshares, Inc. 21
 3,100 NBT Bancorp, Inc. 68
 700 Northfield Bancorp, Inc. 10
 1,100 Old National Bancorp 13
 1,400 Pacific Continental Corp. 16
 200 Pacwest Bancorp 4
 391 Park National Corp. 25
 800 Pinnacle Financial Partners, Inc.* 11
 4,100 PNC Financial Services Group, Inc. 257
 4,000 PrivateBancorp, Inc. 53
 600 Prosperity Bancshares, Inc. 22
 9,625 Regions Financial Corp. 73
 720 Renasant Corp. 10
 5,200 S&T Bancorp, Inc. 112
 400 S.Y. Bancorp, Inc. 9
 520 Sandy Spring Bancorp, Inc. 8
 440 SCBT Financial Corp. 16
 600 Signature Bank* 23
 480 Simmons First National Corp. "A" 13
 500 Southside Bancshares, Inc. 10
 800 StellarOne Corp. 11

PORTFOLIO OF INVESTMENTS | 33

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 2,760 Sterling Bancshares, Inc. $ 15
 320 Suffolk Bancorp 10
 4,000 SunTrust Banks, Inc. 108
 3,440 Susquehanna Bancshares, Inc. 30
 600 SVB Financial Group* 27
 11,600 Synovus Financial Corp. 34
 900 TCF Financial Corp. 15
 1,160 Texas Capital Bancshares, Inc.* 21
 560 Tompkins Financial Corp. 22
 680 TowneBank 10
 480 TriCo Bancshares 9
 800 Trustmark Corp. 18
 500 UMB Financial Corp. 19
 5,970 Umpqua Holdings Corp. 75
 800 Union First Market Bankshares 12
 8,100 United Bankshares, Inc. 218
 2,547 United Community Banks, Inc.* 12
 640 Univest Corp. 12
 1,370 Valley National Bancorp 20
 955 Washington Trust Bancorp, Inc. 17
 800 Webster Financial Corp. 15
 1,100 WesBanco, Inc. 21
 900 Westamerica Bancorp 50
 1,486 Western Alliance Bancorp.* 12
 600 Whitney Holding Corp. 7
 500 Wilmington Trust Corp. 8
 640 Wilshire Bancorp, Inc. 7
 700 Wintrust Financial Corp. 25
 1,200 Zions Bancorp 29
 ----------
 3,671
 ----------
REINSURANCE (0.1%)
 1,520 Alterra Capital Holdings Ltd. 28
 1,400 Arch Capital Group Ltd.* 103
 5,500 Endurance Specialty Holdings Ltd. 204
 1,800 Everest Re Group Ltd. 131
 1,600 Maiden Holdings Ltd. 11
 2,500 PartnerRe Ltd. 182
 1,680 Platinum Underwriters Holdings Ltd. 62
 400 Reinsurance Group of America, Inc. "A" 19
 1,900 RenaissanceRe Holdings Ltd. 103
 400 Transatlantic Holdings, Inc. 19
 2,800 Validus Holdings Ltd. 69
 ----------
 931
 ----------
SPECIALIZED FINANCE (0.1%)
 400 CME Group, Inc. 127
 440 Encore Capital Group, Inc.* 9
 1,000 Interactive Brokers Group, Inc. "A"* 17
 800 IntercontinentalExchange, Inc.* 93
 1,000 MarketAxess Holdings, Inc. 15
 62,200 Moody's Corp. 1,275
 1,325 MSCI, Inc. "A"* 39
 900 NASDAQ OMX Group, Inc.* 17
 840 Newstar Financial, Inc.* 6
 5,600 NYSE Euronext 160
 3,400 PHH Corp.* 75
 400 Portfolio Recovery Associates, Inc.* 27
 ----------
 1,860
 ----------
THRIFTS & MORTGAGE FINANCE (0.0%)
 760 Abington Bancorp, Inc. 7
 1,000 Astoria Financial Corp. 15
 1,800 Bank Mutual Corp. 12
 680 BankFinancial Corp. 6
 760 Beneficial Mutual Bancorp, Inc.* 8
 440 Berkshire Hills Bancorp, Inc. 8

34 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 800 Brookline Bancorp, Inc. $ 8
 520 Clifton Savings Bancorp, Inc. 5
 200 Dime Community Bancorp, Inc. 3
 1,200 Essa Bancorp, Inc. 15
 520 First Financial Holdings, Inc. 7
 2,003 First Niagara Financial Group, Inc. 26
 1,000 Flushing Financial Corp. 14
 520 Home Federal Bancorp, Inc. 8
 4,300 Hudson City Bancorp, Inc. 54
 2,258 Kearny Financial Corp. 20
 43,500 MGIC Investment Corp.*(a) 407
 3,100 New York Community Bancorp, Inc. 50
 1,312 NewAlliance Bancshares, Inc. 15
 1,450 Northwest Bancshares, Inc. 17
 560 OceanFirst Financial Corp. 7
 484 Ocwen Financial Corp.* 6
 2,900 People's United Financial, Inc. 41
 2,400 PMI Group, Inc.* 11
 440 Provident Financial Services, Inc. 5
 1,104 Provident New York Bancorp 10
 700 Radian Group, Inc. 7
 1,200 Rockville Financial, Inc. 14
 400 TFS Financial Corp. 5
 9,950 TrustCo Bank Corp. NY 62
 520 United Financial Bancorp, Inc. 7
 900 ViewPoint Financial Group 14
 700 Washington Federal, Inc. 12
 760 Westfield Financial, Inc. 6
 200 WSFS Financial Corp. 8
 ----------
 920
 ----------
 Total Financials 57,613
 ----------

HEALTH CARE (3.4%)
BIOTECHNOLOGY (0.9%)

 500 Acorda Therapeutics, Inc.* 17
 440 Affymax, Inc.* 10
 4,300 Alexion Pharmaceuticals, Inc.* 215
 2,700 Alkermes, Inc.* 31
 600 Allos Therapeutics, Inc.* 4
 1,309 Alnylam Pharmaceuticals, Inc.* 21
 400 AMAG Pharmaceuticals, Inc.* 13
 76,300 Amgen, Inc.* 3,951
 1,100 Amylin Pharmaceuticals, Inc.* 18
 3,000 Arena Pharmaceuticals, Inc.* 9
 3,400 ARIAD Pharmaceuticals, Inc.* 13
 1,440 ArQule, Inc.* 9
 2,200 Biogen Idec, Inc.* 104
 600 BioMarin Pharmaceutical, Inc.* 12
 7,200 Celera Corp.* 51
 4,100 Celgene Corp.* 216
144,527 Cephalon, Inc.* 8,507
 800 Cepheid* 14
 390 Clinical Data, Inc.* 6
 800 Cubist Pharmaceuticals, Inc.* 17
 1,520 Cytokinetics, Inc.* 4
 920 Cytori Therapeutics, Inc.* 4
 1,000 Dendreon Corp.* 43
 2,360 Dyax Corp.* 6
 100 Emergent BioSolutions, Inc.* 2
 1,494 Enzon Pharmaceuticals, Inc.* 16
 5,280 Exelixis, Inc.* 27

PORTFOLIO OF INVESTMENTS | 35

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 1,400 Genomic Health, Inc.* $ 21
 2,300 Genzyme Corp.* 112
 800 Geron Corp.* 4
 90,200 Gilead Sciences, Inc.* 3,240
 500 Halozyme Therapeutics, Inc.* 4
 1,800 Human Genome Sciences, Inc.* 45
 1,909 Immunogen, Inc.* 17
 2,200 Immunomedics, Inc.* 8
 10,400 Incyte Corp.* 134
 1,200 InterMune, Inc.* 11
 1,200 Isis Pharmaceuticals, Inc.* 11
 3,720 Ligand Pharmaceuticals, Inc. "B"* 6
 500 Mannkind Corp.* 3
 1,300 Martek Biosciences Corp.* 24
 2,200 Maxygen, Inc.* 14
 100 Medivation, Inc.* 1
 680 Metabolix, Inc.* 10
 1,360 Momenta Pharmaceuticals, Inc.* 18
 1,100 Myriad Genetics, Inc.* 20
 1,760 Nabi Biopharmaceuticals* 10
 1,640 NPS Pharmaceuticals, Inc.* 11
 800 Onyx Pharmaceuticals, Inc.* 18
 2,300 Orexigen Therapeutics, Inc.* 12
 600 OSI Pharmaceuticals, Inc.* 34
 1,248 PDL BioPharma, Inc. 7
 720 Pharmasset, Inc.* 21
 700 Regeneron Pharmaceuticals, Inc.* 20
 400 Rigel Pharmaceuticals, Inc.* 3
 1,440 Sangamo Biosciences, Inc.* 6
 480 Savient Pharmaceuticals, Inc.* 6
 2,200 Seattle Genetics, Inc.* 29
 1,500 Talecris Biotherapeutics Holdings Corp.* 25
 540 Theravance, Inc.* 7
 400 United Therapeutics Corp.* 20
 1,400 Vertex Pharmaceuticals, Inc.* 48
 3,500 Vical, Inc.* 12
 1,200 ZymoGenetics, Inc.* 6
 ----------
 17,338
 ----------
HEALTH CARE DISTRIBUTORS (0.1%)
 2,100 AmerisourceBergen Corp. 66
 2,700 Cardinal Health, Inc. 93
 440 Chindex International, Inc.* 5
 1,000 Henry Schein, Inc.* 56
 28,100 McKesson Corp. 1,967
 360 MWI Veterinary Supply, Inc.* 18
 2,450 Owens & Minor, Inc. 73
 600 Patterson Companies, Inc. 18
 200 PharMerica Corp.* 3
 900 PSS World Medical, Inc.* 21
 ----------
 2,320
 ----------
HEALTH CARE EQUIPMENT (0.4%)
 714 Abaxis, Inc.* 16
 760 ABIOMED, Inc.* 7
 1,280 Accuray, Inc.* 8
 1,080 Alphatec Holdings, Inc.* 6
 1,000 American Medical Systems Holdings, Inc.* 23
 80 Analogic Corp. 3
 840 AngioDynamics, Inc.* 12
 200 ArthroCare Corp.* 6
 4,700 Baxter International, Inc. 198
 600 Beckman Coulter, Inc. 34
 2,200 Becton, Dickinson and Co. 157

36 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 11,489 Boston Scientific Corp.* $ 70
 900 C.R. Bard, Inc. 73
 440 Cantel Medical Corp. 8
 5,500 CareFusion Corp.* 140
 1,000 Conceptus, Inc.* 17
 200 CONMED Corp.* 4
 2,100 CryoLife, Inc.* 11
 920 Cyberonics, Inc.* 16
 1,520 DexCom, Inc.* 16
 2,400 Edwards Lifesciences Corp.* 121
 3,000 ev3, Inc.* 57
 700 Exactech, Inc.* 12
 200 Gen-Probe, Inc.* 9
 2,700 Greatbatch, Inc.* 57
 600 Hill-Rom Holdings, Inc. 17
 69,100 Hologic, Inc.* 1,030
 9,900 Hospira, Inc.* 515
 390 IDEXX Laboratories, Inc.* 25
 920 Insulet Corp.* 13
 120 Integra LifeSciences Holdings Corp.* 5
 200 Intuitive Surgical, Inc.* 65
 600 Invacare Corp. 14
 1,400 IRIS International, Inc.* 15
 280 Kensey Nash Corp.* 6
 3,900 Kinetic Concepts, Inc.* 161
 800 Masimo Corp. 18
 59,400 Medtronic, Inc. 2,327
 480 Micrus Endovascular Corp.* 8
 920 Natus Medical, Inc.* 15
 700 NuVasive, Inc.* 28
 800 NxStage Medical, Inc.* 11
 2,400 Orthovita, Inc.* 7
 560 Palomar Medical Technologies, Inc.* 6
 600 ResMed, Inc.* 38
 900 Sirona Dental Systems, Inc.* 32
 440 Somanetics Corp.* 8
 560 SonoSite, Inc.* 16
 1,080 Spectranetics Corp.* 6
 2,600 St. Jude Medical, Inc.* 97
 920 Stereotaxis, Inc.* 3
 900 Steris Corp. 29
 4,900 Stryker Corp. 260
 538 SurModics, Inc.* 9
 1,160 Symmetry Medical, Inc.* 13
 900 Synovis Life Technologies, Inc.* 13
 200 Teleflex, Inc. 11
 1,200 Thoratec Corp.* 53
 1,480 TomoTherapy, Inc.* 5
 21,700 Varian Medical Systems, Inc.* 1,087
 1,400 Volcano Corp.* 31
 300 Wright Medical Group, Inc.* 5
 1,600 Zimmer Holdings, Inc.* 89
 680 ZOLL Medical Corp.* 20
 ----------
 7,192
 ----------
HEALTH CARE FACILITIES (0.0%)
 500 AmSurg Corp.* 10
 320 Assisted Living Concepts, Inc.* 11
 200 Brookdale Senior Living, Inc.* 3
 1,200 Community Health Systems, Inc.* 47
 100 Emeritus Corp.* 2
 360 Ensign Group, Inc. 6
 800 Hanger Orthopedic Group, Inc.* 14
 1,800 Health Management Associates, Inc. "A"* 17
 2,880 HealthSouth Corp.* 57
 758 Kindred Healthcare, Inc.* 12
 200 LifePoint Hospitals, Inc.* 7
 500 National Healthcare Corp. 17
 700 Psychiatric Solutions, Inc.* 23
 1,000 Select Medical Holdings Corp.* 8
 300 Sun Healthcare Group, Inc.* 3

PORTFOLIO OF INVESTMENTS | 37

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 1,440 Sunrise Senior Living, Inc.* $ 6
 5,000 Tenet Healthcare Corp.* 29
 376 U.S. Physical Therapy, Inc.* 6
 600 Universal Health Services, Inc. "B" 25
 500 VCA Antech, Inc.* 13
 ----------
 316
 ----------
HEALTH CARE SERVICES (0.1%)
 336 Air Methods Corp.* 11
 100 Alliance Imaging, Inc.* 1
 200 Almost Family, Inc.* 7
 500 Amedisys, Inc.* 25
 1,080 AMN Healthcare Services, Inc.* 9
 800 Bio-Reference Laboratories, Inc.* 18
 500 CardioNet, Inc.* 4
 600 Catalyst Health Solutions, Inc.* 23
 400 Chemed Corp. 23
 244 CorVel Corp.* 9
 1,002 Cross Country Healthcare, Inc.* 9
 700 DaVita, Inc.* 44
 700 Emdeon, Inc.* 9
 500 Emergency Medical Services Corp. "A"* 27
 2,200 Express Scripts, Inc.* 221
 100 Genoptix, Inc.* 3
 1,310 Gentiva Health Services, Inc.* 36
 1,000 Healthways, Inc.* 14
 518 HMS Holdings Corp.* 28
 1,000 inVentiv Health, Inc.* 25
 520 IPC The Hospitalist Co., Inc.* 15
 1,200 Laboratory Corp. of America Holdings* 91
 500 Landauer, Inc. 30
 6,700 LHC Group, Inc.* 206
 685 Lincare Holdings, Inc.* 32
 5,900 Medco Health Solutions, Inc.* 340
 200 Mednax, Inc.* 11
 1,040 Odyssey Healthcare, Inc.* 28
 1,100 Omnicare, Inc. 28
 360 Providence Service Corp.* 6
 1,100 Quest Diagnostics, Inc. 58
 569 RehabCare Group, Inc.* 17
 810 ResCare, Inc.* 9
 ----------
 1,417
 ----------
HEALTH CARE SUPPLIES (0.0%)
 480 Aga Medical Holdings, Inc.* 7
 10,000 Align Technology, Inc.* 149
 100 Atrion Corp. 14
 500 Cooper Companies, Inc. 18
 1,000 DENTSPLY International, Inc. 32
 500 Haemonetics Corp.* 27
 500 ICU Medical, Inc.* 16
 3,900 Immucor Corp.* 77
 600 Inverness Medical Innovations, Inc.* 21
 1,200 Medical Action Industries, Inc.* 14
 600 Meridian Bioscience, Inc. 10
 880 Merit Medical Systems, Inc.* 13
 1,650 Neogen Corp.* 42
 1,440 OraSure Technologies, Inc.* 7
 840 Quidel Corp.* 10
 1,960 RTI Biologics, Inc.* 7
 78 TranS1, Inc.* -
 500 West Pharmaceutical Services, Inc. 20
 ----------
 484
 ----------

HEALTH CARE TECHNOLOGY (0.0%)
300 Allscripts-Misys Healthcare Solutions, Inc.* 6

38 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 500 athenahealth, Inc.* $ 12
 600 Cerner Corp.* 50
 320 Computer Programs and Systems, Inc. 14
 700 Eclipsys Corp.* 13
 240 MedAssets, Inc.* 6
 1,000 Omnicell, Inc.* 13
 200 Phase Forward, Inc.* 3
 900 Quality Systems, Inc. 53
 640 Vital Images, Inc.* 9
 ----------
 179
 ----------
LIFE SCIENCES TOOLS & SERVICES (0.0%)
 2,200 Accelrys, Inc.* 15
 2,240 Affymetrix, Inc.* 15
 720 Albany Molecular Research, Inc.* 5
 400 Bio-Rad Laboratories, Inc. "A"* 37
 300 Bruker Corp.* 4
 400 Charles River Laboratories International, Inc.* 13
 400 Covance, Inc.* 21
 500 Dionex Corp.* 39
 1,200 Enzo Biochem, Inc.* 6
 960 eResearch Technology, Inc.* 8
 900 Illumina, Inc.* 38
 480 Kendle International, Inc.* 7
 1,300 Life Technologies Corp.* 65
 300 Luminex Corp.* 5
 400 Mettler Toledo International, Inc.* 46
 400 Millipore Corp.* 43
 800 PAREXEL International Corp.* 18
 800 PerkinElmer, Inc. 18
 600 Pharmaceutical Product Development, Inc. 16
 1,840 Sequenom, Inc.*(a) 11
 200 TECHNE Corp. 12
 3,300 Thermo Fisher Scientific, Inc.* 172
 1,544 Waters Corp.* 106
 ----------
 720
 ----------
MANAGED HEALTH CARE (0.9%)
 3,490 Aetna, Inc. 102
 700 AMERIGROUP Corp.* 25
 700 Centene Corp.* 16
 2,275 CIGNA Corp. 76
 1,215 Coventry Health Care, Inc.* 25
 700 Health Net, Inc.* 17
 670 HealthSpring, Inc.* 12
 146,000 Humana, Inc.* 6,723
 486 Magellan Health Services, Inc.* 20
 600 Molina Healthcare, Inc.* 16
 640 Triple-S Management Corp. "B"* 12
 112,634 UnitedHealth Group, Inc. 3,274
 200 Universal American Financial Corp.* 3
 1,100 WellCare Health Plans, Inc.* 30
 117,150 WellPoint, Inc.* 6,010
 ----------
 16,361
 ----------
PHARMACEUTICALS (1.0%)
 48,508 Abbott Laboratories 2,307
 46,600 Allergan, Inc. 2,805
 440 Ardea Biosciences, Inc.* 11
 700 Auxilium Pharmaceuticals, Inc.* 20
 497 BioMimetic Therapeutics, Inc.* 6
 2,800 BMP Sunstone Corp.* 14
 42,525 Bristol-Myers Squibb Co. 987
 100 Cadence Pharmaceuticals, Inc.* 1
 3,100 Cypress Bioscience, Inc. 13
 4,100 DepoMed, Inc.* 14
 58,200 Eli Lilly and Co. 1,908
 141,218 Endo Pharmaceuticals Holdings, Inc.* 2,957
 5,200 Forest Laboratories, Inc.* 135

PORTFOLIO OF INVESTMENTS | 39

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 2,200 Impax Laboratories, Inc.* $ 46
 1,960 Inspire Pharmaceutical, Inc.* 11
 21,200 Johnson & Johnson 1,236
 29,000 King Pharmaceuticals, Inc.* 252
 16,800 Medicines Co.* 141
 82,784 Medicis Pharmaceutical Corp. "A" 1,920
 53,645 Merck & Co., Inc. 1,807
 24,400 Mylan, Inc.*(a) 474
 2,800 Nektar Therapeutics* 34
 520 Obagi Medical Products, Inc.* 7
 920 Optimer Pharmaceuticals, Inc.* 10
 1,178 Pain Therapeutics, Inc.* 7
 600 Par Pharmaceutical Companies, Inc.* 17
 500 Perrigo Co. 30
 63,965 Pfizer, Inc. 974
 880 POZEN, Inc.* 7
 1,840 Questcor Pharmaceuticals, Inc.* 17
 700 Salix Pharmaceuticals Ltd.* 25
 1,960 SuperGen, Inc.* 5
 789 Valeant Pharmaceuticals International* 37
 11,865 ViroPharma, Inc.* 144
 720 VIVUS, Inc.* 9
 43,400 Warner Chilcott plc "A"* 1,003
 900 Watson Pharmaceuticals, Inc.* 40
 200 XenoPort, Inc.* 2
 ----------
 19,433
 ----------
 Total Health Care 65,760
 ----------

INDUSTRIALS (1.3%)
AEROSPACE & DEFENSE (0.3%)

 600 AAR Corp.* 12
 100 AeroVironment, Inc.* 2
11,483 Alliant Techsystems, Inc.* 790
 500 American Science and Engineering, Inc. 35
 400 Applied Signal Technology, Inc. 7
 480 Argon ST, Inc.* 12
 600 BE Aerospace, Inc.* 16
 5,900 Boeing Co. 379
 200 Ceradyne, Inc.* 4
 509 Cubic Corp. 18
 700 Curtiss-Wright Corp. 23
 480 DigitalGlobe, Inc.* 13
 320 Ducommun, Inc. 6
 500 Esterline Technologies Corp.* 27
 1,640 GenCorp, Inc.* 8
 2,600 General Dynamics Corp. 177
 600 GeoEye, Inc.* 19
 900 Goodrich Corp. 62
 950 HEICO Corp. 38
 1,000 Herley Industries, Inc.* 14
 1,100 Hexcel Corp.* 18
 5,900 Honeywell International, Inc. 252
 1,900 ITT Corp. 92
15,522 L-3 Communications Holdings, Inc. 1,283
 560 Ladish Co., Inc.* 14
 2,600 Lockheed Martin Corp. 208
 300 Moog, Inc. "A"* 10
 2,500 Northrop Grumman Corp. 151
 700 Orbital Sciences Corp.* 11
 1,000 Precision Castparts Corp. 117
13,500 Raytheon Co. 708
 1,100 Rockwell Collins, Inc. 64
 740 Spirit AeroSystems Holdings, Inc. "A"* 14
 2,000 TASER International, Inc.* 9
 500 Teledyne Technologies, Inc.* 20

40 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 200 TransDigm Group, Inc. $ 11
 300 Triumph Group, Inc. 21
 6,600 United Technologies Corp. 445
 ----------
 5,110
 ----------
AIR FREIGHT & LOGISTICS (0.1%)
 300 Atlas Air Worldwide Holdings, Inc.* 16
 1,500 C.H. Robinson Worldwide, Inc. 87
 304 Dynamex, Inc.* 5
 1,600 Expeditors International of Washington, Inc. 61
 2,500 FedEx Corp. 209
 500 Forward Air Corp. 14
 600 Hub Group, Inc. "A"* 18
 1,100 Pacer International, Inc.* 9
 16,400 United Parcel Service, Inc. "B" 1,029
 ----------
 1,448
 ----------
AIRLINES (0.2%)
 4,280 AirTran Holdings, Inc.* 24
 47,685 Alaska Air Group, Inc.* 2,227
 300 Allegiant Travel Co. 17
 2,700 AMR Corp.* 21
 1,900 Continental Airlines, Inc. "B"* 40
 83,500 Delta Air Lines, Inc.* 1,134
 300 Hawaiian Holdings, Inc.* 2
 7,800 JetBlue Airways Corp.* 48
 1,520 Republic Airways Holdings, Inc.* 9
 1,000 SkyWest, Inc. 15
 5,800 Southwest Airlines Co. 72
 1,700 UAL Corp.* 34
 10,900 US Airways Group, Inc.* 96
 ----------
 3,739
 ----------
BUILDING PRODUCTS (0.1%)
 440 AAON, Inc. 11
 300 American Woodmark Corp. 7
 200 Ameron International Corp. 13
 920 Apogee Enterprises, Inc. 13
 33,500 Armstrong World Industries, Inc.* 1,256
 880 Gibraltar Industries, Inc.* 12
 1,587 Griffon Corp.* 19
 560 Insteel Industries, Inc. 7
 500 Lennox International, Inc. 22
 2,800 Masco Corp. 37
 900 Owens Corning, Inc.* 30
 1,240 Quanex Building Products Corp. 25
 700 Simpson Manufacturing Co., Inc. 20
 531 Trex Co., Inc.* 12
 400 Universal Forest Products, Inc. 15
 200 USG Corp.* 4
 ----------
 1,503
 ----------
COMMERCIAL PRINTING (0.1%)
 13,100 Bowne & Co., Inc. 145
 2,040 Cenveo, Inc.* 15
 7,782 Consolidated Graphics, Inc.* 357
 1,000 Courier Corp. 16
 690 Deluxe Corp. 15
 800 Ennis, Inc. 14
 100 InnerWorkings, Inc.* 1
 600 M & F Worldwide Corp.* 19
 51,700 R.R. Donnelley & Sons Co. 990
 ----------
 1,572
 ----------
CONSTRUCTION & ENGINEERING (0.0%)
 900 AECOM Technology Corp.* 23
 1,240 Comfort Systems USA, Inc. 14
 1,123 Dycom Industries, Inc.* 11
 800 EMCOR Group, Inc.* 20
 1,489 Fluor Corp. 70
 500 Granite Construction, Inc. 15

PORTFOLIO OF INVESTMENTS | 41

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 1,320 Great Lakes Dredge & Dock Corp. $ 8
 600 Insituform Technologies, Inc. "A"* 12
 900 Jacobs Engineering Group, Inc.* 38
 1,500 KBR, Inc. 33
 900 Layne Christensen Co.* 22
 900 MasTec, Inc.* 10
 280 Michael Baker Corp.* 10
 280 Northwest Pipe Co.* 6
 800 Orion Marine Group, Inc.* 12
 1,500 Quanta Services, Inc.* 31
 900 Shaw Group, Inc.* 31
 400 Sterling Construction Co., Inc.* 7
 100 Tutor Perini Corp.* 2
 500 URS Corp.* 22
 ----------
 397
 ----------
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS (0.1%)
 600 AGCO Corp.* 17
 100 Astec Industries, Inc.* 3
 500 Bucyrus International, Inc. 27
 500 Cascade Corp. 17
 4,800 Caterpillar, Inc. 292
 1,600 Cummins, Inc. 109
 3,300 Deere & Co. 190
 2,513 Federal Signal Corp. 17
 2,680 Force Protection, Inc.* 12
 100 FreightCar America, Inc. 3
 100 Greenbrier Companies, Inc.* 1
 800 Joy Global, Inc. 41
 358 Lindsay Corp. 12
 7,100 Manitowoc Co., Inc. 85
 700 Navistar International Corp.* 38
 3,200 Oshkosh Corp.* 114
 2,900 PACCAR, Inc. 119
 3,600 Sauer-Danfoss, Inc.* 52
 800 Terex Corp.* 17
 200 Titan International, Inc. 2
 100 Titan Machinery, Inc.* 1
 3,300 Toro Co. 176
 400 Trinity Industries, Inc. 9
 733 WABCO Holdings, Inc.* 22
 300 Wabtec Corp. 13
 ----------
 1,389
 ----------
 DIVERSIFIED SUPPORT SERVICES (0.0%)
 1,200 Cintas Corp. 31
 400 Copart, Inc.* 14
 600 Enernoc, Inc.* 17
 618 G & K Services, Inc. "A" 15
 600 Healthcare Services Group, Inc. 12
 1,400 Iron Mountain, Inc. 34
 800 Kar Auction Services, Inc.* 11
 200 McGrath RentCorp 5
 1,160 Mobile Mini, Inc.* 19
 100 Viad Corp. 2
 ----------
 160
 ----------
 ELECTRICAL COMPONENTS & EQUIPMENT (0.1%)
 500 A. O. Smith Corp. 23
 700 A123 Systems, Inc.* 6
 600 Acuity Brands, Inc. 25
 1,640 Advanced Battery Technology, Inc.* 5
 700 American Superconductor Corp.* 22
 700 AMETEK, Inc. 28
 700 Baldor Electric Co. 25
 1,520 Belden, Inc. 39
 700 Brady Corp. "A" 20
 6,800 Emerson Electric Co. 316
 700 Encore Wire Corp. 14
 2,080 Ener1, Inc.* 7
 400 Energy Conversion Devices, Inc.* 2
 600 EnerSys* 14
 400 First Solar, Inc.* 45
 733 Franklin Electric Co., Inc. 21

42 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 2,240 FuelCell Energy, Inc.* $ 5
 1,200 Fushi Copperweld, Inc.* 12
 45,207 General Cable Corp.* 1,409
 1,700 GrafTech International Ltd.* 28
 1,400 GT Solar International, Inc.* 8
 700 Hubbell, Inc. "B" 30
 160 II-IV, Inc.* 5
 2,720 Microvision, Inc.*(a) 7
 700 Polypore International, Inc.* 14
 160 Powell Industries, Inc.* 5
 1,200 Regal-Beloit Corp. 72
 1,200 Rockwell Automation, Inc. 64
 600 Roper Industries, Inc. 35
 800 SunPower Corp. "A"* 11
 932 SunPower Corp. "B"* 11
 600 Thomas & Betts Corp.* 23
 640 Vicor Corp.* 8
 3,200 Woodward Governor Co. 92
 ----------
 2,451
 ----------
ENVIRONMENTAL & FACILITIES SERVICES (0.0%)
 653 ABM Industries, Inc. 14
 400 Clean Harbors, Inc.* 25
 800 Covanta Holding Corp.* 12
 600 Energy Solutions, Inc. 4
 100 Fuel Tech, Inc.* 1
 1,080 Metalico, Inc.* 5
 2,400 Republic Services, Inc. 70
 600 Rollins, Inc. 13
 500 Stericycle, Inc.* 29
 100 Team, Inc.* 1
 1,000 Tetra Tech, Inc.* 23
 100 US Ecology, Inc. 1
 500 Waste Connections, Inc.* 18
 3,700 Waste Management, Inc. 120
 600 Waste Services, Inc.* 7
 ----------
 343
 ----------

HEAVY ELECTRICAL EQUIPMENT (0.0%)
1,320 Broadwind Energy, Inc.* 3 HUMAN RESOURCE & EMPLOYMENT SERVICES (0.0%)

 100 Administaff, Inc. 2
 400 CDI Corp. 6
 480 COMSYS IT Partners, Inc.*(b) 9
 520 Heidrick & Struggles International, Inc. 12
 840 Kelly Services, Inc. "A"* 12
 920 Kforce, Inc.* 13
 350 Korn/Ferry International* 5
 600 Manpower, Inc. 27
 1,200 On Assignment, Inc.* 7
 1,100 Robert Half International, Inc. 28
 1,600 SFN Group, Inc.* 12
 716 Towers Watson & Co. "A" 33
 1,440 TrueBlue, Inc.* 19
 ----------
 185
 ----------
INDUSTRIAL CONGLOMERATES (0.2%)
 6,000 3M Co. 476
 600 Carlisle Companies, Inc. 23
 148,700 General Electric Co. 2,431
 7,000 McDermott International, Inc.* 155
 520 Raven Industries, Inc. 19
 380 Standex International Corp. 10
 2,100 Textron, Inc. 44
 2,500 Tredegar Corp. 41
 ----------
 3,199
 ----------
INDUSTRIAL MACHINERY (0.1%)
 600 3D Systems Corp.* 8
 1,200 Actuant Corp. "A" 24
 800 Albany International Corp. "A" 15
 840 Altra Holdings, Inc.* 11
 240 Ampco-Pittsburgh Corp. 6
 881 Badger Meter, Inc. 35
 700 Barnes Group, Inc. 13
 1,280 Blount International, Inc.* 14
 700 Briggs & Stratton Corp. 14
 700 Chart Industries, Inc.* 13

PORTFOLIO OF INVESTMENTS | 43

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 446 China Fire & Security Group, Inc.*(a) $ 6
 500 CIRCOR International, Inc. 15
 700 CLARCOR, Inc. 25
 1,360 Colfax Corp.* 16
 100 Columbus McKinnon Corp.* 2
 600 Crane Co. 20
 1,900 Danaher Corp. 151
 1,000 Donaldson Co., Inc. 43
 1,400 Dover Corp. 63
 400 Dynamic Materials Corp. 6
 1,200 Eaton Corp. 84
 640 EnPro Industries, Inc.* 20
 700 ESCO Technologies, Inc. 18
 500 Flowserve Corp. 48
 300 Gardner Denver, Inc. 14
 472 Gorman-Rupp Co. 13
 3,300 Graco, Inc. 105
 800 Graham Corp. 13
 655 Harsco Corp. 18
 500 IDEX Corp. 15
 3,600 Illinois Tool Works, Inc. 167
 960 John Bean Technologies Corp. 17
 400 Kadant, Inc.* 8
 500 Kaydon Corp. 19
 500 Kennametal, Inc. 14
 320 L.B. Foster Co. "A"* 9
 400 Lincoln Electric Holdings, Inc. 22
 300 Middleby Corp.* 17
 688 Mueller Industries, Inc. 18
 4,720 Mueller Water Products, Inc. "A" 20
 600 Nordson Corp. 40
 800 Pall Corp. 27
 1,200 Parker-Hannifin Corp. 74
 600 Pentair, Inc. 21
 440 PMFG, Inc.* 7
 760 RBC Bearings, Inc.* 21
 191 Robbins & Myers, Inc. 4
 300 Snap-On, Inc. 13
 300 SPX Corp. 18
 393 Sun Hydraulics Corp. 10
 560 Tecumseh Products Co. "A"* 7
 1,050 Tennant Co. 35
 800 Timken Co. 23
 720 TriMas Corp.* 7
 200 Valmont Industries, Inc. 16
 500 Watts Water Technologies, Inc. "A" 16
 ----------
 1,498
 ----------
MARINE (0.0%)
 400 Alexander & Baldwin, Inc. 13
 280 American Commercial Lines, inc.* 6
 2,000 Eagle Bulk Shipping, Inc.* 9
 840 Genco Shipping & Trading Ltd.* 16
 500 Kirby Corp.* 20
 ----------
 64
 ----------
OFFICE SERVICES & SUPPLIES (0.0%)
 1,800 ACCO Brands Corp.* 13
 200 American Reprographics Co.* 2
 880 APAC Customer Services, Inc.* 6
 700 Avery Dennison Corp. 24
 700 Herman Miller, Inc. 13
 700 HNI Corp. 21
 1,320 Interface, Inc. "A" 16
 760 Kimball International, Inc. "B" 5
 300 Knoll, Inc. 4
 1,600 Mine Safety Appliances Co. 44
 1,500 Pitney Bowes, Inc. 34
 2,500 Steelcase, Inc. "A" 21
 6,291 Sykes Enterprises, Inc.* 109
 500 United Stationers, Inc.* 29
 ----------
 341
 ----------

44 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

RAILROADS (0.0%)
 3,100 CSX Corp. $ 162
 600 Genesee & Wyoming, Inc. "A"* 22
 600 Kansas City Southern* 23
 2,900 Norfolk Southern Corp. 164
 640 RailAmerica, Inc.* 7
 3,900 Union Pacific Corp. 278
 ----------
 656
 ----------
RESEARCH & CONSULTING SERVICES (0.0%)
 480 Advisory Board Co.* 18
 200 CBIZ, Inc.* 1
 500 Corporate Executive Board Co. 16
 120 CoStar Group, Inc.* 5
 360 CRA International, Inc.* 8
 760 Diamond Management & Technology Consultants, Inc. 8
 300 Dun & Bradstreet Corp. 22
 800 Equifax, Inc. 24
 480 Exponent, Inc.* 13
 700 FTI Consulting, Inc.* 30
 100 Huron Consulting Group, Inc.* 2
 280 ICF International, Inc.* 6
 200 IHS, Inc. "A"* 10
 400 Navigant Consulting, Inc.* 5
 300 Resources Connection, Inc.* 5
 600 School Specialty, Inc.* 13
 3,000 Verisk Analytics, Inc. "A"* 91
 300 VSE Corp. 12
 ----------
 289
 ----------
SECURITY & ALARM SERVICES (0.0%)
 525 Brink's Co. 12
 360 Cornell Companies, Inc.* 10
 700 Corrections Corp. of America* 14
 600 GEO Group, Inc.* 12
 ----------
 48
 ----------
TRADING COMPANIES & DISTRIBUTORS (0.0%)
 1,520 Aircastle Ltd. 15
 600 Applied Industrial Technologies, Inc. 17
 4,600 Beacon Roofing Supply, Inc.* 97
 900 Fastenal Co. 45
 200 GATX Corp. 6
 880 H&E Equipment Services, Inc.* 9
 560 Houston Wire & Cable Co. 6
 1,040 Interline Brands, Inc.* 21
 200 Kaman Corp. 5
 5,225 MSC Industrial Direct Co., Inc. "A" 270
 300 RSC Holdings, Inc.* 2
 1,800 Rush Enterprises, Inc. "A"* 27
 480 TAL International Group, Inc. 12
 500 United Rentals, Inc.* 6
 400 W.W. Grainger, Inc. 41
 500 Watsco, Inc. 29
 600 WESCO International, Inc.* 22
 ----------
 630
 ----------
TRUCKING (0.0%)
 1,100 AMERCO* 60
 500 Arkansas Best Corp. 12
 940 Avis Budget Group, Inc.* 11
 720 Celadon Group, Inc.* 10
 200 Con-Way, Inc. 7
 1,740 Dollar Thrifty Automotive Group, Inc.* 81
 600 Heartland Express, Inc. 9
 1,600 Hertz Global Holdings, Inc.* 18
 500 JB Hunt Transport Services, Inc. 17
 800 Knight Transportation, Inc. 16
 778 Landstar System, Inc. 33

PORTFOLIO OF INVESTMENTS | 45

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 1,200 Marten Transport, Ltd.* $ 27
 500 Old Dominion Freight Line, Inc.* 18
 139 Patriot Transportation Holding, Inc.* 12
 600 Ryder System, Inc. 27
 440 Saia, Inc.* 6
 600 Werner Enterprises, Inc. 13
 ----------
 377
 ----------
 Total Industrials 25,402
 ----------

INFORMATION TECHNOLOGY (5.2%)
APPLICATION SOFTWARE (0.1%)

 200 ACI Worldwide, Inc.* 4
 1,550 Actuate Corp.* 7
 4,100 Adobe Systems, Inc.* 132
 1,100 Advent Software, Inc.* 48
 2,820 ANSYS, Inc.* 123
 1,775 Autodesk, Inc.* 52
 1,200 Blackbaud, Inc. 27
 500 Blackboard, Inc.* 20
 800 Bottomline Technologies, Inc.* 13
 2,000 Cadence Design Systems, Inc.* 13
 1,300 Citrix Systems, Inc.* 57
 2,700 Compuware Corp.* 22
 600 Concur Technologies, Inc.* 25
 900 Ebix, Inc.* 14
 1,520 Epicor Software Corp.* 14
 200 Epiq Systems, Inc.* 2
 600 FactSet Research Systems, Inc. 41
 900 Fair Isaac Corp. 21
 1,100 Henry Jack & Associates, Inc. 26
 1,100 Informatica Corp.* 28
 400 Interactive Intelligence, Inc.* 7
 2,500 Intuit, Inc.* 89
 657 JDA Software Group, Inc.* 18
 720 Kenexa Corp.* 10
 3,240 Lawson Software, Inc.* 27
 720 Manhattan Associates, Inc.* 21
 800 Mentor Graphics Corp.* 7
 500 MicroStrategy, Inc. "A"* 39
 680 Monotype Imaging Holdings, Inc.* 7
 100 Net 1 U.E.P.S Technologies, Inc.* 1
 1,000 NetScout Systems, Inc.* 14
 1,700 Nuance Communications, Inc.* 29
 1,200 Parametric Technology Corp.* 20
 800 Pegasystems, Inc. 24
 1,500 PROS Holdings, Inc.* 10
 800 Quest Software, Inc.* 15
 1,800 S1 Corp.* 11
 800 Salesforce.com, Inc.* 69
 920 Smith Micro Software, Inc.* 9
 360 Solarwinds, Inc.* 7
 800 Solera Holdings, Inc. 28
 1,700 SuccessFactors, Inc.* 38
 1,240 Symyx Technologies, Inc.* 8
 600 Synchronoss Technologies, Inc.* 12
 1,300 Synopsys, Inc.* 28
 502 Taleo Corp. "A"* 13
 3,200 TIBCO Software, Inc.* 36
 1,400 TiVo, Inc.* 13
 7,300 Tyler Technologies, Inc.* 118
 466 Ultimate Software Group, Inc.* 16
 ----------
 1,433
 ----------
COMMUNICATIONS EQUIPMENT (0.3%)
 800 Acme Packet, Inc.* 23
 39,300 ADC Telecommunications, Inc.* 325
 700 ADTRAN, Inc. 19
 1,100 Anaren, Inc.* 16
 1,300 ARRIS Group, Inc.* 14

46 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 880 Aruba Networks, Inc.* $ 12
 1,920 Aviat Networks, Inc.* 8
 354 Bel Fuse, Inc. "B" 6
 500 Black Box Corp. 15
 600 Blue Coat Systems, Inc.* 13
 3,600 Brocade Communications Systems, Inc.* 20
 700 Ciena Corp.* 11
 48,000 Cisco Systems, Inc.* 1,112
 2,000 Cogo Group, Inc.* 14
 600 CommScope, Inc.* 17
 500 Comtech Telecommunications Corp.* 14
 640 DG FastChannel, Inc.* 27
 800 Digi International, Inc.* 7
 600 EchoStar Corp. "A"* 13
 520 EMS Technologies, Inc.* 8
 1,200 Emulex Corp.* 13
 2,880 Extreme Networks, Inc.* 8
 500 F5 Networks, Inc.* 35
 680 Globecomm Systems, Inc.* 5
 3,080 Harmonic, Inc.* 18
 900 Harris Corp. 42
 500 Hughes Communications, Inc.* 13
 2,440 Infinera Corp.* 17
 600 InterDigital, Inc.* 16
 1,040 Ixia* 10
 2,000 JDS Uniphase Corp.* 23
 4,200 Juniper Networks, Inc.* 112
 360 Loral Space & Communications, Inc.* 14
 18,700 Motorola, Inc.* 128
 600 Netgear, Inc.* 14
 2,600 Network Equipment Technologies, Inc.* 12
 800 Oplink Communications, Inc.* 11
 5,380 Palm, Inc.* 31
 1,000 Plantronics, Inc. 30
 1,000 Polycom, Inc.* 30
 90,100 QUALCOMM, Inc. 3,204
 700 Riverbed Technology, Inc.* 19
 1,040 SeaChange International, Inc.* 9
 1,440 ShoreTel, Inc.* 8
 3,280 Sycamore Networks, Inc. 58
 1,400 Symmetricom, Inc.* 7
 900 Tekelec* 13
 2,900 Tellabs, Inc. 26
 600 Viasat, Inc.* 19
 ----------
 5,639
 ----------
COMPUTER HARDWARE (0.9%)
 600 3PAR, Inc.* 6
 22,626 Apple, Inc.* 5,819
 4,200 Avid Technology, Inc.* 57
 1,320 Cray, Inc.* 6
 180,271 Dell, Inc.* 2,403
 500 Diebold, Inc. 15
 65,456 Hewlett-Packard Co. 3,012
 40,080 International Business Machines Corp. 5,020
 1,100 NCR Corp.* 15
 960 Silicon Graphics International Corp.* 8
 600 Stratasys, Inc.* 14
 760 Super Micro Computer, Inc.* 10
 13,100 Teradata Corp.* 418
 ----------
 16,803
 ----------
COMPUTER STORAGE & PERIPHERALS (0.7%)
 4,040 Adaptec, Inc.* 12
 520 Compellent Technologies, Inc.* 7
 300 Electronics for Imaging, Inc.* 3
 16,300 EMC Corp.* 303
 200 Imation Corp.* 2
 480 Intermec, Inc.* 5
 680 Intevac, Inc.* 8

PORTFOLIO OF INVESTMENTS | 47

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 840 Isilon Systems, Inc.* $ 11
 28,200 Lexmark International, Inc. "A"* 1,059
 3,100 NetApp, Inc.* 117
 1,520 Netezza Corp.* 20
 1,040 Novatel Wireless, Inc.* 6
 1,100 QLogic Corp.* 20
 35,900 SanDisk Corp.* 1,674
 15,100 Seagate Technology* 232
 200 STEC, Inc.* 2
 600 Synaptics, Inc.* 18
 263,274 Western Digital Corp.* 9,165
 ----------
 12,664
 ----------
DATA PROCESSING & OUTSOURCED SERVICES (0.3%)
 500 Alliance Data Systems Corp.* 35
 3,900 Automatic Data Processing, Inc. 159
 1,312 Broadridge Financial Solutions, Inc. 25
 320 Cass Information Systems, Inc. 10
 21,856 Computer Sciences Corp.* 1,093
 600 Convergys Corp.* 7
 4,874 CSG Systems International, Inc.* 100
 1,000 CyberSource Corp.* 26
 200 DST Systems, Inc. 8
 2,200 Euronet Worldwide, Inc.* 29
 480 ExlService Holdings, Inc.* 8
 1,100 Fidelity National Information Services, Inc. 30
 1,100 Fiserv, Inc.* 52
 1,600 Genpact Ltd.* 27
 11,000 Global Cash Access Holdings, Inc.* 88
 884 Global Payments, Inc. 37
 300 Heartland Payment Systems, Inc. 5
 19,324 Hewitt Associates, Inc. "A"* 720
 1,080 info GROUP, Inc.* 9
 21,021 Lender Processing Services, Inc. 713
 2,800 MasterCard, Inc. "A" 565
 2,680 MoneyGram International, Inc.* 7
 1,300 NeuStar, Inc. "A"* 28
 2,400 Paychex, Inc. 68
 300 Syntel, Inc. 10
 200 TeleTech Holdings, Inc.* 3
 500 TNS, Inc.* 10
 1,100 Total System Services, Inc. 16
 22,300 VeriFone Holdings, Inc.* 450
 3,600 Visa, Inc. "A" 261
 49,400 Western Union Co. 788
 600 Wright Express Corp.* 19
 ----------
 5,406
 ----------
ELECTRONIC COMPONENTS (0.0%)
 1,200 Amphenol Corp. "A" 51
 700 AVX Corp. 10
 12,500 Corning, Inc. 218
 500 Dolby Laboratories, Inc. "A"* 33
 640 DTS, Inc.* 21
 680 Littelfuse, Inc.* 24
 2,440 Power One, Inc.* 19
 520 Rogers Corp.* 15
 1,640 Technitrol, Inc. 6
 959 Universal Display Corp.* 15
 24,300 Vishay Intertechnology, Inc.* 220
 ----------
 632
 ----------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.0%)
 2,700 Agilent Technologies, Inc.* 87
 600 Checkpoint Systems, Inc.* 12
 1,360 China Security & Surveillance Technology, Inc.*(a) 6

48 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 200 Cogent, Inc.* $ 2
 600 Cognex Corp. 12
 100 Coherent, Inc.* 4
 640 Comverge, Inc.* 6
 1,080 Daktronics, Inc. 9
 880 Electro Scientific Industries, Inc.* 11
 600 FARO Technologies, Inc.* 14
 1,300 FLIR Systems, Inc.* 37
 200 Itron, Inc.* 13
 7,500 L-1 Identity Solutions, Inc.* 56
 517 MTS Systems Corp. 15
 300 National Instruments Corp. 10
 1,160 Newport Corp.* 12
 520 OSI Systems, Inc.* 14
 500 Rofin-Sinar Technologies, Inc.* 12
 ----------
 332
 ----------
ELECTRONIC MANUFACTURING SERVICES (0.1%)
 1,100 Benchmark Electronics, Inc.* 20
 1,080 CTS Corp. 11
 1,058 Echelon Corp.* 9
 100 IPG Photonics Corp.* 2
 44,900 Jabil Circuit, Inc. 615
 724 Maxwell Technologies, Inc.* 9
 480 Measurement Specialties, Inc.* 7
 760 Mercury Computer Systems, Inc.* 9
 1,240 Methode Electronics, Inc. 13
 1,200 Molex, Inc. 25
 600 Multi-Fineline Electronix, Inc.* 16
 640 Park Electrochemical Corp. 17
 500 Plexus Corp.* 17
 800 Radisys Corp.* 7
 1,320 Smart Modular Technologies, Inc.* 8
 800 Trimble Navigation Ltd.* 23
 1,400 TTM Technologies, Inc.* 16
 ----------
 824
 ----------
HOME ENTERTAINMENT SOFTWARE (0.0%)
 52,800 Activision Blizzard, Inc. 568
 2,500 Electronic Arts, Inc.* 41
 16,300 Take-Two Interactive Software, Inc.* 189
 2,360 THQ, Inc.* 14
 ----------
 812
 ----------
INTERNET SOFTWARE & SERVICES (0.7%)
 1,500 Akamai Technologies, Inc.* 60
 4,436 AOL, Inc.* 91
 4,080 Art Technology Group, Inc.* 15
 680 comScore, Inc.* 10
 1,200 Constant Contact, Inc.* 26
 200 Dealertrack Holdings, Inc.* 3
 600 Digital River, Inc.* 17
 1,040 DivX, Inc.* 7
 3,800 EarthLink, Inc. 33
 40,100 eBay, Inc.* 859
 529 Equinix, Inc.* 49
 21,700 Google, Inc. "A"* 10,528
 600 IAC/InterActiveCorp.* 14
 1,120 InfoSpace, Inc.* 9
 1,800 Internap Network Services Corp.* 9
 880 Internet Brands, Inc. "A"* 9
 1,200 Internet Capital Group, Inc.* 10
 500 J2 Global Communications, Inc.* 12
 200 Knot, Inc.* 1
 1,200 Liquidity Services, Inc.* 16
 680 Loopnet, Inc.* 7
 100 MercadoLibre, Inc.* 5
 1,520 ModusLink Global Solutions, Inc.* 12
 900 Monster Worldwide, Inc.* 13
 4,160 Move, Inc.* 9

PORTFOLIO OF INVESTMENTS | 49

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 1,560 NIC, Inc. $ 10
 920 Perficient, Inc.* 10
 900 Rackspace Hosting, Inc.* 16
 2,680 RealNetworks, Inc.* 10
 600 Savvis, Inc.* 11
 1,800 Terremark Worldwide, Inc.* 14
 9,600 Time Warner, Inc. 297
 1,507 United Online, Inc. 10
 2,900 ValueClick, Inc.* 34
 31,600 VeriSign, Inc.* 882
 640 Vocus, Inc.* 10
 200 WebMD Health Corp. "A"* 9
 9,300 Yahoo!, Inc.* 143
 ----------
 13,280
 ----------
IT CONSULTING & OTHER SERVICES (0.0%)
 1,524 Acxiom Corp.* 26
 5,900 Amdocs Ltd.* 168
 500 CACI International, Inc. "A"* 23
 2,200 CIBER, Inc.* 7
 2,300 Cognizant Technology Solutions Corp. "A"* 115
 600 Forrester Research, Inc.* 19
 3,060 Gartner, Inc.* 76
 720 iGATE Corp. 8
 520 Integral Systems, Inc.* 4
 500 ManTech International Corp. "A"* 23
 500 Maximus, Inc. 30
 240 NCI, Inc. "A"* 5
 1,200 Ness Technologies, Inc.* 6
 680 RightNow Technologies, Inc.* 10
 2,900 SAIC, Inc.* 50
 1,700 Sapient Corp. 17
 500 SRA International, Inc. "A"* 11
 600 Unisys Corp.* 14
 ----------
 612
 ----------
OFFICE ELECTRONICS (0.0%)
 10,909 Xerox Corp. 102
 300 Zebra Technologies Corp. "A"* 8
 ----------
 110
 ----------
SEMICONDUCTOR EQUIPMENT (0.1%)
 1,058 Advanced Energy Industries, Inc.* 13
 12,200 Amkor Technology, Inc.*(a) 83
 10,600 Applied Materials, Inc. 137
 200 ATMI, Inc.* 3
 2,240 Brooks Automation, Inc.* 19
 400 Cabot Microelectronics Corp.* 15
 760 Cohu, Inc. 11
 500 Cymer, Inc.* 15
 4,240 Entegris, Inc.* 23
 500 FEI Co.* 10
 700 FormFactor, Inc.* 9
 1,200 KLA-Tencor Corp. 37
 2,382 Kulicke & Soffa Industries, Inc.* 17
 900 Lam Research Corp.* 34
 1,800 MEMC Electronic Materials, Inc.* 20
 600 MKS Instruments, Inc.* 12
 1,000 Novellus Systems, Inc.* 26
 1,720 Photronics, Inc.* 9
 400 Rubicon Technology, Inc.* 11
 1,040 Rudolph Technologies, Inc.* 9
 1,500 Teradyne, Inc.* 16
 700 Tessera Technologies, Inc.* 12
 760 Ultratech, Inc.* 11
 400 Varian Semiconductor Equipment Associates, Inc.* 12
 23,400 Veeco Instruments, Inc.* 893
 ----------
 1,457
 ----------

50 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

SEMICONDUCTORS (1.0%)
 840 Actel Corp.* $ 12
 4,500 Advanced Micro Devices, Inc.* 39
 5,200 Altera Corp. 123
 2,200 ANADIGICS, Inc.* 9
 2,200 Analog Devices, Inc. 64
 2,200 Applied Micro Circuits Corp.* 24
 11,300 Atheros Communications, Inc.* 384
 11,400 Atmel Corp.* 58
 9,100 Broadcom Corp. "A" 314
 500 Cavium Networks, Inc.* 13
 640 Ceva, Inc.* 8
 2,160 Cirrus Logic, Inc.* 31
 800 Cree, Inc.* 53
 1,600 Cypress Semiconductor Corp.* 18
 240 Diodes, Inc.* 5
 800 DSP Group, Inc.* 5
 1,760 Entropic Communications, Inc.* 9
 1,160 Exar Corp.* 8
 800 Fairchild Semiconductor International, Inc.* 8
 300 Hittite Microwave Corp.* 14
 1,100 Integrated Device Technology, Inc.* 6
 506,300 Intel Corp. 10,845
 700 International Rectifier Corp.* 15
 1,100 Intersil Corp. "A" 15
 760 IXYS Corp.* 7
 2,320 Kopin Corp.* 8
 3,700 Lattice Semiconductor Corp.* 18
 9,100 Linear Technology Corp. 254
 5,500 LSI Corp.* 29
 15,800 Marvell Technology Group Ltd.* 300
 2,300 Maxim Integrated Products, Inc. 41
 1,300 Micrel, Inc. 14
 1,300 Microchip Technology, Inc. 36
 7,100 Micron Technology, Inc.* 65
 1,000 Microsemi Corp.* 16
 1,440 MIPS Technologies, Inc.* 7
 200 Monolithic Power Systems, Inc.* 4
 1,700 National Semiconductor Corp. 24
 800 NetLogic Microsystems, Inc.* 23
 160 NVE Corp.* 8
 17,600 NVIDIA Corp.* 231
 600 OmniVision Technologies, Inc.* 12
 3,300 ON Semiconductor Corp.* 24
 800 Pericom Semiconductor Corp.* 8
 1,120 PLX Technology, Inc.* 5
 1,900 PMC-Sierra, Inc.* 15
 12,900 Power Integrations, Inc. 438
 800 Rambus, Inc.* 19
 8,600 RF Micro Devices, Inc.* 41
 1,035 Semtech Corp.* 18
 840 Sigma Designs, Inc.* 9
 2,440 Silicon Image, Inc.* 9
 700 Silicon Laboratories, Inc.* 32
 1,900 Skyworks Solutions, Inc.* 30
 720 Standard Microsystems Corp.* 17
 357 Supertex, Inc.* 10
 125,502 Texas Instruments, Inc. 3,065
 3,440 TriQuint Semiconductor, Inc.* 24
 725 Volterra Semiconductor Corp.* 17
 108,800 Xilinx, Inc. 2,660
 13,700 Zoran Corp.* 132
 ----------
 19,750
 ----------

PORTFOLIO OF INVESTMENTS | 51

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

SYSTEMS SOFTWARE (1.0%)
 900 ArcSight, Inc.* $ 19
 1,600 Ariba, Inc.* 24
 1,900 BMC Software, Inc.* 70
 30,863 CA, Inc. 625
 1,500 CommVault Systems, Inc.* 34
 600 Double-Take Software, Inc.* 6
 400 Fortinet, Inc.* 7
 2,000 McAfee, Inc.* 64
 900 MICROS Systems, Inc.* 31
 574,409 Microsoft Corp. 14,820
 6,700 Novell, Inc.* 39
 480 Opnet Technologies, Inc. 8
 76,323 Oracle Corp. 1,723
 500 Progress Software Corp.* 16
 960 Radiant Systems, Inc.* 13
 44,900 Red Hat, Inc.* 1,316
 900 Rovi Corp.* 34
 1,716 SonicWALL, Inc.* 16
 720 Sourcefire, Inc.* 15
 700 Sybase, Inc.* 45
 6,500 Symantec Corp.* 92
 1,240 TeleCommunication Systems, Inc. "A"* 6
 840 VASCO Data Security International, Inc.* 5
 500 VMware, Inc. "A"* 33
 500 Websense, Inc.* 10
 ----------
 19,071
 ----------
TECHNOLOGY DISTRIBUTORS (0.0%)
 1,200 Agilysys, Inc. 8
 500 Anixter International, Inc.* 24
 800 Arrow Electronics, Inc.* 22
 6,400 Avnet, Inc.* 184
 3,800 Brightpoint, Inc.* 28
 600 Electro Rent Corp. 8
 1,400 Ingram Micro, Inc. "A"* 24
 1,480 Insight Enterprises, Inc.* 22
 200 ScanSource, Inc.* 5
 500 SYNNEX Corp.* 13
 7,090 Tech Data Corp.* 288
 ----------
 626
 ----------
 Total Information Technology 99,451
 ----------

MATERIALS (1.6%)
ALUMINUM (0.0%)

 7,600 Alcoa, Inc. 88
 460 Century Aluminum Co.* 5
 100 Kaiser Alum Corp. 4
 ----------
 97
 ----------
COMMODITY CHEMICALS (0.0%)
 800 Calgon Carbon Corp.* 12
 3,800 Celanese Corp. "A" 109
 600 Koppers Holdings, Inc. 16
 1,400 NL Industries, Inc. 10
 1,000 Spartech Corp.* 13
 900 Westlake Chemical Corp. 19
 ----------
 179
 ----------
CONSTRUCTION MATERIALS (0.0%)
 200 Eagle Materials, Inc. 6
 1,600 Headwaters, Inc.* 6
 200 Martin Marietta Materials, Inc. 19
 500 Texas Industries, Inc. 18
 900 Vulcan Materials Co. 46
 ----------
 95
 ----------
DIVERSIFIED CHEMICALS (0.2%)
 30,900 Ashland, Inc. 1,657
 700 Cabot Corp. 20
 8,900 Dow Chemical Co. 240
 7,100 E.I. du Pont de Nemours & Co. 257
 819 Eastman Chemical Co. 49
 500 FMC Corp. 30
 92,000 Huntsman Corp. 918
 582 LSB Industries, Inc.* 10
 900 Olin Corp. 17
 1,100 PPG Industries, Inc. 70
 920 ShengdaTech, Inc.* 5
 1,300 Solutia, Inc.* 20
 ----------
 3,293
 ----------

52 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

DIVERSIFIED METALS & MINING (0.6%)
 500 AMCOL International Corp. $ 13
 640 Brush Engineered Materials, Inc.* 16
 300 Compass Minerals International, Inc. 23
 150,900 Freeport-McMoRan Copper & Gold, Inc. 10,571
 1,720 General Moly, Inc.* 6
 1,400 Horsehead Holding Corp.* 15
 500 RTI International Metals, Inc.* 13
 1,300 Southern Copper Corp. 38
 500 Titanium Metals Corp.* 9
 400 Walter Industries, Inc. 32
 ----------
 10,736
 ----------
FERTILIZERS & AGRICULTURAL CHEMICALS (0.1%)
 24,296 CF Industries Holdings, Inc. 1,666
 400 Intrepid Potash, Inc.* 10
 4,100 Monsanto Co. 209
 1,200 Mosaic Co. 55
 623 Scotts Miracle-Gro Co. "A" 28
 ----------
 1,968
 ----------
FOREST PRODUCTS (0.0%)
 80 Deltic Timber Corp. 4
 1,160 Louisiana-Pacific Corp.* 10
 1,600 Weyerhaeuser Co. 68
 ----------
 82
 ----------
INDUSTRIAL GASES (0.0%)
 1,500 Air Products & Chemicals, Inc. 104
 800 Airgas, Inc. 50
 2,300 Praxair, Inc. 178
 ----------
 332
 ----------
METAL & GLASS CONTAINERS (0.0%)
 200 AEP Industries, Inc.* 5
 500 AptarGroup, Inc. 20
 600 Ball Corp. 30
 1,100 Crown Holdings, Inc.* 26
 100 Greif, Inc. "A" 5
 1,020 Myers Industries, Inc. 9
 1,200 Owens-Illinois, Inc.* 36
 1,190 Pactiv Corp.* 34
 700 Silgan Holdings, Inc. 20
 ----------
 185
 ----------
PAPER PACKAGING (0.0%)
 800 Bemis Co., Inc. 23
 100 Boise, Inc.* 1
 3,400 Graphic Packaging Holding Co.* 11
 600 Packaging Corp. of America 13
 600 Rock-Tenn Co. "A" 31
 1,300 Sealed Air Corp. 27
 700 Sonoco Products Co. 21
 1,600 Temple-Inland, Inc. 34
 ----------
 161
 ----------
PAPER PRODUCTS (0.2%)
 2,600 Buckeye Technologies, Inc.* 31
 600 Clearwater Paper Corp.* 37
 9,800 Domtar Corp.* 600
 1,000 Glatfelter 12
 111,414 International Paper Co. 2,588
 1,200 KapStone Paper & Packaging Corp.* 13
 1,300 MeadWestvaco Corp. 31
 100 Neenah Paper, Inc. 2
 400 Schweitzer-Mauduit International, Inc. 22
 1,400 Wausau Paper Corp.* 12
 ----------
 3,348
 ----------
SPECIALTY CHEMICALS (0.5%)
 878 A. Schulman, Inc. 20
 500 Albemarle Corp. 22
 500 Arch Chemicals, Inc. 17
 960 Balchem Corp. 23
 400 Cytec Industries, Inc. 17
 1,700 Ecolab, Inc. 80
 700 Ferro Corp.* 6

PORTFOLIO OF INVESTMENTS | 53

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 700 H.B. Fuller Co. $ 15
 560 Innophos Holdings, Inc. 16
 760 Innospec, Inc.* 10
 500 International Flavors & Fragrances, Inc. 22
 2,100 Landec Corp.* 13
 96,100 Lubrizol Corp. 8,512
 400 Minerals Technologies, Inc. 21
 900 Nalco Holding Co. 21
 700 Newmarket Corp. 72
 500 OM Group, Inc.* 15
 3,040 PolyOne Corp.* 30
 360 Quaker Chemical Corp. 10
 600 Rockwood Holdings, Inc.* 16
 800 RPM International, Inc. 16
 700 Sensient Technologies Corp. 19
 900 Sigma-Aldrich Corp. 48
 240 Stepan Co. 17
 1,000 Valspar Corp. 31
 900 W.R. Grace & Co.* 23
 680 Zep, Inc. 13
 ----------
 9,125
 ----------
STEEL (0.0%)
 800 AK Steel Holding Corp. 12
 700 Allegheny Technologies, Inc. 38
 520 AM Castle & Co.* 8
 200 Carpenter Technology Corp. 8
 1,000 Cliffs Natural Resources, Inc. 56
 700 Commercial Metals Co. 11
 400 Haynes International, Inc. 13
 2,400 Nucor Corp. 103
 280 Olympic Steel, Inc. 8
 400 Reliance Steel & Aluminum Co. 18
 300 Schnitzer Steel Industries, Inc. "A" 15
 1,500 Steel Dynamics, Inc. 22
 1,000 United States Steel Corp. 47
 1,720 Worthington Industries, Inc. 25
 ----------
 384
 ----------
 Total Materials 29,985
 ----------

TELECOMMUNICATION SERVICES (0.3%)
ALTERNATIVE CARRIERS (0.0%)

 400 AboveNet, Inc.* 18
 300 Clearwire Corp. "A"* 3
 1,366 Cogent Communications Group, Inc.* 12
 29,900 Level 3 Communications, Inc.* 40
 2,400 Neutral Tandem, Inc.* 32
 4,040 PAETEC Holding Corp.* 17
 760 Premiere Global Services, Inc.* 6
 900 tw telecom, inc.* 16
 ----------
 144
 ----------
INTEGRATED TELECOMMUNICATION SERVICES (0.2%)
 2,500 Alaska Communications Systems Group, Inc. 21
 152,907 AT&T, Inc. 3,716
 500 Atlantic Tele-Network, Inc. 21
 600 Cbeyond, Inc.* 9
 2,205 CenturyTel, Inc. 76
 7,000 Cincinnati Bell, Inc.* 22
 2,300 Frontier Communications Corp.(a) 18
 1,560 General Communication, Inc. "A"* 9
 35,900 Qwest Communications International, Inc. 188
 21,900 Verizon Communications, Inc. 603
 2,800 Windstream Corp. 30
 ----------
 4,713
 ----------

54 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

WIRELESS TELECOMMUNICATION SERVICES (0.1%)
 3,000 American Tower Corp. "A"* $ 122
 2,700 Crown Castle International Corp.* 100
 1,500 Leap Wireless International, Inc.* 24
 2,000 MetroPCS Communications, Inc.* 18
 4,250 NII Holdings, Inc. "B"* 155
 1,000 NTELOS Holdings Corp. 18
 700 SBA Communications Corp. "A"* 23
 1,500 Shenandoah Telecommunications Co. 25
 85,200 Sprint Nextel Corp.* 437
 1,000 Syniverse Holdings, Inc.* 20
 2,200 Telephone & Data Systems, Inc. 72
 1,771 U.S. Cellular Corp.* 74
 6,900 USA Mobility, Inc. 97
 ----------
 1,185
 ----------
 Total Telecommunication Services 6,042
 ----------

UTILITIES (0.9%)
ELECTRIC UTILITIES (0.1%)

 1,500 Allegheny Energy, Inc. 31
 500 ALLETE, Inc. 17
 3,600 American Electric Power Co., Inc. 115
 360 Central Vermont Public Service Corp. 7
 800 Cleco Corp. 21
 1,600 DPL, Inc. 40
 10,100 Duke Energy Corp. 161
 2,500 Edison International 81
 700 El Paso Electric Co.* 14
 700 Empire District Electric Co. 13
 1,400 Entergy Corp. 105
 5,300 Exelon Corp. 205
 2,800 FirstEnergy Corp. 99
 3,100 FPL Group, Inc. 155
 900 Great Plains Energy, Inc. 16
 909 Hawaiian Electric Industries, Inc. 20
 700 IdaCorp, Inc. 23
 300 ITC Holdings Corp. 16
 600 MGE Energy, Inc. 21
 1,200 Northeast Utilities 31
 1,600 NV Energy, Inc. 19
 200 Otter Tail Corp. 4
 1,600 Pepco Holdings, Inc. 26
 600 Pinnacle West Capital Corp. 21
 1,000 PNM Resources, Inc. 12
 800 Portland General Electric Co. 15
 2,900 PPL Corp. 75
 2,000 Progress Energy, Inc. 77
 6,200 Southern Co. 203
 500 UIL Holdings Corp. 13
 600 UniSource Energy Corp. 18
 600 Weststar Energy, Inc. 13
 ----------
 1,687
 ----------
GAS UTILITIES (0.1%)
 400 AGL Resources, Inc. 15
 600 Atmos Energy Corp. 16
 280 Chesapeake Utilities Corp. 8
 1,000 Energen Corp. 44
 1,000 EQT Corp. 39
 500 Laclede Group, Inc. 17
 600 National Fuel Gas Co. 29
 600 New Jersey Resources Corp. 21
 600 Nicor, Inc. 24
 450 Northwest Natural Gas Co. 20
 700 ONEOK, Inc. 31
 900 Piedmont Natural Gas Co., Inc. 23
 1,200 Questar Corp. 54

PORTFOLIO OF INVESTMENTS | 55

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 500 South Jersey Industries, Inc. $ 22
 700 Southwest Gas Corp. 21
 25,494 UGI Corp. 666
 700 WGL Holdings, Inc. 24
 ----------
 1,074
 ----------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.5%)
 5,400 AES Corp.* 55
 2,500 Calpine Corp.* 34
 304,800 Constellation Energy Group, Inc. 10,784
 1,560 Mirant Corp.* 19
 20,500 NRG Energy, Inc.* 479
 300 Ormat Technologies, Inc. 9
 9,400 RRI Energy, Inc.* 42
 ----------
 11,422
 ----------
MULTI-UTILITIES (0.2%)
 700 Alliant Energy Corp. 22
 1,700 Ameren Corp. 42
 600 Avista Corp. 12
 600 Black Hills Corp. 17
 2,900 CenterPoint Energy, Inc. 40
 472 CH Energy Group, Inc. 18
 1,500 CMS Energy Corp. 22
 2,000 Consolidated Edison, Inc. 85
 4,600 Dominion Resources, Inc. 179
 35,421 DTE Energy Co. 1,612
 17,000 Integrys Energy Group, Inc. 769
 1,300 MDU Resources Group, Inc. 24
 2,000 NiSource, Inc. 30
 600 NorthWestern Corp. 16
 1,171 NSTAR 41
 800 OGE Energy Corp. 29
 16,469 PG&E Corp. 683
 4,209 Public Service Enterprise Group, Inc. 129
 800 SCANA Corp. 29
 1,793 Sempra Energy 82
 1,400 TECO Energy, Inc. 22
 500 Vectren Corp. 12
 800 Wisconsin Energy Corp. 39
 3,400 Xcel Energy, Inc. 70
 ----------
 4,024
 ----------
WATER UTILITIES (0.0%)
 500 American States Water Co. 17
 700 American Water Works Co., Inc. 14
 800 Aqua America, Inc. 14
 397 Cadiz, Inc.* 5
 500 California Water Service Group 18
 280 Connecticut Water Service, Inc. 6
 480 Middlesex Water Co. 8
 600 SJW Corp. 15
 760 Southwest Water Co. 8
 ----------
 105
 ----------
 Total Utilities 18,312
 ----------
 Total Common Stocks (cost: $438,170) 457,974
 ----------

PREFERRED SECURITIES (1.0%)

CONSUMER STAPLES (0.3%)
AGRICULTURAL PRODUCTS (0.3%)

80,000 Dairy Farmers of America, Inc., 7.88%,
 cumulative redeemable, perpetual(c) 6,560
 ----------

FINANCIALS (0.7%)
LIFE & HEALTH INSURANCE (0.4%)

130,000 Delphi Financial Group, Inc., 7.38%, perpetual* 2,610
165,000 Delphi Financial Group, Inc., 8.00%* 4,059
 ----------
 6,669
 ----------

56 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
$(000)/SHARES SECURITY (000)
--------------------------------------------------------------------------------

OTHER DIVERSIFIED FINANCIAL SERVICES (0.3%)
70 International Lease

 Finance Corp., 0.97%, perpetual(b) $ 5,600
 ----------
PROPERTY & CASUALTY INSURANCE (0.0%)
 $3,000 Security Capital Assurance Ltd., 6.88%,
 perpetual*(b) -
 ----------
REGIONAL BANKS (0.0%)
 10 CoBank, ACB, 7.81%, perpetual*(c) 448
 ----------
 Total Financials 12,717
 ----------

GOVERNMENT (0.0%)
U.S. GOVERNMENT (0.0%)

140,000 Fannie Mae, 8.25%, perpetual* 147
 80,000 Freddie Mac, 8.38%, perpetual* 84
 ----------
 Total Government 231
 ----------
 Total Preferred Securities (cost: $26,113) 19,508
 ----------

WARRANTS (0.0%)

ENERGY (0.0%)
COAL & CONSUMABLE FUELS (0.0%)
90 GreenHunter Energy, Inc., acquired 07/15/2008; cost: $0*(a),(b),(d) - INVESTMENT COMPANIES (7.6%)

 1,866,279 PIMCO Commodity Real Return Strategy Fund 13,941
 1,204,379 SPDR Trust Series 1 ETF(a) 131,807
 ----------
 Total Investment Companies (cost: $144,938) 145,748
 ----------
HEDGE FUNDS (2.5%)
 2,866,972 Deutsche iGAP Investment Trust "B",
 acquired 10/01/2008; cost: $50,000*(e),(d) 47,535
 ----------
 Total U.S. Equity Securities (cost: $659,221) 670,765
 ----------

INTERNATIONAL EQUITY SECURITIES (23.0%)

COMMON STOCKS (16.4%)

CONSUMER DISCRETIONARY (1.5%)
ADVERTISING (0.0%)

 1,789 JC Decaux S.A.*(b) 42
 72,879 WPP plc(b) 690
 ----------
 732
 ----------
APPAREL & ACCESSORIES & LUXURY GOODS (0.1%)
 3,836 Adidas-Salomon AG(b) 190
 103,333 Burberry Group plc(b) 1,029
 300 Christian Dior(b) 28
 519 lululemon athletica, inc.* 21
 4,035 LVMH Moet Hennessy-Louis Vuitton S.A.(a),(b) 424
 13,866 Swatch Group Ltd.(b) 667
 ----------
 2,359
 ----------
APPAREL RETAIL (0.1%)
 1,800 ABC-MART, Inc.(b) 62
 27,152 Hennes & Mauritz AB "B"(b) 1,520
 4,722 Industria de Diseno Textil S.A.(b) 263
 ----------
 1,845
 ----------
AUTO PARTS & EQUIPMENT (0.2%)
 38,800 Aisin Seiki Co. Ltd.(b) 1,090
 19,900 Denso Corp.(b) 532
 70,000 NHK Spring Co.(b) 664
 11,100 NOK Corp.(b) 178
 18,900 Toyota Industries Corp.(b) 484
 ----------
 2,948
 ----------

PORTFOLIO OF INVESTMENTS | 57

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

AUTOMOBILE MANUFACTURERS (0.4%)
 39,823 Bayerische Motoren Werke AG(b) $ 1,835
 20,816 Daimler AG*(b) 1,026
 25,000 Fuji Heavy Industries Ltd.* 144
 5,400 Honda Motor Co. Ltd.(b) 164
 173,000 Isuzu Motors Ltd.(b) 534
 191,200 Nissan Motor Co. Ltd.*(b) 1,375
 17,131 Renault S.A.*(b) 611
 34,500 Toyota Motor Corp.(b) 1,264
 659 Volkswagen AG(b) 56
 ----------
 7,009
 ----------
BROADCASTING (0.0%)
 900 Central European Media Enterprises Ltd. "A"* 23
 15,811 Mediaset S.p.A.(b) 98
 ----------
 121
 ----------
CABLE & SATELLITE (0.0%)
 2,082 SES(b) 43
 ----------
CASINOS & GAMING (0.1%)
 57,977 OPAP S.A.(b) 877
 680,000 Sands China Ltd.*(b) 984
 89,160 Tabcorp Holdings Ltd.(b) 502
 93,387 Tatts Group Ltd.(b) 188
 ----------
 2,551
 ----------

COMPUTER & ELECTRONICS RETAIL (0.0%)
2,200 Yamada Denki Co. Ltd.(b) 153 DEPARTMENT STORES (0.2%)

67,105 Next plc(b) 2,011
 7,597 PPR(b) 899
 ----------
 2,910
 ----------

FOOTWEAR (0.0%)
34,500 Yue Yuen Industrial Holdings, Ltd.(b) 103 HOME IMPROVEMENT RETAIL (0.1%)
633,297 Kingfisher plc(b) 2,043 HOMEBUILDING (0.0%)
34,000 Sekisui House Ltd. 307 HOMEFURNISHING RETAIL (0.0%)
4,300 Nitori Co.(b) 341 HOTELS, RESORTS, & CRUISE LINES (0.0%)
2,520 Orient-Express Hotels Ltd. "A"* 26 HOUSEHOLD APPLIANCES (0.0%)
5,100 Rinnai Corp. 255 INTERNET RETAIL (0.1%)
30,600 Dena Co. Ltd.(b) 911 MOVIES & ENTERTAINMENT (0.1%)

 100 CTC Media, Inc. 2
 61,185 Vivendi S.A.(a),(b) 1,320
 ----------
 1,322
 ----------
PUBLISHING (0.1%)
 640,305 Fairfax Media Ltd.(b) 808
 11,642 Pearson plc(b) 160
 ----------
 968
 ----------

RESTAURANTS (0.0%)
50,000 Compass Group plc(b) 386 SPECIALIZED CONSUMER SERVICES (0.0%)
440 Steiner Leisure Ltd.* 18 TEXTILES (0.0%)
3,000 Nisshinbo Industries, Inc.(b) 28 TIRES & RUBBER (0.0%)

46,400 Bridgestone Corp.(b) 750
 ----------
 Total Consumer Discretionary 28,129
 ----------

CONSUMER STAPLES (1.4%)
AGRICULTURAL PRODUCTS (0.1%)

 31,969 Elders Ltd.* 28
 180,040 Golden Agri-Resources Ltd.(b) 65
1,380,640 Marine Harvest ASA*(b) 1,108
 240,000 Wilmar International Ltd.(b) 990
 ----------
 2,191
 ----------
BREWERS (0.2%)
 18,128 Carlsberg A/S(b) 1,369
 26,979 Heineken Holding N.V.(b) 998
 18,626 Heineken N.V.(b) 796
 ----------
 3,163
 ----------

58 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

DISTILLERS & VINTNERS (0.1%)
83,147 Diageo plc(b) $ 1,271 FOOD RETAIL (0.2%)

 8,986 Casino Guichard-Perrachon S.A.(a),(b) 685
 14,071 Delhaize Group(a),(b) 1,126
 82,809 Jeronimo Martins SGPS S.A.(a),(b) 759
 101,198 Koninklijke Ahold N.V.(a),(b) 1,274
 47,130 Tesco plc(b) 280
 34,899 Woolworths Ltd.(b) 778
 ----------
 4,902
 ----------
HOUSEHOLD PRODUCTS (0.1%)
 2,898 Henkel AG & Co.(b) 115
 13,768 Reckitt Benckiser Group plc(b) 645
 5,600 Unicharm Corp.(b) 552
 ----------
 1,312
 ----------
HYPERMARKETS & SUPER CENTERS (0.1%)
 35,800 Aeon Co. Ltd.(b) 369
 38,818 Metro AG(b) 2,032
 24,944 Wesfarmers Ltd.(b) 607
 ----------
 3,008
 ----------
PACKAGED FOODS & MEAT (0.3%)
 36,479 CSM N.V.(b) 1,084
 167,307 Goodman Fielder Ltd.(b) 192
 62,619 Nestle S.A.(b) 2,827
 8,700 Nissin Food Products Co. Ltd. 288
 112,200 Tate & Lyle plc(b) 681
 7,000 Toyo Suisan Kaisha Ltd.(b) 153
 18,422 Unilever N.V.(a),(b) 503
 28,612 Unilever plc(b) 770
 ----------
 6,498
 ----------
PERSONAL PRODUCTS (0.1%)
 4,143 L'Oreal S.A.(a),(b) 386
 30,700 Shiseido Co.(b) 585
 ----------
 971
 ----------

SOFT DRINKS (0.0%)
67,896 Coca-Cola Amatil Ltd.(b) 621 TOBACCO (0.2%)

81,893 British America Tobacco plc(b) 2,415
45,579 Imperial Tobacco Group plc(b) 1,184
 ----------
 3,599
 ----------
 Total Consumer Staples 27,536
 ----------

ENERGY (1.4%)
COAL & CONSUMABLE FUELS (0.1%)

 161,500 China Shenhua Energy Co. Ltd. "H"(b) 642
 12,083 Whitehaven Coal Ltd.(b) 49
 512,000 Yanzhou Coal Mining Co. Ltd. "H"(b) 1,195
 ----------
 1,886
 ----------
INTEGRATED OIL & GAS (1.0%)
 45,237 BG Group plc(b) 692
 944,431 BP plc(b),(f) 6,750
 54,898 ENI S.p.A.(b) 1,031
 20,600 Petroleo Brasileiro S.A. ADR 734
 55,494 Repsol YPF S.A.(b) 1,139
 70,474 Royal Dutch Shell plc "A"(b),(f) 1,852
 93,058 Royal Dutch Shell plc "A" 2,438
 84,041 Royal Dutch Shell plc "B"(b),(f) 2,121
 20,800 Statoil ASA(a),(b) 417
 70,768 Total S.A.(a),(b),(f) 3,301
 ----------
 20,475
 ----------
OIL & GAS EQUIPMENT & SERVICES (0.1%)
 106,900 Aker Kvaerner ASA(b) 1,510
 44,300 TGS Nopec Geophysical Co. ASA*(b) 600
 ----------
 2,110
 ----------

PORTFOLIO OF INVESTMENTS | 59

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

OIL & GAS EXPLORATION & PRODUCTION (0.1%)
 148 INPEX Holdings, Inc.(b) $ 924
 1,100 Japan Petroleum Exploration Co., Ltd.(b) 50
 ----------
 974
 ----------
OIL & GAS REFINING & MARKETING (0.1%)
 47,661 Caltex Australia(b) 450
 150,000 Cosmo Oil Co. Ltd. 439
 177,200 JX Holdings, Inc.* 951
 ----------
 1,840
 ----------
OIL & GAS STORAGE & TRANSPORTATION (0.0%)
 1,680 DHT Maritime, Inc. 7
 1,300 Frontline Ltd.(a) 43
 1,360 Nordic American Tanker Shipping Ltd. 38
 1,433 Ship Finance International Ltd. 26
 ----------
 114
 ----------
 Total Energy 27,399
 ----------

FINANCIALS (3.4%)
ASSET MANAGEMENT & CUSTODY BANKS (0.1%)
316,621 3i Group plc(b) 1,301 CONSUMER FINANCE (0.0%)

 7,200 ORIX Corp.(b) 550
 2,300 SFCG Co. Ltd., acquired 06/26/2008 and 07/16/2008;
 cost: $274*(b),(d) -
 ----------
 550
 ----------
DIVERSIFIED BANKS (1.9%)
 110,763 Australia and New Zealand Banking Group Ltd.(b) 2,095
 105,066 Banco Bilbao Vizcaya Argentaria S.A.(b) 1,089
 16,203 Banco Espirito Santo S.A.(b) 62
 920 Banco Latinoamericano de Exportaciones S.A. "E" 12
 106,101 Banco Popular Espanol S.A.(b) 537
 240,023 Banco Santander S.A.(b),(f) 2,436
 155,685 Bank Hapoalim Ltd.*(b) 591
2,076,000 Bank of China Ltd. "H"(b) 1,032
 19,600 Bank of Montreal 1,149
 180,380 Barclays plc(b) 787
 18,598 BNP Paribas S.A.(b) 1,054
 7,400 Canadian Imperial Bank of Commerce 502
 33,542 Commonwealth Bank of Australia(b) 1,470
 35,000 DnB NOR ASA(b) 349
 78,950 Hana Financial Group, Inc. 1,985
 266,630 HSBC Holdings plc(b),(f) 2,418
 946,894 Industrial and Commercial Bank of China Ltd. "H"(b) 697
 30,364 KBC Groep N.V.*(b) 1,175
3,094,480 Lloyds TSB Group plc*(b) 2,523
 85,000 Mitsubishi UFJ Financial Group, Inc.(b) 413
 277,600 Mizuho Trust & Banking Co., Ltd.(b) 501
 69,300 National Australia Bank Ltd.(b) 1,447
 22,700 National Bank of Canada 1,241
 269,601 Natixis*(b) 1,173
 56,160 Nordea Bank AB(b) 459
 38,776 OTP Bank*(b) 983
 27,000 Overseas Chinese Town Asia Holdings Ltd.(b) 161
 765,414 Royal Bank of Scotland Group plc*(b) 515
 4,786 Societe Generale 206
 62,968 Standard Chartered plc(b) 1,487
 51,100 Sumitomo Mitsui Financial Group, Inc.(b) 1,519
 121,000 Sumitomo Trust and Banking Co. Ltd.(b) 646
 24,043 Svenska Handelsbanken AB "A"(b) 582
 39,000 United Overseas Bank Ltd.(b) 504

60 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 76,976 Westpac Banking Corp.(b) $ 1,512
 67,630 Woori Finance Holdings Co. Ltd.(b) 867
 ----------
 36,179
 ----------
DIVERSIFIED CAPITAL MARKETS (0.4%)
 115,658 Credit Suisse Group(b) 4,484
 27,082 Deutsche Bank AG(a),(b) 1,606
 109,207 Investec plc(b) 772
 80,122 UBS AG*(b) 1,062
 ----------
 7,924
 ----------

INVESTMENT BANKING & BROKERAGE (0.0%)
2,300 Lazard Ltd. "A" 72 LIFE & HEALTH INSURANCE (0.2%)

1,120,406 Legal & General Group plc(b) 1,276
 199,780 Old Mutual plc(b) 328
 29,684 Prudential plc(b) 232
 20,700 Sun Life Financial, Inc.(a) 585
 5,239 Swiss Life Holding*(b) 556
 ----------
 2,977
 ----------
MULTI-LINE INSURANCE (0.3%)
 15,116 Allianz Holding AG(b) 1,509
 148,166 Aviva plc(b) 683
 24,187 AXA S.A.(a),(b) 397
 15,564 Sampo OYJ "A"(b) 329
 8,175 Topdanmark A/S*(b) 925
 7,004 Zurich Financial Services AG(b) 1,424
 ----------
 5,267
 ----------
MULTI-SECTOR HOLDINGS (0.0%)
 25,000 Criteria Caixacorp S.A.(b) 107
 14,616 Investor AB(b) 235
 ----------
 342
 ----------
OTHER DIVERSIFIED FINANCIAL SERVICES (0.2%)
 308,443 FirstRand Ltd.(b) 793
 160,097 ING Groep N.V.*(b) 1,267
 2,801 OKO Bank plc "A"(b) 28
 28,200 Toronto-Dominion Bank 1,929
 ----------
 4,017
 ----------
PROPERTY & CASUALTY INSURANCE (0.0%)
 1,400 Allied World Assurance Co. Holdings Ltd. 63
 1,055 Argo Group International Holdings Ltd. 32
 2,500 Aspen Insurance Holdings Ltd. 63
 9,000 NKSJ Holdings, Inc.* 55
 78,986 Suncorp Metway 545
 1,160 United American Indemnity Ltd. "A"* 9
 2,800 XL Capital Ltd. "A" 49
 ----------
 816
 ----------
REGIONAL BANKS (0.2%)
 15,000 77th Bank Ltd.(b) 77
 27,554 Bendigo Bank Ltd.(b) 197
 11,000 Chiba Bank Ltd.(b) 67
 137,000 Fukuoka Financial Group, Inc.(b) 567
 19,000 Gunma Bank Ltd.(b) 97
 178,000 Nishi Nippon City Bank Ltd.(b) 488
 760 Oriental Financial Group, Inc. 10
 19,100 Popular, Inc.* 58
 116,400 Sapporo Hokuyo Holdings, Inc.(b) 429
 664,000 Shinsei Bank Ltd.*(b) 671
 12,000 Yamaguchi Financial Group, Inc. 115
 ----------
 2,776
 ----------
REINSURANCE (0.1%)
 203 Enstar Group Ltd.* 13
 1,322 Flagstone Reinsurance Holdings Ltd. 16
 960 Greenlight Capital Re Ltd. "A"* 23
 51,731 Hannover Rueckversicherungs(b) 2,215
 2,840 Montpelier Re Holdings Ltd. 44
 ----------
 2,311
 ----------

PORTFOLIO OF INVESTMENTS | 61

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

SPECIALIZED FINANCE (0.0%)
 129,602 IG Group Holdings plc(b) $ 710
 ----------
 Total Financials 65,242
 ----------

HEALTH CARE (1.4%)
BIOTECHNOLOGY (0.0%)
1,240 Protalix BioTherapeutics, Inc.* 8 HEALTH CARE DISTRIBUTORS (0.1%)

 11,300 Alfresa Holdings Corp.(b) 525
 17,400 Suzuken Co.Ltd.(b) 610
 ----------
 1,135
 ----------
HEALTH CARE EQUIPMENT (0.1%)
 520 Orthofix International N.V.* 17
 84,238 Smith & Nephew plc(b) 762
 9,000 Sonova Holding AG(b) 968
 3,480 Synthes, Inc.(b) 366
 ----------
 2,113
 ----------

HEALTH CARE SUPPLIES (0.0%)
3,119 Coloplast A/S "B"(b) 319 PHARMACEUTICALS (1.2%)

 50,798 AstraZeneca plc(b) 2,127
 18,019 Bayer AG(b) 1,007
187,146 GlaxoSmithKline plc(b) 3,128
 45,320 H Lundbeck A/S(b) 662
166,803 Meda AB "A"(b) 1,271
155,456 Novartis AG(b) 7,038
 17,756 Novo Nordisk A/S(b) 1,365
 27,626 Orion Oyj "B"(b) 486
 15,093 Roche Holdings AG(b) 2,070
 53,875 Sanofi-Aventis S.A.(a),(b) 3,228
 31,227 Shire Ltd.(b) 641
 38,806 STADA Arzneimittel AG(b) 1,387
 4,791 Teva Pharmaceutical Industries Ltd.(b) 262
 5,393 Teva Pharmaceutical Industries Ltd.ADR 296
 ----------
 24,968
 ----------
 Total Health Care 28,543
 ----------

INDUSTRIALS (2.3%)
AEROSPACE & DEFENSE (0.2%)

 179,336 BAE Systems plc(b),(f) 836
 15,629 MTU Aero Engines Holding AG(b) 836
 41,641 Safran S.A.(b) 1,118
 14,107 Zodiac Aerospace(b) 693
 ----------
 3,483
 ----------
AIR FREIGHT & LOGISTICS (0.0%)
 5,976 TNT N.V.(b) 151
 2,700 UTi Worldwide, Inc. 39
 ----------
 190
 ----------
AIRLINES (0.1%)
 539,237 Cathay Pacific Airways(b) 1,027
 800 Copa Holdings S.A."A" 41
 24,000 Singapore Airlines Ltd.(b) 243
 ----------
 1,311
 ----------
BUILDING PRODUCTS (0.2%)
 153,000 Asahi Glass Co.Ltd.(b) 1,604
 28,736 Compagnie De Saint Gobain(b) 1,092
 ----------
 2,696
 ----------

COMMERCIAL PRINTING (0.0%)
16,000 Dai Nippon Printing Co.Ltd.(b) 193 CONSTRUCTION & ENGINEERING (0.1%)

 12,564 Bouygues S.A.(b) 529
 19,200 Daelim Industrial Co. Ltd.(b) 893
 25,738 Fomento de Construccionesy Contratas S.A.(a),(b) 629
 7,437 Hochtief AG(b) 476
 ----------
 2,527
 ----------
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS (0.1%)
 2,400 Komatsu Ltd.(b) 45
 3,449 Scania AB(b) 50
 199,000 SembCorp Marine Ltd.(b) 568
 41,500 Tata Motors Ltd.ADR(a) 692
 79,938 Volvo AB "B"*(b) 828

62 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 481,000 Yangzijiang Shipbuilding Holdings Ltd.(b) $ 433
 ----------
 2,616
 ----------
ELECTRICAL COMPONENTS & EQUIPMENT (0.2%)
 101,000 Fuji Electric Holdings Co. Ltd.(b) 275
 480 Harbin Electric, Inc.* 10
 18,673 Nexans S.A.(a),(b) 1,161
 9,153 Schneider Electric S.A.(a),(b) 911
 169,700 Sumitomo Electric Industries Ltd.(b) 2,010
 ----------
 4,367
 ----------
HEAVY ELECTRICAL EQUIPMENT (0.1%)
 19,759 Alstom S.A.(b) 938
 168,000 Mitsubishi Electric Corp.(b) 1,366
 ----------
 2,304
 ----------
INDUSTRIAL CONGLOMERATES (0.5%)
 122,041 Cookson Group PLC*(b) 835
 62,541 CSR Ltd.(b) 89
 21,686 DCC plc(b) 496
 127,000 Fraser & Neave Ltd.(b) 443
 5,200 Jardine Matheson Holdings Ltd.(b) 181
 57,268 Koninklijke Philips Electronics N.V.(b) 1,708
 45,000 NWS Holdings Ltd.(b) 79
 89,000 SembCorp Industries(b) 254
 49,171 Siemens AG(b) 4,419
 12,502 Wendel(b) 679
 ----------
 9,183
 ----------
INDUSTRIAL MACHINERY (0.3%)
 7,000 Alfa Laval AB(b) 88
 46,515 Atlas Copco AB(a),(b) 658
 4,200 FANUC Ltd.(b) 441
 114,800 JTEKT Corp.(b) 1,189
 25,152 Kone Oyj "B"(a),(b) 982
 17,250 Metso Corp.(b) 539
 112,000 Mitsubishi Heavy Industries Ltd.(b) 409
 18,000 NSK Ltd.(b) 130
 9,000 SKF AB "B"(a),(b) 157
 200 SMC Corp.(b) 26
 9,631 Sulzer AG(b) 801
 37,000 Sumitomo Heavy Industries Ltd.(b) 209
 2,000 Wartsila Corp. OYJ "B"(b) 85
 50,531 Weir Group plc(b) 676
 ----------
 6,390
 ----------
MARINE (0.0%)
 6 A.P. Moeller-Maersk A/S(b) 44
 1,600 General Maritime Corp. 11
 27,500 Orient Overseas International Ltd.*(b) 188
 ----------
 243
 ----------

MARINE PORTS & SERVICES (0.0%)
1,100 Teekay Corp. 28 OFFICE SERVICES & SUPPLIES (0.0%)

893 Societe BIC S.A.(b) 62

TRADING COMPANIES & DISTRIBUTORS (0.5%)

 70,100 Bunzl plc(b) 724
 112,000 Itochu Corp.(b) 923
 144,000 Marubeni Corp.(b) 804
 106,700 Mitsubishi Corp.(b) 2,409
 136,100 Mitsui & Co. Ltd.(b) 1,954
 99,600 Sumitomo Corp.(b) 1,080
 280 Textainer Group Holding Ltd. 7
 49,900 Toyota Tsusho Corp.(b) 693
 ----------
 8,594
 ----------
TRUCKING (0.0%)
 104,000 ComfortDelGro Corp. Ltd.(b) 107
 39,234 FirstGroup plc(b) 213
 35,000 Fukuyama Transporting Co., Ltd.(b) 164
 ----------
 484
 ----------
 Total Industrials 44,671
 ----------

PORTFOLIO OF INVESTMENTS | 63

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

INFORMATION TECHNOLOGY (1.0%)
APPLICATION SOFTWARE (0.0%)

 900 AsiaInfo Holdings, Inc.* $ 20
 1,046 Dassault Systemes S.A.(b) 60
 10,018 SAP AG*(b) 425
 ----------
 505
 ----------
COMMUNICATIONS EQUIPMENT (0.1%)
 17,191 Nokia Oyj(b) 174
 42,100 Research In Motion Ltd.* 2,552
 ----------
 2,726
 ----------

COMPUTER HARDWARE (0.1%)
129,000 Fujitsu Ltd.(b) 826 ELECTRONIC COMPONENTS (0.2%)

 8,000 Kyocera Corp.(b) 697
 1,400 Mabuchi Motor Co.(b) 70
 5,000 Murata Manufacturing Co., Ltd.(b) 244
 13,500 Nidec Corp.(b) 1,228
 66,000 Nippon Electric Glass Co. Ltd.(b) 848
 ----------
 3,087
 ----------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.1%)
 10,200 FUJIFILM Holdings Corp.(b) 300
 225,000 Hitachi Ltd.*(b) 934
 ----------
 1,234
 ----------
INTERNET SOFTWARE & SERVICES (0.1%)
 1,100 Sohu.com, Inc.* 49
 68,200 Tencent Holdings Ltd.(b) 1,298
 4,290 United Internet AG*(b) 54
 3,611 Yahoo Japan Corp.(b) 1,259
 ----------
 2,660
 ----------

IT CONSULTING & OTHER SERVICES (0.0%)
1,870 OBIC Co., Ltd.(b) 358 OFFICE ELECTRONICS (0.1%)

 30,700 Brother Industries Ltd.(b) 336
 39,300 Canon, Inc.(b) 1,610
 6,244 Neopost S.A.(b) 451
 ----------
 2,397
 ----------
SEMICONDUCTOR EQUIPMENT (0.1%)
 20,000 ASM Pacific Technology Ltd.(b) 157
 36,505 ASML Holding N.V.(b) 1,031
 5,500 Tokyo Electron Ltd.(b) 322
 ----------
 1,510
 ----------
SEMICONDUCTORS (0.2%)
 308,236 Infineon Technologies AG*(b) 1,720
 937 Samsung Electronics Co. Ltd.(b) 606
 38,952 STMicroelectronics N.V.(b) 303
 162,800 United Microelectronics Corp. ADR*(a) 539
 ----------
 3,168
 ----------
 Total Information Technology 18,471
 ----------

MATERIALS (1.9%)
COMMODITY CHEMICALS (0.2%)

 44,000 Asahi Kasei Corp.(b) 227
 66,000 Denki Kagaku Kogyo Kabushiki Kaisha(b) 302
 76,500 Kuraray Co.(b) 938
 4,016 LG Chem Ltd.(b) 900
 373,000 Mitsui Chemicals, Inc.(b) 1,140
 ----------
 3,507
 ----------
CONSTRUCTION MATERIALS (0.0%)
 1,598 RHI AG*(b) 42
 ----------
DIVERSIFIED CHEMICALS (0.2%)
 76,699 BASF AG(b) 4,021
 45,000 Mitsubishi Chemical Holdings Corp.(b) 211
 ----------
 4,232
 ----------
DIVERSIFIED METALS & MINING (1.0%)
 26,973 Anglo American Capital plc*(b) 1,034
 79,969 BHP Billiton Ltd.(b),(f) 2,598
 231,385 BHP Billiton plc(b) 6,365
 2,400 First Quantum Minerals Ltd. 127

64 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 36,434 KGHM Polska Miedz S.A.(b) $ 1,057
 16,941 Rio Tinto Ltd.(b) 967
 98,048 Rio Tinto plc(b) 4,519
 24,000 Sumitomo Metal Mining Co. Ltd.(b) 335
 15,557 Vedanta Resources plc(b) 518
 58,009 Xstrata plc(b) 848
 ----------
 18,368
 ----------

FERTILIZERS & AGRICULTURAL CHEMICALS (0.0%)
21,781 Incitec Pivot Ltd.(b) 55 INDUSTRIAL GASES (0.0%)
5,608 Linde AG(b) 573 PAPER PRODUCTS (0.2%)

 151,414 Mondi plc(b) 913
 371,000 Nine Dragons Paper Holdings Ltd.(b) 549
 6,523 Sequana Capital(b) 82
 173,385 Stora Enso Oyj(b) 1,281
 ----------
 2,825
 ----------
SPECIALTY CHEMICALS (0.1%)
 17,000 Daicel Chemical Industries, Ltd.(b) 116
 831 Givaudan S.A.(b) 645
 65,600 JSR Corp.(b) 1,184
 7,800 Nitto Denko Corp. 279
 888 Umicore(b) 27
 ----------
 2,251
 ----------
STEEL (0.2%)
 14,419 ArcelorMittal ADR(b) 434
 20,319 Evraz Group S.A. GDR* 550
 23,100 JFE Holdings, Inc.(b) 761
 60,000 Kobe Steel Ltd.(b) 121
 68,917 Magnitogorsk Iron & Steel Works GDR* 725
 5,800 Maruichi Steel Tube Ltd.(b) 103
 214,000 Nippon Steel Corp.(b) 742
 81,965 Onesteel Ltd.(b) 221
 22,554 ThyssenKrupp AG(b) 608
 ----------
 4,265
 ----------
 Total Materials 36,118
 ----------

TELECOMMUNICATION SERVICES (1.1%)
ALTERNATIVE CARRIERS (0.0%)
960 Global Crossing Ltd.* 13 INTEGRATED TELECOMMUNICATION SERVICES (0.6%)

 13,154 Belgacom S.A.(b) 406
 351,189 BT Group plc(b) 643
 24,000 Deutsche Telekom AG(b) 269
 41,371 France Telecom S.A.(b) 788
 95,069 Koninklijke (Royal) KPN N.V.(b) 1,239
 23,530 KT Corp.(b) 866
 32,500 Nippon Telegraph & Telephone Corp.(b) 1,331
 205,217 Portugal Telecom SGPS S.A.(b) 2,084
 628,553 Telecom Italia S.p.A.(b) 583
 643,363 Telecom Italia S.p.A.(a),(b) 763
 101,731 Telefonica S.A.(b),(f) 1,949
 45,174 TeliaSonera AB(b) 273
 ----------
 11,194
 ----------
WIRELESS TELECOMMUNICATION SERVICES (0.5%)
 13,400 America Movil S.A.B. de C.V. ADR "L" 634
 90 KDDI Corp.(b) 411
 55,142 Mobile TeleSystems ADR* 1,060
 98,569 Sistema JSFC GDR(b) 2,557
 8,000 SoftBank Corp.(b) 193
2,791,283 Vodafone Group plc(b) 5,589
 ----------
 10,444
 ----------
 Total Telecommunication Services 21,651
 ----------
UTILITIES (1.0%)
----------------
ELECTRIC UTILITIES (0.6%)
 35,701 E.ON AG(b) 1,087
 819,382 EDP-Energias de Portugal(a),(b) 2,528
 351,769 Enel S.p.A.(b),(f) 1,611
 46,037 Fortum Oyj(b) 1,038
 105,333 Iberdrola S.A.(b) 702

PORTFOLIO OF INVESTMENTS | 65

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 75,400 Kansai Electric Power Co., Inc.(b) $ 1,724
 55,372 Public Power Corp.*(b) 860
 34,594 Red Electrica de Espana(b) 1,364
 10,000 Scottish & Southern Energy plc(b) 152
 247,078 Terna-Rete Elettrica Nationale S.p.A.(b) 924
 ----------
 11,990
 ----------
GAS UTILITIES (0.3%)
 14,375 Enagas S.A.(b) 234
 34,828 Gas Natural SDG S.A.(b) 507
 457,403 Snam Rete Gas S.p.A.(a),(b) 1,842
 430,000 Tokyo Gas Co. Ltd.(b) 1,876
 ----------
 4,459
 ----------
MULTI-UTILITIES (0.1%)
 12,212 Gaz de France S.A.(b) 380
 136,307 National Grid plc(b) 1,030
 13,144 RWE AG(b) 945
 ----------
 2,355
 ----------
WATER UTILITIES (0.0%)
 480 Consolidated Water Co. Ltd. 6
 ----------
 Total Utilities 18,810
 ----------
 Total Common Stocks (cost: $354,414) 316,570
 ----------

PRINCIPAL
AMOUNT
$(000)/SHARES

PREFERRED SECURITIES (0.7%)

CONSUMER DISCRETIONARY (0.0%)
AUTOMOBILE MANUFACTURERS (0.0%)
6,261 Volkswagen AG(b) 537 CONSUMER STAPLES (0.0%)
HOUSEHOLD PRODUCTS (0.0%)
3,300 Henkel AG & Co. KGaA(b) 153 FINANCIALS (0.6%)
DIVERSIFIED BANKS (0.3%)

 134,314 Banco Bradesco S.A. 2,184
 161,150 Banco Itau Holding Financeira S.A. 2,985
 ----------
 5,169
 ----------
REINSURANCE (0.3%)
 3,000 Ram Holdings Ltd., 7.50%, non-cumulative,
 perpetual, acquired 1/23/2007 and
 3/02/2007; cost: $3,065*(d) 750
 $6,500 Swiss Re Capital I LP, 6.85%, perpetual(c) 5,271
 ----------
 6,021
 ----------
 Total Financials 11,190
 ----------

INDUSTRIALS (0.1%)
TRADING COMPANIES & DISTRIBUTORS (0.1%)

137,000 Itausa-Investimentos Itau S.A. 815
 ----------
 Total Preferred Securities
 (cost: $14,686) 12,695
 ----------

RIGHTS (0.0%)

INDUSTRIALS (0.0%)
TRADING COMPANIES & DISTRIBUTORS (0.0%)
882 Itausa-Investimentos Itau S.A.*(b) 1 UTILITIES (0.0%)
MULTI-UTILITIES (0.0%)

54,522 National Grid plc* 108
 ----------
 Total Rights (cost: $-) 109
 ----------

66 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

INVESTMENT COMPANIES (5.9%)
 343,699 iShares MSCI EAFE Index ETF(a) $ 16,608
2,545,102 iShares MSCI Emerging Markets Index ETF(a) 96,968
 ----------
 Total Investment Companies (cost: $97,127) 113,576
 ----------
 Total International Equity Securities
 (cost: $466,227) 442,950
 ----------

PRECIOUS METALS AND MINERALS SECURITIES (3.9%)

GOLD (3.2%)

AFRICAN GOLD COMPANIES (0.4%)

 90,000 AngloGold Ashanti Ltd. ADR 3,773
 280,000 Gold Fields Ltd. ADR 3,850
 ----------
 7,623
 ----------
AUSTRALIAN GOLD COMPANIES (0.3%)
 800,000 Lihir Gold Ltd.(b) 2,678
 110,000 Newcrest Mining Ltd.(b) 2,986
 ----------
 5,664
 ----------

EUROPEAN GOLD COMPANIES (0.2%)
45,000 Randgold Resources Ltd. ADR 3,935 NORTH AMERICAN GOLD COMPANIES (2.1%)

 55,000 Agnico-Eagle Mines Ltd. 3,222
 2,300 Allied Nevada Gold Corp.* 44
 85,000 Barrick Gold Corp. 3,577
 260,000 Eldorado Gold Corp. 4,407
 290,000 Gammon Gold, Inc.* 2,129
 80,000 Goldcorp, Inc. 3,447
 230,000 IAMGOLD Corp. 3,981
 180,000 Kinross Gold Corp. 3,098
 96,800 Newmont Mining Corp. 5,210
 150,000 Red Back Mining, Inc.* 3,827
 75,400 Royal Gold, Inc. 3,780
 340,000 Yamana Gold, Inc. 3,658
 ----------
 40,380
 ----------
SOUTH AMERICAN GOLD COMPANIES (0.2%)
 100,000 Compania de Minas Buenaventura S.A. ADR 3,600
 ----------
 Total Gold 61,202
 ----------

PLATINUM GROUP METALS (0.3%)
 130,000 Impala Platinum Holdings Ltd.(b) 3,296
 100,000 Lonmin plc*(b) 2,435
 440 Stillwater Mining Co.* 6
 ----------
 Total Platinum Group Metals 5,737
 ----------
SILVER (0.4%)
 5,600 Coeur d'Alene Mines Corp.* 84
 7,360 Hecla Mining Co.* 40
 120,000 Pan American Silver Corp. 2,998
 200,000 Silver Wheaton Corp.* 3,778
 ----------
 Total Silver 6,900
 ----------
 Total Precious Metals
 and Minerals Securities
 (cost: $50,804) 73,839
 ----------

GLOBAL REAL ESTATE EQUITY SECURITIES (2.3%)

COMMON STOCKS (1.6%)

DIVERSIFIED REAL ESTATE ACTIVITIES (0.3%)

 400 Consolidated-Tomoka Land Co. 12
 174,000 Hopewell Holdings Ltd.(b) 473
1,031,000 New World Development Ltd.(b) 1,655
 600 St. Joe Co.* 16
 72,000 Sun Hung Kai Properties Ltd.(b) 957
 45,000 Swire Pacific Ltd.(b) 485
 360 Tejon Ranch Co.* 9

PORTFOLIO OF INVESTMENTS | 67

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 307,000 UOL Group Ltd.(b) $ 845
 81,000 Wharf (Holdings) Ltd.(b) 396
 205,000 Wheelock & Co. Ltd.(b) 543
 ----------
 Total Diversified Real Estate Activities 5,391
 ----------

REAL ESTATE DEVELOPMENT (0.0%)
1,000 Forestar Group, Inc.* 18 REAL ESTATE OPERATING COMPANIES (0.0%)

 700 Forest City Enterprises, Inc. "A"* 9
 58,210 Immofinanz AG*(b) 179
 ----------
 Total Real Estate Operating Companies 188
 ----------
REAL ESTATE SERVICES (0.0%)
 5,805 Altisource Portfolio Solutions S.A.* 156
 1,900 CB Richard Ellis Group, Inc. "A"* 30
 200 Jones Lang LaSalle, Inc. 15
 ----------
 Total Real Estate Services 201
 ----------
REITs - DIVERSIFIED (0.1%)
 108,472 BGP Holdings plc, acquired 08/06/2009;
 cost: $0*(b),(d) -
 1,520 CapLease, Inc. 8
 1,800 Colonial Properties Trust 27
 141,439 Cousins Properties, Inc. 1,091
 3,020 Gecina S.A.(b) 248
 1,720 Gramercy Capital Corp.* 3
 2,200 Investors Real Estate Trust 19
 700 Liberty Property Trust, Inc. 22
 7 One Liberty Properties, Inc. -
 500 PS Business Parks, Inc. 27
 269,945 Stockland(b) 877
 637 Vornado Realty Trust 50
 900 Washington REIT 26
 ----------
 Total REITs - Diversified 2,398
 ----------
REITs - INDUSTRIAL (0.1%)
 42,100 AMB Property Corp. 1,092
 7,080 DCT Industrial Trust, Inc. 34
 1,100 DuPont Fabros Technology, Inc. 28
 600 EastGroup Properties, Inc. 22
 15,280 First Industrial Realty Trust, Inc.* 102
 880 First Potomac Realty Trust 13
 1,700 Monmouth Real Estate Investment Corp. "A" 13
 3,800 ProLogis 43
 ----------
 Total REITs - Industrial 1,347
 ----------
REITs - MORTGAGE (0.2%)
 400 American Capital Agency Corp. 11
 196,500 Annaly Capital Management, Inc. 3,333
 1,500 Anworth Mortgage Asset Corp. 10
 1,000 Capstead Mortgage Corp. 11
 20,600 Chimera Investment Corp. 81
 1,100 Hatteras Financial Corp. 30
 3,240 iStar Financial, Inc.* 20
 3,800 MFA Mortgage Investments, Inc. 28
 1,920 NorthStar Realty Finance Corp. 6
 1,400 Redwood Trust, Inc. 21
 920 Resource Capital Corp. 5
 1,400 Starwood Property Trust, Inc. 26
 ----------
 Total REITs - Mortgage 3,582
 ----------
REITs - OFFICE (0.1%)
 500 Alexandria Real Estate Equities, Inc. 33
 1,900 BioMed Realty Trust, Inc. 32
 1,000 Boston Properties, Inc. 77

68 | USAA CORNERSTONE STRATEGY FUND

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 900 Brandywine Realty Trust $ 11
 500 Corporate Office Properties Trust 19
 500 Digital Realty Trust, Inc. 29
 800 Douglas Emmett, Inc. 12
 87,700 Duke Realty Corp. 1,042
 2,120 Franklin Street Properties Corp. 26
 500 Government Properties Income Trust 13
 800 Highwoods Properties, Inc. 24
 1,700 HRPT Properties Trust 11
 800 Kilroy Realty Corp. 26
 6,598 Lexington Realty Trust 41
 36,500 Mack-Cali Realty Corp. 1,204
 720 Parkway Properties, Inc. 12
 500 SL Green Realty Corp. 31
 ----------
 Total REITs - Office 2,643
 ----------
REITs - RESIDENTIAL (0.4%)
 741 American Campus Communities, Inc. 20
 800 Apartment Investment & Management Co. "A" 16
 480 Associated Estates Realty Corp. 7
 14,515 AvalonBay Communities, Inc. 1,423
 30,500 BRE Properties, Inc. 1,246
 500 Camden Property Trust 23
 1,840 Education Realty Trust, Inc. 12
 23,800 Equity LifeStyle Properties, Inc. 1,233
 33,100 Equity Residential Properties Trust 1,494
 300 Essex Property Trust, Inc. 32
 500 Home Properties, Inc. 24
 600 Mid-America Apartment Communities, Inc. 33
 51,700 Post Properties, Inc. 1,297
 520 Sun Communities, Inc. 15
 1,100 UDR, Inc. 22
 ----------
 Total REITs - Residential 6,897
 ----------
REITs - RETAIL (0.2%)
 59,601 Acadia Realty Trust 1,066
 100 Alexander's, Inc. 32
 1,400 CBL & Associates Properties, Inc. 20
 1,280 Cedar Shopping Centers, Inc. 9
 42,421 CFS Retail Property Trust(b) 69
 20,540 Developers Diversified Realty Corp. 235
 700 Equity One, Inc. 12
 16,500 Federal Realty Investment Trust 1,216
 793 Getty Realty Corp. 18
 2,040 Glimcher Realty Trust 14
 2,600 Inland Real Estate Corp. 22
 3,100 Kimco Realty Corp. 44
 1,520 Kite Realty Group Trust 7
 192,000 Link REIT(b) 459
 759 Macerich Co. 31
 900 National Retail Properties, Inc. 20
 1,220 Pennsylvania REIT 17
 816 Ramco-Gershenson Properties Trust 9
 700 Realty Income Corp. 22
 500 Regency Centers Corp. 18
 500 Saul Centers, Inc. 19
 17,768 Simon Property Group, Inc. 1,511
 600 Tanger Factory Outlet Centers, Inc. 25
 500 Taubman Centers, Inc. 20
 640 Urstadt Biddle Properties, Inc. "A" 11
 600 Weingarten Realty Investors 13
 ----------
 Total REITs - Retail 4,939
 ----------

REITs - SPECIALIZED (0.2%)
2,040 Ashford Hospitality Trust, Inc.* 16
960 Cogdell Spencer, Inc. 6

PORTFOLIO OF INVESTMENTS | 69

--------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
SHARES SECURITY (000)
--------------------------------------------------------------------------------

 3,561 DiamondRock Hospitality Co.* $ 33
 500 Entertainment Properties Trust 20
 1,080 Extra Space Storage, Inc. 16
 2,080 FelCor Lodging Trust, Inc.* 14
 2,300 HCP, Inc. 73
 1,000 Health Care REIT, Inc. 43
 1,200 Healthcare Realty Trust, Inc. 28
 2,960 Hersha Hospitality Trust 14
 800 Hospitality Properties Trust 18
 96,293 Host Hotels & Resorts, Inc. 1,373
 800 LaSalle Hotel Properties 18
 760 LTC Properties, Inc. 20
 2,040 Medical Properties Trust, Inc. 20
 1,100 National Health Investors, Inc. 45
 30,000 Nationwide Health Properties, Inc. 1,065
 1,100 OMEGA Healthcare Investors, Inc. 22
 1,200 Plum Creek Timber Co., Inc. 42
 1,086 Potlatch Corp. 38
 1,359 Public Storage 126
 3,996 Rayonier, Inc. 179
 1,100 Senior Housing Properties Trust 23
 500 Sovran Self Storage, Inc. 18
 2,400 Strategic Hotel Capital, Inc.* 12
 828 Sunstone Hotel Investors, Inc.* 9
 2,560 U-Store-It Trust 21
 360 Universal Health Realty Income Trust 12
 1,200 Ventas, Inc. 56
 ----------
 Total REITs - Specialized 3,380
 ----------
 Total Common Stocks (cost: $25,367) 30,984
 ----------

INVESTMENT COMPANIES (0.7%)
1,660,219 ING International Real Estate Fund 11,870
 63,378 SPDR DJ Wilshire International Real Estate ETF(a) 1,992
 ----------
 Total Investment Companies (cost: $11,613) 13,862
 ----------
RIGHTS (0.0%)
DIVERSIFIED REAL ESTATE ACTIVITIES (0.0%)
 360 Tejon Ranch Co.* -
 ----------
 Total Rights (cost: $-) -
 ----------
 Total Global Real Estate Equity Securities
 (cost: $36,980) 44,846
 ----------

70 | USAA CORNERSTONE STRATEGY FUND

---------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
---------------------------------------------------------------------------------------------------

 BONDS (34.9%)

 CORPORATE OBLIGATIONS (18.2%)

 CONSUMER DISCRETIONARY (0.1%)
 -----------------------------
 APPAREL & ACCESSORIES & LUXURY GOODS (0.1%)
$ 1,024 Kellwood Co.(g) 12.88% 12/31/2014 $ 860
 2,861 Kellwood Co. 7.63 10/15/2017 1,445
 ----------
 Total Consumer Discretionary 2,305
 ----------
 CONSUMER STAPLES (0.5%)
 -----------------------
 DRUG RETAIL (0.5%)
 9,866 CVS Caremark Corp. 6.30 6/01/2037 8,933
 ----------
 ENERGY (1.0%)
 -------------
 OIL & GAS STORAGE & TRANSPORTATION (1.0%)
 7,280 Enbridge Energy Partners, LP 8.05 10/01/2037 7,199
 4,780 Enterprise Products Operating, LP 7.00 6/01/2067 4,195
 9,750 Southern Union Co. 7.20(h) 11/01/2066 8,824
 ----------
 Total Energy 20,218
 ----------
 FINANCIALS (14.1%)
 ------------------
 CONSUMER FINANCE (0.5%)
 6,552 American Express Co. 6.80 9/01/2066 6,241
 3,500 Capital One Financial Corp. 7.69 8/15/2036 3,237
 ----------
 9,478
 ----------
 DIVERSIFIED BANKS (1.4%)
 6,651 Comerica Capital Trust II 6.58 2/20/2037 5,587
 1,000 Emigrant Bancorp, Inc.(c) 6.25 6/15/2014 753
 6,500 First Tennessee Bank, N.A. 5.65 4/01/2016 6,262
 4,000 USB Capital IX 6.19 -(i) 3,160
 5,800 USB Realty Corp.(c) 6.09 -(i) 4,263
 6,500 Wachovia Capital Trust III 5.80 -(i) 5,200
 1,000 Wells Fargo Capital XIII 7.70 -(i) 990
 ----------
 26,215
 ----------
 DIVERSIFIED REAL ESTATE ACTIVITIES (0.2%)
 3,000 Brookfield Asset Management, Inc. 5.80 4/25/2017 2,923
 ----------
 INVESTMENT BANKING & BROKERAGE (0.3%)
 8,693 Goldman Sachs Capital II 5.79 -(i) 6,694
 ----------
 LIFE & HEALTH INSURANCE (1.9%)
 2,000 Great-West Life & Annuity Insurance Co.(c) 7.15 5/16/2046 1,800
 10,000 Lincoln National Corp. 7.00 5/17/2066 8,300


================================================================================

 PORTFOLIO OF INVESTMENTS | 71

================================================================================



---------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
---------------------------------------------------------------------------------------------------

$ 1,300 MetLife Capital Trust X(c) 9.25% 4/08/2038 $ 1,423
 2,000 MetLife, Inc. 10.75 8/01/2069 2,395
 10,010 Nationwide Mutual Insurance Co.(c) 5.81 12/15/2024 8,715
 6,500 Prudential Financial, Inc. 8.88 6/15/2038 6,955
 9,030 StanCorp Financial Group, Inc. 6.90 6/01/2067 7,445
 ----------
 37,033
 ----------
 MULTI-LINE INSURANCE (1.2%)
 10,012 Genworth Financial, Inc. 6.15 11/15/2066 7,034
 10,705 Glen Meadow(c) 6.51 2/12/2067 8,002
 9,165 Oil Insurance Ltd.(c) 7.56 -(i) 8,013
 ----------
 23,049
 ----------
 MULTI-SECTOR HOLDINGS (0.1%)
 2,000 Leucadia National Corp. 8.65 1/15/2027 1,895
 ----------
 OTHER DIVERSIFIED FINANCIAL SERVICES (1.4%)
 1,360 Bank of America Corp. Capital Trust XV 1.05(h) 6/01/2056 829
 5,000 BankAmerica Capital III 0.87(h) 1/15/2027 3,390
 4,000 BankBoston Capital Trust IV 0.85(h) 6/08/2028 2,684
 2,000 First Republic Bank Corp. 7.75 9/15/2012 2,175
 7,710 General Electric Capital Corp. 6.38 11/15/2067 7,180
 8,000 JPMorgan Chase & Co. Capital XXI 1.29(h) 2/02/2037 5,611
 1,625 MBNA Capital B 1.14(h) 2/01/2027 1,102
 5,190 ZFS Finance USA Trust IV(c) 5.88 5/09/2032 4,570
 ----------
 27,541
 ----------
 PROPERTY & CASUALTY INSURANCE (1.8%)
 7,000 Allstate Corp. 6.13 5/15/2037 6,160
 7,000 Chubb Corp. 6.38 3/29/2067 6,720
 3,000 Fund American Companies, Inc. 5.88 5/15/2013 3,103
 2,000 Ironshore Holdings US, Inc.(c) 8.50 5/15/2020 1,994
 2,070 Liberty Mutual Group, Inc. 7.30 6/15/2014 2,242
 7,000 Progressive Corp. 6.70 6/15/2037 6,395
 1,000 RLI Corp. 5.95 1/15/2014 1,030
 6,500 Travelers Companies, Inc. 6.25 3/15/2037 6,067
 ----------
 33,711
 ----------
 REGIONAL BANKS (3.2%)
 3,000 AgFirst Farm Credit Bank 6.59 -(i) 2,522
 3,500 City National Capital Trust I 9.63 2/01/2040 3,574
 3,000 Cullen/Frost Bankers, Inc. 5.75 2/15/2017 2,852
 8,500 Fifth Third Capital Trust IV 6.50 4/15/2037 6,864
 3,500 First Empire Capital Trust I 8.23 2/01/2027 3,367
 5,000 Fulton Capital Trust I 6.29 2/01/2036 3,204


================================================================================

72 | USAA CORNERSTONE STRATEGY FUND

================================================================================



---------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
---------------------------------------------------------------------------------------------------

$ 10,000 Huntington Capital III 6.65% 5/15/2037 $ 6,983
 5,039 Manufacturers & Traders Trust Co. 5.63 12/01/2021 4,679
 4,000 PNC Preferred Funding Trust(c) 6.52 -(i) 3,045
 4,979 PNC Preferred Funding Trust III(c) 8.70 -(i) 5,073
 6,500 Regions Financing Trust II 6.63 5/15/2047 4,726
 2,000 Susquehanna Bancshares, Inc. 2.16(h) 5/01/2014 1,529
 2,500 Susquehanna Capital II 11.00 3/23/2040 2,631
 3,000 TCF National Bank 5.50 2/01/2016 2,861
 10,000 Webster Capital Trust IV 7.65 6/15/2037 7,000
 ----------
 60,910
 ----------
 REINSURANCE (0.4%)
 4,000 Max USA Holdings Ltd.(c) 7.20 4/14/2017 4,184
 4,000 Platinum Underwriters Finance, Inc. 7.50 6/01/2017 4,384
 ----------
 Total Reinsurance 8,568
 ----------
 REITs - INDUSTRIAL (0.3%)
 1,000 ProLogis 6.88 3/15/2020 957
 4,500 ProLogis 2.25 4/01/2037 4,247
 1,000 ProLogis 1.88 11/15/2037 909
 ----------
 Total REITs - Industrial 6,113
 ----------
 REITs - OFFICE (0.6%)
 3,000 Brandywine Operating Partnership, LP 5.70 5/01/2017 2,965
 3,390 Duke Realty, LP 5.95 2/15/2017 3,425
 1,426 HRPT Properties Trust 5.75 11/01/2015 1,471
 2,715 HRPT Properties Trust 6.25 8/15/2016 2,802
 1,000 HRPT Properties Trust 6.25 6/15/2017 1,026
 ----------
 11,689
 ----------
 REITs - RETAIL (0.6%)
 2,592 Developers Diversified Realty Corp. 5.38 10/15/2012 2,571
 2,000 Developers Diversified Realty Corp. 5.50 5/01/2015 1,931
 4,000 New Plan Excel Realty Trust, Inc. 5.13 9/15/2012 3,600
 3,000 New Plan Excel Realty Trust, Inc. 5.30 1/15/2015 2,355
 413 New Plan Excel Realty Trust, Inc.,
 acquired 02/20/2009; cost: $140(d) 7.68 11/02/2026 326
 ----------
 10,783
 ----------
 REITs - SPECIALIZED (0.2%)
 1,000 Hospitality Properties Trust 5.13 2/15/2015 980
 3,500 Ventas Realty, LP 6.75 4/01/2017 3,513
 ----------
 4,493
 ----------
 Total Financials 271,095
 ----------


================================================================================

 PORTFOLIO OF INVESTMENTS | 73

================================================================================



---------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
---------------------------------------------------------------------------------------------------

 INDUSTRIALS (0.1%)
 ------------------
 AIRLINES (0.1%)
$ 197 Airport Airplanes 0.71%(h) 3/15/2019 $ 193
 1,436 America West Airlines, Inc. Pass-Through
 Trust (INS) 7.93 1/02/2019 1,422
 ----------
 Total Industrials 1,615
 ----------
 UTILITIES (2.4%)
 ----------------
 ELECTRIC UTILITIES (1.3%)
 1,846 Cedar Brakes II, LLC(c) 9.88 9/01/2013 1,894
 2,000 FPL Group Capital, Inc. 6.35 10/01/2066 1,822
 4,000 FPL Group Capital, Inc. 6.65 6/15/2067 3,665
 1,000 FPL Group Capital, Inc. 7.30 9/01/2067 987
 716 Oglethorpe Power Corp. 6.97 6/30/2011 717
 10,000 PPL Capital Funding, Inc. 6.70 3/30/2067 8,762
 1,000 SPI Electricity Property Ltd. (INS) 7.25 12/01/2016 1,157
 2,992 Texas Competitive Electric Holdings Co., LLC(j) 3.79 10/10/2014 2,313
 1,970 Texas Competitive Electric Holdings Co., LLC(j) 3.97 10/10/2014 1,515
 2,965 Texas Competitive Electric Holdings Co., LLC(j) 3.97 10/10/2014 2,289
 ----------
 25,121
 ----------
 MULTI-UTILITIES (1.1%)
 6,500 Dominion Resources, Inc. 7.50 6/30/2066 6,313
 1,000 Dominion Resources, Inc. 6.30 9/30/2066 925
 9,741 Integrys Energy Group, Inc. 6.11 12/01/2066 8,778
 3,000 Puget Sound Energy, Inc. 6.97 6/01/2067 2,751
 3,500 Wisconsin Energy Corp. 6.25 5/15/2067 3,189
 ----------
 21,956
 ----------
 Total Utilities 47,077
 ----------
 Total Corporate Obligations (cost: $300,621) 351,243
 ----------

 EURODOLLAR AND YANKEE OBLIGATIONS (2.9%)

 ENERGY (0.5%)
 -------------
 INTEGRATED OIL & GAS (0.0%)
 133 PEMEX Finance Ltd. 8.88 11/15/2010 137
 300 PEMEX Finance Ltd. 9.03 2/15/2011 305
 ----------
 442
 ----------
 OIL & GAS DRILLING (0.1%)
 672 Delek & Avner-Yam Tethys Ltd.(c) 5.33 8/01/2013 684
 ----------


================================================================================

74 | USAA CORNERSTONE STRATEGY FUND

================================================================================



---------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
---------------------------------------------------------------------------------------------------

 OIL & GAS STORAGE & TRANSPORTATION (0.4%)
$ 8,000 TransCanada Pipelines Ltd. 6.35% 5/15/2067 $ 7,267
 ----------
 Total Energy 8,393
 ----------
 FINANCIALS (2.3%)
 -----------------
 DIVERSIFIED BANKS (0.5%)
 6,500 Barclays Bank plc(c) 8.55 -(i) 6,175
 4,125 BayernLB Capital Trust I 6.20 -(i) 1,908
 2,500 Landsbanki Islands hf, acquired 10/12/2007;
 cost: $2,500(c),(d),(k) 7.43 -(i) 9
 3,000 Royal Bank of Scotland Group plc 7.64 -(i) 1,710
 ----------
 9,802
 ----------
 DIVERSIFIED CAPITAL MARKETS (0.4%)
 8,000 UBS Preferred Funding Trust I 8.62 -(i) 7,803
 ----------
 DIVERSIFIED REAL ESTATE ACTIVITIES (0.1%)
 2,000 Brookfield Asset Management, Inc. 7.13 6/15/2012 2,149
 ----------
 MULTI-LINE INSURANCE (0.7%)
 5,092 AXA SA 3.79(h) -(i) 3,439
 3,270 AXA SA 4.05(h) -(i) 2,348
 8,000 ING Capital Funding Trust III 8.44 -(i) 7,120
 ----------
 Total Multi-Line Insurance 12,907
 ----------
 OTHER DIVERSIFIED FINANCIAL SERVICES (0.1%)
 3,000 ZFS Finance USA Trust II(c) 6.45 12/15/2065 2,760
 ----------
 PROPERTY & CASUALTY INSURANCE (0.5%)
 2,500 Allied World Assurance Holdings Ltd. 7.50 8/01/2016 2,722
 6,670 QBE Insurance Group Ltd.(c) 5.65 7/01/2023 6,114
 ----------
 8,836
 ----------
 REGIONAL BANKS (0.0%)
 3,000 Glitnir Banki hf, acquired 9/11/2006 and
 10/18/2006; cost: $3,051(c),(d),(k) 7.45 -(i) 11
 ----------
 Total Financials 44,268
 ----------
 MATERIALS (0.1%)
 ----------------
 DIVERSIFIED METALS & MINING (0.1%)
 2,500 Glencore Finance S.A. 8.00 -(i) 2,412
 ----------
 Total Eurodollar and Yankee
 Obligations (cost: $59,478) 55,073
 ----------


================================================================================

 PORTFOLIO OF INVESTMENTS | 75

================================================================================



-----------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------------

 ASSET-BACKED SECURITIES (1.6%)

 FINANCIALS (1.6%)
 -----------------
 ASSET-BACKED FINANCING (1.6%)
$ 376 Aerco Ltd.(c) 0.86%(h) 7/15/2025 $ 352
 3,000 AESOP Funding II, LLC(c) 9.31 10/20/2013 3,334
 43 AmeriCredit Automobile Receivables Trust 2.03(h) 1/12/2012 43
 2,000 AmeriCredit Automobile Receivables Trust 6.96 10/14/2014 2,130
 1,500 Banc of America Securities Auto Trust 5.51 2/19/2013 1,504
 1,500 Bank of America Credit Card Trust 0.63(h) 6/15/2014 1,466
 1,050 Citibank Credit Card Issuance Trust 6.95 2/18/2014 1,122
 3,000 Credit Acceptance Auto Loan Trust(c) 5.68 5/15/2017 3,096
 3,000 GE Equipment Midticket, LLC 0.66(h) 9/15/2017 2,902
 2,000 Hertz Vehicle Financing, LLC(c) 5.08 11/25/2011 2,021
 1,475 MBNA Master Credit Card Note Trust 6.80 7/15/2014 1,574
 1,700 Prestige Auto Receivables Trust "A"(c) 5.67 4/15/2017 1,701
 3,000 Rental Car Finance Corp.(c) 0.48(h) 7/25/2013 2,786
 1,817 SLM Student Loan Trust 0.87(h) 10/25/2038 1,581
 3,000 Triad Automobile Receivables Owners Trust 5.43 7/14/2014 3,140
 1,661 Trinity Rail Leasing, LP(c) 5.90 5/14/2036 1,562
 533 USXL Funding, LLC (INS)(c) 5.38(h) 4/15/2014 532
 ----------
 Total Financials 30,846
 ----------
 Total Asset-Backed Securities (cost: $29,489) 30,846
 ----------
 COMMERCIAL MORTGAGE SECURITIES (8.2%)

 FINANCIALS (8.2%)
 -----------------
 COMMERCIAL MORTGAGE-BACKED SECURITIES (8.2%)
 392 Banc of America Commercial Mortgage, Inc. 7.20 9/15/2032 393
 2,000 Banc of America Commercial Mortgage, Inc. 4.77 7/10/2043 1,577
 1,200 Banc of America Commercial Mortgage, Inc. 4.95 7/10/2043 983
 8,045 Banc of America Commercial Mortgage, Inc. 6.01 7/10/2044 6,890
 3,000 Banc of America Commercial Mortgage, Inc. 5.96 5/10/2045 2,695
 1,175 Banc of America Commercial Mortgage, Inc. 5.68 7/10/2046 1,028
 6,000 Banc of America Commercial Mortgage, Inc. 5.35 9/10/2047 3,224
 5,735 Banc of America Commercial Mortgage, Inc.(c) 6.14 9/10/2047 5,017
 436 Bear Stearns Commercial Mortgage Securities, Inc. 4.00 3/13/2040 441
 3,500 Bear Stearns Commercial Mortgage Securities, Inc. 5.69 6/11/2050 3,568
 3,000 Chase Commercial Mortgage Securities Corp. 6.39 11/18/2030 3,002
 2,798 Chase Commercial Mortgage Securities Corp. 7.32 10/15/2032 2,820
 1,000 Citigroup Commercial Mortgage Trust 5.40 7/15/2044 568
 860 Citigroup Commercial Mortgage Trust 5.89 12/10/2049 878


================================================================================

76 | USAA CORNERSTONE STRATEGY FUND

================================================================================



-----------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------------

$ 4,500 Citigroup Commercial Mortgage Trust 6.30% 12/10/2049 $ 3,841
 2,000 Commercial Mortgage 5.54 2/11/2017 1,621
 6,000 Commercial Mortgage Loan Trust 6.22 12/10/2049 4,718
 5,000 Commercial Mortgage Trust 4.58 10/15/2037 5,025
 2,500 Credit Suisse Commercial Mortgage Trust 5.82 6/15/2038 2,238
 4,000 Credit Suisse Commercial Mortgage Trust 6.02 6/15/2038 4,104
 1,050 Credit Suisse Commercial Mortgage Trust 5.55 2/15/2039 867
 6,562 Credit Suisse Commercial Mortgage Trust 6.22 2/15/2041 6,656
 2,000 Credit Suisse First Boston Mortgage Securities Corp.(c) 6.65 12/18/2035 2,011
 2,213 Credit Suisse First Boston Mortgage Securities Corp.(c) 5.02 1/15/2037 1,793
 2,500 Credit Suisse First Boston Mortgage Securities Corp. 5.10 8/15/2038 2,216
 1,000 GE Capital Commercial Mortgage Corp. 6.07 6/10/2038 1,033
 3,355 GE Capital Commercial Mortgage Corp. 5.61 12/10/2049 2,234
 2,500 GMAC Commercial Mortgage Securities, Inc. 4.75 5/10/2043 2,375
 499 Government Lease Trust(c) 6.48 5/18/2011 507
 49 Greenwich Capital Commercial Funding Corp. 4.02 1/05/2036 49
 1,000 GS Mortgage Securities Corp. II(c) 6.45 8/05/2018 1,030
 2,000 J.P. Morgan Chase Commercial Mortgage Securities Corp. 4.99 9/12/2037 1,824
 625 J.P. Morgan Chase Commercial Mortgage Securities Corp. 5.00 10/15/2042 581
 2,000 J.P. Morgan Chase Commercial Mortgage Securities Corp. 5.49 4/15/2043 2,125
 3,000 J.P. Morgan Chase Commercial Mortgage Securities Corp. 5.81 6/12/2043 3,071
 2,000 J.P. Morgan Chase Commercial Mortgage Securities Corp. 5.35 12/15/2044 1,356
 2,000 J.P. Morgan Chase Commercial Mortgage Securities Corp. 5.35 12/15/2044 1,236
 808 LB-UBS Commercial Mortgage Trust 4.56 9/15/2026 820
 4,000 LB-UBS Commercial Mortgage Trust 5.87 6/15/2032 4,072
 3,000 LB-UBS Commercial Mortgage Trust(c) 5.33 12/15/2036 2,661
 1,500 Merrill Lynch Mortgage Trust 5.23 11/12/2037 1,493
 1,000 Merrill Lynch Mortgage Trust 5.38 1/12/2044 565
 3,000 Merrill Lynch Mortgage Trust 5.38 8/12/2048 2,788
 3,500 Merrill Lynch Mortgage Trust 5.83 6/12/2050 3,498
 7,000 Merrill Lynch Mortgage Trust 5.69 2/12/2051 7,051
 5,000 Merrill Lynch/Countrywide Commercial Mortgage Trust 5.36 8/12/2048 4,927
 3,000 ML-CFC Commercial Mortgage Trust 5.42 8/12/2048 2,200
 3,000 ML-CFC Commercial Mortgage Trust 5.96 8/12/2049 2,533
 4,000 ML-CFC Commercial Mortgage Trust 5.70 9/12/2049 3,876
 4,000 Morgan Stanley Capital I, Inc. 5.80 8/12/2041 4,352


================================================================================

 PORTFOLIO OF INVESTMENTS | 77

================================================================================



-----------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------------

$ 878 Morgan Stanley Capital I, Inc. 5.15% 8/13/2042 $ 598
 723 Morgan Stanley Capital I, Inc. 5.17 8/13/2042 472
 3,000 Morgan Stanley Capital I, Inc. 5.81 12/12/2049 2,982
 5,000 Morgan Stanley Capital I, Inc. 4.77 7/15/2056 4,159
 5,000 Mortgage Capital Funding, Inc. 7.06 6/18/2030 4,988
 2,000 Prudential Mortgage Capital Funding, LLC 6.76 5/10/2034 2,056
 2,264 Wachovia Bank Commercial Mortgage Trust 5.00 7/15/2041 2,282
 2,119 Wachovia Bank Commercial Mortgage Trust 4.66 4/15/2042 2,123
 3,000 Wachovia Bank Commercial Mortgage Trust 4.61 5/15/2044 3,015
 4,500 Wachovia Bank Commercial Mortgage Trust 5.42 1/15/2045 4,537
 4,000 Wachovia Bank Commercial Mortgage Trust 5.50 10/15/2048 4,061
 ----------
 Total Financials 157,704
 ----------
 Total Commercial Mortgage Securities (cost: $137,335) 157,704
 ----------
 U.S. GOVERNMENT AGENCY ISSUES (0.0%)(l)

 INTEREST-ONLY COMMERCIAL MORTGAGE-BACKED SECURITIES (0.0%)
 3,952 Government National Mortgage Assn. 1.75 7/16/2010 48
 ----------
 MORTGAGE-BACKED PASS-THROUGH SECURITIES (0.0%)
 67 Government National Mortgage Assn. I 6.50 5/15/2023 73
 60 Government National Mortgage Assn. I 6.50 4/15/2024 65
 22 Government National Mortgage Assn. I 7.50 3/15/2017 25
 27 Government National Mortgage Assn. I 7.50 3/15/2017 29
 7 Government National Mortgage Assn. I 8.00 6/15/2016 8
 4 Government National Mortgage Assn. I 8.00 9/15/2016 5
 8 Government National Mortgage Assn. I 8.00 11/15/2016 9
 5 Government National Mortgage Assn. I 8.50 6/15/2016 5
 3 Government National Mortgage Assn. I 8.50 6/15/2016 4
 9 Government National Mortgage Assn. I 8.50 7/15/2016 10
 2 Government National Mortgage Assn. I 8.50 9/15/2016 2
 15 Government National Mortgage Assn. I 8.50 12/15/2016 17
 8 Government National Mortgage Assn. I 8.50 12/15/2016 9
 1 Government National Mortgage Assn. I 8.50 1/15/2017 1
 5 Government National Mortgage Assn. I 8.50 1/15/2017 5
 2 Government National Mortgage Assn. I 8.50 2/15/2017 3
 2 Government National Mortgage Assn. I 9.00 6/15/2016 2
 1 Government National Mortgage Assn. I 9.00 7/15/2016 2
 1 Government National Mortgage Assn. I 9.00 8/15/2016 1
 2 Government National Mortgage Assn. I 9.00 9/15/2016 2
 1 Government National Mortgage Assn. I 9.00 10/15/2016 2
 10 Government National Mortgage Assn. I 9.50 9/15/2016 11
 13 Government National Mortgage Assn. I 9.50 11/15/2016 14
 2 Government National Mortgage Assn. I 9.50 11/15/2016 3


================================================================================

78 | USAA CORNERSTONE STRATEGY FUND

================================================================================



-----------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
-----------------------------------------------------------------------------------------------------------

$ 2 Government National Mortgage Assn. I 9.50% 11/15/2016 $ 2
 10 Government National Mortgage Assn. I 9.50 4/15/2017 11
 ----------
 320
 ----------
 Total U.S. Government Agency Issues (cost: $296) 368
 ----------
 U.S. TREASURY SECURITIES (3.7%)

 INFLATION-INDEXED NOTES (3.7%)
 52,858 2.13%, 2/15/2040 56,645
 12,669 2.50%, 1/15/2029 14,104
 ----------
 Total Inflation-Indexed Notes (cost: $68,505) 70,749
 ----------
 Total U.S. Treasury Securities (cost: $68,505) 70,749
 ----------
 MUNICIPAL BONDS (0.3%)

 CASINOS & GAMING (0.2%)
 4,000 Mashantucket (Western) Pequot Tribe,
 acquired 7/29/2005 and 10/05/2009;
 cost: $3,410(c),(d),(k) 5.91 9/01/2021 2,006
 2,375 Seneca Nation of Indians Capital
 Improvements Auth. 6.75 12/01/2013 2,274
 ----------
 4,280
 ----------
 SPECIAL ASSESSMENT/TAX/FEE (0.1%)
 1,710 Erie County Tobacco Asset Securitization Corp. 6.00 6/01/2028 1,495
 ----------
 Total Municipal Bonds (cost: $7,448) 5,775
 ----------
 Total Bonds (cost: $603,172) 671,758
 ----------


-----------------------------------------------------------------------------------------------------------
NUMBER OF
SHARES
-----------------------------------------------------------------------------------------------------------

 MONEY MARKET INSTRUMENTS (0.8%)

 MONEY MARKET FUNDS (0.8%)
15,037,422 State Street Institutional Liquid Reserve Fund, 0.18%(m) 15,037
 ----------


-----------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
(000)
-----------------------------------------------------------------------------------------------------------

 U.S. TREASURY BILLS (0.0%)
$ 600 1.16%, 6/17/2010(n),(o) 600
 ----------
 Total Money Market Instruments (cost: $15,637) 15,637
 ----------


================================================================================

 PORTFOLIO OF INVESTMENTS | 79

================================================================================



-----------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
(000) SECURITY (000)
-----------------------------------------------------------------------------------------------------------

 SHORT-TERM INVESTMENTS PURCHASED WITH CASH
 COLLATERAL FROM SECURITIES LOANED (12.7%)

 REPURCHASE AGREEMENTS (11.3%)
$ 59,000 Credit Suisse First Boston LLC, 0.20%, acquired on
 5/28/2010 and due 6/01/2010 at $59,000 (collateralized
 by $60,245 of Freddie Mac(l),(+), 0.17% - 0.28%(o),
 due 7/06/2010 - 11/15/2010; market value $60,183) $ 59,000
 58,000 Deutsche Bank Securities, Inc., 0.20%, acquired on
 5/28/2010 and due 6/01/2010 at $58,000 (collateralized by
 $10,000 of Freddie Mac(l),(+), 1.63%, due 7/19/2012;
 and $48,915 of Federal Home Loan Bank(l), (+), 0.38 - 4.30%,
 due 6/22/2010 - 5/13/2019; combined market value $59,160) 58,000
 50,000 Goldman Sachs & Co., 0.19%, acquired on 5/28/2010 and
 due 6/01/2010 at $50,000 (collateralized by $50,958 of
 Federal Farm Credit(l),(+), 0.36% - 5.00%, due
 6/02/2010 - 5/14/2012; market value $51,000) 50,000
 50,000 HSBC Securities (USA), Inc., 0.19%, acquired on
 5/28/2010 and due 6/01/2010 at $50,000 (collateralized by
 $50,755 of U.S. Treasury, 1.00%, due 3/31/2012;
 market value $51,002) 50,000
 ----------
 Total Repurchase Agreements 217,000
 ----------


-----------------------------------------------------------------------------------------------------------
NUMBER OF
SHARES
-----------------------------------------------------------------------------------------------------------

 MONEY MARKET FUNDS (1.4%)
 126,829 BlackRock Liquidity Funds TempFund Portfolio, 0.16%(m) 127
27,832,628 Fidelity Institutional Money Market Portfolio, 0.23%(m) 27,832
 ----------
 Total Money Market Funds 27,959
 ----------
 Total Short-Term Investments Purchased With Cash Collateral
 From Securities Loaned (cost: $244,959) 244,959
 ----------

 TOTAL INVESTMENTS (COST: $2,077,000) $2,164,754
 ==========


================================================================================

80 | USAA CORNERSTONE STRATEGY FUND

================================================================================



-----------------------------------------------------------------------------------------------------------
 MARKET
NUMBER OF VALUE
CONTRACTS SECURITY (000)
-----------------------------------------------------------------------------------------------------------

 PURCHASED OPTIONS (0.1%)
 225 Put - Russell 2000 Index expiring June 19, 2010 at 620 $ 214
 225 Put - Russell 2000 Index expiring June 19, 2010 at 630 261
 799 Put - S&P 500 Index expiring June 19, 2010 at 1,080 2,001
 ----------
 TOTAL PURCHASED OPTIONS (COST: $2,981) $ 2,476
 ==========
 WRITTEN OPTIONS (0.0%)
 (225) Put - Russell 2000 Index expiring June 19, 2010 at 550 (58)
 (799) Put - S&P 500 Index expiring June 19, 2010 at 970 (459)
 ----------
 TOTAL WRITTEN OPTIONS (PREMIUMS RECEIVED: $1,102) $ (517)
 ==========


-----------------------------------------------------------------------------------------------------------
NUMBER OF CONTRACT UNREALIZED
CONTRACTS EXPIRATION VALUE DEPRECIATION
LONG/(SHORT) DATE (000) (000)
-----------------------------------------------------------------------------------------------------------

 FUTURES (0.2%)
 42 DJ Euro Stoxx 50 Index 6/18/2010 $1,341 $ (65)
 12 FTSE 100 Index 6/18/2010 900 (35)
 26 Nikkei 225 Index 6/10/2010 1,254 (76)
 2 SPI 200 Index 6/17/2010 188 (19)
 ------ ----------
 TOTAL FUTURES $3,683 $ (195)
 ====== ==========


-----------------------------------------------------------------------------------------------------------
 UNREALIZED
 CONTRACT APPRECIATION
NUMBER OF FORWARD FOREIGN CURRENCY SETTLEMENT VALUE (DEPRECIATION)
CONTRACTS EXCHANGE CONTRACTS DATE (000) (000)
-----------------------------------------------------------------------------------------------------------

 CONTRACTS TO SELL
 302,000 Pound Sterling 6/02/2010 $ 437 $ 20
 513,000 Euro Currency 6/02/2010 630 30
 ------ ----------
 Receivable Amount ($1,117) $1,067 $ 50
 ------ ----------
 CONTRACTS TO BUY
 302,000 Pound Sterling 6/02/2010 $ 437 $ (3)
 513,000 Euro Currency 6/02/2010 630 (6)
 ------ ----------
 Payable Amount ($1,076) $1,067 $ (9)
 ------ ----------

 NET APPRECIATION/(DEPRECIATION) $ 41
 ==========


================================================================================

 PORTFOLIO OF INVESTMENTS | 81

================================================================================



-------------------------------------------------------------------------------------------------------
($ IN 000s) VALUATION HIERARCHY
-------------------------------------------------------------------------------------------------------
 (LEVEL 1) (LEVEL 2) (LEVEL 3)
 QUOTED PRICES OTHER SIGNIFICANT SIGNIFICANT
 IN ACTIVE MARKETS OBSERVABLE UNOBSERVABLE
ASSETS FOR IDENTICAL LIABILITIES INPUTS INPUTS TOTAL
-------------------------------------------------------------------------------------------------------

U.S. Equity Securities:
 Common Stocks $457,965 $ 9 $ - $ 457,974
 Preferred Securities 4,591 9,317 5,600 19,508
 Warrants - - - -
 Investment Companies 145,748 - - 145,748
 Hedge Funds - 47,535 - 47,535
International Equity Securities:
 Common Stocks 20,076 296,494 - 316,570
 Preferred Securities 5,984 6,711 - 12,695
 Rights 108 1 - 109
 Investment Companies 113,576 - - 113,576
Precious Metals and Minerals Securities:
 Gold 61,202 - - 61,202
 Platinum Group Metals 6 5,731 - 5,737
 Silver 6,900 - - 6,900
Global Real Estate Equity Securities:
 Common Stocks 23,798 7,186 - 30,984
 Investment Companies 13,862 - - 13,862
 Rights - - - -
Bonds:
 Corporate Obligations - 351,243 - 351,243
 Eurodollar and Yankee Obligations - 55,073 - 55,073
 Asset-backed Securities - 30,846 - 30,846
 Commercial Mortgage Securities - 157,704 - 157,704
 U.S. Government Agency Issues - 368 - 368
 U.S. Treasury Securities 70,749 - - 70,749
 Municipal Bonds - 5,775 - 5,775
Money Market Instruments:
 Money Market Funds 15,037 - - 15,037
 U.S. Treasury Bills - 600 - 600
Short-Term Investments Purchased With
 Cash Collateral From Securities Loaned:
 Repurchase Agreements - 217,000 - 217,000
 Money Market Funds 27,959 - - 27,959
Purchased Options 2,476 - - 2,476
Futures* (195) - - (195)
Forward Currency Contracts to Sell - 50 - 50
-------------------------------------------------------------------------------------------------------
Total $969,842 $1,191,643 $5,600 $2,167,085
-------------------------------------------------------------------------------------------------------


================================================================================

82 | USAA CORNERSTONE STRATEGY FUND

================================================================================



-------------------------------------------------------------------------------------------------------
($ IN 000s) VALUATION HIERARCHY
-------------------------------------------------------------------------------------------------------
 (LEVEL 1) (LEVEL 2) (LEVEL 3)
 QUOTED PRICES OTHER SIGNIFICANT SIGNIFICANT
 IN ACTIVE MARKETS OBSERVABLE UNOBSERVABLE
LIABILITIES FOR IDENTICAL ASSETS INPUTS INPUTS TOTAL
-------------------------------------------------------------------------------------------------------

Written Options $(517) $ - $- $(517)
Forward Currency Contracts to Buy* - (9) - (9)
-------------------------------------------------------------------------------------------------------
Total $(517) $(9) $- $(526)
-------------------------------------------------------------------------------------------------------


*Futures and Forward Currency Contracts are valued at the unrealized
 appreciation/depreciation on the investment.

The following is a reconciliation of assets in which significant unobservable
inputs (Level 3) were used in determining value:



-------------------------------------------------------------------------------------------------------
 PREFERRED
 SECURITIES
-------------------------------------------------------------------------------------------------------

Balance as of May 31, 2009 $ -
Net realized gain (loss) -
Change in net unrealized appreciation/depreciation* (350)
Net purchases (sales) 5,950
Transfers in and/or out of Level 3 -
-------------------------------------------------------------------------------------------------------
Balance as of May 31, 2010 $5,600
-------------------------------------------------------------------------------------------------------

*Reported in the statement of operations in the change in net unrealized appreciation/depreciation of investments.

PORTFOLIO OF INVESTMENTS | 83

NOTES TO PORTFOLIO OF INVESTMENTS

May 31, 2010

o GENERAL NOTES

Market values of securities are determined by procedures and practices discussed in Note 1 to the financial statements.

The portfolio of investments category percentages shown represent the percentages of the investments to net assets, and, in total, may not equal 100%. A category percentage of 0.0% represents less than 0.1% of net assets. Investments in foreign securities were 29.4% of net assets at May 31, 2010.

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.

o 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.

HEDGE FUNDS -- private investment funds open to a limited range of investors and exempt from certain regulations. Deutsche iGAP

84 | USAA CORNERSTONE STRATEGY FUND

Investment Trust, managed by Deutsche Bank Trust Company Americas, invests primarily in a diversified portfolio of short-term money market investments, and long and short positions in exchange-traded equity index and government bond index futures, currency forward contracts, and other derivative instruments. As of May 31, 2010, the Fund owns approximately 40% of the Class "B" shares of the iGAP fund and may redeem all or part of its investment upon 10 days' prior written notice. The Fund does not invest in the iGAP fund for the purpose of exercising management or control.

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 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.

U.S. TREASURY INFLATION-INDEXED NOTES -- designed to provide a real rate of return after being adjusted over time to reflect the impact of inflation. Their principal value periodically adjusts to the rate of inflation. They trade at the prevailing real, or after-inflation, interest rates. The U.S. Treasury guarantees repayment of these securities of at least their face value in the event of sustained deflation or a drop in prices. Inflation adjustments to the face value of these securities are included in interest income.

NOTES TO PORTFOLIO OF INVESTMENTS | 85

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.

o PORTFOLIO ABBREVIATIONS AND DESCRIPTIONS

ADR American depositary receipts are receipts issued by a U.S. bank
 evidencing ownership of foreign shares. Dividends are paid in U.S.
 dollars.
GDR Global depositary receipts are receipts issued by a U.S. or foreign
 bank evidencing ownership of foreign shares. Dividends are paid in
 U.S. dollars.
iShares Exchange-traded funds, managed by BlackRock, Inc., that represent a
 portfolio of stocks designed to closely track a specific market
 index. iShares funds 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 one of the following:
 AMBAC Assurance Corp., or Financial Guaranty Insurance Co. Although
 bond insurance reduces the risk of loss due to default by an issuer,
 such bonds remain subject

86 | USAA CORNERSTONE STRATEGY FUND

to the risk that value may fluctuate for other reasons, and there is no assurance that the insurance company will meet its obligations.

o SPECIFIC NOTES

(a) The security or a portion thereof was out on loan as of May 31, 2010.

(b) Security was fair valued at May 31, 2010, by USAA Investment Management Company (the Manager) in accordance with valuation procedures approved by the Board of Trustees.

(c) 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 Board of Trustees, unless otherwise noted as illiquid.

(d) Security deemed illiquid by the Manager, under liquidity guidelines approved by the Board of Trustees. The aggregate market value of these securities at May 31, 2010, was $50,637,000, which represented 2.6% of the Fund's net assets.

(e) Restricted security that is not registered under the Securities Act of 1933.

(f) Security, or a portion thereof, is segregated to cover the value of open futures contracts at May 31, 2010.

(g) 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.

(h) Variable-rate or floating-rate security -- interest rate is adjusted periodically. The interest rate disclosed represents the current rate at May 31, 2010.

NOTES TO PORTFOLIO OF INVESTMENTS | 87

(i) Security is perpetual and has no final maturity date but may be subject to calls at various dates in the future.

(j) 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 May 31, 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 Board of Trustees, unless otherwise noted as illiquid.

(k) Currently the issuer is in default with respect to interest and/or principal payments.

(l) U.S. government agency issues -- mortgage-backed securities issued by Government National Mortgage Association (GNMA) and certain other U.S. government guaranteed securities are supported by the full faith and credit of the U.S. government. Securities issued by government-sponsored enterprises, indicated with "+", 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.

(m) Rate represents the money market fund annualized seven-day yield at May 31, 2010.

(n) Securities with a value of $600,000 are segregated as collateral for initial margin requirements on open futures contracts.

(o) Zero-coupon security. Rate represents the effective yield at the date of purchase.

* Non-income-producing security.

See accompanying notes to financial statements.

88 | USAA CORNERSTONE STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES
(IN THOUSANDS)

May 31, 2010

ASSETS
 Investments in securities, at market value (including securities
 on loan of $234,944) (cost of $1,860,000) $1,947,754
 Investment in repurchase agreements (cost approximates market value) 217,000
 Purchased options, at market value (cost of $2,981) 2,476
 Cash denominated in foreign currencies (identified cost of $1,973) 1,951
 Receivables:
 Capital shares sold 976
 USAA Investment Management Company (Note 6D) 659
 Dividends and interest 12,355
 Securities sold 35,628
 Other 138
 Variation margin on futures contracts 30
 Unrealized appreciation on foreign currency contracts held, at value 65
 ----------
 Total assets 2,219,032
 ----------
LIABILITIES
 Payables:
 Upon return of securities loaned 244,959
 Securities purchased 45,675
 Capital shares redeemed 1,206
 Bank overdraft 950
 Written options, at market value (premiums received of $1,102) 517
 Accrued management fees 1,255
 Accrued transfer agent's fees 35
 Other accrued expenses and payables 282
 ----------
 Total liabilities 294,879
 ----------
 Net assets applicable to capital shares outstanding $1,924,153
 ==========
NET ASSETS CONSIST OF:
 Paid-in capital $2,239,632
 Accumulated undistributed net investment income 28,862
 Accumulated net realized loss on investments, options, and
 futures transactions (431,978)
 Net unrealized appreciation of investments, options, and futures contracts 87,639
 Net unrealized depreciation of foreign currency translations (2)
 ----------
 Net assets applicable to capital shares outstanding $1,924,153
 ==========
 Capital shares outstanding, unlimited number of shares authorized,
 no par value 94,195
 ==========
 Net asset value, redemption price, and offering price per share $ 20.43
 ==========

See accompanying notes to financial statements.

FINANCIAL STATEMENTS | 89

STATEMENT OF OPERATIONS
(IN THOUSANDS)

Year ended May 31, 2010

INVESTMENT INCOME
 Dividends (net of foreign taxes withheld of $981) $ 27,140
 Interest 55,163
 Securities lending (net) 509
 --------
 Total income 82,812
 --------
EXPENSES
 Management fees 14,046
 Administration and servicing fees 2,809
 Transfer agent's fees 5,920
 Custody and accounting fees 1,017
 Postage 305
 Shareholder reporting fees 155
 Trustees' fees 10
 Registration fees 49
 Professional fees 145
 Other 37
 --------
 Total expenses 24,493
 Expenses reimbursed (2,207)
 --------
 Net expenses 22,286
 --------
NET INVESTMENT INCOME 60,526
 --------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
FOREIGN CURRENCY, OPTIONS, AND FUTURES CONTRACTS
 Net realized gain (loss) on:
 Investments:
 Unaffiliated transactions 154,868
 Affiliated transactions (Note 8) (210)
 Foreign currency transactions (197)
 Options (17,969)
 Futures transactions 824
 Change in net unrealized appreciation/depreciation of:
 Investments 160,416
 Foreign currency translations (205)
 Options (620)
 Futures contracts (575)
 --------
 Net realized and unrealized gain 296,332
 --------
 Increase in net assets resulting from operations $356,858
 ========

See accompanying notes to financial statements.

90 | USAA CORNERSTONE STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS
(IN THOUSANDS)

Years ended May 31,

------------------------------------------------------------------------------------------
 2010 2009
------------------------------------------------------------------------------------------

FROM OPERATIONS
 Net investment income $ 60,526 $ 52,545
 Net realized gain (loss) on investments 154,658 (527,959)
 Net realized loss on foreign currency transactions (197) (1,146)
 Net realized gain (loss) on options (17,969) 5,820
 Net realized gain (loss) on futures transactions 824 (2,119)
 Change in net unrealized appreciation/depreciation of:
 Investments 160,416 (122,038)
 Foreign currency translations (205) 254
 Options (620) 217
 Futures contracts (575) 168
 ---------------------------
 Increase (decrease) in net assets resulting
 from operations 356,858 (594,258)
 ---------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
 Net investment income (57,537) (46,508)
 ---------------------------
FROM CAPITAL SHARE TRANSACTIONS
 Proceeds from shares sold 274,468 261,778
 Reinvested dividends 56,774 45,873
 Cost of shares redeemed (310,364) (306,735)
 ---------------------------
 Increase in net assets from capital
 share transactions 20,878 916
 ---------------------------
 Net increase (decrease) in net assets 320,199 (639,850)
NET ASSETS
 Beginning of year 1,603,954 2,243,804
 ---------------------------
 End of year $1,924,153 $1,603,954
 ===========================
Accumulated undistributed net investment income:
 End of year $ 28,862 $ 25,824
 ===========================
CHANGE IN SHARES OUTSTANDING
 Shares sold 13,623 15,003
 Shares issued for dividends reinvested 2,771 3,022
 Shares redeemed (15,378) (17,677)
 ---------------------------
 Increase in shares outstanding 1,016 348
 ===========================

See accompanying notes to financial statements.

FINANCIAL STATEMENTS | 91

NOTES TO FINANCIAL STATEMENTS

May 31, 2010

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USAA MUTUAL FUNDS TRUST (the Trust), registered under the Investment Company Act of 1940 (the 1940 Act), as amended, is an open-end management investment company organized as a Delaware statutory trust consisting of 46 separate funds. The information presented in this annual report pertains only to the USAA Cornerstone Strategy Fund (the Fund), which is classified as diversified under the 1940 Act. The Fund's investment objective is to achieve a positive, inflation-adjusted rate of return and a reasonably stable value of Fund shares, thereby preserving the purchasing power of shareholders' capital.

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

92 | USAA CORNERSTONE STRATEGY FUND

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, USAA Investment Management Company (the Manager), an affiliate of the Fund, and the Fund's subadvisers, if applicable, will monitor for events that would materially affect the value of the Fund's foreign securities. The Fund's subadvisers have agreed to notify the Manager of significant events they identify that would materially affect the value of the Fund's foreign securities. If the Manager determines that a particular event would materially affect the value of the Fund's foreign securities, then the Manager, under valuation procedures approved by the Trust's Board of Trustees, will consider such available information that it deems relevant to determine a fair value for the affected foreign securities. In addition, the Fund may use information from an external vendor or other sources to adjust the foreign market closing prices of foreign equity securities to reflect what the Fund believes to be the fair value of the securities as of the close of the NYSE. Fair valuation of affected foreign equity securities may occur frequently based on an assessment that events that occur on a fairly regular basis (such as U.S. market movements) are significant.

3. Investments in open-end investment companies, hedge, or other funds, other than ETFs, are valued at their NAV at the end of each business day.

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

5. Debt securities with maturities greater than 60 days are valued each business day by a pricing service (the Service) approved by

NOTES TO FINANCIAL STATEMENTS | 93

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.

6. Repurchase agreements are valued at cost, which approximates market value.

7. Futures are valued based upon the last sale price at the close of market on the principal exchange on which they are traded.

8. Options are valued by a pricing service at the National Best Bid/Offer (NBBO) composite price, which is derived from the best available bid and ask prices in all participating options exchanges determined to most closely reflect market value of the options at the time of computation of the Fund's NAV.

9. Securities for which market quotations are not readily available or are considered unreliable, or whose values have been materially affected by events occurring after the close of their primary markets but before the pricing of the Fund, are valued in good faith at fair value, using methods determined by the Manager in consultation with the Fund's subadvisers, if applicable, under valuation procedures approved by the Trust's Board of Trustees. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.

Fair value methods used by the Manager include, but are not limited to, obtaining market quotations from secondary pricing services,

94 | USAA CORNERSTONE STRATEGY FUND

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 that were valued as of May 31, 2010, using significant unobservable inputs, 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 held a preferred security that was not priced by any of the pricing services. The fair value methods included using inputs such as the last available quotations from the sole market maker for the security. Refer to the portfolio of

NOTES TO FINANCIAL STATEMENTS | 95

investments for a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value.

C. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES -- On December 1, 2008, the Fund adopted an accounting standard that requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements, if any.

The Fund may buy, sell, and enter into certain types of derivatives, including, but not limited to futures contracts, options, options on futures contracts, and forward currency contracts under circumstances in which such instruments are expected by the portfolio manager to aid in achieving the Fund's investment objective. The Fund also may use derivatives in circumstances where the portfolio manager believes they offer an economical means of gaining exposure to a particular asset class or securities market or to keep cash on hand to meet shareholder redemptions or other needs while maintaining exposure to the market. With exchange listed futures contracts and options, counterparty credit risk to the Fund is limited to the exchange's clearinghouse which, as counterparty to all exchange traded futures contracts and options, guarantees the transactions against default from the actual counterparty to the trade.

FUTURES CONTRACTS -- The Fund is subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The Fund may use futures contracts to gain exposure to, or hedge against, changes in the value of equities, interest rates, or foreign currencies. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date. Upon entering into such contracts, the Fund is required to deposit with the broker in either cash or securities an initial margin in an amount equal to a certain percentage of the contract amount. Subsequent payments (variation margin) are made or received by the Fund each day, depending on the daily fluctuations in the value of the contract, and are recorded

96 | USAA CORNERSTONE STRATEGY FUND

for financial statement purposes as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Upon entering into such contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly in an unfavorable direction, in which case, the Fund may not achieve the anticipated benefits of the futures contracts.

OPTION TRANSACTIONS -- The Fund is subject to equity price risk in the normal course of pursuing its investment objectives. The Fund may use options on underlying instruments, namely, equity securities, ETFs, and equity indexes, to gain exposure to, or hedge against, changes in the value of equity securities, ETFs, or equity indexes. A call option gives the purchaser the right to buy, and the writer the obligation to sell, the underlying instrument at a specified price during a specified period. Conversely, a put option gives the purchaser the right to sell, and the writer the obligation to buy, the underlying instrument at a specified price during a specified period. The purchaser of the option pays a premium to the writer of the option.

Premiums paid for purchased options are included in the Fund's statement of assets and liabilities as an investment. If a purchased option expires unexercised, the premium paid is recognized as a realized loss. If a purchased call option on a security is exercised, the cost of the security acquired includes the exercise price and the premium paid. If a purchased put option on a security is exercised, the realized gain or loss on the security sold is determined from the exercise price, the original cost of the security, and the premium paid. The risk associated with purchasing a call or put option is limited to the premium paid.

Premiums received from writing options are included in the Fund's statement of assets and liabilities as a liability. If a written option expires unexercised, the premium received is recognized as a realized gain. If a written call option on a security is exercised, the realized gain or loss on the security sold is determined from the exercise price, the original cost of the security, and the premium received. If a written

NOTES TO FINANCIAL STATEMENTS | 97

put option on a security is exercised, the cost of the security acquired is the exercise price paid less the premium received. The Fund, as a writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option.

In an attempt to reduce the Fund's volatility over time, the Fund may implement a strategy that involves writing (selling) index call or corresponding ETF options and purchasing index put or corresponding ETF options or index put spread options against a highly correlated stock portfolio. The combination of the diversified stock portfolio with the index call and put or corresponding ETF options is designed to provide the Fund with consistent returns over a wide range of equity market environments. This strategy may not fully protect the Fund against declines in the portfolio's value, and the Fund could experience a loss. Options on securities indexes or corresponding ETF options are different from options on individual securities in that the holder of the index options contract has the right to receive an amount of cash equal to the difference between the exercise price and the closing price of the underlying index on exercise date. If an option on an index is exercised, the realized gain or loss is determined from the exercise price, the value of the underlying index, and the amount of the premium.

FORWARD CURRENCY CONTRACTS -- The Fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The Fund may enter into transactions to purchase or sell forward currency contracts in order to gain exposure to, or hedge against, changes in foreign exchange rates on its investment in securities traded in foreign countries. Forward currency contracts are agreements to exchange one currency for another at a future date and at a specified price. When the Fund believes that the currency of a specific country may deteriorate relative to the U.S. dollar, it may enter into a forward contract to sell that currency. The Fund bears the market risk that arises from changes in foreign exchange rates and the credit risk that a counterparty may fail to perform under a contract. The Fund's net equity in open forward currency contracts is included in the statement of assets and liabilities as net unrealized appreciation or depreciation and is generated from differences in the forward currency exchange

98 | USAA CORNERSTONE STRATEGY FUND

rates at the trade dates of the contracts and the rates at the reporting date. When the contracts are settled, the Fund records a realized gain or loss equal to the difference in the forward currency exchange rates at the trade dates and at the settlement dates.

FAIR VALUES OF DERIVATIVE INSTRUMENTS
(IN THOUSANDS)

ASSETS 5/31/2010 5/31/2009
--------------------------------------------------------------------------------------------------
 STATEMENT OF STATEMENT OF
DERIVATIVES NOT ACCOUNTED ASSETS AND ASSETS AND
FOR AS HEDGING INSTRUMENTS LIABILITIES LIABILITIES
UNDER STATEMENT 133 LOCATION FAIR VALUE LOCATION FAIR VALUE
--------------------------------------------------------------------------------------------------

Equity contracts Purchased $2,281* Purchased $5,214*
 options; Net options; Net
 unrealized unrealized
 appreciation of depreciation of
 investments, investments,
 options, and options, and
 futures contracts futures contracts
--------------------------------------------------------------------------------------------------
Forward contracts Unrealized 50** - -
 appreciation on
 foreign currency
 contracts
--------------------------------------------------------------------------------------------------


 *Includes cumulative appreciation (depreciation) of futures contracts as
 reported in the portfolio of investments. Only current day's variation margin
 is reported within the statement of assets and liabilities.



LIABILITIES 5/31/2010 5/31/2009
--------------------------------------------------------------------------------------------------
 STATEMENT OF STATEMENT OF
DERIVATIVES NOT ACCOUNTED ASSETS AND ASSETS AND
FOR AS HEDGING INSTRUMENTS LIABILITIES LIABILITIES
UNDER STATEMENT 133 LOCATION FAIR VALUE LOCATION FAIR VALUE
--------------------------------------------------------------------------------------------------

Equity contracts Written options $517 Written options $3,299
--------------------------------------------------------------------------------------------------
Forward contracts Unrealized 9** - -
 depreciation on
 foreign currency
 contracts
--------------------------------------------------------------------------------------------------

**Net value of $41 for forward currency contracts is reported as a component of unrealized appreciation on foreign currency contracts.

NOTES TO FINANCIAL STATEMENTS | 99

THE EFFECT OF DERIVATIVE INSTRUMENTS ON THE STATEMENT OF CHANGES IN NET ASSETS DURING THE YEAR ENDED MAY 31, 2010, AND SIX-MONTH PERIOD ENDED MAY 31, 2009*

(IN THOUSANDS)

DERIVATIVES
NOT ACCOUNTED
FOR AS HEDGING STATEMENT OF CHANGE IN UNREALIZED
INSTRUMENTS CHANGES IN APPRECIATION
UNDER NET ASSETS REALIZED GAIN (LOSS) (DEPRECIATION)
STATEMENT 133 LOCATION ON DERIVATIVES ON DERIVATIVES
------------------------------------------------------------------------------------------------
 5/31/2010 5/31/2009* 5/31/2010 5/31/2009*
------------------------------------------------------------------------------------------------

Interest rate Net realized $ (121) $ - $ - $ -
contracts gain (loss) on
 options and
 futures transactions/
 change in net
 unrealized
 appreciation/
 depreciation of
 options and futures
 contracts
------------------------------------------------------------------------------------------------
Equity contracts Net realized (17,024) (1,939) (1,195) 1,735
 gain (loss) on
 options and
 futures transactions/
 change in net
 unrealized
 appreciation/
 depreciation of
 options and futures
 contracts
------------------------------------------------------------------------------------------------
Forward Change in - - 41 -
contracts net unrealized
 appreciation/depreciation
 of foreign currency
 translations
------------------------------------------------------------------------------------------------
Total $(17,145) $(1,939) $(1,154) $1,735
------------------------------------------------------------------------------------------------

*The statement of changes reflects the year ended May 31, 2009, while the schedule reflects the period December 1, 2008 - May 31, 2009. This accounting standard was effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.

100 | USAA CORNERSTONE STRATEGY FUND

D. FEDERAL TAXES -- The Fund's policy is to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its income to its shareholders. Therefore, no federal income tax provision is required.

E. INVESTMENTS IN SECURITIES -- Security transactions are accounted for on the date the securities are purchased or sold (trade date). Gains or losses from sales of investment securities are computed on the identified cost basis. Dividend income, less foreign taxes, if any, is recorded on the ex-dividend date. If the ex-dividend date has passed, certain dividends from foreign securities are recorded upon notification. Interest income is recorded daily on the accrual basis. Discounts and premiums are amortized over the life of the respective securities, using the effective yield method for long-term securities and the straight-line method for short-term securities.

F. 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.

G. FOREIGN CURRENCY TRANSLATIONS -- The Fund's assets may be invested in the securities of foreign issuers and may be traded in foreign currency. Since the Fund's accounting records are maintained in U.S. dollars, foreign currency amounts are translated into U.S. dollars on the following bases:

1. Purchases and sales of securities, income, and expenses at the exchange rate obtained from an independent pricing service on the respective dates of such transactions.

NOTES TO FINANCIAL STATEMENTS | 101

2. Market value of securities, other assets, and liabilities at the
 exchange rate obtained from an independent pricing service on a daily
 basis.

The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Separately, net realized foreign currency gains/losses may arise from sales of foreign currency, currency gains/losses realized between the trade and settlement dates on security transactions, and from the difference between amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts received. At the end of the Fund's fiscal year, these net realized foreign currency gains/losses are reclassified from accumulated net realized gain/loss to accumulated undistributed net investment income on the statement of assets and liabilities as such amounts are treated as ordinary income/loss for tax purposes. Net unrealized foreign currency exchange gains/losses arise from changes in the value of assets and liabilities, other than investments in securities, resulting from changes in the exchange rate.

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

102 | USAA CORNERSTONE STRATEGY FUND

I. EXPENSES PAID INDIRECTLY -- A portion of the brokerage commissions that the Fund pays may be recaptured as a credit that is tracked and used by the custodian to directly reduce expenses paid by the Fund. In addition, through arrangements with the Fund's custodian and other banks utilized by the Fund for cash management purposes, realized credits, if any, generated from cash balances in the Fund's bank accounts may be used to directly reduce the Fund's expenses. For the year ended May 31, 2010, brokerage commission recapture credits and custodian and other bank credits reduced the Fund's expenses by less than $500.

J. INDEMNIFICATIONS -- Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, in the normal course of business the Trust enters into contracts that contain a variety of representations and warranties that provide general indemnifications. The Trust's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. However, the Trust expects the risk of loss to be remote.

K. USE OF ESTIMATES -- The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that may affect the reported amounts in the financial statements.

(2) LINE OF CREDIT

The Fund participates in a joint, short-term, revolving, committed loan agreement of $750 million with USAA Capital Corporation (CAPCO), an affiliate of the Manager. The purpose of the agreement is to meet temporary or emergency cash needs, including redemption requests that might otherwise require the untimely disposition of securities. Subject to availability, the Fund may borrow from CAPCO an amount up to 5% of the Fund's total assets at a rate per annum equal to the rate at which CAPCO obtains funding in the capital markets, with no markup.

NOTES TO FINANCIAL STATEMENTS | 103

The USAA funds that are party to the loan agreement are assessed facility fees by CAPCO based on the funds' assessed proportionate share of CAPCO's operating expenses related to obtaining and maintaining CAPCO's funding programs in total (in no event to exceed 0.13% annually of the amount of the committed loan agreement). Prior to September 25, 2009, the maximum annual facility fee was 0.07% of the amount of the committed loan agreement. The facility fees are allocated among the funds based on their respective average net assets for the period.

For the year ended May 31, 2010, the Fund paid CAPCO facility fees of $8,000, which represents 4.4% of the total fees paid to CAPCO by the USAA funds. The Fund had no borrowings under this agreement during the year ended May 31, 2010.

(3) DISTRIBUTIONS

The character of any distributions made during the year from net investment income or net realized gains is determined in accordance with federal tax regulations and may differ from those determined in accordance with U.S. generally accepted accounting principles. Also, due to the timing of distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains were recorded by the Fund.

During the current fiscal year, permanent differences between book-basis and tax-basis accounting for foreign currency gains and losses and passive foreign investment corporations gains and losses resulted in reclassifications to the statement of assets and liabilities to increase accumulated undistributed net investment income and increase accumulated net realized loss on investments by $49,000. These reclassifications had no effect on net assets.

The tax character of distributions paid during the years ended May 31, 2010, and 2009, was as follows:

2010 2009
Ordinary income* $57,537,000 $46,508,000

*Includes distribution of short-term realized capital gains, if any, which are taxable as ordinary income.

104 | USAA CORNERSTONE STRATEGY FUND

As of May 31, 2010, the components of net assets representing distributable earnings on a tax basis were as follows:

Undistributed ordinary income $24,814,000
Accumulated capital and other losses (425,658,000)
Unrealized appreciation of investments 84,579,000
Unrealized depreciation on foreign currency translations 2,000

The difference between book-basis and tax-basis unrealized appreciation of investments is attributable to the tax deferral of losses on wash sales, the tax deferral of mark-to-market adjustments, the mark-to-market of open futures contracts, passive foreign investment corporations gains and losses, and partnership basis adjustments.

Distributions of net investment income and realized gains from security transactions not offset by capital losses are made annually in the succeeding fiscal year or as otherwise required to avoid the payment of federal taxes. At May 31, 2010, the Fund had a current post-October currency loss of $254,000 and capital loss carryovers of $425,404,000, for federal income tax purposes. The post-October loss will be recognized on the first day of the following fiscal year. If not offset by subsequent capital gains, the capital loss carryovers will expire between 2017 and 2018, as shown below. It is unlikely that the Trust's Board of Trustees will authorize a distribution of capital gains realized in the future until the capital loss carryovers have been used or expire.

 CAPITAL LOSS CARRYOVERS
-------------------------------------------
EXPIRES BALANCE
------- ------------
 2017 $ 35,551,000
 2018 389,853,000
 ------------
 Total $425,404,000
 ============

The Fund is required to evaluate tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the statement of operations

NOTES TO FINANCIAL STATEMENTS | 105

if the tax positions were deemed to not meet the more-likely-than-not threshold. For the year ended May 31, 2010, the Fund did not incur any income tax, interest, or penalties. As of May 31, 2010, the Manager has reviewed all open tax years and concluded that there was no impact to the Fund's net assets or results of operations. Tax year ended May 31, 2010, and each of the three preceding fiscal years, remain subject to examination by the Internal Revenue Service and state taxing authorities. On an ongoing basis, the Manager will monitor its tax positions to determine if adjustments to this conclusion are necessary.

(4) INVESTMENT TRANSACTIONS

Cost of purchases and proceeds from sales/maturities of securities, excluding short-term securities, for the year ended May 31, 2010, were $2,736,543,000 and $2,730,868,000, respectively.

As of May 31, 2010, the cost of securities, including short-term securities, for federal income tax purposes, was $2,082,651,000.

Gross unrealized appreciation and depreciation of investments as of May 31, 2010, for federal income tax purposes, were $190,191,000 and $105,612,000, respectively, resulting in net unrealized appreciation of $84,579,000.

For the year ended May 31, 2010 transactions in written call and put options* were as follows:

 PREMIUMS
 NUMBER OF RECEIVED
 CONTRACTS (000'S)
 ----------------------
Outstanding at May 31, 2009 11,164 $ 7,726
Options written 72,751 97,077
Options terminated in closing purchase transactions (61,773) (87,460)
Options expired (21,118) (16,241)
 ----------------------
Outstanding at May 31, 2010 1,024 $ 1,102
 ======================

*Refer to Note 1C for a discussion of derivative instruments and how they are accounted for in the Fund's financial statements.

106 | USAA CORNERSTONE STRATEGY FUND

(5) LENDING OF PORTFOLIO SECURITIES

The Fund, through its third-party securities-lending agent, Wachovia Global Securities Lending (Wachovia), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with cash collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Cash collateral is invested in high-quality short-term investments. Cash collateral requirements are determined daily based on the prior business day's ending value of securities loaned. Imbalances in cash collateral may occur on days where market volatility causes security prices to change significantly, and are adjusted the next business day. The Fund and Wachovia retain 80% and 20%, respectively, of the income earned from the investment of cash received as collateral, net of any expenses associated with the lending transaction. Wachovia receives no other fees from the Fund for its services as securities-lending agent. Risks to the Fund in securities-lending transactions are that the borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower. Wachovia Bank, N.A., parent company of Wachovia, has agreed to indemnify the Fund against any losses due to counterparty default in securities-lending transactions. For the year ended May 31, 2010, the Fund received securities-lending income of $509,000, which is net of the 20% income retained by Wachovia. As of May 31, 2010, the Fund loaned securities having a fair market value of approximately $234,944,000, which excluded $89,000, of securities on loan that were sold prior to May 31, 2010. The Fund received cash collateral of $244,959,000 for the loans, which was invested in short-term investments, as noted in the Fund's portfolio of investments.

(6) TRANSACTIONS WITH MANAGER

A. MANAGEMENT FEES -- The Manager provides investment management services to the Fund pursuant to an Advisory Agreement. Under this agreement, the Manager is responsible for managing the business and affairs of the Fund and for directly managing the day-to-day

NOTES TO FINANCIAL STATEMENTS | 107

investment of a portion of the Fund's assets, subject to the authority of and supervision by the Trust's Board of Trustees. The Manager is also authorized to select (with approval of the Trust's Board of Trustees and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a portion of the Fund's assets. The Manager monitors each subadviser's performance through quantitative and qualitative analysis, and periodically recommends to the Trust's Board of Trustees as to whether each subadviser's agreement should be renewed, terminated, or modified. The Manager also is responsible for allocating assets to the subadvisers. The allocation for each subadviser can range from 0% to 100% of the Fund's assets, and the Manager can change the allocations without shareholder approval.

The investment management fee for the Fund is composed of a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.75% of the Fund's average net assets for the fiscal year.

The performance adjustment is calculated monthly by comparing the Fund's performance to that of the Lipper Global Flexible Funds Index over the performance period. The Lipper Global Flexible Funds Index tracks the total return performance of the 30 largest funds in the Lipper Global Flexible Portfolio Funds category. The performance period for the Fund consists of the current month plus the previous 35 months. The following table is utilized to determine the extent of the performance adjustment:

OVER/UNDER PERFORMANCE ANNUAL ADJUSTMENT RATE
RELATIVE TO INDEX(1) AS A % OF THE FUND'S AVERAGE NET ASSETS(1)
---------------------------------------------------------------------------
+/- 1.00% to 4.00% +/- 0.04%
+/- 4.01% to 7.00% +/- 0.05%
+/- 7.01% and greater +/- 0.06%

(1)Based on the difference between average annual performance of the Fund and its relevant index, rounded to the nearest 0.01%. Average net assets are calculated over a rolling 36-month period.

The annual performance adjustment rate is multiplied by the average net assets of the Fund over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number

108 | USAA CORNERSTONE STRATEGY FUND

of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is the performance adjustment; a positive adjustment in the case of overperformance, or a negative adjustment in the case of underperformance.

Under the performance fee arrangement, the Fund will pay a positive performance fee adjustment for a performance period whenever the Fund outperforms the Lipper Global Flexible Funds Index over that period, even if the Fund had overall negative returns during the performance period.

For the year ended May 31, 2010, the Fund incurred total management fees, paid or payable to the Manager, of $14,046,000. For the year ended May 31, 2010, the Fund did not incur any performance adjustment.

B. SUBADVISORY ARRANGEMENTS -- The Manager has entered into investment subadvisory agreements with Batterymarch Financial Management, Inc. (Batterymarch), Credit Suisse Asset Management, LLC (Credit Suisse), Credit Suisse Securities (USA) LLC (CSSU) for its Volaris Volatility Management Group (Volaris Group), and Quantitative Management Associates LLC (QMA), under which Batterymarch directs the investment and reinvestment of a portion of the Fund's assets invested in U.S. and international stocks (as allocated from time to time by the Manager), Credit Suisse directs the investment and reinvestment of a portion of the Fund's assets invested in U.S. stocks (as allocated from time to time by the Manager), Volaris Group directs the investment and reinvestment of the portion of the Fund's assets invested in index options (as allocated from time to time by the Manager), and QMA directs the investment and reinvestment of a portion of the Fund's assets invested in international stocks (as allocated from time to time by the Manager).

The Manager (not the Fund) pays Batterymarch a subadvisory fee based on the aggregate average net assets that Batterymarch manages in the USAA Cornerstone Strategy Fund and the USAA Capital Growth Fund combined, in an annual amount of 0.25% on the first $250 million of assets; 0.21% on assets over $250 million and up to $500 million; and 0.17% on assets over $500 million. For the year ended May 31, 2010, the Manager incurred subadvisory fees for the Fund, paid or payable to Batterymarch, of $615,000.

NOTES TO FINANCIAL STATEMENTS | 109

The Manager (not the Fund) pays Credit Suisse a subadvisory fee in the annual amount of 0.15% of the portion of the Fund's average net assets that Credit Suisse manages. For the year ended May 31, 2010, the Manager incurred subadvisory fees, paid or payable to Credit Suisse, of $528,000.

The Manager (not the Fund) pays CSSU's Volaris Group a subadvisory fee based on the total notional amount of the options contracts that CSSU's Volaris Group manages in the USAA Balanced Strategy Fund, the USAA Cornerstone Strategy Fund, the USAA First Start Growth Fund, the USAA Total Return Strategy Fund, and the USAA Global Opportunities Fund, in an annual amount of 0.23% on the first $50 million of the total notional amount; 0.20% on the total notional amount over $50 million and up to $250 million; 0.12% on the total notional amount over $250 million and up to $500 million; 0.10% on the total notional amount over $500 million and up to $2 billion and 0.08% on the total notional amount over $2 billion. The notional amount is based on the daily closing price of the index that underlies the written options strategy for the Fund. For the year ended May 31, 2010, the Manager incurred subadvisory fees for the Fund, paid or payable to CSSU's Volaris Group of $681,000.

The Manager (not the Fund) pays QMA a subadvisory fee in the annual amount of 0.25% of the portion of the Fund's average net assets that QMA manages. For the year ended May 31, 2010, the Manager incurred subadvisory fees, paid or payable to QMA, of $586,000.

C. ADMINISTRATION AND SERVICING FEES -- The Manager provides certain administration and shareholder servicing functions for the Fund. For such services, the Manager receives a fee accrued daily and paid monthly at an annualized rate of 0.15% of the Fund's average net assets. For the year ended May 31, 2010, the Fund incurred administration and servicing fees, paid or payable to the Manager, of $2,809,000.

In addition to the services provided under its Administration and Servicing Agreement with the Fund, the Manager also provides certain compliance and legal services for the benefit of the Fund. The Trust's Board of Trustees has approved the reimbursement of a portion of

110 | USAA CORNERSTONE STRATEGY FUND

these expenses incurred by the Manager. For the year ended May 31, 2010, the Fund reimbursed the Manager $78,000 for these compliance and legal services. These expenses are included in the professional fees on the Fund's statement of operations.

D. EXPENSE LIMITATION -- The Manager has voluntarily agreed to limit the annual expenses of the Fund to 1.19% of its average annual net assets, excluding extraordinary expenses and before reductions of any expenses paid indirectly, and will reimburse the Fund for all expenses in excess of that amount. The Manager may modify or terminate this voluntary agreement at any time. For the year ended May 31, 2010, the Fund incurred reimbursable expenses of $2,207,000, of which $659,000 was receivable from the Manager.

E. TRANSFER AGENT'S FEES -- USAA Transfer Agency Company, d/b/a USAA Shareholder Account Services (SAS), an affiliate of the Manager, provides transfer agent services to the Fund based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. The Fund also pays SAS fees that are related to the administration and servicing of accounts that are traded on an omnibus basis. For the year ended May 31, 2010, the Fund incurred transfer agent's fees, paid or payable to SAS, of $5,920,000.

F. UNDERWRITING SERVICES -- The Manager provides exclusive underwriting and distribution of the Fund's shares on a continuing best-efforts basis. The Manager receives no commissions or fees for this service.

(7) TRANSACTIONS WITH AFFILIATES

Certain trustees and officers of the Fund are also directors, officers, and/or employees of the Manager. None of the affiliated trustees or Fund officers received any compensation from the Fund.

(8) SECURITY TRANSACTIONS WITH AFFILIATED FUNDS

During the year ended May 31, 2010, in accordance with affiliated transaction procedures approved by the Trust's Board of Trustees, purchases and sales of security transactions were executed between the Fund and the following affiliated USAA funds at the then-current market price with no brokerage commissions incurred.

NOTES TO FINANCIAL STATEMENTS | 111

 NET REALIZED
 COST TO GAIN (LOSS) TO
 SELLER PURCHASER PURCHASER SELLER
--------------------------------------------------------------------------------
USAA Cornerstone USAA High-Yield $ 455,000 $ 186,000
 Strategy Fund Opportunities Fund
USAA Cornerstone USAA Intermediate-Term 1,595,000 (455,000)
 Strategy Fund Bond Fund
USAA Cornerstone USAA Short-Term 1,078,000 59,000
 Strategy Fund Bond Fund

(9) NEW ACCOUNTING PRONOUNCEMENT

FAIR VALUE MEASUREMENTS -- 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.

112 | USAA CORNERSTONE STRATEGY FUND

(10) FINANCIAL HIGHLIGHTS

Per share operating performance for a share outstanding throughout each period is as follows:

 YEAR ENDED MAY 31,
 -------------------------------------------------------------------
 2010 2009 2008 2007 2006
 -------------------------------------------------------------------

Net asset value at
 beginning of period $ 17.21 $ 24.17 $ 28.51 $ 26.50 $ 26.53
 -------------------------------------------------------------------
Income (loss) from investment
 operations:
 Net investment income .65 .57 .46 .40 .56
 Net realized and unrealized
 gain (loss) 3.19 (7.02) (1.16) 4.38 1.68
 -------------------------------------------------------------------
Total from investment operations 3.84 (6.45) (.70) 4.78 2.24
 -------------------------------------------------------------------
Less distributions from:
 Net investment income (.62) (.51) (.44) (.53) (.22)
 Realized capital gains - - (3.20) (2.24) (2.05)
 -------------------------------------------------------------------
Total distributions (.62) (.51) (3.64) (2.77) (2.27)
 -------------------------------------------------------------------
Net asset value at end of period $ 20.43 $ 17.21 $ 24.17 $ 28.51 $ 26.50
 ===================================================================
Total return (%)* 22.31 (26.39) (2.79) 18.82(a) 8.67
Net assets at end of period (000) $1,924,153 $1,603,954 $2,243,804 $2,193,361 $1,712,123
Ratios to average net assets:**
 Expenses (%)(b) 1.19 1.19 1.19 1.19(a) 1.17
 Expenses, excluding
 reimbursements (%)(b) 1.31 1.37 1.21 1.19(a) 1.17
 Net investment income (%) 3.23 3.23 2.06 1.68 2.01
Portfolio turnover (%) 151 162 175(c) 127 151
 * Assumes reinvestment of all net investment income and realized capital gain distributions, if any,
 during the period. Includes adjustments in accordance with U.S. generally accepted accounting
 principles and could differ from the Lipper reported return.
 ** For the year ended May 31, 2010, average net assets were $1,873,172,000.
(a) For the year ended May 31, 2007, SAS voluntarily reimbursed the Fund for a portion of the
 transfer agent's fees incurred. The reimbursement had no effect on the Fund's total return or
 ratio of expenses to average net assets.
(b) Reflects total operating expenses of the Fund before reductions of any expenses paid indirectly.
 The Fund's expenses paid indirectly decreased the expense ratios as follows:
 (.00%)(+) (.00%)(+) (.00%)(+) (.00%)(+) (.01%)
 (+) Represents less than 0.01% of average net assets.
(c) Reflects increased trading activity due to changes in subadvisers and asset allocation strategies.

NOTES TO FINANCIAL STATEMENTS | 113

EXPENSE EXAMPLE

May 31, 2010 (unaudited)

EXAMPLE

As a shareholder of the Fund, you incur two types of costs: direct costs, such as wire fees, redemption fees, and low balance fees; and indirect costs, including management fees, transfer agency fees, and other Fund operating expenses. This example is intended to help you understand your indirect costs, also referred to as "ongoing costs" (in dollars), of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period of December 1, 2009, through May 31, 2010.

ACTUAL EXPENSES

The first line of the table on the next page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested at the beginning of the period, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second line of the table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses

114 | USAA CORNERSTONE STRATEGY FUND

you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any direct costs, such as wire fees, redemption fees, or low balance fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these direct costs were included, your costs would have been higher.

 EXPENSES PAID
 BEGINNING ENDING DURING PERIOD*
 ACCOUNT VALUE ACCOUNT VALUE DECEMBER 1, 2009 -
 DECEMBER 1, 2009 MAY 31, 2010 MAY 31, 2010
 ---------------------------------------------------------

Actual $1,000.00 $1,018.40 $5.99

Hypothetical 1,000.00 1,019.00 5.99
 (5% return before expenses)

* Expenses are equal to the Fund's annualized expense ratio of 1.19%, which is net of any reimbursements and expenses paid indirectly, multiplied by the average account value over the period, multiplied by 182 days/365 days (to reflect the one-half-year period). The Fund's ending account value on the first line in the table is based on its actual total return of 1.84% for the six-month period of December 1, 2009, through May 31, 2010.

EXPENSE EXAMPLE | 115

ADVISORY AGREEMENTS

May 31, 2010

At a meeting of the Board of Trustees (the Board) held on April 9, 2010, the Board, including the Trustees who are not "interested persons" of the Trust (the Independent Trustees), approved the continuance of the Advisory Agreement between the Trust and the Manager with respect to the Fund and the Subadvisory Agreements with respect to the Fund. In advance of the meeting, the Trustees received and considered a variety of information relating to the Advisory Agreement and Subadvisory Agreements and the Manager and each Subadviser, and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Manager's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Manager; and (iii) information about the Manager's and Subadvisers' operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement and the Subadvisory Agreements with management and with experienced independent counsel and received materials from such counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement and the Subadvisory Agreements with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement and the Subadvisory Agreements with respect to the Fund in private sessions with their counsel at which no representatives of management were present.

At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Manager and by each Subadviser. At the meeting at which the renewal of the Advisory Agreement and Subadvisory Agreements is considered, particular focus is given to information concerning Fund performance,

116 | USAA CORNERSTONE STRATEGY FUND

comparability of fees and total expenses, and profitability. However, the Board noted that the evaluation process with respect to the Manager and the Subadvisers is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement and Subadvisory Agreements included certain information previously received at such meetings.

ADVISORY AGREEMENT

After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by independent counsel.

NATURE, EXTENT, AND QUALITY OF SERVICES -- In considering the nature, extent, and quality of the services provided by the Manager under the Advisory Agreement, the Board reviewed information provided by the Manager relating to its operations and personnel. The Board also took into account its familiarity with the Manager's management through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Manager and the services provided to the Fund by the Manager under the Advisory Agreement, as well as other services provided by the Manager and its affiliates under other agreements and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Manager and its affiliates provide administrative services, stockholder services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.

The Board considered the Manager's management style and the performance of its duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Manager, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The Board discussed the Manager's effectiveness in monitoring the performance of the Subadvisers and its timeliness in responding to performance issues. The allocation of the Fund's brokerage, including the Manager's process for monitoring "best execution" and the utilization of "soft dollars," also were considered.

ADVISORY AGREEMENTS | 117

The Manager's role in coordinating the activities of the Fund's other service providers also was considered. The Board considered the Manager's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Manager and its affiliates in managing investment companies, including the Fund. The Board also reviewed the compliance and administrative services provided to the Fund by the Manager, including oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Manager and its affiliates provide compliance and administrative services to the Fund. The Trustees, guided also by information obtained from their experiences as directors/trustees of the Fund and other investment companies managed by the Manager, also focused on the quality of the Manager's compliance and administrative staff.

EXPENSES AND PERFORMANCE -- In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type (in this case, investment companies with no sales loads and front-end loads), asset size, and expense components (the "expense group") and
(ii) a larger group of investment companies that includes all no-load and front-end load retail open-end investment companies in the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's management fee rate -- which includes advisory and administrative services and the effects of any performance fee adjustment as well as any fee waivers or reimbursements -- was below the median of its expense group and its expense universe. The data indicated that the Fund's total expenses, after reimbursements, were below the median of its expense group and its expense universe. The Board took into account the various services provided to the Fund by the Manager and its affiliates. The Board also noted the level and method of computing the management fee, including any performance adjustment to such fee. The Board also took into account the Manager's

118 | USAA CORNERSTONE STRATEGY FUND

current voluntary undertakings to maintain expense limitations for the Fund and that the subadvisory fees under the Subadvisory Agreements are paid by the Manager.

In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total return with its Lipper index and with that of other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was above the average of its performance universe and its Lipper index for the one-year period ended December 31, 2009, was lower than the average of its performance universe but above its Lipper index for the three- and ten-year periods ended December 31, 2009, and was lower than the average of its performance universe and its Lipper index for the five-year period ended December 31, 2009. The Board also noted that the Fund's percentile performance ranking was in the top 30% of its performance universe for the one-year period ended December 31, 2009, and was in the bottom 50% of its performance universe for the three-, and five-year periods ended December 31, 2009. The Board took into account management's discussion of the Fund's performance, as well as the various steps management has taken to address the Fund's performance. The Board also noticed the Fund's more recent improved performance.

COMPENSATION AND PROFITABILITY -- The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Manager's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This consideration included a broad review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Manager pays the subadvisory fees and had agreed to maintain expense limitations for the Fund. The Trustees reviewed the profitability of the Manager's relationship with the Fund before tax

ADVISORY AGREEMENTS | 119

expenses. In reviewing the overall profitability of the management fee to the Manager, the Board also considered the fact that affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Manager from its relationship with the Trust, including that the Manager may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Manager should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial risk that it assumes as Manager.

ECONOMIES OF SCALE -- The Board considered whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in any economies of scale. The Board took into account management's discussions of the current advisory fee structure. The Board also considered the fee waivers and expense reimbursement arrangements by the Manager and the fact that the Manager pays the subadvisory fees. The Board also took into account other economies of scale achieved by the Fund with respect to certain fixed expenses as a result of the Fund's asset size. The Board determined that the current investment management fee structure was reasonable.

CONCLUSIONS -- The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Manager, among others: (i) the Manager has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Manager maintains an appropriate compliance program; (iii) appropriate action has been taken to address the Fund's performance; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Manager; and (v) the Manager and its affiliates' level of profitability from their relationship with the Fund is reasonable. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.

SUBADVISORY AGREEMENTS

In approving each Subadvisory Agreement with respect to the Fund, the Board considered various factors, among them: (i) the nature, extent, and quality of services provided to the Fund by the respective Subadviser, including the personnel providing services; (ii) each Subadviser's

120 | USAA CORNERSTONE STRATEGY FUND

compensation and any other benefits derived from the subadvisory relationship;
(iii) comparisons of subadvisory fees and performance to comparable investment companies; and (iv) the terms of each Subadvisory Agreement. The Board's analysis of these factors is set forth below. After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve each Subadvisory Agreement. In approving each Subadvisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by independent counsel.

NATURE, EXTENT, AND QUALITY OF SERVICES PROVIDED; INVESTMENT PERSONNEL -- The Trustees considered information provided to them regarding the services provided by the Subadvisers, including information presented periodically throughout the previous year. The Board considered each Subadviser's level of knowledge and investment style. The Board reviewed the experience and credentials of the investment personnel who are responsible for managing the investment of portfolio securities with respect to the Fund and each Subadviser's level of staffing. The Trustees noted that the materials provided to them by each Subadviser indicated that the method of compensating portfolio managers is reasonable and includes appropriate mechanisms to prevent a manager with underperformance from taking undue risks. The Trustees also noted each Subadviser's brokerage practices. The Board also considered each Subadviser's regulatory and compliance history. The Board noted that the Manager's monitoring processes of each Subadviser include: (i) regular telephonic meetings to discuss, among other matters, investment strategies and to review portfolio performance; (ii) monthly portfolio compliance checklists and quarterly compliance certifications to the Board; and (iii) due diligence visits to each Subadviser.

SUBADVISER COMPENSATION -- The Board also took into consideration the financial condition of each Subadviser. In considering the cost of services to be provided by each Subadviser and the profitability to that Subadviser of its relationship with the Fund, the Trustees noted the undertakings of the Manager to maintain expense limitations for the Fund and also noted that the fees under each Subadvisory Agreement were paid by the Manager. The Trustees also relied on the ability of the Manager to negotiate each Subadvisory Agreement and the fees thereunder at arm's length. The

ADVISORY AGREEMENTS | 121

Board also considered information relating to the cost of services to be provided by each Subadviser, each Subadviser's profitability with respect to the Fund, and the potential economies of scale in each Subadviser's management of the Fund, to the extent available. However, for the reasons noted above, this information was less significant to the Board's consideration of the Subadvisory Agreements than the other factors considered.

SUBADVISORY FEES AND FUND PERFORMANCE -- The Board compared the subadvisory fees for the Fund with the fees that each Subadviser charges to comparable clients, as applicable. The Board considered that the Fund pays a management fee to the Manager and that, in turn, the Manager pays a subadvisory fee to each Subadviser. As noted above, the Board considered, among other data, the Fund's performance during the one-, three-, and five-year periods ended December 31, 2009, as compared to the Fund's respective peer group and noted that the Board reviews at its regularly scheduled meetings information about the Fund's performance results. The Board also considered the performance of each Subadviser. The Board noted the Manager's expertise and resources in monitoring the performance, investment style, and risk-adjusted performance of each Subadviser. The Board was mindful of the Manager's focus on each Subadviser's performance and the actions management has taken to address performance of the Fund. The Board also noted each Subadviser's long-term performance record for similar accounts, as applicable.

CONCLUSIONS -- The Board reached the following conclusions regarding each Subadvisory Agreement, among others: (i) each Subadviser is qualified to manage the Fund's assets in accordance with its investment objectives and policies;
(ii) each Subadviser maintains an appropriate compliance program; (iii) appropriate action has been taken with respect to the performance of the Fund; and (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Manager and each Subadviser. Based on its conclusions, the Board determined that approval of each Subadvisory Agreement with respect to the Fund would be in the best interests of the Fund and its shareholders.

122 | USAA CORNERSTONE STRATEGY FUND

TRUSTEES' AND OFFICERS' INFORMATION

TRUSTEES AND OFFICERS OF THE TRUST

The Board of Trustees of the Trust consists of six Trustees. These Trustees and the Trust's Officers supervise the business affairs of the USAA family of funds. The Board of Trustees is responsible for the general oversight of the funds' business and for assuring that the funds are managed in the best interests of each fund's respective shareholders. The Board of Trustees periodically reviews the funds' investment performance as well as the quality of other services provided to the funds and their shareholders by each of the fund's service providers, including USAA Investment Management Company (IMCO) and its affiliates. The term of office for each Trustee shall be 20 years or until the Trustee reaches age 70. All members of the Board of Trustees shall be presented to shareholders for election or re-election, as the case may be, at least once every five years. Vacancies on the Board of Trustees can be filled by the action of a majority of the Trustees, provided that at least two-thirds of the Trustees have been elected by the shareholders.

Set forth below are the Trustees and Officers of the Trust, their respective offices and principal occupations during the last five years, length of time served, and information relating to any other directorships held. Each serves on the Board of Trustees of the USAA family of funds consisting of one registered investment company offering 46 individual funds as of May 31, 2010. Unless otherwise indicated, the business address of each is 9800 Fredericksburg Road, San Antonio, TX 78288.

If you would like more information about the funds' Trustees, you may call (800) 531-USAA (8722) to request a free copy of the funds' statement of additional information (SAI).

TRUSTEES' AND OFFICERS' INFORMATION | 123

INTERESTED TRUSTEE(1)

CHRISTOPHER W. CLAUS(2, 4)
Trustee, President, and Vice Chair of the Board of Trustees Born: December 1960
Year of Election or Appointment: 2001

Chair of the Board of Directors, IMCO (11/04-present); President, IMCO (2/08-10/09); Chief Investment Officer, IMCO (2/07-2/08); President and Chief Executive Officer, IMCO (2/01-2/07); Chair of the Board of Directors, USAA Financial Advisors, Inc. (FAI) (1/07-present); President, FAI (12/07-10/09); President, Financial Advice and Solutions Group (FASG) USAA (9/09-present); President, Financial Services Group, USAA (1/07-9/09). Mr. Claus serves as Chair of the Board of Directors of USAA Shareholder Account Services (SAS), USAA Financial Planning Services Insurance Agency, Inc. (FPS), and FAI. He also serves as Vice Chair for USAA Life Insurance Company (USAA Life).

NON-INTERESTED (INDEPENDENT) TRUSTEES

BARBARA B. DREEBEN(3, 4, 5, 6)
Trustee
Born: June 1945
Year of Election or Appointment: 1994

President, Postal Addvantage (7/92-present), a postal mail list management service. Mrs. Dreeben holds no other directorships of any publicly held corporations or other investment companies outside the USAA family of funds.

124 | USAA CORNERSTONE STRATEGY FUND

ROBERT L. MASON, PH.D.(3, 4, 5, 6)
Trustee
Born: June 1946
Year of Election or Appointment: 1997

Institute Analyst, Southwest Research Institute (3/02-present), which focuses in the fields of technological research. Dr. Mason holds no other directorships of any publicly held corporations or other investment companies outside the USAA family of funds.

BARBARA B. OSTDIEK, PH.D.(3, 4, 5, 6, 7) Trustee
Born: March 1964
Year of Election or Appointment: 2007

Academic Director of the El Paso Corporation Finance Center at Jesse H. Jones Graduate School of Business at Rice University (7/02-present); Associate Professor of Finance at Jesse H. Jones Graduate School of Management at Rice University (7/01-present). Dr. Ostdiek holds no other directorships of any publicly held corporations or other investment companies outside the USAA family of funds.

MICHAEL F. REIMHERR(3, 4, 5, 6)
Trustee
Born: August 1945
Year of Election or Appointment: 2000

President of Reimherr Business Consulting (5/95-present), an organization that performs business valuations of large companies to include the development of annual business plans, budgets, and internal financial reporting. Mr. Reimherr holds no other directorships of any publicly held corporations or other investment companies outside the USAA family of funds.

TRUSTEES' AND OFFICERS' INFORMATION | 125

RICHARD A. ZUCKER(2, 3, 4, 5, 6)
Trustee and Chair of the Board of Trustees Born: July 1943
Year of Election or Appointment: 1992(+)

Vice President, Beldon Roofing Company (7/85-present). Mr. Zucker holds no other directorships of any publicly held corporations or other investment companies outside the USAA family of funds.

(1) Indicates the Trustee is an employee of IMCO or affiliated companies and is considered an "interested person" under the Investment Company Act of 1940.
(2) Member of Executive Committee
(3) Member of Audit Committee
(4) Member of Pricing and Investment Committee
(5) Member of Corporate Governance Committee (6) The address for all non-interested trustees is that of the USAA Funds, P.O. Box 659430, San Antonio, TX 78265-9430.
(7) Dr. Ostdiek was appointed the Audit Committee Financial Expert for the Funds' Board in November 2008. (+) Mr. Zucker was elected as Chair of the Board in 2005.

126 | USAA CORNERSTONE STRATEGY FUND

INTERESTED OFFICERS(1)

DANIEL S. McNAMARA
Vice President
Born: June 1966
Year of Appointment: 2009

President and Director, IMCO, FAI, FPS, and SAS (10/09-present); President, Banc of America Investment Advisors (9/07-9/09); Managing Director, Planning and Financial Products Group, Bank of America (9/01-9/09).

R. MATTHEW FREUND
Vice President
Born: July 1963
Year of Appointment: 2010

Senior Vice President, Investment Portfolio Management, IMCO (3/10-present); Vice President, Fixed Income Investments, IMCO (2/04-3/10). Mr. Freund also serves as a Director for SAS.

JOHN P. TOOHEY
Vice President
Born: March 1968
Year of Appointment: 2009

Vice President, Equity Investments, IMCO (2/09-present); Managing Director, AIG Investments (12/00-1/09).

CHRISTOPHER P. LAIA
Secretary
Born: January 1960
Year of Appointment: 2010

Vice President, Financial Advice & Solutions Group General Counsel, USAA (10/08-present); Vice President, Securities Counsel, USAA (6/07-10/08); Assistant Secretary, USAA family of funds (11/08-4/10); General Counsel, Secretary, and Partner, Brown Advisory (6/02-6/07). Mr. Laia also holds the Officer positions of Vice President and Secretary of IMCO and SAS and Vice President and Assistant Secretary of FAI and FPS.

TRUSTEES' AND OFFICERS' INFORMATION | 127

JAMES G. WHETZEL
Assistant Secretary
Born: February 1978
Year of Appointment: 2010

Executive Attorney, Financial Advice & Solutions Group General Counsel, USAA (11/08-present); Reed Smith, LLP, Associate (08/05-11/08).

ROBERTO GALINDO, JR.
Treasurer
Born: November 1960
Year of Appointment: 2008

Assistant Vice President, Portfolio Accounting/Financial Administration, USAA (12/02-present); Assistant Treasurer, USAA family of funds (7/00-2/08).

WILLIAM A. SMITH
Assistant Treasurer
Born: June 1948
Year of Appointment: 2009

Vice President, Senior Financial Officer, and Treasurer, IMCO, FAI, FPS, SAS and USAA Life (2/09-present); Vice President, Senior Financial Officer, USAA (2/07-present); consultant, Robert Half/Accounttemps (8/06-1/07); Chief Financial Officer, California State Automobile Association (8/04-12/05).

JEFFREY D. HILL
Chief Compliance Officer
Born: December 1967
Year of Appointment: 2004

Assistant Vice President, Mutual Funds Compliance, USAA (9/04-present).

(1) Indicates those Officers who are employees of IMCO or affiliated companies and are considered "interested persons" under the Investment Company Act of 1940.

128 | USAA CORNERSTONE STRATEGY FUND

================================================================================
TRUSTEES Christopher W. Claus
 Barbara B. Dreeben
 Robert L. Mason, Ph.D.
 Barbara B. Ostdiek, Ph.D.
 Michael F. Reimherr
 Richard A. Zucker
--------------------------------------------------------------------------------
ADMINISTRATOR, USAA Investment Management Company
INVESTMENT ADVISER, P.O. Box 659453
UNDERWRITER, AND San Antonio, Texas 78265-9825
DISTRIBUTOR
--------------------------------------------------------------------------------
TRANSFER AGENT USAA Shareholder Account Services
 9800 Fredericksburg Road
 San Antonio, Texas 78288
--------------------------------------------------------------------------------
CUSTODIAN AND State Street Bank and Trust Company
ACCOUNTING AGENT P.O. Box 1713
 Boston, Massachusetts 02105
--------------------------------------------------------------------------------
INDEPENDENT Ernst & Young LLP
REGISTERED PUBLIC 100 West Houston St., Suite 1800
ACCOUNTING FIRM San Antonio, Texas 78205
--------------------------------------------------------------------------------
MUTUAL FUND Under "Products & Services"
SELF-SERVICE 24/7 click "Investments," then
AT USAA.COM "Mutual Funds"

OR CALL Under "My Accounts" go to
(800) 531-USAA "Investments." View account balances,
 (8722) or click "I want to...," and select
 the desired action.
--------------------------------------------------------------------------------

Copies of the Manager's proxy voting policies and procedures, approved by the Trust's Board of Trustees for use in voting proxies on behalf of the Fund, are available without charge (i) by calling (800) 531-USAA (8722); (ii) at USAA.COM; and (iii) on the SEC's Web site at HTTP://WWW.SEC.GOV. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (i) at usaa.com; and (ii) on the SEC's Web site at HTTP://WWW.SEC.GOV.

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. These Forms N-Q are available at no charge (i) by calling (800) 531-USAA (8722); (ii) at USAA.COM; and (iii) on the SEC's Web site at HTTP://WWW.SEC.GOV. These Forms N-Q also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) 732-0330.

USAA

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ITEM 2. CODE OF ETHICS.

On September 24, 2009, the Board of Trustees of USAA Mutual Funds Trust approved a Code of Ethics (Sarbanes Code) applicable solely to its senior financial officers, including its principal executive officer (President), as defined under the Sarbanes-Oxley Act of 2002 and implementing regulations of the Securities and Exchange Commission. A copy of the Sarbanes Code is attached as an Exhibit to this Form N-CSR.

No waivers (explicit or implicit) have been granted from a provision of the Sarbanes Code.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

On November 18, 2008, the Board of Trustees of USAA Mutual Funds Trust designated Dr. Barbara B. Ostdiek, Ph.D. as the Board's audit committee financial expert. Dr. Ostdiek has served as an Associate Professor of Management at Rice University since 2001. Dr. Ostdiek also has served as an Academic Director at El Paso Corporation Finance Center since 2002. Dr. Ostdiek is an independent trustee who serves as a member of the Audit Committee, Pricing and Investment Committee and the Corporate Governance Committee of the Board of Trustees of USAA Mutual Funds Trust.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a) AUDIT FEES. The Registrant, USAA Mutual Funds Trust, consists of 46 funds in all. Only 10 funds of the Registrant have a fiscal year-end of May 31 and are included within this report (the Funds). The aggregate fees accrued or billed by the Registrant's independent auditor, Ernst & Young LLP, for professional services rendered for the audit of the Registrant's annual financial statements and services provided in connection with statutory and regulatory filings by the Registrant for the Funds for fiscal years ended May 31, 2010 and 2009 were $280,916 and $288,764, respectively.

(b) AUDIT RELATED FEE. The aggregate fees accrued or paid to Ernst & Young, LLP by USAA Shareholder Account Services (SAS) for professional services rendered for audit related services related to the annual study of internal controls of the transfer agent for fiscal years ended May 31, 2010 and 2009 were $61,513 and $63,500, respectively. All services were preapproved by the Audit Committee.

(c) TAX FEES. No such fees were billed by Ernst & Young LLP for the review of federal, state and city income and tax returns and excise tax calculations for fiscal years ended May 31, 2010 and 2009.

(d) ALL OTHER FEES. No such fees were billed by Ernst & Young LLP for fiscal years ended May 31, 2010 and 2009.

(e)(1) AUDIT COMMITTEE PRE-APPROVAL POLICY. All audit and non-audit services to be performed for the Registrant by Ernst & Young LLP must be pre-approved by the Audit Committee. The Audit Committee Charter also permits the Chair of the Audit Committee to pre-approve any permissible non-audit service that must be commenced prior to a scheduled meeting of the Audit Committee. All non-audit services were pre-approved by the Audit Committee or its Chair, consistent with the Audit Committee's preapproval procedures.

(2) Not applicable.

(f) Not applicable.

(g) The aggregate non-audit fees billed by Ernst & Young LLP for services rendered to the Registrant and the Registrant's investment adviser, IMCO, and the Funds' transfer agent, SAS, for May 31, 2010 and 2009 were $104,896 and $108,000, respectively.

(h) Ernst & Young LLP provided non-audit services to IMCO in 2010 and 2009 that were not required to be pre-approved by the Registrant's Audit Committee because the services were not directly related to the operations of the Registrant's Funds. The Board of Trustees will consider Ernst & Young LLP's independence and will consider whether the provision of these non-audit services to IMCO is compatible with maintaining Ernst & Young LLP's independence.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not Applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

Filed as part of the report to shareholders.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not Applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not Applicable.

Item 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not Applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The Corporate Governance Committee selects and nominates candidates for membership on the Board as independent directors. Currently, there is no procedure for shareholders to recommend candidates to serve on the Board.

ITEM 11. CONTROLS AND PROCEDURES

The principal executive officer and principal financial officer of USAA Mutual Funds Trust (Trust) have concluded that the Trust's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

There were no significant changes or corrective actions with regard to significant deficiencies or material weaknesses in the Trust's internal controls or in other factors that could significantly affect the Trust's internal controls subsequent to the date of their evaluation. The only change to the procedures was to document the annual disclosure controls and procedures established for the new section of the shareholder reports detailing the factors considering by the Trust's Board in approving the Trust's advisory agreements.

ITEM 12. EXHIBITS.

(a)(1). Code of Ethics pursuant to Item 2 of Form N-CSR is filed hereto exactly as set forth below:

CODE OF ETHICS
FOR PRINCIPAL EXECUTIVE OFFICER
AND SENIOR FINANCIAL OFFICERS

USAA MUTUAL FUNDS TRUST

I. PURPOSE OF THE CODE OF ETHICS

USAA Mutual Funds Trust (the Trust or the Funds) has adopted this code of ethics (the Code) to comply with Section 406 of the Sarbanes-Oxley Act of 2002 (the Act) and implementing regulations of the Securities and Exchange Commission (SEC). The Code applies to the Trust's Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer (each a Covered Officer), as detailed in Appendix A.

The purpose of the Code is to promote:
- honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between the Covered Officers' personal and professional relationships;
- full, fair, accurate, timely and understandable disclosure in reports and documents that the Trust files with, or submits to, the SEC and in other public communications made by the Trust;
- compliance with applicable laws and governmental rules and regulations;
- prompt internal reporting of violations of the Code to the Chief Legal Officer of the Trust, the President of the Trust (if the violation concerns the Treasurer), the CEO of USAA, and if deemed material to the Funds' financial condition or reputation, the Chair of the Trust's Board of Trustees; and
- accountability for adherence to the Code.

Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to actual and apparent conflicts of interest.

II. CONFLICTS OF INTEREST

A. DEFINITION OF A CONFLICT OF INTEREST.

A conflict of interest exists when a Covered Officer's private interest influences, or reasonably appears to influence, the Covered Officer's judgment or ability to act in the best interests of the Funds and their shareholders. For example, a conflict of interest could arise if a Covered Officer, or an immediate family member, receives personal benefits as a result of his or her position with the Funds.

Certain conflicts of interest arise out of relationships between Covered Officers and the Funds and are already subject to conflict of interest provisions in the Investment Company Act of 1940 (the 1940 Act) and the Investment Advisers Act of 1940 (the Advisers Act). For example, Covered Officers may not individually engage in certain transactions with the Funds because of their status as "affiliated persons" of the Funds. The USAA Funds' and USAA Investment Management Company's (IMCO) compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.

Although typically not presenting an opportunity for improper personal benefit, conflicts could arise from, or as a result of, the contractual relationships between the Funds and IMCO of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Funds or for IMCO, or for both), be involved in establishing policies and implementing decisions that will have different effects on IMCO and the Funds. The participation of Covered Officers in such activities is inherent in the contractual relationship between the Funds and IMCO and is consistent with the performance by the Covered Officers of their duties as officers of the Funds. Thus, if performed in compliance with the provisions of the 1940 Act and the Advisers Act, such activities will be deemed to have been handled ethically.

B. GENERAL RULE. Covered Officers Should Avoid Actual and Apparent Conflicts of Interest.

Conflicts of interest, other than the conflicts described in the two preceding paragraphs, are covered by the Code. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Funds and their shareholders.

Each Covered Officer must not engage in conduct that constitutes an actual conflict of interest between the Covered Officer's personal interest and the interests of the Funds and their shareholders. Examples of actual conflicts of interest are listed below but are not exclusive. Each Covered Officer must not:

- use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Funds whereby the Covered Officer would benefit personally to the detriment of the Funds and their shareholders;
- cause the Funds to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Funds and their shareholders.
- accept gifts, gratuities, entertainment or any other benefit from any person or entity that does business or is seeking to do business with the Funds DURING CONTRACT NEGOTIATIONS.
- accept gifts, gratuities, entertainment or any other benefit with a market value over $100 per person, per year, from or on behalf of any person or entity that does, or seeks to do, business with or on behalf of the Funds.
- EXCEPTION. Business-related entertainment such as meals, and tickets to sporting or theatrical events, which are infrequent and not lavish are excepted from this prohibition. Such entertainment must be appropriate as to time and place, reasonable and customary in nature, modest in cost and value, incidental to the business, and not so frequent as to raise any question of impropriety (Customary Business Entertainment).

Certain situations that could present the appearance of a conflict of interest should be discussed with, and approved by, or reported to, an appropriate person. Examples of these include:

- service as a director on the board or an officer of any public or private company, other than a USAA company or the Trust, must be approved by the USAA Funds' and Investment Code of Ethics Committee and reported to the Trust.
- the receipt of any non-nominal (I.E., valued over $25) gifts from any person or entity with which a Trust has current or prospective business dealings must be reported to the Chief Legal Officer. For purposes of this Code, the individual holding the title of Secretary of the Trust shall be considered the Chief Legal Officer of the Trust.
- the receipt of any business-related entertainment from any person or entity with which the Funds have current or prospective business dealings must be approved in advance by the Chief Legal Officer unless such entertainment qualifies as Customary Business Entertainment.
- any ownership interest in, or any consulting or employment relationship with, any of the Trust's service providers, other than IMCO or any other USAA company, must be approved by the CEO of USAA and reported to the Trust's Board.
- any material direct or indirect financial interest in commissions, transaction charges or spreads paid by the Funds for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership should be approved by the CEO of USAA and reported to the Trust's Board.

III. DISCLOSURE AND COMPLIANCE REQUIREMENTS

- Each Covered Officer should familiarize himself with the disclosure requirements applicable to the Funds, and the procedures and policies implemented to promote full, fair, accurate, timely and understandable disclosure by the Trust.
- Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Funds to others, whether within or outside the Funds, including to the Funds' Trustees and auditors, and to government regulators and self-regulatory organizations.
- Each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Funds and IMCO with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents filed by the Trust with, or submitted to, the SEC, and in other public communications made by the Funds.
- Each Covered Officer is responsible for promoting compliance with the standards and restrictions imposed by applicable laws, rules and regulations, and promoting compliance with the USAA Funds' and IMCO's operating policies and procedures.
- A Covered Officer should not retaliate against any person who reports a potential violation of this Code in good faith.
- A Covered Officer should notify the Chief Legal Officer promptly if he knows of any violation of the Code. Failure to do so itself is a violation of this Code.

IV. REPORTING AND ACCOUNTABILITY

A. INTERPRETATION OF THE CODE. The Chief Legal Officer of the Trust is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret the Code in any particular situation. The Chief Legal Officer should consult, if appropriate, the USAA Funds' outside counsel or counsel for the Independent Trustees. However, any approvals or waivers sought by a Covered Officer will be reported initially to the CEO of USAA and will be considered by the Trust's Board of Trustees.

B. REQUIRED REPORTS

- EACH COVERED OFFICER MUST:
- Upon adoption of the Code, affirm in writing to the Board that he has received, read and understands the Code.
- Annually thereafter affirm to the Chief Legal Officer that he has complied with the requirements of the Code.

- THE CHIEF LEGAL OFFICER MUST:
- report to the Board about any matter or situation submitted by a Covered Officer for interpretation under the Code, and the advice given by the Chief Legal Officer;
- report annually to the Board and the Corporate Governance Committee describing any issues that arose under the Code, or informing the Board and Corporate Governance Committee that no reportable issues occurred during the year.

C. INVESTIGATION PROCEDURES

The Funds will follow these procedures in investigating and enforcing this Code:

- INITIAL COMPLAINT. All complaints or other inquiries concerning potential violations of the Code must be reported to the Chief Legal Officer. The Chief Legal Officer shall be responsible for documenting any complaint. The Chief Legal Officer also will report immediately to the President of the Trust (if the complaint involves the Treasurer), the CEO of USAA and the Chair of the Trust's Audit Committee (if the complaint involves the President) any material potential violations that could have a material effect on the Funds' financial condition or reputation. For all other complaints, the Chief Legal Officer will report quarterly to the Board.
- INVESTIGATIONS. The Chief Legal Officer will take all appropriate action to investigate any potential violation unless the CEO of USAA directs another person to undertake such investigation. The Chief Legal Officer may utilize USAA's Office of Ethics to do a unified investigation under this Code and USAA's Code of Conduct. The Chief Legal Officer may direct the Trust's outside counsel or the counsel to the Independent Trustees (if any) to participate in any investigation under this Code.
- STATUS REPORTS. The Chief Legal Officer will provide monthly status reports to the Board about any alleged violation of the Code that could have a material effect on the Funds' financial condition or reputation, and quarterly updates regarding all other alleged violations of the Code.
- VIOLATIONS OF THE CODE. If after investigation, the Chief Legal Officer, or other investigating person, believes that a violation of the Code has occurred, he will report immediately to the CEO of USAA the nature of the violation, and his recommendation regarding the materiality of the violation. If, in the opinion of the investigating person, the violation could materially affect the Funds' financial condition or reputation, the Chief Legal Officer also will notify the Chair of the Trust's Audit Committee. The Chief Legal Officer will inform, and make a recommendation to, the Board, which will consider what further action is appropriate. Appropriate action could include: (1) review of, and modifications to, the Code or other applicable policies or procedures;
(2) notifications to appropriate personnel of IMCO or USAA;
(3) dismissal of the Covered Officer; and/or (4) other disciplinary actions including reprimands or fines.
- The Board of Trustees understands that Covered Officers also are subject to USAA's Code of Business Conduct. If a violation of this Code also violates USAA's Code of Business Conduct, these procedures do not limit or restrict USAA's ability to discipline such Covered Officer under USAA's Code of Business Conduct. In that event, the Chairman of the Board of Trustees will report to the Board the action taken by USAA with respect to a Covered Officer.

V. OTHER POLICIES AND PROCEDURES

This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Act and the implementing regulations adopted by the SEC applicable to registered investment companies. If other policies and procedures of the Trust, IMCO, or other service providers govern or purport to govern the behavior or activities of Covered Officers, they are superseded by this Code to the extent that they overlap, conflict with, or are more lenient than the provisions of this Code. The Investment Code of Ethics (designated to address 1940 Act and Advisers Act requirements) and IMCO's more detailed compliance policies and procedures (including its Insider Trading Policy) are separate requirements applying to Covered Officers and other IMCO employees, and are not part of this Code. Also, USAA's Code of Conduct imposes separate requirements on Covered Officers and all employees of USAA, and also is not part of this Code.

VI. AMENDMENTS

Any amendment to this Code, other than amendments to Appendix A, must be approved or ratified by majority vote of the Board of Trustees.

VII. CONFIDENTIALITY AND DOCUMENT RETENTION

The Chief Legal Officer shall retain material investigation documents and reports required to be prepared under the Code for six years from the date of the resolution of any such complaint. All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trust's Board of Trustees and counsel for the Independent Trustees (if any), the Trust and its counsel, IMCO, and other personnel of USAA as determined by the Trust's Chief Legal Officer or the Chair of the Trust's Board of Trustees.

Approved and adopted by IMCO's Code of Ethics Committee: June 12, 2003.

Approved and adopted by the Boards of Directors/Trustees of USAA Mutual Fund, Inc., USAA Tax-Exempt Fund, Inc., USAA Investment Trust & USAA State Tax-Free Trust: June 25, 2003.

Approved and adopted by the Board of Trustees of USAA Life Investment Trust:
August 20, 2003.

Approved and adopted as amended by IMCO's Code of Ethics Committee: August 15, 2005.

Approved and adopted as amended by the Boards of Directors/Trustees of USAA Mutual Fund, Inc., USAA Tax-Exempt Fund, Inc., USAA Investment Trust & USAA State Tax-Free Trust: September 14, 2005.

Approved and adopted as amended by the Board of Trustees of USAA Life Investment Trust: December 8, 2005.

Approved and adopted as amended by IMCO's Code of Ethics Committee: August 16,
2006.

Approved and adopted by the Board of Trustees of USAA Mutual Funds Trust:
September 13, 2006.

Approved and adopted by IMCO's Code of Ethics Committee: August 28, 2007.

Approved and adopted by the Investment Code of Ethics Committee: August 29, 2008.

Approved and adopted as amended by the Board of Trustees of USAA Mutual Funds Trust: September 19, 2008.

Approved and adopted by the Investment Code of Ethics Committee: August 17, 2009.

Approved and adopted by the Board of Trustees of USAA Mutual Funds Trust:
September 24, 2009.

APPENDIX A
COVERED OFFICERS

PRESIDENT
TREASURER

(a)(2). Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.

(a)(3). Not Applicable.

(b). Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b))is filed and attached hereto as Exhibit 99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant: USAA MUTUAL FUNDS TRUST, Period Ended May 31, 2010

By:* /s/ CHRISTOPHER P. LAIA
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 Signature and Title: Christopher P. Laia, Secretary

Date: August 6, 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: August 6, 2010
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By:* /s/ ROBERTO GALINDO, JR.
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 Signature and Title: Roberto Galindo, Jr., Treasurer

Date: August 6, 2010
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*Print the name and title of each signing officer under his or her signature.

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