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 | 811-07852 | |||||||
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USAA Mutual Funds Trust | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
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15935 La Cantera Pkwy, Building Two, San Antonio, Texas |
| 78256 | ||||||
(Address of principal executive offices) |
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Citi Fund Services Ohio, Inc., 4400 Easton Commons, Suite 200, Columbus, OH 43219 | ||||||||
(Name and address of agent for service) | ||||||||
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Registrant’s telephone number, including area code: | 800-235-8396 |
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Date of fiscal year end: | July 31 |
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Date of reporting period: | January 31, 2020 |
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Item 1. Reports to Stockholders.
JANUARY 31, 2020
Semi Annual Report
USAA Aggressive Growth Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 4 | ||||||
Statement of Assets and Liabilities | 7 | ||||||
Statement of Operations | 8 | ||||||
Statements of Changes in Net Assets | 9 | ||||||
Financial Highlights | 10 | ||||||
Notes to Financial Statements | 12 | ||||||
Supplemental Information | 20 | ||||||
Expense Examples | 20 | ||||||
Proxy Voting and Portfolio Holdings Information | 20 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
1
USAA Mutual Funds Trust USAA Aggressive Growth Fund | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA Aggressive Growth Fund seeks capital appreciation.
Top 10 Holdings*
1/31/20
(% of Net Assets)
Amazon.com, Inc. | 5.9 | % | |||||
Visa, Inc. Class A | 5.7 | % | |||||
Microsoft Corp. | 4.9 | % | |||||
Alphabet, Inc. Class C | 4.6 | % | |||||
Facebook, Inc. Class A | 4.2 | % | |||||
ServiceNow, Inc. | 3.7 | % | |||||
Apple, Inc. | 3.1 | % | |||||
NVIDIA Corp. | 2.9 | % | |||||
PayPal Holdings, Inc. | 2.7 | % | |||||
Salesforce.com, Inc. | 2.5 | % |
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Aggressive Growth Fund (continued) | January 31, 2020 |
(Unaudited)
Sector Allocation*:
1/31/20
(% of Net Assets)
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentage are of the net assets of the Fund and may not equal 100%.
3
USAA Mutual Funds Trust USAA Aggressive Growth Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (98.0%) | |||||||||||
Communication Services (11.7%): | |||||||||||
Activision Blizzard, Inc. | 463,406 | $ | 27,100 | ||||||||
Alphabet, Inc. Class C (a) | 52,959 | 75,956 | |||||||||
Facebook, Inc. Class A (a) | 347,106 | 70,084 | |||||||||
The Walt Disney Co. | 83,918 | 11,607 | |||||||||
Twitter, Inc. (a) | 316,565 | 10,282 | |||||||||
195,029 | |||||||||||
Consumer Discretionary (17.0%): | |||||||||||
Alibaba Group Holding Ltd., ADR (a) | 154,742 | 31,968 | |||||||||
Amazon.com, Inc. (a) | 49,024 | 98,475 | |||||||||
Burlington Stores, Inc. (a) | 135,008 | 29,360 | |||||||||
Hilton Worldwide Holdings, Inc. | 138,845 | 14,968 | |||||||||
Lululemon Athletica, Inc. (a) | 137,617 | 32,944 | |||||||||
Nike, Inc. Class B | 127,593 | 12,287 | |||||||||
Target Corp. | 73,989 | 8,194 | |||||||||
The Home Depot, Inc. | 56,124 | 12,802 | |||||||||
The TJX Cos., Inc. | 230,053 | 13,582 | |||||||||
Ulta Beauty, Inc. (a) | 71,505 | 19,157 | |||||||||
Vail Resorts, Inc. | 41,577 | 9,750 | |||||||||
283,487 | |||||||||||
Consumer Staples (1.6%): | |||||||||||
Church & Dwight Co., Inc. | 157,560 | 11,694 | |||||||||
Tyson Foods, Inc. Class A | 188,922 | 15,611 | |||||||||
27,305 | |||||||||||
Electronic Equipment, Instruments & Components (1.6%): | |||||||||||
Amphenol Corp. Class A | 99,074 | 9,855 | |||||||||
Keysight Technologies, Inc. (a) | 184,470 | 17,154 | |||||||||
27,009 | |||||||||||
Energy (0.2%): | |||||||||||
EOG Resources, Inc. | 46,049 | 3,357 | |||||||||
Financials (1.5%): | |||||||||||
MSCI, Inc. | 85,979 | 24,573 | |||||||||
Health Care (15.8%): | |||||||||||
Bluebird Bio, Inc. (a) | 104,807 | 8,352 | |||||||||
Bristol-Myers Squibb Co. | 309,661 | 19,493 | |||||||||
Edwards Lifesciences Corp. (a) | 107,671 | 23,673 | |||||||||
Exact Sciences Corp. (a) | 98,178 | 9,158 | |||||||||
Illumina, Inc. (a) | 60,118 | 17,438 | |||||||||
Intuitive Surgical, Inc. (a) | 21,915 | 12,268 | |||||||||
IQVIA Holdings, Inc. (a) | 96,920 | 15,047 | |||||||||
Merck & Co., Inc. | 188,594 | 16,113 | |||||||||
Sage Therapeutics, Inc. (a) | 80,634 | 5,344 | |||||||||
The Cooper Cos., Inc. | 31,184 | 10,817 | |||||||||
UnitedHealth Group, Inc. | 135,771 | 36,991 | |||||||||
Veeva Systems, Inc. Class A (a) | 180,537 | 26,469 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Aggressive Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Vertex Pharmaceuticals, Inc. (a) | 124,444 | $ | 28,256 | ||||||||
Zoetis, Inc. | 254,025 | 34,093 | |||||||||
263,512 | |||||||||||
Industrials (9.1%): | |||||||||||
CoStar Group, Inc. (a) | 55,194 | 36,041 | |||||||||
IHS Markit Ltd. (a) | 119,871 | 9,453 | |||||||||
Ingersoll-Rand PLC | 210,628 | 28,062 | |||||||||
L3Harris Technologies, Inc. | 86,748 | 19,200 | |||||||||
Roper Technologies, Inc. | 36,500 | 13,931 | |||||||||
Union Pacific Corp. | 104,722 | 18,789 | |||||||||
Woodward, Inc. | 136,362 | 15,860 | |||||||||
Xylem, Inc. | 105,162 | 8,588 | |||||||||
149,924 | |||||||||||
IT Services (13.8%): | |||||||||||
Black Knight, Inc. (a) | 206,293 | 13,805 | |||||||||
EPAM Systems, Inc. (a) | 129,229 | 29,482 | |||||||||
Euronet Worldwide, Inc. (a) | 168,810 | 26,611 | |||||||||
PayPal Holdings, Inc. (a) | 395,401 | 45,032 | |||||||||
Twilio, Inc. Class A (a) | 164,377 | 20,439 | |||||||||
Visa, Inc. Class A | 476,070 | 94,723 | |||||||||
230,092 | |||||||||||
Semiconductors & Semiconductor Equipment (5.8%): | |||||||||||
Broadcom, Inc. | 20,221 | 6,171 | |||||||||
KLA Corp. | 45,995 | 7,623 | |||||||||
Lam Research Corp. | 40,054 | 11,945 | |||||||||
Marvell Technology Group Ltd. | 437,789 | 10,524 | |||||||||
Microchip Technology, Inc. (b) | 84,933 | 8,279 | |||||||||
NVIDIA Corp. | 203,977 | 48,226 | |||||||||
STMicroelectronics NV, NYS (b) | 187,524 | 5,223 | |||||||||
97,991 | |||||||||||
Software (16.8%): | |||||||||||
Fair Isaac Corp. (a) | 52,197 | 21,003 | |||||||||
Microsoft Corp. | 482,604 | 82,153 | |||||||||
Proofpoint, Inc. (a) | 147,477 | 18,112 | |||||||||
RingCentral, Inc. Class A (a) | 44,377 | 9,123 | |||||||||
Salesforce.com, Inc. (a) | 224,598 | 40,947 | |||||||||
ServiceNow, Inc. (a) | 184,864 | 62,525 | |||||||||
The Trade Desk, Inc. Class A (a) | 31,035 | 8,354 | |||||||||
Workday, Inc. Class A (a) | 212,760 | 39,282 | |||||||||
281,499 | |||||||||||
Technology Hardware, Storage & Peripherals (3.1%): | |||||||||||
Apple, Inc. | 168,229 | 52,069 | |||||||||
Total Common Stocks (Cost $1,215,792) | 1,635,847 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Aggressive Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Collateral for Securities Loaned^ (0.2%) | |||||||||||
HSBC U.S. Government Money Market Fund, I Shares, 1.52% (c) | 3,134,821 | $ | 3,135 | ||||||||
Total Collateral for Securities Loaned (Cost $3,135) | 3,135 | ||||||||||
Total Investments (Cost $1,218,927) — 98.2% | 1,638,982 | ||||||||||
Other assets in excess of liabilities — 1.8% | 29,301 | ||||||||||
NET ASSETS — 100.00% | $ | 1,668,283 |
^ Purchased with cash collateral from securities on loan.
(a) Non-income producing security.
(b) All or a portion of this security is on loan.
(c) Rate disclosed is the daily yield on January 31, 2020.
ADR — American Depositary Receipt
NYS — New York Registered Shares
PLC — Public Limited Company
See notes to financial statements.
6
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Aggressive Growth Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,218,927) | $ | 1,638,982 | (a) | ||||
Cash and cash equivalents | 41,659 | ||||||
Receivables: | |||||||
Interest and dividends | 233 | ||||||
Capital shares issued | 626 | ||||||
Investments sold | 16,058 | ||||||
From Adviser | 6 | ||||||
Prepaid expenses | 3 | ||||||
Total assets | 1,697,567 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 3,135 | ||||||
Investments purchased | 23,938 | ||||||
Capital shares redeemed | 1,096 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 624 | ||||||
Administration fees | 213 | ||||||
Transfer agent fees | 118 | ||||||
Custodian fees | 43 | ||||||
Compliance fees | — | (b) | |||||
Other accrued expenses | 117 | ||||||
Total liabilities | 29,284 | ||||||
Net Assets: | |||||||
Capital | 1,273,938 | ||||||
Total distributable earnings/(loss) | 394,345 | ||||||
Net assets | $ | 1,668,283 | |||||
Net Assets: | |||||||
Fund Shares | $ | 1,655,593 | |||||
Institutional Shares | 12,690 | ||||||
Total | $ | 1,668,283 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 42,592 | ||||||
Institutional Shares | 321 | ||||||
Total | 42,913 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 38.87 | |||||
Institutional Shares | 39.55 |
(a) Includes $2,894 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
7
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA Aggressive Growth Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 4,294 | |||||
Interest | 283 | ||||||
Securities lending (net of fees) | 71 | ||||||
Total Income | 4,648 | ||||||
Expenses: | |||||||
Investment advisory fees | 3,556 | ||||||
Administration fees — Fund Shares | 1,195 | ||||||
Administration fees — Institutional Shares | 6 | ||||||
Sub-Administration fees | 27 | ||||||
Custodian fees | 39 | ||||||
Transfer agent fees — Fund Shares | 895 | ||||||
Transfer agent fees — Institutional Shares | 6 | ||||||
Trustees' fees | 22 | ||||||
Compliance fees | 5 | ||||||
Legal and audit fees | 52 | ||||||
State registration and filing fees | 37 | ||||||
Other expenses | 93 | ||||||
Total Expenses | 5,933 | ||||||
Expenses waived/reimbursed by Adviser | (11 | ) | |||||
Net Expenses | 5,922 | ||||||
Net Investment Income (Loss) | (1,274 | ) | |||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | (22,363 | ) | |||||
Net change in unrealized appreciation/depreciation on investment securities | 127,630 | ||||||
Net realized/unrealized gains (losses) on investments | 105,267 | ||||||
Change in net assets resulting from operations | $ | 103,993 |
See notes to financial statements.
8
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Aggressive Growth Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | (1,274 | ) | $ | 4,716 | ||||||
Net realized gains (losses) from investments | (22,363 | ) | 294,543 | ||||||||
Net change in unrealized appreciation/depreciation on investments | 127,630 | (213,886 | ) | ||||||||
Change in net assets resulting from operations | 103,993 | 85,373 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (273,924 | ) | (223,656 | ) | |||||||
Institutional Shares | (2,048 | ) | (1,695 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (275,972 | ) | (225,351 | ) | |||||||
Change in net assets resulting from capital transactions | 204,102 | 171,815 | |||||||||
Change in net assets | 32,123 | 31,837 | |||||||||
Net Assets: | |||||||||||
Beginning of period | 1,636,160 | 1,604,323 | |||||||||
End of period | $ | 1,668,283 | $ | 1,636,160 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 48,988 | $ | 147,097 | |||||||
Distributions reinvested | 270,045 | 220,904 | |||||||||
Cost of shares redeemed | (117,023 | ) | (197,789 | ) | |||||||
Total Fund Shares | $ | 202,010 | $ | 170,212 | |||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 1,914 | $ | 10,190 | |||||||
Distributions reinvested | 2,005 | 1,661 | |||||||||
Cost of shares redeemed | (1,827 | ) | (10,248 | ) | |||||||
Total Institutional Shares | $ | 2,092 | $ | 1,603 | |||||||
Change in net assets resulting from capital transactions | $ | 204,102 | $ | 171,815 | |||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,193 | 3,315 | |||||||||
Reinvested | 7,237 | 5,648 | |||||||||
Redeemed | (2,830 | ) | (4,535 | ) | |||||||
Total Fund Shares | 5,600 | 4,428 | |||||||||
Institutional Shares | |||||||||||
Issued | 44 | 224 | |||||||||
Reinvested | 53 | 42 | |||||||||
Redeemed | (42 | ) | (230 | ) | |||||||
Total Institutional Shares | 55 | 36 | |||||||||
Change in Shares | 5,655 | 4,464 |
See notes to financial statements.
9
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Aggressive Growth Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 43.91 | (0.03 | )(d) | 2.63 | 2.60 | (0.04 | ) | (7.60 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 48.92 | 0.13 | 1.72 | 1.85 | (0.08 | ) | (6.78 | ) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 43.96 | 0.19 | 8.79 | 8.98 | (0.19 | ) | (3.83 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 40.02 | 0.36 | 6.30 | 6.66 | (0.33 | ) | (2.39 | ) | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 42.55 | 0.33 | (0.20 | ) | 0.13 | (0.33 | ) | (2.33 | ) | |||||||||||||||||
Year Ended July 31, 2015 | $ | 40.90 | 0.79 | 5.75 | 6.54 | (0.79 | ) | (4.10 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 44.54 | (0.03 | )(d) | 2.69 | 2.66 | (0.05 | ) | (7.60 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 49.55 | 0.14 | (d) | 1.75 | 1.89 | (0.12 | ) | (6.78 | ) | |||||||||||||||||
Year Ended July 31, 2018 | $ | 44.36 | 0.14 | (d) | 8.93 | 9.07 | (0.05 | ) | (3.83 | ) | |||||||||||||||||
Year Ended July 31, 2017 | $ | 40.39 | 0.21 | (d) | 6.52 | 6.73 | (0.37 | ) | (2.39 | ) | |||||||||||||||||
Year Ended July 31, 2016 | $ | 42.92 | 0.44 | (0.24 | ) | 0.20 | (0.40 | ) | (2.33 | ) | |||||||||||||||||
Year Ended July 31, 2015 | $ | 41.22 | 0.21 | (d) | 6.47 | 6.68 | (0.88 | ) | (4.10 | ) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two-year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects total annual operating expenses of the shares before reductions of any expenses paid indirectly. The shares' expenses paid indirectly decreased the expense ratio by less than 0.01%.
(f) Prior to December 1, 2017, USAA Asset Management Company ("AMCO") (previous Investment Adviser) had voluntarily agreed to limit the annual expenses of the Institutional Shares to 0.70% of the Institutional Shares' average daily net assets.
See notes to financial statements.
10
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Aggressive Growth Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (7.64 | ) | $ | 38.87 | 6.70 | % | 0.74 | % | (0.16 | )% | 0.74 | % | $ | 1,655,593 | 33 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (6.86 | ) | $ | 43.91 | 5.53 | % | 0.72 | % | 0.30 | % | 0.72 | % | $ | 1,624,319 | 78 | % | |||||||||||||||||||
Year Ended July 31, 2018 | (4.02 | ) | $ | 48.92 | 21.57 | % | 0.75 | %(e) | 0.32 | % | 0.75 | % | $ | 1,592,944 | 57 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (2.72 | ) | $ | 43.96 | 17.92 | % | 0.81 | %(e) | 0.57 | % | 0.81 | % | $ | 1,340,385 | 51 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (2.66 | ) | $ | 40.02 | 0.36 | % | 0.85 | %(e) | 0.30 | % | 0.85 | % | $ | 1,208,124 | 70 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (4.89 | ) | $ | 42.55 | 16.96 | % | 0.88 | %(e) | 0.30 | % | 0.88 | % | $ | 1,247,753 | 55 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (7.65 | ) | $ | 39.55 | 6.71 | % | 0.70 | % | (0.12 | )% | 0.89 | % | $ | 12,690 | 33 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (6.90 | ) | $ | 44.54 | 5.56 | % | 0.70 | % | 0.32 | % | 0.83 | % | $ | 11,841 | 78 | % | |||||||||||||||||||
Year Ended July 31, 2018 | (3.88 | ) | $ | 49.55 | 21.54 | % | 0.75 | %(e)(f) | 0.30 | % | 0.94 | % | $ | 11,379 | 57 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (2.76 | ) | $ | 44.36 | 17.94 | % | 0.73 | %(e) | 0.54 | % | 0.73 | % | $ | 5,587 | 51 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (2.73 | ) | $ | 40.39 | 0.51 | % | 0.70 | %(e) | 0.45 | % | 0.70 | % | $ | 136,361 | 70 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (4.98 | ) | $ | 42.92 | 17.21 | % | 0.68 | %(e) | 0.50 | % | 0.68 | % | $ | 163,115 | 55 | % |
See notes to financial statements.
11
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Aggressive Growth Fund (the "Fund"). The Fund offers two classes of shares: Fund Shares and Institutional Shares. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges except with respect to fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or the over-the-counter markets, are valued
12
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
at the last sales price or official closing price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations typically are categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at net asset value. These valuations typically are categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. These valuations typically are categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's net asset value ("NAV") to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's net asset value is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. These valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of January 31, 2020, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 1,635,847 | $ | — | $ | — | $ | 1,635,847 | |||||||||||
Collateral for Securities Loaned | 3,135 | — | — | 3,135 | |||||||||||||||
Total | $ | 1,638,982 | $ | — | $ | — | $ | 1,638,982 |
For the six-months ended January 31, 2020, there were no transfers in or out of the Level 3 fair value hierarchy.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs. ETFs are a type of index fund, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
13
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Foreign Exchange Currency Contracts:
The Fund may enter into foreign exchange currency contracts to convert U.S. dollars to and from various foreign currencies. A foreign exchange currency contract is an obligation by the Fund to purchase or sell a specific currency at a future date at a price (in U.S. dollars) set at the time of the contract. The Fund does not engage in "cross-currency" foreign exchange contracts (i.e., contracts to purchase or sell one foreign currency in exchange for another foreign currency). The Fund's foreign exchange currency contracts might be considered spot contracts (typically a contract of one week or less) or forward contracts (typically a contract term over one week). A spot contract is entered into for purposes of hedging against foreign currency fluctuations relating to a specific portfolio transaction, such as the delay between a security transaction trade date and settlement date. Forward contracts are entered into for purposes of hedging portfolio holdings or concentrations of such holdings. Each foreign exchange currency contract is adjusted daily by the prevailing spot or forward rate of the underlying currency, and any appreciation or depreciation is recorded for financial statement purposes as unrealized until the contract settlement date, at which time the Fund records realized gains or losses equal to the difference between the value of a contract at the time it was opened and the value at the time it was closed. The Fund could be exposed to risk if a counterparty is unable to meet the terms of a foreign exchange currency contract or if the value of the foreign currency changes unfavorably. In addition, the use of foreign exchange currency contracts does not eliminate fluctuations in the underlying prices of the securities. As of January 31, 2020, the Fund had no open forward foreign exchange currency contracts.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a securities lending agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income, net of income retained by Citibank. Borrowers are required to secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are cured the next business day once the shortfall exceeds $100 thousand. Collateral may be cash, U.S. government securities, or other securities as permitted by SEC guidelines. Cash collateral may be invested in high-quality short-term investments, primarily open-end investment companies. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Risks relating to securities-lending transactions include that the borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower. The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy borrower default.
14
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Cash collateral is listed in the Fund's Portfolio of Investments and Financial Statements while non-cash collateral is not included. The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2020.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 2,894 | $ | — | $ | 3,135 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as net change in unrealized appreciation/depreciation on investments and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as net realized gains or losses from investment transactions and foreign currency translations on the Statement of Operations.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, and printing fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
3. Purchases and Sales:
Cost of purchases and proceeds from sales/maturities of securities (excluding securities maturing less than one year from acquisition) for the six-months ended January 31, 2020, were as follows for the Fund (amounts in thousands):
Excluding U.S Government Securities | |||||||||||
Purchases | Sales | ||||||||||
$ | 522,153 | $ | 583,889 |
There were no purchases and sales of U.S. government securities during the six-months ended January 31, 2020.
15
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA funds. The USAA fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi annual reports may be viewed at usaa.com. As of January 31, 2020, certain USAA fund-of-funds owned total outstanding shares of the Fund:
USAA Cornerstone Conservative Fund | 0.1 | % | |||||
USAA Cornerstone Equity Fund | 0.6 | % |
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee, which is accrued daily and paid monthly, is computed as a percentage of the Fund's average daily net assets at annualized rates of 0.50% of the first $750 million of average daily net assets, 0.40% of that portion of average daily net assets over $750 million but not over $1.5 billion, and 0.33% of that portion of average daily net assets over $1.5 billion. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
No performance adjustments will be made for periods beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter will be utilized in calculating future performance adjustments.
The performance adjustment will be calculated monthly by comparing each class' performance to that of the Lipper Large-Cap Growth Funds Index. The Lipper Large-Cap Growth Funds Index tracks the total return performance of each class within the Lipper Large-Cap Growth Funds category.
The performance period for each share class will consist of the current month plus the previous number of months beginning July 1, 2019. The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points) | Annual Adjustment Rate (in basis points)(1) | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
(1) Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of the class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Large-Cap Growth Funds Index over that period, even if the class has overall negative returns during the performance period.
16
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six-months ended January 31, 2020, the Fund had no subadvisors.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15% and 0.10% of average daily net assets of the Fund Shares and Institutional Shares, respectively. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. VCTA, an affiliate of the Adviser, provides transfer agent services to the Fund Shares based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10% of average daily net assets, plus out-of-pocket expenses. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust. The Distributor received no fees or other compensation for such distribution services.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain
17
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
The expense limits (excluding voluntary waivers) are 0.75% and 0.70% for Fund Shares and Institutional Shares, respectively. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||
$ | 11 |
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
The Fund invests in large-capitalization companies. Such investments may go in and out of favor based on market and economic conditions and may underperform other market segments. Some large-capitalization companies may be unable to respond quickly to new competitive challenges and attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. As such, returns on investments in stocks of large-capitalization companies could trail the returns on investments in stocks of small- and mid-capitalization companies.
Overall stock market risks may affect the value of the Fund. Factors such as domestic and international economic growth and market conditions, interest rate levels, and political events affect the securities market.
The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected. Price changes may be temporary or last for extended periods.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent)
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six-months ended January 31, 2020.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Fund in the Victory Fund Complex relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period is presented on the Statement of Operations under Interest expense on Interfund lending. As a Lender, interest earned by the Fund, if any, during the period is reflected on the Statement of Operations under Income on Interfund lending.
The Fund did not utilize or participate in the Facility during the six-months ended January 31, 2020.
8. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
9. Subsequent Event
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
19
USAA Mutual Funds Trust | Supplemental Information January 31, 2020 |
(Unaudited)
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019 through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,067.00 | $ | 1,021.42 | $ | 3.84 | $ | 3.76 | 0.74 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,067.10 | 1,021.62 | 3.64 | 3.56 | 0.70 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's web site at www.sec.gov.
20
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800) 235-8396 |
23418-0320
JANUARY 31, 2020
Semi Annual Report
USAA Capital Growth Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 4 | ||||||
Statement of Assets and Liabilities | 16 | ||||||
Statement of Operations | 17 | ||||||
Statements of Changes in Net Assets | 18 | ||||||
Financial Highlights | 20 | ||||||
Notes to Financial Statements | 22 | ||||||
Supplemental Information | 31 | ||||||
Expense Examples | 31 | ||||||
Proxy Voting and Portfolio Holdings Information | 31 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
1
USAA Mutual Funds Trust USAA Capital Growth Fund | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA Capital Growth Fund seeks capital appreciation.
Top 10 Holdings*
1/31/20
(% of Net Assets)
Apple, Inc. | 4.2 | % | |||||
Microsoft Corp. | 1.3 | % | |||||
Walmart, Inc. | 1.2 | % | |||||
Johnson & Johnson | 1.2 | % | |||||
The Procter & Gamble Co. | 1.1 | % | |||||
Mastercard, Inc. Class A | 1.1 | % | |||||
AT&T, Inc. | 1.0 | % | |||||
Nestle SA Registered Shares | 1.0 | % | |||||
Exxon Mobil Corp. | 0.9 | % | |||||
Merck & Co., Inc. | 0.9 | % |
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Capital Growth Fund (continued) | January 31, 2020 |
(Unaudited)
Sector Allocation*:
1/31/20
(% of Net Assets)
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
3
USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (99.1%) | |||||||||||
Communication Services (5.6%): | |||||||||||
AfreecaTV Co. Ltd. | 7,670 | $ | 343 | ||||||||
AT&T, Inc. | 220,357 | 8,290 | |||||||||
Charter Communications, Inc. Class A (a) | 6,098 | 3,155 | |||||||||
CITIC Telecom International Holdings Ltd. | 732,000 | 253 | |||||||||
Comcast Corp. Class A | 82,148 | 3,549 | |||||||||
DISH Network Corp. Class A (a) | 67,329 | 2,475 | |||||||||
Fox Corp. Class A | 66,541 | 2,467 | |||||||||
HKT Trust & HKT Ltd. | 266,000 | 397 | |||||||||
Innocean Worldwide, Inc. | 6,598 | 391 | |||||||||
KDDI Corp. | 22,900 | 692 | |||||||||
Koninklijke KPN NV | 529,618 | 1,484 | |||||||||
Liberty Broadband Corp. Class C (a) | 20,162 | 2,680 | |||||||||
Major Cineplex Group PCL | 315,200 | 213 | |||||||||
Masmovil Ibercom SA (a) | 15,941 | 333 | |||||||||
Match Group, Inc. (a) (b) | 29,434 | 2,302 | |||||||||
Nippon Telegraph & Telephone Corp. | 95,400 | 2,433 | |||||||||
NOS SGPS SA | 50,889 | 264 | |||||||||
Omnicom Group, Inc. | 31,684 | 2,386 | |||||||||
Plan B Media PCL | 1,390,400 | 264 | |||||||||
Sirius XM Holdings, Inc. | 352,744 | 2,494 | |||||||||
Tele2 AB | 22,448 | 339 | |||||||||
Telefonica SA | 471,273 | 3,188 | |||||||||
Tencent Holdings Ltd. | 36,100 | 1,721 | |||||||||
Turk Telekomunikasyon AS (a) | 254,021 | 330 | |||||||||
Verizon Communications, Inc. | 65,547 | 3,896 | |||||||||
Vivendi SA | 23,221 | 635 | |||||||||
Vodafone Group PLC | 222,592 | 437 | |||||||||
Wuhu Sanqi Interactive Entertainment Network Technology Group Co. Ltd. Class A | 88,386 | 409 | |||||||||
47,820 | |||||||||||
Consumer Discretionary (10.6%): | |||||||||||
Aditya Birla Fashion and Retail Ltd. (a) | 146,311 | 478 | |||||||||
Alsea SAB de CV (a) | 117,827 | 285 | |||||||||
Aristocrat Leisure Ltd. | 17,225 | 411 | |||||||||
AutoZone, Inc. (a) | 2,193 | 2,320 | |||||||||
Bandai Namco Holdings, Inc. | 7,100 | 413 | |||||||||
Barratt Developments PLC | 57,646 | 610 | |||||||||
Booking Holdings, Inc. (a) | 1,469 | 2,689 | |||||||||
Carnival Corp. | 48,755 | 2,122 | |||||||||
China Kepei Education Group, Ltd. | 654,000 | 347 | |||||||||
Cie Generale des Etablissements Michelin SCA | 12,550 | 1,456 | |||||||||
Dollarama, Inc. | 38,384 | 1,308 | |||||||||
DR Horton, Inc. | 48,443 | 2,867 | |||||||||
eBay, Inc. | 70,677 | 2,372 | |||||||||
Even Construtora e Incorporadora SA (a) | 118,100 | 461 | |||||||||
Faurecia SE | 43,295 | 2,062 | |||||||||
Fiat Chrysler Automobiles NV | 25,742 | 335 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Ford Motor Co. | 277,939 | $ | 2,451 | ||||||||
Galaxy Entertainment Group Ltd. | 51,000 | 334 | |||||||||
Garmin Ltd. | 25,635 | 2,485 | |||||||||
General Motors Co. Class C | 73,008 | 2,438 | |||||||||
Giant Manufacturing Co. Ltd. | 44,000 | 259 | |||||||||
Grupo SBF SA (a) | 47,300 | 436 | |||||||||
GVC Holdings PLC | 29,363 | 339 | |||||||||
Hangzhou Robam Appliances Co. Ltd. Class A | 64,600 | 298 | |||||||||
Hikari Tsushin, Inc. | 7,800 | 1,918 | |||||||||
Hyosung TNC Co. Ltd. | 2,795 | 385 | |||||||||
Jarir Marketing Co. | 7,240 | 310 | |||||||||
JD Sports Fashion PLC | 70,406 | 761 | |||||||||
Kering SA | 1,112 | 679 | |||||||||
Kordsa Teknik Tekstil AS | 165,412 | 390 | |||||||||
La Kaffa International Co. Ltd. | 59,000 | 345 | |||||||||
Las Vegas Sands Corp. | 37,374 | 2,441 | |||||||||
Leejam Sports Co. JSC | 16,649 | 351 | |||||||||
Lowe's Cos., Inc. | 25,632 | 2,979 | |||||||||
Lululemon Athletica, Inc. (a) | 11,349 | 2,717 | |||||||||
LVMH Moet Hennessy Louis Vuitton SE | 12,697 | 5,530 | |||||||||
Mitra Adiperkasa Tbk PT | 5,962,000 | 418 | |||||||||
Next PLC | 24,148 | 2,194 | |||||||||
Nike, Inc. Class B | 65,197 | 6,278 | |||||||||
NVR, Inc. (a) | 663 | 2,531 | |||||||||
O'Reilly Automotive, Inc. (a) | 6,108 | 2,480 | |||||||||
Power Wind Health Industry, Inc. | 56,000 | 311 | |||||||||
Poya International Co. Ltd. | 34,000 | 487 | |||||||||
Somboon Advance Technology PCL Class F | 237,900 | 97 | |||||||||
Sony Corp. | 27,800 | 1,944 | |||||||||
Starbucks Corp. | 35,919 | 3,047 | |||||||||
Target Corp. | 22,355 | 2,476 | |||||||||
The Home Depot, Inc. | 18,621 | 4,248 | |||||||||
The Indian Hotels Co. Ltd. | 237,437 | 473 | |||||||||
The TJX Cos., Inc. | 48,318 | 2,853 | |||||||||
Tofas Turk Otomobil Fabrikasi AS | 70,646 | 312 | |||||||||
Tong Yang Industry Co. Ltd. | 196,000 | 275 | |||||||||
Tongcheng-Elong Holdings Ltd. (a) | 144,800 | 203 | |||||||||
Topkey Corp. | 60,000 | 255 | |||||||||
Toyota Motor Corp. | 84,500 | 5,876 | |||||||||
United Arrows Ltd. | 48,700 | 1,295 | |||||||||
Wynn Macau Ltd. | 834,800 | 1,733 | |||||||||
Yum! Brands, Inc. | 26,041 | 2,754 | |||||||||
90,922 | |||||||||||
Consumer Staples (8.4%): | |||||||||||
Altria Group, Inc. | 59,112 | 2,810 | |||||||||
Anhui Kouzi Distillery Co. Ltd. Class A | 34,441 | 249 | |||||||||
Ausnutria Dairy Corp. Ltd. | 196,000 | 238 | |||||||||
Bakkafrost P/F | 6,429 | 458 | |||||||||
Barry Callebaut AG Registered Shares | 169 | 373 | |||||||||
BGF Retail Co. Ltd. | 2,114 | 291 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
British American Tobacco PLC | 15,035 | $ | 663 | ||||||||
Brown-Forman Corp. Class B | 37,965 | 2,568 | |||||||||
Carlsberg A/S Class B | 4,053 | 592 | |||||||||
Coca-Cola HBC AG | 10,241 | 376 | |||||||||
Colgate-Palmolive Co. | 40,879 | 3,016 | |||||||||
Costco Wholesale Corp. | 11,297 | 3,451 | |||||||||
Diageo PLC | 68,343 | 2,702 | |||||||||
Imperial Brands PLC | 46,390 | 1,189 | |||||||||
Koninklijke Ahold Delhaize NV | 21,982 | 539 | |||||||||
L'Oreal SA | 2,126 | 591 | |||||||||
Matsumotokiyoshi Holdings Co. Ltd. | 52,800 | 2,112 | |||||||||
NeoPharm Co. Ltd. | 2,830 | 96 | |||||||||
Nestle SA Registered Shares | 74,724 | 8,244 | |||||||||
Nippon Suisan Kaisha Ltd. | 78,200 | 427 | |||||||||
Pernod Ricard SA | 1,853 | 321 | |||||||||
Royal Unibrew | 26,120 | 2,484 | |||||||||
Sysco Corp. | 31,815 | 2,613 | |||||||||
Tate & Lyle PLC | 48,844 | 511 | |||||||||
Tesco PLC | 254,383 | 827 | |||||||||
The Clorox Co. | 16,759 | 2,636 | |||||||||
The Kraft Heinz Co. | 79,059 | 2,308 | |||||||||
The Procter & Gamble Co. | 73,035 | 9,102 | |||||||||
The SPAR Group Ltd. | 27,948 | 357 | |||||||||
Toyo Suisan Kaisha Ltd. | 8,000 | 335 | |||||||||
Tyson Foods, Inc. Class A | 27,757 | 2,294 | |||||||||
Unilever PLC | 37,012 | 2,207 | |||||||||
Walgreens Boots Alliance, Inc. | 91,666 | 4,661 | |||||||||
Walmart, Inc. | 89,492 | 10,247 | |||||||||
71,888 | |||||||||||
Energy (5.3%): | |||||||||||
Aker BP ASA | 31,892 | 899 | |||||||||
Beach Energy Ltd. | 519,684 | 907 | |||||||||
BP PLC | 468,949 | 2,823 | |||||||||
Cairn Energy PLC (a) | 119,765 | 267 | |||||||||
Chevron Corp. | 32,098 | 3,439 | |||||||||
China Suntien Green Energy Corp. Ltd. Class H | 1,190,000 | 307 | |||||||||
ConocoPhillips | 45,187 | 2,685 | |||||||||
Exxon Mobil Corp. | 125,583 | 7,802 | |||||||||
Galp Energia SGPS SA | 37,108 | 561 | |||||||||
Grupa Lotos SA | 14,060 | 279 | |||||||||
Marathon Petroleum Corp. | 43,420 | 2,366 | |||||||||
Parex Resources, Inc. (a) | 88,237 | 1,397 | |||||||||
Petronet LNG Ltd. | 120,059 | 448 | |||||||||
Phillips 66 | 74,537 | 6,810 | |||||||||
Repsol SA | 31,271 | 430 | |||||||||
Royal Dutch Shell PLC Class A | 121,409 | 3,189 | |||||||||
Santos Ltd. | 117,555 | 674 | |||||||||
Total SA | 54,471 | 2,652 | |||||||||
Valero Energy Corp. | 86,060 | 7,256 | |||||||||
45,191 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Financials (13.8%): | |||||||||||
3i Group PLC | 82,786 | $ | 1,204 | ||||||||
AGNC Investment Corp. | 10,696 | 199 | |||||||||
AIA Group Ltd. | 165,800 | 1,642 | |||||||||
Allianz SE | 14,426 | 3,443 | |||||||||
Annaly Capital Management, Inc. | 28,434 | 277 | |||||||||
Aon PLC | 13,381 | 2,948 | |||||||||
Australia & New Zealand Banking Group Ltd. | 21,307 | 363 | |||||||||
AXA SA | 57,037 | 1,517 | |||||||||
Banca Generali SpA | 44,395 | 1,411 | |||||||||
Banco ABC Brasil SA | 71,000 | 360 | |||||||||
Banco Santander SA | 146,924 | 579 | |||||||||
Bank Tabungan Pensiunan Nasional Syariah Tbk PT (a) | 1,283,800 | 414 | |||||||||
Barclays PLC | 169,771 | 375 | |||||||||
BOC Hong Kong Holdings Ltd. | 126,000 | 417 | |||||||||
Capital One Financial Corp. | 26,007 | 2,595 | |||||||||
Cembra Money Bank AG | 12,373 | 1,447 | |||||||||
Chailease Holding Co. Ltd. | 95,000 | 394 | |||||||||
China Life Insurance Co. Ltd. (a) | 437,000 | 355 | |||||||||
China Merchants Bank Co. Ltd. Class H | 262,500 | 1,265 | |||||||||
Cholamandalam Investment and Finance Co. Ltd. | 85,626 | 393 | |||||||||
Cincinnati Financial Corp. | 24,506 | 2,572 | |||||||||
Citigroup, Inc. | 44,475 | 3,309 | |||||||||
Close Brothers Group PLC | 72,987 | 1,362 | |||||||||
DBS Group Holdings Ltd. | 32,200 | 593 | |||||||||
Discover Financial Services | 29,877 | 2,245 | |||||||||
DNB ASA | 35,431 | 620 | |||||||||
Erste Group Bank AG | 11,468 | 421 | |||||||||
Federal Bank Ltd. | 203,005 | 259 | |||||||||
Fidelity National Financial, Inc. | 55,899 | 2,725 | |||||||||
Gentera SAB de CV | 494,686 | 558 | |||||||||
Hannover Rueck SE | 3,942 | 765 | |||||||||
HSBC Holdings PLC | 261,063 | 1,897 | |||||||||
ING Groep NV | 293,421 | 3,185 | |||||||||
Intercontinental Exchange, Inc. | 30,033 | 2,995 | |||||||||
Intercorp Financial Services, Inc. (a) | 7,515 | 317 | |||||||||
Jafco Co. Ltd. | 24,100 | 1,002 | |||||||||
JPMorgan Chase & Co. | 39,431 | 5,219 | |||||||||
KBC Group NV | 5,886 | 432 | |||||||||
Kiatnakin Bank PCL Class F | 166,600 | 363 | |||||||||
Legal & General Group PLC | 778,827 | 3,132 | |||||||||
Liberty Holdings Ltd. | 40,765 | 285 | |||||||||
Lloyds Banking Group PLC | 377,205 | 282 | |||||||||
Macquarie Group Ltd. | 36,509 | 3,487 | |||||||||
Manappuram Finance Ltd. | 155,908 | 409 | |||||||||
Manulife Financial Corp. | 183,584 | 3,577 | |||||||||
Marsh & McLennan Cos., Inc. | 25,264 | 2,826 | |||||||||
Mediobanca Banca di Credito Finanziario SpA | 32,326 | 322 | |||||||||
MetLife, Inc. | 51,670 | 2,569 | |||||||||
Metropolitan Bank & Trust Co. | 237,030 | 267 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Mitsubishi UFJ Financial Group, Inc. | 413,800 | $ | 2,125 | ||||||||
Mizuho Financial Group, Inc. | 231,300 | 343 | |||||||||
MSCI, Inc. | 9,950 | 2,844 | |||||||||
NN Group NV | 11,705 | 406 | |||||||||
ORIX Corp. | 57,700 | 975 | |||||||||
Partners Group Holding AG | 378 | 346 | |||||||||
Prudential Financial, Inc. | 27,964 | 2,546 | |||||||||
Raiffeisen Bank International AG | 10,880 | 248 | |||||||||
Regions Financial Corp. | 144,112 | 2,244 | |||||||||
RHB Bank Berhad | 306,100 | 425 | |||||||||
S&P Global, Inc. | 10,569 | 3,105 | |||||||||
Shinsei Bank Ltd. | 21,300 | 326 | |||||||||
Singapore Exchange Ltd. | 45,700 | 290 | |||||||||
Skandinaviska Enskilda Banken AB Class A | 44,191 | 437 | |||||||||
SpareBank 1 SMN | 146,016 | 1,611 | |||||||||
State Street Corp. | 31,910 | 2,413 | |||||||||
Sumitomo Mitsui Financial Group, Inc. | 14,100 | 496 | |||||||||
Sumitomo Mitsui Trust Holdings, Inc. | 8,500 | 313 | |||||||||
Swiss Life Holding AG | 2,684 | 1,350 | |||||||||
Synchrony Financial | 68,968 | 2,235 | |||||||||
T. Rowe Price Group, Inc. | 21,490 | 2,870 | |||||||||
The Allstate Corp. | 24,077 | 2,854 | |||||||||
The Bank of New York Mellon Corp. | 52,484 | 2,350 | |||||||||
The Hartford Financial Services Group, Inc. | 42,698 | 2,531 | |||||||||
The Toronto-Dominion Bank | 39,555 | 2,186 | |||||||||
Tokio Marine Holdings, Inc. | 45,500 | 2,470 | |||||||||
Transaction Capital Ltd. | 204,447 | 330 | |||||||||
U.S. Bancorp | 51,044 | 2,717 | |||||||||
UBS Group AG Registered Shares | 175,121 | 2,176 | |||||||||
Wells Fargo & Co. | 74,032 | 3,475 | |||||||||
118,630 | |||||||||||
Health Care (15.2%): | |||||||||||
AbbVie, Inc. | 73,700 | 5,971 | |||||||||
Alkem Laboratories Ltd. | 16,665 | 560 | |||||||||
Almirall SA | 14,584 | 216 | |||||||||
Amgen, Inc. | 27,940 | 6,036 | |||||||||
Anthem, Inc. | 9,384 | 2,489 | |||||||||
Astellas Pharma, Inc. | 40,600 | 718 | |||||||||
AstraZeneca PLC | 6,672 | 653 | |||||||||
Biogen, Inc. (a) | 18,478 | 4,968 | |||||||||
Bristol-Myers Squibb Co. | 106,374 | 6,696 | |||||||||
Cardinal Health, Inc. | 47,792 | 2,447 | |||||||||
Cerner Corp. | 35,491 | 2,549 | |||||||||
Cleopatra Hospital (a) (c) | 922,084 | 338 | |||||||||
CSL Ltd. | 18,073 | 3,716 | |||||||||
CVS Health Corp. | 40,273 | 2,731 | |||||||||
DENTSPLY SIRONA, Inc. | 44,388 | 2,486 | |||||||||
DexCom, Inc. (a) | 11,792 | 2,839 | |||||||||
Dong-A ST Co. Ltd. | 3,865 | 303 | |||||||||
Eli Lilly & Co. | 24,527 | 3,425 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Fresenius Medical Care AG & Co. KGaA | 6,038 | $ | 464 | ||||||||
Gilead Sciences, Inc. | 44,115 | 2,788 | |||||||||
GlaxoSmithKline PLC | 34,684 | 814 | |||||||||
HCA Healthcare, Inc. | 17,607 | 2,444 | |||||||||
Hikma Pharmaceuticals PLC | 19,499 | 471 | |||||||||
Hoya Corp. | 37,900 | 3,628 | |||||||||
ICON PLC (a) | 5,905 | 996 | |||||||||
Il Dong Pharmaceutical Co. Ltd. (a) | 21,797 | 284 | |||||||||
I-Sens, Inc. | 15,786 | 302 | |||||||||
Johnson & Johnson | 68,425 | 10,187 | |||||||||
Korian SA | 7,267 | 331 | |||||||||
Lonza Group AG Registered Shares | 988 | 406 | |||||||||
Luye Pharma Group Ltd. (d) | 387,000 | 248 | |||||||||
McKesson Corp. | 36,916 | 5,266 | |||||||||
Medtronic PLC | 30,689 | 3,542 | |||||||||
Merck & Co., Inc. | 88,447 | 7,557 | |||||||||
Mettler-Toledo International, Inc. (a) | 3,248 | 2,459 | |||||||||
Novartis AG | 65,272 | 6,169 | |||||||||
Novo Nordisk A/S Class B | 6,395 | 389 | |||||||||
Pfizer, Inc. | 96,385 | 3,589 | |||||||||
Qualicorp Consultoria e Corretora de Seguros SA | 47,900 | 464 | |||||||||
Recordati SpA | 31,630 | 1,353 | |||||||||
ResMed, Inc. | 16,579 | 2,636 | |||||||||
Roche Holding AG | 21,907 | 7,351 | |||||||||
Sanofi | 8,513 | 821 | |||||||||
Shionogi & Co. Ltd. | 50,400 | 2,997 | |||||||||
Smith & Nephew PLC | 76,690 | 1,845 | |||||||||
Thermo Fisher Scientific, Inc. | 10,206 | 3,197 | |||||||||
UCB SA | 3,651 | 336 | |||||||||
Veeva Systems, Inc. Class A (a) | 18,210 | 2,670 | |||||||||
Waters Corp. (a) | 10,899 | 2,439 | |||||||||
Zoetis, Inc. | 21,554 | 2,893 | |||||||||
130,477 | |||||||||||
Industrials (10.7%): | |||||||||||
3M Co. | 17,721 | 2,812 | |||||||||
ACS, Actividades de Construccion y Servicios SA | 21,929 | 729 | |||||||||
AerCap Holdings NV (a) | 11,861 | 671 | |||||||||
Airbus SE | 3,289 | 483 | |||||||||
Alstom SA | 7,111 | 377 | |||||||||
Arconic, Inc. | 80,933 | 2,424 | |||||||||
Ashtead Group PLC | 31,487 | 1,016 | |||||||||
Atlas Copco AB Class B | 121,833 | 3,789 | |||||||||
Canadian Pacific Railway Ltd. | 13,961 | 3,709 | |||||||||
Cebu Air, Inc. | 212,040 | 313 | |||||||||
Central Japan Railway Co. | 4,800 | 942 | |||||||||
Cia de Locacao das Americas | 62,100 | 342 | |||||||||
Cintas Corp. | 9,651 | 2,692 | |||||||||
CK Hutchison Holdings Ltd. | 74,000 | 654 | |||||||||
CNH Industrial NV | 54,903 | 523 | |||||||||
Controladora Vuela Cia de Aviacion SAB de CV, ADR (a) | 41,193 | 535 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Copart, Inc. (a) | 28,232 | $ | 2,865 | ||||||||
Cummins, Inc. | 14,047 | 2,247 | |||||||||
Delta Air Lines, Inc. | 41,021 | 2,287 | |||||||||
Eaton Corp. PLC | 27,609 | 2,608 | |||||||||
Engineers India Ltd. | 323,086 | 414 | |||||||||
en-japan, Inc. | 41,500 | 1,649 | |||||||||
Experian PLC | 50,546 | 1,759 | |||||||||
Ferreycorp SAA | 427,669 | 253 | |||||||||
Fuji Electric Co. Ltd. | 61,300 | 1,795 | |||||||||
General Dynamics Corp. | 14,912 | 2,616 | |||||||||
Gunkul Engineering PCL | 3,497,900 | 294 | |||||||||
HEICO Corp. Class A | 27,894 | 2,682 | |||||||||
Hitachi Construction Machinery Co. Ltd. | 71,300 | 1,911 | |||||||||
Illinois Tool Works, Inc. | 15,696 | 2,747 | |||||||||
ITOCHU Corp. | 115,100 | 2,689 | |||||||||
JSL SA | 71,900 | 522 | |||||||||
Lockheed Martin Corp. | 7,931 | 3,395 | |||||||||
Metso Oyj | 9,401 | 334 | |||||||||
Mitsubishi Electric Corp. | 31,200 | 433 | |||||||||
Mitsui & Co. Ltd. | 36,200 | 644 | |||||||||
MTU Aero Engines AG | 2,437 | 738 | |||||||||
Mytilineos Holdings SA | 45,070 | 461 | |||||||||
Northrop Grumman Corp. | 8,133 | 3,046 | |||||||||
Obayashi Corp. | 39,400 | 432 | |||||||||
OKUMA Corp. | 17,500 | 797 | |||||||||
PNC Infratech Ltd. | 182,417 | 506 | |||||||||
Qantas Airways Ltd. | 77,324 | 328 | |||||||||
RELX PLC | 79,732 | 2,115 | |||||||||
Rockwell Automation, Inc. | 12,828 | 2,459 | |||||||||
Samsung Engineering Co. Ltd. (a) | 21,536 | 306 | |||||||||
Sandvik AB | 23,938 | 437 | |||||||||
Sanwa Holdings Corp. | 108,600 | 1,143 | |||||||||
Secom Co. Ltd. | 3,900 | 342 | |||||||||
Seibu Holdings, Inc. | 18,800 | 293 | |||||||||
Shenzhen Expressway Co. Ltd. Class H | 204,000 | 264 | |||||||||
Southwest Airlines Co. | 44,338 | 2,437 | |||||||||
Taisei Corp. | 6,600 | 264 | |||||||||
Taiwan Secom Co. Ltd. | 144,000 | 423 | |||||||||
Teledyne Technologies, Inc. (a) | 7,253 | 2,648 | |||||||||
Teleperformance | 3,458 | 867 | |||||||||
The Boeing Co. | 11,066 | 3,522 | |||||||||
United Airlines Holdings, Inc. (a) | 27,133 | 2,030 | |||||||||
United Technologies Corp. | 21,829 | 3,279 | |||||||||
Vinci SA | 3,386 | 375 | |||||||||
Volvo AB Class B | 25,110 | 429 | |||||||||
W.W. Grainger, Inc. | 7,550 | 2,285 | |||||||||
Wijaya Karya Persero Tbk PT | 2,063,200 | 284 | |||||||||
Wolters Kluwer NV | 41,393 | 3,110 | |||||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. Class H | 366,000 | 269 | |||||||||
92,044 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Information Technology (18.6%): | |||||||||||
Adobe, Inc. (a) | 10,714 | $ | 3,762 | ||||||||
Advantest Corp. | 11,000 | 574 | |||||||||
Alten SA | 3,021 | 372 | |||||||||
Apple, Inc. | 116,725 | 36,129 | |||||||||
Applied Materials, Inc. | 90,904 | 5,272 | |||||||||
Avast PLC (d) | 53,432 | 300 | |||||||||
Beijing Sinnet Technology Co. Ltd. Class A | 115,200 | 341 | |||||||||
Broadcom, Inc. | 10,073 | 3,074 | |||||||||
Capgemini SE | 23,772 | 2,952 | |||||||||
CDW Corp. | 35,858 | 4,677 | |||||||||
Chinasoft International Ltd. | 720,000 | 420 | |||||||||
Cisco Systems, Inc. | 77,548 | 3,565 | |||||||||
Cognizant Technology Solutions Corp. Class A | 41,603 | 2,554 | |||||||||
Constellation Software, Inc. | 2,216 | 2,330 | |||||||||
Douzone Bizon Co. Ltd. | 6,912 | 518 | |||||||||
Flexium Interconnect, Inc. | 150,000 | 518 | |||||||||
Formosa Sumco Technology Corp. | 100,000 | 363 | |||||||||
FUJIFILM Holdings Corp. | 8,900 | 442 | |||||||||
Fujitsu Ltd. | 16,900 | 1,788 | |||||||||
Global Payments, Inc. | 15,375 | 3,005 | |||||||||
Global Unichip Corp. | 39,000 | 302 | |||||||||
Hewlett Packard Enterprises Co. | 157,035 | 2,187 | |||||||||
Hitachi Ltd. | 12,300 | 469 | |||||||||
Holy Stone Enterprise Co. Ltd. | 101,000 | 326 | |||||||||
HyVision System, Inc. (a) | 40,529 | 406 | |||||||||
Ingenico Group SA | 3,900 | 453 | |||||||||
Intel Corp. | 68,404 | 4,373 | |||||||||
International Business Machines Corp. | 47,402 | 6,813 | |||||||||
Intuit, Inc. | 10,925 | 3,063 | |||||||||
Keysight Technologies, Inc. (a) | 24,882 | 2,314 | |||||||||
Kingboard Laminates Holdings Ltd. | 357,000 | 365 | |||||||||
Kingdee International Software Group Co. Ltd. | 367,000 | 392 | |||||||||
KLA Corp. | 14,735 | 2,442 | |||||||||
Lam Research Corp. | 18,586 | 5,542 | |||||||||
Leidos Holdings, Inc. | 25,732 | 2,585 | |||||||||
Lelon Electronics Corp. | 263,000 | 329 | |||||||||
LG Innotek Co. Ltd. | 3,057 | 381 | |||||||||
Logitech International SA Class R | 11,257 | 504 | |||||||||
Mastercard, Inc. Class A | 28,610 | 9,039 | |||||||||
Melexis NV (b) | 11,886 | 844 | |||||||||
Micron Technology, Inc. (a) | 50,943 | 2,705 | |||||||||
Microsoft Corp. | 65,063 | 11,076 | |||||||||
Micro-Star International Co. Ltd. | 144,000 | 437 | |||||||||
Murata Manufacturing Co. Ltd. | 6,800 | 385 | |||||||||
NTT Data Corp. | 31,700 | 445 | |||||||||
NVIDIA Corp. | 14,280 | 3,376 | |||||||||
NXP Semiconductor NV | 3,604 | 457 | |||||||||
Obic Co. Ltd. | 2,900 | 395 | |||||||||
Oracle Corp. | 121,201 | 6,357 |
See notes to financial statements.
11
USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Oracle Corp. Japan | 9,500 | $ | 822 | ||||||||
SAP SE | 29,079 | 3,787 | |||||||||
SFA Engineering Corp. | 9,182 | 310 | |||||||||
Sino-American Silicon Products, Inc. | 144,000 | 460 | |||||||||
STMicroelectronics NV | 12,534 | 349 | |||||||||
Supreme Electronics Co. Ltd. | 345,000 | 371 | |||||||||
TE Connectivity Ltd. | 26,922 | 2,482 | |||||||||
Texas Instruments, Inc. | 25,399 | 3,064 | |||||||||
Tokai Carbon Korea Co. Ltd. | 4,916 | 243 | |||||||||
Ulvac, Inc. | 19,200 | 693 | |||||||||
Unitest, Inc. | 34,084 | 437 | |||||||||
Venustech Group, Inc. Class A | 70,000 | 385 | |||||||||
VeriSign, Inc. (a) | 13,309 | 2,770 | |||||||||
Walsin Technology Corp. | 69,000 | 471 | |||||||||
Wistron Corp. | 453,000 | 404 | |||||||||
Xinyi Solar Holdings Ltd. | 440,000 | 308 | |||||||||
159,074 | |||||||||||
Materials (4.2%): | |||||||||||
Air Products & Chemicals, Inc. | 11,854 | 2,830 | |||||||||
Anglo American PLC | 41,376 | 1,080 | |||||||||
ArcelorMittal SA | 31,410 | 461 | |||||||||
Arkema SA | 19,807 | 1,815 | |||||||||
Berger Paints India Ltd. | 66,295 | 520 | |||||||||
BHP Group Ltd. | 124,815 | 3,199 | |||||||||
Boliden AB | 16,595 | 394 | |||||||||
Celanese Corp., Series A | 20,640 | 2,136 | |||||||||
Evraz PLC | 165,626 | 769 | |||||||||
Hansol Chemical Co. Ltd. | 5,232 | 476 | |||||||||
HeidelbergCement AG | 4,238 | 286 | |||||||||
Impala Platinum Holdings Ltd. (a) | 34,720 | 326 | |||||||||
JK Lakshmi Cement Ltd. | 57,884 | 289 | |||||||||
Kirkland Lake Gold Ltd. | 28,341 | 1,162 | |||||||||
Klabin SA | 70,400 | 341 | |||||||||
Linde PLC | 15,181 | 3,084 | |||||||||
LyondellBasell Industries NV Class A | 54,767 | 4,265 | |||||||||
Martin Marietta Materials, Inc. | 9,168 | 2,419 | |||||||||
Merdeka Copper Gold Tbk PT (a) | 4,081,100 | 350 | |||||||||
PT Indocement Tunggal Prakarsa Tbk PT | 224,600 | 269 | |||||||||
Rio Tinto Ltd. | 26,503 | 1,719 | |||||||||
Rio Tinto PLC | 55,232 | 2,953 | |||||||||
Shinkong Synthetic Fibers Corp. | 1,097,000 | 419 | |||||||||
Showa Denko KK | 9,900 | 237 | |||||||||
The Sherwin-Williams Co. | 4,767 | 2,655 | |||||||||
Tipco Asphalt PCL | 512,300 | 338 | |||||||||
Tosoh Corp. | 17,400 | 245 | |||||||||
Ube Industries Ltd. | 24,200 | 486 | |||||||||
West China Cement Ltd. | 2,050,000 | 329 | |||||||||
35,852 |
See notes to financial statements.
12
USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Real Estate (3.3%): | |||||||||||
Alexandria Real Estate Equities, Inc. | 2,214 | $ | 361 | ||||||||
Aliansce Sonae Shopping Centers SA | 37,105 | 456 | |||||||||
Alstria Office REIT-AG | 16,686 | 331 | |||||||||
American Tower Corp. | 8,643 | 2,002 | |||||||||
AvalonBay Communities, Inc. | 2,726 | 591 | |||||||||
Bekasi Fajar Industrial Estate Tbk PT | 16,935,500 | 207 | |||||||||
Boston Properties, Inc. | 3,018 | 433 | |||||||||
Camden Property Trust | 1,890 | 212 | |||||||||
China SCE Group Holdings Ltd. | 757,134 | 397 | |||||||||
CK Asset Holdings Ltd. | 237,500 | 1,517 | |||||||||
Crown Castle International Corp. | 8,117 | 1,216 | |||||||||
Daiwa House Industry Co. Ltd. | 17,200 | 542 | |||||||||
Digital Realty Trust, Inc. (b) | 4,068 | 500 | |||||||||
Duke Realty Corp. | 7,057 | 256 | |||||||||
Equinix, Inc. | 1,656 | 977 | |||||||||
Equity LifeStyle Properties, Inc. | 3,377 | 246 | |||||||||
Equity Residential | 7,241 | 602 | |||||||||
Essex Property Trust, Inc. | 1,283 | 397 | |||||||||
Extra Space Storage, Inc. | 2,509 | 278 | |||||||||
Fastighets AB Balder Class B (a) | 7,842 | 372 | |||||||||
Federal Realty Investment Trust | 1,463 | 183 | |||||||||
Healthpeak Properties, Inc. | 9,589 | 345 | |||||||||
Host Hotels & Resorts, Inc. | 14,251 | 233 | |||||||||
Invitation Homes, Inc. | 10,498 | 330 | |||||||||
Iron Mountain, Inc. | 5,605 | 177 | |||||||||
Kimco Realty Corp. | 8,241 | 157 | |||||||||
Leg Immobilien AG | 3,437 | 424 | |||||||||
Lendlease Group | 26,391 | 317 | |||||||||
Liberty Property Trust | 3,054 | 191 | |||||||||
Medical Properties Trust, Inc. | 9,957 | 221 | |||||||||
Mid-America Apartment Communities, Inc. | 2,227 | 306 | |||||||||
Mirvac Group | 195,669 | 441 | |||||||||
National Retail Properties, Inc. | 3,193 | 179 | |||||||||
Nexity SA | 6,853 | 331 | |||||||||
Omega Healthcare Investors, Inc. | 4,263 | 179 | |||||||||
Prologis, Inc. | 12,324 | 1,145 | |||||||||
Public Storage | 3,069 | 687 | |||||||||
Realty Income Corp. | 6,214 | 487 | |||||||||
Regency Centers Corp. | 3,272 | 203 | |||||||||
SBA Communications Corp. | 2,209 | 551 | |||||||||
Scentre Group | 759,306 | 1,948 | |||||||||
Simon Property Group, Inc. | 6,015 | 801 | |||||||||
SL Green Realty Corp. | 1,610 | 148 | |||||||||
Sumitomo Realty & Development Co. Ltd. | 43,300 | 1,594 | |||||||||
Sun Communities, Inc. | 1,771 | 287 | |||||||||
Times China Holdings Ltd. | 169,000 | 295 | |||||||||
UDR, Inc. | 5,718 | 274 |
See notes to financial statements.
13
USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Ventas, Inc. | 7,275 | $ | 421 | ||||||||
VEREIT, Inc. | 20,607 | 201 | |||||||||
VICI Properties, Inc. | 9,002 | 241 | |||||||||
Vonovia SE | 25,722 | 1,468 | |||||||||
Vornado Realty Trust | 3,354 | 221 | |||||||||
W.P. Carey, Inc. | 3,335 | 281 | |||||||||
Welltower, Inc. | 7,913 | 672 | |||||||||
Weyerhaeuser Co. | 14,546 | 421 | |||||||||
Yuzhou Properties Co. Ltd. | 530,000 | 245 | |||||||||
28,498 | |||||||||||
Utilities (3.4%): | |||||||||||
ACEA SpA | 21,997 | 513 | |||||||||
Atlantica Yield PLC | 15,427 | 443 | |||||||||
CESC Ltd. | 42,450 | 422 | |||||||||
Chubu Electric Power Co., Inc. | 113,600 | 1,543 | |||||||||
Cia de Saneamento Do Parana | 12,800 | 303 | |||||||||
Duke Energy Corp. | 30,736 | 3,001 | |||||||||
E.ON SE | 63,902 | 724 | |||||||||
Enel SpA | 620,242 | 5,406 | |||||||||
Exelon Corp. | 58,366 | 2,778 | |||||||||
FirstEnergy Corp. | 54,037 | 2,745 | |||||||||
NextEra Energy, Inc. | 13,329 | 3,574 | |||||||||
Orsted A/S (d) | 5,479 | 598 | |||||||||
Sempra Energy | 18,027 | 2,896 | |||||||||
Terna Energy SA (a) | 46,095 | 415 | |||||||||
The Kansai Electric Power Co., Inc. | 33,000 | 370 | |||||||||
The Southern Co. | 45,549 | 3,206 | |||||||||
28,937 | |||||||||||
Total Common Stocks (Cost $762,491) | 849,333 | ||||||||||
Preferred Stocks (0.2%) | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Volkswagen AG | 6,417 | 1,151 | |||||||||
Financials (0.0%): (e) | |||||||||||
Banco do Estado do Rio Grande do Sul SA | 82,100 | 385 | |||||||||
Industrials (0.1%): | |||||||||||
Randon SA Implementos e Participacoes | 147,100 | 467 | |||||||||
Total Preferred Stocks (Cost $1,797) | 2,003 | ||||||||||
Exchange-Traded Funds (0.1%) | |||||||||||
iShares Core MSCI EAFE ETF | 11,079 | 703 | |||||||||
iShares MSCI EAFE ETF | 2,668 | 180 | |||||||||
Total Exchange-Traded Funds (Cost $871) | 883 |
See notes to financial statements.
14
USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Collateral for Securities Loaned ^(0.4%) | |||||||||||
HSBC U.S. Government Money Market Fund, I Shares, 1.52% (f) | 3,299,219 | $ | 3,299 | ||||||||
Total Collateral for Securities Loaned (Cost $3,299) | 3,299 | ||||||||||
Total Investments (Cost $768,458) — 99.8% | 855,518 | ||||||||||
Other assets in excess of liabilities — 0.2% | 1,758 | ||||||||||
NET ASSETS — 100.00% | $ | 857,276 |
^ Purchased with cash collateral from securities on loan.
(a) Non-income producing security.
(b) All or a portion of this security is on loan.
(c) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of January 31, 2020, illiquid securities were 0.04% of the Fund's net assets.
(d) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid based upon procedures approved by the Board of Trustees. As of January 31, 2020, the fair value of these securities was $1,146 thousands and amounted to 0.1% of net assets.
(e) Amount represents less than 0.05% of net assets.
(f) Rate disclosed is the daily yield on January 31, 2020.
ADR — American Depositary Receipt
ETF — Exchange-Traded Fund
PCL — Public Company Limited
PLC — Public Limited Company
REIT — Real Estate Investment Trust
See notes to financial statements.
15
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Capital Growth Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $768,458) | $ | 855,518 | (a) | ||||
Foreign currency, at value (Cost $50) | 50 | ||||||
Cash and cash equivalents | 4,343 | ||||||
Receivables: | |||||||
Interest and dividends | 808 | ||||||
Capital shares issued | 309 | ||||||
Investments sold | 1,229 | ||||||
Reclaims | 541 | ||||||
From Adviser | 16 | ||||||
Prepaid expenses | — | (b) | |||||
Total assets | 862,814 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 3,299 | ||||||
Investments purchased | 910 | ||||||
Capital shares redeemed | 316 | ||||||
Accrued foreign capital gains taxes | 86 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 572 | ||||||
Administration fees | 112 | ||||||
Custodian fees | 42 | ||||||
Transfer agent fees | 95 | ||||||
Compliance fees | — | (b) | |||||
Other accrued expenses | 106 | ||||||
Total liabilities | 5,538 | ||||||
Net Assets: | |||||||
Capital | 728,822 | ||||||
Total distributable earnings/(loss) | 128,454 | ||||||
Net assets | $ | 857,276 | |||||
Net Assets: | |||||||
Fund Shares | $ | 819,274 | |||||
Institutional Shares | 38,002 | ||||||
Total | $ | 857,276 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 75,931 | ||||||
Institutional Shares | 3,509 | ||||||
Total | 79,440 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 10.79 | |||||
Institutional Shares | 10.83 |
(a) Includes $3,116 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
16
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA Capital Growth Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 10,157 | |||||
Interest | 16 | ||||||
Securities lending (net of fees) | 37 | ||||||
Foreign tax withholding | (358 | ) | |||||
Total Income | 9,852 | ||||||
Expenses: | |||||||
Investment advisory fees | 3,440 | ||||||
Administration fees — Fund shares | 618 | ||||||
Administration fees — Institutional shares | 46 | ||||||
Sub-Administration fees | 23 | ||||||
Custodian fees | 50 | ||||||
Transfer agent fees — Fund Shares | 691 | ||||||
Transfer agent fees — Institutional Shares | 47 | ||||||
Trustees' fees | 22 | ||||||
Compliance fees | 3 | ||||||
Legal and audit fees | 56 | ||||||
State registration and filing fees | 27 | ||||||
Interest expense on interfund lending | — | (a) | |||||
Other expenses | 67 | ||||||
Total Expenses | 5,090 | ||||||
Expenses waived/reimbursed by Adviser | (16 | ) | |||||
Net Expenses | 5,074 | ||||||
Net Investment Income (Loss) | 4,778 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities and foreign currency translations | 64,887 | ||||||
Foreign refunds (taxes) on realized gains | (18 | ) | |||||
Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations | (34,696 | ) | |||||
Net change in accrued foreign taxes on realized gains | (86 | ) | |||||
Net realized/unrealized gains (losses) on investments | 30,087 | ||||||
Change in net assets resulting from operations | $ | 34,865 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
17
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Capital Growth Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 4,778 | $ | 13,162 | |||||||
Net realized gains (losses) from investments | 64,869 | 62,784 | |||||||||
Net change in unrealized appreciation/depreciation on investments | (34,782 | ) | (90,256 | ) | |||||||
Change in net assets resulting from operations | 34,865 | (14,310 | ) | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (72,351 | ) | (66,864 | ) | |||||||
Institutional Shares | (6,085 | ) | (620 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (78,436 | ) | (67,484 | ) | |||||||
Change in net assets resulting from capital transactions | (35,908 | ) | 107,918 | ||||||||
Change in net assets | (79,479 | ) | 26,124 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 936,755 | 910,631 | |||||||||
End of period | $ | 857,276 | $ | 936,755 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 16,478 | $ | 45,444 | |||||||
Distributions reinvested | 71,922 | 66,499 | |||||||||
Cost of shares redeemed | (53,124 | ) | (104,140 | ) | |||||||
Total Fund Shares | $ | 35,276 | $ | 7,803 | |||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 236 | $ | 100,957 | |||||||
Distributions reinvested | 5,585 | 148 | |||||||||
Cost of shares redeemed | (77,005 | ) | (990 | ) | |||||||
Total Institutional Shares | $ | (71,184 | ) | $ | 100,115 | ||||||
Change in net assets resulting from capital transactions | $ | (35,908 | ) | $ | 107,918 | ||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,468 | 3,952 | |||||||||
Reinvested | 6,484 | 6,365 | |||||||||
Redeemed | (4,733 | ) | (9,094 | ) | |||||||
Total Fund Shares | 3,219 | 1,223 | |||||||||
Institutional Shares | |||||||||||
Issued | 21 | 9,136 | |||||||||
Reinvested | 502 | 14 | |||||||||
Redeemed | (6,706 | ) | (87 | ) | |||||||
Total Institutional Shares | (6,183 | ) | 9,063 | ||||||||
Change in Shares | (2,964 | ) | 10,286 |
See notes to financial statements.
18
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19
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains From Investments | ||||||||||||||||||||||
USAA Capital Growth Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 11.36 | 0.06 | (d) | 0.38 | 0.44 | (0.17 | ) | (0.84 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 12.63 | 0.16 | (0.48 | ) | (0.32 | ) | (0.17 | ) | (0.78 | ) | ||||||||||||||||
Year Ended July 31, 2018 | $ | 11.67 | 0.15 | 1.21 | 1.36 | (0.12 | ) | (0.28 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 9.97 | 0.14 | 1.71 | 1.85 | (0.15 | ) | — | |||||||||||||||||||
Year Ended July 31, 2016 | $ | 10.16 | 0.13 | (0.21 | ) | (0.08 | ) | (0.11 | ) | — | |||||||||||||||||
Year Ended July 31, 2015 | $ | 9.31 | 0.12 | 0.88 | 1.00 | (0.15 | ) | — | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 11.39 | 0.07 | (d) | 0.38 | 0.45 | (0.17 | ) | (0.84 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 12.66 | 0.23 | (d) | (0.55 | ) | (0.32 | ) | (0.17 | ) | (0.78 | ) | |||||||||||||||
Year Ended July 31, 2018 | $ | 11.70 | 0.17 | 1.20 | 1.37 | (0.13 | ) | (0.28 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 9.98 | 0.15 | 1.71 | 1.86 | (0.14 | ) | — | |||||||||||||||||||
August 7, 2015 (i) through July 31, 2016 | $ | 10.20 | 0.14 | (0.24 | ) | (0.10 | ) | (0.12 | ) | — |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two-year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects increased trading activity due to current year transition or asset allocation shift.
(f) Reflects overall increase in purchases and sales of securities.
(g) Reflects overall decrease in purchases and sales of securities.
(h) Prior to December 1, 2014, USAA Asset Management Company ("AMCO") (previous Investment Adviser) had voluntarily agreed to limit the annual expenses of the Fund Shares to 1.30% of the Fund Shares' average daily net assets.
(i) Commencement of operations.
See notes to financial statements.
20
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Capital Growth Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (1.01 | ) | $ | 10.79 | 3.77 | % | 1.12 | % | 1.02 | % | 1.12 | % | $ | 819,274 | 110 | %(e) | |||||||||||||||||||
Year Ended July 31, 2019 | (0.95 | ) | $ | 11.36 | (1.82 | )% | 1.13 | % | 1.43 | % | 1.13 | % | $ | 826,325 | 54 | %(f) | |||||||||||||||||||
Year Ended July 31, 2018 | (0.40 | ) | $ | 12.63 | 11.76 | % | 1.15 | % | 1.25 | % | 1.15 | % | $ | 902,670 | 22 | %(g) | |||||||||||||||||||
Year Ended July 31, 2017 | (0.15 | ) | $ | 11.67 | 18.75 | % | 1.21 | % | 1.27 | % | 1.21 | % | $ | 836,515 | 55 | %(f) | |||||||||||||||||||
Year Ended July 31, 2016 | (0.11 | ) | $ | 9.97 | (0.76 | )% | 1.24 | % | 1.39 | % | 1.24 | % | $ | 721,357 | 24 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (0.15 | ) | $ | 10.16 | 10.79 | % | 1.23 | %(h) | 0.95 | % | 1.23 | % | $ | 760,764 | 38 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (1.01 | ) | $ | 10.83 | 3.83 | % | 1.01 | % | 1.22 | % | 1.01 | % | $ | 38,002 | 110 | %(e) | |||||||||||||||||||
Year Ended July 31, 2019 | (0.95 | ) | $ | 11.39 | (1.77 | )% | 1.03 | % | 2.04 | % | 1.03 | % | $ | 110,430 | 54 | %(f) | |||||||||||||||||||
Year Ended July 31, 2018 | (0.41 | ) | $ | 12.66 | 11.84 | % | 1.10 | % | 1.38 | % | 1.21 | % | $ | 7,961 | 22 | %(g) | |||||||||||||||||||
Year Ended July 31, 2017 | (0.14 | ) | $ | 11.70 | 18.79 | % | 1.10 | % | 1.38 | % | 1.47 | % | $ | 5,762 | 55 | %(f) | |||||||||||||||||||
August 7, 2015 (i) through July 31, 2016 | (0.12 | ) | $ | 9.98 | (0.99 | )% | 1.10 | % | 1.57 | % | 1.48 | % | $ | 4,891 | 24 | % |
See notes to financial statements.
21
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Capital Growth Fund (the "Fund"). The Fund offers two classes of shares: Fund Shares and Institutional Shares. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges except with respect to fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or the over-the-counter markets, are valued at the last sales price or official closing price. If there have been no sales for that day on the exchange
22
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations typically are categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at net asset value. These valuations typically are categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. These valuations typically are categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's net asset value ("NAV") to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's net asset value is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. These valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of January 31, 2020, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 581,651 | $ | 267,682 | $ | — | $ | 849,333 | |||||||||||
Preferred Stocks | 852 | 1,151 | — | 2,003 | |||||||||||||||
Exchange-Traded Funds | 883 | — | — | 883 | |||||||||||||||
Collateral for Securities Loaned | 3,299 | — | — | 3,299 | |||||||||||||||
Total | $ | 586,685 | $ | 268,833 | $ | — | $ | 855,518 |
For the six-months ended January 31, 2020, there were no transfers in or out of the Level 3 fair value hierarchy.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs. ETFs are a type of index fund, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
23
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Foreign Exchange Currency Contracts:
The Fund may enter into foreign exchange currency contracts to convert U.S. dollars to and from various foreign currencies. A foreign exchange currency contract is an obligation by the Fund to purchase or sell a specific currency at a future date at a price (in U.S. dollars) set at the time of the contract. The Fund does not engage in "cross-currency" foreign exchange contracts (i.e., contracts to purchase or sell one foreign currency in exchange for another foreign currency). The Fund's foreign exchange currency contracts might be considered spot contracts (typically a contract of one week or less) or forward contracts (typically a contract term over one week). A spot contract is entered into for purposes of hedging against foreign currency fluctuations relating to a specific portfolio transaction, such as the delay between a security transaction trade date and settlement date. Forward contracts are entered into for purposes of hedging portfolio holdings or concentrations of such holdings. Each foreign exchange currency contract is adjusted daily by the prevailing spot or forward rate of the underlying currency, and any appreciation or depreciation is recorded for financial statement purposes as unrealized until the contract settlement date, at which time the Fund records realized gains or losses equal to the difference between the value of a contract at the time it was opened and the value at the time it was closed. The Fund could be exposed to risk if a counterparty is unable to meet the terms of a foreign exchange currency contract or if the value of the foreign currency changes unfavorably. In addition, the use of foreign exchange currency contracts does not eliminate fluctuations in the underlying prices of the securities. As of January 31, 2020, the Fund had no open forward foreign exchange currency contracts.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a securities lending agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income, net of income retained by Citibank. Borrowers are required to secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are cured the next business day once the shortfall exceeds $100 thousand. Collateral may be cash, U.S. government securities, or other securities as permitted by SEC guidelines. Cash collateral may be invested in high-quality short-term investments, primarily open-end investment companies. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Risks relating to securities-lending transactions include 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
24
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
the borrower. The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy borrower default. Cash collateral is listed in the Fund's Portfolio of Investments and Financial Statements while non-cash collateral is not included. The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2020.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 3,116 | $ | — | $ | 3,299 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as net change in unrealized appreciation/depreciation on investments and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as net realized gains or losses from investment transactions and foreign currency translations on the Statement of Operations.
Foreign Taxes:
The Fund may be subject to foreign taxes related to foreign income received (a portion of which may be reclaimable), capital gains on the sale of securities, and certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, and printing fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
25
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
3. Purchases and Sales:
Cost of purchases and proceeds from sales/maturities of securities (excluding securities maturing less than one year from acquisition) for the six-months ended January 31, 2020, were as follows for the Fund (amounts in thousands):
Excluding U.S Government Securities | |||||||||||
Purchases | Sales | ||||||||||
$ | 993,836 | $ | 1,112,666 |
There were no purchases and sales of U.S. government securities during the six-months ended January 31, 2020.
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA funds. The USAA fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi annual reports may be viewed at usaa.com. As of January 31, 2020, certain USAA fund-of-funds owned total outstanding shares of the Fund:
USAA Cornerstone Conservative Fund | 0.2 | % | |||||
USAA Cornerstone Equity Fund | 0.7 | % | |||||
USAA Target Retirement Income Fund | 0.0 | %* | |||||
USAA Target Retirement 2030 Fund | 0.9 | % | |||||
USAA Target Retirement 2040 Fund | 1.0 | % | |||||
USAA Target Retirement 2050 Fund | 0.6 | % | |||||
USAA Target Retirement 2060 Fund | 0.1 | % |
* Amount is less than 0.05%.
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Inc. ("VCM" or "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive 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 daily net assets. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
No performance adjustments will be made for periods beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter will be utilized in calculating future performance adjustments.
The performance adjustment will be calculated monthly by comparing each class' performance to that of the Lipper Global Funds Index. The Lipper Global Funds Index tracks the total return performance of each class within the Lipper Global Funds category.
26
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
For the Fund Shares and Institutional Shares, the performance period will consist of the current month plus the previous number of months beginning July 1, 2019. The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)1 | Annual Adjustment Rate (in basis points)1 | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
1 Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of the class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Global Funds Index over that period, even if the class has overall negative returns during the performance period.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six-months ended January 31, 2020, the Fund had no subadvisors.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15% and 0.10% of average daily net assets of the Fund Shares and Institutional Shares, respectively. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. VCTA, an affiliate of the Adviser, provides transfer agent services to the Fund Shares based on an annual charge
27
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10% of average daily net assets, plus out-of-pocket expenses. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust. The Distributor received no fees or other compensation for such distribution services.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
The expense limits (excluding voluntary waivers) are 1.12% and 1.10% for Fund Shares and Institutional Shares, respectively. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||
$ | 16 |
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Overall stock market risks may affect the value of the Fund. Factors such as domestic and international economic growth and market conditions, interest rate levels, and political events affect the securities market.
28
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected. Price changes may be temporary or last for extended periods.
Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The average borrowing for the days outstanding and average interest rate for the Fund during the six-months ended January 31, 2020 were as follows (amounts in thousands):
Amount Outstanding at January 31, 2020 | Average Borrowings* | Days Outstanding | Average Rate* | Maximum Borrowing During the Period | |||||||||||||||
$ | — | $ | 4,000 | 1 | 3.15 | % | $ | 4,000 |
* For the six-months ended January 31, 2020, based on the number of days borrowings were outstanding.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Fund in the Victory Fund Complex relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period is presented on the Statement of Operations under Interest expense on Interfund lending. As a Lender, interest earned by the Fund, if any, during the period is reflected on the Statement of Operations under Income on Interfund lending.
The average borrowing and lending for the days outstanding and average interest rate for the Fund during the six-months ended January 31, 2020 were as follows (amounts in thousands):
Borrower or Lender | Amount Outstanding at January 31, 2020 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
Borrower | $ | — | $ | 1,600 | 1 | 2.13 | % | $ | 1,600 |
* For the six-months ended January 31, 2020, based on the number of days borrowings were outstanding.
29
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
8. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
9. Subsequent Event
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
30
USAA Mutual Funds Trust | Supplemental Information January 31, 2020 |
(Unaudited)
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019 through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,037.70 | $ | 1,019.51 | $ | 5.74 | $ | 5.69 | 1.12 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,038.30 | 1,020.06 | 5.17 | 5.13 | 1.01 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's web site at www.sec.gov.
31
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800) 235-8396 |
36843-0320
JANUARY 31, 2020
Semi Annual Report
USAA Growth & Income Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 4 | ||||||
Statement of Assets and Liabilities | 10 | ||||||
Statement of Operations | 11 | ||||||
Statements of Changes in Net Assets | 12 | ||||||
Financial Highlights | 14 | ||||||
Notes to Financial Statements | 18 | ||||||
Supplemental Information | 27 | ||||||
Expense Examples | 27 | ||||||
Proxy Voting and Portfolio Holdings Information | 27 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
USAA Mutual Funds Trust
1
USAA Mutual Funds Trust USAA Growth & Income Fund | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA Growth & Income Fund seeks capital growth with a secondary investment objective of current income.
Top 10 Holdings*
1/31/20
(% of Net Assets)
Microsoft Corp. | 5.0 | % | |||||
Apple, Inc. | 3.6 | % | |||||
Amazon.com, Inc. | 2.5 | % | |||||
Visa, Inc. Class A | 2.2 | % | |||||
Alphabet, Inc. Class C | 2.1 | % | |||||
Facebook, Inc. Class A | 1.9 | % | |||||
Merck & Co., Inc. | 1.7 | % | |||||
The Home Depot, Inc. | 1.7 | % | |||||
Ingersoll-Rand PLC | 1.6 | % | |||||
Euronet Worldwide, Inc. | 1.6 | % |
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Growth & Income Fund (continued) | January 31, 2020 |
(Unaudited)
Sector Allocation*:
1/31/20
(% of Net Assets)
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
3
USAA Mutual Funds Trust USAA Growth & Income Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (99.7%) | |||||||||||
Communication Services (7.8%): | |||||||||||
Activision Blizzard, Inc. | 6,289 | $ | 368 | ||||||||
Alphabet, Inc. Class C (a) | 27,585 | 39,563 | |||||||||
AT&T, Inc. | 77,458 | 2,914 | |||||||||
Comcast Corp. Class A | 143,500 | 6,198 | |||||||||
Facebook, Inc. Class A (a) | 176,881 | 35,714 | |||||||||
Omnicom Group, Inc. | 83,038 | 6,253 | |||||||||
The Walt Disney Co. | 107,283 | 14,838 | |||||||||
Twitter, Inc. (a) | 352,002 | 11,433 | |||||||||
Verizon Communications, Inc. | 494,253 | 29,378 | |||||||||
146,659 | |||||||||||
Communications Equipment (0.6%): | |||||||||||
Cisco Systems, Inc. | 243,881 | 11,211 | |||||||||
Juniper Networks, Inc. | 11,981 | 275 | |||||||||
11,486 | |||||||||||
Consumer Discretionary (12.1%): | |||||||||||
Amazon.com, Inc. (a) | 22,860 | 45,920 | |||||||||
Best Buy Co., Inc. | 101,763 | 8,618 | |||||||||
Expedia Group, Inc. | 28,200 | 3,058 | |||||||||
Foot Locker, Inc. | 59,634 | 2,264 | |||||||||
Ford Motor Co. | 611,808 | 5,396 | |||||||||
Garmin Ltd. | 13,888 | 1,346 | |||||||||
General Motors Co. Class C | 122,800 | 4,100 | |||||||||
Genuine Parts Co. | 49,877 | 4,667 | |||||||||
H&R Block, Inc. | 76,989 | 1,786 | |||||||||
Hilton Worldwide Holdings, Inc. | 153,553 | 16,553 | |||||||||
Kohl's Corp. | 53,386 | 2,282 | |||||||||
L Brands, Inc. | 55,194 | 1,278 | |||||||||
Las Vegas Sands Corp. | 74,979 | 4,897 | |||||||||
Lowe's Cos., Inc. | 45,582 | 5,298 | |||||||||
McDonald's Corp. | 40,790 | 8,728 | |||||||||
Nike, Inc. Class B | 189,859 | 18,283 | |||||||||
Starbucks Corp. | 118,993 | 10,094 | |||||||||
Target Corp. | 182,299 | 20,188 | |||||||||
The Gap, Inc. | 131,383 | 2,287 | |||||||||
The Home Depot, Inc. | 135,904 | 31,001 | |||||||||
The TJX Cos., Inc. | 314,129 | 18,547 | |||||||||
Vail Resorts, Inc. | 46,275 | 10,852 | |||||||||
227,443 | |||||||||||
Consumer Staples (7.8%): | |||||||||||
Campbell Soup Co. | 54,924 | 2,658 | |||||||||
Church & Dwight Co., Inc. | 174,460 | 12,948 | |||||||||
Colgate-Palmolive Co. | 96,900 | 7,149 | |||||||||
General Mills, Inc. | 105,288 | 5,498 | |||||||||
Ingredion, Inc. | 15,560 | 1,369 | |||||||||
Kimberly-Clark Corp. | 68,200 | 9,769 | |||||||||
PepsiCo, Inc. | 39,870 | 5,662 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Growth & Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Philip Morris International, Inc. | 121,579 | $ | 10,055 | ||||||||
Sysco Corp. | 42,300 | 3,475 | |||||||||
The Clorox Co. | 18,498 | 2,910 | |||||||||
The Hershey Co. | 10,215 | 1,585 | |||||||||
The JM Smucker Co. | 24,387 | 2,527 | |||||||||
The Procter & Gamble Co. | 221,661 | 27,624 | |||||||||
Tyson Foods, Inc. Class A | 209,186 | 17,285 | |||||||||
Walgreens Boots Alliance, Inc. | 200,202 | 10,180 | |||||||||
Walmart, Inc. | 227,588 | 26,056 | |||||||||
146,750 | |||||||||||
Electronic Equipment, Instruments & Components (0.6%): | |||||||||||
Amphenol Corp. Class A | 110,324 | 10,974 | |||||||||
Energy (2.4%): | |||||||||||
Chevron Corp. | 52,078 | 5,580 | |||||||||
EOG Resources, Inc. | 61,901 | 4,513 | |||||||||
Exxon Mobil Corp. | 240,928 | 14,967 | |||||||||
Occidental Petroleum Corp. | 29,965 | 1,190 | |||||||||
ONEOK, Inc. | 47,568 | 3,561 | |||||||||
Phillips 66 | 51,669 | 4,721 | |||||||||
Schlumberger Ltd. | 79,346 | 2,659 | |||||||||
Valero Energy Corp. | 109,335 | 9,218 | |||||||||
46,409 | |||||||||||
Financials (10.1%): | |||||||||||
Aflac, Inc. | 131,500 | 6,781 | |||||||||
American Express Co. | 37,341 | 4,849 | |||||||||
American Financial Group, Inc. | 37,583 | 4,089 | |||||||||
Ameriprise Financial, Inc. | 17,953 | 2,970 | |||||||||
Bank of America Corp. | 339,723 | 11,153 | |||||||||
Capital One Financial Corp. | 34,422 | 3,435 | |||||||||
Cboe Global Markets, Inc. | 11,532 | 1,421 | |||||||||
Chimera Investment Corp. | 228,660 | 4,848 | |||||||||
Citigroup, Inc. | 125,913 | 9,369 | |||||||||
CME Group, Inc. | 2,619 | 569 | |||||||||
Comerica, Inc. | 45,900 | 2,807 | |||||||||
Discover Financial Services | 66,844 | 5,023 | |||||||||
Everest Re Group Ltd. | 12,894 | 3,566 | |||||||||
FactSet Research Systems, Inc. | 5,599 | 1,602 | |||||||||
Fidelity National Financial, Inc. | 31,034 | 1,513 | |||||||||
Fifth Third Bancorp | 129,500 | 3,684 | |||||||||
Franklin Resources, Inc. | 223,784 | 5,662 | |||||||||
Huntington Bancshares, Inc. | 390,725 | 5,302 | |||||||||
Intercontinental Exchange, Inc. | 22,162 | 2,210 | |||||||||
Invesco Ltd. | 159,518 | 2,760 | |||||||||
JPMorgan Chase & Co. | 61,574 | 8,150 | |||||||||
M&T Bank Corp. | 24,800 | 4,179 | |||||||||
Marsh & McLennan Cos., Inc. | 9,816 | 1,098 | |||||||||
MetLife, Inc. | 92,200 | 4,583 | |||||||||
Nasdaq, Inc. | 17,732 | 2,065 | |||||||||
People's United Financial, Inc. | 266,800 | 4,114 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Growth & Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Principal Financial Group, Inc. | 14,549 | $ | 770 | ||||||||
Prudential Financial, Inc. | 25,696 | 2,340 | |||||||||
RenaissanceRe Holdings Ltd. | 25,300 | 4,793 | |||||||||
S&P Global, Inc. | 19,868 | 5,835 | |||||||||
T. Rowe Price Group, Inc. | 16,228 | 2,167 | |||||||||
The Allstate Corp. | 74,900 | 8,879 | |||||||||
The Bank of New York Mellon Corp. | 82,500 | 3,694 | |||||||||
The Hanover Insurance Group, Inc. | 20,181 | 2,797 | |||||||||
The Hartford Financial Services Group, Inc. | 86,300 | 5,116 | |||||||||
The PNC Financial Services Group, Inc. | 59,702 | 8,869 | |||||||||
The Progressive Corp. | 39,700 | 3,203 | |||||||||
The Travelers Cos., Inc. | 29,190 | 3,842 | |||||||||
Truist Financial Corp. | 35,304 | 1,821 | |||||||||
U.S. Bancorp | 110,700 | 5,891 | |||||||||
Unum Group | 42,512 | 1,135 | |||||||||
Wells Fargo & Co. | 363,631 | 17,070 | |||||||||
Zions Bancorp NA | 79,200 | 3,603 | |||||||||
189,627 | |||||||||||
Health Care (12.1%): | |||||||||||
Abbott Laboratories | 27,058 | 2,358 | |||||||||
AbbVie, Inc. | 119,269 | 9,663 | |||||||||
Amgen, Inc. | 45,690 | 9,871 | |||||||||
Anthem, Inc. | 2,668 | 708 | |||||||||
Becton Dickinson & Co. | 5,552 | 1,528 | |||||||||
Bluebird Bio, Inc. (a) | 115,448 | 9,200 | |||||||||
Bristol-Myers Squibb Co. | 399,666 | 25,159 | |||||||||
Cardinal Health, Inc. | 115,029 | 5,891 | |||||||||
Danaher Corp. | 8,487 | 1,365 | |||||||||
Exact Sciences Corp. (a) | 108,147 | 10,088 | |||||||||
Intuitive Surgical, Inc. (a) | 24,345 | 13,627 | |||||||||
IQVIA Holdings, Inc. (a) | 107,917 | 16,754 | |||||||||
Johnson & Johnson | 182,279 | 27,135 | |||||||||
McKesson Corp. | 6,773 | 966 | |||||||||
Medtronic PLC | 104,200 | 12,029 | |||||||||
Merck & Co., Inc. | 375,553 | 32,088 | |||||||||
Pfizer, Inc. | 69,782 | 2,599 | |||||||||
Sage Therapeutics, Inc. (a) | 89,596 | 5,938 | |||||||||
Stryker Corp. | 13,300 | 2,802 | |||||||||
The Cooper Cos., Inc. | 34,710 | 12,041 | |||||||||
UnitedHealth Group, Inc. | 41,274 | 11,244 | |||||||||
Vertex Pharmaceuticals, Inc. (a) | 56,451 | 12,818 | |||||||||
225,872 | |||||||||||
Industrials (11.4%): | |||||||||||
3M Co. | 14,759 | 2,342 | |||||||||
Alaska Air Group, Inc. | 42,700 | 2,758 | |||||||||
Allegion PLC | 22,514 | 2,912 | |||||||||
Allison Transmission Holdings, Inc. | 78,200 | 3,456 | |||||||||
C.H. Robinson Worldwide, Inc. | 76,218 | 5,505 | |||||||||
Cummins, Inc. | 28,158 | 4,504 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Growth & Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Delta Air Lines, Inc. | 149,800 | $ | 8,350 | ||||||||
Eaton Corp. PLC | 62,641 | 5,918 | |||||||||
Honeywell International, Inc. | 54,299 | 9,406 | |||||||||
IHS Markit Ltd. (a) | 132,497 | 10,449 | |||||||||
Illinois Tool Works, Inc. | 33,200 | 5,809 | |||||||||
Ingersoll-Rand PLC | 230,719 | 30,738 | |||||||||
Johnson Controls International PLC | 44,495 | 1,755 | |||||||||
L3Harris Technologies, Inc. | 96,053 | 21,260 | |||||||||
Lennox International, Inc. | 12,328 | 2,873 | |||||||||
Lockheed Martin Corp. | 28,600 | 12,244 | |||||||||
Nielsen Holdings PLC | 78,660 | 1,605 | |||||||||
PACCAR, Inc. | 50,944 | 3,781 | |||||||||
Republic Services, Inc. Class A | 63,890 | 6,073 | |||||||||
Robert Half International, Inc. | 40,800 | 2,373 | |||||||||
Rockwell Automation, Inc. | 13,897 | 2,663 | |||||||||
Roper Technologies, Inc. | 40,547 | 15,475 | |||||||||
Snap-on, Inc. | 4,488 | 716 | |||||||||
Southwest Airlines Co. | 48,113 | 2,645 | |||||||||
The Boeing Co. | 17,879 | 5,690 | |||||||||
Toro Co. | 34,091 | 2,728 | |||||||||
United Parcel Service, Inc. Class B | 35,000 | 3,623 | |||||||||
Waste Management, Inc. | 75,900 | 9,237 | |||||||||
Woodward, Inc. | 151,529 | 17,625 | |||||||||
Xylem, Inc. | 114,438 | 9,345 | |||||||||
213,858 | |||||||||||
IT Services (7.2%): | |||||||||||
Black Knight, Inc. (a) | 224,489 | 15,023 | |||||||||
Euronet Worldwide, Inc. (a) | 186,740 | 29,438 | |||||||||
International Business Machines Corp. | 76,432 | 10,986 | |||||||||
PayPal Holdings, Inc. (a) | 122,806 | 13,986 | |||||||||
The Western Union Co. | 15,115 | 407 | |||||||||
Twilio, Inc. Class A (a) | 181,714 | �� | 22,594 | ||||||||
Visa, Inc. Class A | 205,948 | 40,978 | |||||||||
133,412 | |||||||||||
Materials (1.0%): | |||||||||||
Air Products & Chemicals, Inc. | 33,918 | 8,096 | |||||||||
Eastman Chemical Co. | 13,450 | 959 | |||||||||
LyondellBasell Industries NV Class A | 81,913 | 6,378 | |||||||||
Martin Marietta Materials, Inc. | 2,997 | 791 | |||||||||
Nucor Corp. | 27,126 | 1,289 | |||||||||
Packaging Corp. of America | 12,718 | 1,218 | |||||||||
Steel Dynamics, Inc. | 38,367 | 1,146 | |||||||||
Westrock Co. | 32,052 | 1,250 | |||||||||
21,127 | |||||||||||
Real Estate (2.9%): | |||||||||||
Alexandria Real Estate Equities, Inc. | 10,357 | 1,690 | |||||||||
AvalonBay Communities, Inc. | 14,469 | 3,135 | |||||||||
Boston Properties, Inc. | 3,783 | 542 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Growth & Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Cyrusone, Inc. | 20,147 | $ | 1,226 | ||||||||
Digital Realty Trust, Inc. | 16,974 | 2,088 | |||||||||
Equity Residential | 22,611 | 1,879 | |||||||||
Essex Property Trust, Inc. | 7,160 | 2,218 | |||||||||
Healthpeak Properties, Inc. | 39,560 | 1,424 | |||||||||
Host Hotels & Resorts, Inc. | 117,529 | 1,920 | |||||||||
Jones Lang LaSalle, Inc. | 30,046 | 5,102 | |||||||||
Prologis, Inc. | 34,007 | 3,159 | |||||||||
Public Storage | 20,000 | 4,475 | |||||||||
Realty Income Corp. | 37,511 | 2,941 | |||||||||
Regency Centers Corp. | 11,381 | 706 | |||||||||
Simon Property Group, Inc. | 53,717 | 7,153 | |||||||||
Ventas, Inc. | 89,954 | 5,205 | |||||||||
VEREIT, Inc. | 96,645 | 943 | |||||||||
VICI Properties, Inc. | 43,659 | 1,170 | |||||||||
Vornado Realty Trust | 15,417 | 1,014 | |||||||||
W.P. Carey, Inc. | 9,882 | 831 | |||||||||
Welltower, Inc. | 38,854 | 3,299 | |||||||||
Weyerhaeuser Co. | 59,185 | 1,713 | |||||||||
53,833 | |||||||||||
Semiconductors & Semiconductor Equipment (5.8%): | |||||||||||
Broadcom, Inc. | 22,485 | 6,862 | |||||||||
Intel Corp. | 162,518 | 10,390 | |||||||||
KLA Corp. | 51,132 | 8,475 | |||||||||
Lam Research Corp. | 44,425 | 13,248 | |||||||||
Marvell Technology Group Ltd. | 478,773 | 11,509 | |||||||||
Microchip Technology, Inc. | 94,589 | 9,221 | |||||||||
NVIDIA Corp. | 79,809 | 18,868 | |||||||||
QUALCOMM, Inc. | 104,987 | 8,956 | |||||||||
STMicroelectronics NV, NYS (b) | 205,079 | 5,711 | |||||||||
Texas Instruments, Inc. | 97,051 | 11,709 | |||||||||
104,949 | |||||||||||
Software (9.7%): | |||||||||||
Fair Isaac Corp. (a) | 57,740 | 23,234 | |||||||||
Microsoft Corp. | 546,436 | 93,020 | |||||||||
Oracle Corp. | 147,473 | 7,735 | |||||||||
RingCentral, Inc. Class A (a) | 48,610 | 9,993 | |||||||||
Salesforce.com, Inc. (a) | 92,128 | 16,796 | |||||||||
ServiceNow, Inc. (a) | 51,461 | 17,406 | |||||||||
Workday, Inc. Class A (a) | 65,098 | 12,019 | |||||||||
180,203 | |||||||||||
Technology Hardware, Storage & Peripherals (3.6%): | |||||||||||
Apple, Inc. | 216,130 | 66,894 | |||||||||
Utilities (4.6%): | |||||||||||
AES Corp. | 125,303 | 2,489 | |||||||||
Alliant Energy Corp. | 29,228 | 1,735 | |||||||||
Ameren Corp. | 44,177 | 3,625 | |||||||||
American Electric Power Co., Inc. | 27,373 | 2,853 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Growth & Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
CenterPoint Energy, Inc. | 96,796 | $ | 2,563 | ||||||||
CMS Energy Corp. | 94,247 | 6,457 | |||||||||
Consolidated Edison, Inc. | 24,785 | 2,330 | |||||||||
Dominion Energy, Inc. | 73,300 | 6,285 | |||||||||
DTE Energy Co. | 22,497 | 2,983 | |||||||||
Duke Energy Corp. | 97,300 | 9,498 | |||||||||
Entergy Corp. | 19,796 | 2,604 | |||||||||
Evergy, Inc. | 96,900 | 6,992 | |||||||||
Eversource Energy | 42,212 | 3,902 | |||||||||
Exelon Corp. | 66,291 | 3,155 | |||||||||
NextEra Energy, Inc. | 12,878 | 3,454 | |||||||||
Pinnacle West Capital Corp. | 25,450 | 2,486 | |||||||||
PPL Corp. | 133,923 | 4,847 | |||||||||
Sempra Energy | 17,894 | 2,874 | |||||||||
The Southern Co. | 51,900 | 3,654 | |||||||||
WEC Energy Group, Inc. | 73,826 | 7,375 | |||||||||
Xcel Energy, Inc. | 78,562 | 5,436 | |||||||||
87,597 | |||||||||||
Total Common Stocks (Cost $1,612,143) | 1,867,093 | ||||||||||
Collateral for Securities Loaned (0.2%)^ | |||||||||||
HSBC U.S. Government Money Market Fund, I Shares, 1.52% (c) | 2,987,248 | 2,987 | |||||||||
Total Collateral for Securities Loaned (Cost $2,987) | 2,987 | ||||||||||
Total Investments (Cost $1,615,130) — 99.9% | 1,870,080 | ||||||||||
Other assets in excess of liabilities — 0.1% | 1,391 | ||||||||||
NET ASSETS — 100.00% | $ | 1,871,471 |
^ Purchased with cash collateral from securities on loan.
(a) Non-income producing security.
(b) All or a portion of this security is on loan.
(c) Rate disclosed is the daily yield on January 31, 2020.
NYS — New York Registered Shares
PLC — Public Limited Company
See notes to financial statements.
9
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Growth & Income Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,615,130) | $ | 1,870,080 | (a) | ||||
Cash and cash equivalents | 6,491 | ||||||
Receivables: | |||||||
Interest and dividends | 1,840 | ||||||
Capital shares issued | 628 | ||||||
Investments sold | 19,024 | ||||||
From Adviser | 13 | ||||||
Prepaid expenses | 5 | ||||||
Total assets | 1,898,081 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 2,987 | ||||||
Investments purchased | 21,214 | ||||||
Capital shares redeemed | 859 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 970 | ||||||
Administration fees | 235 | ||||||
Custodian fees | 59 | ||||||
Compliance fees | — | (b) | |||||
Transfer agent fees | 137 | ||||||
12b-1 fees | 1 | ||||||
Other accrued expenses | 148 | ||||||
Total liabilities | 26,610 | ||||||
Net Assets: | |||||||
Capital | 1,587,723 | ||||||
Total distributable earnings/(loss) | 283,748 | ||||||
Net assets | $ | 1,871,471 | |||||
Net Assets: | |||||||
Fund Shares | $ | 1,686,279 | |||||
Institutional Shares | 176,579 | ||||||
Adviser Shares | 8,613 | ||||||
Total | $ | 1,871,471 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 83,615 | ||||||
Institutional Shares | 8,765 | ||||||
Adviser Shares | 429 | ||||||
Total | 92,809 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 20.17 | |||||
Institutional Shares | 20.15 | ||||||
Adviser Shares | 20.07 |
(a) Includes $2,750 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
10
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA Growth & Income Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 17,262 | |||||
Interest | 115 | ||||||
Securities lending (net of fees) | 7 | ||||||
Total Income | 17,384 | ||||||
Expenses: | |||||||
Investment advisory fees | 5,551 | ||||||
Administration fees — Fund shares | 1,253 | ||||||
Administration fees — Institutional shares | 85 | ||||||
Administration fees — Adviser shares | 7 | ||||||
Sub-Administration fees | 21 | ||||||
12b-1 fees — Adviser Shares | 12 | ||||||
Custodian fees | 45 | ||||||
Transfer agent fees — Fund Shares | 832 | ||||||
Transfer agent fees — Institutional Shares | 85 | ||||||
Transfer agent fees — Adviser Shares | 1 | ||||||
Trustees' fees | 22 | ||||||
Compliance fees | 6 | ||||||
Legal and audit fees | 54 | ||||||
State registration and filing fees | 42 | ||||||
Interest expense on interfund lending | — | (a) | |||||
Other expenses | 110 | ||||||
Total Expenses | 8,126 | ||||||
Expenses waived/reimbursed by Adviser | (19 | ) | |||||
Net Expenses | 8,107 | ||||||
Net Investment Income (Loss) | 9,277 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 29,286 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | 66,475 | ||||||
Net realized/unrealized gains (losses) on investments | 95,761 | ||||||
Change in net assets resulting from operations | $ | 105,038 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
11
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Growth & Income Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 9,277 | $ | 19,191 | |||||||
Net realized gains (losses) from investments | 29,286 | 394,988 | |||||||||
Net change in unrealized appreciation/depreciation on investments | 66,475 | (399,883 | ) | ||||||||
Change in net assets resulting from operations | 105,038 | 14,296 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (334,295 | ) | (166,142 | ) | |||||||
Institutional Shares | (34,452 | ) | (15,193 | ) | |||||||
Adviser Shares | (2,042 | ) | (1,013 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (370,789 | ) | (182,348 | ) | |||||||
Change in net assets resulting from capital transactions | 289,140 | 89,869 | |||||||||
Change in net assets | 23,389 | (78,183 | ) | ||||||||
Net Assets: | |||||||||||
Beginning of period | 1,848,082 | 1,926,265 | |||||||||
End of period | $ | 1,871,471 | $ | 1,848,082 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 32,785 | $ | 90,122 | |||||||
Distributions reinvested | 328,705 | 163,732 | |||||||||
Cost of shares redeemed | (108,614 | ) | (182,952 | ) | |||||||
Total Fund Shares | $ | 252,876 | $ | 70,902 | |||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 5,033 | $ | 14,447 | |||||||
Distributions reinvested | 34,449 | 15,189 | |||||||||
Cost of shares redeemed | (3,417 | ) | (10,756 | ) | |||||||
Total Institutional Shares | $ | 36,065 | $ | 18,880 | |||||||
Adviser Shares | |||||||||||
Proceeds from shares issued | $ | 102 | $ | 219 | |||||||
Distributions reinvested | 102 | 36 | |||||||||
Cost of shares redeemed | (5 | ) | (168 | ) | |||||||
Total Adviser Shares | $ | 199 | $ | 87 | |||||||
Change in net assets resulting from capital transactions | $ | 289,140 | $ | 89,869 |
(continues on next page)
See notes to financial statements.
12
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands) (continued)
USAA Growth & Income Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,465 | 3,781 | |||||||||
Reinvested | 16,428 | 7,465 | |||||||||
Redeemed | (4,876 | ) | (7,709 | ) | |||||||
Total Fund Shares | 13,017 | 3,537 | |||||||||
Institutional Shares | |||||||||||
Issued | 220 | 625 | |||||||||
Reinvested | 1,723 | 693 | |||||||||
Redeemed | (153 | ) | (425 | ) | |||||||
Total Institutional Shares | 1,790 | 893 | |||||||||
Adviser Shares | |||||||||||
Issued | 4 | 9 | |||||||||
Reinvested | 5 | 2 | |||||||||
Redeemed | — | (a) | (7 | ) | |||||||
Total Adviser Shares | 9 | 4 | |||||||||
Change in Shares | 14,816 | 4,434 |
(a) Represents less than 500 shares.
See notes to financial statements.
13
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Growth & Income Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 23.70 | 0.11 | (d) | 1.21 | 1.32 | (0.12 | ) | (4.73 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 26.19 | 0.25 | (0.24 | ) | 0.01 | (0.24 | ) | (2.26 | ) | |||||||||||||||||
Year Ended July 31, 2018 | $ | 24.25 | 0.19 | 3.03 | 3.22 | (0.18 | ) | (1.10 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 20.39 | 0.21 | 3.94 | 4.15 | (0.22 | ) | (0.07 | ) | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 22.00 | 0.15 | (0.51 | ) | (0.36 | ) | (0.14 | ) | (1.11 | ) | ||||||||||||||||
Year Ended July 31, 2015 | $ | 22.63 | 0.17 | 2.14 | 2.31 | (0.18 | ) | (2.76 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 23.68 | 0.12 | (d) | 1.21 | 1.33 | (0.13 | ) | (4.73 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 26.17 | 0.26 | (0.24 | ) | 0.02 | (0.25 | ) | (2.26 | ) | |||||||||||||||||
Year Ended July 31, 2018 | $ | 24.23 | 0.20 | 3.03 | 3.23 | (0.19 | ) | (1.10 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 20.38 | 0.22 | 3.94 | 4.16 | (0.24 | ) | (0.07 | ) | ||||||||||||||||||
August 7, 2015 (g) through July 31, 2016 | $ | 22.10 | 0.16 | (0.60 | ) | (0.44 | ) | (0.17 | ) | (1.11 | ) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two-year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects increased trading activity due to current year transition or asset allocation shift.
(f) Prior to December 1, 2018, USAA Asset Management Company ("AMCO") (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Institutional Shares to 0.85% of the Institutional Shares' average daily net assets.
(g) Commencement of operations.
See notes to financial statements.
14
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Growth & Income Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (4.85 | ) | $ | 20.17 | 5.85 | % | 0.88 | % | 0.99 | % | 0.88 | % | $ | 1,686,279 | 36 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (2.50 | ) | $ | 23.70 | 0.89 | % | 0.88 | % | 1.04 | % | 0.88 | % | $ | 1,673,033 | 93 | %(e) | |||||||||||||||||||
Year Ended July 31, 2018 | (1.28 | ) | $ | 26.19 | 13.59 | % | 0.88 | % | 0.80 | % | 0.88 | % | $ | 1,756,259 | 23 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.29 | ) | $ | 24.25 | 20.49 | % | 0.91 | % | 0.89 | % | 0.91 | % | $ | 1,605,220 | 21 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (1.25 | ) | $ | 20.39 | (1.49 | )% | 0.95 | % | 0.78 | % | 0.95 | % | $ | 1,380,560 | 22 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (2.94 | ) | $ | 22.00 | 10.70 | % | 0.93 | % | 0.66 | % | 0.93 | % | $ | 1,583,353 | 35 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (4.86 | ) | $ | 20.15 | 5.91 | % | 0.84 | % | 1.04 | % | 0.84 | % | $ | 176,579 | 36 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (2.51 | ) | $ | 23.68 | 0.94 | % | 0.83 | %(f) | 1.09 | % | 0.83 | % | $ | 165,137 | 93 | %(e) | |||||||||||||||||||
Year Ended July 31, 2018 | (1.29 | ) | $ | 26.17 | 13.66 | % | 0.84 | % | 0.85 | % | 0.84 | % | $ | 159,148 | 23 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.31 | ) | $ | 24.23 | 20.54 | % | 0.85 | % | 0.95 | % | 0.85 | % | $ | 139,866 | 21 | % | |||||||||||||||||||
August 7, 2015 (g) through July 31, 2016 | (1.28 | ) | $ | 20.38 | (1.87 | )% | 0.85 | % | 0.83 | % | 0.87 | % | $ | 117,512 | 22 | % |
(continues on next page)
See notes to financial statements.
15
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period (continued)
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Growth & Income Fund | |||||||||||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 23.61 | 0.09 | (d) | 1.20 | 1.29 | (0.10 | ) | (4.73 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 26.10 | 0.19 | (0.25 | ) | (0.06 | ) | (0.17 | ) | (2.26 | ) | ||||||||||||||||
Year Ended July 31, 2018 | $ | 24.17 | 0.12 | 3.02 | 3.14 | (0.11 | ) | (1.10 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 20.32 | 0.15 | 3.91 | 4.06 | (0.14 | ) | (0.07 | ) | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 21.93 | 0.10 | (0.50 | ) | (0.40 | ) | (0.10 | ) | (1.11 | ) | ||||||||||||||||
Year Ended July 31, 2015 | $ | 22.56 | 0.10 | 2.14 | 2.24 | (0.11 | ) | (2.76 | ) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two-year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects increased trading activity due to current year transition or asset allocation shift.
(h) Prior to December 1, 2017, AMCO (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Adviser Shares to 1.20% of the Adviser Shares' average daily net assets.
(i) Prior to December 1, 2014, AMCO (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Adviser Shares to 1.30% of the Adviser Shares' average daily net assets.
See notes to financial statements.
16
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Growth & Income Fund | |||||||||||||||||||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (4.83 | ) | $ | 20.07 | 5.70 | % | 1.15 | % | 0.75 | % | 1.28 | % | $ | 8,613 | 36 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (2.43 | ) | $ | 23.61 | 0.62 | % | 1.15 | % | 0.77 | % | 1.23 | % | $ | 9,912 | 93 | %(e) | |||||||||||||||||||
Year Ended July 31, 2018 | (1.21 | ) | $ | 26.10 | 13.28 | % | 1.17 | %(h) | 0.52 | % | 1.20 | % | $ | 10,858 | 23 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.21 | ) | $ | 24.17 | 20.10 | % | 1.20 | % | 0.60 | % | 1.24 | % | $ | 9,987 | 21 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (1.21 | ) | $ | 20.32 | (1.72 | )% | 1.20 | % | 0.53 | % | 1.28 | % | $ | 8,332 | 22 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (2.87 | ) | $ | 21.93 | 10.40 | % | 1.22 | %(i) | 0.37 | % | 1.27 | % | $ | 9,098 | 35 | % |
See notes to financial statements.
17
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Growth & Income Fund (the "Fund"). The Fund offers three classes of shares: Fund Shares, Institutional Shares, and Adviser Shares. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges except with respect to fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or
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system where the security is principally traded, if available, or the over-the-counter markets, are valued at the last sales price or official closing price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations typically are categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at net asset value. These valuations typically are categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. These valuations typically are categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's net asset value ("NAV") to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's net asset value is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. These valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of January 31, 2020, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 1,867,093 | $ | — | $ | — | $ | 1,867,093 | |||||||||||
Collateral for Securities Loaned | 2,987 | — | — | 2,987 | |||||||||||||||
Total | $ | 1,870,080 | $ | — | $ | — | $ | 1,870,080 |
For the six-months ended January 31, 2020, there were no transfers in or out of the Level 3 fair value hierarchy.
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs. ETFs are a type of index fund, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
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Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Foreign Exchange Currency Contracts:
The Fund may enter into foreign exchange currency contracts to convert U.S. dollars to and from various foreign currencies. A foreign exchange currency contract is an obligation by the Fund to purchase or sell a specific currency at a future date at a price (in U.S. dollars) set at the time of the contract. The Fund does not engage in "cross-currency" foreign exchange contracts (i.e., contracts to purchase or sell one foreign currency in exchange for another foreign currency). The Fund's foreign exchange currency contracts might be considered spot contracts (typically a contract of one week or less) or forward contracts (typically a contract term over one week). A spot contract is entered into for purposes of hedging against foreign currency fluctuations relating to a specific portfolio transaction, such as the delay between a security transaction trade date and settlement date. Forward contracts are entered into for purposes of hedging portfolio holdings or concentrations of such holdings. Each foreign exchange currency contract is adjusted daily by the prevailing spot or forward rate of the underlying currency, and any appreciation or depreciation is recorded for financial statement purposes as unrealized until the contract settlement date, at which time the Fund records realized gains or losses equal to the difference between the value of a contract at the time it was opened and the value at the time it was closed. The Fund could be exposed to risk if a counterparty is unable to meet the terms of a foreign exchange currency contract or if the value of the foreign currency changes unfavorably. In addition, the use of foreign exchange currency contracts does not eliminate fluctuations in the underlying prices of the securities. As of January 31, 2020, the Fund had no open forward foreign exchange currency contracts.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a securities lending agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income, net of income retained by Citibank. Borrowers are required to secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are cured the next business day once the shortfall exceeds $100 thousand. Collateral may be cash, U.S. government securities, or other securities as permitted by SEC guidelines. Cash collateral may be invested in high-quality short-term investments, primarily open-end investment companies. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on
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the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Risks relating to securities-lending transactions include that the borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower. The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy borrower default. Cash collateral is listed in the Fund's Portfolio of Investments and Financial Statements while non-cash collateral is not included. The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2020.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||||||
$ | 2,750 | $ | — | $ | 2,987 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as net change in unrealized appreciation/depreciation on investments and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as net realized gains or losses from investment transactions and foreign currency translations on the Statement of Operations.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, distribution and service 12b-1 fees, and printing fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
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3. Purchases and Sales:
Cost of purchases and proceeds from sales/maturities of securities (excluding securities maturing less than one year from acquisition) for the six-months ended January 31, 2020, were as follows for the Fund (amounts in thousands):
Excluding U.S Government Securities | |||||||||||
Purchases | Sales | ||||||||||
$ | 664,133 | $ | 709,213 |
There were no purchases and sales of U.S. government securities during the six-months ended January 31, 2020.
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.60% of the Fund's average daily net assets. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
No performance adjustments will be made for periods beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter will be utilized in calculating future performance adjustments.
The performance adjustment will be calculated monthly by comparing each class' performance to that of the Lipper Multi-Cap Core Funds Index. The Lipper Multi-Cap Core Funds Index tracks the total return performance of each class within the Lipper Multi-Cap Core Funds category.
For the Fund Shares, Institutional Shares, and Adviser Shares, the performance period will consist of the current month plus the previous number of months beginning July 1, 2019. The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)(1) | Annual Adjustment Rate (in basis points)(1) | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
(1) Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of the class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Multi-Cap Core Funds Index over that period, even if the class has overall negative returns during the performance period.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
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The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six-months ended January 31, 2020, the Fund had no subadvisors.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15% of average daily net assets of the Fund Shares and Adviser Shares, and 0.10% of average daily net assets of the Institutional Shares. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. VCTA, an affiliate of the Adviser, provides transfer agent services to the Fund Shares and Adviser Shares based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10% of average daily net assets, plus out-of-pocket expenses. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the Adviser Shares pursuant to a Distribution Agreement between the Distributor and the Trust. Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, at an annual rate of up to 0.25% of the average daily net assets of the Adviser Shares. Amounts incurred are reflected on the Statement of Operations as 12b-1 Fees.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
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Adviser Shares are offered and sold without imposition of an initial sales charge or a contingent deferred sales charge.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
The expense limits (excluding voluntary waivers) are 0.88%, 0.84%, and 1.15% for Fund Shares, Institutional Shares, and Adviser Shares, respectively. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||
$ | 19 |
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Overall stock market risks may affect the value of the Fund. Factors such as domestic and international economic growth and market conditions, interest rate levels, and political events affect the securities market.
The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected. Price changes may be temporary or last for extended periods.
Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
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$600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six-months ended January 31, 2020.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Fund in the Victory Fund Complex relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period is presented on the Statement of Operations under Interest expense on Interfund lending. As a Lender, interest earned by the Fund, if any, during the period is reflected on the Statement of Operations under Income on Interfund lending.
The average borrowing and lending for the days outstanding and average interest rate for the Fund during the six-months ended January 31, 2020 were as follows (amounts in thousands):
Amount Borrower or Lender | Outstanding at January 31, 2020 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||||||
USAA Growth & Income Fund | Borrower | $ | — | $ | 1,360 | 2 | 2.16 | % | $ | 1,721 |
*For the six-months ended January 31, 2020, based on the number of days borrowings were outstanding.
7. Federal Income Tax Information:
The Fund intends to distribute any net investment income quarterly. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
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8. Subsequent Event:
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
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USAA Mutual Funds Trust | Supplemental Information January 31, 2020 |
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Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019 through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,058.50 | $ | 1,020.71 | $ | 4.55 | $ | 4.47 | 0.88 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,059.10 | 1,020.91 | 4.35 | 4.27 | 0.84 | % | ||||||||||||||||||||
Adviser Shares | 1,000.00 | 1,057.00 | 1,019.36 | 5.95 | 5.84 | 1.15 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's web site at www.sec.gov.
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Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800 | ) 235-8396 |
23432-0320
JANUARY 31, 2020
Semi Annual Report
USAA Growth Fund
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Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 4 | ||||||
Statement of Assets and Liabilities | 7 | ||||||
Statement of Operations | 8 | ||||||
Statements of Changes in Net Assets | 9 | ||||||
Financial Highlights | 10 | ||||||
Notes to Financial Statements | 12 | ||||||
Supplemental Information | 20 | ||||||
Expense Examples | 20 | ||||||
Proxy Voting and Portfolio Holdings Information | 20 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
USAA Mutual Funds Trust
1
USAA Mutual Funds Trust USAA Growth Fund | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA Growth Fund seeks long-term growth of capital.
Top 10 Holdings*
1/31/20
(% of Net Assets)
Visa, Inc. Class A | 6.0 | % | |||||
Amazon.com, Inc. | 6.0 | % | |||||
Microsoft Corp. | 5.3 | % | |||||
Facebook, Inc. Class A | 4.6 | % | |||||
Alphabet, Inc. Class C | 4.0 | % | |||||
Alibaba Group Holding Ltd., ADR | 2.9 | % | |||||
NVIDIA Corp. | 2.8 | % | |||||
Apple, Inc. | 2.5 | % | |||||
ServiceNow, Inc. | 2.4 | % | |||||
PayPal Holdings, Inc. | 1.7 | % |
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Growth Fund (continued) | January 31, 2020 |
(Unaudited)
Sector Allocation*:
1/31/20
(% of Net Assets)
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
3
USAA Mutual Funds Trust USAA Growth Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (98.8%) | |||||||||||
Communication Services (11.6%): | |||||||||||
Activision Blizzard, Inc. | 458,013 | $ | 26,785 | ||||||||
Alphabet, Inc. Class A (a) | 18,919 | 27,107 | |||||||||
Alphabet, Inc. Class C (a) | 80,165 | 114,975 | |||||||||
Facebook, Inc. Class A (a) | 650,394 | 131,321 | |||||||||
The Walt Disney Co. | 113,333 | 15,675 | |||||||||
Twitter, Inc. (a) | 427,351 | 13,880 | |||||||||
329,743 | |||||||||||
Communications Equipment (0.8%): | |||||||||||
Cisco Systems, Inc. | 466,816 | 21,460 | |||||||||
Consumer Discretionary (16.8%): | |||||||||||
Alibaba Group Holding Ltd., ADR (a) | 396,087 | 81,828 | |||||||||
Amazon.com, Inc. (a) | 84,362 | 169,460 | |||||||||
Burlington Stores, Inc. (a) | 133,430 | 29,017 | |||||||||
Hilton Worldwide Holdings, Inc. | 187,614 | 20,225 | |||||||||
Lululemon Athletica, Inc. (a) | 135,847 | 32,521 | |||||||||
Nike, Inc. Class B | 172,265 | 16,589 | |||||||||
Starbucks Corp. | 222,374 | 18,864 | |||||||||
Target Corp. | 99,047 | 10,968 | |||||||||
The Home Depot, Inc. | 75,774 | 17,284 | |||||||||
The TJX Cos., Inc. | 311,767 | 18,407 | |||||||||
Ulta Beauty, Inc. (a) | 70,732 | 18,950 | |||||||||
Vail Resorts, Inc. | 56,084 | 13,152 | |||||||||
Yum China Holdings, Inc. | 245,848 | 10,589 | |||||||||
Yum! Brands, Inc. | 147,896 | 15,643 | |||||||||
473,497 | |||||||||||
Consumer Staples (5.4%): | |||||||||||
Church & Dwight Co., Inc. | 213,525 | 15,848 | |||||||||
Colgate-Palmolive Co. | 220,146 | 16,242 | |||||||||
Danone SA, ADR | 1,193,478 | 19,036 | |||||||||
Monster Beverage Corp. (a) | 492,417 | 32,795 | |||||||||
The Coca-Cola Co. | 402,639 | 23,514 | |||||||||
The Procter & Gamble Co. | 192,164 | 23,948 | |||||||||
Tyson Foods, Inc. Class A | 256,026 | 21,155 | |||||||||
152,538 | |||||||||||
Electronic Equipment, Instruments & Components (1.1%): | |||||||||||
Amphenol Corp. Class A | 133,532 | 13,282 | |||||||||
Keysight Technologies, Inc. (a) | 182,525 | 16,973 | |||||||||
30,255 | |||||||||||
Energy (0.6%): | |||||||||||
EOG Resources, Inc. | 62,206 | 4,535 | |||||||||
Schlumberger Ltd. | 377,048 | 12,635 | |||||||||
17,170 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Financials (2.2%): | |||||||||||
FactSet Research Systems, Inc. | 56,189 | $ | 16,076 | ||||||||
MSCI, Inc. | 85,991 | 24,577 | |||||||||
SEI Investments Co. | 314,516 | 20,525 | |||||||||
61,178 | |||||||||||
Health Care (16.0%): | |||||||||||
Amgen, Inc. | 69,595 | 15,036 | |||||||||
Bluebird Bio, Inc. (a) | 141,539 | 11,279 | |||||||||
Bristol-Myers Squibb Co. | 418,189 | 26,325 | |||||||||
Cerner Corp. | 255,826 | 18,376 | |||||||||
Edwards Lifesciences Corp. (a) | 106,423 | 23,398 | |||||||||
Exact Sciences Corp. (a) | 132,587 | 12,368 | |||||||||
Illumina, Inc. (a) | 59,408 | 17,232 | |||||||||
Intuitive Surgical, Inc. (a) | 29,552 | 16,543 | |||||||||
IQVIA Holdings, Inc. (a) | 130,707 | 20,293 | |||||||||
Merck & Co., Inc. | 373,934 | 31,949 | |||||||||
Novartis AG, ADR | 214,396 | 20,263 | |||||||||
NOVO Nordisk AS, ADR | 432,888 | 26,333 | |||||||||
Regeneron Pharmaceuticals, Inc. (a) | 71,965 | 24,319 | |||||||||
Roche Holdings Ltd., ADR | 695,442 | 29,069 | |||||||||
Sage Therapeutics, Inc. (a) | 108,820 | 7,213 | |||||||||
The Cooper Cos., Inc. | 42,067 | 14,593 | |||||||||
UnitedHealth Group, Inc. | 147,823 | 40,274 | |||||||||
Varian Medical Systems, Inc. (a) | 60,890 | 8,559 | |||||||||
Veeva Systems, Inc. Class A (a) | 178,422 | 26,158 | |||||||||
Vertex Pharmaceuticals, Inc. (a) | 141,205 | 32,061 | |||||||||
Zoetis, Inc. | 250,925 | 33,677 | |||||||||
455,318 | |||||||||||
Industrials (8.0%): | |||||||||||
CoStar Group, Inc. (a) | 54,272 | 35,439 | |||||||||
Deere & Co. | 130,348 | 20,671 | |||||||||
Expeditors International of Washington, Inc. | 303,250 | 22,149 | |||||||||
IHS Markit Ltd. (a) | 162,267 | 12,796 | |||||||||
Ingersoll-Rand PLC | 283,083 | 37,715 | |||||||||
L3Harris Technologies, Inc. | 117,561 | 26,020 | |||||||||
Roper Technologies, Inc. | 49,341 | 18,831 | |||||||||
Union Pacific Corp. | 103,516 | 18,573 | |||||||||
Woodward, Inc. | 184,000 | 21,401 | |||||||||
Xylem, Inc. | 140,778 | 11,496 | |||||||||
225,091 | |||||||||||
IT Services (11.9%): | |||||||||||
Automatic Data Processing, Inc. | 50,482 | 8,652 | |||||||||
Black Knight, Inc. (a) | 276,159 | 18,481 | |||||||||
EPAM Systems, Inc. (a) | 127,700 | 29,133 | |||||||||
Euronet Worldwide, Inc. (a) | 228,629 | 36,041 | |||||||||
PayPal Holdings, Inc. (a) | 428,936 | 48,851 | |||||||||
Twilio, Inc. Class A (a) | 222,236 | 27,633 | |||||||||
Visa, Inc. Class A | 853,319 | 169,784 | |||||||||
338,575 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Growth Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Semiconductors & Semiconductor Equipment (5.9%): | |||||||||||
Broadcom, Inc. | 27,855 | $ | 8,500 | ||||||||
KLA Corp. | 62,094 | 10,291 | |||||||||
Lam Research Corp. | 54,035 | 16,114 | |||||||||
Marvell Technology Group Ltd. | 587,718 | 14,129 | |||||||||
Microchip Technology, Inc. | 114,617 | 11,173 | |||||||||
NVIDIA Corp. | 341,142 | 80,657 | |||||||||
QUALCOMM, Inc. | 295,467 | 25,206 | |||||||||
STMicroelectronics NV, NYS (b) | 251,744 | 7,011 | |||||||||
173,081 | |||||||||||
Software (16.0%): | |||||||||||
Autodesk, Inc. (a) | 216,253 | 42,569 | |||||||||
Fair Isaac Corp. (a) | 70,692 | 28,445 | |||||||||
Microsoft Corp. | 884,091 | 150,498 | |||||||||
Oracle Corp. | 744,375 | 39,042 | |||||||||
Proofpoint, Inc. (a) | 145,712 | 17,895 | |||||||||
RingCentral, Inc. Class A (a) | 59,643 | 12,261 | |||||||||
Salesforce.com, Inc. (a) | 251,619 | 45,873 | |||||||||
ServiceNow, Inc. (a) | 201,010 | 67,988 | |||||||||
The Trade Desk, Inc. Class A (a) | 31,522 | 8,485 | |||||||||
Workday, Inc. Class A (a) | 231,828 | 42,803 | |||||||||
455,859 | |||||||||||
Technology Hardware, Storage & Peripherals (2.5%): | |||||||||||
Apple, Inc. | 227,610 | 70,448 | |||||||||
Total Common Stocks (Cost $1,836,402) | 2,804,213 | ||||||||||
Collateral for Securities Loaned^(0.0%) (c) | |||||||||||
HSBC U.S. Government Money Market Fund, I Shares, 1.52% (d) | 936,207 | 936 | |||||||||
Total Collateral for Securities Loaned (Cost $936) | 936 | ||||||||||
Total Investments (Cost $1,837,338) — 98.8% | 2,805,149 | ||||||||||
Other assets in excess of liabilities — 1.2% | 35,315 | ||||||||||
NET ASSETS — 100.00% | $ | 2,840,464 |
^ Purchased with cash collateral from securities on loan.
(a) Non-income producing security.
(b) All or a portion of this security is on loan.
(c) Amount represents less than 0.05% of net assets.
(d) Rate disclosed is the daily yield on January 31, 2020.
ADR — American Depositary Receipt
NYS — New York Registered Shares
PLC — Public Limited Company
See notes to financial statements.
6
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Growth Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,837,338) | $ | 2,805,149 | (a) | ||||
Cash and cash equivalents | 45,196 | ||||||
Receivables: | |||||||
Interest and dividends | 635 | ||||||
Capital shares issued | 951 | ||||||
Investments sold | 22,395 | ||||||
Reclaims | 982 | ||||||
Prepaid expenses | 10 | ||||||
Total assets | 2,875,318 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 936 | ||||||
Investments purchased | 30,002 | ||||||
Capital shares redeemed | 1,557 | ||||||
Payable to Adviser | 2 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 1,591 | ||||||
Administration fees | 318 | ||||||
Custodian fees | 90 | ||||||
Transfer agent fees | 237 | ||||||
Compliance fees | — | (b) | |||||
Other accrued expenses | 121 | ||||||
Total liabilities | 34,854 | ||||||
Net Assets: | |||||||
Capital | 1,882,744 | ||||||
Total distributable earnings/(loss) | 957,720 | ||||||
Net assets | $ | 2,840,464 | |||||
Net Assets: | |||||||
Fund Shares | $ | 1,704,790 | |||||
Institutional Shares | 1,135,674 | ||||||
Total | $ | 2,840,464 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 63,993 | ||||||
Institutional Shares | 42,741 | ||||||
Total | 106,734 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 26.64 | |||||
Institutional Shares | 26.57 |
(a) Includes $862 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
7
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA Growth Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 9,538 | |||||
Interest | 411 | ||||||
Securities lending (net of fees) | 96 | ||||||
Total Income | 10,045 | ||||||
Expenses: | |||||||
Investment advisory fees | 8,888 | ||||||
Administration fees — Fund Shares | 1,241 | ||||||
Administration fees — Institutional Shares | 540 | ||||||
Sub-Administration fees | 29 | ||||||
Custodian fees | 65 | ||||||
Transfer agent fees — Fund Shares | 772 | ||||||
Transfer agent fees — Institutional Shares | 540 | ||||||
Trustees' fees | 22 | ||||||
Compliance fees | 8 | ||||||
Legal and audit fees | 51 | ||||||
State registration and filing fees | 35 | ||||||
Interest expense on interfund lending | — | (a) | |||||
Other expenses | 155 | ||||||
Total Expenses | 12,346 | ||||||
Expenses waived/reimbursed by Adviser | (4 | ) | |||||
Net Expenses | 12,342 | ||||||
Net Investment Income (Loss) | (2,297 | ) | |||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | (5,275 | ) | |||||
Net change in unrealized appreciation/depreciation on investment securities | 191,321 | ||||||
Net realized/unrealized gains (losses) on investments | 186,046 | ||||||
Change in net assets resulting from operations | $ | 183,749 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
8
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Growth Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | (2,297 | ) | $ | 11,844 | ||||||
Net realized gains (losses) from investments | (5,275 | ) | 697,328 | ||||||||
Net change in unrealized appreciation/depreciation on investments | 191,321 | (420,992 | ) | ||||||||
Change in net assets resulting from operations | 183,749 | 288,180 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (353,429 | ) | (172,418 | ) | |||||||
Institutional Shares | (238,249 | ) | (126,833 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (591,678 | ) | (299,251 | ) | |||||||
Change in net assets resulting from capital transactions | 488,124 | (134,407 | ) | ||||||||
Change in net assets | 80,195 | (145,478 | ) | ||||||||
Net Assets: | |||||||||||
Beginning of period | 2,760,269 | 2,905,747 | |||||||||
End of period | $ | 2,840,464 | $ | 2,760,269 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 64,385 | $ | 154,373 | |||||||
Distributions reinvested | 347,843 | 170,170 | |||||||||
Cost of shares redeemed | (140,384 | ) | (221,811 | ) | |||||||
Total Fund Shares | $ | 271,844 | $ | 102,732 | |||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 89,560 | $ | 73,455 | |||||||
Distributions reinvested | 238,149 | 126,793 | |||||||||
Cost of shares redeemed | (111,429 | ) | (437,387 | ) | |||||||
Total Institutional Shares | $ | 216,280 | $ | (237,139 | ) | ||||||
Change in net assets resulting from capital transactions | $ | 488,124 | $ | (134,407 | ) | ||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 2,178 | 5,086 | |||||||||
Reinvested | 13,475 | 6,270 | |||||||||
Redeemed | (4,819 | ) | (7,389 | ) | |||||||
Total Fund Shares | 10,834 | 3,967 | |||||||||
Institutional Shares | |||||||||||
Issued | 2,895 | 2,430 | |||||||||
Reinvested | 9,247 | 4,682 | |||||||||
Redeemed | (3,840 | ) | (13,944 | ) | |||||||
Total Institutional Shares | 8,302 | (6,832 | ) | ||||||||
Change in Shares | 19,136 | (2,865 | ) |
See notes to financial statements.
9
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Growth Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 31.54 | (0.03 | )(d) | 1.94 | 1.91 | (0.07 | ) | (6.74 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 32.15 | 0.12 | 2.80 | 2.92 | (0.09 | ) | (3.44 | ) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 28.65 | 0.07 | 4.18 | 4.25 | (0.05 | ) | (0.70 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 25.53 | 0.09 | 4.31 | 4.40 | (0.05 | ) | (1.23 | ) | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 25.91 | 0.10 | 1.19 | 1.29 | (0.11 | ) | (1.56 | ) | ||||||||||||||||||
Year Ended July 31, 2015 | $ | 23.62 | 0.28 | 3.73 | 4.01 | (0.28 | ) | (1.44 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 31.47 | (0.02 | )(d) | 1.94 | 1.92 | (0.08 | ) | (6.74 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 32.08 | 0.15 | 2.78 | 2.93 | (0.10 | ) | (3.44 | ) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 28.59 | 0.09 | 4.18 | 4.27 | (0.08 | ) | (0.70 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 25.48 | 0.12 | 4.30 | 4.42 | (0.08 | ) | (1.23 | ) | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 25.86 | 0.15 | 1.16 | 1.31 | (0.13 | ) | (1.56 | ) | ||||||||||||||||||
Year Ended July 31, 2015 | $ | 23.57 | 0.30 | 3.72 | 4.02 | (0.29 | ) | (1.44 | ) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two-year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
See notes to financial statements.
10
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Growth Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (6.81 | ) | $ | 26.64 | 6.83 | % | 0.92 | % | (0.18 | )% | 0.92 | % | $ | 1,704,790 | 27 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (3.53 | ) | $ | 31.54 | 10.90 | % | 0.90 | %(e) | 0.41 | % | 0.90 | %(e) | $ | 1,676,470 | 70 | %(f) | |||||||||||||||||||
Year Ended July 31, 2018 | (0.75 | ) | $ | 32.15 | 14.99 | % | 0.97 | %(e) | 0.33 | % | 0.97 | %(e) | $ | 1,581,693 | 19 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (1.28 | ) | $ | 28.65 | 18.04 | % | 1.09 | %(e) | 0.36 | % | 1.09 | %(e) | $ | 1,375,305 | 17 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (1.67 | ) | $ | 25.53 | 5.25 | % | 1.11 | %(e) | 0.36 | % | 1.11 | %(e) | $ | 1,143,344 | 18 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (1.72 | ) | $ | 25.91 | 17.50 | % | 1.08 | %(e)(g) | 0.25 | % | 1.11 | %(e) | $ | 1,262,075 | 31 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (6.82 | ) | $ | 26.57 | 6.85 | % | 0.88 | % | (0.15 | )% | 0.88 | % | $ | 1,135,674 | 27 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (3.54 | ) | $ | 31.47 | 10.94 | % | 0.85 | %(e) | 0.47 | % | 0.85 | %(e) | $ | 1,083,799 | 70 | %(f) | |||||||||||||||||||
Year Ended July 31, 2018 | (0.78 | ) | $ | 32.08 | 15.07 | % | 0.92 | %(e) | 0.39 | % | 0.92 | %(e) | $ | 1,324,054 | 19 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (1.31 | ) | $ | 28.59 | 18.14 | % | 1.01 | %(e) | 0.43 | % | 1.01 | %(e) | $ | 1,299,751 | 17 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (1.69 | ) | $ | 25.48 | 5.34 | % | 1.02 | %(e) | 0.47 | % | 1.02 | %(e) | $ | 1,012,360 | 18 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (1.73 | ) | $ | 25.86 | 17.57 | % | 1.01 | %(e) | 0.31 | % | 1.01 | %(e) | $ | 865,996 | 31 | % |
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects total annual operating expenses of the shares before reductions of any expenses paid indirectly. The shares' expenses paid indirectly decreased the expense ratio by less than 0.01%.
(f) Reflects increased trading activity due to current year transition or asset allocation shift.
(g) Prior to December 1, 2014, USAA Asset Management Company ("AMCO") (previous Investment Adviser) had voluntarily agreed to limit the annual expenses of the Fund Shares to 1.00% of the Fund Shares' average daily net assets.
See notes to financial statements.
11
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Growth Fund (the "Fund"). The Fund offers two classes of shares: Fund Shares and Institutional Shares. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges except with respect to fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or the over-the-counter markets, are valued
12
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
at the last sales price or official closing price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations typically are categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at net asset value. These valuations typically are categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. These valuations typically are categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's net asset value ("NAV") to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2020, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 2,804,213 | $ | — | $ | — | $ | 2,804,213 | |||||||||||
Collateral for Securities Loaned | 936 | — | — | 936 | |||||||||||||||
Total | $ | 2,805,149 | $ | — | $ | — | $ | 2,805,149 |
For the six-months ended January 31, 2020, there were no transfers in or out of the Level 3 fair value hierarchy.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs. ETFs are a type of index fund, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
13
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a securities lending agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income, net of income retained by Citibank. Borrowers are required to secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are cured the next business day once the shortfall exceeds $100 thousand. Collateral may be cash, U.S. government securities, or other securities as permitted by SEC guidelines. Cash collateral may be invested in high-quality short-term investments, primarily open-end investment companies. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Risks relating to securities-lending transactions include that the borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower. The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy borrower default. Cash collateral is listed in the Fund's Portfolio of Investments and Financial Statements while non-cash collateral is not included. The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2020.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 862 | $ | — | $ | 936 |
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, and printing fees), and realized and unrealized gains or losses on investments are allocated to
14
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
3. Purchases and Sales:
Cost of purchases and proceeds from sales/maturities of securities (excluding securities maturing less than one year from acquisition) for the six-months ended January 31, 2020, were as follows for the Fund (amounts in thousands):
Excluding | U.S Government Securities | ||||||
Purchases | Sales | ||||||
$ | 718,773 | $ | 798,192 |
There were no purchases and sales of U.S. government securities during the six-months ended January 31, 2020.
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA funds. The USAA fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi annual reports may be viewed at usaa.com. As of January 31, 2020, certain USAA fund-of-funds owned total outstanding shares of the Fund:
USAA Cornerstone Conservative Fund | 0.1 | % | |||||
USAA Cornerstone Equity Fund | 0.4 | % | |||||
USAA Target Retirement Income Fund | 0.1 | % | |||||
USAA Target Retirement 2020 Fund | 0.3 | % | |||||
USAA Target Retirement 2030 Fund | 1.6 | % | |||||
USAA Target Retirement 2040 Fund | 2.2 | % | |||||
USAA Target Retirement 2050 Fund | 1.4 | % | |||||
USAA Target Retirement 2060 Fund | 0.2 | % |
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.65% of the Fund's average daily net assets. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
No performance adjustments will be made for periods beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter will be utilized in calculating future performance adjustments.
The performance adjustment will be calculated monthly by comparing each class' performance to that of the Lipper Large-Cap Growth Funds Index. The Lipper Large-Cap Growth Funds Index tracks the total return performance of each class within the Lipper Large-Cap Growth Funds category.
15
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The performance period for each share class will consist of the current month plus the previous number of months beginning July 1, 2019. The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points) | Annual Adjustment Rate (in basis points)1 | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
1 Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of the class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Large-Cap Growth Funds Index over that period, even if the class has overall negative returns during the performance period.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets.
VCM has entered into a Subadvisory Agreement with Loomis, Sayles & Company, L.P. ("Loomis Sayles") and Renaissance Investment Management ("Renaissance"), under which Loomis Sayles and Renaissance each direct the investment and reinvestment of a portion of the Fund's assets (as allocated from time to time by VCM). These arrangements provide for monthly fees that are paid by VCM. VCM (not the Fund) pays the subadviser fees.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15% and 0.10% of average daily net assets of the Fund Shares and Institutional Shares, respectively. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
16
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. VCTA, an affiliate of the Adviser, provides transfer agent services to the Fund Shares based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10% of average daily net assets, plus out-of-pocket expenses. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust. The Distributor received no fees or other compensation for such distribution services.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
The expense limits (excluding voluntary waivers) are 0.92% and 0.88% for Fund Shares and Institutional Shares, respectively. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||
$ | 4 |
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
17
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Overall stock market risks may affect the value of the Fund. Factors such as domestic and international economic growth and market conditions, interest rate levels, and political events affect the securities market.
The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected. Price changes may be temporary or last for extended periods.
Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six-months ended January 31, 2020.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Fund in the Victory Fund Complex relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period is presented on the Statement of Operations under Interest expense on Interfund lending. As a Lender, interest earned by the Fund, if any, during the period is reflected on the Statement of Operations under Income on Interfund lending.
The average borrowing and lending for the days outstanding and average interest rate for the Fund during the six-months ended January 31, 2020 were as follows (amounts in thousands):
Borrower or Lender | Amount Outstanding at January 31, 2020 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
Borrower | $ | — | $ | 2,775 | 1 | 2.17 | % | $ | 2,775 |
* For the six-months ended January 31, 2020, based on the number of days borrowings were outstanding.
8. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
9. Subsequent Event
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
19
USAA Mutual Funds Trust | Supplemental Information January 31, 2020 |
(Unaudited)
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019 through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,068.30 | $ | 1,020.51 | $ | 4.78 | $ | 4.67 | 0.92 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,068.50 | 1,020.71 | 4.58 | 4.47 | 0.88 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's web site at www.sec.gov.
20
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
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usaa.com | (800) 235-8396 |
23420-0320
JANUARY 31, 2020
Semi Annual Report
USAA High Income Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 5 | ||||||
Statement of Assets and Liabilities | 21 | ||||||
Statement of Operations | 22 | ||||||
Statements of Changes in Net Assets | 23 | ||||||
Financial Highlights | 26 | ||||||
Notes to Financial Statements | 30 | ||||||
Supplemental Information | 40 | ||||||
Expense Examples | 40 | ||||||
Proxy Voting and Portfolio Holdings Information | 40 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
USAA Mutual Funds Trust
1
USAA Mutual Funds Trust USAA High Income Fund | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA High Income Fund seeks to provide an attractive total return primarily through high current income and secondarily through capital appreciation.
Top 10 Holdings*
1/31/20
(% of Net Assets)
iShares iBoxx High Yield Corporate Bond ETF | 3.2 | % | |||||
SPDR Bloomberg Barclays High Yield Bond ETF | 3.0 | % | |||||
CCO Holdings LLC/CCO Holdings Capital Corp. | 1.3 | % | |||||
NuStar Logistics LP | 1.2 | % | |||||
Sprint Corp. | 1.0 | % | |||||
CHS, Inc. | 1.0 | % | |||||
Dairy Farmers of America, Inc. | 1.0 | % | |||||
Altice Luxembourg SA | 0.9 | % | |||||
HCA, Inc. | 0.8 | % | |||||
Petroleos Mexicano | 0.8 | % |
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA High Income Fund (continued) | January 31, 2020 |
(Unaudited)
Sector Allocation*:
1/31/20
(% of Net Assets)
*Does not include futures, money market instruments, and short term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
3
USAA Mutual Funds Trust USAA High Income Fund (continued) | January 31, 2020 |
(Unaudited)
Portfolio Ratings Mix*
1/31/20
(% of Net Assets)
This chart reflects the highest long-term rating from a Nationally Recognized Statistical Rating Organization (NRSRO), with the four highest long-term credit ratings labeled, in descending order of credit quality, AAA, AA, A, and BBB. These categories represent investment-grade quality. NRSRO ratings are shown because they provide independent analysis of the credit quality of the Fund's investments. Victory Capital Management, Inc. ("Adviser") also performs its own fundamental credit analysis of each security. As part of its fundamental credit analysis, the Adviser considers various criteria, including industry specific actions, peer comparisons, payment ranking, and structure specific characteristics. Any of the Fund's securities that are not rated by an NRSRO appear in the chart above as "Unrated," but these securities are analyzed and monitored by the Adviser on an ongoing basis. Government securities that are issued or guaranteed as to principal and interest by the U.S. government and pre-refunded and escrowed-to-maturity municipal bonds that are not rated are treated as AAA for credit quality purposes.
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
4
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Asset Backed Securities (0.1%) | |||||||||||
NP SPE II LLC, Series 2019-2A Class C1, 6.44%, 11/19/49 (a) | $ | 2,929 | $ | 2,954 | |||||||
Total Asset Backed Securities (Cost $2,928) | 2,954 | ||||||||||
Collateralized Mortgage Obligations (0.2%) | |||||||||||
Banc of America Commercial Mortgage Trust, Series 2008-1 Class AJ, 6.79%, 2/10/51 (b) | 163 | 171 | |||||||||
Bear Stearns Commercial Mortgage Securities Trust, Series 2007-T26 Class AJ, 5.56%, 1/12/45, Callable 2/8/22 @ 100 (b) | 5,000 | 4,065 | |||||||||
CHL Mortgage Pass-Through Trust, Series 2004-25 Class 1A6, 2.62%(LIBOR01M+96bps), 2/25/35, Callable 2/25/20 @ 100 (c) | 2,228 | 652 | |||||||||
Credit Suisse Commercial Mortgage Trust, Series 2007-C1 Class AMFL, 1.86%(LIBOR01M+19bps), 2/15/40 (c) | 50 | 48 | |||||||||
Credit Suisse First Boston Mortgage Securities Corp., Series 1998-C1 Class AX, 2.11%, 5/17/40, Callable 3/11/20 @ 100 (b) | 79 | 2 | |||||||||
Total Collateralized Mortgage Obligations (Cost $6,341) | 4,938 | ||||||||||
Common Stocks (2.6%) | |||||||||||
Communication Services (0.5%): | |||||||||||
AT&T, Inc. | 50,503 | 1,899 | |||||||||
CenturyLink, Inc. | 63,000 | 861 | |||||||||
Clear Channel Outdoor Holdings, Inc. (d) | 163,905 | 447 | |||||||||
Comcast Corp. Class A | 77,900 | 3,365 | |||||||||
Iheartmedia, Inc. Class A (d) (e) | 69,703 | 1,232 | |||||||||
Verizon Communications, Inc. | 28,650 | 1,703 | |||||||||
9,507 | |||||||||||
Consumer Discretionary (0.0%): (f) | |||||||||||
Las Vegas Sands Corp. (g) | 13,500 | 882 | |||||||||
Consumer Staples (0.1%): | |||||||||||
Kimberly-Clark Corp. | 11,242 | 1,610 | |||||||||
Energy (0.4%): | |||||||||||
BP PLC, ADR | 53,764 | 1,942 | |||||||||
GenOn Energy, Inc. (d) (h) (i) | 16,168 | 3,234 | |||||||||
Nine Point Energy (d) (h) (i) | 21,663 | 22 | |||||||||
Nine Point Energy Holdings, Inc. (d) (h) (i) | 464 | 46 | |||||||||
Paragon Litigation Class B (d) (h) (i) | 2,542 | 1 | |||||||||
Paragon Litigation Class A (d) (h) (i) | 3,813 | 57 | |||||||||
Royal Dutch Shell PLC, ADR | 32,263 | 1,683 | |||||||||
Thunderbird Resources (d) (h) (i) | 22,883 | 2 | |||||||||
6,987 | |||||||||||
Financials (0.6%): | |||||||||||
CME Group, Inc. | 24,700 | 5,364 | |||||||||
JPMorgan Chase & Co. | 18,507 | 2,450 | |||||||||
KeyCorp | 111,918 | 2,094 | |||||||||
MetLife, Inc. | 21,952 | 1,091 | |||||||||
MFA Financial, Inc. | 129,100 | 1,007 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Prospect Capital Corp. (e) | 202,933 | $ | 1,321 | ||||||||
Regions Financial Corp. | 109,207 | 1,700 | |||||||||
Synchrony Financial | 13,639 | 442 | |||||||||
15,469 | |||||||||||
Health Care (0.4%): | |||||||||||
AbbVie, Inc. | 22,300 | 1,807 | |||||||||
CVS Health Corp. | 18,400 | 1,248 | |||||||||
Johnson & Johnson | 16,562 | 2,466 | |||||||||
Merck & Co., Inc. | 30,900 | 2,640 | |||||||||
8,161 | |||||||||||
Industrials (0.1%): | |||||||||||
United Airlines Holdings, Inc. (d) | 23,000 | 1,720 | |||||||||
Information Technology (0.2%): | |||||||||||
Microsoft Corp. (g) | 18,200 | 3,098 | |||||||||
Materials (0.2%): | |||||||||||
LyondellBasell Industries NV Class A | 19,215 | 1,496 | |||||||||
Newmont Corp. | 33,650 | 1,516 | |||||||||
3,012 | |||||||||||
Real Estate (0.1%): | |||||||||||
Crown Castle International Corp. | 17,000 | 2,547 | |||||||||
Total Common Stocks (Cost $37,757) | 52,993 | ||||||||||
Preferred Stocks (3.7%) | |||||||||||
Communication Services (0.3%): | |||||||||||
Qwest Corp., 6.50%, 9/1/56 | $ | 200,000 | 5,150 | ||||||||
Consumer Staples (1.8%): | |||||||||||
CHS, Inc., cumulative redeemable, Series 1, 7.88% (j) | 200,000 | 5,570 | |||||||||
CHS, Inc., cumulative redeemable, Series 2, 7.10%(LIBOR03M+429bps) (c) (j) | 400,000 | 11,240 | |||||||||
Dairy Farmers of America, Inc., cumulative redeemable, 7.88% (a) (j) | 200,000 | 20,000 | |||||||||
36,810 | |||||||||||
Energy (1.3%): | |||||||||||
NuStar Logistics LP, 8.57%(LIBOR03M+673bps), 1/15/43 (c) (e) (g) | 937,213 | 24,809 | |||||||||
Financials (0.1%): | |||||||||||
American Overseas Group Ltd., non-cumulative, Series A, 5.66%(LIBOR03M+356bps), 12/15/66 (c) (h) (i) | 3,000 | 750 | |||||||||
US Bancorp, non-cumulative, Series A, 3.50%(LIBOR03M+102bps) (c) (j) | 3,399 | 2,992 | |||||||||
3,742 | |||||||||||
Real Estate (0.2%): | |||||||||||
Equity Residential, cumulative redeemable, Series K, 8.29% (j) | 53,362 | 3,388 | |||||||||
Total Preferred Stocks (Cost $71,337) | 73,899 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Convertible Preferred Stocks (0.0%) (f) | |||||||||||
Financials (0.0%): (f) | |||||||||||
Ditech Holding Corp. (h) (j) (k) | 928 | $ | — | (l) | |||||||
Total Convertible Preferred Stock (Cost $1,735) | — | (l) | |||||||||
Senior Secured Loans (4.2%) | |||||||||||
Abe Investment Holdings, Inc., 1st Lien Term Loan B, 6.31%(LIBOR01M+450bps), 2/19/26 (c) | $ | 2,974 | 2,946 | ||||||||
Academy Ltd., 1st Lien Term Loan B, 5.78%(LIBOR01M+400bps), 7/2/22 (c) | 9,720 | 7,769 | |||||||||
Advantage Sales & Marketing, Inc., 2nd Lien Term Loan, 8.30%(LIBOR01M+650bps), 7/25/22 (c) | 5,000 | 4,547 | |||||||||
Avaya, Inc., 1st Lien Term Loan B, 5.93%(LIBOR01M+425bps), 12/15/24 (c) | 2,691 | 2,631 | |||||||||
Bass Pro Group LLC, Term Loan B, 6.80%(LIBOR01M+500bps), 12/16/23 (c) | 6,957 | 6,924 | |||||||||
California Resources Corp., 6.40%(LIBOR01M+475bps), 12/31/22 (c) | 2,000 | 1,804 | |||||||||
Cengage Learning, Inc., 1st Lien Term Loan B, 6.05%(LIBOR01M+425bps), 6/7/23 (c) | 2,888 | 2,751 | |||||||||
Chesapeake Energy Corp., 9.93%(LIBOR03M+800bps), 6/9/24 (c) (m) | 5,000 | 5,019 | |||||||||
CITGO Petroleum Corp., 6.94%(LIBOR03M+500bps), 3/22/24 (c) | 2,382 | 2,382 | |||||||||
Envision Healthcare Corp., 1st Lien Term Loan B, 5.55%(LIBOR01M+375bps), 10/11/25 (c) | 4,950 | 4,151 | |||||||||
H-Food Holdings LLC, 1st Lien Term Loan, 5/31/25 (m) (s) | 2,000 | 1,977 | |||||||||
Intelsat Jackson Holdings SA, 1st Lien Term Loan B5, 6.63%(LIBOR+663bps), 1/2/24 (c) | 1,000 | 1,008 | |||||||||
Lucid Energy Group II Borrower LLC, 1st Lien Term Loan, 4.80%(LIBOR01M+300bps), 2/18/25 (c) | 4,950 | 4,613 | |||||||||
Mallinckrodt International Finance SA, 1st Lien Term Loan B, 4.69%(LIBOR03M+275bps), 9/24/24 (c) | 5,000 | 4,176 | |||||||||
McDermott Technology Americas, Inc., DIP 11.90%(LIBOR03M+1000bps), 10/21/21 (c) (k) (m) | 1,143 | 1,234 | |||||||||
McDermott Technology Americas, Inc., 1st Lien Term Loan B, 6.94%(LIBOR03M+500bps), 5/10/25 (c) (k) | 1,985 | 1,218 | |||||||||
Mitchell International, Inc., 9.05%(LIBOR01M+725bps), 12/1/25 (c) | 5,000 | 4,850 | |||||||||
Neiman Marcus Group Ltd. LLC, 1st Lien Term Loan, 7.73%(LIBOR01M+600bps), 10/25/23 (c) | 6,949 | 5,877 | |||||||||
NPC International, Inc., 2nd Lien Term Loan, 9.43%(LIBOR03M+750bps), 4/18/25 (c) | 3,000 | 86 | |||||||||
PetSmart, Inc., 1st Lien Term Loan B2, 5.67%(LIBOR01M+400bps), 3/10/22 (c) | 1,541 | 1,536 | |||||||||
Pregis TopCo Corp., 1st Lien Term Loan B, 5.80%(LIBOR01M+400bps), 7/25/26 (c) | 1,500 | 1,500 | |||||||||
Quicksilver Resources, Inc., 6/21/19 (h) (s) | 3,993 | 6 | |||||||||
Serta Simmons Bedding LLC, 2nd Lien Term Loan, 9.66%(LIBOR01M+800bps), 11/8/24 (c) | 3,048 | 900 | |||||||||
Team Health Holdings, Inc., 1st Lien Term Loan B, 4.55%(LIBOR01M+275bps), 2/6/24 (c) | 5,973 | 4,764 | |||||||||
Veritas US, Inc., 1st Lien Term Loan B, 6.30%(LIBOR01M+450bps), 1/27/23 (c) | 1,343 | 1,278 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Veritas US, Inc., 1st Lien Term Loan B, 6.44%(LIBOR03M+450bps) (c) | $ | 258 | $ | 246 | |||||||
Versant Health Holdco, Inc., 2nd Lien Term Loan, 8.55%(LIBOR01M+675bps), 12/1/25 (c) | 4,500 | 4,508 | |||||||||
WaterBridge Midstream Operating LLC, 1st Lien Term Loan B, 7.83%(LIBOR06M+575bps), 6/21/26 (c) | 2,993 | 2,944 | |||||||||
Wok Holdings, Inc., 1st Lien Term Loan B, 8.17%(LIBOR06M+625bps), 3/1/26 (c) | 2,978 | 2,425 | |||||||||
Total Senior Secured Loans (Cost $97,723) | 86,070 | ||||||||||
Corporate Bonds (56.9%) | |||||||||||
Communication Services (10.9%): | |||||||||||
AMC Entertainment Holdings, Inc., 6.13%, 5/15/27, Callable 5/15/22 @ 103.06 (e) | 6,000 | 5,176 | |||||||||
CCO Holdings LLC/CCO Holdings Capital Corp., 4.75%, 3/1/30, Callable 9/1/24 @ 102.38 (a) | 25,000 | 25,697 | |||||||||
CenturyLink, Inc. 7.50%, 4/1/24, Callable 1/1/24 @ 100 | 5,000 | 5,651 | |||||||||
7.65%, 3/15/42 | 6,621 | 7,147 | |||||||||
Cincinnati Bell, Inc. 7.00%, 7/15/24, Callable 3/9/20 @ 105.25 (a) | 6,000 | 6,277 | |||||||||
8.00%, 10/15/25, Callable 10/15/20 @ 106 (a) | 4,000 | 4,260 | |||||||||
Clear Channel Worldwide Holdings, Inc., 5.13%, 8/15/27, Callable 8/15/22 @ 102.56 (a) | 1,667 | 1,717 | |||||||||
CSC Holdings LLC 5.38%, 2/1/28, Callable 2/1/23 @ 102.69 (a) | 1,000 | 1,066 | |||||||||
7.50%, 4/1/28, Callable 4/1/23 @ 103.75 (a) | 3,000 | 3,410 | |||||||||
6.50%, 2/1/29, Callable 2/1/24 @ 103.25 (a) | 4,500 | 5,013 | |||||||||
5.75%, 1/15/30, Callable 1/15/25 @ 102.88 (a) | 11,000 | 11,818 | |||||||||
Dish DBS Corp. 5.00%, 3/15/23 | 5,000 | 5,084 | |||||||||
5.88%, 11/15/24 | 6,000 | 6,073 | |||||||||
7.75%, 7/1/26 | 7,000 | 7,350 | |||||||||
Embarq Corp., 8.00%, 6/1/36 | 5,000 | 5,554 | |||||||||
Frontier Communications Corp. 11.00%, 9/15/25, Callable 6/15/25 @ 100 | 10,000 | 4,587 | |||||||||
8.50%, 4/1/26, Callable 4/1/21 @ 106.38 (a) | 4,000 | 4,086 | |||||||||
9.00%, 8/15/31 | 9,000 | 4,115 | |||||||||
Getty Images, Inc., 9.75%, 3/1/27, Callable 3/1/22 @ 104.88 (a) | 1,500 | 1,508 | |||||||||
Iheartcommunications, Inc. 6.38%, 5/1/26, Callable 5/1/22 @ 103.19 (e) | 394 | 427 | |||||||||
8.38%, 5/1/27, Callable 5/1/22 @ 104.19 | 3,714 | 4,042 | |||||||||
Meredith Corp., 6.88%, 2/1/26, Callable 2/1/21 @ 103.44 | 5,000 | 5,153 | |||||||||
National CineMedia LLC, 5.75%, 8/15/26, Callable 8/15/21 @ 102.88 | 5,000 | 4,956 | |||||||||
Netflix, Inc. 4.88%, 4/15/28 | 5,000 | 5,344 | |||||||||
3.88%, 6/15/30, Callable 3/15/30 @ 100 (a) | 2,500 | 2,611 | |||||||||
Nexstar Escrow, Inc., 5.63%, 7/15/27, Callable 7/15/22 @ 104.22 (a) | 3,000 | 3,155 | |||||||||
Radiate Holdco LLC/Radiate Finance, Inc., 6.88%, 2/15/23, Callable 3/9/20 @ 103.44 (a) | 3,000 | 3,076 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Salem Media Group, Inc., 6.75%, 6/1/24, Callable 6/1/20 @ 103.38 (a) (e) | $ | 5,000 | $ | 4,852 | |||||||
Scripps Escrow, Inc., 5.88%, 7/15/27, Callable 7/15/22 @ 104.41 (a) | 1,000 | 1,050 | |||||||||
Sinclair Television Group, Inc., 5.50%, 3/1/30, Callable 12/1/24 @ 102.75 (a) | 8,000 | 8,214 | |||||||||
Sprint Corp. 7.63%, 2/15/25, Callable 11/15/24 @ 100 (g) | 20,000 | 20,921 | |||||||||
7.63%, 3/1/26, Callable 11/1/25 @ 100 | 10,000 | 10,441 | |||||||||
T-Mobile USA, Inc. 6.50%, 1/15/24, Callable 2/18/20 @ 102.17 | 5,000 | 5,134 | |||||||||
6.00%, 4/15/24, Callable 2/18/20 @ 104.5 | 5,000 | 5,163 | |||||||||
4.75%, 2/1/28, Callable 2/1/23 @ 102.38 | 10,000 | 10,641 | |||||||||
Trilogy International Partners LLC/Trilogy International Finance, Inc., 8.88%, 5/1/22, Callable 3/9/20 @ 104.44 (a) | 2,500 | 2,328 | |||||||||
Windstream Services LLC/Windstream Finance Corp., 9.00%, 6/30/25, Callable 6/30/21 @ 104.5 (a) (k) (n) | 3,000 | 1,150 | |||||||||
Zayo Group LLC/Zayo Capital, Inc. 6.38%, 5/15/25, Callable 5/15/20 @ 103.19 | 5,000 | 5,114 | |||||||||
5.75%, 1/15/27, Callable 1/15/22 @ 102.88 (a) | 500 | 511 | |||||||||
219,872 | |||||||||||
Consumer Discretionary (6.9%): | |||||||||||
Ashton Woods USA LLC/Ashton Woods Finance Co. 6.75%, 8/1/25, Callable 8/1/20 @ 105.06 (a) | 4,000 | 4,130 | |||||||||
9.88%, 4/1/27, Callable 4/1/22 @ 107.41 (a) | 2,000 | 2,303 | |||||||||
Beazer Homes USA, Inc., 7.25%, 10/15/29, Callable 10/15/24 @ 103.63 (a) | 10,000 | 10,926 | |||||||||
CEC Entertainment, Inc., 8.00%, 2/15/22, Callable 3/9/20 @ 100 | 5,000 | 4,932 | |||||||||
Sports Group LLC, 6.63%, 8/15/27, Callable 8/15/22 @ 103.31 (a) (e) | 3,000 | 2,808 | |||||||||
Eldorado Resorts, Inc. 7.00%, 8/1/23, Callable 3/9/20 @ 103.5 | 2,000 | 2,076 | |||||||||
6.00%, 4/1/25, Callable 4/1/20 @ 104.5 | 2,500 | 2,620 | |||||||||
Ford Motor Co., 6.63%, 10/1/28 | 10,000 | 11,450 | |||||||||
Golden Nugget, Inc., 8.75%, 10/1/25, Callable 10/1/20 @ 104.38 (a) | 10,000 | 10,528 | |||||||||
L Brands, Inc., 6.95%, 3/1/33 | 5,000 | 4,519 | |||||||||
LGI Homes, Inc., 6.88%, 7/15/26, Callable 7/15/21 @ 103.44 (a) | 2,500 | 2,638 | |||||||||
M/I Homes, Inc., 4.95%, 2/1/28, Callable 2/1/23 @ 103.71 (a) | 3,000 | 3,090 | |||||||||
Mattel, Inc., 6.75%, 12/31/25, Callable 12/31/20 @ 105.06 (a) | 3,000 | 3,217 | |||||||||
Midas Intermediate Holdco II LLC/Midas Intermediate Holdco II Finance, Inc., 7.88%, 10/1/22, Callable 2/24/20 @ 100 (a) | 4,733 | 4,530 | |||||||||
Newell Brands, Inc., 5.37%, 4/1/36, Callable 10/1/35 @ 100 (o) | 3,500 | 3,840 | |||||||||
Panther BF Aggregator 2 LP/Panther Finance Co., Inc., 8.50%, 5/15/27, Callable 5/15/22 @ 104.25 (a) | 7,500 | 8,063 | |||||||||
Party City Holdings, Inc., 6.63%, 8/1/26, Callable 8/1/21 @ 103.31 (a) (e) | 3,000 | 2,149 | |||||||||
PetSmart, Inc. 7.13%, 3/15/23, Callable 3/9/20 @ 103.56 (a) | 5,000 | 4,980 | |||||||||
8.88%, 6/1/25, Callable 6/1/20 @ 104.44 (a) (e) | 3,000 | 3,075 | |||||||||
5.88%, 6/1/25, Callable 6/1/20 @ 102.94 (a) | 1,670 | 1,719 | |||||||||
Scientific Games International, Inc., 8.25%, 3/15/26, Callable 3/15/22 @ 104.13 (a) | 10,000 | 10,796 | |||||||||
Taylor Morrison Communities, Inc., 5.75%, 1/15/28, Callable 10/15/27 @ 100 (a) | 5,000 | 5,469 | |||||||||
Tesla, Inc., 5.30%, 8/15/25, Callable 8/15/20 @ 103.98 (a) (e) | 5,000 | 5,060 | |||||||||
The Men's Wearhouse, Inc., 7.00%, 7/1/22, Callable 3/9/20 @ 101.75 (e) | 5,162 | 5,086 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Trident TPI Holdings, Inc., 6.63%, 11/1/25, Callable 11/1/20 @ 103.31 (a) | $ | 3,000 | $ | 2,730 | |||||||
USA Compression Partners LP/USA Compression Finance Corp., 6.88%, 9/1/27, Callable 9/1/22 @ 105.16 | 3,000 | 3,130 | |||||||||
Weekley Homes LLC/Weekley Finance Corp., 6.63%, 8/15/25, Callable 8/15/20 @ 104.97 | 5,000 | 5,232 | |||||||||
Williams Scotsman International, Inc., 6.88%, 8/15/23, Callable 8/15/20 @ 103.44 (a) | 3,000 | 3,151 | |||||||||
Yum! Brands, Inc., 4.75%, 1/15/30, Callable 10/15/29 @ 100 (a) | 4,000 | 4,274 | |||||||||
138,521 | |||||||||||
Consumer Staples (2.2%): | |||||||||||
Albertsons Cos. LLC, 5.75%, 3/15/25, Callable 3/9/20 @ 104.31 | 12,000 | 12,450 | |||||||||
Constellation Merger Sub, Inc., 8.50%, 9/15/25, Callable 9/15/20 @ 104.25 (a) (e) | 3,000 | 2,732 | |||||||||
Coty, Inc., 6.50%, 4/15/26, Callable 4/15/21 @ 104.88 (a) (e) | 5,000 | 5,251 | |||||||||
Energizer Holdings, Inc., 7.75%, 1/15/27, Callable 1/15/22 @ 103.88 (a) | 3,000 | 3,318 | |||||||||
H-Food Holdings LLC/Hearthside Finance Co., Inc., 8.50%, 6/1/26, Callable 6/1/21 @ 104.25 (a) | 4,000 | 3,531 | |||||||||
JBS Investments II GMBH, 5.75%, 1/15/28, Callable 7/15/22 @ 102.88 (a) | 1,500 | 1,585 | |||||||||
JBS USA Lux SA/JBS USA Finance, Inc., 5.88%, 7/15/24, Callable 3/9/20 @ 102.94 (a) | 3,000 | 3,086 | |||||||||
NBM US Holdings, Inc., 6.63%, 8/6/29, Callable 8/6/24 @ 103.31 (a) | 3,000 | 3,229 | |||||||||
Pilgrim's Pride Corp., 5.88%, 9/30/27, Callable 9/30/22 @ 102.94 (a) | 3,000 | 3,189 | |||||||||
Post Holdings, Inc. 5.75%, 3/1/27, Callable 3/1/22 @ 102.88 (a) | 3,000 | 3,166 | |||||||||
5.50%, 12/15/29, Callable 12/15/24 @ 102.75 (a) (e) | 2,500 | 2,652 | |||||||||
44,189 | |||||||||||
Energy (7.4%): | |||||||||||
Alliance Resource Operating Partners LP/Alliance Resource Finance Corp., 7.50%, 5/1/25, Callable 5/1/20 @ 105.63 (a) (e) | 5,000 | 4,325 | |||||||||
Antero Midstream Partners LP/Antero Midstream Finance Corp., 5.75%, 3/1/27, Callable 3/1/22 @ 102.88 (a) | 3,000 | 2,345 | |||||||||
Antero Resources Corp., 5.63%, 6/1/23, Callable 3/9/20 @ 102.81 | 3,000 | 2,158 | |||||||||
Blue Racer Midstream LLC/Blue Racer Finance Corp., 6.13%, 11/15/22, Callable 3/9/20 @ 101.53 (a) | 5,000 | 4,892 | |||||||||
Buckeye Partners LP, 5.60%, 10/15/44, Callable 4/15/44 @ 100 | 12,754 | 11,737 | |||||||||
California Resources Corp., 8.00%, 12/15/22, Callable 3/9/20 @ 102 (a) | 2,662 | 903 | |||||||||
Carrizo Oil & Gas, Inc., 8.25%, 7/15/25, Callable 7/15/20 @ 106.19 | 3,000 | 3,061 | |||||||||
Citgo Holding, Inc., 9.25%, 8/1/24, Callable 8/1/21 @ 104.63 (a) | 1,000 | 1,075 | |||||||||
Citgo Petroleum Corp., 6.25%, 8/15/22, Callable 3/9/20 @ 101.56 (a) | 1,875 | 1,900 | |||||||||
CONSOL Energy, Inc., 11.00%, 11/15/25, Callable 11/15/21 @ 105.5 (a) (e) | 5,000 | 3,489 | |||||||||
CSI Compressco LP/CSI Compressco Finance, Inc., 7.25%, 8/15/22, Callable 3/9/20 @ 101.81 | 5,000 | 4,716 | |||||||||
Diamond Offshore Drilling, Inc., 7.88%, 8/15/25, Callable 5/15/25 @ 100 (e) | 3,500 | 2,852 | |||||||||
Energy Transfer Operating LP 7.13%(H15T5Y+531bps), Callable 5/15/30 @ 100 (c) (j) | 3,000 | 3,055 | |||||||||
4.93%(LIBOR03M+302bps), 11/1/66, Callable 3/16/20 @ 100 (c) | 3,000 | 2,449 | |||||||||
Enlink Midstream Partners LP, 6.00%(LIBOR03M+411bps), Callable 12/15/22 @ 100 (c) (j) | 7,000 | 4,887 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Enterprise Products Operating LLC, 4.68%(LIBOR03M+278bps), 6/1/67, Callable 3/9/20 @ 100 (c) | $ | 3,000 | $ | 2,931 | |||||||
Enterprise TE Partners LP, 4.68%(LIBOR03M+278bps), 6/1/67, Callable 3/9/20 @ 100 (c) | 3,000 | 2,798 | |||||||||
EQT Corp., 7.00%, 2/1/30, Callable 10/1/29 @ 100 | 1,821 | 1,603 | |||||||||
GenOn Energy, Inc., 9.88%, 10/15/20 (h) | 7,000 | — | |||||||||
Hess Midstream Partners LP, 5.13%, 6/15/28, Callable 6/15/23 @ 102.56 (a) | 2,000 | 2,064 | |||||||||
Highpoint Operating Corp., 7.00%, 10/15/22, Callable 3/9/20 @ 101.17 (e) | 6,000 | 5,689 | |||||||||
Hilcorp Energy I, LP/Hilcorp Finance Co., 6.25%, 11/1/28, Callable 11/1/23 @ 103.13 (a) | 3,000 | 2,663 | |||||||||
Martin Midstream Partners, LP/Martin Midstream Finance Corp., 7.25%, 2/15/21, Callable 3/9/20 @ 100 | 3,000 | 2,759 | |||||||||
MPLX LP, 6.88%(LIBOR03M+465bps), Callable 2/15/23 @ 100 (c) (j) | 5,000 | 5,040 | |||||||||
Murphy Oil Corp. 6.88%, 8/15/24, Callable 3/9/20 @ 105.16 | 4,000 | 4,180 | |||||||||
5.75%, 8/15/25, Callable 8/15/20 @ 104.31 | 3,000 | 3,087 | |||||||||
Nabors Industries, Inc., 5.75%, 2/1/25, Callable 11/1/24 @ 100 | 3,500 | 2,898 | |||||||||
Natural Resource Partners LP/NRP Finance Corp., 9.13%, 6/30/25, Callable 10/30/21 @ 104.56 (a) (e) | 500 | 449 | |||||||||
NGL Energy Partners LP/NGL Energy Finance Corp., 7.50%, 4/15/26, Callable 4/15/22 @ 103.75 (a) | 5,000 | 4,851 | |||||||||
PBF Holding Co. LLC/PBF Finance Corp., 7.25%, 6/15/25, Callable 6/15/20 @ 105.44 | 5,000 | 5,315 | |||||||||
Petroleos Mexicanos, 6.63%, 6/15/35 | 15,000 | 15,663 | |||||||||
Range Resources Corp., 4.88%, 5/15/25, Callable 2/15/25 @ 100 (e) | 5,000 | 3,902 | |||||||||
Rex Energy Corp., 8.00%, 10/1/20 (i) | 2,408 | 18 | |||||||||
Rowan Companies, Inc., 7.38%, 6/15/25, Callable 3/15/25 @ 100 | 3,500 | 2,218 | |||||||||
Southern Union Co., 4.93%(LIBOR03M+302bps), 11/1/66, Callable 3/9/20 @ 100 (c) | 2,000 | 1,469 | |||||||||
Southwestern Energy Co. 4.10%, 3/15/22, Callable 12/15/21 @ 100 (e) | 3,000 | 2,950 | |||||||||
6.20%, 1/23/25, Callable 10/23/24 @ 100 (o) | 7,000 | 5,821 | |||||||||
7.75%, 10/1/27, Callable 10/1/22 @ 103.88 (e) | 2,000 | 1,669 | |||||||||
SRC Energy, Inc., 6.25%, 12/1/25, Callable 12/1/20 @ 104.69 | 5,000 | 5,043 | |||||||||
Targa Resources Partners LP/Targa Resources Partners Finance Corp., 5.00%, 1/15/28, Callable 1/15/23 @ 102.5 | 4,000 | 4,071 | |||||||||
Whiting Petroleum Corp., 6.63%, 1/15/26, Callable 10/15/25 @ 100 | 7,000 | 3,942 | |||||||||
WPX Energy, Inc., 8.25%, 8/1/23, Callable 6/1/23 @ 100 | 3,000 | 3,453 | |||||||||
150,390 | |||||||||||
Financials (8.3%): | |||||||||||
Adient Global Holdings Corp., 4.88%, 8/15/26, Callable 8/15/21 @ 102.44 (a) | 7,000 | 6,602 | |||||||||
AmTrust Financial Services, Inc., 6.13%, 8/15/23 | 10,000 | 10,136 | |||||||||
AmWINS Group, Inc., 7.75%, 7/1/26, Callable 7/1/21 @ 105.81 (a) | 4,000 | 4,371 | |||||||||
Banc of California, Inc., 5.25%, 4/15/25, Callable 1/15/25 @ 100 | 5,000 | 5,129 | |||||||||
Bank OZK, 5.50%(LIBOR03M+443bps), 7/1/26, Callable 7/1/21 @ 100 (c) | 5,000 | 5,177 | |||||||||
Credit Acceptance Corp. 5.13%, 12/31/24, Callable 12/31/21 @ 102.56 (a) | 4,000 | 4,181 | |||||||||
6.63%, 3/15/26, Callable 3/15/22 @ 103.31 (a) | 9,750 | 10,561 | |||||||||
First Midwest Bancorp, Inc., 5.88%, 9/29/26, Callable 8/29/26 @ 100 | 5,000 | 5,707 |
See notes to financial statements.
11
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Flex Acquisition Co., Inc. 6.88%, 1/15/25, Callable 3/9/20 @ 103.44 (a) | $ | 3,150 | $ | 3,165 | |||||||
7.88%, 7/15/26, Callable 7/15/21 @ 103.94 (a) | 2,000 | 2,038 | |||||||||
Ford Motor Credit Co. LLC, 5.11%, 5/3/29, Callable 2/3/29 @ 100 | 10,000 | 10,464 | |||||||||
Genworth Holdings, Inc., 3.91%(LIBOR03M+200bps), 11/15/66, Callable 2/24/20 @ 100 (c) | 3,000 | 1,890 | |||||||||
HUB International Ltd., 7.00%, 5/1/26, Callable 5/1/21 @ 103.5 (a) | 5,000 | 5,166 | |||||||||
ILFC E-Capital Trust II, 4.15%, 12/21/65, Callable 3/9/20 @ 100 (a) | 5,362 | 4,425 | |||||||||
LABL Escrow Issuer LLC 6.75%, 7/15/26, Callable 7/15/22 @ 103.38 (a) | 1,000 | 1,073 | |||||||||
10.50%, 7/15/27, Callable 7/15/22 @ 105.25 (a) | 2,000 | 2,120 | |||||||||
Lehman Brothers Holdings, 5.75%, 4/25/11, MTN (i) (n) | 1,000 | 13 | |||||||||
Lehman Brothers Treasury Co. BV, MTN (j) (p) | 1,447 | 15 | |||||||||
MetLife, Inc., 10.75%, 8/1/69, Callable 8/1/34 @ 100 | 2,000 | 3,352 | |||||||||
Navient Corp. 6.75%, 6/25/25 (e) | 7,000 | 7,643 | |||||||||
6.75%, 6/15/26 | 5,000 | 5,445 | |||||||||
5.63%, 8/1/33, MTN | 13,000 | 11,860 | |||||||||
PPL Capital Funding, Inc., 4.63%(LIBOR03M+267bps), 3/30/67, Callable 3/16/20 @ 100 (c) | 5,000 | 4,883 | |||||||||
Prudential Financial, Inc., 5.20%(LIBOR03M+304bps), 3/15/44, Callable 3/15/24 @ 100 (c) | 5,000 | 5,336 | |||||||||
Resideo Funding, Inc., 6.13%, 11/1/26, Callable 11/1/21 @ 104.59 (a) (e) | 1,500 | 1,476 | |||||||||
SBL Holdings, Inc., 5.13%, 11/13/26, Callable 9/13/26 @ 100 (a) | 5,000 | 5,133 | |||||||||
Springleaf Finance Corp. 7.13%, 3/15/26 | 9,000 | 10,339 | |||||||||
6.63%, 1/15/28, Callable 7/15/27 @ 100 | 1,000 | 1,128 | |||||||||
5.38%, 11/15/29, Callable 5/15/29 @ 100 | 3,500 | 3,642 | |||||||||
Synovus Financial Corp., 5.90%(USSW5+338bps), 2/7/29, Callable 2/7/24 @ 100 (c) | 10,000 | 10,714 | |||||||||
The Hanover Insurance Group, Inc., 8.21%, 2/3/27 | 3,780 | 4,446 | |||||||||
The Hartford Financial Services Group, Inc., 4.03%(LIBOR03M+213bps), 2/12/67, Callable 3/16/20 @ 100 (a) (c) | 5,000 | 4,813 | |||||||||
Zenith National Insurance Capital Trust I, 8.55%, 8/1/28 (a) | 2,000 | 2,402 | |||||||||
164,845 | |||||||||||
Health Care (6.4%): | |||||||||||
Bausch Health Cos., Inc. 5.00%, 1/30/28, Callable 1/30/23 @ 102.5 (a) | 3,133 | 3,169 | |||||||||
5.25%, 1/30/30, Callable 1/30/25 @ 102.63 (a) | 13,370 | 13,608 | |||||||||
Centene Corp., 4.63%, 12/15/29, Callable 12/15/24 @ 102.31 (a) | 1,500 | 1,616 | |||||||||
CHS, Inc. 6.88%, 2/1/22, Callable 3/9/20 @ 100 (e) | 3,339 | 3,055 | |||||||||
8.00%, 3/15/26, Callable 3/15/22 @ 104 (a) | 20,000 | 20,865 | |||||||||
CHS/Community Health System, 6.63%, 2/15/25, Callable 2/15/22 @ 103.31 (a) (m) | 6,000 | 6,058 | |||||||||
DaVita, Inc. 5.13%, 7/15/24, Callable 2/24/20 @ 102.56 | 3,000 | 3,067 | |||||||||
5.00%, 5/1/25, Callable 5/1/20 @ 102.5 | 5,000 | 5,119 | |||||||||
Eastern Maine Healthcare Systems, 5.02%, 7/1/36 | 3,000 | 3,127 | |||||||||
Encompass Health Corp., 5.75%, 9/15/25, Callable 9/15/20 @ 102.88 | 2,000 | 2,090 |
See notes to financial statements.
12
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
HCA, Inc., 5.63%, 9/1/28, Callable 3/1/28 @ 100 | $ | 14,500 | $ | 16,802 | |||||||
Mednax, Inc., 6.25%, 1/15/27, Callable 1/15/22 @ 104.69 (a) | 5,000 | 5,096 | |||||||||
Ortho-Clinical Diagnostics, Inc./Ortho-Clinical Diagnostics SA, 7.25%, 2/1/28, Callable 2/1/23 @ 103.63 (a) | 1,000 | 1,017 | |||||||||
Par Pharmaceutical, Inc., 7.50%, 4/1/27, Callable 4/1/22 @ 105.63 (a) | 5,250 | 5,332 | |||||||||
RegionalCare Hospital Partners Holdings, Inc., 8.25%, 5/1/23, Callable 3/9/20 @ 106.19 (a) | 10,000 | 10,501 | |||||||||
Select Medical Corp., 6.25%, 8/15/26, Callable 8/15/22 @ 103.13 (a) | 5,000 | 5,400 | |||||||||
Tenet Healthcare Corp. 6.75%, 6/15/23 | 14,000 | 15,186 | |||||||||
7.00%, 8/1/25, Callable 8/1/20 @ 103.5 (e) | 6,425 | 6,674 | |||||||||
127,782 | |||||||||||
Industrials (5.0%): | |||||||||||
ADT Security Corp., 4.88%, 7/15/32 (a) | 3,500 | 3,253 | |||||||||
Advanced Drainage Systems, Inc., 5.00%, 9/30/27, Callable 9/30/22 @ 102.5 (a) | 1,000 | 1,036 | |||||||||
Ahern Rentals, Inc., 7.38%, 5/15/23, Callable 3/9/20 @ 103.69 (a) | 3,000 | 2,402 | |||||||||
Aptim Corp., 7.75%, 6/15/25, Callable 6/15/20 @ 103.88 (a) (e) | 3,312 | 2,070 | |||||||||
Arconic, Inc., 5.95%, 2/1/37 | 5,000 | 5,574 | |||||||||
Brand Energy & Infrastructure Services, Inc., 8.50%, 7/15/25, Callable 7/15/20 @ 106.34 (a) | 4,000 | 4,023 | |||||||||
Builders FirstSource, Inc., 6.75%, 6/1/27, Callable 6/1/22 @ 103.38 (a) | 2,333 | 2,556 | |||||||||
Covanta Holding Corp., 5.88%, 7/1/25, Callable 7/1/20 @ 104.41 | 3,000 | 3,117 | |||||||||
Gates Global LLC/Gates Corp., 6.25%, 1/15/26, Callable 1/15/22 @ 103.13 (a) | 3,000 | 3,087 | |||||||||
General Electric Co., 5.00%(LIBOR03M+333bps), Callable 1/21/21 @ 100 (c) (j) | 5,000 | 4,968 | |||||||||
H&E Equipment Services, Inc., 5.63%, 9/1/25, Callable 9/1/20 @ 104.22 | 2,000 | 2,089 | |||||||||
Hertz Corp. 7.63%, 6/1/22, Callable 3/9/20 @ 103.81 (a) | 2,000 | 2,071 | |||||||||
6.00%, 1/15/28, Callable 1/15/23 @ 103 (a) | 5,000 | 5,043 | |||||||||
IAA, Inc., 5.50%, 6/15/27, Callable 6/15/22 @ 102.75 (a) | 2,250 | 2,393 | |||||||||
Icahn Enterprises LP/Icahn Enterprises Finance Corp., 5.25%, 5/15/27, Callable 11/15/26 @ 100 (a) | 4,000 | 4,013 | |||||||||
JB Poindexter & Co., Inc., 7.13%, 4/15/26, Callable 4/15/21 @ 105.34 (a) | 3,000 | 3,218 | |||||||||
Matthews International C, 5.25%, 12/1/25, Callable 12/1/20 @ 103.94 (a) | 3,500 | 3,509 | |||||||||
Prime Security Services Borrower LLC/Prime Finance, Inc., 6.25%, 1/15/28, Callable 1/15/23 @ 103.13 (a) | 8,000 | 7,896 | |||||||||
RR Donnelley & Sons Co., 6.00%, 4/1/24 | 3,000 | 3,061 | |||||||||
Textron Financial Corp., 3.64%(LIBOR03M+174bps), 2/15/42, Callable 2/24/20 @ 100 (a) (c) | 5,000 | 4,098 | |||||||||
Titan International, Inc., 6.50%, 11/30/23, Callable 3/9/20 @ 104.88 | 3,000 | 2,657 | |||||||||
TransDigm, Inc. 7.50%, 3/15/27, Callable 3/15/22 @ 103.75 | 5,000 | 5,471 | |||||||||
5.50%, 11/15/27, Callable 11/15/22 @ 102.75 (a) | 9,000 | 9,064 | |||||||||
United Rentals North America, Inc., 5.50%, 5/15/27, Callable 5/15/22 @ 102.75 | 3,000 | 3,192 | |||||||||
Univar Solutions USA, Inc., 5.13%, 12/1/27, Callable 12/1/22 @ 102.56 (a) | 1,000 | 1,040 | |||||||||
Waste Pro USA, Inc., 5.50%, 2/15/26, Callable 2/15/21 @ 104.13 (a) | 3,000 | 3,090 | |||||||||
XPO Logistics, Inc., 6.75%, 8/15/24, Callable 8/15/21 @ 103.38 (a) | 5,333 | 5,761 | |||||||||
Zekelman Industries, Inc., 9.88%, 6/15/23, Callable 3/9/20 @ 104.94 (a) | 1,198 | 1,259 | |||||||||
101,011 |
See notes to financial statements.
13
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Information Technology (1.9%): | |||||||||||
CommScope Technologies LLC 6.00%, 6/15/25, Callable 6/15/20 @ 103 (a) | $ | 6,000 | $ | 5,746 | |||||||
5.00%, 3/15/27, Callable 3/15/22 @ 102.5 (a) | 12,000 | 10,814 | |||||||||
GTT Communications, Inc., 7.88%, 12/31/24, Callable 3/9/20 @ 105.91 (a) | 1,000 | 780 | |||||||||
Itron, Inc., 5.00%, 1/15/26, Callable 1/15/21 @ 102.5 (a) | 1,500 | 1,557 | |||||||||
NCR Corp., 6.13%, 9/1/29, Callable 9/1/24 @ 103.06 (a) | 1,500 | 1,637 | |||||||||
Refinitiv US Holdings, 6.25%, 5/15/26, Callable 11/15/21 @ 103.13 (a) | 3,000 | 3,251 | |||||||||
Solera LLC/Solera Finance, Inc., 10.50%, 3/1/24, Callable 3/9/20 @ 105.25 (a) | 3,500 | 3,709 | |||||||||
Sophia, LP/Sophia Finance, Inc., 9.00%, 9/30/23, Callable 3/9/20 @ 102.25 (a) | 6,000 | 6,163 | |||||||||
Veritas US, Inc., 10.50%, 2/1/24, Callable 2/18/20 @ 105.25 (a) (e) | 1,500 | 1,380 | |||||||||
Western Digital Corp., 4.75%, 2/15/26, Callable 11/15/25 @ 100 | 3,000 | 3,202 | |||||||||
38,239 | |||||||||||
Materials (5.2%): | |||||||||||
AK Steel Corp., 6.38%, 10/15/25, Callable 10/15/20 @ 103.19 (e) | 7,417 | 7,284 | |||||||||
Allegheny Ludlum LLC, 6.95%, 12/15/25 | 10,456 | 11,151 | |||||||||
Allegheny Technologies, Inc., 5.88%, 12/1/27, Callable 12/1/22 @ 102.94 | 500 | 510 | |||||||||
Bway Holding Co., 7.25%, 4/15/25, Callable 4/15/20 @ 103.63 (a) | 10,000 | 9,951 | |||||||||
Compass Minerals International, Inc., 6.75%, 12/1/27, Callable 12/1/22 @ 103.38 (a) | 4,000 | 4,286 | |||||||||
Freeport-McMoRan, Inc., 5.45%, 3/15/43, Callable 9/15/42 @ 100 | 10,000 | 10,190 | |||||||||
Kraton Polymers LLC/Kraton Polymers Capital Corp., 7.00%, 4/15/25, Callable 4/15/20 @ 105.25 (a) | 3,000 | 3,060 | |||||||||
Kronos Acquisition Holdings, Inc., 9.00%, 8/15/23, Callable 3/9/20 @ 104.5 (a) | 8,000 | 7,676 | |||||||||
New Enterprise Stone & Lime Co., Inc. | |||||||||||
10.13%, 4/1/22, Callable 3/9/20 @ 107.59 (a) | 2,000 | 2,101 | |||||||||
6.25%, 3/15/26, Callable 3/15/21 @ 103.13 (a) | 1,000 | 1,048 | |||||||||
Novelis Corp., 4.75%, 1/30/30, Callable 1/30/25 @ 102.38 (a) | 5,000 | 5,026 | |||||||||
Olin Corp., 5.00%, 2/1/30, Callable 2/1/24 @ 102.5 | 5,000 | 5,090 | |||||||||
Plastipak Holdings, Inc., 6.25%, 10/15/25, Callable 10/15/20 @ 103.13 (a) (e) | 3,000 | 2,643 | |||||||||
Reynolds Group Issuer, Inc., 7.00%, 7/15/24, Callable 3/16/20 @ 103.5 (a) | 3,250 | 3,346 | |||||||||
Sealed Air Corp., 6.88%, 7/15/33 (a) | 3,000 | 3,565 | |||||||||
SunCoke Energy Partners, LP/SunCoke Energy Partners Finance Corp., 7.50%, 6/15/25, Callable 6/15/20 @ 105.63 (a) | 5,000 | 4,831 | |||||||||
The Chemours Co., 5.38%, 5/15/27, Callable 2/15/27 @ 100 | 3,000 | 2,601 | |||||||||
United States Steel Corp., 6.25%, 3/15/26, Callable 3/15/21 @ 103.13 (e) | 10,000 | 8,439 | |||||||||
Venator Finance SARL/Venator Materials LLC, 5.75%, 7/15/25, Callable 7/15/20 @ 104.31 (a) | 5,000 | 4,625 | |||||||||
Warrior Met Coal LLC, 8.00%, 11/1/24, Callable 11/1/20 @ 104 (a) | 7,000 | 7,279 | |||||||||
104,702 | |||||||||||
Real Estate (0.8%): | |||||||||||
Outfront Media Capital LLC/Outfront Media Capital Corp., 4.63%, 3/15/30, Callable 3/15/25 @ 102.31 (a) | 1,000 | 1,031 | |||||||||
Sabra Health Care LP, 5.13%, 8/15/26, Callable 5/15/26 @ 100 | 3,000 | 3,279 | |||||||||
Uniti Group LP/Uniti Group Finance, Inc./CSL Capital LLC, 7.13%, 12/15/24, Callable 3/9/20 @ 105.34 (a) (e) | 2,000 | 1,584 | |||||||||
VICI Properties LP/VICI Note Co., Inc., 4.13%, 8/15/30, Callable 2/15/25 @ 102.06 (a) (m) | 750 | 760 | |||||||||
Washington Prime Group LP, 5.95%, 8/15/24, Callable 6/15/24 @ 100 (e) | 10,000 | 8,915 | |||||||||
15,569 |
See notes to financial statements.
14
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Utilities (1.9%): | |||||||||||
Calpine Corp. 5.75%, 1/15/25, Callable 3/9/20 @ 102.88 | $ | 10,000 | $ | 10,275 | |||||||
4.50%, 2/15/28, Callable 2/15/23 @ 102.25 (a) | 3,000 | 2,974 | |||||||||
Genesis Energy LP, 6.50%, 10/1/25, Callable 10/1/20 @ 104.88 | 4,000 | 3,893 | |||||||||
Genesis Energy LP/Genesis Energy Finance Corp., 7.75%, 2/1/28, Callable 2/1/23 @ 105.81 | 3,500 | 3,528 | |||||||||
NRG Energy, Inc. 7.25%, 5/15/26, Callable 5/15/21 @ 103.63 | 1,500 | 1,623 | |||||||||
5.75%, 1/15/28, Callable 1/15/23 @ 102.88 | 3,000 | 3,232 | |||||||||
Talen Energy Supply LLC, 7.25%, 5/15/27, Callable 5/15/22 @ 103.63 (a) | 3,000 | 3,077 | |||||||||
Vistra Energy Corp., 5.88%, 6/1/23, Callable 3/9/20 @ 101.96 | 5,000 | 5,105 | |||||||||
Vistra Operations Co. LLC, 5.00%, 7/31/27, Callable 7/31/22 @ 102.5 (a) | 5,000 | 5,150 | |||||||||
38,857 | |||||||||||
Total Corporate Bonds (Cost $1,121,727) | 1,143,977 | ||||||||||
Yankee Dollar (19.3%) | |||||||||||
Communication Services (2.2%): | |||||||||||
Altice France SA 7.38%, 5/1/26, Callable 5/1/21 @ 103.69 (a) | 10,000 | 10,665 | |||||||||
8.13%, 2/1/27, Callable 2/1/22 @ 106.09 (a) | 4,000 | 4,477 | |||||||||
Altice Luxembourg SA, 7.63%, 2/15/25, Callable 3/9/20 @ 103.81 (a) | 16,500 | 17,182 | |||||||||
Digicel International Finance Ltd./Digicel Holdings Bermuda Ltd., 8.75%, 5/25/24, Callable 5/25/21 @ 104.38 (a) | 5,000 | 4,976 | |||||||||
Digicel Ltd., 6.00%, 4/15/21, Callable 3/9/20 @ 100 (a) | 3,500 | 2,771 | |||||||||
Telecom Italia Capital SA, 7.20%, 7/18/36 | 5,000 | 6,197 | |||||||||
46,268 | |||||||||||
Consumer Discretionary (1.2%): | |||||||||||
Brookfield Residential Properties, Inc., 6.38%, 5/15/25, Callable 5/15/20 @ 103.19 (a) | 3,000 | 3,113 | |||||||||
Cirsa Finance International S.A.R.L, 7.88%, 12/20/23, Callable 6/20/20 @ 103.94 (a) | 2,702 | 2,853 | |||||||||
IHO Verwaltungs GMBH PIK, 6.38%, 5/15/29, Callable 5/15/24 @ 103.19 (a) (t) | 3,000 | 3,279 | |||||||||
Mattamy Group Corp., 6.50%, 10/1/25, Callable 10/1/20 @ 104.88 (a) | 1,250 | 1,337 | |||||||||
Melco Reosrts Finance Ltd., 5.38%, 12/4/29, Callable 12/4/24 @ 102.69 (a) | 3,000 | 3,014 | |||||||||
Wynn Macau Ltd., 5.13%, 12/15/29, Callable 12/15/24 @ 102.56 (a) (e) | 3,000 | 2,975 | |||||||||
YPSO Finance BIS SA, 6.00%, 2/15/28 (m) | 10,000 | 9,891 | |||||||||
26,462 | |||||||||||
Consumer Staples (0.9%): | |||||||||||
Avon International Capital PLC, 6.50%, 8/15/22, Callable 3/16/20 @ 103.94 (a) | 7,000 | 7,255 | |||||||||
JBS USA LUX SA/JBS USA Finance, Inc., 6.75%, 2/15/28, Callable 2/15/23 @ 103.38 (a) | 6,000 | 6,659 | |||||||||
Minerva Luxembourg SA, 5.88%, 1/19/28, Callable 1/19/23 @ 102.94 (a) | 3,000 | 3,167 | |||||||||
NBM US Holdings, Inc., 7.00%, 5/14/26, Callable 5/14/22 @ 103.5 | 800 | 858 | |||||||||
17,939 |
See notes to financial statements.
15
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Energy (2.7%): | |||||||||||
Baytex Energy Corp., 8.75%, 4/1/27, Callable 4/1/23 @ 106.56 (a) (m) | $ | 3,000 | $ | 2,920 | |||||||
Hunt Oil Co. of Peru LLC Sucursal Del Peru, 6.38%, 6/1/28 (a) | 3,060 | 3,318 | |||||||||
Meg Energy Corp., 7.00%, 3/31/24, Callable 3/9/20 @ 102.33 (a) | 8,000 | 8,063 | |||||||||
Noble Holding International Ltd., 7.95%, 4/1/25, Callable 1/1/25 @ 100 | 4,250 | 2,034 | |||||||||
Petrobras Global Finance BV, 5.75%, 2/1/29 | 4,093 | 4,727 | |||||||||
Petroleos Maxicanos, 5.95%, 1/28/31, Callable 10/28/30 @ 100 (a) | 3,000 | 3,046 | |||||||||
Petroleos Mexicanos 6.50%, 3/13/27 | 2,000 | 2,166 | |||||||||
6.84%, 1/23/30, Callable 10/23/29 @ 100 (a) | 6,000 | 6,510 | |||||||||
Tecpetrol SA, 4.88%, 12/12/22, Callable 12/12/20 @ 102.44 (a) (e) | 5,000 | 4,916 | |||||||||
Transocean, Inc. 9.00%, 7/15/23 (a) | 4,000 | 4,293 | |||||||||
7.50%, 1/15/26, Callable 1/15/21 @ 105.63 (a) | 4,000 | 3,728 | |||||||||
7.50%, 4/15/31 | 3,750 | 2,733 | |||||||||
Transportadora de Gas del Sur SA, 6.75%, 5/2/25, Callable 5/2/22 @ 103.38 (a) (e) | 5,000 | 4,591 | |||||||||
53,045 | |||||||||||
Financials (4.4%): | |||||||||||
Altice Financing SA, 5.00%, 1/15/28, Callable 1/15/23 @ 102.5 (a) | 5,000 | 4,950 | |||||||||
Altice Finco SA, 7.63%, 2/15/25, Callable 3/9/20 @ 103.81 (a) | 11,500 | 11,959 | |||||||||
BBVA Bancomer SA, 5.88%(H15T5Y+431bps), 9/13/34, Callable 9/13/29 @ 100 (a) (c) | 4,500 | 5,015 | |||||||||
Deutsche Bank AG 4.50%, 4/1/25 | 5,000 | 5,155 | |||||||||
4.30%(USSW5+225bps), 5/24/28, Callable 5/24/23 @ 100 (c) | 2,000 | 1,979 | |||||||||
4.87%(USISDA05+255bps), 12/1/32, Callable 12/1/27 @ 100 (c) | 14,000 | 13,958 | |||||||||
Intelsat Jackson Holdings SA 5.50%, 8/1/23, Callable 3/9/20 @ 101.83 | 5,000 | 4,014 | |||||||||
8.50%, 10/15/24, Callable 10/15/20 @ 106.38 (a) | 5,000 | 4,204 | |||||||||
9.75%, 7/15/25, Callable 7/15/21 @ 104.88 (a) | 5,000 | 4,259 | |||||||||
Intesa Sanpaolo SpA, 5.71%, 1/15/26 (a) | 5,000 | 5,534 | |||||||||
QBE Capital Funding III Ltd., 7.25%(USSW10+405bps), 5/24/41, Callable 5/24/21 @ 100 (a) (c) | 5,000 | 5,281 | |||||||||
Rede D'or Finance Sarl, 4.50%, 1/22/30, Callable 10/22/29 @ 100 (a) | 3,000 | 3,021 | |||||||||
Royal Bank of Scotland Group PLC, 4.26%(LIBOR03M+232bps), Callable 9/30/27 @ 100 (c) (j) | 5,000 | 4,999 | |||||||||
Schahin II Finance Co. SPV Ltd. 8.00%, 5/25/20 (a) (h) | 135 | 125 | |||||||||
5.88%, 9/25/22 (i) (n) | 5,212 | 337 | |||||||||
Transcanada Trust, 5.63%(LIBOR03M+353bps), 5/20/75, Callable 5/20/25 @ 100 (c) | 3,000 | 3,162 | |||||||||
UniCredit SpA, 7.30%(USISDA05+491bps), 4/2/34, Callable 4/2/29 @ 100 (a) (c) | 10,000 | 11,813 | |||||||||
89,765 | |||||||||||
Health Care (1.0%): | |||||||||||
Bausch Health Cos., Inc. 6.13%, 4/15/25, Callable 4/15/20 @ 103.06 (a) | 5,000 | 5,154 | |||||||||
7.25%, 5/30/29, Callable 5/30/24 @ 103.63 (a) | 5,000 | 5,620 |
See notes to financial statements.
16
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Teva Pharmaceutical Finance Netherlands III BV 6.75%, 3/1/28, Callable 12/1/27 @ 100 (e) | $ | 5,000 | $ | 5,217 | |||||||
4.10%, 10/1/46 | 5,000 | 3,843 | |||||||||
19,834 | |||||||||||
Industrials (1.6%): | |||||||||||
Bombardier, Inc. 7.50%, 3/15/25, Callable 3/16/20 @ 103.75 (a) | 15,000 | 14,502 | |||||||||
7.88%, 4/15/27, Callable 4/15/22 @ 103.94 (a) | 10,000 | 9,504 | |||||||||
Latam Airlines Pass Through Trust B, 4.50%, 8/15/25 | 3,059 | 3,065 | |||||||||
Norwe Air Shuttle ASA, 7.50%, 5/10/25 (a) | 3,667 | 3,779 | |||||||||
30,850 | |||||||||||
Materials (4.1%): | |||||||||||
Alcoa Nederland Holding, 6.13%, 5/15/28, Callable 5/15/23 @ 103.06 (a) | 4,000 | 4,218 | |||||||||
ArcelorMittal, 7.00%, 10/15/39 | 10,000 | 12,642 | |||||||||
Ardagh Packaging Finance PLC/Holdings USA, Inc., 6.00%, 2/15/25, Callable 2/18/20 @ 104.5 (a) | 3,000 | 3,134 | |||||||||
Cemex SAB de CV, 5.45%, 11/19/29, Callable 11/19/24 @ 102.73 (a) | 3,000 | 3,197 | |||||||||
Eldorado Gold Corp., 9.50%, 6/1/24, Callable 12/1/21 @ 107.13 (a) | 3,000 | 3,223 | |||||||||
First Quantum Minerals Ltd. 7.50%, 4/1/25, Callable 4/1/20 @ 105.63 (a) | 10,000 | 9,828 | |||||||||
6.88%, 3/1/26, Callable 3/1/21 @ 105.16 (a) | 3,000 | 2,911 | |||||||||
Infrabuild Australia Pty Ltd., 12.00%, 10/1/24, Callable 10/1/21 @ 109 (a) | 3,000 | 3,050 | |||||||||
Methanex Corp., 5.25%, 12/15/29, Callable 9/15/29 @ 100 | 5,000 | 5,261 | |||||||||
Mineral Resources Ltd., 8.13%, 5/1/27, Callable 5/1/22 @ 106.09 (a) | 3,000 | 3,276 | |||||||||
New Gold, Inc., 6.38%, 5/15/25, Callable 5/15/20 @ 104.78 (a) | 1,394 | 1,311 | |||||||||
Smurfit Kappa Treasury Funding DAC, 7.50%, 11/20/25 | 3,200 | 3,980 | |||||||||
Starfruit Finco BV/Starfruit US Holdco LLC, 8.00%, 10/1/26, Callable 10/1/21 @ 104 (a) (e) | 5,000 | 5,249 | |||||||||
Teck Resources Ltd., 6.13%, 10/1/35 | 10,000 | 11,873 | |||||||||
Vedanta Resources Ltd. 8.25%, 6/7/21 (a) | 5,000 | 5,167 | |||||||||
6.38%, 7/30/22 (a) (e) | 3,000 | 2,929 | |||||||||
81,249 | |||||||||||
Sovereign Bond (0.2%): | |||||||||||
Bahamas Government International Bond, 6.00%, 11/21/28, Callable 8/21/28 @ 100 (a) (e) | 3,000 | 3,394 | |||||||||
Utilities (1.0%): | |||||||||||
AES Gener SA, 7.13%(USSW5+464bps), 3/26/79, Callable 4/7/24 @ 100 (a) (c) | 5,000 | 5,368 | |||||||||
Electricite de France SA, 5.25%(USSW10+371bps), Callable 1/29/23 @ 100 (a) (c) (j) | 5,000 | 5,267 | |||||||||
Empresa Electrica Cochrane SpA, 5.50%, 5/14/27 (a) | 3,000 | 3,130 | |||||||||
ENEL SpA, 8.75%(USSW5+588bps), 9/24/73, Callable 9/24/23 @ 100 (a) (c) | 4,975 | 5,876 | |||||||||
19,641 | |||||||||||
Total Yankee Dollar (Cost $369,128) | 388,447 |
See notes to financial statements.
17
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Municipal Bonds (0.2%) | |||||||||||
Illinois (0.1%): | |||||||||||
City of Chicago, GO, Series B, 7.05%, 1/1/29 | $ | 2,000 | $ | 2,308 | |||||||
New Jersey (0.1%): | |||||||||||
South Jersey Transportation Authority Revenue, Series B, 3.36%, 11/1/28 | 1,375 | 1,405 | |||||||||
Total Municipal Bonds (Cost $3,375) | 3,713 | ||||||||||
U.S. Government Agency Mortgages (0.2%) | |||||||||||
Federal Home Loan Mortgage Corp. Series K052 Class A2, 3.15%, 11/25/25 | 3,000 | 3,227 | |||||||||
Total U.S. Government Agency Mortgages (Cost $3,051) | 3,227 | ||||||||||
U.S. Treasury Obligations (0.0%) (f) | |||||||||||
U.S. Treasury Notes, 2.00%, 2/15/25 | 550 | 568 | |||||||||
Total U.S. Treasury Obligations (Cost $545) | 568 | ||||||||||
Exchange-Traded Funds (6.2%) | |||||||||||
iShares iBoxx High Yield Corporate Bond ETF (e) | 724,568 | 63,421 | |||||||||
SPDR Bloomberg Barclays High Yield Bond ETF | 556,281 | 60,657 | |||||||||
Total Exchange-Traded Funds (Cost $119,740) | 124,078 | ||||||||||
Warrants (0.0%) (f) | |||||||||||
Energy (0.0%): | |||||||||||
Sabine Oil & Gas Holdings, Inc. (i) | 1,282 | 17 | |||||||||
Sabine Oil & Gas Holdings, Inc. (i) | 8,785 | 144 | |||||||||
SandRidge Energy, Inc. (i) | 13,764 | — | (l) | ||||||||
SandRidge Energy, Inc. | 5,795 | — | (l) | ||||||||
161 | |||||||||||
Total Warrants (Cost $—) | 161 | ||||||||||
Commercial Paper (6.2%) | |||||||||||
Cabot Corp., 1.73%, 2/6/20 (a) (q) | 7,500 | 7,498 | |||||||||
CSLB Holdings, Inc., 1.72%, 2/3/20 (a) (q) | 16,000 | 15,997 | |||||||||
Duke Energy Corp., 1.69%, 2/6/20 (a) (q) | 5,300 | 5,299 | |||||||||
Eaton Corp., 1.68%, 2/3/20 (a) (q) | 6,700 | 6,699 | |||||||||
Enbridge US, Inc., 1.76%, 2/21/20 (a) (q) | 11,000 | 10,989 | |||||||||
Glencore Funding LLC, 1.89%, 2/10/20 (a) (q) | 12,000 | 11,994 | |||||||||
Hyundai Capital America, 1.69%, 2/5/20 (a) (q) | 15,000 | 14,996 | |||||||||
Kentucky Utilities Co., 1.74%, 2/13/20 (a) (q) | 7,000 | 6,996 | |||||||||
ONEOK, Inc., 1.87%, 2/4/20 (a) (q) | 10,000 | 9,998 | |||||||||
Ontario Power Generation, 1.79%, 2/4/20 (a) (q) | 5,600 | 5,599 | |||||||||
Plains All American Pipeline LP 1.69%, 2/5/20 (a) (q) | 5,200 | 5,199 | |||||||||
1.69%, 2/6/20 (a) (q) | 9,000 | 8,997 | |||||||||
Spire, Inc., 1.68%, 2/3/20 (a) (q) | 15,000 | 14,998 | |||||||||
Total Commercial Paper (Cost $125,264) | 125,259 |
See notes to financial statements.
18
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Collateral for Securities Loaned^ (4.3%) | |||||||||||
HSBC U.S. Government Money Market Fund, I Shares, 1.52% (r) | 85,665,131 | $ | 85,665 | ||||||||
Total Collateral for Securities Loaned (Cost $85,665) | 85,665 | ||||||||||
Total Investments (Cost $2,046,316) — 104.1% | 2,095,949 | ||||||||||
Liabilities in excess of other assets — (4.1)% | (82,649 | ) | |||||||||
NET ASSETS — 100.00% | $ | 2,013,300 |
^ Purchased with cash collateral from securities on loan.
(a) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid based upon procedures approved by the Board of Trustees. As of January 31, 2020, the fair value of these securities was $997,042 thousand and amounted to 49.5% of net assets.
(b) The rate for certain asset-backed and mortgage backed securities may vary based on factors relating to the pool of assets underlying the security. The rate disclosed is the rate in effect at January 31, 2020.
(c) Variable or Floating-Rate Security. Rate disclosed is as of January 31, 2020.
(d) Non-income producing security.
(e) All or a portion of this security is on loan.
(f) Amount represents less than 0.05% of net assets.
(g) All or a portion of this security has been segregated as collateral for securities purchased on a when-issued basis.
(h) Security was fair valued based upon procedures approved by the Board of Trustees and represents 0.2% of the Fund's net assets as of January 31, 2020. This security is classified as Level 3 within the fair value hierarchy. (See Note 2)
(i) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of January 31, 2020, illiquid securities were 0.2% of the Fund's net assets.
(j) Security is perpetual and has no final maturity date but may be subject to calls at various dates in the future.
(k) At January 31, 2020, the issuer was in bankruptcy.
(l) Rounds to less than $1 thousand.
(m) Security purchased on a when-issued basis.
(n) Defaulted security.
(o) Variable Rate Demand Notes that provide the rights to sell the security at face value on either that day or within the rate-reset period. The interest rate is reset on the put date at a stipulated daily, weekly, monthly, quarterly, or other specified time interval to reflect current market conditions. These securities do not indicate a reference rate and spread in their description.
(p) Zero-coupon bond.
See notes to financial statements.
19
USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Unaudited)
(q) Rate represents the effective yield at January 31, 2020.
(r) Rate disclosed is the daily yield on January 31, 2020.
(s) The rates for this senior secured loan will be known on settlement date of the loan, subsequent to this report date. Senior secured loans have rates that will fluctuate over time in line with prevailing interest rates.
(t) 7.125% of coupon is paid in kind.
ADR — American Depositary Receipt
bps — Basis points
ETF — Exchange-Traded Fund
DIP — Debtor in Possesion
GO — General Obligation
H15T5Y — 5 Year Treasury Constant Maturity Rate
LIBOR — London InterBank Offered Rate
LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LIBOR06M — 6 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LLC — Limited Liability Company
LP — Limited Partnership
MTN — Medium Term Note
PIK — Payment in-kind
PLC — Public Limited Company
USISDA05 — 5 Year ICE Swap Rate, rate disclosed as of January 31, 2020
USSW10 — USD 10 Year Swap Rate, rate disclosed as of January 31, 2020
USSW5 — USD 5 Year Swap Rate, rate disclosed as of January 31, 2020
See notes to financial statements.
20
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA High Income Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $2,046,316) | $ | 2,095,949 | (a) | ||||
Deposits with brokers for futures contracts | 53 | ||||||
Receivables: | |||||||
Interest and dividends | 27,362 | ||||||
Capital shares issued | 847 | ||||||
Investments sold | 8,836 | ||||||
From Adviser | 38 | ||||||
Prepaid expenses | 6 | ||||||
Total assets | 2,133,091 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Cash | 4,373 | ||||||
Collateral received on loaned securities | 85,665 | ||||||
Investments purchased | 26,866 | ||||||
Capital shares redeemed | 1,360 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 859 | ||||||
Administration fees | 223 | ||||||
Custodian fees | 118 | ||||||
Transfer agent fees | 165 | ||||||
Compliance fees | — | (b) | |||||
12b-1 fees | 1 | ||||||
Other accrued expenses | 161 | ||||||
Total liabilities | 119,791 | ||||||
Net Assets: | |||||||
Capital | 2,096,863 | ||||||
Total distributable earnings/(loss) | (83,563 | ) | |||||
Net assets | $ | 2,013,300 | |||||
Net Assets: | |||||||
Fund Shares | $ | 1,199,719 | |||||
Institutional Shares | 797,837 | ||||||
Adviser Shares | 10,103 | ||||||
R6 Shares | 5,641 | ||||||
Total | $ | 2,013,300 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 151,378 | ||||||
Institutional Shares | 100,782 | ||||||
Adviser Shares | 1,272 | ||||||
R6 Shares | 712 | ||||||
Total | 254,144 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 7.93 | |||||
Institutional Shares | 7.92 | ||||||
Adviser Shares | 7.94 | ||||||
R6 Shares | 7.92 |
(a) Includes $82,763 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
21
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA High Income Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 8,552 | |||||
Interest | 59,169 | ||||||
Securities lending (net of fees) | 370 | ||||||
Total Income | 68,091 | ||||||
Expenses: | |||||||
Investment advisory fees | 5,130 | ||||||
Administration fees — Fund Shares | 908 | ||||||
Administration fees — Institutional Shares | 413 | ||||||
Administration fees — Adviser Shares | 8 | ||||||
Administration fees — R6 Shares | 1 | ||||||
Sub-Administration fees | 11 | ||||||
12b-1 fees — Adviser Shares | 13 | ||||||
Custodian fees | 113 | ||||||
Transfer agent fees — Fund Shares | 785 | ||||||
Transfer agent fees — Institutional Shares | 413 | ||||||
Transfer agent fees — Adviser Shares | 4 | ||||||
Transfer agent fees — R6 Shares | — | (a) | |||||
Trustees' fees | 22 | ||||||
Compliance fees | 6 | ||||||
Legal and audit fees | 61 | ||||||
State registration and filing fees | 58 | ||||||
Interest expense on Interfund lending | 1 | ||||||
Other expenses | 134 | ||||||
Total Expenses | 8,081 | ||||||
Expenses waived/reimbursed by Adviser | (60 | ) | |||||
Net Expenses | 8,021 | ||||||
Net Investment Income (Loss) | 60,070 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | (48,967 | ) | |||||
Net realized gains (losses) from affiliated security transactions | 41 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | 51,680 | ||||||
Net realized/unrealized gains (losses) on investments | 2,754 | ||||||
Change in net assets resulting from operations | $ | 62,824 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
22
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA High Income Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 60,070 | $ | 126,090 | |||||||
Net realized gains (losses) from investments | (48,926 | ) | (7,451 | ) | |||||||
Net change in unrealized appreciation (depreciation) on investments | 51,680 | (20,776 | ) | ||||||||
Change in net assets resulting from operations | 62,824 | 97,863 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (34,737 | ) | (71,053 | ) | |||||||
Institutional Shares | (23,553 | ) | (55,401 | ) | |||||||
Adviser Shares | (281 | ) | (574 | ) | |||||||
R6 Shares | (158 | ) | (315 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (58,729 | ) | (127,343 | ) | |||||||
Change in net assets resulting from capital transactions | (132,340 | ) | (17,963 | ) | |||||||
Change in net assets | (128,245 | ) | (47,443 | ) | |||||||
Net Assets: | |||||||||||
Beginning of period | 2,141,545 | 2,188,988 | |||||||||
End of period | $ | 2,013,300 | $ | 2,141,545 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 88,528 | $ | 205,681 | |||||||
Distributions reinvested | 32,238 | 66,013 | |||||||||
Cost of shares redeemed | (136,564 | ) | (250,114 | ) | |||||||
Total Fund Shares | $ | (15,798 | ) | $ | 21,580 | ||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 33,575 | $ | 76,300 | |||||||
Distributions reinvested | 22,833 | 53,355 | |||||||||
Cost of shares redeemed | (173,418 | ) | (169,564 | ) | |||||||
Total Institutional Shares | $ | (117,010 | ) | $ | (39,909 | ) | |||||
Adviser Shares | |||||||||||
Proceeds from shares issued | $ | 628 | $ | 926 | |||||||
Distributions reinvested | 128 | 255 | |||||||||
Cost of shares redeemed | (698 | ) | (1,036 | ) | |||||||
Total Adviser Shares | $ | 58 | $ | 145 | |||||||
R6 Shares | |||||||||||
Proceeds from shares issued | $ | 634 | $ | 243 | |||||||
Distributions reinvested | 11 | 9 | |||||||||
Cost of shares redeemed | (235 | ) | (31 | ) | |||||||
Total R6 Shares | $ | 410 | $ | 221 | |||||||
Change in net assets resulting from capital transactions | $ | (132,340 | ) | $ | (17,963 | ) |
(continues on next page)
See notes to financial statements.
23
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands) (continued)
USAA High Income Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 11,243 | 26,154 | |||||||||
Reinvested | 4,097 | 8,428 | |||||||||
Redeemed | (17,345 | ) | (31,952 | ) | |||||||
Total Fund Shares | (2,005 | ) | 2,630 | ||||||||
Institutional Shares | |||||||||||
Issued | 4,261 | 9,714 | |||||||||
Reinvested | 2,904 | 6,820 | |||||||||
Redeemed | (22,080 | ) | (21,566 | ) | |||||||
Total Institutional Shares | (14,915 | ) | (5,032 | ) | |||||||
Adviser Shares | |||||||||||
Issued | 80 | 118 | |||||||||
Reinvested | 16 | 32 | |||||||||
Redeemed | (89 | ) | (133 | ) | |||||||
Total Adviser Shares | 7 | 17 | |||||||||
R6 Shares | |||||||||||
Issued | 81 | 31 | |||||||||
Reinvested | 1 | 1 | |||||||||
Redeemed | (30 | ) | (4 | ) | |||||||
Total R6 Shares | 52 | 28 | |||||||||
Change in Shares | (16,861 | ) | (2,357 | ) |
See notes to financial statements.
24
This page is intentionally left blank.
25
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA High Income Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 7.91 | 0.23 | (d) | 0.02 | 0.25 | (0.23 | ) | — | ||||||||||||||||||
Year Ended July 31, 2019 | $ | 8.01 | 0.47 | (0.10 | ) | 0.37 | (0.47 | ) | — | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 8.27 | 0.47 | (0.26 | ) | 0.21 | (0.47 | ) | — | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 7.90 | 0.47 | 0.37 | 0.84 | (0.47 | ) | — | |||||||||||||||||||
Year Ended July 31, 2016 | $ | 8.17 | 0.48 | (0.28 | ) | 0.20 | (0.47 | ) | — | ||||||||||||||||||
Year Ended July 31, 2015 | $ | 8.91 | 0.47 | (0.68 | ) | (0.21 | ) | (0.47 | ) | (0.06 | ) | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 7.90 | 0.23 | (d) | 0.02 | 0.25 | (0.23 | ) | — | ||||||||||||||||||
Year Ended July 31, 2019 | $ | 8.00 | 0.47 | (0.09 | ) | 0.38 | (0.48 | ) | — | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 8.26 | 0.48 | (0.26 | ) | 0.22 | (0.48 | ) | — | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 7.90 | 0.48 | 0.36 | 0.84 | (0.48 | ) | — | |||||||||||||||||||
Year Ended July 31, 2016 | $ | 8.16 | 0.48 | (0.26 | ) | 0.22 | (0.48 | ) | — | ||||||||||||||||||
Year Ended July 31, 2015 | $ | 8.91 | 0.48 | (0.69 | ) | (0.21 | ) | (0.48 | ) | (0.06 | ) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Amount is less than $0.005.
See notes to financial statements.
26
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Total Distributions | Redemption Fees Added to Beneficial Interests | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | |||||||||||||||||||||||||||||||
USAA High Income Fund | |||||||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (0.23 | ) | — | $ | 7.93 | 3.19 | % | 0.82 | % | 5.83 | % | 0.82 | % | $ | 1,199,719 | 24 | % | ||||||||||||||||||||||
Year Ended July 31, 2019 | (0.47 | ) | — | (e) | $ | 7.91 | 4.85 | % | 0.85 | % | 5.93 | % | 0.85 | % | $ | 1,212,711 | 31 | % | |||||||||||||||||||||
Year Ended July 31, 2018 | (0.47 | ) | — | (e) | $ | 8.01 | 2.65 | % | 0.81 | % | 5.79 | % | 0.81 | % | $ | 1,207,790 | 22 | % | |||||||||||||||||||||
Year Ended July 31, 2017 | (0.47 | ) | — | (e) | $ | 8.27 | 10.92 | % | 0.83 | % | 5.80 | % | 0.83 | % | $ | 1,225,990 | 21 | % | |||||||||||||||||||||
Year Ended July 31, 2016 | (0.47 | ) | — | (e) | $ | 7.90 | 2.95 | % | 0.82 | % | 6.22 | % | 0.82 | % | $ | 1,105,081 | 36 | % | |||||||||||||||||||||
Year Ended July 31, 2015 | (0.53 | ) | — | (e) | $ | 8.17 | (2.42 | )% | 0.89 | % | 5.46 | % | 0.89 | % | $ | 1,322,058 | 16 | % | |||||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (0.23 | ) | — | $ | 7.92 | 3.23 | % | 0.73 | % | 5.92 | % | 0.74 | % | $ | 797,837 | 24 | % | ||||||||||||||||||||||
Year Ended July 31, 2019 | (0.48 | ) | — | (e) | $ | 7.90 | 4.94 | % | 0.78 | % | 6.00 | % | 0.78 | % | $ | 913,599 | 31 | % | |||||||||||||||||||||
Year Ended July 31, 2018 | (0.48 | ) | — | (e) | $ | 8.00 | 2.74 | % | 0.72 | % | 5.88 | % | 0.72 | % | $ | 966,124 | 22 | % | |||||||||||||||||||||
Year Ended July 31, 2017 | (0.48 | ) | — | (e) | $ | 8.26 | 10.89 | % | 0.75 | % | 5.89 | % | 0.75 | % | $ | 970,767 | 21 | % | |||||||||||||||||||||
Year Ended July 31, 2016 | (0.48 | ) | — | (e) | $ | 7.90 | 3.19 | % | 0.71 | % | 6.32 | % | 0.71 | % | $ | 990,980 | 36 | % | |||||||||||||||||||||
Year Ended July 31, 2015 | (0.54 | ) | — | (e) | $ | 8.16 | (2.44 | )% | 0.80 | % | 5.55 | % | 0.80 | % | $ | 811,060 | 16 | % |
(continues on next page)
See notes to financial statements.
27
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period (continued)
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA High Income Fund | |||||||||||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||
Six,Months Ended January 31, 2020 (unaudited) | $ | 7.93 | 0.22 | (d) | 0.01 | 0.23 | (0.22 | ) | — | ||||||||||||||||||
Year Ended July 31, 2019 | $ | 8.03 | 0.46 | (0.10 | ) | 0.36 | (0.46 | ) | — | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 8.28 | 0.46 | (0.26 | ) | 0.20 | (0.45 | ) | — | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 7.92 | 0.46 | 0.35 | 0.81 | (0.45 | ) | — | |||||||||||||||||||
Year Ended July 31, 2016 | $ | 8.18 | 0.44 | (0.25 | ) | 0.19 | (0.45 | ) | — | ||||||||||||||||||
Year Ended July 31, 2015 | $ | 8.92 | 0.45 | (0.69 | ) | (0.24 | ) | (0.45 | ) | (0.06 | ) | ||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||
Six,Months Ended January 31, 2020 (unaudited) | $ | 7.90 | 0.24 | (d) | 0.01 | 0.25 | (0.23 | ) | — | ||||||||||||||||||
Year Ended July 31, 2019 | $ | 8.01 | 0.48 | (0.10 | ) | 0.38 | (0.49 | ) | — | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 8.26 | 0.48 | (0.25 | ) | 0.23 | (0.48 | ) | — | ||||||||||||||||||
December 1, 2016 (i) through July 31, 2017 | $ | 7.98 | 0.32 | 0.28 | 0.60 | (0.32 | ) | — |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Amount is less than $0.005.
See notes to financial statements.
28
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Total Distributions | Redemption Fees Added to Beneficial Interests | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | |||||||||||||||||||||||||||||||
USAA High Income Fund | |||||||||||||||||||||||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||||||||||||||
Six,Months Ended January 31, 2020 (unaudited) | (0.22 | ) | — | $ | 7.94 | 2.98 | % | 1.00 | % | 5.66 | % | 1.23 | % | $ | 10,103 | 24 | % | ||||||||||||||||||||||
Year Ended July 31, 2019 | (0.46 | ) | — | (e) | $ | 7.93 | 4.69 | % | 1.00 | % | 5.78 | % | 1.21 | % | $ | 10,021 | 31 | % | |||||||||||||||||||||
Year Ended July 31, 2018 | (0.45 | ) | — | (e) | $ | 8.03 | 2.55 | % | 1.02 | %(f) | 5.58 | % | 1.13 | % | $ | 10,019 | 22 | % | |||||||||||||||||||||
Year Ended July 31, 2017 | (0.45 | ) | — | (e) | $ | 8.28 | 10.49 | % | 1.08 | %(g) | 5.55 | % | 1.15 | % | $ | 10,096 | 21 | % | |||||||||||||||||||||
Year Ended July 31, 2016 | (0.45 | ) | — | (e) | $ | 7.92 | 2.73 | % | 1.15 | % | 5.88 | % | 1.19 | % | $ | 9,183 | 36 | % | |||||||||||||||||||||
Year Ended July 31, 2015 | (0.51 | ) | 0.01 | $ | 8.18 | (2.67 | )% | 1.16 | %(h) | 5.19 | % | 1.21 | % | $ | 12,545 | 16 | % | ||||||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||||||||||||||
Six,Months Ended January 31, 2020 (unaudited) | (0.23 | ) | — | $ | 7.92 | 3.27 | % | 0.65 | % | 5.98 | % | 0.94 | % | $ | 5,641 | 24 | % | ||||||||||||||||||||||
Year Ended July 31, 2019 | (0.49 | ) | — | $ | 7.90 | 4.95 | % | 0.65 | % | 6.13 | % | 0.96 | % | $ | 5,214 | 31 | % | ||||||||||||||||||||||
Year Ended July 31, 2018 | (0.48 | ) | — | $ | 8.01 | 2.94 | % | 0.65 | % | 5.95 | % | 0.92 | % | $ | 5,055 | 22 | % | ||||||||||||||||||||||
December 1, 2016 (i) through July 31, 2017 | (0.32 | ) | — | $ | 8.26 | 7.64 | % | 0.65 | % | 5.88 | % | 1.26 | % | $ | 5,177 | 21 | % |
(f) Prior to December 1, 2017, USAA Asset Management Company ("AMCO") (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Adviser Shares to 1.05% of the Adviser Shares' average daily net assets.
(g) Prior to December 1, 2016, AMCO (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Adviser Shares to 1.15% of the Adviser Shares' average daily net assets.
(h) Prior to December 1, 2014, AMCO (previous Investment Adviser) voluntarily agreed to limit the annual expense of the Adviser Shares to 1.20% of the Adviser Shares' average daily net assets.
(i) Commencement of operations.
See notes to financial statements.
29
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA High Income Fund (the "Fund"). The Fund offers four classes of shares: Fund Shares, Institutional Shares, Adviser Shares, and R6 Shares. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges except with respect to fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or
30
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
system where the security is principally traded, if available, or the over-the-counter markets, are valued at the last sales price or official closing price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations typically are categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at net asset value. These valuations typically are categorized as Level 1 in the fair value hierarchy.
Debt securities of United States ("U.S.") issuers, along with corporate and municipal securities, including short-term investments maturing in 60 days or less, may be valued using evaluated bid or the last sales price to price securities by dealers or an independent pricing service approved by the Board. These valuations are typically categorized as Level 2 in the fair value hierarchy.
Futures are valued at the settlement price at the close of market on the principal exchange on which they are traded or, in the absence of any transactions that day, the last sale on the prior trading date. These valuations typically are categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. These valuations typically are categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's net asset value ("NAV") to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2020, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Asset Backed Securities | $ | — | $ | 2,954 | $ | — | $ | 2,954 | |||||||||||
Collateralized Mortgage Obligations | — | 4,938 | — | 4,938 | |||||||||||||||
Common Stocks | 49,632 | 3,291 | 70 | 52,993 | |||||||||||||||
Preferred Stocks | 49,760 | 23,389 | 750 | 73,899 | |||||||||||||||
Convertible Preferred Stock | — | — | — | (a) | — | ||||||||||||||
Senior Secured Loans | — | 86,064 | 6 | 86,070 | |||||||||||||||
Corporate Bonds | — | 1,532,299 | 125 | 1,532,424 | |||||||||||||||
Municipal Bonds | — | 3,713 | — | 3,713 | |||||||||||||||
U.S. Government Agency Mortgages | — | 3,227 | — | 3,227 | |||||||||||||||
U.S. Treasury Obligations | — | 568 | — | 568 | |||||||||||||||
Exchange-Traded Funds | 124,078 | — | — | 124,078 | |||||||||||||||
Warrants | — | 161 | — | 161 | |||||||||||||||
Commercial Paper | — | 125,259 | — | 125,259 | |||||||||||||||
Collateral for Securities Loaned | 85,665 | — | — | 85,665 | |||||||||||||||
Total | $ | 309,135 | $ | 1,785,863 | $ | 951 | $ | 2,095,949 |
(a) Amount is less than $1 thousand.
For the six-months ended January 31, 2020, there were no transfers in or out of the Level 3 fair value hierarchy.
31
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs. ETFs are a type of index fund, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Securities Purchased on a Delayed-Delivery or When-Issued Basis:
The Fund may purchase securities on a delayed-delivery or when-issued basis. Delivery and payment for securities that have been purchased by the Fund on a delayed-delivery, when-issued basis, or for delayed draws on loans can take place a month or more after the trade date. At the time the Fund makes the commitment to purchase a security on a delayed-delivery or when-issued basis, the Fund records the transaction and reflects the value of the security in determining net asset value. No interest accrues to the Fund until the transaction settles and payment takes place. A segregated account is established and the Fund maintains cash and/or marketable securities at least equal in value to commitments for delayed-delivery or when-issued securities. If the Fund owns delayed-delivery or when-issued securities, these values are included in "Payable for investments purchased" on the accompanying Statement of Assets and Liabilities and the segregated assets are identified in the Schedule of Portfolio Investments.
Municipal Obligations:
The values of municipal obligations can fluctuate and may be affected by adverse tax, legislative, or political changes, and by financial developments affecting municipal issuers. Payment of municipal obligations may depend on a relatively limited source of revenue, resulting in greater credit risk. Future changes in federal tax laws or the activity of an issuer may adversely affect the tax-exempt status of municipal obligations.
Mortgage- and Asset-Backed Securities:
The values of some mortgage-related or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Fund to a lower rate of return upon reinvestment of principal. The values of mortgage and asset-backed securities depend in part on the credit quality and adequacy of the underlying assets or collateral and may fluctuate in response to the market's perception of these factors as well as current
32
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
and future repayment rates. Some mortgage-backed securities are backed by the full faith and credit of the U.S. government (e.g., mortgage-backed securities issued by the Government National Mortgage Association, commonly known as "Ginnie Mae"), while other mortgage-backed securities (e.g., mortgage-backed securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, commonly known as "Fannie Mae" and "Freddie Mac"), are backed only by the credit of the government entity issuing them. In addition, some mortgage-backed securities are issued by private entities and, as such, are not guaranteed by the U.S. government or any agency or instrumentality of the U.S. government.
Leveraged Loans:
The Fund may invest in leveraged loans, a type of bank loan. Leveraged loans are adjustable-rate bank loans made to companies rated below investment grade. The interest rates on leveraged loans are reset periodically based upon the fluctuations of a base interest rate such as LIBOR and a "spread" above that base interest rate that represents a risk premium to the lending banks and/or other participating investors. Many bank loans bear an adjustable rate of interest; however, leveraged loans provide for a greater "spread" over the base interest rate than other bank loans because they are considered to represent a greater credit risk. Because they are perceived to represent a greater credit risk, leveraged loans possess certain attributes that are similar to high-yield securities. However, because they are often secured by collateral of the borrower, leveraged loans possess certain attributes that are similar to other bank loans.
Below Investment Grade Securities:
The Fund may invest in below investment grade securities (i.e. lower-quality, "junk" debt), which are subject to various risks. Lower-quality debt is considered to be speculative because it is less certain that the issuer will be able to pay interest or repay the principal than in the case of investment grade debt. These securities can involve a substantially greater risk of default than higher-rated securities, and their values can decline significantly over short periods of time. Lower-quality debt securities tend to be more sensitive to adverse news about their issuers, the market and the economy in general, than higher-quality debt securities. The market for these securities can be less liquid, especially during periods of recession or general market decline.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a securities lending agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income, net of income retained by Citibank. Borrowers are required to secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are cured the next business day once the shortfall exceeds $100 thousand. Collateral may be cash, U.S. government securities, or other securities as permitted by SEC guidelines. Cash collateral may be invested in high-quality short-term investments, primarily open-end investment
33
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
companies. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Risks relating to securities-lending transactions include that the borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower. The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy borrower default. Cash collateral is listed in the Fund's Portfolio of Investments and Financial Statements while non-cash collateral is not included. The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2020:
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 82,763 | $ | — | $ | 85,665 |
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, distribution and service 12b-1 fees, and printing fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
Cross-Trade Transactions:
Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades, which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the six-months ended January 31, 2020, the Fund engaged in the following securities transactions with affiliated funds, which resulted in the following net realized gains (losses) (amounts in thousands):
Purchases | Sales | Net Realized Gains (Losses) | |||||||||||||
$ | — | $ | 5,041 | $ | 41 |
34
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
3. Purchases and Sales:
Cost of purchases and proceeds from sales/maturities of securities (excluding securities maturing less than one year from acquisition) for the six-months ended January 31, 2020, were as follows for the Fund (amounts in thousands):
Purchases (excluding U.S. Government Securities) | Sales (excluding U.S. Government Securities) | Purchases of U.S. Government Securities | Sales of U.S Government Securities | ||||||||||||
$ | 453,563 | $ | 580,814 | $ | — | $ | 4,650 |
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA funds. The USAA fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi-annual reports may be viewed at usaa.com. As of January 31, 2020, certain USAA fund-of-funds owned total outstanding shares of the Fund:
USAA Cornerstone Conservative Fund | 0.3 | % | |||||
USAA Target Retirement Income Fund | 0.3 | % | |||||
USAA Target Retirement 2020 Fund | 0.6 | % | |||||
USAA Target Retirement 2030 Fund | 1.4 | % | |||||
USAA Target Retirement 2040 Fund | 1.1 | % | |||||
USAA Target Retirement 2050 Fund | 0.1 | % | |||||
USAA Target Retirement 2060 Fund | 0.0 | %* |
* Amount is less than 0.05%.
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.50% of the Fund's average daily net assets. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
No performance adjustments will be made for periods beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter will be utilized in calculating future performance adjustments.
The performance adjustment will be calculated monthly by comparing each class' performance to that of the Lipper High Yield Bond Funds Index. The Lipper High Yield Bond Funds Index tracks the total return performance of each class within the Lipper High Yield Bond Funds category.
35
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The performance period for each class will consist of the current month plus the previous number of months beginning July 1, 2019. The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)(1) | Annual Adjustment Rate (in basis points)(1) | ||||||
+/- 20 to 50 | +/- 4 | ||||||
+/- 51 to 100 | +/- 5 | ||||||
+/- 101 and greater | +/- 6 |
(1) Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of the class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper High Yield Bond Funds Index over that period, even if the class has overall negative returns during the performance period.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six-months ended January 31, 2020, the Fund had no subadvisors.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15% of average daily net assets of the Fund Shares and Adviser Shares, 0.10% of average daily net assets of the Institutional Shares, and 0.05% of average daily net assets of the R6 Shares. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
36
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. VCTA, an affiliate of the Adviser, provides transfer agent services to the Fund Shares and Adviser Shares based on an annual charge of $25.50 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares and R6 Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10% and 0.01%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the Adviser Shares pursuant to a Distribution Agreement between the Distributor and the Trust. Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, at an annual rate of up to 0.25% of the average daily net assets of the Adviser Shares. Amounts incurred are reflected on the Statement of Operations as 12b-1 Fees.
Adviser Shares are offered and sold without imposition of an initial sales charge or a contingent deferred sales charge.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
The expense limits (excluding voluntary waivers) are 0.83%, 0.73%, 1.00%, and 0.65% for Fund Shares, Institutional Shares, Adviser Shares, and R6 Shares, respectively. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||
$ | 60 |
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
37
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
The value of a debt security or other income-producing security changes in response to various factors, including, for example, market-related factors (such as changes in interest rates or changes in the risk appetite of investors generally) and changes in the actual or perceived ability of the issuer (or of issuers generally) to meet its (or their) obligations.
The fixed-income securities in the Fund's portfolio are subject to credit risk, which is the possibility that an issuer of a fixed-income security will fail to make timely interest and/or principal payments on its securities or that negative market perceptions of the issuer's ability to make such payments will cause the price of that security to decline. The Fund accepts some credit risk as a recognized means to enhance an investor's return. All fixed-income securities, varying from the highest quality to the very speculative, have some degree of credit risk.
Fixed-income securities rated below investment grade, also known as "junk" or high-yield bonds, generally entail greater economic, credit, and liquidity risk than investment-grade securities. Their prices may be more volatile, especially during economic downturns, financial setbacks, or liquidity events. High-yield securities also can involve a substantially greater risk of default than higher quality debt securities, and their values can decline significantly over short periods of time.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six-months ended January 31, 2020.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Fund in the Victory Fund Complex relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period is presented on the Statement of Operations under Interest expense on Interfund lending. As a Lender, interest earned by the Fund, if any, during the period is reflected on the Statement of Operations under Income on Interfund lending.
38
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The average borrowing and lending for the days outstanding and average interest rate for the Fund during the six-months ended January 31, 2020 were as follows (amounts in thousands):
Amount Borrower or Lender | Outstanding at January 31, 2020 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||||||
USAA High Income Fund | Borrower | $ | — | $ | 3,281 | 5 | 2.49 | % | $ | 5,765 |
*For the six-months ended January 31, 2020, based on the number of days borrowings were outstanding.
8. Federal Income Tax Information:
The Fund intends to distribute any net investment income monthly. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
9. Subsequent Event
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
39
USAA Mutual Funds Trust | Supplemental Information January 31, 2020 |
(Unaudited)
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019, through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,031.90 | $ | 1,021.01 | $ | 4.19 | $ | 4.17 | 0.82 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,032.30 | 1,021.47 | 3.73 | 3.71 | 0.73 | % | ||||||||||||||||||||
Adviser Shares | 1,000.00 | 1,029.80 | 1,020.11 | 5.10 | 5.08 | 1.00 | % | ||||||||||||||||||||
R6 Shares | 1,000.00 | 1,032.70 | 1,021.87 | 3.32 | 3.30 | 0.65 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's web site at www.sec.gov.
40
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800) 235-8396 |
40051-0320
JANUARY 31, 2020
Semi Annual Report
USAA Income Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 5 | ||||||
Statement of Assets and Liabilities | 39 | ||||||
Statement of Operations | 40 | ||||||
Statements of Changes in Net Assets | 41 | ||||||
Financial Highlights | 44 | ||||||
Notes to Financial Statements | 48 | ||||||
Supplemental Information | 59 | ||||||
Expense Examples | 59 | ||||||
Proxy Voting and Portfolio Holdings Information | 60 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
USAA Mutual Funds Trust
1
USAA Mutual Funds Trust USAA Income Fund | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA Income Fund seeks maximum current income without undue risk to principal.
Top 10 Holdings*
1/31/20
(% of Net Assets)
U.S. Treasury Note 2% 2/15/25 | 0.9 | % | |||||
U.S. Treasury Bond 2.5% 2/15/45 | 0.8 | % | |||||
U.S. Treasury Inflation Indexed Bond 2.375% 1/15/25 | 0.7 | % | |||||
Federal National Mortgage Association 4% 2/1/50 | 0.6 | % | |||||
U.S. Treasury Note 1.625% 2/15/26 | 0.6 | % | |||||
U.S. Treasury Note 2.625% 11/15/20 | 0.6 | % | |||||
U.S. Treasury Bond 2.25% 8/15/46 | 0.5 | % | |||||
U.S. Treasury Bond 3.875% 8/15/40 | 0.4 | % | |||||
SBA Tower Trust 3.448% 3/15/48 | 0.3 | % | |||||
Federal National Mortgage Association 3.5% 2/1/50 | 0.3 | % |
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Income Fund (continued) | January 31, 2020 |
(Unaudited)
Asset Allocation*:
1/31/20
(% of Net Assets)
*Does not include futures, money market instruments, and short term investments purchased with cash collateral from securities loaned.
3
USAA Mutual Funds Trust USAA Income Fund (continued) | January 31, 2020 |
(Unaudited)
Portfolio Ratings Mix*
1/31/20
(% of Net Assets)
This chart reflects the highest long-term rating from a Nationally Recognized Statistical Rating Organization (NRSRO), with the four highest long-term credit ratings labeled, in descending order of credit quality, AAA, AA, A, and BBB. These categories represent investment-grade quality. NRSRO ratings are shown because they provide independent analysis of the credit quality of the Fund's investments. Victory Capital Management, Inc. ("Adviser") also performs its own fundamental credit analysis of each security. As part of its fundamental credit analysis, the Adviser considers various criteria, including industry specific actions, peer comparisons, payment ranking, and structure specific characteristics. Any of the Fund's securities that are not rated by an NRSRO appear in the chart above as "Unrated," but these securities are analyzed and monitored by the Adviser on an ongoing basis. Government securities that are issued or guaranteed as to principal and interest by the U.S. government and pre-refunded and escrowed-to-maturity municipal bonds that are not rated are treated as AAA for credit quality purposes.
*Does not include futures, money market instruments and short-term investments purchased with cash collateral from securities loaned.
4
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Asset Backed Securities (4.9%) | |||||||||||
AmeriCredit Automobile Receivables Trust, Series 2016-2 Class D, 3.65%, 5/9/22, Callable 10/8/20 @ 100 | $ | 5,000 | $ | 5,056 | |||||||
AmeriCredit Automobile Receivables Trust, Series 2016-3 Class D, 2.71%, 9/8/22, Callable 3/8/21 @ 100 | 9,650 | 9,733 | |||||||||
AmeriCredit Automobile Receivables Trust, Series 2018-2 Class C, 3.59%, 6/18/24, Callable 11/18/22 @ 100 | 4,000 | 4,148 | |||||||||
AmeriCredit Automobile Receivables Trust, Series 2017-4 Class C, 2.60%, 9/18/23, Callable 2/18/22 @ 100 | 5,000 | 5,061 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2018-2A Class B, 4.27%, 3/20/25 (a) | 5,250 | 5,631 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2019-2A Class B, 3.55%, 9/22/25 (a) | 7,500 | 7,897 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2016-2A Class B, 3.36%, 11/20/22 (a) | 6,000 | 6,099 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2016-1A Class C, 4.94%, 6/20/22 (a) | 2,827 | 2,905 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2019-3A Class B, 2.65%, 3/20/26 (a) | 12,500 | 12,677 | |||||||||
BCC Funding Corp. LLC, Series 2019-1A Class A2, 2.46%, 8/20/24, Callable 9/20/23 @ 100 (a) | 10,000 | 10,055 | |||||||||
BCC Funding LLC, Series 2016-1 Class D, 4.78%, 8/20/22, Callable 5/20/20 @ 100 (a) | 1,951 | 1,965 | |||||||||
California Republic Auto Receivables Trust, Series 2017-1 Class B, 2.91%, 12/15/22, Callable 4/15/21 @ 100 | 6,500 | 6,569 | |||||||||
Canadian Pacer Auto Receivables Trust, Series 2020-1A Class A4, 1.89%, 3/19/25, Callable 12/19/23 @ 100 (a) (b) | 6,067 | 6,097 | |||||||||
Canadian Pacer Auto Receivables Trust, Series 2020-1A Class B, 2.00%, 7/21/25, Callable 12/19/23 @ 100 (a) (b) | 2,000 | 2,010 | |||||||||
Canadian Pacer Auto Receivables Trust, Series 2018-2A Class B, 3.63%, 1/19/24, Callable 1/19/22 @ 100 (a) | 1,250 | 1,289 | |||||||||
CarMax Auto Owner Trust, Series 2020-1 Class B, 2.21%, 9/15/25, Callable 1/15/24 @ 100 | 6,375 | 6,445 | |||||||||
Centre Point Funding LLC, Series 2012-2A Class 1, 2.61%, 8/20/21 (a) | 424 | 423 | |||||||||
Chesapeake Funding LLC, Series 2018-2A Class B, 3.52%, 8/15/30, Callable 8/15/21 @ 100 (a) | 6,000 | 6,132 | |||||||||
Chesapeake Funding LLC, Series 2018-3A Class C, 3.81%, 1/15/31, Callable 1/15/22 @ 100 (a) | 6,000 | 6,201 | |||||||||
CIT Education Loan Trust, Series 2007-1 Class B, 2.25%(LIBOR03M+30bps), 6/25/42, Callable 12/25/30 @ 100 (a) (c) | 4,729 | 4,404 | |||||||||
CPS Auto Receivables Trust, Series 2019-C Class C, 2.84%, 6/16/25, Callable 11/15/23 @ 100 (a) | 2,500 | 2,536 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2017-2 Class C, 3.35%, 6/15/26, Callable 1/15/21 @ 100 (a) | 4,850 | 4,897 | |||||||||
Element Rail Leasing I LLC, Series 2014-1A Class A2, 3.67%, 4/19/44 (a) | 25,000 | 25,257 | |||||||||
Exeter Automobile Receivables Trust, Series 2020-1A Class B, 2.26%, 4/15/24, Callable 3/15/24 @ 100 (a) | 5,132 | 5,154 | |||||||||
ExteNet LLC, Series 2019-1A Class A2, 3.20%, 7/26/49, Callable 1/25/23 @ 100 (a) | 5,625 | 5,754 | |||||||||
Flagship Credit Auto Trust, Series 2016-4 Class D, 3.89%, 11/15/22, Callable 9/15/21 @ 100 (a) | 6,795 | 6,947 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
GM Financial Consumer Automobile Receivables Trust, Series 2020-1 Class A4, 1.90%, 3/17/25, Callable 9/16/23 @ 100 | $ | 4,500 | $ | 4,548 | |||||||
Hertz Vehicle Financing LLC, Series 2018-3 Class A, 4.03%, 7/25/24 (a) | 5,000 | 5,311 | |||||||||
Hertz Vehicle Financing LP, Series 2019-3A Class A, 2.67%, 12/26/25 (a) | 8,928 | 9,109 | |||||||||
Hertz Vehicle Financing LP, Series 2019-1A Class B, 4.10%, 3/25/23 (a) | 6,250 | 6,474 | |||||||||
Hertz Vehicle Financing LP, Series 2017-2A Class A, 3.29%, 10/25/23 (a) | 8,667 | 8,948 | |||||||||
Hertz Vehicle Financing LP, Series 2016-4A Class A, 2.65%, 7/25/22 (a) | 3,000 | 3,027 | |||||||||
HPEFS Equipment Trust, Series 2019-1A Class C, 2.49%, 9/20/29, Callable 5/20/22 @ 100 (a) | 2,700 | 2,716 | |||||||||
InSite Issuer LLC, Series 2018-1A Class A, 4.10%, 12/15/48, Callable 7/15/24 @ 100 (a) | 8,000 | 8,391 | |||||||||
Master Credit Card Trust, Series 2020-1A Class B, 2.27%, 9/23/24 (a) | 834 | 840 | |||||||||
MMAF Equipment Finance LLC, Series 2017-A Class A5, 2.68%, 7/16/27, Callable 6/16/29 @ 100 (a) | 2,750 | 2,820 | |||||||||
MMAF Equipment Finance LLC, Series 2015-A Class A5, 2.49%, 2/19/36, Callable 11/16/22 @ 100 (a) | 7,999 | 8,061 | |||||||||
Navient Student Loan Trust, Series 2015-2 Class B, 3.16%(LIBOR01M+150bps), 8/25/50, Callable 5/25/28 @ 100 (c) | 3,000 | 2,928 | |||||||||
Navient Student Loan Trust, Series 2018-2A Class B, 2.81%(LIBOR01M+115bps), 3/25/67, Callable 3/25/33 @ 100 (a) (c) | 3,500 | 3,421 | |||||||||
Nelnet Student Loan Trust, Series 2005-4 Class B, 2.21%(LIBOR03M+28bps), 9/22/35, Callable 9/22/28 @ 100 (c) | 1,200 | 1,077 | |||||||||
NP SPE II LLC, Series 2019-2A Class C1, 6.44%, 11/19/49 (a) | 6,833 | 6,892 | |||||||||
NP SPE LLC, Series 2017-1A Class A2, 4.22%, 10/21/47, Callable 10/20/27 @ 100 (a) | 15,625 | 16,694 | |||||||||
OneMain Direct Auto Receivables Trust, Series 2017-2 Class C, 2.82%, 7/15/24, Callable 8/14/20 @ 100 (a) | 8,500 | 8,518 | |||||||||
OSCAR US Funding Trust IX LLC, Series 2018-2A Class A4, 3.63%, 9/10/25 (a) | 12,000 | 12,444 | |||||||||
OSCAR US Funding Trust LLC, Series 2018-1A Class A4, 3.50%, 5/12/25 (a) | 4,760 | 4,904 | |||||||||
Project Silver, Series 2019-1 Class A, 3.97%, 7/15/44 (a) | 4,808 | 4,914 | |||||||||
PSNH Funding LLC, Series 2018-1 Class A3, 3.81%, 2/1/35 | 15,545 | 17,790 | |||||||||
Renew, Series 2017-2 Class A, 3.22%, 9/22/53, Callable 9/20/30 @ 100 (a) | 1,322 | 1,368 | |||||||||
Renew, Series 2018-1 Class A, 3.95%, 9/20/53, Callable 11/20/25 @ 100 (a) | 5,269 | 5,467 | |||||||||
Santander Drive Auto Receivables Trust, Series 2016-2 Class D, 3.39%, 4/15/22, Callable 10/15/20 @ 100 | 16,400 | 16,518 | |||||||||
Sapphire Aviation Finance Ltd., Series 2018-1A Class A, 4.25%, 3/15/40 (a) | 4,145 | 4,256 | |||||||||
SCF Equipment Leasing LLC, Series 2019-1A Class B, 3.49%, 1/20/26, Callable 4/20/20 @ 100 (a) | 6,000 | 6,204 | |||||||||
SCF Equipment Leasing LLC, Series 2017-2A Class A, 3.41%, 12/20/23, Callable 2/20/20 @ 100 (a) | 3,015 | 3,030 | |||||||||
SLM Student Loan Trust, Series 2012-6 Class B, 2.66%(LIBOR01M+100bps), 4/27/43, Callable 4/25/27 @ 100 (c) | 20,862 | 19,591 | |||||||||
SLM Student Loan Trust, Series 2007-7 Class B, 2.54%(LIBOR03M+75bps), 10/27/70, Callable 1/25/23 @ 100 (c) | 5,740 | 5,318 | |||||||||
SLM Student Loan Trust, Series 2007-1 Class B, 2.01%(LIBOR03M+22bps), 1/27/42, Callable 10/25/28 @ 100 (c) | 7,197 | 6,710 | |||||||||
SLM Student Loan Trust, Series 2006-9 Class B, 2.17%(LIBOR03M+23bps), 1/25/41, Callable 1/25/32 @ 100 (c) | 4,958 | 4,498 | |||||||||
SLM Student Loan Trust, Series 2005-9 Class B, 2.09%(LIBOR03M+30bps), 1/25/41, Callable 10/25/30 @ 100 (c) | 1,558 | 1,462 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
SLM Student Loan Trust, Series 2006-10 Class B, 2.01%(LIBOR03M+22bps), 3/25/44, Callable 10/25/31 @ 100 (c) | $ | 2,088 | $ | 1,895 | |||||||
SLM Student Loan Trust, Series 2003-14 Class B, 2.34%(LIBOR03M+55bps), 10/25/65, Callable 10/25/28 @ 100 (c) | 1,733 | 1,642 | |||||||||
Start Ltd., Series 2018-1 Class A, 4.09%, 5/15/43, Callable 5/15/25 @ 100 (a) | 7,422 | 7,678 | |||||||||
Synchrony Credit Card Master Note Trust, Series 2018-2 Class C, 3.87%, 5/15/26 | 18,417 | 19,423 | |||||||||
TRIP Rail Master Funding LLC, Series 2014-1A Class A2, 4.09%, 4/15/44, Callable 7/15/21 @ 100 (a) | 10,000 | 10,187 | |||||||||
TRIP Rail Master Funding LLC, Series 2017-1A Class A2, 3.74%, 8/15/47, Callable 4/15/24 @ 100 (a) | 3,334 | 3,434 | |||||||||
VB-S1 Issuer LLC, Series 2018-1A Class C, 3.41%, 2/15/48, Callable 2/15/22 @ 100 (a) | 7,850 | 7,969 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-2A Class D, 4.00%, 1/16/24, Callable 11/15/21 @ 100 (a) | 4,000 | 4,109 | |||||||||
World Omni Auto Receivables Trust, Series 2018-D Class C, 3.87%, 8/15/25, Callable 10/15/22 @ 100 | 4,000 | 4,212 | |||||||||
Total Asset Backed Securities (Cost $425,802) | 436,140 | ||||||||||
Collateralized Mortgage Obligations (5.9%) | |||||||||||
American Money Management Corp., Series 2016-19A Class AR, 2.97% (LIBOR03M+114bps), 10/16/28, Callable 7/15/20 @ 100 (a) (c) | 3,500 | 3,502 | |||||||||
ARES CLO Ltd., Series 2019-52A Class A2, 3.45%(LIBOR03M+165bps), 4/22/31, Callable 4/22/21 @ 100 (a) (c) | 4,000 | 4,002 | |||||||||
BAMLL Commercial Mortgage Securities Trust, Series 2015-200P Class B, 3.49%, 4/14/33 (a) | 9,027 | 9,527 | |||||||||
Banc of America Commercial Mortgage Trust, Series 2006-3 Class AM, 5.86%, 7/10/44 (d) | 1,937 | 598 | |||||||||
Bank, Series 2019-BN24 Class ASB, 2.93%, 11/15/62 | 7,123 | 7,526 | |||||||||
BX Commercial Mortgage Trust, Series 2019-XL Class B, 2.76% (LIBOR01M+108bps), 10/15/36 (a) (c) | 6,172 | 6,178 | |||||||||
BX Trust, Series 2019-OC11 Class A, 3.20%, 12/9/41 (a) | 9,231 | 9,928 | |||||||||
Cantor Commercial Real Estate Lending, Series 2019-CF3 Class ASB, 2.94%, 1/15/53 | 6,000 | 6,339 | |||||||||
CIFC Funding Ltd., Series 2017-I Class B, 3.52%(LIBOR03M+170bps), 4/23/29, Callable 1/21/21 @ 100 (a) (c) | 3,500 | 3,503 | |||||||||
CIFC Funding Ltd., Series 2018-I Class B, 3.22%(LIBOR03M+140bps), 4/18/31, Callable 4/18/20 @ 100 (a) (c) | 3,250 | 3,240 | |||||||||
Citigroup Commercial Mortgage Trust, Series 2019-SMRT Class C, 4.68%, 1/10/24 (a) | 8,100 | 8,734 | |||||||||
Citigroup Commercial Mortgage Trust, Series 2014-GC23 Class A3, 3.36%, 7/10/47 | 8,395 | 8,888 | |||||||||
Citigroup Commercial Mortgage Trust, Series 2017-P8 Class AS, 3.79%, 9/15/50 (d) | 9,500 | 10,423 | |||||||||
Citigroup Commercial Mortgage Trust, Series 2014-GC23 Class AS, 3.86%, 7/10/47 | 4,000 | 4,278 | |||||||||
Citigroup Commercial Mortgage Trust, Series 2019-GC41 Class AS, 3.02%, 8/10/56 | 10,339 | 10,789 | |||||||||
Citigroup Commercial Mortgage Trust, Series 2014-GC23 Class A4, 3.62%, 7/10/47 | 2,500 | 2,679 | |||||||||
COMM Mortgage Trust, Series 2015-PC1 Class A5, 3.90%, 7/10/50 (e) | 15,000 | 16,386 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
COMM Mortgage Trust, Series 2014-CCRE19 Class A5, 3.80%, 8/10/47 | $ | 5,000 | $ | 5,390 | |||||||
COMM Mortgage Trust, Series 2015-LC23 Class AM, 4.16%, 10/10/48 (d) | 6,300 | 6,896 | |||||||||
COMM Mortgage Trust, Series 2012-CCRE4 Class XA, 1.85%, 10/15/45 (d) (f) | 54,399 | 1,912 | |||||||||
COMM Mortgage Trust, Series 2014-CCRE19 Class AM, 4.08%, 8/10/47 | 7,500 | 8,074 | |||||||||
COMM Mortgage Trust, Series 2015-PC1 Class B, 4.58%, 7/10/50 (d) | 2,500 | 2,723 | |||||||||
COMM Mortgage Trust, Series 2015-PC1 Class AM, 4.29%, 7/10/50 (d) | 2,000 | 2,204 | |||||||||
COMM Mortgage Trust, Series 2012-CCRE1 Class XA, 2.03%, 5/15/45 (d) | 34,583 | 1,167 | |||||||||
COMM Mortgage Trust, Series 2012-CCRE4 Class AM, 3.25%, 10/15/45 | 8,600 | 8,665 | |||||||||
COMM Mortgage Trust, Series 2012-CCRE3 Class AM, 3.42%, 10/15/45 (a) | 5,925 | 6,087 | |||||||||
DBJPM Mortgage Trust, Series 2016-SFC Class B, 3.24%, 8/10/36 (a) | 2,500 | 2,559 | |||||||||
DBJPM Mortgage Trust, Series 2016-SFC Class A, 2.83%, 8/10/36 (a) | 4,750 | 4,884 | |||||||||
Dryden CLO Ltd., Series 2018-57A Class A, 2.92%(LIBOR03M+101bps), 5/15/31, Callable 5/15/20 @ 100 (a) (c) | 2,500 | 2,491 | |||||||||
Dryden CLO Ltd., Series 2017-53A Class B, 3.23%(LIBOR03M+140bps), 1/15/31, Callable 4/15/20 @ 100 (a) (c) | 6,400 | 6,396 | |||||||||
Dryden CLO Ltd., Series 2018-58A Class B, 3.34%(LIBOR03M+150bps), 7/17/31, Callable 7/17/20 @ 100 (a) (c) | 5,000 | 4,958 | |||||||||
Dryden Senior Loan Fund, Series 2016-43A Class BR, 3.57%(LIBOR03M+175bps), 7/20/29, Callable 7/20/20 @ 100 (a) (c) | 4,000 | 4,006 | |||||||||
Dryden Senior Loan Fund, Series 2015-37A Class AR, 2.93%(LIBOR03M+110bps), 1/15/31, Callable 4/15/20 @ 100 (a) (c) | 10,000 | 9,988 | |||||||||
Eaton Vance CLO Ltd., Series 2015-1 Class A2R, 3.07%(LIBOR03M+125bps), 1/20/30, Callable 4/20/20 @ 100 (a) (c) | 10,000 | 9,847 | |||||||||
FREMF Mortgage Trust, Series 2019-K99 Class B, 3.77%, 9/25/29 (a) (d) | 10,000 | 10,586 | |||||||||
GE Commercial Mortgage Corp., Series 2007-C1 Class AM, 5.61%, 12/10/49 (d) | 628 | 621 | |||||||||
Goldentree Loan Management US CLO Ltd., Series 2019-5A Class A, 3.49% (LIBOR03M+130bps), 10/20/32, Callable 10/20/21 @ 100 (a) (c) | 5,000 | 5,011 | |||||||||
Goldentree Loan Management US CLO Ltd., Series 2019-5A Class B, 3.99% (LIBOR03M+180bps), 10/20/32, Callable 10/20/21 @ 100 (a) (c) | 2,000 | 2,007 | |||||||||
Grippen Park CLO Ltd., Series 2017-1A Class A, 3.08%(LIBOR03M+126bps), 1/20/30, Callable 4/20/20 @ 100 (a) (c) | 10,000 | 9,997 | |||||||||
GS Mortgage Securities Corp., Series 2005-ROCK Class X1, 0.21%, 5/3/32 (a) (d) (f) | 190,667 | 2,582 | |||||||||
GS Mortgage Securities Corp., Series 2013-GC10 Class AS, 3.28%, 2/10/46 | 5,000 | 5,194 | |||||||||
GS Mortgage Securities Corp., Series 2013-GC10 Class B, 3.68%, 2/10/46 (a) | 10,000 | 10,392 | |||||||||
GS Mortgage Securities Trust, Series 2015-GC32 Class A4, 3.76%, 7/10/48 | 6,000 | 6,555 | |||||||||
GS Mortgage Securities Trust, Series 2013-GC14 Class A5, 4.24%, 8/10/46 | 5,000 | 5,378 | |||||||||
GS Mortgage Securities Trust, Series 2020-GC45 Class AAB, 2.84%, 2/13/53 | 3,571 | 3,756 | |||||||||
GS Mortgage Securities Trust, Series 2012-GCJ7 Class XA, 2.35%, 5/10/45 (d) | 23,009 | 625 | |||||||||
GS Mortgage Securities Trust, Series 2012-GCJ7 Class A4, 3.38%, 5/10/45 | 3,998 | 4,066 | |||||||||
GS Mortgage Securities Trust, Series 2020-GC45 Class A5, 2.91%, 2/13/53 | 4,231 | 4,481 | |||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2010-C2 Class C, 5.79%, 11/15/43 (a) (d) | 15,000 | 15,325 | |||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2012-C6 Class B, 4.82%, 5/15/45 (d) | 10,697 | 11,226 | |||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2012-CIBX Class AS, 4.27%, 6/15/45 | 10,000 | 10,491 | |||||||||
JPMBB Commercial Mortgage Securities Trust, Series 2014-C18 Class AS, 4.44%, 2/15/47, Callable 2/11/24 @ 100 (d) | 9,000 | 9,735 | |||||||||
Loomis Sayles CLO Ltd., Series 2015-2A Class A1R, 2.73% (LIBOR03M+90bps), 4/15/28, Callable 4/15/20 @ 100 (a) (c) | 5,000 | 4,991 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Madison Park Funding Ltd., Series 2018-27A Class A2, 3.17% (LIBOR03M+135bps), 4/20/30, Callable 4/20/20 @ 100 (a) (c) | $ | 5,320 | $ | 5,288 | |||||||
Magnetite Ltd., Series 2012-7A Class A1R2, 2.63%(LIBOR03M+80bps), 1/15/28, Callable 4/15/20 @ 100 (a) (c) | 5,000 | 4,997 | |||||||||
Morgan Stanley Bank of America Merrill Lynch Trust, Series C9 Class AS, 3.46%, 5/15/46 | 3,200 | 3,343 | |||||||||
Morgan Stanley Capital Trust, Series 2012-C4 Class AS, 3.77%, 3/15/45 | 3,000 | 3,099 | |||||||||
Morgan Stanley Capital Trust, Series 2011-C2 Class B, 5.20%, 6/15/44 (a) (d) | 2,750 | 2,806 | |||||||||
Morgan Stanley Capital Trust, Series 2015-MS1 Class AS, 4.17%, 5/15/48 (d) | 7,000 | 7,593 | |||||||||
Oaktree EIF Ltd., Series 2016-IIIA Class B, 3.82%(LIBOR03M+200bps), 10/20/27, Callable 4/20/20 @ 100 (a) (c) | 10,000 | 10,017 | |||||||||
Octagon Investment Partners Ltd., Series 2015-1A Class A1R, 2.68% (LIBOR03M+85bps), 7/15/27, Callable 4/15/20 @ 100 (a) (c) | 10,000 | 9,977 | |||||||||
Palmer Square Loan Funding Ltd., Series 2019-2 Class B, 4.07% (LIBOR03M+225bps), 4/20/27, Callable 7/20/20 @ 100 (a) (c) | 4,500 | 4,493 | |||||||||
Race Point CLO Ltd., Series 2016-10A Class A1R, 2.89% (LIBOR03M+110bps), 7/25/31, Callable 7/25/20 @ 100 (a) (c) | 4,500 | 4,485 | |||||||||
Sound Point CLO Ltd., Series 2013-2RA Class B, 3.28% (LIBOR03M+145bps), 4/15/29, Callable 4/15/20 @ 100 (a) (c) | 5,000 | 4,980 | |||||||||
Stewart Park CLO Ltd., Series 2015-1A Class A2R, 3.08%(LIBOR03M+125bps), 1/15/30, Callable 4/15/20 @ 100 (a) (c) | 7,000 | 6,887 | |||||||||
TIAA CLO Ltd., Series 2017-1A Class B, 3.52%(LIBOR03M+170bps), 4/20/29, Callable 4/20/20 @ 100 (a) (c) | 7,000 | 6,994 | |||||||||
Trinitas CLO Ltd., Series 2017-6A Class AR, 2.96%(LIBOR03M+117bps), 7/25/29, Callable 4/25/20 @ 100 (a) (c) | 10,000 | 10,002 | |||||||||
Trinitas CLO Ltd., Series 2016-5A Class AR, 3.18%(LIBOR03M+139bps), 10/25/28, Callable 4/25/20 @ 100 (a) (c) | 9,750 | 9,751 | |||||||||
Trinitas CLO Ltd., Series 2018-9A Class B1, 3.77%(LIBOR03M+195bps), 1/20/32, Callable 1/20/21 @ 100 (a) (c) | 7,600 | 7,594 | |||||||||
UBS Commercial Mortgage Trust, Series 2012-C1 Class XA, 2.26%, 5/10/45 (a) (d) (f) | 47,005 | 1,644 | |||||||||
UBS Commercial Mortgage Trust, Series 2012-C1 Class B, 4.82%, 5/10/45 | 15,000 | 15,784 | |||||||||
UBS Commercial Mortgage Trust, Series 2012-C1 Class AS, 4.17%, 5/10/45 | 9,375 | 9,766 | |||||||||
UBS-Barclays Commercial Mortgage Trust, Series 2012-C2 Class ASEC, 4.18%, 5/10/63 (a) | 2,313 | 2,411 | |||||||||
Venture CLO Ltd., Series 2014-16A Class ARR, 2.68%(LIBOR03M+85bps), 1/15/28, Callable 4/15/20 @ 100 (a) (c) | 10,000 | 10,001 | |||||||||
Voya CLO Ltd., Series 2017-1 Class A2, 3.44%(LIBOR03M+160bps), 4/17/30, Callable 4/17/20 @ 100 (a) (c) | 3,000 | 2,993 | |||||||||
Wells Fargo Commercial Mortgage Trust, Series 2015-C28 Class A4, 3.54%, 5/15/48 | 7,000 | 7,543 | |||||||||
Wells Fargo Commercial Mortgage Trust, Series 2012-LC5 Class XA, 1.91%, 10/15/45 (a) (d) (f) | 23,507 | 890 | |||||||||
WFRBS Commercial Mortgage Trust, Series 2012-C10 Class A5, 3.24%, 12/15/45 | 5,000 | 5,151 | |||||||||
WFRBS Commercial Mortgage Trust, Series 2012-C7 Class AS, 4.09%, 6/15/45 (d) | 10,000 | 10,402 | |||||||||
WFRBS Commercial Mortgage Trust, Series 2013-C18 Class A3, 3.65%, 12/15/46 | 20,000 | 20,212 | |||||||||
WFRBS Commercial Mortgage Trust, Series 2011-C4 Class B, 5.40%, 6/15/44 (a) (d) | 6,500 | 6,755 | |||||||||
WFRBS Commercial Mortgage Trust, Series 2013-C13 Class AS, 3.35%, 5/15/45 | 5,000 | 5,187 | |||||||||
Total Collateralized Mortgage Obligations (Cost $513,808) | 528,831 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Common Stocks (0.3%) | |||||||||||
Communication Services (0.1%): | |||||||||||
AT&T, Inc. | 44,050 | $ | 1,657 | ||||||||
Verizon Communications, Inc. | 21,000 | 1,248 | |||||||||
2,905 | |||||||||||
Consumer Staples (0.1%): | |||||||||||
Kimberly-Clark Corp. | 24,000 | 3,438 | |||||||||
Energy (0.0%): (g) | |||||||||||
BP PLC, ADR | 107,500 | 3,884 | |||||||||
Chevron Corp. | 23,780 | 2,548 | |||||||||
Royal Dutch Shell PLC, ADR (h) | 55,000 | 2,868 | |||||||||
9,300 | |||||||||||
Financials (0.1%): | |||||||||||
Bank of Montreal | 50,000 | 3,811 | |||||||||
Canadian Imperial Bank of Commerce (h) | 25,000 | 2,037 | |||||||||
MFA Financial, Inc. | 199,850 | 1,559 | |||||||||
7,407 | |||||||||||
Utilities (0.0%): (g) | |||||||||||
Dominion Energy, Inc. | 15,200 | 1,303 | |||||||||
The Southern Co. | 27,500 | 1,936 | |||||||||
3,239 | |||||||||||
Total Common Stocks (Cost $21,001) | 26,289 | ||||||||||
Preferred Stocks (0.8%) | |||||||||||
Consumer Staples (0.3%): | |||||||||||
CHS, Inc., Series 1, cumulative redeemable, 7.88% (i) | 200,000 | 5,570 | |||||||||
Dairy Farmers of America, Inc., cumulative redeemable, 7.88% (a) (i) | 172,520 | 17,252 | |||||||||
22,822 | |||||||||||
Financials (0.0%): (g) | |||||||||||
Citigroup Capital, cumulative redeemable, 8.14%(LIBOR03M+637bps), 10/30/40 (c) | 40,000 | 1,127 | |||||||||
Real Estate (0.4%): | |||||||||||
Equity Residential, Series K, cumulative redeemable, 8.29% (i) | 111,611 | 7,087 | |||||||||
Mid-America Apartment Communities, Inc., cumulative redeemable, Series I, 8.50% (i) | 219,731 | 15,109 | |||||||||
Prologis, Inc., Series Q, cumulative redeemable, 8.54% (i) | 284,623 | 20,778 | |||||||||
42,974 | |||||||||||
Utilities (0.1%): | |||||||||||
Entergy Texas, Inc., 5.63%, 6/1/64 | 200,000 | 5,608 | |||||||||
Total Preferred Stocks (Cost $58,021) | 72,531 | ||||||||||
Senior Secured Loans (0.5%) | |||||||||||
CSC Holdings LLC, 1st Lien Term Loan, 3.93%(LIBOR01M+225bps), 7/17/25 (c) | $ | 2,393 | 2,395 | ||||||||
Harbor Freight Tools USA, Inc., 1st Lien Term Loan, 4.30%(LIBOR01M+250bps), 8/16/23 (c) | 7,414 | 7,349 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
McGraw-Hill Global Education Holdings LLC, 1st Lien Term Loan B, 5.80% (LIBOR01M+400bps), 5/4/22 (c) | $ | 3,349 | $ | 3,197 | |||||||
Reynolds Group Holdings, Inc., 1st Lien Term Loan B, 4.55%(LIBOR01M+275bps), 2/5/23 (c) | 8,542 | 8,549 | |||||||||
Solera LLC, 1st Lien Term Loan B, 4.55%(LIBOR01M+275bps), 3/3/23 (c) | 7,183 | 7,188 | |||||||||
Sprint Communications, Inc., 1st Lien Term Loan B, 4.81%(LIBOR01M+300bps), 2/3/24 (c) | 7,178 | 7,074 | |||||||||
Terex Corp. 1st Lien Term Loan, 3.84%(LIBOR02M+200bps), 1/31/24 (c) | 4,777 | 4,781 | |||||||||
Total Senior Secured Loans (Cost $40,679) | 40,533 | ||||||||||
Corporate Bonds (47.2%) | |||||||||||
Communication Services (2.6%): | |||||||||||
Activision Blizzard, Inc., 3.40%, 9/15/26, Callable 6/15/26 @ 100 | 7,500 | 8,039 | |||||||||
AT&T, Inc. 4.50%, 5/15/35, Callable 11/15/34 @ 100 | 25,000 | 28,697 | |||||||||
5.25%, 3/1/37, Callable 9/1/36 @ 100 | 10,000 | 12,215 | |||||||||
4.85%, 3/1/39, Callable 9/1/38 @ 100 | 5,000 | 5,935 | |||||||||
CBS Corp., 4.20%, 6/1/29, Callable 3/1/29 @ 100 | 10,000 | 11,184 | |||||||||
CCO Holdings LLC/CCO Holdings Capital Corp., 5.75%, 2/15/26, Callable 2/15/21 @ 102.88 (a) | 5,000 | 5,251 | |||||||||
CenturyLink, Inc. 5.80%, 3/15/22 | 10,000 | 10,549 | |||||||||
6.75%, 12/1/23 | 2,000 | 2,222 | |||||||||
Charter Communications Operating LLC, 6.38%, 10/23/35, Callable 4/23/35 @ 100 | 20,000 | 26,049 | |||||||||
Comcast Corp., 3.90%, 3/1/38, Callable 9/1/37 @ 100 | 15,000 | 17,143 | |||||||||
Crown Castle Towers LLC, 3.22%, 5/15/42, Callable 5/15/21 @ 100 (a) | 10,000 | 10,128 | |||||||||
CSC Holdings LLC 5.50%, 4/15/27, Callable 4/15/22 @ 102.75 (a) | 3,000 | 3,190 | |||||||||
5.75%, 1/15/30, Callable 1/15/25 @ 102.88 (a) | 10,000 | 10,744 | |||||||||
Discovery Communications LLC, 3.95%, 3/20/28, Callable 12/20/27 @ 100 | 15,000 | 16,210 | |||||||||
Fox Corp., 4.71%, 1/25/29, Callable 10/25/28 @ 100 (a) | 7,600 | 8,843 | |||||||||
Qwest Corp., 6.75%, 12/1/21 | 5,000 | 5,349 | |||||||||
Sirius XM Radio, Inc., 5.38%, 7/15/26, Callable 7/15/21 @ 102.69 (a) | 5,000 | 5,274 | |||||||||
Sprint Corp., 7.25%, 9/15/21 (h) | 2,250 | 2,359 | |||||||||
Sprint Spectrum Co. LLC/Sprint Spectrum Co. II LLC, 4.74%, 9/20/29 (a) | 19,500 | 20,664 | |||||||||
T-Mobile USA, Inc., 4.75%, 2/1/28, Callable 2/1/23 @ 102.38 | 2,857 | 3,040 | |||||||||
Verizon Communications, Inc. 4.40%, 11/1/34, Callable 5/1/34 @ 100 | 10,000 | 11,987 | |||||||||
4.13%, 8/15/46 | 5,000 | 5,830 | |||||||||
230,902 | |||||||||||
Consumer Discretionary (1.1%): | |||||||||||
Advance Auto Parts, Inc., 4.50%, 12/1/23, Callable 9/1/23 @ 100 | 10,000 | 10,831 | |||||||||
Amazon.com, Inc., 3.88%, 8/22/37, Callable 2/22/37 @ 100 | 12,000 | 14,091 | |||||||||
AutoZone, Inc., 3.75%, 6/1/27, Callable 3/1/27 @ 100 | 5,000 | 5,433 | |||||||||
Hasbro, Inc., 3.55%, 11/19/26, Callable 9/19/26 @ 100 | 12,000 | 12,496 | |||||||||
Hilton Worldwide Finance LLC/Hilton Worldwide Finance Corp., 4.88%, 4/1/27, Callable 4/1/22 @ 102.44 | 8,000 | 8,388 | |||||||||
Horace Mann School, 3.27%, 7/1/27 | 2,500 | 2,565 | |||||||||
KB Home, 4.80%, 11/15/29, Callable 5/15/29 @ 100 | 2,000 | 2,085 |
See notes to financial statements.
11
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Lennar Corp., 5.88%, 11/15/24, Callable 5/15/24 @ 100 | $ | 5,000 | $ | 5,639 | |||||||
Murphy Oil USA, Inc., 4.75%, 9/15/29, Callable 9/15/24 @ 102.38 | 2,000 | 2,087 | |||||||||
Newell Brands, Inc., 3.85%, 4/1/23, Callable 2/1/23 @ 100 | 7,500 | 7,800 | |||||||||
Princeton Theological Seminary, 4.11%, 7/1/23 | 6,080 | 6,522 | |||||||||
The Art Institute of Chicago, 3.23%, 3/1/22 | 2,750 | 2,806 | |||||||||
University of Notre Dame du Lac, 3.44%, 2/15/45 | 5,000 | 5,617 | |||||||||
Vanderbilt University Medical Center, 4.17%, 7/1/37, Callable 1/1/37 @ 100 | 1,000 | 1,135 | |||||||||
Volkswagen Group of America Finance LLC, 3.20%, 9/26/26, Callable 7/26/26 @ 100 (a) | 7,105 | 7,466 | |||||||||
94,961 | |||||||||||
Consumer Staples (1.9%): | |||||||||||
Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc., 4.70%, 2/1/36, Callable 8/1/35 @ 100 | 20,000 | 23,992 | |||||||||
Anheuser-Busch InBev Worldwide, Inc. 4.38%, 4/15/38, Callable 10/15/37 @ 100 | 6,500 | 7,521 | |||||||||
5.45%, 1/23/39, Callable 7/23/38 @ 100 | 5,250 | 6,836 | |||||||||
BAT Capital Corp., 4.39%, 8/15/37, Callable 2/15/37 @ 100 | 5,000 | 5,217 | |||||||||
Bunge Ltd. Finance Corp., 3.25%, 8/15/26, Callable 5/15/26 @ 100 | 3,000 | 3,064 | |||||||||
Flowers Foods, Inc., 3.50%, 10/1/26, Callable 7/1/26 @ 100 | 10,000 | 10,499 | |||||||||
General Mills, Inc., 4.55%, 4/17/38, Callable 10/17/37 @ 100 | 4,667 | 5,543 | |||||||||
Keurig Dr Pepper, Inc. 4.60%, 5/25/28, Callable 2/25/28 @ 100 | 7,143 | 8,208 | |||||||||
4.99%, 5/25/38, Callable 11/25/37 @ 100 | 4,667 | 5,687 | |||||||||
Kraft Heinz Foods Co. 4.88%, 2/15/25, Callable 3/16/20 @ 102.44 (a) | 13,899 | 14,264 | |||||||||
3.95%, 7/15/25, Callable 4/15/25 @ 100 | 10,000 | 10,713 | |||||||||
3.75%, 4/1/30, Callable 1/1/30 @ 100 (a) | 3,750 | 3,965 | |||||||||
Mars, Inc., 3.88%, 4/1/39, Callable 10/1/38 @ 100 (a) | 14,000 | 16,440 | |||||||||
Mead Johnson Nutrition Co., 4.13%, 11/15/25, Callable 8/15/25 @ 100 | 3,500 | 3,899 | |||||||||
PepsiCo, Inc., 4.25%, 10/22/44, Callable 4/22/44 @ 100 | 5,000 | 6,164 | |||||||||
SC Johnson & Son, Inc., 4.35%, 9/30/44, Callable 3/30/44 @ 100 (a) | 10,000 | 11,645 | |||||||||
Smithfield Foods, Inc. 4.25%, 2/1/27, Callable 11/1/26 @ 100 (a) | 5,000 | 5,270 | |||||||||
5.20%, 4/1/29, Callable 1/1/29 @ 100 (a) | 10,000 | 11,237 | |||||||||
The JM Smucker Co., 4.25%, 3/15/35 | 5,000 | 5,623 | |||||||||
165,787 | |||||||||||
Energy (6.2%): | |||||||||||
Boardwalk Pipelines LP 4.95%, 12/15/24, Callable 9/15/24 @ 100 | 15,000 | 16,369 | |||||||||
4.45%, 7/15/27, Callable 4/15/27 @ 100 | 10,000 | 10,371 | |||||||||
Buckeye Partners LP 4.13%, 12/1/27, Callable 9/1/27 @ 100 | 15,000 | 14,839 | |||||||||
5.60%, 10/15/44, Callable 4/15/44 @ 100 | 15,000 | 13,805 | |||||||||
Cameron LNG LLC, 3.30%, 1/15/35, Callable 9/15/34 @ 100 (a) | 22,364 | 23,568 | |||||||||
Chevron Phillips Chemical Co. LLC, 3.40%, 12/1/26, Callable 9/1/26 @ 100 (a) | 10,000 | 10,650 | |||||||||
Columbia Pipeline Group, Inc., 4.50%, 6/1/25, Callable 3/1/25 @ 100 | 15,000 | 16,640 | |||||||||
ConocoPhillips Co. 4.95%, 3/15/26, Callable 12/15/25 @ 100 | 10,000 | 11,656 | |||||||||
4.15%, 11/15/34, Callable 5/15/34 @ 100 | 10,000 | 11,499 |
See notes to financial statements.
12
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Continental Resources, Inc., 5.00%, 9/15/22, Callable 3/16/20 @ 100 | $ | 4,042 | $ | 4,060 | |||||||
DCP Midstream Operating LP, 5.85%(LIBOR03M+385bps), 5/21/43, Callable 5/21/23 @ 100 (a) (c) | 15,000 | 13,882 | |||||||||
Diamondback Energy, Inc. 3.25%, 12/1/26, Callable 10/1/26 @ 100 | 4,000 | 4,082 | |||||||||
3.50%, 12/1/29, Callable 9/1/29 @ 100 | 5,000 | 5,035 | |||||||||
Enable Midstream Partners LP, 4.15%, 9/15/29, Callable 6/15/29 @ 100 | 10,000 | 9,731 | |||||||||
Enable Oklahoma Intrastate Transmission LLC, 6.25%, 3/15/20 (a) (h) | 9,307 | 9,348 | |||||||||
Energy Transfer Operating LP 4.75%, 1/15/26, Callable 10/15/25 @ 100 | 5,000 | 5,477 | |||||||||
4.93%(LIBOR03M+302bps), 11/1/66, Callable 3/16/20 @ 100 (c) | 15,010 | 12,254 | |||||||||
Energy Transfer Partners LP/Regency Energy Finance, 4.50%, 11/1/23, Callable 8/1/23 @ 100 | 7,000 | 7,471 | |||||||||
EnLink Midstream Partners LP 4.15%, 6/1/25, Callable 3/1/25 @ 100 | 14,000 | 12,855 | |||||||||
4.85%, 7/15/26, Callable 4/15/26 @ 100 | 10,000 | 9,224 | |||||||||
Enterprise Products Operating LLC, 2.80%, 1/31/30, Callable 10/31/29 @ 100 | 10,000 | 10,117 | |||||||||
EOG Resources, Inc., 3.90%, 4/1/35, Callable 10/1/34 @ 100 | 10,000 | 11,365 | |||||||||
EQM Midstream Partners LP, 4.00%, 8/1/24, Callable 5/1/24 @ 100 | 6,437 | 6,147 | |||||||||
EQT Corp., 7.00%, 2/1/30, Callable 10/1/29 @ 100 | 7,589 | 6,679 | |||||||||
EQT Midstream Partners LP, 4.13%, 12/1/26, Callable 9/1/26 @ 100 | 14,000 | 12,634 | |||||||||
Halliburton Co., 3.80%, 11/15/25, Callable 8/15/25 @ 100 | 20,000 | 21,599 | |||||||||
Hess Corp., 4.30%, 4/1/27, Callable 1/1/27 @ 100 | 7,500 | 8,015 | |||||||||
Marathon Petroleum Corp., 4.75%, 9/15/44, Callable 3/15/44 @ 100 | 10,000 | 11,260 | |||||||||
Midwest Connector Capital Co. LLC, 4.63%, 4/1/29, Callable 1/1/29 @ 100 (a) | 25,000 | 27,492 | |||||||||
MPLX LP, 4.00%, 2/15/25, Callable 11/15/24 @ 100 | 7,500 | 7,962 | |||||||||
Murphy Oil Corp., 5.75%, 8/15/25, Callable 8/15/20 @ 104.31 | 5,000 | 5,145 | |||||||||
Newfield Exploration Co. 5.63%, 7/1/24 | 6,730 | 7,430 | |||||||||
5.38%, 1/1/26, Callable 10/1/25 @ 100 | 9,500 | 10,422 | |||||||||
Northwest Pipeline LLC, 4.00%, 4/1/27, Callable 1/1/27 @ 100 | 6,067 | 6,567 | |||||||||
NuStar Logistics LP, 6.00%, 6/1/26, Callable 3/1/26 @ 100 | 3,500 | 3,687 | |||||||||
Occidental Petroleum Corp. 3.40%, 4/15/26, Callable 1/15/26 @ 100 | 10,000 | 10,453 | |||||||||
3.00%, 2/15/27, Callable 11/15/26 @ 100 | 5,000 | 5,096 | |||||||||
3.50%, 8/15/29, Callable 5/15/29 @ 100 | 6,279 | 6,476 | |||||||||
ONEOK Partners LP, 4.90%, 3/15/25, Callable 12/15/24 @ 100 (h) | 10,000 | 11,168 | |||||||||
Phillips 66, 4.65%, 11/15/34, Callable 5/15/34 @ 100 | 10,000 | 11,988 | |||||||||
Plains All American Pipeline LP/PAA Finance Corp., 3.55%, 12/15/29, Callable 9/15/29 @ 100 | 10,000 | 9,933 | |||||||||
Rockies Express Pipeline LLC 4.95%, 7/15/29, Callable 4/15/29 @ 100 (a) | 13,730 | 13,718 | |||||||||
4.80%, 5/15/30, Callable 2/15/30 @ 100 (a) | 3,000 | 2,952 | |||||||||
Sabal Trail Transmission LLC, 4.68%, 5/1/38, Callable 11/1/37 @ 100 (a) | 15,000 | 17,499 | |||||||||
Schlumberger Holdings Corp. 4.00%, 12/21/25, Callable 9/21/25 @ 100 (a) | 961 | 1,053 | |||||||||
3.90%, 5/17/28, Callable 2/17/28 @ 100 (a) | 14,669 | 15,821 | |||||||||
Southwestern Energy Co. 6.20%, 1/23/25, Callable 10/23/24 @ 100 (j) | 2,000 | 1,663 | |||||||||
7.50%, 4/1/26, Callable 4/1/21 @ 105.63 (h) | 5,000 | 4,173 |
See notes to financial statements.
13
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Spectra Energy Partners LP, 3.38%, 10/15/26, Callable 7/15/26 @ 100 | $ | 5,000 | $ | 5,295 | |||||||
Targa Resources Partners LP/Targa Resources Partners Finance Corp., 5.50%, 3/1/30, Callable 3/1/25 @ 102.75 (a) | 5,000 | 5,159 | |||||||||
The Williams Cos., Inc., 4.55%, 6/24/24, Callable 3/24/24 @ 100 | 10,000 | 10,918 | |||||||||
TransCanada PipeLines Ltd., 4.12%(LIBOR03M+221bps), 5/15/67, Callable 3/16/20 @ 100 (c) | 12,124 | 10,576 | |||||||||
Transcontinental Gas Pipe Line Co. LLC, 7.85%, 2/1/26, Callable 11/1/25 @ 100 | 3,000 | 3,868 | |||||||||
Transocean Pontus Ltd., 6.13%, 8/1/25, Callable 8/1/21 @ 104.59 (a) | 2,076 | 2,138 | |||||||||
Western Midstream Operating LP 5.38%, 6/1/21, Callable 3/1/21 @ 100 | 10,000 | 10,315 | |||||||||
3.10%, 2/1/25, Callable 1/1/25 @ 100 | 4,211 | 4,236 | |||||||||
Whiting Petroleum Corp., 6.63%, 1/15/26, Callable 10/15/25 @ 100 | 5,000 | 2,816 | |||||||||
546,651 | |||||||||||
Financials (15.8%): | |||||||||||
American Equity Investment Life Holding Co., 5.00%, 6/15/27, Callable 3/15/27 @ 100 | 5,000 | 5,466 | |||||||||
American International Group, Inc., 3.88%, 1/15/35, Callable 7/15/34 @ 100 | 10,000 | 11,052 | |||||||||
AmSouth Bancorp, 6.75%, 11/1/25 | 5,000 | 6,040 | |||||||||
AmTrust Financial Services, Inc., 6.13%, 8/15/23 | 10,000 | 10,135 | |||||||||
Ares Capital Corp. 3.50%, 2/10/23, Callable 1/10/23 @ 100 | 10,000 | 10,275 | |||||||||
4.20%, 6/10/24, Callable 5/10/24 @ 100 | 5,000 | 5,284 | |||||||||
4.25%, 3/1/25, Callable 1/1/25 @ 100 | 5,000 | 5,300 | |||||||||
Assurant, Inc. 4.90%, 3/27/28, Callable 12/27/27 @ 100 (h) | 5,000 | 5,602 | |||||||||
3.70%, 2/22/30, Callable 11/22/29 @ 100 | 3,846 | 4,034 | |||||||||
Athene Global Funding, 3.00%, 7/1/22 (a) | 20,000 | 20,459 | |||||||||
Atlantic Union Bankshares Corp., 5.00%(LIBOR03M+318bps), 12/15/26, Callable 12/15/21 @ 100 (c) | 10,000 | 10,149 | |||||||||
AXA Equitable Holdings, Inc., 4.35%, 4/20/28, Callable 1/20/28 @ 100 | 15,000 | 16,579 | |||||||||
Banc of California, Inc., 5.25%, 4/15/25, Callable 1/15/25 @ 100 | 15,000 | 15,386 | |||||||||
BancorpSouth Bank, 4.13%(LIBOR03M+247bps), 11/20/29, Callable 11/20/24 @ 100 (c) | 8,572 | 8,711 | |||||||||
Bank of America Corp. 4.00%, 4/1/24, MTN | 4,864 | 5,268 | |||||||||
4.20%, 8/26/24, MTN (e) | 10,000 | 10,872 | |||||||||
3.95%, 4/21/25, MTN | 5,000 | 5,412 | |||||||||
3.71%(LIBOR03M+151bps), 4/24/28, Callable 4/24/27 @ 100 (c) | 8,000 | 8,725 | |||||||||
3.42%(LIBOR03M+104bps), 12/20/28, Callable 12/20/27 @ 100 (c) | 4,383 | 4,701 | |||||||||
Bank OZK, 5.50%(LIBOR03M+443bps), 7/1/26, Callable 7/1/21 @ 100 (c) (h) | 5,000 | 5,177 | |||||||||
BankUnited, Inc., 4.88%, 11/17/25, Callable 8/17/25 @ 100 | 10,000 | 11,160 | |||||||||
BBVA USA, 3.88%, 4/10/25, Callable 3/10/25 @ 100 | 20,000 | 21,223 | |||||||||
Blackstone Holdings Finance Co. LLC, 2.50%, 1/10/30, Callable 10/10/29 @ 100 (a) | 20,000 | 20,381 | |||||||||
BOKF Merger Corp., 5.62%(LIBOR03M+317bps), 6/25/30, Callable 6/25/25 @ 100 (c) | 8,000 | 8,300 | |||||||||
BP Capital Markets America, Inc., 3.59%, 4/14/27, Callable 1/14/27 @ 100 | 15,000 | 16,245 | |||||||||
Cadence BanCorp, 4.75%(LIBOR03M+303bps), 6/30/29, Callable 6/30/24 @ 100 (c) | 5,833 | 5,951 |
See notes to financial statements.
14
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Capital One Financial Corp. 3.75%, 4/24/24, Callable 3/24/24 @ 100 | $ | 10,000 | $ | 10,681 | |||||||
3.75%, 3/9/27, Callable 2/9/27 @ 100 | 15,000 | 16,215 | |||||||||
Chubb INA Holdings, Inc. 3.35%, 5/15/24 | 5,000 | 5,326 | |||||||||
3.35%, 5/3/26, Callable 2/3/26 @ 100 | 10,000 | 10,829 | |||||||||
CIT Group, Inc. 5.25%, 3/7/25, Callable 12/7/24 @ 100 | 10,000 | 11,045 | |||||||||
4.13%(H15T5Y+237bps), 11/13/29, Callable 11/13/24 @ 100 (c) | 15,000 | 14,992 | |||||||||
Citigroup, Inc. 4.40%, 6/10/25 | 20,000 | 22,086 | |||||||||
4.45%, 9/29/27 (e) | 5,000 | 5,622 | |||||||||
3.67%(LIBOR03M+139bps), 7/24/28, Callable 7/24/27 @ 100 (c) | 10,000 | 10,851 | |||||||||
Citizens Financial Group, Inc. 4.15%, 9/28/22 (a) | 15,000 | 15,763 | |||||||||
3.75%, 7/1/24 | 5,500 | 5,772 | |||||||||
Credit Acceptance Corp., 6.63%, 3/15/26, Callable 3/15/22 @ 103.31 (a) | 4,875 | 5,280 | |||||||||
Cullen/Frost Bankers, Inc., 4.50%, 3/17/27, Callable 2/17/27 @ 100 (h) | 3,500 | 3,820 | |||||||||
Cullen/Frost Capital Trust II, 3.46%(LIBOR03M+155bps), 3/1/34, Callable 3/16/20 @ 100 (c) | 10,000 | 9,454 | |||||||||
DAE Funding LLC, 5.00%, 8/1/24, Callable 8/1/20 @ 103.75 (a) | 3,000 | 3,138 | |||||||||
Discover Bank, 4.68%(USSW5+173bps), 8/9/28, Callable 8/9/23 @ 100 (c) | 10,000 | 10,593 | |||||||||
Eagle Bancorp, Inc., 5.00%(LIBOR03M+385bps), 8/1/26, Callable 8/1/21 @ 100 (c) | 10,000 | 10,086 | |||||||||
Fifth Third Bank, 3.85%, 3/15/26, Callable 2/15/26 @ 100 | 10,000 | 10,901 | |||||||||
First Maryland Capital I, 2.83%(LIBOR03M+100bps), 1/15/27, Callable 3/16/20 @ 100 (c) | 3,500 | 3,370 | |||||||||
FirstMerit Bank NA, 4.27%, 11/25/26 | 10,000 | 11,038 | |||||||||
Flagstar Bancorp, Inc., 6.13%, 7/15/21, Callable 6/15/21 @ 100 | 10,000 | 10,365 | |||||||||
Ford Motor Credit Co. LLC 4.06%, 11/1/24, Callable 10/1/24 @ 100 | 10,000 | 10,317 | |||||||||
4.54%, 8/1/26, Callable 6/1/26 @ 100 | 10,000 | 10,378 | |||||||||
Fulton Financial Corp. 3.60%, 3/16/22 | 3,250 | 3,320 | |||||||||
4.50%, 11/15/24 (h) | 10,000 | 10,824 | |||||||||
GlaxoSmithKline Capital, Inc., 4.20%, 3/18/43 | 10,000 | 12,223 | |||||||||
Glencore Funding LLC 4.13%, 5/30/23 (a) | 5,000 | 5,269 | |||||||||
4.00%, 3/27/27, Callable 12/27/26 @ 100 (a) | 15,000 | 15,871 | |||||||||
4.88%, 3/12/29, Callable 12/12/28 @ 100 (a) | 6,700 | 7,420 | |||||||||
Global Atlantic Fin Co., 8.63%, 4/15/21 (a) | 10,000 | 10,702 | |||||||||
Global Atlantic Financial Co., 4.40%, 10/15/29, Callable 7/15/29 @ 100 (a) | 17,143 | 17,525 | |||||||||
Hilltop Holdings, Inc., 5.00%, 4/15/25, Callable 1/15/25 @ 100 | 5,000 | 5,127 | |||||||||
Home BancShares, Inc., 5.62%(LIBOR03M+358bps), 4/15/27, Callable 4/15/22 @ 100 (c) | 5,000 | 5,150 | |||||||||
Huntington Bancshares, Inc., 4.35%, 2/4/23 | 10,000 | 10,624 | |||||||||
Hyundai Capital America 3.25%, 9/20/22 (a) | 10,000 | 10,271 | |||||||||
3.50%, 11/2/26, Callable 9/2/26 @ 100 (a) | 20,000 | 20,861 | |||||||||
ILFC E-Capital Trust I, 3.90%, 12/21/65, Callable 3/16/20 @ 100 (a) (j) | 10,000 | 7,947 | |||||||||
Intercontinental Exchange, Inc., 3.10%, 9/15/27, Callable 6/15/27 @ 100 | 15,000 | 16,046 |
See notes to financial statements.
15
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Jackson National Life Global Funding 2.50%, 6/27/22 (a) | $ | 10,000 | $ | 10,175 | |||||||
3.25%, 1/30/24 (a) | 20,000 | 21,018 | |||||||||
JPMorgan Chase & Co. 2.95%, 10/1/26, Callable 7/1/26 @ 100 | 20,000 | 21,012 | |||||||||
2.41%(LIBOR03M+50bps), 2/1/27, Callable 3/16/20 @ 100 (c) (h) | 4,000 | 3,819 | |||||||||
4.25%, 10/1/27 | 5,000 | 5,656 | |||||||||
KeyBank NA, 3.40%, 5/20/26, MTN | 20,000 | 21,406 | |||||||||
LegacyTexas Financial Group, Inc., 5.50%(LIBOR03M+389bps), 12/1/25, Callable 12/1/20 @ 100 (c) | 5,000 | 4,926 | |||||||||
Level 3 Financing, Inc., 3.88%, 11/15/29, Callable 8/15/29 @ 100 (a) | 20,000 | 20,742 | |||||||||
Lincoln National Corp. 4.20%, 3/15/22 | 10,000 | 10,474 | |||||||||
4.26%(LIBOR03M+236bps), 5/17/66, Callable 2/28/20 @ 100 (c) | 15,000 | 13,549 | |||||||||
Loews Corp., 3.75%, 4/1/26, Callable 1/1/26 @ 100 | 5,000 | 5,463 | |||||||||
Main Street Capital Corp. 4.50%, 12/1/22 | 4,500 | 4,753 | |||||||||
5.20%, 5/1/24 | 7,800 | 8,437 | |||||||||
Manufacturers & Traders Trust Co., 3.40%, 8/17/27 | 5,000 | 5,421 | |||||||||
MassMutual Global Funding 3.60%, 4/9/24 (a) | 10,000 | 10,718 | |||||||||
2.75%, 6/22/24 (a) | 10,000 | 10,408 | |||||||||
MB Financial Bank NA, 4.00%(LIBOR03M+187bps), 12/1/27, Callable 12/1/22 @ 100 (c) | 10,417 | 10,614 | |||||||||
Mercury General Corp., 4.40%, 3/15/27, Callable 12/15/26 @ 100 | 15,000 | 16,184 | |||||||||
MetLife, Inc., 4.13%, 8/13/42 | 10,000 | 11,785 | |||||||||
MUFG Americas Holdings Corp., 3.00%, 2/10/25, Callable 1/10/25 @ 100 | 16,000 | 16,671 | |||||||||
National Rural Utilities Cooperative Finance Corp., 4.75%(LIBOR03M+291bps), 4/30/43, Callable 4/30/23 @ 100 (c) | 9,500 | 9,896 | |||||||||
Nationwide Mutual Insurance Co., 4.18%(LIBOR03M+229bps), 12/15/24, Callable 3/16/20 @ 100 (a) (c) | 29,505 | 29,467 | |||||||||
New York Community Bancorp, Inc., 5.90%(LIBOR03M+278bps), 11/6/28, Callable 11/6/23 @ 100 (c) (h) | 10,000 | 10,524 | |||||||||
Nuveen Finance LLC, 4.13%, 11/1/24 (a) | 5,000 | 5,491 | |||||||||
Ohio National Financial Services, Inc., 6.63%, 5/1/31 (a) | 5,000 | 5,405 | |||||||||
Old Republic International Corp., 3.88%, 8/26/26, Callable 7/26/26 @ 100 | 20,000 | 21,527 | |||||||||
People's United Bank NA, 4.00%, 7/15/24, Callable 4/16/24 @ 100 | 1,000 | 1,047 | |||||||||
Pine Street Trust I, 4.57%, 2/15/29, Callable 11/15/28 @ 100 (a) | 20,000 | 22,241 | |||||||||
Pinnacle Financial Partners, Inc., 4.13%(LIBOR03M+278bps), 9/15/29, Callable 9/15/24 @ 100 (c) | 5,000 | 5,105 | |||||||||
PNC Bank NA 4.20%, 11/1/25, Callable 10/2/25 @ 100 | 7,000 | 7,807 | |||||||||
2.70%, 10/22/29 | 10,000 | 10,281 | |||||||||
PPL Capital Funding, Inc., 4.63%(LIBOR03M+267bps), 3/30/67, Callable 3/16/20 @ 100 (c) | 21,130 | 20,636 | |||||||||
Primerica, Inc., 4.75%, 7/15/22 | 10,000 | 10,673 | |||||||||
ProAssurance Corp., 5.30%, 11/15/23 | 9,864 | 10,755 | |||||||||
Prudential Financial, Inc. 5.62%(LIBOR03M+392bps), 6/15/43, Callable 6/15/23 @ 100 (c) | 10,000 | 10,811 | |||||||||
4.35%, 2/25/50, Callable 8/25/49 @ 100 | 5,000 | 5,973 |
See notes to financial statements.
16
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Regions Bank, 6.45%, 6/26/37 | $ | 10,409 | $ | 14,221 | |||||||
S&P Global, Inc., 4.00%, 6/15/25, Callable 3/15/25 @ 100 | 10,000 | 11,010 | |||||||||
Santander Holdings USA, Inc., 4.40%, 7/13/27, Callable 4/14/27 @ 100 | 5,818 | 6,374 | |||||||||
Signature Bank, 4.13%(LIBOR03M+256bps), 11/1/29, Callable 11/1/24 @ 100 (c) | 10,000 | 10,180 | |||||||||
StanCorp Financial Group, Inc., 5.00%, 8/15/22 | 17,050 | 18,030 | |||||||||
Starwood Property Trust, Inc., 3.63%, 2/1/21, Callable 11/1/20 @ 100 | 5,450 | 5,456 | |||||||||
Sterling Bancorp 3.50%, 6/8/20, Callable 5/8/20 @ 100 | 8,000 | 7,965 | |||||||||
4.00%(SOFR+253bps), 12/30/29, Callable 12/30/24 @ 100 (c) | 8,750 | 8,867 | |||||||||
Sterling National Bank, 5.25%(LIBOR03M+394bps), 4/1/26, Callable 4/1/21 @ 100 (c) | 5,000 | 5,089 | |||||||||
Susquehanna Bancshares, Inc., 5.38%, 8/15/22 (h) | 6,021 | 6,500 | |||||||||
Synchrony Financial 3.95%, 12/1/27, Callable 9/1/27 @ 100 | 13,500 | 14,378 | |||||||||
5.15%, 3/19/29, Callable 12/19/28 @ 100 | 9,250 | 10,686 | |||||||||
Synovus Financial Corp., 5.90%(USSW5+338bps), 2/7/29, Callable 2/7/24 @ 100 (c) | 10,000 | 10,713 | |||||||||
TCF National Bank 6.25%, 6/8/22 | 10,000 | 10,782 | |||||||||
4.13%(LIBOR03M+238bps), 7/2/29, Callable 7/2/24 @ 100 (c) | 4,000 | 3,963 | |||||||||
Texas Capital Bank NA, 5.25%, 1/31/26 | 12,335 | 13,179 | |||||||||
The Allstate Corp., 5.75%(LIBOR03M+294bps), 8/15/53, Callable 8/15/23 @ 100 (c) | 5,000 | 5,425 | |||||||||
The Hanover Insurance Group, Inc., 4.50%, 4/15/26, Callable 1/15/26 @ 100 | 13,086 | 14,544 | |||||||||
The Hartford Financial Services Group, Inc., 4.03%(LIBOR03M+213bps), 2/12/67, Callable 3/16/20 @ 100 (a) (c) | 14,000 | 13,475 | |||||||||
The PNC Financial Services Group, Inc. 2.85%, 11/9/22 (p) | 10,000 | 10,279 | |||||||||
3.15%, 5/19/27, Callable 4/19/27 @ 100 | 5,000 | 5,366 | |||||||||
2.55%, 1/22/30, Callable 10/24/29 @ 100 | 15,000 | 15,318 | |||||||||
TIAA FSB Holdings, Inc., 5.75%, 7/2/25, Callable 6/2/25 @ 100 | 10,000 | 10,854 | |||||||||
Torchmark Corp., 4.55%, 9/15/28, Callable 6/15/28 @ 100 | 7,670 | 8,743 | |||||||||
Towne Bank, 4.50%(LIBOR03M+255bps), 7/30/27, Callable 7/30/22 @ 100 (c) | 11,062 | 10,986 | |||||||||
United Financial Bancorp, Inc., 5.75%, 10/1/24 | 2,500 | 2,698 | |||||||||
US BanCorp, 3.10%, 4/27/26, MTN, Callable 3/27/26 @ 100 | 5,000 | 5,299 | |||||||||
USB Realty Corp., 2.98%(LIBOR03M+115bps), Callable 1/15/22 @ 100 (a) (c) (i) | 16,800 | 15,036 | |||||||||
WEA Finance LLC/Westfield UK & Europe Finance PLC, 3.75%, 9/17/24, Callable 6/17/24 @ 100 (a) | 20,000 | 21,345 | |||||||||
Webster Financial Corp., 4.38%, 2/15/24, Callable 1/16/24 @ 100 | 5,000 | 5,336 | |||||||||
Wells Fargo & Co., 3.00%, 10/23/26 | 20,000 | 20,961 | |||||||||
Zions Bancorp NA, 3.25%, 10/29/29, Callable 7/29/29 @ 100 | 25,000 | 25,308 | |||||||||
1,414,225 | |||||||||||
Health Care (3.4%): | |||||||||||
Abbvie, Inc. 3.20%, 11/6/22, Callable 9/6/22 @ 100 | 5,000 | 5,161 | |||||||||
3.60%, 5/14/25, Callable 2/14/25 @ 100 | 10,000 | 10,694 | |||||||||
AbbVie, Inc., 3.20%, 11/21/29, Callable 8/21/29 @ 100 (a) | 15,000 | 15,607 | |||||||||
Anthem, Inc., 2.88%, 9/15/29, Callable 6/15/29 @ 100 | 9,677 | 9,789 |
See notes to financial statements.
17
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Baylor Scott & White Holdings 3.10%, 11/15/25, Callable 8/15/25 @ 100 | $ | 7,000 | $ | 7,397 | |||||||
2.65%, 11/15/26, Callable 8/15/26 @ 100 | 20,000 | 20,274 | |||||||||
Becton Dickinson & Co., 3.70%, 6/6/27, Callable 3/6/27 @ 100 | 5,000 | 5,432 | |||||||||
Bon Secours Charity Health System, Inc., 5.25%, 11/1/25 | 3,000 | 3,214 | |||||||||
Boston Medical Center Corp., 4.52%, 7/1/26 | 4,250 | 4,711 | |||||||||
Bristol-Myers Squibb Co., 3.90%, 2/20/28, Callable 11/20/27 @ 100 (a) | 5,000 | 5,607 | |||||||||
Cigna Corp. 3.40%, 3/1/27, Callable 12/1/26 @ 100 (a) | 15,000 | 15,841 | |||||||||
3.05%, 10/15/27, Callable 7/15/27 @ 100 (a) | 10,000 | 10,369 | |||||||||
Community Health Network, Inc., 4.24%, 5/1/25 | 10,000 | 10,628 | |||||||||
CVS Health Corp. 4.30%, 3/25/28, Callable 12/25/27 @ 100 | 11,700 | 12,980 | |||||||||
3.25%, 8/15/29, Callable 5/15/29 @ 100 | 8,966 | 9,326 | |||||||||
CVS Pass-Through Trust 6.04%, 12/10/28 | 5,618 | 6,350 | |||||||||
7.51%, 1/10/32 (a) | 3,591 | 4,522 | |||||||||
5.93%, 1/10/34 (a) | 3,867 | 4,535 | |||||||||
Eastern Maine Healthcare Systems, 5.02%, 7/1/36 | 17,000 | 17,720 | |||||||||
Elanco Animal Health, Inc., 4.27%, 8/28/23, Callable 7/28/23 @ 100 | 8,333 | 8,871 | |||||||||
Gilead Sciences, Inc., 3.65%, 3/1/26, Callable 12/1/25 @ 100 | 10,000 | 10,900 | |||||||||
HCA, Inc. 5.00%, 3/15/24 | 5,000 | 5,534 | |||||||||
5.25%, 4/15/25 | 15,000 | 17,040 | |||||||||
4.50%, 2/15/27, Callable 8/15/26 @ 100 | 2,500 | 2,746 | |||||||||
Medtronic, Inc., 4.38%, 3/15/35 | 7,154 | 8,877 | |||||||||
Mercy Health 3.38%, 11/1/25 | 15,000 | 15,794 | |||||||||
4.30%, 7/1/28 | 3,720 | 4,213 | |||||||||
Mylan, Inc., 4.55%, 4/15/28, Callable 1/15/28 @ 100 | 5,555 | 6,135 | |||||||||
Northwell Healthcare, Inc., 3.39%, 11/1/27, Callable 8/1/27 @ 100 | 3,900 | 4,115 | |||||||||
NYU Langone Hospitals, 4.17%, 7/1/37 | 6,500 | 7,065 | |||||||||
Premier Health Partners, 2.91%, 11/15/26, Callable 5/15/26 @ 100 | 10,000 | 10,006 | |||||||||
SSM Health Care Corp., 3.82%, 6/1/27, Callable 3/1/27 @ 100 (h) | 8,500 | 9,395 | |||||||||
Teleflex, Inc., 4.88%, 6/1/26, Callable 6/1/21 @ 102.44 | 2,000 | 2,095 | |||||||||
UnitedHealth Group, Inc., 3.10%, 3/15/26 | 5,000 | 5,344 | |||||||||
298,287 | |||||||||||
Industrials (5.0%): | |||||||||||
Air Lease Corp., 3.63%, 4/1/27, Callable 1/1/27 @ 100 | 10,000 | 10,579 | |||||||||
American Airlines Pass Through Trust 3.70%, 4/1/28 | 7,265 | 7,783 | |||||||||
4.00%, 3/22/29 | 8,342 | 8,998 | |||||||||
4.00%, 8/15/30 (h) | 4,381 | 4,761 | |||||||||
3.60%, 4/15/31 | 9,188 | 9,586 | |||||||||
Arconic, Inc., 5.13%, 10/1/24, Callable 7/1/24 @ 100 | 17,750 | 19,149 | |||||||||
Ashtead Capital, Inc., 4.25%, 11/1/29, Callable 11/1/24 @ 102.13 (a) | 1,786 | 1,855 | |||||||||
Brambles USA, Inc., 4.13%, 10/23/25, Callable 7/25/25 @ 100 (a) | 5,500 | 5,986 |
See notes to financial statements.
18
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
British Airways Pass Through Trust 4.63%, 12/20/25 (a) | $ | 14,361 | $ | 15,269 | |||||||
3.35%, 12/15/30 (a) | 7,000 | 7,276 | |||||||||
3.80%, 3/20/33 (a) | 3,854 | 4,142 | |||||||||
Burlington Northern Santa Fe LLC 3.75%, 4/1/24, Callable 1/1/24 @ 100 | 8,000 | 8,614 | |||||||||
3.65%, 9/1/25, Callable 6/1/25 @ 100 | 10,000 | 10,948 | |||||||||
3.90%, 8/1/46, Callable 2/1/46 @ 100 | 7,000 | 8,041 | |||||||||
Continental Airlines Pass Through Trust 5.50%, 4/29/22 | 1,365 | 1,390 | |||||||||
4.15%, 10/11/25 | 6,801 | 7,233 | |||||||||
4.00%, 4/29/26 | 3,497 | 3,733 | |||||||||
Delta Air Lines Pass Through Trust, 3.88%, 1/30/29 | 7,244 | 7,840 | |||||||||
Eaton Corp. 2.75%, 11/2/22 | 10,000 | 10,271 | |||||||||
3.10%, 9/15/27, Callable 6/15/27 @ 100 (h) | 10,000 | 10,642 | |||||||||
FedEx Corp., 3.90%, 2/1/35 | 10,000 | 10,565 | |||||||||
General Electric Co., 5.00%(LIBOR03M+333bps), Callable 1/21/21 @ 100 (c) (i) | 11,842 | 11,767 | |||||||||
Hawaiian Airlines Pass Through Certificates 4.95%, 7/15/23 | 12,961 | 13,190 | |||||||||
3.90%, 7/15/27 | 11,860 | 12,014 | |||||||||
Hillenbrand, Inc. 5.50%, 7/15/20 | 5,000 | 5,062 | |||||||||
4.50%, 9/15/26, Callable 7/15/26 @ 100 | 15,000 | 16,119 | |||||||||
Hubbell, Inc. 3.35%, 3/1/26, Callable 12/1/25 @ 100 | 10,000 | 10,405 | |||||||||
3.50%, 2/15/28, Callable 11/15/27 @ 100 | 5,000 | 5,330 | |||||||||
Ingersoll-Rand Co., 9.00%, 8/15/21 | 1,500 | 1,648 | |||||||||
JetBlue Pass Through Trust, 2.95%, 11/15/29 | 9,756 | 9,939 | |||||||||
Kansas City Southern, 3.13%, 6/1/26, Callable 3/1/26 @ 100 | 7,000 | 7,332 | |||||||||
Kennametal, Inc., 4.63%, 6/15/28, Callable 3/15/28 @ 100 | 8,295 | 9,056 | |||||||||
Molex Electronic Technologies LLC, 3.90%, 4/15/25, Callable 1/15/25 @ 100 (a) | 10,000 | 10,528 | |||||||||
Penske Truck Leasing Co. LP/PTL Finance Corp., 3.95%, 3/10/25, Callable 1/10/25 @ 100 (a) | 5,000 | 5,392 | |||||||||
Raytheon Co., 4.20%, 12/15/44, Callable 6/15/44 @ 100 | 10,000 | 12,241 | |||||||||
Snap-on, Inc., 3.25%, 3/1/27, Callable 12/1/26 @ 100 | 10,000 | 10,666 | |||||||||
Spirit Airlines Pass Through Trust 4.45%, 10/1/25 | 2,677 | 2,786 | |||||||||
4.10%, 10/1/29 | 11,477 | 12,210 | |||||||||
3.38%, 8/15/31 | 9,244 | 9,637 | |||||||||
The Conservation Fund A Nonprofit Corp., 3.47%, 12/15/29, Callable 9/15/29 @ 100 | 2,900 | 2,985 | |||||||||
Totem Ocean Trailer Express, Inc., Title XI (NBGA-United States Government), 6.37%, 4/15/28 | 7,363 | 8,485 | |||||||||
TTX Co. 4.15%, 1/15/24 (a) | 5,000 | 5,366 | |||||||||
3.60%, 1/15/25 (a) | 10,000 | 10,664 | |||||||||
Union Pacific Corp. 3.38%, 2/1/35, Callable 8/1/34 @ 100 | 10,000 | 10,852 | |||||||||
4.25%, 4/15/43, Callable 10/15/42 @ 100 | 10,000 | 11,634 | |||||||||
4.30%, 3/1/49, Callable 9/1/48 @ 100 | 12,000 | 14,329 |
See notes to financial statements.
19
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
United Airlines Pass Through Trust 3.70%, 6/1/24 | $ | 7,000 | $ | 7,239 | |||||||
4.30%, 2/15/27 | 3,763 | 4,084 | |||||||||
3.75%, 3/3/28 | 15,472 | 16,434 | |||||||||
US Airways Pass Through Trust 6.25%, 10/22/24 (h) | 2,256 | 2,460 | |||||||||
3.95%, 5/15/27 | 6,524 | 6,954 | |||||||||
Wabtec Corp., 3.45%, 11/15/26, Callable 8/15/26 @ 100 | 14,050 | 14,527 | |||||||||
455,996 | |||||||||||
Information Technology (1.7%): | |||||||||||
Analog Devices, Inc., 4.50%, 12/5/36, Callable 6/5/36 @ 100 | 5,000 | 5,572 | |||||||||
Applied Materials, Inc. 3.30%, 4/1/27, Callable 1/1/27 @ 100 | 10,000 | 10,807 | |||||||||
5.10%, 10/1/35, Callable 4/1/35 @ 100 | 10,000 | 13,109 | |||||||||
Broadcom, Inc., 3.63%, 10/15/24, Callable 9/15/24 @ 100 (a) | 5,000 | 5,265 | |||||||||
CommScope, Inc., 6.00%, 3/1/26, Callable 3/1/22 @ 103 (a) | 2,500 | 2,624 | |||||||||
Dell International LLC/EMC Corp., 4.90%, 10/1/26, Callable 8/1/26 @ 100 (a) | 5,000 | 5,569 | |||||||||
Keysight Technologies, Inc. 4.60%, 4/6/27, Callable 1/6/27 @ 100 | 2,604 | 2,952 | |||||||||
3.00%, 10/30/29, Callable 7/30/29 @ 100 | 5,263 | 5,427 | |||||||||
Micron Technology, Inc., 4.66%, 2/15/30, Callable 11/15/29 @ 100 | 10,000 | 11,272 | |||||||||
Microsoft Corp. 3.30%, 2/6/27, Callable 11/6/26 @ 100 | 10,000 | 10,947 | |||||||||
4.20%, 11/3/35, Callable 5/3/35 @ 100 | 20,000 | 24,557 | |||||||||
3.45%, 8/8/36, Callable 2/8/36 @ 100 | 10,000 | 11,333 | |||||||||
Motorola Solutions, Inc., 4.60%, 2/23/28, Callable 11/23/27 @ 100 | 10,000 | 11,111 | |||||||||
Qualcomm, Inc. 3.25%, 5/20/27, Callable 2/20/27 @ 100 | 7,000 | 7,521 | |||||||||
4.65%, 5/20/35, Callable 11/20/34 @ 100 | 10,000 | 12,347 | |||||||||
Total System Services, Inc., 4.80%, 4/1/26, Callable 1/1/26 @ 100 | 5,000 | 5,663 | |||||||||
Trimble, Inc., 4.15%, 6/15/23, Callable 5/15/23 @ 100 | 3,000 | 3,191 | |||||||||
VeriSign, Inc., 5.25%, 4/1/25, Callable 1/1/25 @ 100 | 4,250 | 4,684 | |||||||||
153,951 | |||||||||||
Materials (1.7%): | |||||||||||
Allegheny Ludlum LLC, 6.95%, 12/15/25 | 5,000 | 5,332 | |||||||||
Ball Corp., 5.25%, 7/1/25 | 5,000 | 5,604 | |||||||||
CF Industries, Inc., 4.50%, 12/1/26 (a) | 10,000 | 11,045 | |||||||||
Crown Americas LLC/Crown Americas Capital Corp., 4.25%, 9/30/26, Callable 3/31/26 @ 100 | 5,000 | 5,211 | |||||||||
Eagle Materials, Inc., 4.50%, 8/1/26, Callable 8/1/21 @ 102.25 | 3,000 | 3,127 | |||||||||
Freeport-McMoRan, Inc., 5.45%, 3/15/43, Callable 9/15/42 @ 100 | 10,000 | 10,190 | |||||||||
Graphic Packaging International LLC, 4.13%, 8/15/24, Callable 5/15/24 @ 100 | 2,000 | 2,096 | |||||||||
Huntsman International LLC, 4.50%, 5/1/29, Callable 2/1/29 @ 100 | 2,700 | 2,938 | |||||||||
International Paper Co. 3.80%, 1/15/26, Callable 10/15/25 @ 100 | 5,000 | 5,445 | |||||||||
3.00%, 2/15/27, Callable 11/15/26 @ 100 (h) | 7,500 | 7,899 | |||||||||
LafargeHolcim Finance US LLC, 3.50%, 9/22/26, Callable 6/22/26 @ 100 (a) | 1,435 | 1,501 |
See notes to financial statements.
20
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Monsanto Co. 3.38%, 7/15/24, Callable 4/15/24 @ 100 (h) | $ | 5,000 | $ | 5,144 | |||||||
3.95%, 4/15/45, Callable 10/15/44 @ 100 | 5,000 | 4,552 | |||||||||
Reynolds Group Issuer, Inc. 5.13%, 7/15/23, Callable 3/16/20 @ 102.56 (a) | 2,500 | 2,550 | |||||||||
7.00%, 7/15/24, Callable 3/16/20 @ 103.5 (a) | 5,000 | 5,148 | |||||||||
Sasol Financing USA LLC, 5.88%, 3/27/24, Callable 2/27/24 @ 100 | 8,000 | 8,578 | |||||||||
Sealed Air Corp., 6.88%, 7/15/33 (a) | 9,000 | 10,695 | |||||||||
The Dow Chemical Co., 4.25%, 10/1/34, Callable 4/1/34 @ 100 | 20,000 | 22,587 | |||||||||
The Mosaic Co., 4.05%, 11/15/27, Callable 8/15/27 @ 100 (h) | 5,000 | 5,338 | |||||||||
The Sherwin-Williams Co., 3.45%, 6/1/27, Callable 3/1/27 @ 100 | 2,900 | 3,118 | |||||||||
Westlake Chemical Corp., 3.60%, 8/15/26, Callable 5/15/26 @ 100 | 10,000 | 10,579 | |||||||||
Worthington Industries, Inc., 4.30%, 8/1/32, Callable 5/1/32 @ 100 | 8,890 | 9,545 | |||||||||
148,222 | |||||||||||
Real Estate (2.0%): | |||||||||||
Alexandria Real Estate Equities, Inc., 4.50%, 7/30/29, Callable 4/30/29 @ 100 | 5,000 | 5,801 | |||||||||
AvalonBay Communities, Inc. 3.45%, 6/1/25, Callable 3/3/25 @ 100 | 5,000 | 5,381 | |||||||||
3.20%, 1/15/28, Callable 10/15/27 @ 100, MTN | 2,679 | 2,864 | |||||||||
Boston Properties LP, 3.85%, 2/1/23, Callable 11/1/22 @ 100 | 10,000 | 10,559 | |||||||||
Columbia Property Trust Operating Partnership, 3.65%, 8/15/26, Callable 5/15/26 @ 100 | 7,500 | 7,862 | |||||||||
EPR Properties, 4.75%, 12/15/26, Callable 9/15/26 @ 100 | 10,000 | 11,113 | |||||||||
ERP Operating LP, 2.85%, 11/1/26, Callable 8/1/26 @ 100 | 9,000 | 9,420 | |||||||||
Federal Realty Investment Trust 3.00%, 8/1/22, Callable 5/1/22 @ 100 | 7,000 | 7,168 | |||||||||
2.75%, 6/1/23, Callable 3/1/23 @ 100 | 10,000 | 10,236 | |||||||||
3.25%, 7/15/27, Callable 4/15/27 @ 100 | 1,852 | 1,971 | |||||||||
Hospitality Properties Trust, 4.95%, 2/15/27, Callable 8/15/26 @ 100 | 5,000 | 5,312 | |||||||||
Hudson Pacific Properties LP 3.95%, 11/1/27 | 5,000 | 5,394 | |||||||||
4.65%, 4/1/29, Callable 1/1/29 @ 100 | 1,979 | 2,246 | |||||||||
MPT Operating Partnership LP/MPT Finance Corp. 5.25%, 8/1/26, Callable 8/1/21 @ 102.63 | 4,901 | 5,149 | |||||||||
4.63%, 8/1/29, Callable 8/1/24 @ 102.31 | 1,000 | 1,046 | |||||||||
Physicians Realty LP, 4.30%, 3/15/27, Callable 12/15/26 @ 100 | 7,500 | 8,191 | |||||||||
Realty Income Corp. 4.13%, 10/15/26, Callable 7/15/26 @ 100 | 5,000 | 5,612 | |||||||||
3.00%, 1/15/27, Callable 10/15/26 @ 100 | 6,000 | 6,290 | |||||||||
Sabra Health Care LP, 5.13%, 8/15/26, Callable 5/15/26 @ 100 | 4,000 | 4,372 | |||||||||
SBA Tower Trust, 3.45%, 3/15/48 (a) | 30,000 | 31,180 | |||||||||
Spirit Realty LP, 4.45%, 9/15/26, Callable 6/15/26 @ 100 | 7,500 | 8,297 | |||||||||
STORE Capital Corp., 4.63%, 3/15/29, Callable 12/15/28 @ 100 | 5,000 | 5,701 | |||||||||
Washington Real Estate Investment Trust, 3.95%, 10/15/22, Callable 7/15/22 @ 100 | 14,000 | 14,549 | |||||||||
175,714 | |||||||||||
Utilities (5.8%): | |||||||||||
AES Corp. 4.88%, 5/15/23, Callable 3/16/20 @ 101.63 | 4,298 | 4,351 | |||||||||
5.50%, 4/15/25, Callable 4/15/20 @ 102.75 | 10,000 | 10,327 |
See notes to financial statements.
21
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
American Water Capital Corp., 2.95%, 9/1/27, Callable 6/1/27 @ 100 | $ | 10,000 | $ | 10,437 | |||||||
Aqua America, Inc., 4.28%, 5/1/49, Callable 11/1/48 @ 100 | 10,000 | 11,766 | |||||||||
Aquarion Co., 4.00%, 8/15/24, Callable 5/15/24 @ 100 (a) | 15,000 | 15,968 | |||||||||
Atlantic City Electric Co., 3.38%, 9/1/24, Callable 6/1/24 @ 100 | 5,000 | 5,277 | |||||||||
Atmos Energy Corp., 4.13%, 10/15/44, Callable 4/15/44 @ 100 | 10,000 | 11,780 | |||||||||
Berkshire Hathaway Energy Co., 4.50%, 2/1/45, Callable 8/1/44 @ 100 | 15,000 | 18,248 | |||||||||
Black Hills Corp., 3.88%, 10/15/49, Callable 4/15/49 @ 100 | 20,000 | 21,163 | |||||||||
Cleco Corporate Holdings LLC 3.74%, 5/1/26, Callable 2/1/26 @ 100 | 15,000 | 15,756 | |||||||||
3.38%, 9/15/29, Callable 6/11/29 @ 100 (a) | 7,333 | 7,494 | |||||||||
Consumers Energy Co., 3.95%, 7/15/47, Callable 1/15/47 @ 100 | 10,000 | 11,939 | |||||||||
Delmarva Power & Light Co., 4.15%, 5/15/45, Callable 11/15/44 @ 100 | 5,000 | 5,890 | |||||||||
Dominion Energy South Carolina, Inc. 5.30%, 5/15/33 | 5,000 | 6,508 | |||||||||
4.10%, 6/15/46, Callable 12/15/45 @ 100 | 5,000 | 5,565 | |||||||||
Duke Energy Carolinas LLC, 3.88%, 3/15/46, Callable 9/15/45 @ 100 | 7,000 | 8,096 | |||||||||
Duke Energy Indiana LLC, 3.75%, 5/15/46, Callable 11/15/45 @ 100 | 10,000 | 11,298 | |||||||||
Duke Energy Progress LLC, 4.15%, 12/1/44, Callable 6/1/44 @ 100 | 10,000 | 11,844 | |||||||||
Duquesne Light Holdings, Inc., 5.90%, 12/1/21 (a) | 3,500 | 3,723 | |||||||||
Edison International, 5.75%, 6/15/27, Callable 4/15/27 @ 100 | 2,500 | 2,885 | |||||||||
Emera US Finance LP, 3.55%, 6/15/26, Callable 3/15/26 @ 100 | 6,000 | 6,401 | |||||||||
Entergy Arkansas LLC, 3.05%, 6/1/23, Callable 3/1/23 @ 100 | 4,000 | 4,136 | |||||||||
Entergy Louisiana LLC, 4.95%, 1/15/45, Callable 1/15/25 @ 100 | 7,000 | 7,655 | |||||||||
Entergy Mississippi LLC, 3.25%, 12/1/27, Callable 9/1/27 @ 100 | 5,000 | 5,341 | |||||||||
Entergy Texas, Inc. 2.55%, 6/1/21, Callable 5/1/21 @ 100 | 10,000 | 10,039 | |||||||||
3.45%, 12/1/27, Callable 9/1/27 @ 100 (h) | 15,000 | 15,774 | |||||||||
3.55%, 9/30/49, Callable 3/30/49 @ 100 | 5,000 | 5,459 | |||||||||
Florida Power & Light Co., 3.15%, 10/1/49, Callable 4/1/49 @ 100 | 5,000 | 5,327 | |||||||||
Georgia Power Co., 3.25%, 4/1/26, Callable 1/1/26 @ 100 | 5,000 | 5,294 | |||||||||
Gulf Power Co., 3.30%, 5/30/27, Callable 2/28/27 @ 100 | 10,000 | 10,678 | |||||||||
ITC Holdings Corp., 3.35%, 11/15/27, Callable 8/15/27 @ 100 | 7,500 | 8,000 | |||||||||
MidAmerican Energy Co., 3.15%, 4/15/50, Callable 10/15/49 @ 100 | 7,000 | 7,336 | |||||||||
Mississippi Power Co., 4.25%, 3/15/42 | 3,168 | 3,546 | |||||||||
Monongahela Power Co. 4.10%, 4/15/24, Callable 1/15/24 @ 100 (a) | 10,000 | 10,799 | |||||||||
5.40%, 12/15/43, Callable 6/15/43 @ 100 (a) | 10,000 | 13,533 | |||||||||
National Fuel Gas Co. 4.90%, 12/1/21, Callable 9/1/21 @ 100 | 10,000 | 10,445 | |||||||||
5.20%, 7/15/25, Callable 4/15/25 @ 100 | 10,000 | 11,117 | |||||||||
3.95%, 9/15/27, Callable 6/15/27 @ 100 | 10,000 | 10,285 | |||||||||
Northern States Power Co. 4.00%, 8/15/45, Callable 2/15/45 @ 100 | 15,000 | 17,878 | |||||||||
3.60%, 5/15/46, Callable 11/15/45 @ 100 | 20,000 | 22,691 | |||||||||
Oncor Electric Delivery Co. LLC, 3.75%, 4/1/45, Callable 10/1/44 @ 100 | 5,000 | 5,700 | |||||||||
Pacific Gas & Electric Co., 2.95%, 3/1/26, Callable 12/1/25 @ 100 (k) | 15,000 | 15,370 | |||||||||
PECO Energy Co., 3.00%, 9/15/49, Callable 3/15/49 @ 100 | 7,000 | 7,111 | |||||||||
Pedernales Electric Cooperative, Inc., 5.95%, 11/15/22 (a) | 2,733 | 2,991 | |||||||||
Potomac Electric Power Co., 4.15%, 3/15/43, Callable 9/15/42 @ 100 | 5,000 | 5,871 | |||||||||
Public Service Electric & Gas Co., 3.80%, 3/1/46, MTN, Callable 9/1/45 @ 100 | 10,000 | 11,621 |
See notes to financial statements.
22
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Southern California Edison Co. 6.25%(LIBOR03M+420bps), Callable 2/1/22 @ 100 (c) (i) | $ | 10,000 | $ | 10,340 | |||||||
4.00%, 4/1/47, Callable 10/1/46 @ 100 | 15,000 | 16,617 | |||||||||
Southern Co. Gas Capital Corp., 3.25%, 6/15/26, Callable 3/15/26 @ 100 | 7,000 | 7,442 | |||||||||
Spire, Inc., 3.54%, 2/27/24, Callable 12/27/23 @ 100 | 11,880 | 12,344 | |||||||||
System Energy Resources, Inc., 4.10%, 4/1/23, Callable 1/1/23 @ 100 | 5,000 | 5,296 | |||||||||
Tri-State Generation & Transmission Association, Inc. 4.70%, 11/1/44, Callable 5/1/44 @ 100 | 10,000 | 11,981 | |||||||||
4.25%, 6/1/46, Callable 12/1/45 @ 100 | 10,000 | 11,328 | |||||||||
WEC Energy Group, Inc., 4.02%(LIBOR03M+211bps), 5/15/67, Callable 3/16/20 @ 100 (c) | 15,000 | 14,130 | |||||||||
530,191 | |||||||||||
Total Corporate Bonds (Cost $3,921,970) | 4,214,887 | ||||||||||
Foreign Bonds (0.3%) | |||||||||||
Sovereign Bond (0.3%): | |||||||||||
Province of Alberta Canada, 2.55%, 12/15/22 | 15,000 | 11,623 | |||||||||
Province of Ontario Canada, 2.85%, 6/2/23 | 20,000 | 15,698 | |||||||||
27,321 | |||||||||||
Total Foreign Bonds (Cost $34,588) | 27,321 | ||||||||||
Yankee Dollar (16.8%) | |||||||||||
Communication Services (0.9%): | |||||||||||
British Telecommunications PLC, 3.25%, 11/8/29, Callable 8/8/29 @ 100 (a) | 14,000 | 14,322 | |||||||||
Deutsche Telekom International Finance BV 3.60%, 1/19/27, Callable 10/19/26 @ 100 (a) | 15,000 | 16,138 | |||||||||
4.75%, 6/21/38, Callable 12/21/37 @ 100 (a) | 5,000 | 5,952 | |||||||||
Pearson Funding Four PLC, 3.75%, 5/8/22 (a) | 10,000 | 10,133 | |||||||||
Telecom Italia Capital, 6.38%, 11/15/33 | 10,000 | 11,670 | |||||||||
Tencent Holdings Ltd., 3.93%, 1/19/38, Callable 7/19/37 @ 100 (a) | 5,000 | 5,623 | |||||||||
Vodafone Group PLC 5.00%, 5/30/38 | 6,667 | 7,998 | |||||||||
4.25%, 9/17/50 | 10,000 | 10,934 | |||||||||
82,770 | |||||||||||
Consumer Discretionary (0.0% (g)): | |||||||||||
International Game Technology PLC, 6.50%, 2/15/25, Callable 8/15/24 @ 100 (a) | 3,000 | 3,380 | |||||||||
Consumer Staples (1.0%): | |||||||||||
Alimentation Couche-Tard, Inc., 2.95%, 1/25/30, Callable 10/25/29 @ 100 (a) | 7,333 | 7,444 | |||||||||
Avon International Capital PLC, 6.50%, 8/15/22, Callable 3/16/20 @ 103.94 (a) | 8,928 | 9,254 | |||||||||
Bacardi Ltd., 4.70%, 5/15/28, Callable 2/15/28 @ 100 (a) | 10,000 | 11,235 | |||||||||
Becle SAB de CV, 3.75%, 5/13/25 (a) | 7,500 | 7,796 | |||||||||
Hutchison Whampoa International Ltd. 4.63%, 1/13/22 (a) | 5,000 | 5,238 | |||||||||
3.63%, 10/31/24 (a) | 10,000 | 10,666 | |||||||||
Imperial Brands Finance PLC 4.25%, 7/21/25, Callable 4/21/25 @ 100 (a) | 20,000 | 21,530 | |||||||||
3.88%, 7/26/29, Callable 4/26/29 @ 100 (a) | 10,000 | 10,437 | |||||||||
83,600 |
See notes to financial statements.
23
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Energy (1.0%): | |||||||||||
Aker BP ASA, 5.88%, 3/31/25, Callable 3/31/21 @ 102.94 (a) | $ | 4,500 | $ | 4,726 | |||||||
APT Pipelines Ltd., 4.25%, 7/15/27, Callable 4/15/27 @ 100 (a) | 6,000 | 6,604 | |||||||||
Eni SpA 4.75%, 9/12/28 (a) | 11,000 | 12,747 | |||||||||
4.25%, 5/9/29, Callable 2/9/29 @ 100 (a) | 4,000 | 4,510 | |||||||||
Noble Holding International Ltd., 4.90%, 8/1/20 (h) (l) | 10,000 | 9,721 | |||||||||
Petrobras Global Finance BV, 5.75%, 2/1/29 | 7,407 | 8,554 | |||||||||
Petroleos Maxicanos, 5.95%, 1/28/31, Callable 10/28/30 @ 100 (a) | 6,667 | 6,769 | |||||||||
Petroleos Mexicanos 5.38%, 3/13/22 | 6,000 | 6,359 | |||||||||
6.84%, 1/23/30, Callable 10/23/29 @ 100 (a) | 6,000 | 6,510 | |||||||||
Saudi Arabian Oil Co., 4.25%, 4/16/39 (a) | 15,000 | 16,590 | |||||||||
Transocean, Inc., 8.38%, 12/15/21 (h) | 2,250 | 2,324 | |||||||||
85,414 | |||||||||||
Financials (8.7%): | |||||||||||
ABN AMRO Bank NV 4.75%, 7/28/25 (a) | 15,000 | 16,615 | |||||||||
4.80%, 4/18/26 (a) | 10,000 | 11,171 | |||||||||
Amcor Finance USA, Inc., 3.63%, 4/28/26, Callable 1/28/26 @ 100 (a) | 4,750 | 5,021 | |||||||||
Athene Holding Ltd., 4.13%, 1/12/28, Callable 10/12/27 @ 100 | 8,000 | 8,509 | |||||||||
Australia & New Zealand Banking Group Ltd., 4.40%, 5/19/26 (a) | 10,000 | 11,015 | |||||||||
Banco Santander Mexico SA, 5.95%(H15T5Y+300bps), 10/1/28, Callable 10/1/23 @ 100 (a) (c) | 1,000 | 1,084 | |||||||||
Bank of Montreal, 3.80%(USSW5+143bps), 12/15/32, Callable 12/15/27 @ 100 (c) | 7,500 | 8,038 | |||||||||
Banque Federative du Credit Mutuel SA, 2.70%, 7/20/22 (a) | 5,000 | 5,102 | |||||||||
Barclays PLC 4.84%, 5/9/28, Callable 5/7/27 @ 100 | 12,300 | 13,691 | |||||||||
5.09%(LIBOR03M+305bps), 6/20/30, Callable 6/20/29 @ 100 (c) | 10,000 | 11,466 | |||||||||
BAT International Finance PLC, 3.95%, 6/15/25 (a) | 20,000 | 21,466 | |||||||||
BBVA Bancomer SA, 4.38%, 4/10/24 (a) | 10,000 | 10,797 | |||||||||
BNP Paribas SA 7.20%(LIBOR03M+129bps), Callable 6/25/37 @ 100 (a) (c) (h) (i) | 5,000 | 5,652 | |||||||||
4.70%(LIBOR03M+224bps), 1/10/25, Callable 1/10/24 @ 100 (a) (c) | 10,000 | 10,956 | |||||||||
4.38%, 9/28/25 (a) | 5,000 | 5,468 | |||||||||
4.38%, 5/12/26 (a) | 10,000 | 10,933 | |||||||||
4.63%, 3/13/27 (a) | 4,000 | 4,461 | |||||||||
BP Capital Markets PLC 3.28%, 9/19/27, Callable 6/19/27 @ 100 | 5,000 | 5,323 | |||||||||
3.72%, 11/28/28, Callable 8/28/28 @ 100 | 10,000 | 11,039 | |||||||||
BPCE SA 3.00%, 5/22/22 (a) | 9,200 | 9,420 | |||||||||
4.00%, 9/12/23 (a) | 5,000 | 5,343 | |||||||||
3.50%, 10/23/27 (a) | 9,524 | 10,145 | |||||||||
3.25%, 1/11/28 (a) | 10,000 | 10,616 | |||||||||
Brookfield Finance, Inc., 4.85%, 3/29/29, Callable 12/29/28 @ 100 | 10,000 | 11,884 | |||||||||
Canadian Imperial Bank of Commerce, 7.26%, 4/10/32 (a) | 3,047 | 3,735 | |||||||||
Commonwealth Bank of Australia, 3.25%, 7/20/23 (a) (h) | 10,000 | 10,548 |
See notes to financial statements.
24
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Co-operatieve Rabobank UA 3.88%, 2/8/22 | $ | 10,000 | $ | 10,433 | |||||||
3.95%, 11/9/22 | 16,903 | 17,758 | |||||||||
4.00%(USSW5+189bps), 4/10/29, Callable 4/10/24 @ 100, MTN (c) | 8,000 | 8,454 | |||||||||
Credit Agricole SA 3.25%, 10/4/24 (a) | 14,286 | 15,005 | |||||||||
4.13%, 1/10/27 (a) | 15,000 | 16,472 | |||||||||
Credit Suisse Group AG 3.57%, 1/9/23, Callable 1/9/22 @ 100 (a) | 11,400 | 11,731 | |||||||||
3.87%(LIBOR03M+141bps), 1/12/29, Callable 1/12/28 @ 100 (a) (c) | 4,445 | 4,841 | |||||||||
Credit Suisse Group Funding Guernsey Ltd., 4.55%, 4/17/26 | 10,000 | 11,274 | |||||||||
Danske Bank A/S 5.38%, 1/12/24 (a) | 5,000 | 5,565 | |||||||||
3.24%(LIBOR03M+159bps), 12/20/25, Callable 12/20/24 @ 100 (a) (c) | 3,500 | 3,612 | |||||||||
Deutsche Bank AG 5.00%, 2/14/22 | 10,000 | 10,473 | |||||||||
4.87%(USISDA05+255bps), 12/1/32, Callable 12/1/27 @ 100 (c) | 10,000 | 9,971 | |||||||||
Enel Finance International NV 4.63%, 9/14/25 (a) | 5,000 | 5,553 | |||||||||
3.63%, 5/25/27 (a) | 5,000 | 5,324 | |||||||||
HSBC Bank PLC, 2.19%(LIBOR06M+25bps), Callable 6/30/20 @ 100 (c) (i) | 15,000 | 12,344 | |||||||||
HSBC Holdings PLC 3.90%, 5/25/26 | 10,000 | 10,863 | |||||||||
4.38%, 11/23/26 | 5,000 | 5,517 | |||||||||
ING Groep NV, 3.95%, 3/29/27 | 14,100 | 15,582 | |||||||||
Intesa Sanpaolo SpA, 3.25%, 9/23/24 (a) (h) | 5,000 | 5,117 | |||||||||
Lloyds Banking Group PLC 3.75%, 1/11/27 | 25,000 | 26,829 | |||||||||
3.57%(LIBOR03M+121bps), 11/7/28, Callable 11/7/27 @ 100 (c) | 5,000 | 5,324 | |||||||||
Mizuho Financial Group, Inc., 3.17%, 9/11/27 | 20,000 | 21,095 | |||||||||
National Australia Bank Ltd., 3.00%, 1/20/23 | 5,000 | 5,185 | |||||||||
Nationwide Building Society 4.00%, 9/14/26 (a) | 20,000 | 21,404 | |||||||||
4.12%(USISDA05+185bps), 10/18/32, Callable 10/18/27 @ 100 (a) (c) | 12,000 | 12,754 | |||||||||
Nordea Bank Abp, 4.88%, 5/13/21 (a) | 11,000 | 11,392 | |||||||||
ORIX Corp., 3.70%, 7/18/27 | 10,000 | 10,874 | |||||||||
QBE Capital Funding III Ltd., 7.25%(USSW10+405bps), 5/24/41, Callable 5/24/21 @ 100 (a) (c) | 20,000 | 21,125 | |||||||||
Royal Bank of Canada, 4.65%, 1/27/26 (h) | 20,000 | 22,756 | |||||||||
Royal Bank of Scotland Group PLC 6.13%, 12/15/22 | 10,000 | 10,960 | |||||||||
6.10%, 6/10/23 | 5,000 | 5,554 | |||||||||
3.88%, 9/12/23 | 7,000 | 7,399 | |||||||||
4.27%(LIBOR03M+176bps), 3/22/25, Callable 3/22/24 @ 100 (c) | 4,000 | 4,298 | |||||||||
4.80%, 4/5/26 | 5,000 | 5,646 | |||||||||
3.75%(H15T5Y+210bps), 11/1/29, Callable 11/1/24 @ 100 (c) | 3,000 | 3,113 | |||||||||
5.08%(LIBOR03M+191bps), 1/27/30, Callable 1/27/29 @ 100 (c) | 10,000 | 11,762 | |||||||||
Santander UK Group Holdings PLC, 3.57%, 1/10/23, Callable 1/10/22 @ 100 | 5,000 | 5,139 | |||||||||
Santander UK PLC 5.00%, 11/7/23 (a) | 20,000 | 21,810 | |||||||||
4.00%, 3/13/24 | 5,000 | 5,393 |
See notes to financial statements.
25
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Shell International Finance BV, 3.63%, 8/21/42 | $ | 10,000 | $ | 11,071 | |||||||
Siemens Financieringsmaatschappij NV 3.25%, 5/27/25 (a) | 20,000 | 21,345 | |||||||||
3.40%, 3/16/27 (a) | 10,000 | 10,813 | |||||||||
Standard Chartered PLC, 4.87%(LIBOR03M+197bps), 3/15/33, Callable 3/15/28 @ 100 (a) (c) | 7,500 | 8,325 | |||||||||
Suncorp-Metway Ltd., 2.80%, 5/4/22 (a) | 7,500 | 7,635 | |||||||||
Swedbank AB, 2.65%, 3/10/21 (a) | 7,500 | 7,569 | |||||||||
The Bank of Nova Scotia, 4.50%, 12/16/25 | 10,000 | 11,189 | |||||||||
The Toronto-Dominion Bank, 3.62%(USSW5+221bps), 9/15/31, Callable 9/15/26 @ 100 (c) | 10,000 | 10,704 | |||||||||
Washington Aircraft 1 Co. DAC(NBGA-United States Government), 2.64%, 9/15/26 | 4,024 | 4,269 | |||||||||
Westpac Banking Corp., 4.32%(USISDA05+224bps), 11/23/31, Callable 11/23/26 @ 100 (c) | 10,000 | 10,893 | |||||||||
XLIT Ltd., 4.45%, 3/31/25 | 5,000 | 5,533 | |||||||||
774,545 | |||||||||||
Health Care (0.6%): | |||||||||||
Allergan Funding SCS, 3.80%, 3/15/25, Callable 12/15/24 @ 100 | 15,000 | 16,086 | |||||||||
Covidien International Finance SA, 2.95%, 6/15/23, Callable 3/15/23 @ 100 | 10,000 | 10,363 | |||||||||
Mylan NV, 3.95%, 6/15/26, Callable 3/15/26 @ 100 | 5,000 | 5,332 | |||||||||
Takeda Pharmaceutical Co. Ltd., 5.00%, 11/26/28, Callable 8/26/28 @ 100 | 5,000 | 5,965 | |||||||||
Teva Pharmaceutical Finance Netherlands BV, 3.15%, 10/1/26 | 15,000 | 12,857 | |||||||||
50,603 | |||||||||||
Industrials (1.8%): | |||||||||||
Air Canada Pass Through Trust 5.38%, 11/15/22 (a) | 3,195 | 3,289 | |||||||||
4.13%, 11/15/26 (a) | 18,213 | 19,577 | |||||||||
3.60%, 9/15/28 (a) | 8,155 | 8,672 | |||||||||
3.75%, 6/15/29 (a) | 4,987 | 5,369 | |||||||||
Avolon Holdings Funding Ltd., 4.38%, 5/1/26, Callable 3/1/26 @ 100 (a) | 6,460 | 6,984 | |||||||||
Bombardier, Inc., 7.50%, 3/15/25, Callable 3/16/20 @ 103.75 (a) | 10,000 | 9,669 | |||||||||
Canadian National Railway Co., 2.75%, 3/1/26, Callable 12/1/25 @ 100 | 12,000 | 12,574 | |||||||||
CK Hutchison International Ltd., 3.50%, 4/5/27 (a) | 10,000 | 10,683 | |||||||||
CK Hutchison International Ltd. 2.75%, 10/3/26 (a) | 7,500 | 7,679 | |||||||||
3.25%, 9/29/27 (a) | 10,000 | 10,518 | |||||||||
CNH Industrial NV, 3.85%, 11/15/27, MTN, Callable 8/15/27 @ 100 | 5,000 | 5,306 | |||||||||
Heathrow Funding Ltd., 4.88%, 7/15/21 (a) | 10,000 | 10,374 | |||||||||
Latam Airlines Pass Through Trust, 4.20%, 8/15/29 | 11,256 | 11,610 | |||||||||
Rolls-Royce PLC, 3.63%, 10/14/25, Callable 7/14/25 @ 100 (a) | 5,000 | 5,281 | |||||||||
Smiths Group PLC, 3.63%, 10/12/22 (a) | 12,250 | 12,590 | |||||||||
Sydney Airport Finance Co. Pty Ltd., 3.63%, 4/28/26, Callable 1/28/26 @ 100 (a) | 10,000 | 10,656 | |||||||||
Turkish Airlines Pass Through Trust, 4.20%, 9/15/28 (a) | 7,186 | 6,768 | |||||||||
157,599 | |||||||||||
Information Technology (0.1%): | |||||||||||
Tyco Electronics Group SA, 3.13%, 8/15/27, Callable 5/15/27 @ 100 | 4,800 | 5,047 | |||||||||
Materials (1.8%): | |||||||||||
Air Liquide Finance SA, 3.50%, 9/27/46, Callable 3/27/46 @ 100 (a) | 10,000 | 11,038 |
See notes to financial statements.
26
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Anglo American Capital PLC 4.88%, 5/14/25 (a) | $ | 5,000 | $ | 5,583 | |||||||
4.00%, 9/11/27 (a) | 6,667 | 7,117 | |||||||||
Arcelormittal, 6.25%, 2/25/22 | 10,000 | 10,782 | |||||||||
ArcelorMittal, 7.00%, 10/15/39 | 8,000 | 10,114 | |||||||||
Boral Finance Pty Ltd., 3.75%, 5/1/28, Callable 2/1/28 @ 100 (a) | 3,462 | 3,576 | |||||||||
Braskem Netherlands Finance BV, 4.50%, 1/31/30 (a) | 25,000 | 25,192 | |||||||||
CCL Industries, Inc., 3.25%, 10/1/26, Callable 7/1/26 @ 100 (a) | 7,500 | 7,608 | |||||||||
Cemex SAB de CV, 7.75%, 4/16/26, Callable 4/16/21 @ 103.88 (a) | 9,250 | 10,083 | |||||||||
Fresnillo PLC, 5.50%, 11/13/23 (a) | 20,000 | 21,850 | |||||||||
Industrias Penoles SAB de CV, 4.15%, 9/12/29, Callable 6/12/29 @ 100 (a) | 2,500 | 2,608 | |||||||||
Kinross Gold Corp. 5.95%, 3/15/24, Callable 12/15/23 @ 100 | 10,000 | 11,210 | |||||||||
4.50%, 7/15/27, Callable 4/15/27 @ 100 | 2,000 | 2,129 | |||||||||
LYB International Finance II BV, 3.50%, 3/2/27, Callable 12/2/26 @ 100 (e) | 1,925 | 2,041 | |||||||||
Syngenta Finance NV, 3.93%, 4/23/21 (a) | 5,000 | 5,098 | |||||||||
Teck Resources Ltd., 6.13%, 10/1/35 | 12,334 | 14,643 | |||||||||
Vale Overseas Ltd., 6.25%, 8/10/26 | 9,000 | 10,639 | |||||||||
Yara International ASA, 4.75%, 6/1/28, Callable 3/1/28 @ 100 (a) | 11,673 | 13,040 | |||||||||
174,351 | |||||||||||
Real Estate (0.2%): | |||||||||||
Scentre Group Trust 1/Scentre Group Trust 2 2.38%, 4/28/21, Callable 3/29/21 @ 100 (a) | 5,000 | 5,027 | |||||||||
3.25%, 10/28/25, Callable 7/30/25 @ 100 (a) | 10,000 | 10,429 | |||||||||
15,456 | |||||||||||
Sovereign Bond (0.2%): | |||||||||||
Caribbean Development Bank, 4.38%, 11/9/27 (a) | 5,000 | 5,159 | |||||||||
Republic of Italy Government International Bond, 5.38%, 6/15/33 | 10,000 | 12,148 | |||||||||
17,307 | |||||||||||
Utilities (0.5%): | |||||||||||
Comision Federal de Electricidad, 4.75%, 2/23/27 (a) | 5,000 | 5,415 | |||||||||
Electricite de France SA, 5.25%(USSW10+371bps), Callable 1/29/23 @ 100 (a) (c) (i) | 20,000 | 21,070 | |||||||||
ENEL Chile SA, 4.88%, 6/12/28 | 10,000 | 11,253 | |||||||||
Fortis, Inc., 3.06%, 10/4/26, Callable 7/4/26 @ 100 | 10,000 | 10,439 | |||||||||
Transelec SA, 3.88%, 1/12/29, Callable 10/16/28 @ 100 (a) | 3,500 | 3,667 | |||||||||
51,844 | |||||||||||
Total Yankee Dollar (Cost $1,396,091) | 1,501,916 | ||||||||||
Government National Mortgage Association (0.0%) (g) | |||||||||||
Pass-throughs (0.0%): | |||||||||||
Government National Mortgage Assoc. 6.00%, 8/20/32 | 346 | 395 | |||||||||
Total Government National Mortgage Association (Cost $347) | 395 |
See notes to financial statements.
27
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Municipal Bonds (7.4%) | |||||||||||
Alabama (0.0%): (g) | |||||||||||
The Water Works Board of The City of Birmingham Revenue 2.70%, 1/1/29 | $ | 3,000 | $ | 3,071 | |||||||
2.80%, 1/1/30, Continuously Callable @100 | 3,000 | 3,077 | |||||||||
6,148 | |||||||||||
California (0.9%): | |||||||||||
Industry Public Facilities Authority Tax Allocation (INS-Assured Guaranty Municipal Corp.) Series A, 3.47%, 1/1/21 | 5,000 | 5,051 | |||||||||
Series A, 3.82%, 1/1/22 | 5,000 | 5,152 | |||||||||
Las Virgenes Unified School District, GO, Series C1, 5.54%, 8/1/25 | 1,250 | 1,428 | |||||||||
Placentia-Yorba Linda Unified School District, GO, 5.40%, 8/1/21 | 850 | 895 | |||||||||
Port of Oakland Revenue 4.50%, 5/1/32, Pre-refunded 5/1/22 @ 100 | 75 | 80 | |||||||||
4.50%, 5/1/32, Continuously Callable @100 | 11,625 | 12,468 | |||||||||
Series P, 4.50%, 5/1/30, Continuously Callable @100 | 5,000 | 5,364 | |||||||||
Riverside Community College District, GO Series B, 3.49%, 8/1/23 | 4,250 | 4,524 | |||||||||
Series B, 3.61%, 8/1/24 | 3,000 | 3,254 | |||||||||
San Jose Redevelopment Agency Successor Agency Tax Allocation, Series A-T, 3.13%, 8/1/28, Continuously Callable @100 | 10,000 | 10,756 | |||||||||
San Marcos Redevelopment Agency Successor Agency Tax Allocation Series B, 4.02%, 10/1/25 | 5,250 | 5,817 | |||||||||
Series B, 4.47%, 10/1/29 | 6,500 | 7,556 | |||||||||
Torrance Unified School District, GO, Series B, 5.52%, 8/1/21 | 2,000 | 2,110 | |||||||||
Vista Redevelopment Agency Successor Agency Tax Allocation(INS-Assured Guaranty Municipal Corp.), Series A, 4.13%, 9/1/30, Continuously Callable @100 | 2,590 | 2,816 | |||||||||
67,271 | |||||||||||
Colorado (0.1%): | |||||||||||
County of El Paso Co. Revenue, 4.47%, 10/1/35 | 5,000 | 5,986 | |||||||||
Connecticut (0.8%): | |||||||||||
City of Bridgeport, GO Series A, 4.03%, 8/15/28 | 10,000 | 10,997 | |||||||||
Series A, 4.08%, 8/15/29, Continuously Callable @100 | 7,380 | 8,110 | |||||||||
City of New Haven, GO, Series B, 4.68%, 8/1/31, Continuously Callable @100 | 10,000 | 11,404 | |||||||||
State of Connecticut, GO Series A, 3.23%, 1/15/25 | 5,000 | 5,314 | |||||||||
Series A, 3.43%, 4/15/28 | 1,500 | 1,646 | |||||||||
Series A, 3.90%, 9/15/28 | 2,500 | 2,838 | |||||||||
Town of Hamden, GO, 4.93%, 8/15/30, Continuously Callable @100 | 3,845 | 4,257 | |||||||||
Town of Stratford, GO, 5.75%, 8/15/30, Continuously Callable @100 | 10,000 | 11,305 | |||||||||
55,871 | |||||||||||
Florida (0.4%): | |||||||||||
City of Jacksonville Revenue, 2.37%, 10/1/20 | 3,000 | 3,009 | |||||||||
County of Broward Florida Airport System Revenue, Series C, 2.91%, 10/1/32, Continuously Callable @100 | 9,500 | 9,827 |
See notes to financial statements.
28
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
County of Miami-Dade Aviation Revenue Series B, 2.70%, 10/1/26 | $ | 8,250 | $ | 8,541 | |||||||
Series B, 3.38%, 10/1/30, Continuously Callable @100 | 2,500 | 2,715 | |||||||||
Palm Beach County School District Certificate participation, 5.40%, 8/1/25 | 6,000 | 7,009 | |||||||||
The School Board of Miami-Dade County Certificate participation(INS-Assured Guaranty Municipal Corp.), Series B, 5.38%, 5/1/31, Continuously Callable @100 | 10,000 | 10,445 | |||||||||
41,546 | |||||||||||
Georgia (0.3%): | |||||||||||
Athens Housing Authority Revenue 2.54%, 12/1/27 | 3,405 | 3,469 | |||||||||
2.59%, 12/1/28 | 4,585 | 4,663 | |||||||||
2.69%, 12/1/29 | 4,740 | 4,841 | |||||||||
Atlanta & Fulton County Recreation Authority Revenue 3.80%, 12/15/37 | 2,000 | 2,176 | |||||||||
4.00%, 12/15/46 | 1,500 | 1,717 | |||||||||
Savannah Hospital Authority Revenue, 3.99%, 7/1/38 | 5,000 | 5,410 | |||||||||
22,276 | |||||||||||
Hawaii (0.5%): | |||||||||||
City & County of Honolulu, GO 2.81%, 11/1/23, Pre-refunded 11/1/22 @ 100 | 900 | 930 | |||||||||
3.06%, 11/1/25, Pre-refunded 11/1/22 @ 100 | 680 | 707 | |||||||||
3.16%, 11/1/26, Pre-refunded 11/1/22 @ 100 | 775 | 808 | |||||||||
3.26%, 11/1/27, Pre-refunded 11/1/22 @ 100 | 625 | 653 | |||||||||
3.36%, 11/1/28, Pre-refunded 11/1/22 @ 100 | 690 | 723 | |||||||||
State of Hawaii Department of Budget & Finance Revenue 3.25%, 1/1/25 | 3,000 | 3,184 | |||||||||
3.10%, 5/1/26 | 7,235 | 7,729 | |||||||||
State of Hawaii Department of Business Economic Development & Tourism Revenue, Series A2, 3.24%, 1/1/31 | 15,000 | 15,710 | |||||||||
State of Hawaii, GO, 2.80%, 10/1/27, Continuously Callable @100 | 7,000 | 7,317 | |||||||||
37,761 | |||||||||||
Idaho (0.0%): (g) | |||||||||||
Idaho State Building Authority Revenue 3.78%, 9/1/30, Continuously Callable @100 | 2,500 | 2,764 | |||||||||
3.93%, 9/1/31, Continuously Callable @100 | 2,120 | 2,360 | |||||||||
3.98%, 9/1/32, Continuously Callable @100 | 2,000 | 2,226 | |||||||||
7,350 | |||||||||||
Illinois (0.5%): | |||||||||||
Chicago Midway International Airport Revenue Series A, 5.00%, 1/1/25, Continuously Callable @100 | 6,500 | 7,412 | |||||||||
Series A, 5.00%, 1/1/26, Continuously Callable @100 | 8,000 | 9,114 | |||||||||
Chicago O'Hare International Airport Revenue, Series B, 5.00%, 1/1/21 | 5,000 | 5,175 | |||||||||
City of Chicago Wastewater Transmission Revenue, 5.84%, 1/1/35 | 6,500 | 8,162 | |||||||||
Illinois Finance Authority Revenue 3.55%, 8/15/29 | 2,025 | 2,184 | |||||||||
3.60%, 8/15/30 | 3,000 | 3,260 |
See notes to financial statements.
29
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Winnebago & Boone Counties School District No 205 Revenue, 3.80%, 12/1/26, Continuously Callable @100 | $ | 4,500 | $ | 4,789 | |||||||
40,096 | |||||||||||
Indiana (0.2%): | |||||||||||
Indiana Finance Authority Revenue Series A, 3.62%, 7/1/36 | 1,500 | 1,650 | |||||||||
Series B, 3.43%, 9/15/32, Continuously Callable @100 | 4,500 | 4,454 | |||||||||
Series C, 4.36%, 7/15/29 | 4,955 | 5,767 | |||||||||
Series C, 4.53%, 7/15/31 | 4,260 | 5,089 | |||||||||
16,960 | |||||||||||
Kansas (0.2%): | |||||||||||
Kansas Development Finance Authority Revenue, Series H, 4.73%, 4/15/37 | 10,000 | 12,350 | |||||||||
Kentucky (0.0%): (g) | |||||||||||
Kentucky Economic Development Finance Authority Revenue 3.72%, 12/1/26 | 2,335 | 2,509 | |||||||||
3.82%, 12/1/27 | 1,985 | 2,155 | |||||||||
3.92%, 12/1/28, Continuously Callable @100 | 1,000 | 1,088 | |||||||||
4.02%, 12/1/29, Continuously Callable @100 | 1,500 | 1,637 | |||||||||
4.12%, 12/1/30, Continuously Callable @100 | 1,300 | 1,424 | |||||||||
Kentucky Economic Development Finance Authority Revenue(INS-Assured Guaranty Municipal Corp.), 3.62%, 12/1/25 | 1,000 | 1,063 | |||||||||
9,876 | |||||||||||
Louisiana (0.3%): | |||||||||||
Louisiana Local Government Environmental Facilities & Community Development Authority Revenue, 3.24%, 8/1/28 | 20,000 | 20,694 | |||||||||
Maine (0.1%): | |||||||||||
Maine Municipal Bond Bank Revenue, 4.25%, 6/1/23 | 5,000 | 5,394 | |||||||||
Maryland (0.0%): (g) | |||||||||||
Maryland Economic Development Corp. Revenue Series B, 4.05%, 6/1/27 | 2,290 | 2,439 | |||||||||
Series B, 4.15%, 6/1/28 | 2,390 | 2,566 | |||||||||
Series B, 4.25%, 6/1/29 | 2,495 | 2,701 | |||||||||
Series B, 4.35%, 6/1/30 | 1,325 | 1,448 | |||||||||
Series B, 4.40%, 6/1/31 | 1,385 | 1,522 | |||||||||
10,676 | |||||||||||
Massachusetts (0.1%): | |||||||||||
Massachusetts School Building Authority Revenue, Series B, 2.97%, 10/15/32, Continuously Callable @100 | 6,500 | 6,844 | |||||||||
Michigan (0.1%): | |||||||||||
Michigan Finance Authority Revenue, 3.08%, 12/1/34 | 10,000 | 10,489 | |||||||||
Mississippi (0.2%): | |||||||||||
State of Mississippi, GO Series D, 3.73%, 10/1/32 | 10,000 | 11,565 | |||||||||
Series E, 2.83%, 12/1/24 | 1,800 | 1,898 | |||||||||
Series E, 3.03%, 12/1/25 | 2,000 | 2,141 | |||||||||
15,604 |
See notes to financial statements.
30
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
New Jersey (0.5%): | |||||||||||
City of Atlantic, GO Series A, 4.23%, 9/1/25 | $ | 2,525 | $ | 2,745 | |||||||
Series A, 4.29%, 9/1/26 | 2,415 | 2,652 | |||||||||
Economic Development Authority Revenue, Series C, 5.71%, 6/15/30 | 2,500 | 2,966 | |||||||||
New Jersey Economic Development Authority Revenue 5.25%, 9/1/22, Continuously Callable @100 | 2,700 | 2,812 | |||||||||
Series NNN, 3.77%, 6/15/31 | 10,000 | 10,354 | |||||||||
Series YY, 4.45%, 6/15/20 | 14,310 | 14,388 | |||||||||
New Jersey Educational Facilities Authority Revenue, Series E, 4.02%, 7/1/39 | 3,000 | 3,300 | |||||||||
New Jersey Transportation Trust Fund Authority Revenue 5.50%, 12/15/22 | 3,320 | 3,725 | |||||||||
4.08%, 6/15/39 | 3,845 | 4,087 | |||||||||
New Jersey Transportation Trust Fund Authority Revenue(INS — AMBAC Assurance Corp.), Series B, 5.25%, 12/15/22 | 5,000 | 5,547 | |||||||||
New Jersey Transportation Trust Fund Authority Revenue, Build America Bond, Series C, 5.75%, 12/15/28 | 1,810 | 2,166 | |||||||||
South Jersey Port Corp. Revenue Series B, 5.00%, 1/1/25 | 500 | 582 | |||||||||
Series B, 5.00%, 1/1/26 | 1,000 | 1,190 | |||||||||
Series B, 5.00%, 1/1/27 | 1,000 | 1,213 | |||||||||
Series B, 5.00%, 1/1/28 | 500 | 616 | |||||||||
58,343 | |||||||||||
New Mexico (0.0%): (g) | |||||||||||
County of Sandoval Revenue, 2.72%, 6/1/20 | 1,000 | 1,002 | |||||||||
New York (0.5%): | |||||||||||
Long Island Power Authority Revenue Series B, 3.98%, 9/1/25 | 2,500 | 2,747 | |||||||||
Series B, 4.13%, 9/1/26 | 2,500 | 2,793 | |||||||||
Long Island Power Authority Revenue, Build America Bond, 5.25%, 5/1/22 | 10,000 | 10,742 | |||||||||
New York City Transitional Finance Authority Future Tax Secured Revenue, 5.00%, 2/1/35, Continuously Callable @100 | 5,000 | 5,195 | |||||||||
New York State Dormitory Authority Revenue, 5.10%, 8/1/34 | 11,400 | 13,646 | |||||||||
New York State Thruway Authority Revenue, Series M, 2.55%, 1/1/28 | 3,846 | 3,920 | |||||||||
Town of Oyster Bay, GO 3.80%, 2/1/20 | 1,830 | 1,830 | |||||||||
3.95%, 2/1/21 | 1,500 | 1,521 | |||||||||
42,394 | |||||||||||
North Carolina (0.1%): | |||||||||||
City of Kannapolis NC Tax Allocation, Build America Bond, Series B, 7.28%, 3/1/27, Continuously Callable @100 | 5,000 | 5,020 | |||||||||
Ohio (0.1%): | |||||||||||
City of Cleveland Airport System Revenue Series A, 2.88%, 1/1/31 | 1,230 | 1,259 | |||||||||
Series A, 2.93%, 1/1/32 | 2,990 | 3,060 | |||||||||
Series A, 2.98%, 1/1/33 | 3,190 | 3,244 | |||||||||
Cleveland Department of Public Utilities Division of Public Power Revenue, 5.50%, 11/15/38, Continuously Callable @100 | 10,000 | 10,670 | |||||||||
18,233 |
See notes to financial statements.
31
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Oklahoma (0.2%): | |||||||||||
Oklahoma Development Finance Authority Revenue, Series C, 5.45%, 8/15/28 | $ | 10,250 | $ | 11,786 | |||||||
Other Territories (0.0%): (g) | |||||||||||
Federal Home Loan Mortgage Corp. Revenue, Series A, 1.60%, 8/15/51, (Put Date 6/15/22) (m) | 3,105 | 3,135 | |||||||||
Pennsylvania (0.5%): | |||||||||||
Commonwealth Financing Authority Revenue, Series A, 3.86%, 6/1/38 | 5,045 | 5,700 | |||||||||
Pennsylvania Economic Development Financing Authority Revenue, Series B, 3.20%, 11/15/27 | 1,375 | 1,445 | |||||||||
Pennsylvania IDA Revenue, 3.56%, 7/1/24 (a) | 10,000 | 10,404 | |||||||||
Scranton School District, GO Series A, 3.15%, 6/15/34, (Put Date 6/15/24) (a) (m) | 2,810 | 2,861 | |||||||||
Series B, 3.15%, 6/15/34, (Put Date 6/15/24) (a) (m) | 1,415 | 1,443 | |||||||||
State Public School Building Authority Revenue, 3.15%, 4/1/30 | 6,460 | 6,637 | |||||||||
State Public School Building Authority Revenue(INS-Build America Mutual Assurance Co.), Series B-1, 4.08%, 12/1/23 | 1,300 | 1,394 | |||||||||
The School District of Philadelphia, GO, 5.06%, 9/1/42 | 10,000 | 12,044 | |||||||||
41,928 | |||||||||||
South Carolina (0.2%): | |||||||||||
South Carolina Public Service Authority Revenue, Series D, 4.77%, 12/1/45 | 10,000 | 12,359 | |||||||||
Tennessee (0.1%): | |||||||||||
Jackson Energy Authority Revenue 2.90%, 4/1/22 | 2,000 | 2,048 | |||||||||
3.05%, 4/1/23 | 2,745 | 2,852 | |||||||||
Series E, 3.20%, 4/1/24, Continuously Callable @100 | 3,915 | 4,079 | |||||||||
Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board Revenue, Series B, 4.05%, 7/1/26, Continuously Callable @100 | 8,000 | 8,845 | |||||||||
17,824 | |||||||||||
Texas (0.5%): | |||||||||||
Austin Community College District Public Facility Corp. Revenue, Build America Bond Series A, 6.76%, 8/1/30, Pre-refunded 8/1/20 @ 100 | 1,550 | 1,588 | |||||||||
Series A, 6.91%, 8/1/35, Pre-refunded 8/1/20 @ 100 | 2,000 | 2,051 | |||||||||
City of Houston Combined Utility System Revenue, 5.00%, 11/15/33, Continuously Callable @100 | 5,000 | 5,156 | |||||||||
Colony Local Development Corp. Revenue (INS-Berkshire Hathaway Assurance Corp.), Series A, 4.38%, 10/1/33 | 9,000 | 10,460 | |||||||||
Dallas/Fort Worth International Airport Revenue 4.00%, 11/1/21, Pre-refunded 11/1/20 @ 100 | 12,570 | 12,836 | |||||||||
Series A, 4.44%, 11/1/21 | 2,265 | 2,369 | |||||||||
Ector County Hospital District Revenue, Build America Bond, Series B, 7.18%, 9/15/35, Continuously Callable @100 | 9,700 | 9,839 | |||||||||
Harris County Cultural Education Facilities Finance Corp. Revenue Series B, 2.10%, 5/15/22 | 875 | 880 | |||||||||
Series B, 2.17%, 5/15/23 | 1,000 | 1,008 | |||||||||
Series B, 2.57%, 5/15/26 | 1,000 | 1,015 | |||||||||
McLennan County Public Facility Corp. Revenue, 3.90%, 6/1/29, Continuously Callable @100 | 2,000 | 2,153 |
See notes to financial statements.
32
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Port of Corpus Christi Authority of Nueces County Revenue, 3.49%, 12/1/25 | $ | 1,000 | $ | 1,084 | |||||||
State of Texas, GO, 3.00%, 4/1/28 | 3,850 | 4,156 | |||||||||
54,595 | |||||||||||
Wisconsin (0.0%): (g) | |||||||||||
State of Wisconsin Revenue, Series A, 2.40%, 5/1/30 (b) | 4,000 | 4,046 | |||||||||
Total Municipal Bonds (Cost $612,663) | 663,857 | ||||||||||
U.S. Government Agency Mortgages (6.9%) | |||||||||||
Federal Home Loan Mortgage Corp. 5.00%, 6/1/20 | 7 | 7 | |||||||||
5.50%, 11/1/20 | 79 | 80 | |||||||||
5.50%, 12/1/20 | 48 | 48 | |||||||||
5.00%, 1/1/21 | 94 | 94 | |||||||||
Series K018 Class X1, 1.44%, 1/25/22 (d) (f) | 54,144 | 958 | |||||||||
Series K020 Class X1, 1.51%, 5/25/22 (d) (f) | 85,702 | 2,072 | |||||||||
Series K021 Class X1, 1.56%, 6/25/22 (d) (f) | 66,623 | 1,752 | |||||||||
Series K025 Class X1, 0.94%, 10/25/22 (d) (f) | 64,032 | 1,134 | |||||||||
Series K026 Class X1, 1.10%, 11/25/22 (d) (f) | 89,211 | 1,922 | |||||||||
Series K028 Class A2, 3.11%, 2/25/23 | 4,000 | 4,144 | |||||||||
Series K044 Class A2, 2.81%, 1/25/25 | 15,000 | 15,709 | |||||||||
Series K045 Class A2, 3.02%, 1/25/25 | 10,000 | 10,576 | |||||||||
Series KPLB Class A, 2.77%, 5/25/25 | 17,000 | 17,827 | |||||||||
Series K049 Class A2, 3.01%, 7/25/25 | 8,000 | 8,528 | |||||||||
Series KC02 Class A2, 3.37%, 7/25/25 (e) | 10,000 | 10,741 | |||||||||
Series K053 Class A2, 3.00%, 12/25/25 | 7,000 | 7,476 | |||||||||
Series KIR1 Class A2, 2.85%, 3/25/26 (e) | 12,000 | 12,646 | |||||||||
Series K056 Class AM, 2.59%, 5/25/26 | 10,000 | 10,392 | |||||||||
Series K058 Class A2, 2.65%, 8/25/26 (e) | 20,000 | 21,001 | |||||||||
Series K062 Class A2, 3.41%, 12/25/26 (e) | 10,000 | 11,013 | |||||||||
Series K063 Class A2, 3.43%, 1/25/27 (d) | 9,000 | 9,919 | |||||||||
Series S8FX Class A1, 3.02%, 3/25/27 | 11,911 | 12,610 | |||||||||
Series KIR2 Class A2, 3.17%, 3/25/27 | 9,500 | 10,328 | |||||||||
Series K064 Class AM, 3.33%, 3/25/27 (d) | 8,420 | 9,189 | |||||||||
Series K068 Class A2, 3.24%, 8/25/27 | 4,533 | 4,943 | |||||||||
Series K069 Class A2, 3.19%, 9/25/27 (d) | 5,759 | 6,261 | |||||||||
Series K070 Class A2, 3.30%, 11/25/27 (d) | 8,766 | 9,600 | |||||||||
Series K075 Class A2, 3.65%, 2/25/28 (d) | 3,000 | 3,363 | |||||||||
Series K082 Class A2, 3.92%, 9/25/28 (d) | 5,000 | 5,727 | |||||||||
Series K083 Class A2, 4.05%, 9/25/28 (d) | 5,000 | 5,777 | |||||||||
Series K085 Class A2, 4.06%, 10/25/28 (d) | 6,794 | 7,842 | |||||||||
Series K153 Class A2, 3.29%, 3/25/29 (d) | 7,500 | 8,267 | |||||||||
Series 4818 Class VD, 4.00%, 6/15/29 | 8,868 | 9,080 | |||||||||
Series K095 Class A2, 2.79%, 6/25/29 | 8,750 | 9,344 | |||||||||
Series K094 Class A2, 2.90%, 6/25/29 | 10,000 | 10,762 | |||||||||
Series K097 Class AM, 2.22%, 7/25/29 | 5,000 | 4,999 | |||||||||
Series K097 Class A2, 2.51%, 7/25/29 | 8,000 | 8,371 | |||||||||
Series K096 Class A2, 2.52%, 7/25/29 | 9,000 | 9,425 | |||||||||
Series KG02 Class A2, 2.41%, 8/25/29 | 9,091 | 9,361 | |||||||||
Series K100 Class A2, 2.67%, 9/25/29 | 5,455 | 5,785 |
See notes to financial statements.
33
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Series K151 Class A3, 3.51%, 4/25/30 | $ | 15,500 | $ | 17,365 | |||||||
Series K158 Class A2, 3.90%, 12/25/30 (d) | 7,000 | 8,160 | |||||||||
Series K153 Class A3, 3.12%, 10/25/31 (d) | 4,855 | 5,226 | |||||||||
Series K154 Class A3, 3.46%, 11/25/32 | 4,455 | 4,958 | |||||||||
Series K158 Class A3, 3.90%, 10/25/33 (d) | 5,000 | 5,879 | |||||||||
Series K-1510 Class A3, 3.79%, 1/25/34 | 19,200 | 22,384 | |||||||||
Series K1511 Class A3, 3.54%, 3/25/34 | 10,000 | 11,377 | |||||||||
Series K-1512 Class A3, 3.06%, 4/25/34 | 5,500 | 5,949 | |||||||||
Series K-1513 Class A3, 2.80%, 8/25/34 | 10,000 | 10,566 | |||||||||
5.50%, 12/1/35 | 536 | 606 | |||||||||
5.50%, 4/1/36 | 281 | 317 | |||||||||
3.50%, 5/1/42 | 8,167 | 8,639 | |||||||||
3.50%, 6/1/46 | 8,703 | 9,099 | |||||||||
3.50%, 8/1/46 | 3,318 | 3,513 | |||||||||
3.50%, 5/1/47 | 6,908 | 7,209 | |||||||||
Series K098 Class A2, 2.43%, 10/25/52 | 10,000 | 10,361 | |||||||||
430,681 | |||||||||||
Federal National Mortgage Association | |||||||||||
5.50%, 7/1/21 | 82 | 83 | |||||||||
7.00%, 10/1/22 | 5 | 5 | |||||||||
Series 2016-M2 Class AV2, 2.15%, 1/25/23 | 7,157 | 7,230 | |||||||||
7.00%, 3/1/23 | 3 | 3 | |||||||||
Series 2017-M15 Class AV2, 2.72%, 11/25/24 (d) | 4,834 | 5,002 | |||||||||
Series 2017-M2 Class A2, 2.89%, 2/25/27 (d) | 3,500 | 3,725 | |||||||||
Series M7 Class A2, 2.96%, 2/25/27 (d) | 2,500 | 2,686 | |||||||||
2.50%, 2/1/28 | 6,064 | 6,183 | |||||||||
Series M4 Class A2, 3.15%, 3/25/28 (d) | 7,105 | 7,693 | |||||||||
Series 2019-M12 Class A2, 2.89%, 5/25/29 (d) | 8,000 | 8,552 | |||||||||
6.50%, 4/1/31 | 163 | 188 | |||||||||
6.50%, 7/1/31 | 4 | 4 | |||||||||
6.50%, 3/1/32 | 285 | 330 | |||||||||
5.00%, 6/1/33 | 1,107 | 1,225 | |||||||||
2.50%, 11/1/34 (e) | 9,766 | 9,944 | |||||||||
5.50%, 9/1/35 | 1,395 | 1,576 | |||||||||
5.50%, 10/1/35 | 730 | 825 | |||||||||
5.50%, 1/1/36 | 205 | 231 | |||||||||
5.50%, 4/1/36 | 600 | 678 | |||||||||
6.00%, 5/1/36 | 605 | 700 | |||||||||
6.00%, 6/1/36 | 482 | 559 | |||||||||
5.50%, 2/1/37 | 692 | 782 | |||||||||
5.50%, 3/1/37 | 410 | 464 | |||||||||
6.00%, 8/1/37 | 702 | 817 | |||||||||
5.50%, 11/1/37 | 298 | 337 | |||||||||
5.50%, 5/1/38 | 892 | 1,008 | |||||||||
4.00%, 4/1/48 | 3,784 | 3,959 | |||||||||
3.50%, 9/1/49 (e) | 9,573 | 9,881 | |||||||||
3.00%, 2/1/50 | 20,000 | 20,462 | |||||||||
3.50%, 2/1/50 | 30,000 | 30,964 | |||||||||
4.00%, 2/1/50 | 50,000 | 52,306 | |||||||||
178,402 |
See notes to financial statements.
34
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Government National Mortgage Association Series 200677.00%, 5/15/23 | $ | 8 | $ | 9 | |||||||
7.00%, 5/15/23 | 14 | 15 | |||||||||
7.00%, 5/15/23 | 13 | 14 | |||||||||
7.00%, 5/15/23 | 5 | 5 | |||||||||
6.50%, 6/15/23 | 3 | 3 | |||||||||
7.00%, 6/15/23 | 32 | 34 | |||||||||
7.00%, 6/15/23 | 4 | 4 | |||||||||
6.50%, 7/15/23 | 86 | 91 | |||||||||
7.50%, 7/15/23 | 14 | 14 | |||||||||
7.00%, 8/15/23 | 5 | 5 | |||||||||
7.00%, 8/15/23 | 5 | 5 | |||||||||
7.00%, 8/15/23 | 40 | 42 | |||||||||
6.50%, 9/15/23 | 15 | 16 | |||||||||
7.00%, 9/15/23 | 20 | 20 | |||||||||
6.50%, 10/15/23 | 51 | 53 | |||||||||
6.50%, 10/15/23 | 30 | 32 | |||||||||
6.50%, 10/15/23 | 8 | 8 | |||||||||
6.50%, 12/15/23 | 67 | 70 | |||||||||
6.50%, 12/15/23 | 39 | 41 | |||||||||
6.50%, 1/15/24 | 16 | 17 | |||||||||
6.50%, 2/15/24 | 27 | 28 | |||||||||
7.00%, 1/15/26 | 9 | 9 | |||||||||
7.00%, 3/15/26 | 7 | 7 | |||||||||
7.00%, 3/15/26 | 4 | 4 | |||||||||
6.50%, 4/15/26 | 32 | 35 | |||||||||
7.50%, 6/15/26 | 107 | 116 | |||||||||
7.50%, 6/15/26 | 47 | 51 | |||||||||
7.50%, 7/15/26 | 31 | 32 | |||||||||
7.00%, 10/15/27 | 94 | 104 | |||||||||
7.50%, 2/15/28 | 91 | 100 | |||||||||
6.50%, 5/15/28 | 172 | 191 | |||||||||
6.00%, 8/15/28 | 43 | 45 | |||||||||
6.00%, 9/15/28 | 924 | 1,016 | |||||||||
6.00%, 9/15/28 | 38 | 40 | |||||||||
6.00%, 9/15/28 | 96 | 104 | |||||||||
6.00%, 10/15/28 | 154 | 169 | |||||||||
7.50%, 12/15/28 | 71 | 79 | |||||||||
6.00%, 1/15/29 | 98 | 105 | |||||||||
6.00%, 1/15/29 | 11 | 12 | |||||||||
6.00%, 1/15/29 | 123 | 135 | |||||||||
7.00%, 6/15/29 | 63 | 68 | |||||||||
7.00%, 6/15/29 | 141 | 157 | |||||||||
7.00%, 7/15/29 | 17 | 18 | |||||||||
7.00%, 8/15/31 | 175 | 202 | |||||||||
6.50%, 8/20/31 | 112 | 129 | |||||||||
6.50%, 10/15/31 | 334 | 380 | |||||||||
7.00%, 7/15/32 | 48 | 55 | |||||||||
6.00%, 9/20/32 | 259 | 296 | |||||||||
6.00%, 1/15/33 | 155 | 176 |
See notes to financial statements.
35
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
5.50%, 4/20/33 | $ | 363 | $ | 408 | |||||||
5.00%, 8/15/33 | 2,125 | 2,347 | |||||||||
7,116 | |||||||||||
Government National Mortgage Association | |||||||||||
7.50%, 5/15/27 | 57 | 62 | |||||||||
7.50%, 8/15/29 | 57 | 65 | |||||||||
127 | |||||||||||
Total U.S. Government Agency Mortgages (Cost $587,110) | 616,326 | ||||||||||
U.S. Treasury Obligations (7.8%) | |||||||||||
U.S. Treasury Bonds | |||||||||||
3.88%, 8/15/40 | 30,000 | 40,163 | |||||||||
2.75%, 8/15/42 (e) | 15,000 | 17,093 | |||||||||
2.75%, 11/15/42 | 10,000 | 11,391 | |||||||||
3.38%, 5/15/44 | 5,000 | 6,304 | |||||||||
3.00%, 11/15/44 | 25,000 | 29,734 | |||||||||
2.50%, 2/15/45 (e) | 65,000 | 70,941 | |||||||||
2.50%, 2/15/46 | 15,000 | 16,418 | |||||||||
2.25%, 8/15/46 (e) | 42,950 | 44,856 | |||||||||
2.88%, 11/15/46 (e) | 10,000 | 11,763 | |||||||||
2.75%, 11/15/47 (e) | 12,000 | 13,856 | |||||||||
3.00%, 2/15/49 | 10,000 | 12,170 | |||||||||
U.S. Treasury Inflation Indexed Bonds | |||||||||||
2.38%, 1/15/25 | 40,000 | 61,547 | |||||||||
0.88%, 1/15/29 | 10,000 | 11,107 | |||||||||
U.S. Treasury Notes | |||||||||||
3.63%, 2/15/20 | 20,000 | 20,009 | |||||||||
2.63%, 11/15/20 | 50,000 | 50,420 | |||||||||
1.50%, 8/31/21 | 10,000 | 10,015 | |||||||||
2.00%, 2/15/22 | 15,000 | 15,198 | |||||||||
1.63%, 11/15/22 | 7,000 | 7,059 | |||||||||
2.38%, 1/31/23 (e) | 5,000 | 5,155 | |||||||||
2.00%, 2/15/23 | 10,000 | 10,207 | |||||||||
2.50%, 5/15/24 | 5,000 | 5,244 | |||||||||
2.25%, 11/15/24 | 10,000 | 10,425 | |||||||||
2.50%, 1/31/25 (e) | 5,000 | 5,281 | |||||||||
2.00%, 2/15/25 | 80,000 | 82,569 | |||||||||
2.75%, 8/31/25 | 10,000 | 10,738 | |||||||||
3.00%, 10/31/25 | 15,000 | 16,337 | |||||||||
2.25%, 11/15/25 | 5,000 | 5,240 | |||||||||
1.63%, 2/15/26 | 50,000 | 50,656 | |||||||||
2.38%, 5/15/27 (e) | 10,000 | 10,647 | |||||||||
2.25%, 8/15/27 | 10,000 | 10,573 | |||||||||
2.25%, 11/15/27 | 10,000 | 10,584 | |||||||||
2.75%, 2/15/28 (e) | 5,000 | 5,486 | |||||||||
2.88%, 5/15/28 | 5,000 | 5,545 | |||||||||
3.13%, 11/15/28 (e) | 5,000 | 5,670 | |||||||||
Total U.S. Treasury Obligations (Cost $643,139) | 700,401 |
See notes to financial statements.
36
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Commercial Paper (0.5%) | |||||||||||
Amilln, 1.68%, 2/3/20 (n) | $ | 18,300 | $ | 18,297 | |||||||
AutoZone, Inc., 1.68%, 2/3/20 (a) (n) | 4,795 | 4,794 | |||||||||
Nieuw Amsterdam Receivables Corp., 1.62%, 2/7/20 (a) (n) | 3,000 | 2,999 | |||||||||
One Gas, Inc. 1.53%, 2/3/20 (a) (n) | 2,000 | 2,000 | |||||||||
1.59%, 2/18/20 (a) (n) | 4,556 | 4,552 | |||||||||
Puget Sound Energy, Inc., 1.69%, 2/5/20 (n) | 9,000 | 8,998 | |||||||||
Xcel Energy, Inc., 1.73%, 2/11/20 (a) (n) | 2,700 | 2,699 | |||||||||
Total Commercial Paper (Cost $44,341) | 44,339 | ||||||||||
Collateral for Securities Loaned^ (0.3%) | |||||||||||
HSBC U.S. Government Money Market Fund, I Shares, 1.52% (o) | 30,208,705 | 30,209 | |||||||||
Total Collateral for Securities Loaned (Cost $30,209) | 30,209 | ||||||||||
Total Investments (Cost $8,329,769) — 99.6% | 8,903,975 | ||||||||||
Other assets in excess of liabilities — 0.4% | 36,295 | ||||||||||
NET ASSETS — 100.00% | $ | 8,940,270 |
^ Purchased with cash collateral from securities on loan.
(a) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid based upon procedures approved by the Board of Trustees. As of January 31, 2020, the fair value of these securities was $2,367,533 (thousand) and amounted to 26.6% of net assets.
(b) Security purchased on a when-issued basis.
(c) Variable or Floating-Rate Security. Rate disclosed is as of January 31, 2020.
(d) The rate for certain asset-backed and mortgage backed securities may vary based on factors relating to the pool of assets underlying the security. The rate disclosed is the rate in effect at January 31, 2020.
(e) All or a portion of this security has been segregated as collateral for securities purchased on a when-issued basis.
(f) Security is interest only.
(g) Amount represents less than 0.05% of net assets.
(h) All or a portion of this security is on loan.
(i) Security is perpetual and has no final maturity date but may be subject to calls at various dates in the future.
(j) Variable Rate Demand Notes that provide the rights to sell the security at face value on either that day or within the rate-reset period. The interest rate is reset on the put date at a stipulated daily, weekly, monthly, quarterly, or other specified time interval to reflect current market conditions. These securities do not indicate a reference rate and spread in their description.
(k) Defaulted security.
See notes to financial statements.
37
USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Unaudited)
(l) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of January 31, 2020, illiquid securities were 0.1% of the Fund's net assets.
(m) Put Bond.
(n) Rate represents the effective yield at January 31, 2020.
(o) Rate disclosed is the daily yield on January 31, 2020.
(p) Stepped-Coupon security converts to coupon form on 11/09/22 with a rate of 2.85%.
ADR — American Depositary Receipt
AMBAC — American Municipal Bond Assurance Corporation
bps — Basis points
GO — General Obligation
H15T5Y — 5 Year Treasury Constant Maturity Rate
IDA — Industrial Development Authority
LIBOR — London InterBank Offered Rate
LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LIBOR02M — 2 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LIBOR03M �� 3 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LIBOR06M — 6 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LLC — Limited Liability Company
LP — Limited Partnership
MTN — Medium Term Note
PLC — Public Limited Company
SOFR — Secured Overnight Financing Rate
USISDA05 — 5 Year ICE Swap Rate, rate disclosed as of January 31, 2020
USSW10 — USD 10 Year Swap Rate, rate disclosed as of January 31, 2020
USSW5 — USD 5 Year Swap Rate, rate disclosed as of January 31, 2020
Credit Enhancements — Adds 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 the name listed. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons, and there is no assurance that the insurance company will meet its obligations.
NBGA Principal and interest payments or, under certain circumstances, underlying mortgages, are guaranteed by a nonbank guarantee agreement from the name listed.
See notes to financial statements.
38
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Income Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $8,329,769) | $ | 8,903,975 | (a) | ||||
Cash and cash equivalents | 270 | ||||||
Deposits with brokers for futures contracts | 1,976 | ||||||
Receivables: | |||||||
Interest and dividends | 74,852 | ||||||
Capital shares issued | 5,812 | ||||||
Investments sold | 4,181 | ||||||
From Adviser | 6 | ||||||
Prepaid expenses | 25 | ||||||
Total assets | 8,991,097 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 30,209 | ||||||
Investments purchased | 12,066 | ||||||
Capital shares redeemed | 4,582 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 1,783 | ||||||
Administration fees | 888 | ||||||
Custodian fees | 252 | ||||||
Transfer agent fees | 679 | ||||||
Compliance fees | 1 | ||||||
12b-1 fees | 10 | ||||||
Other accrued expenses | 357 | ||||||
Total liabilities | 50,827 | ||||||
Net Assets: | |||||||
Capital | 8,359,646 | ||||||
Total distributable earnings/(loss) | 580,624 | ||||||
Net assets | $ | 8,940,270 | |||||
Net Assets: | |||||||
Fund Shares | $ | 3,408,583 | |||||
Institutional Shares | 5,415,117 | ||||||
Adviser Shares | 93,408 | ||||||
R6 Shares | 23,162 | ||||||
Total | $ | 8,940,270 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 249,173 | ||||||
Institutional Shares | 396,109 | ||||||
Adviser Shares | 6,848 | ||||||
R6 Shares | 1,694 | ||||||
Total | 653,824 | ||||||
Net asset value, offering and redemption price per share: (b) | |||||||
Fund Shares | $ | 13.68 | |||||
Institutional Shares | 13.67 | ||||||
Adviser Shares | 13.64 | ||||||
R6 Shares | 13.67 |
(a) Includes $29,311 of securities on loan.
(b) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
39
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA Income Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 3,058 | |||||
Interest | 160,475 | ||||||
Securities lending (net of fees) | 158 | ||||||
Foreign tax withholding | (28 | ) | |||||
Total Income | 163,663 | ||||||
Expenses: | |||||||
Investment advisory fees | 10,396 | ||||||
Administration fees — Fund Shares | 2,499 | ||||||
Administration fees — Institutional Shares | 2,607 | ||||||
Administration fees — Adviser Shares | 71 | ||||||
Administration fees — R6 Shares | 6 | ||||||
12b-1 fees — Adviser Shares | 118 | ||||||
Sub-Administration Fees | 14 | ||||||
Custodian fees | 229 | ||||||
Transfer agent fees — Fund Shares | 1,723 | ||||||
Transfer agent fees — Institutional Shares | 2,607 | ||||||
Transfer agent fees — Adviser Shares | 46 | ||||||
Transfer agent fees — R6 Shares | 1 | ||||||
Trustees' fees | 22 | ||||||
Compliance fees | 26 | ||||||
Legal and audit fees | 65 | ||||||
State registration and filing fees | 123 | ||||||
Interest expense on Interfund lending | 3 | ||||||
Other expenses | 310 | ||||||
Total Expenses | 20,866 | ||||||
Expenses waived/reimbursed by Adviser | (6 | ) | |||||
Net Expenses | 20,860 | ||||||
Net Investment Income (Loss) | 142,803 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from unaffiliated investment securities and foreign currency translations | 12,140 | ||||||
Net realized gains (losses) from affiliated security transactions | 61 | ||||||
Net realized gains (losses) from futures contracts | 6,543 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | 266,364 | ||||||
Net change in unrealized appreciation/depreciation on futures contracts | (2,329 | ) | |||||
Net realized/unrealized gains (losses) on investments | 282,779 | ||||||
Change in net assets resulting from operations | $ | 425,582 |
See notes to financial statements.
40
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Income Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 142,803 | $ | 280,012 | |||||||
Net realized gains (losses) from investments | 18,744 | 16,111 | |||||||||
Net change in unrealized appreciation (depreciation) on investments | 264,035 | 358,780 | |||||||||
Change in net assets resulting from operations | 425,582 | 654,903 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (62,920 | ) | (107,662 | ) | |||||||
Institutional Shares | (100,009 | ) | (171,913 | ) | |||||||
Adviser Shares | (1,677 | ) | (3,223 | ) | |||||||
R6 Shares | (437 | ) | (702 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (165,043 | ) | (283,500 | ) | |||||||
Change in net assets resulting from capital transactions | 301,155 | 197,775 | |||||||||
Change in net assets | 561,694 | 569,178 | |||||||||
Net Assets: | |||||||||||
Beginning of period | 8,378,576 | 7,809,398 | |||||||||
End of period | $ | 8,940,270 | $ | 8,378,576 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 367,067 | $ | 615,756 | |||||||
Distributions reinvested | 60,261 | 102,735 | |||||||||
Cost of shares redeemed | (332,758 | ) | (701,564 | ) | |||||||
Total Fund Shares | $ | 94,570 | $ | 16,927 | |||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 539,873 | $ | 949,163 | |||||||
Distributions reinvested | 99,070 | 168,534 | |||||||||
Cost of shares redeemed | (429,578 | ) | (923,600 | ) | |||||||
Total Institutional Shares | $ | 209,365 | $ | 194,097 | |||||||
Adviser Shares | |||||||||||
Proceeds from shares issued | $ | 2,091 | $ | 3,771 | |||||||
Distributions reinvested | 1,647 | 3,180 | |||||||||
Cost of shares redeemed | (8,174 | ) | (21,284 | ) | |||||||
Total Adviser Shares | $ | (4,436 | ) | $ | (14,333 | ) | |||||
R6 Shares | |||||||||||
Proceeds from shares issued | $ | 2,981 | $ | 4,116 | |||||||
Distributions reinvested | 334 | 518 | |||||||||
Cost of shares redeemed | (1,659 | ) | (3,550 | ) | |||||||
Total R6 Shares | $ | 1,656 | $ | 1,084 | |||||||
Change in net assets resulting from capital transactions | $ | 301,155 | $ | 197,775 |
(continues on next page)
See notes to financial statements.
41
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands) (continued)
USAA Income Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 27,230 | 48,140 | |||||||||
Reinvested | 4,479 | 8,039 | |||||||||
Redeemed | (24,677 | ) | (55,041 | ) | |||||||
Total Fund Shares | 7,032 | 1,138 | |||||||||
Institutional Shares | |||||||||||
Issued | 40,047 | 74,103 | |||||||||
Reinvested | 7,368 | 13,197 | |||||||||
Redeemed | (31,870 | ) | (72,144 | ) | |||||||
Total Institutional Shares | 15,545 | 15,156 | |||||||||
Adviser Shares | |||||||||||
Issued | 156 | 292 | |||||||||
Reinvested | 123 | 250 | |||||||||
Redeemed | (608 | ) | (1,673 | ) | |||||||
Total Adviser Shares | (329 | ) | (1,131 | ) | |||||||
R6 Shares | |||||||||||
Issued | 221 | 321 | |||||||||
Reinvested | 25 | 40 | |||||||||
Redeemed | (123 | ) | (280 | ) | |||||||
Total R6 Shares | 123 | 81 | |||||||||
Change in Shares | 22,371 | 15,244 |
See notes to financial statements.
42
This page is intentionally left blank.
43
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains From Investments | ||||||||||||||||||||||
USAA Income Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 13.28 | 0.22 | (d) | 0.44 | 0.66 | (0.22 | ) | (0.04 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 12.68 | 0.45 | 0.60 | 1.05 | (0.45 | ) | — | (e) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 13.20 | 0.45 | (0.51 | ) | (0.06 | ) | (0.44 | ) | (0.02 | ) | ||||||||||||||||
Year Ended July 31, 2017 | $ | 13.40 | 0.44 | (0.20 | ) | 0.24 | (0.44 | ) | — | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 12.99 | 0.47 | 0.40 | 0.87 | (0.46 | ) | — | |||||||||||||||||||
Year Ended July 31, 2015 | $ | 13.28 | 0.47 | (0.27 | ) | 0.20 | (0.46 | ) | (0.01 | ) | |||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 13.27 | 0.23 | (d) | 0.43 | 0.66 | (0.22 | ) | (0.04 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 12.67 | 0.45 | 0.61 | 1.06 | (0.46 | ) | — | (e) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 13.19 | 0.44 | (0.50 | ) | (0.06 | ) | (0.44 | ) | (0.02 | ) | ||||||||||||||||
Year Ended July 31, 2017 | $ | 13.39 | 0.45 | (0.20 | ) | 0.25 | (0.45 | ) | — | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 12.99 | 0.48 | 0.39 | 0.87 | (0.47 | ) | — | |||||||||||||||||||
Year Ended July 31, 2015 | $ | 13.28 | 0.49 | (0.28 | ) | 0.21 | (0.47 | ) | (0.01 | ) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Amount is less than $0.005.
See notes to financial statements.
44
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period (continued)
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Return of Capital | Total Distributions | Net Asset Value, End of Period | Total Return*,(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | |||||||||||||||||||||||||||||||
USAA Income Fund | |||||||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | — | (0.26 | ) | $ | 13.68 | 4.99 | % | 0.52 | % | 3.27 | % | 0.52 | % | $ | 3,408,583 | 9 | % | ||||||||||||||||||||||
Year Ended July 31, 2019 | — | (0.45 | ) | $ | 13.28 | 8.50 | % | 0.55 | % | 3.49 | % | 0.55 | % | $ | 3,214,507 | 13 | % | ||||||||||||||||||||||
Year Ended July 31, 2018 | — | (0.46 | ) | $ | 12.68 | (0.47 | )% | 0.52 | % | 3.40 | % | 0.52 | % | $ | 3,055,739 | 8 | % | ||||||||||||||||||||||
Year Ended July 31, 2017 | — | (0.44 | ) | $ | 13.20 | 1.91 | % | 0.49 | % | 3.40 | % | 0.49 | % | $ | 3,617,550 | 9 | % | ||||||||||||||||||||||
Year Ended July 31, 2016 | — | (0.46 | ) | $ | 13.40 | 6.88 | % | 0.51 | % | 3.61 | % | 0.51 | % | $ | 3,394,088 | 11 | % | ||||||||||||||||||||||
Year Ended July 31, 2015 | (0.02 | ) | (0.49 | ) | $ | 12.99 | 1.45 | % | 0.53 | % | 3.36 | % | 0.53 | % | $ | 3,544,344 | 10 | % | |||||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | — | (0.26 | ) | $ | 13.67 | 5.10 | % | 0.46 | % | 3.33 | % | 0.46 | % | $ | 5,415,117 | 9 | % | ||||||||||||||||||||||
Year Ended July 31, 2019 | — | (0.46 | ) | $ | 13.27 | 8.58 | % | 0.48 | % | 3.56 | % | 0.48 | % | $ | 5,048,203 | 13 | % | ||||||||||||||||||||||
Year Ended July 31, 2018 | — | (0.46 | ) | $ | 12.67 | (0.41 | )% | 0.47 | % | 3.46 | % | 0.47 | % | $ | 4,629,713 | 8 | % | ||||||||||||||||||||||
Year Ended July 31, 2017 | — | (0.45 | ) | $ | 13.19 | 1.97 | % | 0.43 | % | 3.45 | % | 0.43 | % | $ | 3,644,795 | 9 | % | ||||||||||||||||||||||
Year Ended July 31, 2016 | — | (0.47 | ) | $ | 13.39 | 6.89 | % | 0.44 | % | 3.66 | % | 0.44 | % | $ | 3,114,810 | 11 | % | ||||||||||||||||||||||
Year Ended July 31, 2015 | (0.02 | ) | (0.50 | ) | $ | 12.99 | 1.51 | % | 0.46 | % | 3.43 | % | 0.46 | % | $ | 2,227,221 | 10 | % |
(continues on next page)
See notes to financial statements.
45
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains From Investments | ||||||||||||||||||||||
USAA Income Fund | |||||||||||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 13.24 | 0.20 | (d) | 0.44 | 0.64 | (0.20 | ) | (0.04 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 12.65 | 0.42 | 0.59 | 1.01 | (0.42 | ) | — | (e) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 13.16 | 0.41 | (0.49 | ) | (0.08 | ) | (0.41 | ) | (0.02 | ) | ||||||||||||||||
Year Ended July 31, 2017 | $ | 13.36 | 0.42 | (0.21 | ) | 0.21 | (0.41 | ) | — | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 12.96 | 0.44 | 0.38 | 0.82 | (0.42 | ) | — | |||||||||||||||||||
Year Ended July 31, 2015 | $ | 13.25 | 0.44 | (0.27 | ) | 0.17 | (0.43 | ) | (0.01 | ) | |||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 13.27 | 0.23 | (d) | 0.43 | 0.66 | (0.22 | ) | (0.04 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 12.67 | 0.47 | 0.60 | 1.07 | (0.47 | ) | — | (e) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 13.19 | 0.45 | (0.49 | ) | (0.04 | ) | (0.46 | ) | (0.02 | ) | ||||||||||||||||
December 1, 2016 (e) through July 31, 2017 | $ | 12.83 | 0.30 | 0.36 | 0.66 | (0.30 | ) | — |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Amount is less than $0.005.
(f) Prior to December 1, 2014, USAA Asset Management Company ("AMCO") (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Adviser Shares to 0.90% of the Adviser Shares' average daily net assets.
See notes to financial statements.
46
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period (continued)
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Return of Capital | Total Distributions | Net Asset Value, End of Period | Total Return*,(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | |||||||||||||||||||||||||||||||
USAA Income Fund | |||||||||||||||||||||||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | — | (0.24 | ) | $ | 13.64 | 4.89 | % | 0.78 | % | 3.02 | % | 0.79 | % | $ | 93,408 | 9 | % | ||||||||||||||||||||||
Year Ended July 31, 2019 | — | (0.42 | ) | $ | 13.24 | 8.20 | % | 0.77 | % | 3.28 | % | 0.77 | % | $ | 95,026 | 13 | % | ||||||||||||||||||||||
Year Ended July 31, 2018 | — | (0.43 | ) | $ | 12.65 | (0.61 | )% | 0.74 | % | 3.18 | % | 0.74 | % | $ | 105,072 | 8 | % | ||||||||||||||||||||||
Year Ended July 31, 2017 | — | (0.41 | ) | $ | 13.16 | 1.67 | % | 0.72 | % | 3.17 | % | 0.72 | % | $ | 130,912 | 9 | % | ||||||||||||||||||||||
Year Ended July 31, 2016 | — | (0.42 | ) | $ | 13.36 | 6.53 | % | 0.77 | % | 3.36 | % | 0.77 | % | $ | 171,518 | 11 | % | ||||||||||||||||||||||
Year Ended July 31, 2015 | (0.02 | ) | (0.46 | ) | $ | 12.96 | 1.23 | % | 0.79 | %(f) | 3.10 | % | 0.79 | % | $ | 222,494 | 10 | % | |||||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | — | (0.26 | ) | $ | 13.67 | 5.05 | % | 0.39 | % | 3.40 | % | 0.40 | % | $ | 23,162 | 9 | % | ||||||||||||||||||||||
Year Ended July 31, 2019 | — | (0.47 | ) | $ | 13.27 | 8.68 | % | 0.39 | % | 3.65 | % | 0.43 | % | $ | 20,840 | 13 | % | ||||||||||||||||||||||
Year Ended July 31, 2018 | — | (0.48 | ) | $ | 12.67 | (0.32 | )% | 0.39 | % | 3.56 | % | 0.58 | % | $ | 18,874 | 8 | % | ||||||||||||||||||||||
December 1, 2016 (e) through July 31, 2017 | — | (0.30 | ) | $ | 13.19 | 5.22 | % | 0.39 | % | 3.50 | % | 0.99 | % | $ | 5,142 | 9 | % |
See notes to financial statements.
47
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Income Fund (the "Fund"). The Fund offers four classes of shares: Fund Shares, Institutional Shares, Adviser Shares, and R6 Shares. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges except with respect to fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or
48
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
system where the security is principally traded, if available, or the over-the-counter markets, are valued at the last sales price or official closing price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations typically are categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at net asset value. These valuations typically are categorized as Level 1 in the fair value hierarchy.
Debt securities of United States ("U.S.") issuers, along with corporate and municipal securities, including short-term investments maturing in 60 days or less, may be valued using evaluated bid or the last sales price to price securities by dealers or an independent pricing service approved by the Board. These valuations are typically categorized as Level 2 in the fair value hierarchy.
Futures are valued at the settlement price at the close of market on the principal exchange on which they are traded or, in the absence of any transactions that day, the last sale on the prior trading date. These valuations typically are categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. These valuations typically are categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's net asset value ("NAV") to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's net asset value is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. These valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of January 31, 2020, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Asset Backed Securities | $ | — | $ | 436,140 | $ | — | $ | 436,140 | |||||||||||
Collateralized Mortgage Obligations | — | 528,831 | — | 528,831 | |||||||||||||||
Common Stocks | 26,289 | — | — | 26,289 | |||||||||||||||
Preferred Stocks | 48,192 | 24,339 | — | 72,531 | |||||||||||||||
Senior Secured Loans | — | 40,533 | — | 40,533 | |||||||||||||||
Corporate Bonds | — | 5,716,803 | — | 5,716,803 | |||||||||||||||
Foreign Bonds | — | 27,321 | — | 27,321 | |||||||||||||||
Government National Mortgage Association | — | 395 | — | 395 | |||||||||||||||
Municipal Bonds | — | 663,857 | — | 663,857 | |||||||||||||||
U.S. Government Agency Mortgages | — | 616,326 | — | 616,326 | |||||||||||||||
U.S. Treasury Obligations | — | 700,401 | — | 700,401 | |||||||||||||||
Commercial Paper | — | 44,339 | — | 44,339 | |||||||||||||||
Collateral for Securities Loaned | 30,209 | — | — | 30,209 | |||||||||||||||
Total | $ | 104,690 | $ | 8,799,285 | $ | — | $ | 8,903,975 |
For the six-months ended January 31, 2020, there were no transfers in or out of the Level 3 fair value hierarchy.
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Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs. ETFs are a type of index fund, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Derivative Instruments:
Futures Contracts:
The Fund may enter into contracts for the future delivery of securities or foreign currencies and futures contracts based on a specific security, class of securities, foreign currency or an index, and purchase or sell options on any such futures contracts. A futures contract on a securities index is an agreement obligating either party to pay, and entitling the other party to receive, while the contract is outstanding, cash payments based on the level of a specified securities index. No physical delivery of the underlying asset is made. The Fund may use futures contracts to gain exposure to, or hedge against, changes in the value of equities, interest rates, or foreign currencies. The acquisition of put and call options on futures contracts will give the Fund the right (but not the obligation), for a specified price, to sell or to purchase the underlying futures contract, upon exercise of the option, at any time during the option period. Futures transactions involve brokerage costs and require the Fund to segregate assets to cover contracts that would require it to purchase securities or currencies. A good faith margin deposit, known as initial margin, of cash or government securities with a broker or custodian is required to initiate and maintain open positions in futures contracts. Subsequent payments, known as variation margin, are made or received by the Fund based on the change in the market value of the position and are recorded as unrealized appreciation or depreciation until the contract is closed out, at which time the gain or loss is realized. The Fund may lose the expected benefit of futures transactions if interest rates, exchange rates or securities prices change in an unanticipated manner. Such unanticipated changes may also result in lower overall performance than if the Fund had not entered into any futures transactions. In addition, the value of the Fund's futures positions may not prove to be perfectly or even highly correlated with the value of its portfolio securities or foreign currencies, limiting the Fund's ability to hedge effectively against interest rate, exchange rate and/or market risk and giving rise to additional risks. There is no assurance of liquidity in the secondary market for purposes of closing out futures positions. With exchange-listed futures contracts, counterparty credit risk to the Fund is limited to the exchange's clearinghouse which, as counterparty to all exchange-traded futures contracts, guarantees the transactions against default from the actual counterparty to the transaction. The Fund
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invested nominally in futures contracts during the six-months ended January 31, 2020, and held no futures contracts at period end. Futures contracts held during the period were not subject to master netting provisions.
Summary of Derivative Instruments:
The following table presents the effect of derivative instruments on the Statement of Operations, categorized by risk exposure, for the six-months ended January 31, 2020 (amounts in thousands):
Net Realized Gains (Losses) on Derivatives Recognized as a Result from Operations | Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized as a Result of Operations | ||||||||||
Net Realized Gains (Losses) from Futures Contracts | Net Change in Unrealized Appreciation/Depreciation on Futures Contracts | ||||||||||
Interest Rate Risk Exposure: | $ | 6,543 | $ | (2,329 | ) |
Securities Purchased on a Delayed-Delivery or When-Issued Basis:
The Fund may purchase securities on a delayed-delivery or when-issued basis. Delivery and payment for securities that have been purchased by the Fund on a delayed-delivery, when-issued basis, or for delayed draws on loans can take place a month or more after the trade date. At the time the Fund makes the commitment to purchase a security on a delayed-delivery or when-issued basis, the Fund records the transaction and reflects the value of the security in determining net asset value. No interest accrues to the Fund until the transaction settles and payment takes place. A segregated account is established and the Fund maintains cash and/or marketable securities at least equal in value to commitments for delayed-delivery or when-issued securities. If the Fund owns delayed-delivery or when-issued securities, these values are included in "Payable for investments purchased" on the accompanying Statement of Assets and Liabilities and the segregated assets are identified in the Schedule of Portfolio Investments.
Mortgage- and Asset-Backed Securities:
The values of some mortgage-related or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Fund to a lower rate of return upon reinvestment of principal. The values of mortgage and asset-backed securities depend in part on the credit quality and adequacy of the underlying assets or collateral and may fluctuate in response to the market's perception of these factors as well as current and future repayment rates. Some mortgage-backed securities are backed by the full faith and credit of the U.S. government (e.g., mortgage-backed securities issued by the Government National Mortgage Association, commonly known as "Ginnie Mae"), while other mortgage-backed securities (e.g., mortgage-backed securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, commonly known as "Fannie Mae" and "Freddie Mac"), are backed only by the credit of the government entity issuing them. In addition, some mortgage-backed securities are issued by private entities and, as such, are not guaranteed by the U.S. government or any agency or instrumentality of the U.S. government.
Leveraged Loans:
The Fund may invest in leveraged loans, a type of bank loan. Leveraged loans are adjustable-rate bank loans made to companies rated below investment grade. The interest rates on leveraged loans are reset periodically based upon the fluctuations of a base interest rate such as LIBOR and a "spread" above that base interest rate that represents a risk premium to the lending banks and/or other participating investors. Many bank loans bear an adjustable rate of interest; however, leveraged loans provide for a greater "spread" over the base interest rate than other bank loans because they are
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considered to represent a greater credit risk. Because they are perceived to represent a greater credit risk, leveraged loans possess certain attributes that are similar to high-yield securities. However, because they are often secured by collateral of the borrower, leveraged loans possess certain attributes that are similar to other bank loans.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a securities lending agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income, net of income retained by Citibank. Borrowers are required to secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are cured the next business day once the shortfall exceeds $100 thousand. Collateral may be cash, U.S. government securities, or other securities as permitted by SEC guidelines. Cash collateral may be invested in high-quality short-term investments, primarily open-end investment companies. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Risks relating to securities-lending transactions include that the borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower. The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy borrower default. Cash collateral is listed in the Fund's Portfolio of Investments and Financial Statements while non-cash collateral is not included. The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2020.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 29,311 | $ | — | $ | 30,209 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on
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investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as net change in unrealized appreciation/depreciation on investments and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as net realized gains or losses from investment transactions and foreign currency translations on the Statement of Operations.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, distribution and service 12b-1 fees, and printing fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
Cross-Trade Transactions:
Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades, which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the six-months ended January 31, 2020, the Fund engaged in the following securities transactions with affiliated funds, which resulted in the following net realized gains (losses): (amounts in thousands)
Purchases | Sales | Net Realized Gains (Losses) | |||||||||||||
$ | — | $ | 5,162 | $ | 61 |
3. Purchases and Sales:
Cost of purchases and proceeds from sales/maturities of securities (excluding securities maturing less than one year from acquisition) for the six-months ended January 31, 2020, were as follows for the Fund (amounts in thousands):
Purchases (excluding U.S. Government Securities) | Sales (excluding U.S. Government Securities) | Purchases of U.S. Government Securities | Sales of U.S Government Securities | ||||||||||||
$ | 959,156 | $ | 543,933 | $ | 106,569 | $ | 187,982 |
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4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA funds. The USAA fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi-annual reports may be viewed at usaa.com. As of January 31, 2020, certain USAA fund-of-funds owned total outstanding shares of the Fund:
USAA Cornerstone Conservative Fund | 0.7 | % | |||||
USAA Target Retirement Income Fund | 0.7 | % | |||||
USAA Target Retirement 2020 Fund | 1.2 | % | |||||
USAA Target Retirement 2030 Fund | 1.5 | % | |||||
USAA Target Retirement 2040 Fund | 0.9 | % | |||||
USAA Target Retirement 2050 Fund | 0.4 | % | |||||
USAA Target Retirement 2060 Fund | 0.0 | %* |
* Amount is less than 0.05%.
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.24% of the Fund's average daily net assets. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
No performance adjustments will be made for periods beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter will be utilized in calculating future performance adjustments.
The performance adjustment will be calculated monthly by comparing each class' performance to that of the Lipper A Rated Bond Funds Index. The Lipper A Rated Bond Funds Index tracks the total return performance of each class within the Lipper A Rated Bond Funds category.
The performance period for each share class will consist of the current month plus the previous number of months beginning July 1, 2019. The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)1 | Annual Adjustment Rate (in basis points)1 | ||||||
+/- 20 to 50 | +/- 4 | ||||||
+/- 51 to 100 | +/- 5 | ||||||
+/- 101 and greater | +/- 6 |
1 Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of the class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
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Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper A Rated Bond Funds Index over that period, even if the class has overall negative returns during the performance period.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six-months ended January 31, 2020, the Fund had no subadvisors.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15% of average daily net assets of the Fund Shares and Adviser Shares, 0.10% of average daily net assets of the Institutional Shares, and 0.05% of average daily net assets of the R6 Shares, respectively. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. VCTA, an affiliate of the Adviser, provides transfer agent services to the Fund Shares and Adviser Shares based on an annual charge of $25.50 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares and R6 Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10% and 0.01%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the Adviser Shares pursuant to a Distribution Agreement between the Distributor and the Trust. Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, at an annual
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rate of up to 0.25% of the average daily net assets of the Adviser Shares. Amounts incurred are reflected on the Statement of Operations as 12b-1 Fees.
Adviser Shares are offered and sold without imposition of an initial sales charge or a contingent deferred sales charge.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
The expense limits (excluding voluntary waivers) are 0.52%, 0.46%, 0.77% and 0.39% for Fund Shares, Institutional Shares, Adviser Shares, and R6 Shares, respectively. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||
$ | 6 |
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Overall stock market risks may affect the value of the Fund. Factors such as domestic and international economic growth and market conditions, interest rate levels, and political events affect the securities market.
The value of a debt security or other income-producing security changes in response to various factors, including, for example, market-related factors (such as changes in interest rates or changes in the risk appetite of investors generally) and changes in the actual or perceived ability of the issuer (or of issuers generally) to meet its (or their) obligations.
Bond prices generally are linked to the prevailing market interest rates. In general, when interest rates rise, bond prices fall; conversely, when interest rates fall, bond prices rise. The price volatility of a bond also depends on its duration. Generally, the longer the duration of a bond, the greater is its sensitivity to interest rates. To compensate investors for this higher interest rate risk, bonds with longer durations generally offer higher yields than bonds with shorter durations.
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7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six-months ended January 31, 2020.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Fund in the Victory Fund Complex relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period is presented on the Statement of Operations under Interest expense on Interfund lending. As a Lender, interest earned by the Fund, if any, during the period is reflected on the Statement of Operations under Income on Interfund lending.
The average borrowing and lending for the days outstanding and average interest rate for the Fund during the six-months ended January 31, 2020 were as follows (amounts in thousands):
Fund | Amount Borrower or Lender | Outstanding at January 31, 2020 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | |||||||||||||||||||||
USAA Growth & Income Fund | Borrower | $ | — | $ | 5,024 | 9 | 2.61 | % | $ | 8,200 |
*For the six-months ended January 31, 2020, based on the number of days borrowings were outstanding.
8. Federal Income Tax Information:
The Fund intends to distribute any net investment income monthly. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net
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investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
9. Subsequent Event:
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
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(Unaudited)
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019, through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,049.90 | $ | 1,022.52 | $ | 2.68 | $ | 2.64 | 0.52 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,051.00 | 1,022.82 | 2.37 | 2.34 | 0.46 | % | ||||||||||||||||||||
Adviser Shares | 1,000.00 | 1,048.90 | 1,021.22 | 4.02 | 3.96 | 0.78 | % | ||||||||||||||||||||
R6 Shares | 1,000.00 | 1,050.50 | 1,023.18 | 2.01 | 1.98 | 0.39 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Effective July 1, 2019, the Fund's Adviser Shares entered into an expense limitation agreement with the Advisor to limit expenses to 0.77%. The annualized expense ratio of 0.78% for the Adviser Shares, as represented in the table above, reflects adjustments for U.S. generally accepted accounting principles. The values in the table below reflect your costs (in dollars) of investing in the Fund, accruing at the expense limit of 0.77% for the entire six-months ended January 31, 2020.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expenses Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Adviser Shares | $ | 1,000.00 | $ | 1,048.90 | $ | 1,021.27 | $ | 3.97 | $ | 3.91 | 0.77 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
59
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2020 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's web site at www.sec.gov.
60
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800) 235-8396 |
23424-0320
JANUARY 31, 2020
Semi Annual Report
USAA Income Stock Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 4 | ||||||
Statement of Assets and Liabilities | 9 | ||||||
Statement of Operations | 10 | ||||||
Statements of Changes in Net Assets | 11 | ||||||
Financial Highlights | 12 | ||||||
Notes to Financial Statements | 14 | ||||||
Supplemental Information | 22 | ||||||
Expense Examples | 22 | ||||||
Proxy Voting and Portfolio Holdings Information | 22 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
1
USAA Mutual Funds Trust USAA Income Stock Fund | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA Income Stock Fund seeks current income with the prospect of increasing dividend income and the potential for capital appreciation.
Top 10 Holdings*
1/31/20
(% of Net Assets)
Verizon Communications, Inc. | 3.1 | % | |||||
The Procter & Gamble Co. | 2.9 | % | |||||
Johnson & Johnson | 2.8 | % | |||||
Walmart, Inc. | 2.7 | % | |||||
Wells Fargo & Co. | 1.8 | % | |||||
The Home Depot, Inc. | 1.8 | % | |||||
Exxon Mobil Corp. | 1.6 | % | |||||
Merck & Co., Inc. | 1.5 | % | |||||
Lockheed Martin Corp. | 1.3 | % | |||||
Medtronic PLC | 1.3 | % |
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Income Stock Fund (continued) | January 31, 2020 |
(Unaudited)
Sector Allocation*:
1/31/20
(% of Net Assets)
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
3
USAA Mutual Funds Trust USAA Income Stock Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (99.7%) | |||||||||||
Communication Services (4.9%): | |||||||||||
Activision Blizzard, Inc. | 18,720 | $ | 1,095 | ||||||||
AT&T, Inc. | 230,545 | 8,673 | |||||||||
Comcast Corp. Class A | 416,284 | 17,979 | |||||||||
Omnicom Group, Inc. | 247,083 | 18,608 | |||||||||
The Walt Disney Co. | 41,467 | 5,735 | |||||||||
Verizon Communications, Inc. | 1,456,223 | 86,558 | |||||||||
138,648 | |||||||||||
Consumer Discretionary (10.8%): | |||||||||||
Best Buy Co., Inc. | 302,771 | 25,642 | |||||||||
Expedia Group, Inc. | 84,900 | 9,207 | |||||||||
Foot Locker, Inc. | 177,705 | 6,747 | |||||||||
Ford Motor Co. | 1,820,979 | 16,061 | |||||||||
Garmin Ltd. | 41,297 | 4,004 | |||||||||
General Motors Co. Class C | 369,400 | 12,334 | |||||||||
Genuine Parts Co. | 148,422 | 13,888 | |||||||||
H&R Block, Inc. | 229,056 | 5,314 | |||||||||
Kohl's Corp. | 160,306 | 6,853 | |||||||||
L Brands, Inc. | 164,278 | 3,805 | |||||||||
Las Vegas Sands Corp. | 223,100 | 14,571 | |||||||||
Lowe's Cos., Inc. | 135,631 | 15,766 | |||||||||
McDonald's Corp. | 121,326 | 25,960 | |||||||||
Nike, Inc. Class B | 142,828 | 13,754 | |||||||||
Starbucks Corp. | 354,169 | 30,044 | |||||||||
Target Corp. | 302,900 | 33,543 | |||||||||
The Gap, Inc. | 390,927 | 6,806 | |||||||||
The Home Depot, Inc. | 218,795 | 49,907 | |||||||||
The TJX Cos., Inc. | 178,800 | 10,556 | |||||||||
304,762 | |||||||||||
Consumer Staples (12.4%): | |||||||||||
Campbell Soup Co. | 163,380 | 7,906 | |||||||||
Colgate-Palmolive Co. | 291,400 | 21,499 | |||||||||
General Mills, Inc. | 313,901 | 16,392 | |||||||||
Ingredion, Inc. | 46,283 | 4,073 | |||||||||
Kimberly-Clark Corp. | 199,312 | 28,549 | |||||||||
PepsiCo, Inc. | 118,860 | 16,880 | |||||||||
Philip Morris International, Inc. | 361,634 | 29,907 | |||||||||
Sysco Corp. | 127,100 | 10,440 | |||||||||
The Clorox Co. | 55,045 | 8,659 | |||||||||
The Hershey Co. | 30,676 | 4,760 | |||||||||
The JM Smucker Co. | 72,540 | 7,516 | |||||||||
The Procter & Gamble Co. | 653,008 | 81,379 | |||||||||
Walgreens Boots Alliance, Inc. | 598,108 | 30,414 | |||||||||
Walmart, Inc. | 670,075 | 76,717 | |||||||||
345,091 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Income Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Energy (4.6%): | |||||||||||
Chevron Corp. | 156,556 | $ | 16,773 | ||||||||
EOG Resources, Inc. | 32,713 | 2,385 | |||||||||
Exxon Mobil Corp. | 716,849 | 44,532 | |||||||||
Occidental Petroleum Corp. | 89,189 | 3,543 | |||||||||
ONEOK, Inc. | 141,581 | 10,600 | |||||||||
Phillips 66 | 149,550 | 13,664 | |||||||||
Schlumberger Ltd. | 236,167 | 7,914 | |||||||||
Valero Energy Corp. | 325,280 | 27,424 | |||||||||
126,835 | |||||||||||
Financials (20.1%): | |||||||||||
Aflac, Inc. | 382,643 | 19,733 | |||||||||
American Express Co. | 111,144 | 14,434 | |||||||||
American Financial Group, Inc. | 113,186 | 12,314 | |||||||||
Ameriprise Financial, Inc. | 53,857 | 8,908 | |||||||||
Bank of America Corp. | 1,011,147 | 33,196 | |||||||||
Capital One Financial Corp. | 102,454 | 10,225 | |||||||||
Cboe Global Markets, Inc. | 34,324 | 4,229 | |||||||||
Chimera Investment Corp. | 693,956 | 14,712 | |||||||||
Citigroup, Inc. | 374,766 | 27,886 | |||||||||
CME Group, Inc. | 7,796 | 1,693 | |||||||||
Comerica, Inc. | 138,000 | 8,440 | |||||||||
Discover Financial Services | 198,954 | 14,948 | |||||||||
Everest Re Group Ltd. | 38,367 | 10,611 | |||||||||
FactSet Research Systems, Inc. | 16,664 | 4,768 | |||||||||
Fidelity National Financial, Inc. | 92,314 | 4,500 | |||||||||
Fifth Third Bancorp | 370,125 | 10,530 | |||||||||
Franklin Resources, Inc. | 666,069 | 16,852 | |||||||||
Huntington Bancshares, Inc. | 1,174,027 | 15,932 | |||||||||
Intercontinental Exchange, Inc. | 65,964 | 6,579 | |||||||||
Invesco Ltd. | 479,896 | 8,302 | |||||||||
JPMorgan Chase & Co. | 184,529 | 24,424 | |||||||||
M&T Bank Corp. | 74,600 | 12,572 | |||||||||
Marsh & McLennan Cos., Inc. | 29,145 | 3,260 | |||||||||
MetLife, Inc. | 274,390 | 13,640 | |||||||||
Nasdaq, Inc. | 52,778 | 6,147 | |||||||||
People's United Financial, Inc. | 802,500 | 12,375 | |||||||||
Principal Financial Group, Inc. | 43,251 | 2,290 | |||||||||
Prudential Financial, Inc. | 76,387 | 6,956 | |||||||||
RenaissanceRe Holdings Ltd. | 76,000 | 14,398 | |||||||||
S&P Global, Inc. | 59,153 | 17,374 | |||||||||
T. Rowe Price Group, Inc. | 48,682 | 6,501 | |||||||||
The Allstate Corp. | 218,304 | 25,878 | |||||||||
The Bank of New York Mellon Corp. | 236,976 | 10,612 | |||||||||
The Hanover Insurance Group, Inc. | 60,791 | 8,424 | |||||||||
The Hartford Financial Services Group, Inc. | 259,600 | 15,389 | |||||||||
The PNC Financial Services Group, Inc. | 179,900 | 26,724 | |||||||||
The Progressive Corp. | 119,300 | 9,626 | |||||||||
The Travelers Cos., Inc. | 86,863 | 11,433 | |||||||||
Truist Financial Corp. | 110,159 | 5,681 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Income Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
U.S. Bancorp | 321,126 | $ | 17,090 | ||||||||
Unum Group | 126,436 | 3,375 | |||||||||
Wells Fargo & Co. | 1,081,921 | 50,786 | |||||||||
Zions Bancorp NA | 238,300 | 10,840 | |||||||||
564,587 | |||||||||||
Health Care (10.0%): | |||||||||||
Abbott Laboratories | 80,537 | 7,018 | |||||||||
AbbVie, Inc. | 354,993 | 28,762 | |||||||||
Amgen, Inc. | 135,991 | 29,380 | |||||||||
Anthem, Inc. | 7,942 | 2,107 | |||||||||
Becton Dickinson & Co. | 16,526 | 4,548 | |||||||||
Bristol-Myers Squibb Co. | 174,107 | 10,960 | |||||||||
Cardinal Health, Inc. | 342,205 | 17,524 | |||||||||
Danaher Corp. | 25,265 | 4,064 | |||||||||
Johnson & Johnson | 534,845 | 79,622 | |||||||||
McKesson Corp. | 20,159 | 2,875 | |||||||||
Medtronic PLC | 307,143 | 35,457 | |||||||||
Merck & Co., Inc. | 499,468 | 42,675 | |||||||||
Pfizer, Inc. | 207,383 | 7,723 | |||||||||
Stryker Corp. | 40,000 | 8,428 | |||||||||
281,143 | |||||||||||
Industrials (11.6%): | |||||||||||
3M Co. | 43,868 | 6,960 | |||||||||
Alaska Air Group, Inc. | 128,300 | 8,287 | |||||||||
Allegion PLC | 67,010 | 8,666 | |||||||||
Allison Transmission Holdings, Inc. | 235,100 | 10,391 | |||||||||
C.H. Robinson Worldwide, Inc. | 226,805 | 16,380 | |||||||||
Cummins, Inc. | 84,469 | 13,513 | |||||||||
Delta Air Lines, Inc. | 436,713 | 24,343 | |||||||||
Eaton Corp. PLC | 186,343 | 17,604 | |||||||||
Honeywell International, Inc. | 161,932 | 28,050 | |||||||||
Illinois Tool Works, Inc. | 99,757 | 17,455 | |||||||||
Johnson Controls International PLC | 132,435 | 5,225 | |||||||||
Lennox International, Inc. | 36,693 | 8,548 | |||||||||
Lockheed Martin Corp. | 86,100 | 36,862 | |||||||||
Nielsen Holdings PLC | 233,929 | 4,772 | |||||||||
PACCAR, Inc. | 152,818 | 11,341 | |||||||||
Republic Services, Inc. Class A | 192,219 | 18,270 | |||||||||
Robert Half International, Inc. | 122,700 | 7,138 | |||||||||
Rockwell Automation, Inc. | 41,688 | 7,990 | |||||||||
Snap-on, Inc. | 13,343 | 2,130 | |||||||||
Southwest Airlines Co. | 143,204 | 7,873 | |||||||||
The Boeing Co. | 53,214 | 16,936 | |||||||||
Toro Co. | 102,442 | 8,197 | |||||||||
United Parcel Service, Inc. Class B | 105,300 | 10,901 | |||||||||
Waste Management, Inc. | 228,300 | 27,785 | |||||||||
325,617 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Income Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Information Technology (7.8%): | |||||||||||
Apple, Inc. | 89,701 | $ | 27,763 | ||||||||
Cisco Systems, Inc. | 718,905 | 33,048 | |||||||||
Intel Corp. | 483,555 | 30,914 | |||||||||
International Business Machines Corp. | 224,886 | 32,323 | |||||||||
Juniper Networks, Inc. | 35,573 | 816 | |||||||||
Microsoft Corp. | 38,703 | 6,588 | |||||||||
Oracle Corp. | 434,654 | 22,798 | |||||||||
QUALCOMM, Inc. | 312,482 | 26,658 | |||||||||
Texas Instruments, Inc. | 289,629 | 34,943 | |||||||||
The Western Union Co. | 44,878 | 1,207 | |||||||||
217,058 | |||||||||||
Materials (2.4%): | |||||||||||
Air Products & Chemicals, Inc. | 100,953 | 24,098 | |||||||||
Eastman Chemical Co. | 39,985 | 2,850 | |||||||||
LyondellBasell Industries NV Class A | 243,712 | 18,975 | |||||||||
Martin Marietta Materials, Inc. | 8,898 | 2,347 | |||||||||
Nucor Corp. | 80,640 | 3,830 | |||||||||
Packaging Corp. of America | 37,818 | 3,621 | |||||||||
Steel Dynamics, Inc. | 114,105 | 3,409 | |||||||||
Westrock Co. | 95,285 | 3,716 | |||||||||
62,846 | |||||||||||
Real Estate (5.7%): | |||||||||||
Alexandria Real Estate Equities, Inc. | 31,070 | 5,071 | |||||||||
AvalonBay Communities, Inc. | 43,268 | 9,376 | |||||||||
Boston Properties, Inc. | 11,429 | 1,638 | |||||||||
Cyrusone, Inc. | 60,436 | 3,678 | |||||||||
Digital Realty Trust, Inc. | 50,921 | 6,263 | |||||||||
Equity Residential | 67,890 | 5,640 | |||||||||
Essex Property Trust, Inc. | 21,434 | 6,639 | |||||||||
Healthpeak Properties, Inc. | 118,674 | 4,271 | |||||||||
Host Hotels & Resorts, Inc. | 352,560 | 5,761 | |||||||||
Jones Lang LaSalle, Inc. | 89,454 | 15,191 | |||||||||
Prologis, Inc. | 102,013 | 9,475 | |||||||||
Public Storage | 60,100 | 13,448 | |||||||||
Realty Income Corp. | 112,267 | 8,803 | |||||||||
Regency Centers Corp. | 34,142 | 2,118 | |||||||||
Simon Property Group, Inc. | 159,885 | 21,289 | |||||||||
Ventas, Inc. | 270,449 | 15,648 | |||||||||
VEREIT, Inc. | 289,584 | 2,826 | |||||||||
VICI Properties, Inc. | 131,046 | 3,512 | |||||||||
Vornado Realty Trust | 46,295 | 3,045 | |||||||||
W.P. Carey, Inc. | 29,676 | 2,496 | |||||||||
Welltower, Inc. | 116,068 | 9,855 | |||||||||
Weyerhaeuser Co. | 177,540 | 5,140 | |||||||||
161,183 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Income Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Utilities (9.4%): | |||||||||||
AES Corp. | 372,728 | $ | 7,402 | ||||||||
Alliant Energy Corp. | 87,080 | 5,169 | |||||||||
Ameren Corp. | 131,407 | 10,782 | |||||||||
American Electric Power Co., Inc. | 82,198 | 8,567 | |||||||||
CenterPoint Energy, Inc. | 288,364 | 7,636 | |||||||||
CMS Energy Corp. | 281,089 | 19,257 | |||||||||
Consolidated Edison, Inc. | 73,821 | 6,939 | |||||||||
Dominion Energy, Inc. | 220,400 | 18,899 | |||||||||
DTE Energy Co. | 67,039 | 8,890 | |||||||||
Duke Energy Corp. | 292,500 | 28,556 | |||||||||
Entergy Corp. | 59,446 | 7,818 | |||||||||
Evergy, Inc. | 291,600 | 21,042 | |||||||||
Eversource Energy | 125,616 | 11,612 | |||||||||
Exelon Corp. | 198,737 | 9,458 | |||||||||
NextEra Energy, Inc. | 36,092 | 9,680 | |||||||||
Pinnacle West Capital Corp. | 75,704 | 7,396 | |||||||||
PPL Corp. | 398,361 | 14,417 | |||||||||
Sempra Energy | 53,688 | 8,624 | |||||||||
The Southern Co. | 156,100 | 10,989 | |||||||||
WEC Energy Group, Inc. | 222,264 | 22,203 | |||||||||
Xcel Energy, Inc. | 233,690 | 16,169 | |||||||||
261,505 | |||||||||||
Total Common Stocks (Cost $2,402,309) | 2,789,275 | ||||||||||
Total Investments (Cost $2,402,309) — 99.7% | 2,789,275 | ||||||||||
Other assets in excess of liabilities — 0.3% | 8,354 | ||||||||||
NET ASSETS — 100.00% | $ | 2,797,629 |
PLC — Public Limited Company
See notes to financial statements.
8
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Income Stock Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $2,402,309) | $ | 2,789,275 | |||||
Cash and cash equivalents | 6,059 | ||||||
Receivables: | |||||||
Interest and dividends | 4,859 | ||||||
Capital shares issued | 863 | ||||||
Reclaims | 454 | ||||||
From Adviser | 13 | ||||||
Prepaid expenses | 13 | ||||||
Total assets | 2,801,536 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Capital shares redeemed | 1,960 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 1,216 | ||||||
Administration fees | 318 | ||||||
Custodian fees | 82 | ||||||
Transfer agent fees | 177 | ||||||
Compliance fees | — | (a) | |||||
Other accrued expenses | 154 | ||||||
Total liabilities | 3,907 | ||||||
Net Assets: | |||||||
Capital | 2,343,904 | ||||||
Total distributable earnings/(loss) | 453,725 | ||||||
Net assets | $ | 2,797,629 | |||||
Net Assets: | |||||||
Fund Shares | $ | 1,722,823 | |||||
Institutional Shares | 1,065,568 | ||||||
R6 Shares | 9,238 | ||||||
Total | $ | 2,797,629 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 98,477 | ||||||
Institutional Shares | 60,991 | ||||||
R6 Shares | 528 | ||||||
Total | 159,996 | ||||||
Net asset value, offering and redemption price per share: (b) | |||||||
Fund Shares | $ | 17.49 | |||||
Institutional Shares | 17.47 | ||||||
R6 Shares | 17.49 |
(a) Rounds to less than $1 thousand.
(b) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
9
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA Income Stock Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 41,473 | |||||
Interest | 43 | ||||||
Securities lending (net of fees) | 15 | ||||||
Total Income | 41,531 | ||||||
Expenses: | |||||||
Investment advisory fees | 7,082 | ||||||
Administration fees — Fund shares | 1,302 | ||||||
Administration fees — Institutional shares | 542 | ||||||
Administration fees — R6 shares | 3 | ||||||
Sub-Administration fees | 23 | ||||||
Custodian fees | 64 | ||||||
Transfer agent fees — Fund Shares | 627 | ||||||
Transfer agent fees — Institutional Shares | 542 | ||||||
Transfer agent fees — R6 Shares | 1 | ||||||
Trustees' fees | 22 | ||||||
Compliance fees | 9 | ||||||
Legal and audit fees | 55 | ||||||
State registration and filing fees | 39 | ||||||
Interest expense on interfund lending | 1 | ||||||
Other expenses | 115 | ||||||
Total Expenses | 10,427 | ||||||
Expenses waived/reimbursed by Adviser | (18 | ) | |||||
Net Expenses | 10,409 | ||||||
Net Investment Income (Loss) | 31,122 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 56,489 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | 55,551 | ||||||
Net realized/unrealized gains (losses) on investments | 112,040 | ||||||
Change in net assets resulting from operations | $ | 143,162 |
See notes to financial statements.
10
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Income Stock Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 31,122 | $ | 68,012 | |||||||
Net realized gains (losses) from investments | 56,489 | 486,567 | |||||||||
Net change in unrealized appreciation/depreciation on investments | 55,551 | (375,906 | ) | ||||||||
Change in net assets resulting from operations | 143,162 | 178,673 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (285,544 | ) | (133,413 | ) | |||||||
Institutional Shares | (175,664 | ) | (86,990 | ) | |||||||
R6 Shares | (1,731 | ) | (991 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (462,939 | ) | (221,394 | ) | |||||||
Change in net assets resulting from capital transactions | 309,888 | 89,093 | |||||||||
Change in net assets | (9,889 | ) | 46,372 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 2,807,518 | 2,761,146 | |||||||||
End of period | $ | 2,797,629 | $ | 2,807,518 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 58,781 | $ | 93,141 | |||||||
Distributions reinvested | 274,941 | 128,119 | |||||||||
Cost of shares redeemed | (120,307 | ) | (195,299 | ) | |||||||
Total Fund Shares | $ | 213,415 | $ | 25,961 | |||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 28,690 | $ | 216,857 | |||||||
Distributions reinvested | 175,649 | 86,971 | |||||||||
Cost of shares redeemed | (106,163 | ) | (240,262 | ) | |||||||
Total Institutional Shares | $ | 98,176 | $ | 63,566 | |||||||
R6 Shares | |||||||||||
Proceeds from shares issued | $ | 281 | $ | 625 | |||||||
Distributions reinvested | 805 | 550 | |||||||||
Cost of shares redeemed | (2,789 | ) | (1,609 | ) | |||||||
Total R6 Shares | $ | (1,703 | ) | $ | (434 | ) | |||||
Change in net assets resulting from capital transactions | $ | 309,888 | $ | 89,093 | |||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 3,040 | 4,818 | |||||||||
Reinvested | 15,402 | 6,925 | |||||||||
Redeemed | (6,256 | ) | (10,114 | ) | |||||||
Total Fund Shares | 12,186 | 1,629 | |||||||||
Institutional Shares | |||||||||||
Issued | 1,526 | 11,479 | |||||||||
Reinvested | 9,856 | 4,705 | |||||||||
Redeemed | (5,475 | ) | (12,280 | ) | |||||||
Total Institutional Shares | 5,907 | 3,904 | |||||||||
R6 Shares | |||||||||||
Issued | 15 | 32 | |||||||||
Reinvested | 45 | 30 | |||||||||
Redeemed | (141 | ) | (83 | ) | |||||||
Total R6 Shares | (81 | ) | (21 | ) | |||||||
Change in Shares | 18,012 | 5,512 |
See notes to financial statements.
11
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains From Investments | ||||||||||||||||||||||
USAA Income Stock Fund | |||||||||||||||||||||||||||
Fund Shares Six-Months Ended January 31, 2020 (unaudited) | $ | 19.78 | 0.21 | (d) | 0.86 | 1.07 | (0.14 | ) | (3.22 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 20.24 | 0.43 | 0.70 | 1.13 | (0.44 | ) | (1.15 | ) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 19.68 | 0.40 | 1.74 | 2.14 | (0.40 | ) | (1.18 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 18.18 | 0.42 | 1.51 | 1.93 | (0.43 | ) | — | |||||||||||||||||||
Year Ended July 31, 2016 | $ | 17.79 | 0.40 | 0.97 | 1.37 | (0.40 | ) | (0.58 | ) | ||||||||||||||||||
Year Ended July 31, 2015 | $ | 17.72 | 0.44 | 0.51 | 0.95 | (0.46 | ) | (0.42 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 19.76 | 0.22 | (d) | 0.85 | 1.07 | (0.14 | ) | (3.22 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 20.22 | 0.43 | 0.70 | 1.13 | (0.44 | ) | (1.15 | ) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 19.66 | 0.41 | 1.73 | 2.14 | (0.40 | ) | (1.18 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 18.16 | 0.43 | 1.50 | 1.93 | (0.43 | ) | — | |||||||||||||||||||
Year Ended July 31, 2016 | $ | 17.77 | 0.40 | 0.98 | 1.38 | (0.41 | ) | (0.58 | ) | ||||||||||||||||||
Year Ended July 31, 2015 | $ | 17.71 | 0.45 | 0.50 | 0.95 | (0.47 | ) | (0.42 | ) | ||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 19.77 | 0.23 | (d) | 0.85 | 1.08 | (0.14 | ) | (3.22 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 20.23 | 0.45 | 0.69 | 1.14 | (0.45 | ) | (1.15 | ) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 19.67 | 0.47 | 1.69 | 2.16 | (0.42 | ) | (1.18 | ) | ||||||||||||||||||
December 1, 2016(g) through July 31, 2017 | $ | 18.17 | 0.27 | 1.60 | 1.87 | (0.37 | ) | — |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two-year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
See notes to financial statements.
12
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Income Stock Fund | |||||||||||||||||||||||||||||||||||
Fund Shares Six-Months Ended January 31, 2020 (unaudited) | (3.36 | ) | $ | 17.49 | 5.19 | % | 0.75 | % | 2.19 | % | 0.75 | % | $ | 1,722,823 | 29 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (1.59 | ) | $ | 19.78 | 6.26 | % | 0.75 | % | 2.44 | % | 0.75 | % | $ | 1,707,034 | 86 | %(e) | |||||||||||||||||||
Year Ended July 31, 2018 | (1.58 | ) | $ | 20.24 | 11.16 | % | 0.76 | %(f) | 2.19 | % | 0.76 | %(f) | $ | 1,713,558 | 23 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.43 | ) | $ | 19.68 | 10.71 | % | 0.77 | %(f) | 2.24 | % | 0.77 | %(f) | $ | 1,651,374 | 23 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (0.98 | ) | $ | 18.18 | 8.29 | % | 0.80 | %(f) | 2.42 | % | 0.80 | %(f) | $ | 1,564,900 | 19 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (0.88 | ) | $ | 17.79 | 5.36 | % | 0.79 | %(f) | 2.38 | % | 0.79 | %(f) | $ | 1,657,268 | 12 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (3.36 | ) | $ | 17.47 | 5.21 | % | 0.72 | % | 2.22 | % | 0.72 | % | $ | 1,065,568 | 29 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (1.59 | ) | $ | 19.76 | 6.30 | % | 0.73 | % | 2.47 | % | 0.73 | % | $ | 1,088,446 | 86 | %(e) | |||||||||||||||||||
Year Ended July 31, 2018 | (1.58 | ) | $ | 20.22 | 11.21 | % | 0.72 | %(f) | 2.22 | % | 0.72 | %(f) | $ | 1,034,842 | 23 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.43 | ) | $ | 19.66 | 10.76 | % | 0.73 | %(f) | 2.30 | % | 0.73 | %(f) | $ | 1,097,164 | 23 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (0.99 | ) | $ | 18.16 | 8.36 | % | 0.75 | %(f) | 2.47 | % | 0.75 | %(f) | $ | 1,158,385 | 19 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (0.89 | ) | $ | 17.77 | 5.37 | % | 0.73 | %(f) | 2.45 | % | 0.73 | %(f) | $ | 1,080,528 | 12 | % | |||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (3.36 | ) | $ | 17.49 | 5.28 | % | 0.65 | % | 2.30 | % | 0.75 | % | $ | 9,238 | 29 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (1.60 | ) | $ | 19.77 | 6.37 | % | 0.65 | % | 2.54 | % | 0.73 | % | $ | 12,038 | 86 | %(e) | |||||||||||||||||||
Year Ended July 31, 2018 | (1.60 | ) | $ | 20.23 | 11.31 | % | 0.65 | %(f) | 2.33 | % | 0.90 | %(f) | $ | 12,746 | 23 | % | |||||||||||||||||||
December 1, 2016(g) through July 31, 2017 | (0.37 | ) | $ | 19.67 | 10.36 | % | 0.65 | %(f) | 2.13 | % | 1.24 | %(f) | $ | 5,412 | 23 | % |
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects increased trading activity due to current year transition or asset allocation shift.
(f) Reflects total annual operating expenses of the shares before reductions of any expenses paid indirectly. The shares' expenses paid indirectly decreased the expense ratio by less than 0.01%.
(g) Commencement of operations.
See notes to financial statements.
13
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Income Stock Fund (the "Fund"). The Fund offers three classes of shares: Fund Shares, Institutional Shares, and R6 Shares. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges except with respect to fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or the over-the-counter markets, are valued at the last sales price or official closing price. If there have been no sales for that day on the exchange
14
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations typically are categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at net asset value. These valuations typically are categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. These valuations typically are categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's net asset value ("NAV") to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's net asset value is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. These valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of January 31, 2020, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 2,789,275 | $ | — | $ | — | $ | 2,789,275 | |||||||||||
Total | $ | 2,789,275 | $ | — | $ | — | $ | 2,789,275 |
For the six-months ended January 31, 2020, there were no transfers in or out of the Level 3 fair value hierarchy.
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs. ETFs are a type of index fund, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
15
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a securities lending agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income, net of income retained by Citibank. Borrowers are required to secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are cured the next business day once the shortfall exceeds $100 thousand. Collateral may be cash, U.S. government securities, or other securities as permitted by SEC guidelines. Cash collateral may be invested in high-quality short-term investments, primarily open-end investment companies. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Risks relating to securities-lending transactions include that the borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower. The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy borrower default. Cash collateral is listed in the Fund's Portfolio of Investments and Financial Statements while non-cash collateral is not included.
At November 30, 2019, the Fund had no securities on loan.
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as net change in unrealized appreciation/depreciation on investments and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as net realized gains or losses from investment transactions and foreign currency translations on the Statement of Operations.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to
16
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, and printing fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
3. Purchases and Sales:
Cost of purchases and proceeds from sales/maturities of securities (excluding securities maturing less than one year from acquisition) for the six-months ended January 31, 2020, were as follows for the Fund (amounts in thousands):
Excluding U.S Government Securities | |||||||||||
Purchases | Sales | ||||||||||
$ | 804,271 | $ | 924,821 |
There were no purchases and sales of U.S. government securities during the six-months ended January 31, 2020.
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA funds. The USAA fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi annual reports may be viewed at usaa.com. As of January 31, 2020, certain USAA fund-of-funds owned total outstanding shares of the Fund:
USAA Cornerstone Conservative Fund | 0.1 | % | |||||
USAA Cornerstone Equity Fund | 0.3 | % | |||||
USAA Target Retirement Income Fund | 0.1 | % | |||||
USAA Target Retirement 2020 Fund | 0.2 | % | |||||
USAA Target Retirement 2030 Fund | 0.8 | % | |||||
USAA Target Retirement 2040 Fund | 1.2 | % | |||||
USAA Target Retirement 2050 Fund | 0.7 | % | |||||
USAA Target Retirement 2060 Fund | 0.1 | % |
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Management, Inc. ("VCM" or "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled
17
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.50% of the Fund's average daily net assets. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
No performance adjustments will be made for periods beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter will be utilized in calculating future performance adjustments.
The performance adjustment will be calculated monthly by comparing each class' performance to that of the Lipper Equity Income Funds Index. The Lipper Equity Income Funds Index tracks the total return performance of each class within the Lipper Equity Income Funds category.
The performance period for each share class will consist of the current month plus the previous number of months beginning July 1, 2019. The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)1 | Annual Adjustment Rate (in basis points)1 | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
1 Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of the class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Equity Income Funds Index over that period, even if the class has overall negative returns during the performance period.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets.
VCM has entered into a Subadvisory Agreement with Epoch Investment Partners, Inc ("Epoch"), under which Epoch directs the investment and reinvestment of a portion of the Fund's assets (as allocated from time to time by VCM). This arrangement provides for monthly fees that are paid by VCM. VCM (not the Fund) pays the subadviser fees.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15%, 0.10%, and 0.05% of average daily net assets of Fund Shares, Institutional Shares, and R6 Shares, respectively. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. VCTA, an affiliate of the Adviser, provides transfer agent services to the Fund Shares based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares and R6 Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10% and 0.01% of average daily net assets, plus out-of-pocket expenses, respectively. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust. The Distributor received no fees or other compensation for such distribution services.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
The expense limits (excluding voluntary waivers) are 0.76%, 0.72%, and 0.65% for Fund Shares, Institutional Shares, and R6 Shares, respectively. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||
$ | 18 |
19
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Overall stock market risks may affect the value of the Fund. Factors such as domestic and international economic growth and market conditions, interest rate levels, and political events affect the securities market.
The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected. Price changes may be temporary or last for extended periods.
Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market.
Dividend payout risk is the possibility that a number of the companies in which the Fund invests will reduce or eliminate the dividend on the securities held by the Fund. Should many portfolio companies reduce or eliminate their dividend payments, the ability of the Fund to produce investment income to shareholders will be affected adversely.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six-months ended January 31, 2020.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Fund in the Victory Fund Complex relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period is presented on the Statement of Operations under Interest expense on Interfund lending. As a Lender, interest earned by the Fund, if any, during the period is reflected on the Statement of Operations under Income on Interfund lending.
20
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The average borrowing and lending for the days outstanding and average interest rate for the Fund during the six-months ended January 31, 2020 were as follows (amounts in thousands):
Borrower or Lender | Amount Outstanding at January 31, 2020 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
Borrower | $ | — | $ | 2,304 | 4 | 2.49 | % | $ | 2,500 |
* For the six-months ended January 31, 2020, based on the number of days borrowings were outstanding.
8. Federal Income Tax Information:
The Fund intends to distribute any net investment income quarterly. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
9. Subsequent Event:
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
21
USAA Mutual Funds Trust | Supplemental Information January 31, 2020 |
(Unaudited)
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019 through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,051.90 | $ | 1,021.37 | $ | 3.87 | $ | 3.81 | 0.75 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,052.10 | 1,021.52 | 3.71 | 3.66 | 0.72 | % | ||||||||||||||||||||
R6 Shares | 1,000.00 | 1,052.80 | 1,021.87 | 3.35 | 3.30 | 0.65 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's web site at www.sec.gov.
22
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800) 235-8396 |
23422-0320
JANUARY 31, 2020
Semi Annual Report
USAA Intermediate-Term Bond Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 4 | ||||||
Statement of Assets and Liabilities | 29 | ||||||
Statement of Operations | 30 | ||||||
Statements of Changes in Net Assets | 31 | ||||||
Financial Highlights | 34 | ||||||
Notes to Financial Statements | 38 | ||||||
Supplemental Information | 49 | ||||||
Expense Examples | 49 | ||||||
Proxy Voting and Portfolio Holdings Information | 49 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
1
USAA Mutual Funds Trust USAA Intermediate-Term Bond | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA Intermediate-Term Bond Fund seeks high current income without undue risk to principal.
Asset Allocation*:
1/31/20
(% of Net Assets)
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
2
USAA Mutual Funds Trust USAA Intermediate-Term Bond (continued) | January 31, 2020 |
(Unaudited)
Portfolio Ratings Mix*
1/31/20
(% of Net Assets)
This chart reflects the highest long-term rating from a Nationally Recognized Statistical Rating Organization (NRSRO), with the four highest long-term credit ratings labeled, in descending order of credit quality, AAA, AA, A, and BBB. These categories represent investment-grade quality. NRSRO ratings are shown because they provide independent analysis of the credit quality of the Fund's investments. Victory Capital Management, Inc. ("Adviser") also performs its own fundamental credit analysis of each security. As part of its fundamental credit analysis, the Adviser considers various criteria, including industry specific actions, peer comparisons, payment ranking, and structure specific characteristics. Any of the Fund's securities that are not rated by an NRSRO appear in the chart above as "Unrated," but these securities are analyzed and monitored by the Adviser on an ongoing basis. Government securities that are issued or guaranteed as to principal and interest by the U.S. government and pre-refunded and escrowed-to-maturity municipal bonds that are not rated are treated as AAA for credit quality purposes.
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
3
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Asset Backed Securities (6.7%) | |||||||||||
AccessLex Institute, Series 2004-2 Class A3, 1.98% (LIBOR03M+19bps), 10/25/24, Callable 7/25/31 @ 100 (a) | $ | 2,959 | $ | 2,934 | |||||||
Americredit Automobile Receivables Trust, Series 2018-1 Class D, 3.82%, 3/18/24, Callable 6/18/22 @ 100 | 6,360 | 6,629 | |||||||||
Ascentium Equipment Receivables Trust, Series 2018-2A Class B, 3.76%, 5/10/24, Callable 12/10/22 @ 100 (b) | 3,244 | 3,373 | |||||||||
Avis Budget Rental Car Funding Aesop LLC, Series 2020- 1A Class B, 2.68%, 8/20/26 (b) | 4,000 | 4,054 | |||||||||
Bank of The West Auto Trust, Series 2019-1 Class C, 2.90%, 4/15/25, Callable 5/15/23 @ 100 (b) | 2,571 | 2,642 | |||||||||
Cabela's Credit Card Master Note Trust, Series 2013-1A Class A, 2.71%, 2/17/26 (b) | 3,805 | 3,920 | |||||||||
Canadian Pacer Auto Receivables Trust, Series 2020-1A Class C, 2.49%, 5/19/26, Callable 12/19/23 @ 100 (b) (c) | 2,000 | 2,010 | |||||||||
Canadian Pacer Auto Receivables Trust, Series 2019-1 Class C, 3.75%, 7/21/25, Callable 10/19/22 @ 100 (b) | 3,000 | 3,117 | |||||||||
CarMax Auto Owner Trust, Series 2020-1 Class C, 2.34%, 11/17/25, Callable 1/15/24 @ 100 | 4,230 | 4,278 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2018-1A Class B, 3.60%, 4/15/27, Callable 6/15/21 @ 100 (b) | 3,325 | 3,395 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2017-3 Class C, 3.48%, 10/15/26, Callable 7/15/21 @ 100 (b) | 9,665 | 9,841 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2018-1 Class C, 3.77%, 6/15/27, Callable 7/15/21 @ 100 (b) | 2,000 | 2,050 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2018-2 Class C, 4.16%, 9/15/27 (b) | 8,720 | 9,108 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2019- 3A Class A, 2.38%, 11/15/28 (b) | 5,000 | 5,049 | |||||||||
Dell Equipment Finance Trust, Series 2017-2 Class D, 3.27%, 10/23/23, Callable 8/22/20 @ 100 (b) | 3,250 | 3,268 | |||||||||
Drive Auto Receivables Trust, Series 2017-AA Class D, 4.16%, 5/15/24, Callable 3/15/21 @ 100 (b) | 1,000 | 1,016 | |||||||||
Drive Auto Receivables Trust, Series 2018-1 Class D, 3.81%, 5/15/24, Callable 8/15/21 @ 100 | 5,000 | 5,090 | |||||||||
Element Rail Leasing I LLC, Series 2014-1A Class A2, 3.67%, 4/19/44 (b) | 5,000 | 5,052 | |||||||||
Enterprise Fleet Financing LLC, Series 2019-3 Class A2, 2.06%, 5/20/25 (b) | 2,500 | 2,515 | |||||||||
Evergreen Credit Card Trust, Series 2019-3 Class C, 2.71%, 10/16/23 (b) | 4,000 | 4,013 | |||||||||
Evergreen Credit Card Trust, Series 2019-2 Class C, 2.62%, 9/15/24 (b) | 2,096 | 2,107 | |||||||||
Exeter Automobile Receivables Trust, Series 2020-1A Class C, 2.49%, 1/15/25, Callable 3/15/24 @ 100 (b) | 2,273 | 2,291 | |||||||||
Exeter Automobile Receivables Trust, Series 2019-2A Class C, 3.30%, 3/15/24, Callable 8/15/22 @ 100 (b) | 3,731 | 3,801 | |||||||||
Exeter Automobile Receivables Trust, Series 2018-1 Class C, 3.03%, 1/17/23, Callable 12/15/21 @ 100 (b) | 2,170 | 2,182 | |||||||||
ExteNet LLC, Series 2019-1A Class A2, 3.20%, 7/26/49, Callable 1/25/23 @ 100 (b) | 1,875 | 1,918 | |||||||||
Flagship Credit Auto Trust, Series 2018-4 Class C, 4.11%, 10/15/24, Callable 10/15/23 @ 100 (b) | 1,210 | 1,260 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Goal Capital Funding Trust, Series 2005-2 Class A4, 2.11% (LIBOR03M+20bps), 8/25/44, Callable 8/25/20 @ 100 (a) | $ | 9,529 | $ | 9,279 | |||||||
Hertz Vehicle Financing II LP, Series 2017-1A Class A, 2.96%, 10/25/21 (b) | 10,000 | 10,063 | |||||||||
Hertz Vehicle Financing LP, Series 2019-3A Class B, 3.03%, 12/26/25 (b) | 7,000 | 7,124 | |||||||||
Hertz Vehicle Financing LP, Series 2017-2A Class A, 3.29%, 10/25/23 (b) | 4,333 | 4,474 | |||||||||
Hertz Vehicle Financing LP, Series 2019-1A Class B, 4.10%, 3/25/23 (b) | 7,120 | 7,375 | |||||||||
Hertz Vehicle Financing LP, Series 2016-4A Class A, 2.65%, 7/25/22 (b) | 1,000 | 1,009 | |||||||||
HPEFS Equipment Trust, Series 2019-1A Class B, 2.32%, 9/20/29, Callable 5/20/22 @ 100 (b) | 1,750 | 1,757 | |||||||||
HPEFS Equipment Trust, Series 2019-1A Class C, 2.49%, 9/20/29, Callable 5/20/22 @ 100 (b) | 1,350 | 1,358 | |||||||||
Master Credit Card Trust, Series 2020-1A Class B, 2.27%, 9/23/24 (b) | 833 | 839 | |||||||||
Master Credit Card Trust, Series 2020-1A Class C, 2.59%, 9/23/24 (b) | 2,125 | 2,140 | |||||||||
NP SPE II LLC, Series 2019-2A Class A1, 2.86%, 11/19/49 (b) | 12,496 | 12,524 | |||||||||
NP SPE II LLC, Series 2019-2A Class A2, 3.10%, 11/19/49 (b) | 9,845 | 9,948 | |||||||||
NP SPE LLC, Series 2017-1A Class A2, 4.22%, 10/21/47, Callable 10/20/27 @ 100 (b) | 5,875 | 6,277 | |||||||||
Santander Drive Auto Receivables Trust, Series 2017-3 Class D, 3.20%, 11/15/23, Callable 8/15/21 @ 100 | 1,450 | 1,473 | |||||||||
Santander Drive Auto Receivables Trust, Series 2018-5 Class D, 4.19%, 12/16/24, Callable 12/15/21 @ 100 | 4,275 | 4,398 | |||||||||
Santander Drive Auto Receivables Trust, Series 2018-2 Class D, 3.88%, 2/15/24, Callable 12/15/21 @ 100 | 1,665 | 1,719 | |||||||||
Sapphire Aviation Finance Ltd., Series 2018-1A Class A, 4.25%, 3/15/40 (b) | 2,073 | 2,128 | |||||||||
SCF Equipment Leasing LLC, Series 2017-2A Class A, 3.41%, 12/20/23, Callable 2/20/20 @ 100 (b) | 7,395 | 7,432 | |||||||||
SCF Equipment Leasing LLC, Series 2018-1 Class B, 3.97%, 12/20/25, Callable 2/20/20 @ 100 (b) | 1,000 | 1,045 | |||||||||
SCF Equipment Leasing LLC, Series 2019-2 Class C, 3.11%, 6/21/27, Callable 2/20/25 @ 100 (b) | 5,500 | 5,600 | |||||||||
SLM Student Loan Trust, Series 2006-2 Class B, 2.01% (LIBOR03M+22bps), 1/25/41, Callable 1/25/32 @ 100 (a) | 1,944 | 1,764 | |||||||||
SLM Student Loan Trust, Series 2003-14 Class B, 2.34% (LIBOR03M+55bps), 10/25/65, Callable 10/25/28 @ 100 (a) | 693 | 657 | |||||||||
SLM Student Loan Trust, Series 2012-6 Class B, 2.66% (LIBOR01M+100bps), 4/27/43, Callable 4/25/27 @ 100 (a) | 2,500 | 2,348 | |||||||||
Stack Infrastructure Issuer LLC, Series 2019-2A Class A2, 3.08%, 10/25/44, Callable 4/25/23 @ 100 (b) | 2,000 | 2,026 | |||||||||
Synchrony Credit Card Master Note Trust, Series 2018-2 Class C, 3.87%, 5/15/26 | 7,583 | 7,997 | |||||||||
Tesla Auto Lease Trust, Series 2019-A Class B, 2.41%, 12/20/22, Callable 12/20/22 @ 100 (b) | 5,000 | 5,046 | |||||||||
Transportation Finance Equipment Trust, Series 2019-1 Class C, 2.19%, 8/23/24, Callable 5/23/23 @ 100 (b) | 1,250 | 1,249 | |||||||||
Trillium Credit Card Trust II, Series 2020-1A Class C, 2.63%, 12/27/24 (b) | 4,900 | 4,917 | |||||||||
Trillium Credit Card Trust II, Series 2020-1A Class B, 2.33%, 12/27/24 (b) | 2,912 | 2,912 | |||||||||
Trinity Rail Leasing LLC, Series 2019-1 Class A, 3.82%, 4/17/49, Callable 4/17/20 @ 100 (b) | 3,826 | 4,002 | |||||||||
Trinity Rail Leasing LP, Series 2006-1A Class A1, 5.90%, 5/14/36 (b) | 1,685 | 1,727 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
TRIP Rail Master Funding LLC, Series 2017-1A Class A2, 3.74%, 8/15/47, Callable 4/15/24 @ 100 (b) | $ | 3,333 | $ | 3,433 | |||||||
Verizon Owner Trust, Series 2020-A Class C, 2.06%, 7/22/24, Callable 3/20/23 @ 100 | 5,000 | 4,999 | |||||||||
Volvo Financial Equipment LLC, Series 2019-2A Class A4, 2.14%, 9/16/24, Callable 7/15/23 @ 100 (b) | 2,500 | 2,525 | |||||||||
Westlake Automobile Receivables Trust, Series 2019-2A Class D, 3.20%, 11/15/24, Callable 11/15/22 @ 100 (b) | 2,550 | 2,610 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-2A Class D, 4.00%, 1/16/24, Callable 11/15/21 @ 100 (b) | 9,625 | 9,887 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-3 Class C, 3.61%, 10/16/23, Callable 2/15/22 @ 100 (b) | 7,686 | 7,821 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-3A Class D, 4.00%, 10/16/23, Callable 2/15/22 @ 100 (b) | 5,000 | 5,163 | |||||||||
Total Asset Backed Securities (Cost $263,080) | 265,958 | ||||||||||
Collateralized Mortgage Obligations (14.6%) | |||||||||||
Annisa CLO Ltd, Series 2016-2 Class BR, 3.47% (LIBOR03M+165bps), 7/20/31, Callable 7/20/20 @ 100 (a) (b) | 10,000 | 9,986 | |||||||||
ARES LII CLO Ltd., Series 2019-52A Class B, 3.65% (LIBOR03M+185bps), 4/22/31, Callable 4/22/21 @ 100 (a) (b) | 5,000 | 5,008 | |||||||||
Austin Fairmont Hotel Trust, Series 2019-FAIR Class A, 2.73% (LIBOR01M+105bps), 9/15/32 (a) (b) | 5,000 | 5,003 | |||||||||
Austin Fairmont Hotel Trust, Series 2019-FAIR Class D, 3.48% (LIBOR01M+180bps), 9/15/32 (a) (b) | 3,585 | 3,590 | |||||||||
BAMLL Commercial Mortgage Securities Trust, Series 2015-200P Class A, 3.22%, 4/14/33 (b) | 5,000 | 5,306 | |||||||||
BAMLL Commercial Mortgage Securities Trust, Series 2015-200P Class B, 3.49%, 4/14/33 (b) | 13,485 | 14,232 | |||||||||
BAMLL Commercial Mortgage Securities Trust, Series 2015-200P Class C, 3.72%, 4/14/33 (b) (d) | 6,450 | 6,847 | |||||||||
BAMLL Commercial Mortgage Securities Trust, Series 2015-200P Class D, 3.72% (LIBOR01M+105bps), 4/14/33 (a) (b) | 11,735 | 12,366 | |||||||||
Bank, Series 2019-BN24 Class AS, 3.28%, 11/15/62 | 3,000 | 3,225 | |||||||||
Bank, Series 2019-BN23 Class AS, 3.20%, 11/15/29 | 5,000 | 5,312 | |||||||||
Bank, Series 2017-BNK8 Class AS, 3.73%, 11/15/50 | 7,000 | 7,713 | |||||||||
Bank, Series 2017-BNK4 Class AS, 3.78%, 5/15/50 | 5,000 | 5,483 | |||||||||
Bank, Series 2019-BNK22 Class A4, 2.98%, 11/15/62 | 8,000 | 8,500 | |||||||||
Bank, Series 2017-BNK6 Class A5, 3.52%, 7/15/60 | 16,700 | 18,285 | |||||||||
Bank, Series 2019-BNK22 Class AS, 3.21%, 11/15/62 | 9,000 | 9,563 | |||||||||
Barclays Commercial Mortgage Trust, Series 2019-C5 Class AS, 3.37%, 11/15/52 | 5,000 | 5,330 | |||||||||
BBCRE Trust, Series 2015-GTP Class A, 3.97%, 8/10/33 (b) | 5,935 | 6,494 | |||||||||
Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR7 Class B, 5.21%, 2/11/41 (d) | 584 | 590 | |||||||||
Benchmark Mortgage Trust, Series 2019-B14 Class AS, 3.35%, 12/15/61 | 5,000 | 5,382 | |||||||||
Benchmark Mortgage Trust, Series 2019-B12 Class AS, 3.42%, 8/15/52 | 13,828 | 14,980 | |||||||||
BX Commercial Mortgage Trust, Series 2020-BXLP Class D, 3.00% (LIBOR01M+125bps), 12/15/29 (a) (b) (c) | 3,000 | 3,005 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
BX Commercial Mortgage Trust, Series 2019-XL Class B, 2.76% (LIBOR01M+108bps), 10/15/36 (a) (b) | $ | 2,571 | $ | 2,574 | |||||||
BX Commercial Mortgage Trust, Series 2019-XL Class D, 3.13% (LIBOR01M+145bps), 10/15/36 (a) (b) | 4,000 | 4,012 | |||||||||
BX Commercial Mortgage Trust, Series 2019-XL Class C, 2.93% (LIBOR01M+125bps), 10/15/36 (a) (b) | 8,000 | 8,009 | |||||||||
CFCRE Commercial Mortgage Trust, Series 2011-C2 Class AJ, 5.93%, 12/15/47 (b) (d) | 7,000 | 7,372 | |||||||||
CGMS Commercial Mortgage Trust, Series 2017-B1 Class A4, 3.46%, 8/15/50 | 12,050 | 13,150 | |||||||||
CIFC Funding Ltd., Series 2017-I Class B, 3.52% (LIBOR03M+170bps), 4/23/29, Callable 1/21/21 @ 100 (a) (b) | 3,500 | 3,503 | |||||||||
CIFC Funding Ltd., Series 2017-III Class A1, 3.04% (LIBOR03M+122bps), 7/20/30, Callable 4/20/20 @ 100 (a) (b) | 5,000 | 4,997 | |||||||||
Citigroup Commercial Mortgage Trust, Series 2019-PRM Class D, 4.35%, 5/10/36 (b) | 1,850 | 1,966 | |||||||||
Citigroup Commercial Mortgage Trust, Series 2016-C2 Class A4, 2.83%, 8/10/49 | 8,293 | 8,668 | |||||||||
Citigroup Commercial Mortgage Trust, Series 2019-PRM Class A, 3.34%, 5/10/36 (b) | 3,750 | 3,942 | |||||||||
COMM Mortgage Trust, Series 2019-GC44 Class AM, 3.26%, 8/15/57 | 5,000 | 5,356 | |||||||||
COMM Mortgage Trust, Series 2015-PC1 Class AM, 4.29%, 7/10/50 (d) | 3,000 | 3,306 | |||||||||
COMM Mortgage Trust, Series 2020-CBM Class C, 3.40%, 11/13/39 (b) (c) | 2,625 | 2,704 | |||||||||
COMM Mortgage Trust, Series 2015-PC1 Class B, 4.58%, 7/10/50 (d) | 3,366 | 3,667 | |||||||||
COMM Mortgage Trust, Series 2013-CCRE11 Class AM, 4.72%, 8/10/50 (d) | 5,000 | 5,471 | |||||||||
Commercial Mortgage Trust, Series 2006-GG7 Class AM, 5.81%, 7/10/38 (d) | 774 | 789 | |||||||||
CSMC, Series 2019-UVIL Class C, 3.39%, 12/15/41 (b) (d) | 5,000 | 5,185 | |||||||||
DBCG Mortgage Trust, Series 2017-BBG Class A, 2.38% (LIBOR01M+70bps), 6/15/34 (a) (b) | 6,225 | 6,211 | |||||||||
DBJPM Mortgage Trust, Series 2016-SFC Class A, 2.83%, 8/10/36 (b) | 5,000 | 5,141 | |||||||||
DBJPM Mortgage Trust, Series 2016-SFC Class B, 3.24%, 8/10/36 (b) | 2,500 | 2,559 | |||||||||
DBJPM Mortgage Trust, Series 2016-C1 Class A4, 3.28%, 5/10/49 | 10,228 | 10,954 | |||||||||
DBUBS Mortgage Trust, Series 2011-LC3 Class B, 5.51%, 8/10/44 (b) (d) | 1,950 | 2,029 | |||||||||
Dryden Senior Loan Fund, Series 2016-43A Class BR, 3.57% (LIBOR03M+175bps), 7/20/29, Callable 7/20/20 @ 100 (a) (b) | 4,000 | 4,006 | |||||||||
Dryden Senior Loan Fund, Series 2016-42A Class BR, 3.38% (LIBOR03M+155bps), 7/15/30, Callable 7/15/20 @ 100 (a) (b) | 5,000 | 4,962 | |||||||||
Federal Home Loan Mortgage Corp., Series K101 Class A2, 2.52%, 10/25/29 | 10,000 | 10,472 | |||||||||
Federal Home Loan Mortgage Corp., Series K102 Class A2, 2.54%, 10/25/29 | 14,000 | 14,683 | |||||||||
Federal Home Loan Mortgage Corp., Series K103 Class A2, 2.65%, 11/25/29 | 5,000 | 5,295 | |||||||||
Flatiron CLO 18 Ltd., Series 2018-1A Class A, 2.79% (LIBOR03M+95bps), 4/17/31, Callable 4/17/20 @ 100 (a) (b) | 3,500 | 3,466 | |||||||||
FREMF Mortgage Trust, Series 2017-K724 Class B, 3.60%, 11/25/23 (b) (d) | 7,000 | 7,261 | |||||||||
FREMF Mortgage Trust, Series 2019-K99 Class B, 3.77%, 9/25/29 (b) (d) | 10,000 | 10,586 | |||||||||
GS Mortgage Securities Trust, Series 2012-GC6 Class AS, 4.95%, 1/10/45 (b) | 3,000 | 3,148 | |||||||||
GS Mortgage Securities Trust, Series 2019-GSA1 Class AS, 3.34%, 11/10/52 | 10,000 | 10,693 | |||||||||
GS Mortgage Securities Trust, Series 2019-GSA1 Class A4, 3.05%, 11/10/52 | 10,000 | 10,634 | |||||||||
GS Mortgage Securities Trust, Series 2020-GC45 Class AS, 3.17%, 2/13/53 | 3,750 | 3,967 | |||||||||
Hudson Yards Mortgage Trust, Series 2019-30HY Class D, 3.56%, 7/10/39 (b) (d) | 8,187 | 8,535 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Hudson Yards Mortgage Trust, Series 2016-10HY Class A, 2.84%, 8/10/38 (b) | $ | 6,490 | $ | 6,765 | |||||||
Hudson Yards Mortgage Trust, Series 2019-55HY Class D, 3.04%, 12/10/41 (b) (d) | 7,000 | 7,000 | |||||||||
Jackson Park Trust, Series 2019-LIC Class C, 3.13%, 10/14/39 (b) (d) | 5,000 | 5,120 | |||||||||
Jackson Park Trust, Series 2019-LIC Class A, 2.77%, 10/14/39 (b) | 5,000 | 5,148 | |||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2011-C5 Class AS, 5.60%, 8/15/46 (b) (d) | 6,100 | 6,360 | |||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2012-C8 Class XA, 1.91%, 10/15/45 (d) (f) | 20,147 | 721 | |||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2012-C6 Class A3, 3.51%, 5/15/45 | 7,160 | 7,396 | |||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2010-C2 Class C, 5.79%, 11/15/43 (b) (d) | 4,000 | 4,087 | |||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2019-OSB Class C, 3.75%, 6/5/39 (b) (d) | 1,614 | 1,763 | |||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP7 Class AJ, 6.27%, 4/17/45 (d) | 1,002 | 665 | |||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2019-OSB Class D, 3.91%, 6/5/39 (b) (d) | 2,000 | 2,166 | |||||||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C10 Class C, 4.25%, 12/15/47 (d) | 3,045 | 3,178 | |||||||||
KNDL Mortgage Trust, Series 2019-KNSQ Class E, 3.48% (LIBOR01M+180bps), 5/15/36 (a) (b) | 2,500 | 2,488 | |||||||||
LCM LP, Series 18A Class A1R, 2.84% (LIBOR03M+102bps), 4/20/31, Callable 4/20/20 @ 100 (a) (b) | 1,000 | 997 | |||||||||
Magnetite Ltd., Series 2015-12A Class BRRA, 3.43% (LIBOR03M+160bps), 10/15/31, Callable 10/15/20 @ 100 (a) (b) | 3,240 | 3,228 | |||||||||
Morgan Stanley Bank of America Merrill Lynch Trust, Series C17 Class A5, 3.74%, 8/15/47, Callable 7/11/24 @ 100 | 5,000 | 5,367 | |||||||||
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2012-C6 Class XA, 1.77%, 11/15/45 (b) (d) (f) | 19,187 | 655 | |||||||||
Neuberger Berman CLO XIV Ltd., Series 2013-14A Class BR2(LIBOR03M+150bps), 1/28/30 (a) (b) (c) | 5,000 | 5,000 | |||||||||
Neuberger Berman Loan Advisers CLO Ltd., Series 2018-29A Class B2, 4.60%, 10/19/31, Callable 10/19/20 @ 100 (b) | 5,000 | 5,041 | |||||||||
Neuberger Berman Loan Advisers CLO Ltd., Series 2018-29A Class B1, 3.52% (LIBOR03M+170bps), 10/19/31, Callable 10/19/20 @ 100 (a) (b) | 4,000 | 3,998 | |||||||||
Oaktree EIF Ltd., Series 2016-IIIA Class B, 3.82% (LIBOR03M+200bps), 10/20/27, Callable 4/20/20 @ 100 (a) (b) | 10,000 | 10,017 | |||||||||
Octagon Investment Partners 42 Ltd., Series 2019-3A Class B1, 3.78% (LIBOR03M+195bps), 4/15/31, Callable 4/15/21 @ 100 (a) (b) | 5,000 | 5,013 | |||||||||
Octagon Investment Partners XVII Ltd., Series 2013-1A Class CR2, 3.49% (LIBOR03M+170bps), 1/25/31, Callable 4/25/20 @ 100 (a) (b) | 2,750 | 2,646 | |||||||||
One Bryant Park Trust, Series 2019-OBP Class A, 2.52%, 9/13/49 (b) | 6,040 | 6,173 | |||||||||
Palmer Square Loan Funding Ltd., Series 2019-2 Class B, 4.07% (LIBOR03M+225bps), 4/20/27, Callable 7/20/20 @ 100 (a) (b) | 5,000 | 4,993 | |||||||||
Palmer Square Loan Funding Ltd., Series 2019-4 Class A2, 3.40% (LIBOR03M+160bps), 10/24/27, Callable 10/24/20 @ 100 (a) (b) | 4,500 | 4,508 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Palmer Square Loan Funding Ltd., Series 2019-4 Class B, 4.04% (LIBOR03M+210bps), 10/24/27, Callable 10/24/20 @ 100 (a) (b) | $ | 5,000 | $ | 5,000 | |||||||
Palmer Square Loan Funding Ltd., Series 2019-3 Class B, 4.00% (LIBOR03M+210bps), 8/20/27, Callable 8/20/20 @ 100 (a) (b) | 5,000 | 4,964 | |||||||||
Palmer Square Loan Funding Ltd., Series 2020-1A Class B(LIBOR03M+190bps), 2/20/28 (a) (b) (c) | 2,000 | 2,000 | |||||||||
Race Point CLO Ltd., Series 2016-10A Class B1R, 3.44% (LIBOR03M+165bps), 7/25/31, Callable 7/25/20 @ 100 (a) (b) | 5,000 | 4,952 | |||||||||
Sound Point CLO VII-R Ltd., Series 2014-3RA Class C, 4.06% (LIBOR03M+225bps), 10/23/31, Callable 10/23/20 @ 100 (a) (b) | 5,000 | 4,897 | |||||||||
Sound Point CLO XVIII Ltd., Series 2017-4A Class B, 3.62% (LIBOR03M+180bps), 1/21/31, Callable 4/20/20 @ 100 (a) (b) | 1,000 | 962 | |||||||||
Stewart Park CLO Ltd., Series 2015-1A Class A2R, 3.08% (LIBOR03M+125bps), 1/15/30, Callable 4/15/20 @ 100 (a) (b) | 2,000 | 1,968 | |||||||||
Structured Asset Mortgage Investments II Trust, Series 2005-AR5 Class B1, 2.16% (LIBOR01M+50bps), 7/19/35, Callable 2/19/20 @ 100 (a) | 1,325 | 1,285 | |||||||||
TIAA CLO I Ltd., Series 2016-1A Class B2R, 4.59%, 7/20/31, Callable 7/20/20 @ 100 (b) | 2,500 | 2,511 | |||||||||
TIAA CLO I Ltd., Series 2016-1A Class B1R, 3.57% (LIBOR03M+175bps), 7/20/31, Callable 7/20/20 @ 100 (a) (b) | 2,500 | 2,498 | |||||||||
TIAA CLO IV Ltd., Series 2018-1A Class A2, 3.52% (LIBOR03M+170bps), 1/20/32, Callable 1/20/21 @ 100 (a) (b) | 5,000 | 4,996 | |||||||||
Trinitas CLO Ltd., Series 2019-11A Class B1, 4.13% (LIBOR03M+230bps), 7/15/32, Callable 7/15/21 @ 100 (a) (b) | 5,000 | 5,045 | |||||||||
Tryon Park CLO Ltd., Series 2013-1A Class A1SR, 2.72% (LIBOR03M+89bps), 4/15/29, Callable 4/15/20 @ 100 (a) (b) | 5,000 | 4,998 | |||||||||
UBS Commercial Mortgage Trust, Series 2012-C1 Class XA, 2.26%, 5/10/45 (b) (d) | 23,908 | 836 | |||||||||
UBS-Citigroup Commercial Mortgage Trust, Series 2011-C1 Class AS, 5.15%, 1/10/45 (b) | 4,756 | 4,975 | |||||||||
Venture CLO Ltd., Series 2014-16A Class ARR, 2.68% (LIBOR03M+85bps), 1/15/28, Callable 4/15/20 @ 100 (a) (b) | 5,000 | 5,000 | |||||||||
Voya CLO Ltd., Series 2017-1 Class A2, 3.44% (LIBOR03M+160bps), 4/17/30, Callable 4/17/20 @ 100 (a) (b) | 3,000 | 2,993 | |||||||||
Voya CLO Ltd., Series 2018-3 Class B, 3.48% (LIBOR03M+165bps), 10/15/31, Callable 10/15/20 @ 100 (a) (b) | 2,500 | 2,497 | |||||||||
Voya CLO Ltd., Series 2015-3A Class BR, 4.02% (LIBOR03M+220bps), 10/20/31, Callable 10/20/20 @ 100 (a) (b) | 1,250 | 1,237 | |||||||||
Voya CLO Ltd., Series 2019-4A Class A1, 3.08% (LIBOR03M+134bps), 1/15/33, Callable 1/15/22 @ 100 (a) (b) | 5,000 | 5,013 | |||||||||
Voya CLO Ltd., Series 2013-2A Class A1R, 2.76% (LIBOR03M+97bps), 4/25/31, Callable 4/25/20 @ 100 (a) (b) | 8,750 | 8,689 | |||||||||
Voya CLO Ltd., Series 2019-4A Class B, 3.74% (LIBOR03M+200bps), 1/15/33, Callable 1/15/22 @ 100 (a) (b) | 4,500 | 4,523 | |||||||||
Wells Fargo Commercial Mortgage Trust, Series 2015-NXS3 Class B, 4.64%, 9/15/57 (d) | 2,000 | 2,195 | |||||||||
Wells Fargo Commercial Mortgage Trust, Series 2010-C1 Class B, 5.28%, 11/15/43 (b) (d) | 3,000 | 3,044 | |||||||||
Wells Fargo Commercial Mortgage Trust, Series 2018-AUS Class A, 4.19%, 7/17/36 (b) (d) | 4,200 | 4,739 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Wells Fargo Commercial Mortgage Trust, Series 2015-NXS4 Class AS, 3.97%, 12/15/48 | $ | 3,500 | $ | 3,801 | |||||||
Wells Fargo Commercial Mortgage Trust, Series 2015-NXS4 Class B, 4.22%, 12/15/48 (d) | 5,000 | 5,432 | |||||||||
WFRBS Commercial Mortgage Trust, Series 2011-C2 Class B, 5.17%, 2/15/44 (b) (d) | 6,000 | 6,157 | |||||||||
WFRBS Commercial Mortgage Trust, Series 2012-C10 Class XA, 1.69%, 12/15/45 (b) (d) (f) | 59,717 | 2,147 | |||||||||
Total Collateralized Mortgage Obligations (Cost $572,262) | 585,320 | ||||||||||
Preferred Stocks (1.3%) | |||||||||||
Communication Services (0.2%): | |||||||||||
Centaur Funding Corp., cumulative redeemable, 9.08%, 4/21/20 (b) | 7,000 | 7,203 | |||||||||
Consumer Staples (0.7%): | |||||||||||
CHS, Inc., Series 2, cumulative redeemable, 7.10% (LIBOR03M+429bps) (a) (g) | 400,000 | 11,240 | |||||||||
Dairy Farmers of America, Inc., cumulative redeemable, 7.88% (b) (g) | 150,000 | 15,000 | |||||||||
26,240 | |||||||||||
Financials (0.4%): | |||||||||||
American Overseas Group Ltd., non-cumulative, Series A, 5.66% (LIBOR03M+356bps), 12/15/66 (a) (e) (h) | 2,000 | 500 | |||||||||
Citigroup Capital, cumulative redeemable, 8.14% (LIBOR03M+637bps), 10/30/40 (a) | 87,500 | 2,466 | |||||||||
CoBank ACB, 3.01%, 7/10/22 (b) | 2,000 | 1,360 | |||||||||
Delphi Financial Group, Inc., 5.10%, 5/15/37 (h) | 369,987 | 8,510 | |||||||||
US Bancorp, non-cumulative, Series A, 3.50% (LIBOR03M+102bps) (a) (g) | 5,000 | 4,401 | |||||||||
17,237 | |||||||||||
Total Preferred Stocks (Cost $49,780) | 50,680 | ||||||||||
Convertible Corporate Bonds (0.1%) | |||||||||||
Energy (0.1%): | |||||||||||
Whiting Petroleum Corp., 1.25%, 4/1/20 (i) | 2,500 | 2,465 | |||||||||
Total Convertible Corporate Bond (Cost $2,485) | 2,465 | ||||||||||
Senior Secured Loans (2.1%) | |||||||||||
Academy Ltd., 1st Lien Term Loan B, 5.78% (LIBOR01M+400bps), 7/2/22 (a) | 4,912 | 3,926 | |||||||||
AMC Entertainment Holdings, Inc., 1st Lien Term Loan B1, 4.80% (LIBOR01M+300bps), 4/22/26 (a) | 978 | 978 | |||||||||
Blackstone CQP Holdco LP, 1st Lien Term Loan B, 5.41% (LIBOR03M+350bps), 6/20/24 (a) | 5,965 | 5,960 | |||||||||
Buckeye Partners LP, 1st Lien Term Loan, 4.53% (LIBOR01M+275bps), 12/16/26 (a) | 2,000 | 2,016 | |||||||||
California Resources Corp., 6.40% (LIBOR01M+475bps), 12/31/22 (a) | 5,000 | 4,511 | |||||||||
CEC Entertainment, Inc., 1st Lien Term Loan B, 2/14/21 (c) (p) | 10,000 | 9,618 | |||||||||
CenturyLink, Inc., 3/15/27 (c) (p) | 1,000 | 998 | |||||||||
CITGO Petroleum Corp., 6.94% (LIBOR03M+500bps), 3/22/24 (a) | 1,588 | 1,588 | |||||||||
Clear Channel Outdoor Holdings, Inc., 5.30% (LIBOR01M+350bps), 11/25/26 (a) | 1,993 | 1,998 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
ClubCorp Holdings, Inc., 1st Lien Term Loan B, 4.69% (LIBOR03M+275bps), 9/18/24 (a) (c) | $ | 5,987 | $ | 5,673 | |||||||
DaVita, Inc., 8/12/26 (c) (p) | 1,000 | 1,000 | |||||||||
Endo International PLC, 1st Lien Term Loan B, 6.06% (LIBOR01M+425bps), 4/29/24 (a) | 4,937 | 4,751 | |||||||||
Epic Crude Services, LP, 7.04% (LIBOR06M+500bps), 3/1/26 (a) | 4,000 | 3,863 | |||||||||
H-Food Holdings LLC, 1st Lien Term Loan, 5/31/25 (p) | 4,987 | 4,929 | |||||||||
HUB International Ltd., 1st Lien Term Loan B, 5.90% (LIBOR03M+400bps), 4/25/25 (a) | 1,000 | 1,007 | |||||||||
Mauser Packaging Solutions Holding Co., 1st Lien Term Loan B, 5.08% (LIBOR02M+325bps), 4/3/24 (a) | 5,805 | 5,757 | |||||||||
PetSmart, Inc., 1st Lien Term Loan B2, 5.67% (LIBOR01M+400bps), 3/10/22 (a) | 4,706 | 4,691 | |||||||||
Red Ventures LLC, 11/8/24 (c) (p) | 1,000 | 999 | |||||||||
Sally Holdings LLC, 1st Lien Term Loan B2, 4.50%(LIBOR+450bps), 7/5/24 (a) | 4,000 | 3,970 | |||||||||
Serta Simmons Bedding LLC, 1st Lien Term Loan B, 5.17% (LIBOR01M+350bps), 11/8/23 (a) | 9,349 | 6,074 | |||||||||
Solera LLC, 1st Lien Term Loan B, 4.55% (LIBOR01M+275bps), 3/3/23 (a) | 6,437 | 6,441 | |||||||||
Sunshine Luxembourg VII Sarl, 1st Lien Term Loan B, 6.19% (LIBOR03M+425bps), 10/2/26 (a) | 1,000 | 1,004 | |||||||||
Whatabrands LLC, 8/3/26 (c) (p) | 500 | 501 | |||||||||
Whatabrands LLC, 1st Lien Term Loan B, 4.98% (LIBOR01M+325bps), 7/19/26 (a) | 998 | 999 | |||||||||
Zayo Group LLC, 1st Lien Term Loan B2, 4.05% (LIBOR01M+225bps), 1/19/24 (a) | 2,000 | 2,000 | |||||||||
Total Senior Secured Loans (Cost $88,167) | 85,252 | ||||||||||
Corporate Bonds (36.4%) | |||||||||||
Communication Services (1.5%): | |||||||||||
AT&T, Inc., 4.50%, 5/15/35, Callable 11/15/34 @ 100 | 10,000 | 11,479 | |||||||||
Charter Communications Operating LLC, 4.91%, 7/23/25, Callable 4/23/25 @ 100 | 2,000 | 2,239 | |||||||||
Comcast Corp., 4.20%, 8/15/34, Callable 2/15/34 @ 100 | 5,000 | 5,928 | |||||||||
Fox Corp., 5.48%, 1/25/39, Callable 7/25/38 @ 100 (b) | 5,000 | 6,324 | |||||||||
Iheartcommunications, Inc., 4.75%, 1/15/28, Callable 1/15/23 @ 102.38 (b) | 1,000 | 1,019 | |||||||||
Lamar Media Corp. 0.00%, 1/30/27 (c) (j) | 1,000 | 995 | |||||||||
4.00%, 2/15/30, Callable 2/15/25 @ 102 (b) (c) | 1,000 | 1,008 | |||||||||
Qwest Corp., 6.75%, 12/1/21 | 6,000 | 6,419 | |||||||||
Sprint Spectrum, 3.36%, 3/20/23 (b) | 2,625 | 2,648 | |||||||||
Sprint Spectrum Co. LLC, 5.15%, 9/20/29 (b) | 10,000 | 10,890 | |||||||||
T-Mobile USA, Inc., 4.75%, 2/1/28, Callable 2/1/23 @ 102.38 | 1,000 | 1,064 | |||||||||
Verizon Communications, Inc., 4.50%, 8/10/33 | 10,000 | 12,037 | |||||||||
62,050 | |||||||||||
Consumer Discretionary (0.7%): | |||||||||||
Hasbro, Inc., 3.90%, 11/19/29, Callable 8/19/29 @ 100 | 5,000 | 5,187 | |||||||||
Lithia Motors, Inc., 4.63%, 12/15/27, Callable 12/15/22 @ 103.47 (b) | 1,000 | 1,025 |
See notes to financial statements.
11
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
M/I Homes, Inc., 4.95%, 2/1/28, Callable 2/1/23 @ 103.71 (b) | $ | 3,000 | $ | 3,090 | |||||||
Newell Brands, Inc. 3.85%, 4/1/23, Callable 2/1/23 @ 100 | 7,500 | 7,801 | |||||||||
4.20%, 4/1/26, Callable 1/1/26 @ 100 | 10,000 | 10,436 | |||||||||
Nordstrom, Inc., 4.38%, 4/1/30, Callable 1/1/30 @ 100 | 5,000 | 5,224 | |||||||||
Vanderbilt University Medical Center, 4.17%, 7/1/37, Callable 1/1/37 @ 100 | 1,445 | 1,641 | |||||||||
Volkswagen Group of America Finance LLC, 3.20%, 9/26/26, Callable 7/26/26 @ 100 (b) | 1,184 | 1,244 | |||||||||
35,648 | |||||||||||
Consumer Staples (1.4%): | |||||||||||
Albertsons Cos, Inc./ Safeway, Inc. /New Albertsons LP/Albertsons LLC 6.63%, 6/15/24, Callable 3/9/20 @ 104.97 | 5,000 | 5,203 | |||||||||
4.63%, 1/15/27, Callable 1/15/23 @ 103.47 (b) | 3,000 | 3,039 | |||||||||
Anheuser-Busch InBev Worldwide, Inc., 4.38%, 4/15/38, Callable 10/15/37 @ 100 | 5,000 | 5,785 | |||||||||
BAT Capital Corp., 4.39%, 8/15/37, Callable 2/15/37 @ 100 | 2,000 | 2,087 | |||||||||
Bunge Ltd. Finance Corp., 3.25%, 8/15/26, Callable 5/15/26 @ 100 | 5,000 | 5,106 | |||||||||
Kraft Heinz Foods Co. 4.88%, 2/15/25, Callable 3/16/20 @ 102.44 (b) | 11,799 | 12,109 | |||||||||
4.63%, 10/1/39, Callable 4/1/39 @ 100 (b) | 5,000 | 5,429 | |||||||||
McCormick & Co., Inc., 3.40%, 8/15/27, Callable 5/15/27 @ 100 | 1,042 | 1,113 | |||||||||
Reynolds, 1/30/27 (c) (j) | 1,000 | 1,001 | |||||||||
Smithfield Foods, Inc. 4.25%, 2/1/27, Callable 11/1/26 @ 100 (b) | 5,000 | 5,270 | |||||||||
5.20%, 4/1/29, Callable 1/1/29 @ 100 (b) | 3,167 | 3,559 | |||||||||
The JM Smucker Co., 4.25%, 3/15/35 | 5,000 | 5,623 | |||||||||
55,324 | |||||||||||
Energy (5.8%): | |||||||||||
Alliance Resource Operating Partners LP/Alliance Resource Finance Corp., 7.50%, 5/1/25, Callable 5/1/20 @ 105.63 (b) (i) | 3,000 | 2,595 | |||||||||
Antero Midstream Partners LP/Antero Midstream Finance Corp. 5.38%, 9/15/24, Callable 2/24/20 @ 104.03 | 10,000 | 8,854 | |||||||||
5.75%, 3/1/27, Callable 3/1/22 @ 102.88 (b) | 2,941 | 2,299 | |||||||||
Boardwalk Pipelines LP 4.95%, 12/15/24, Callable 9/15/24 @ 100 | 4,000 | 4,365 | |||||||||
4.45%, 7/15/27, Callable 4/15/27 @ 100 | 17,000 | 17,631 | |||||||||
Buckeye Partners LP, 4.35%, 10/15/24, Callable 7/15/24 @ 100 | 5,000 | 5,055 | |||||||||
Buckeye Partners, LP, 3.95%, 12/1/26, Callable 9/1/26 @ 100 | 8,000 | 7,906 | |||||||||
Cameron LNG LLC, 3.30%, 1/15/35, Callable 9/15/34 @ 100 (b) | 2,727 | 2,874 | |||||||||
Cheniere Corpus Christi Holdings LLC, 3.70%, 11/15/29, Callable 5/18/29 @ 100 (b) | 3,000 | 3,104 | |||||||||
Cheniere Energy Partners LP, 4.50%, 10/1/29, Callable 10/1/24 @ 102.25 (b) | 500 | 508 | |||||||||
Chevron Phillips Chemical Co. LLC, 3.40%, 12/1/26, Callable 9/1/26 @ 100 (b) | 5,000 | 5,325 | |||||||||
Continental Resources, Inc., 5.00%, 9/15/22, Callable 3/16/20 @ 100 | 1,348 | 1,354 | |||||||||
DCP Midstream Operating LP, 5.85% (LIBOR03M+385bps), 5/21/43, Callable 5/21/23 @ 100 (a) (b) | 5,000 | 4,627 |
See notes to financial statements.
12
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Enable Midstream Partners LP, 4.15%, 9/15/29, Callable 6/15/29 @ 100 | $ | 5,000 | $ | 4,865 | |||||||
Enable Oklahoma Intrastate Transmission LLC, 6.25%, 3/15/20 (b) | 9,306 | 9,347 | |||||||||
Energy Transfer Operating LP 2.90%, 5/15/25, Callable 4/15/25 @ 100 | 5,000 | 5,055 | |||||||||
4.93% (LIBOR03M+302bps), 11/1/66, Callable 3/16/20 @ 100 (a) | 5,000 | 4,082 | |||||||||
EnLink Midstream LLC, 5.38%, 6/1/29, Callable 3/1/29 @ 100 | 6,000 | 5,434 | |||||||||
EQM Midstream Partners LP, 4.00%, 8/1/24, Callable 5/1/24 @ 100 | 9,000 | 8,594 | |||||||||
EQT Corp. 3.00%, 10/1/22, Callable 9/1/22 @ 100 (i) | 3,000 | 2,889 | |||||||||
7.00%, 2/1/30, Callable 10/1/29 @ 100 | 6,071 | 5,343 | |||||||||
EQT Midstream Partners LP 4.13%, 12/1/26, Callable 9/1/26 @ 100 | 9,000 | 8,122 | |||||||||
5.50%, 7/15/28, Callable 4/15/28 @ 100 | 5,000 | 4,605 | |||||||||
Hilcorp Energy I, LP/Hilcorp Finance Co., 6.25%, 11/1/28, Callable 11/1/23 @ 103.13 (b) | 7,000 | 6,213 | |||||||||
Marathon Petroleum Corp., 4.75%, 9/15/44, Callable 3/15/44 @ 100 | 5,000 | 5,630 | |||||||||
Midwest Connector Capital Co. LLC, 4.63%, 4/1/29, Callable 1/1/29 @ 100 (b) | 5,000 | 5,499 | |||||||||
MPLX LP, 4.00%, 2/15/25, Callable 11/15/24 @ 100 | 7,500 | 7,962 | |||||||||
Northwest Pipeline LLC, 4.00%, 4/1/27, Callable 1/1/27 @ 100 | 6,955 | 7,528 | |||||||||
Nustar Logistics LP, 4.80%, 9/1/20 | 5,000 | 5,043 | |||||||||
NuStar Logistics LP, 4.75%, 2/1/22, Callable 11/1/21 @ 100 | 3,000 | 3,079 | |||||||||
Occidental Petroleum Corp., 3.50%, 8/15/29, Callable 5/15/29 @ 100 | 2,093 | 2,159 | |||||||||
ONEOK, Inc., 4.35%, 3/15/29, Callable 12/15/28 @ 100 | 4,917 | 5,381 | |||||||||
Phillips 66 Partners LP, 3.55%, 10/1/26, Callable 7/1/26 @ 100 | 5,000 | 5,331 | |||||||||
Plains All American Pipeline LP/PAA Finance Corp., 3.85%, 10/15/23, Callable 7/15/23 @ 100 | 5,000 | 5,234 | |||||||||
Rockies Express Pipeline LLC, 4.95%, 7/15/29, Callable 4/15/29 @ 100 (b) | 18,960 | 18,943 | |||||||||
Sabal Trail Transmission LLC, 4.68%, 5/1/38, Callable 11/1/37 @ 100 (b) | 5,000 | 5,833 | |||||||||
Southwestern Energy Co., 6.20%, 1/23/25, Callable 10/23/24 @ 100 (j) | 8,000 | 6,654 | |||||||||
Spectra Energy Partners LP, 3.38%, 10/15/26, Callable 7/15/26 @ 100 | 5,000 | 5,295 | |||||||||
Tallgrass Energy Partners LP/Tallgrass Energy Finance, 5.50%, 1/15/28, Callable 1/15/23 @ 102.75 (b) | 2,936 | 2,934 | |||||||||
Transocean Pontus Ltd., 6.13%, 8/1/25, Callable 8/1/21 @ 104.59 (b) | 594 | 611 | |||||||||
Viper Energy Partners LP, 5.38%, 11/1/27, Callable 11/1/22 @ 102.69 (b) | 2,000 | 2,085 | |||||||||
Western Midstream Operating LP, 3.10%, 2/1/25, Callable 1/1/25 @ 100 | 4,210 | 4,235 | |||||||||
230,482 | |||||||||||
Financials (13.4%): | |||||||||||
American Equity Investment Life Holding Co., 5.00%, 6/15/27, Callable 3/15/27 @ 100 | 5,000 | 5,466 | |||||||||
American International Group, Inc., 8.18% (LIBOR03M+420bps), 5/15/68, Callable 5/15/38 @ 100 (a) | 2,000 | 2,788 | |||||||||
Ares Capital Corp., 4.20%, 6/10/24, Callable 5/10/24 @ 100 | 2,000 | 2,113 | |||||||||
Associated Banc-Corp., 4.25%, 1/15/25, Callable 10/15/24 @ 100 | 10,000 | 10,758 |
See notes to financial statements.
13
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Assurant, Inc. 4.90%, 3/27/28, Callable 12/27/27 @ 100 | $ | 2,500 | $ | 2,801 | |||||||
3.70%, 2/22/30, Callable 11/22/29 @ 100 | 5,000 | 5,245 | |||||||||
Assured Guaranty US Holdings, Inc., 7.00%, 6/1/34 | 1,535 | 2,061 | |||||||||
AXA Equitable Holdings, Inc., 4.35%, 4/20/28, Callable 1/20/28 @ 100 | 10,000 | 11,053 | |||||||||
Banc of California, Inc., 5.25%, 4/15/25, Callable 1/15/25 @ 100 | 10,000 | 10,258 | |||||||||
BancorpSouth Bank, 4.13% (LIBOR03M+247bps), 11/20/29, Callable 11/20/24 @ 100 (a) | 4,286 | 4,356 | |||||||||
BankUnited, Inc., 4.88%, 11/17/25, Callable 8/17/25 @ 100 | 5,000 | 5,580 | |||||||||
BOKF Merger Corp., 5.62% (LIBOR03M+317bps), 6/25/30, Callable 6/25/25 @ 100 (a) | 4,750 | 4,928 | |||||||||
BP Capital Markets America, Inc., 3.02%, 1/16/27, Callable 10/16/26 @ 100 | 5,000 | 5,232 | |||||||||
Cantor Fitzgerald LP, 4.88%, 5/1/24, Callable 4/1/24 @ 100 (b) | 3,000 | 3,236 | |||||||||
Capital One Financial Corp., 3.75%, 3/9/27, Callable 2/9/27 @ 100 | 10,000 | 10,810 | |||||||||
Citizens Financial Group, Inc. 4.15%, 9/28/22 (b) | 15,000 | 15,762 | |||||||||
3.75%, 7/1/24 | 5,500 | 5,772 | |||||||||
Cullen/Frost Bankers, Inc., 4.50%, 3/17/27, Callable 2/17/27 @ 100 (i) | 2,000 | 2,183 | |||||||||
DAE Funding LLC, 4.50%, 8/1/22, Callable 3/9/20 @ 102.25 (b) | 2,898 | 2,956 | |||||||||
Discover Bank, 4.68%(USSW5+173bps), 8/9/28, Callable 8/9/23 @ 100 (a) | 5,000 | 5,296 | |||||||||
Eagle Bancorp, Inc., 5.00% (LIBOR03M+385bps), 8/1/26, Callable 8/1/21 @ 100 (a) | 10,000 | 10,086 | |||||||||
Fifth Third Bank, 3.85%, 3/15/26, Callable 2/15/26 @ 100 | 10,000 | 10,901 | |||||||||
First Financial Bancorp, 5.13%, 8/25/25 | 5,000 | 5,291 | |||||||||
First Maryland Capital I, 2.83% (LIBOR03M+100bps), 1/15/27, Callable 3/16/20 @ 100 (a) | 1,000 | 963 | |||||||||
First Midwest Bancorp, Inc., 5.88%, 9/29/26, Callable 8/29/26 @ 100 | 5,000 | 5,707 | |||||||||
FirstMerit Bank NA, 4.27%, 11/25/26 | 5,000 | 5,519 | |||||||||
Ford Motor Credit Co. LLC 5.58%, 3/18/24, Callable 2/18/24 @ 100 | 3,571 | 3,882 | |||||||||
5.11%, 5/3/29, Callable 2/3/29 @ 100 | 5,000 | 5,232 | |||||||||
Fulton Financial Corp., 4.50%, 11/15/24 | 10,000 | 10,824 | |||||||||
General Motors Financial Co., Inc., 4.35%, 1/17/27, Callable 10/17/26 @ 100 | 5,000 | 5,361 | |||||||||
Glencore Funding LLC 4.00%, 3/27/27, Callable 12/27/26 @ 100 (b) | 10,000 | 10,581 | |||||||||
4.88%, 3/12/29, Callable 12/12/28 @ 100 (b) | 5,000 | 5,537 | |||||||||
Global Atlantic Fin Co., 8.63%, 4/15/21 (b) | 2,000 | 2,140 | |||||||||
Global Atlantic Financial Co., 4.40%, 10/15/29, Callable 7/15/29 @ 100 (b) | 8,572 | 8,763 | |||||||||
Hilltop Holdings, Inc., 5.00%, 4/15/25, Callable 1/15/25 @ 100 | 5,000 | 5,127 | |||||||||
Huntington Bancshares, Inc., 4.35%, 2/4/23 | 10,000 | 10,624 | |||||||||
ILFC E-Capital Trust I, 3.90%, 12/21/65, Callable 3/16/20 @ 100 (b) (j) | 7,000 | 5,563 | |||||||||
Kemper Corp., 4.35%, 2/15/25, Callable 11/15/24 @ 100 | 5,000 | 5,395 | |||||||||
KeyBank NA 3.40%, 5/20/26, MTN | 5,000 | 5,352 | |||||||||
3.90%, 4/13/29 | 5,000 | 5,526 | |||||||||
KeyCorp Capital II, 6.88%, 3/17/29 | 750 | 828 |
See notes to financial statements.
14
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
LegacyTexas Financial Group, Inc., 5.50% (LIBOR03M+389bps), 12/1/25, Callable 12/1/20 @ 100 (a) | $ | 5,000 | $ | 4,926 | |||||||
Level 3 Financing, Inc. 4.63%, 9/15/27, Callable 9/15/22 @ 102.31 (b) | 1,000 | 1,027 | |||||||||
3.88%, 11/15/29, Callable 8/15/29 @ 100 (b) | 10,000 | 10,371 | |||||||||
Lincoln National Corp., 4.26% (LIBOR03M+236bps), 5/17/66, Callable 2/28/20 @ 100 (a) | 8,018 | 7,242 | |||||||||
Loews Corp., 3.75%, 4/1/26, Callable 1/1/26 @ 100 | 5,000 | 5,463 | |||||||||
Main Street Capital Corp., 4.50%, 12/1/22 | 5,000 | 5,281 | |||||||||
MB Financial Bank NA, 4.00% (LIBOR03M+187bps), 12/1/27, Callable 12/1/22 @ 100 (a) | 7,717 | 7,863 | |||||||||
Mercury General Corp., 4.40%, 3/15/27, Callable 12/15/26 @ 100 | 12,350 | 13,325 | |||||||||
MetLife, Inc. 6.40%, 12/15/66, Callable 12/15/31 @ 100 | 8,000 | 10,025 | |||||||||
9.25%, 4/8/68, Callable 4/8/33 @ 100 (b) | 5,000 | 7,543 | |||||||||
Nationwide Mutual Insurance Co., 4.18% (LIBOR03M+229bps), 12/15/24, Callable 3/16/20 @ 100 (a) (b) | 20,235 | 20,209 | |||||||||
New York Community Bancorp, Inc., 5.90% (LIBOR03M+278bps), 11/6/28, Callable 11/6/23 @ 100 (a) | 3,000 | 3,157 | |||||||||
Ohio National Financial Services, Inc., 6.63%, 5/1/31 (b) | 2,000 | 2,162 | |||||||||
Old Republic International Corp., 3.88%, 8/26/26, Callable 7/26/26 @ 100 | 7,000 | 7,534 | |||||||||
OneBeacon US Holdings, Inc., 4.60%, 11/9/22 | 10,025 | 10,623 | |||||||||
People's United Bank NA, 4.00%, 7/15/24, Callable 4/16/24 @ 100 | 10,000 | 10,475 | |||||||||
Pine Street Trust I, 4.57%, 2/15/29, Callable 11/15/28 @ 100 (b) | 5,000 | 5,561 | |||||||||
PNC Bank NA, 2.70%, 10/22/29 | 10,000 | 10,281 | |||||||||
PPL Capital Funding, Inc., 4.63% (LIBOR03M+267bps), 3/30/67, Callable 3/16/20 @ 100 (a) | 4,000 | 3,906 | |||||||||
Primerica, Inc., 4.75%, 7/15/22 | 5,000 | 5,336 | |||||||||
Principal Financial Global Funding LLC, 2.35% (LIBOR03M+52bps), 1/10/31 (a) | 3,000 | 2,747 | |||||||||
ProAssurance Corp., 5.30%, 11/15/23 | 9,864 | 10,755 | |||||||||
Prudential Financial, Inc., 5.88% (LIBOR03M+418bps), 9/15/42, Callable 9/15/22 @ 100 (a) | 5,000 | 5,384 | |||||||||
RLI Corp., 4.88%, 9/15/23 | 5,000 | 5,351 | |||||||||
Santander Holdings USA, Inc., 4.40%, 7/13/27, Callable 4/14/27 @ 100 | 12,818 | 14,042 | |||||||||
SL Green Operating Partnership LP, 3.25%, 10/15/22, Callable 9/15/22 @ 100 | 4,444 | 4,570 | |||||||||
Sterling National Bank, 5.25% (LIBOR03M+394bps), 4/1/26, Callable 4/1/21 @ 100 (a) | 5,000 | 5,089 | |||||||||
SunTrust Capital, 2.58% (LIBOR03M+67bps), 5/15/27, Callable 3/9/20 @ 100 (a) | 5,000 | 4,765 | |||||||||
TCF National Bank 4.60%, 2/27/25 | 5,000 | 5,226 | |||||||||
4.13% (LIBOR03M+238bps), 7/2/29, Callable 7/2/24 @ 100 (a) | 4,000 | 3,963 | |||||||||
Texas Capital Bank NA, 5.25%, 1/31/26 | 10,225 | 10,924 | |||||||||
The Allstate Corp., 5.75% (LIBOR03M+294bps), 8/15/53, Callable 8/15/23 @ 100 (a) | 10,000 | 10,851 | |||||||||
The Hanover Insurance Group, Inc., 4.50%, 4/15/26, Callable 1/15/26 @ 100 | 7,000 | 7,780 |
See notes to financial statements.
15
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
The Hartford Financial Services Group, Inc., 4.03% (LIBOR03M+213bps), 2/12/67, Callable 3/16/20 @ 100 (a) (b) | $ | 10,000 | $ | 9,625 | |||||||
TIAA FSB Holdings, Inc., 5.75%, 7/2/25, Callable 6/2/25 @ 100 | 10,000 | 10,855 | |||||||||
Towne Bank, 4.50% (LIBOR03M+255bps), 7/30/27, Callable 7/30/22 @ 100 (a) | 4,643 | 4,611 | |||||||||
Webster Financial Corp., 4.38%, 2/15/24, Callable 1/16/24 @ 100 | 5,000 | 5,336 | |||||||||
Wells Fargo & Co., 3.00%, 10/23/26 | 5,000 | 5,240 | |||||||||
Wintrust Financial Corp., 5.00%, 6/13/24 | 3,500 | 3,703 | |||||||||
530,983 | |||||||||||
Health Care (2.9%): | |||||||||||
Abbvie, Inc., 4.25%, 11/14/28, Callable 8/14/28 @ 100 | 3,000 | 3,365 | |||||||||
AbbVie, Inc., 3.20%, 11/21/29, Callable 8/21/29 @ 100 (b) | 5,000 | 5,203 | |||||||||
Bausch Health Cos., Inc., 5.00%, 1/30/28, Callable 1/30/23 @ 102.5 (b) | 817 | 826 | |||||||||
Bayer US Finance II LLC 2.85%, 4/15/25, Callable 1/15/25 @ 100 (b) | 5,405 | 5,418 | |||||||||
4.63%, 6/25/38, Callable 12/25/37 @ 100 (b) | 5,000 | 5,845 | |||||||||
Baylor Scott & White Holdings, 2.65%, 11/15/26, Callable 8/15/26 @ 100 | 5,000 | 5,069 | |||||||||
Bon Secours Charity Health System, Inc., 5.25%, 11/1/25 | 5,000 | 5,357 | |||||||||
Boston Medical Center Corp., 3.91%, 7/1/28 | 3,000 | 3,274 | |||||||||
Cigna Corp., 4.38%, 10/15/28, Callable 7/15/28 @ 100 | 5,000 | 5,650 | |||||||||
CVS Health Corp., 4.88%, 7/20/35, Callable 1/20/35 @ 100 (i) | 5,000 | 5,976 | |||||||||
CVS Pass-Through Trust, 5.93%, 1/10/34 (b) | 7,734 | 9,070 | |||||||||
DaVita, Inc., 5.00%, 5/1/25, Callable 5/1/20 @ 102.5 | 1,302 | 1,333 | |||||||||
Eastern Maine Healthcare Systems, 3.71%, 7/1/26 | 14,610 | 14,616 | |||||||||
Elanco Animal Health, Inc., 4.90%, 8/28/28, Callable 5/28/28 @ 100 | 2,000 | 2,284 | |||||||||
Fresenius Medical Care US Finance III, Inc., 3.75%, 6/15/29, Callable 3/15/29 @ 100 (b) | 10,000 | 10,567 | |||||||||
HCA, Inc., 4.50%, 2/15/27, Callable 8/15/26 @ 100 | 5,000 | 5,491 | |||||||||
Mednax, Inc., 6.25%, 1/15/27, Callable 1/15/22 @ 104.69 (b) | 1,000 | 1,019 | |||||||||
Mylan, Inc., 4.55%, 4/15/28, Callable 1/15/28 @ 100 | 7,778 | 8,591 | |||||||||
Premier Health Partners, 2.91%, 11/15/26, Callable 5/15/26 @ 100 | 6,595 | 6,599 | |||||||||
Quest Diagnostics, Inc., 2.95%, 6/30/30, Callable 3/30/30 @ 100 | 5,000 | 5,117 | |||||||||
SSM Health Care Corp., 3.82%, 6/1/27, Callable 3/1/27 @ 100 | 4,000 | 4,421 | |||||||||
115,091 | |||||||||||
Industrials (3.7%): | |||||||||||
Air Lease Corp., 3.63%, 12/1/27, Callable 9/1/27 @ 100 | 5,000 | 5,289 | |||||||||
Aircastle Ltd., 4.25%, 6/15/26, Callable 4/15/26 @ 100 | 5,000 | 5,384 | |||||||||
American Airlines Pass Through Trust 4.00%, 1/15/27 | 5,634 | 6,016 | |||||||||
3.60%, 4/15/31 | 1,838 | 1,917 | |||||||||
Ashtead Capital, Inc., 5.25%, 8/1/26, Callable 8/1/21 @ 103.94 (b) | 2,500 | 2,673 | |||||||||
BAE Systems Holdings, Inc., 3.85%, 12/15/25, Callable 9/15/25 @ 100 (b) | 5,000 | 5,404 | |||||||||
Brambles USA, Inc., 4.13%, 10/23/25, Callable 7/25/25 @ 100 (b) | 5,500 | 5,986 | |||||||||
British Airways Pass Through Trust 4.63%, 12/20/25 (b) | 10,771 | 11,452 | |||||||||
3.35%, 12/15/30 (b) | 2,500 | 2,599 | |||||||||
Continental Airlines Pass Through Trust, 4.15%, 10/11/25 | 7,481 | 7,956 | |||||||||
Continental Airlines Pass Through Trust(INS-AMBAC Assurance Corp.), 6.24%, 9/15/21 | 50 | 50 |
See notes to financial statements.
16
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
FedEx Corp., 3.90%, 2/1/35 | $ | 5,000 | $ | 5,283 | |||||||
Fluor Corp., 4.25%, 9/15/28, Callable 6/15/28 @ 100 | 10,000 | 10,260 | |||||||||
Hawaiian Airlines Pass Through Certificates, 3.90%, 7/15/27 | 6,771 | 6,859 | |||||||||
Kennametal, Inc., 4.63%, 6/15/28, Callable 3/15/28 @ 100 | 5,400 | 5,895 | |||||||||
Molex Electronic Technologies LLC, 3.90%, 4/15/25, Callable 1/15/25 @ 100 (b) | 5,000 | 5,264 | |||||||||
Pentair Finance Sarl, 4.50%, 7/1/29, Callable 4/1/29 @ 100 | 7,500 | 8,243 | |||||||||
Spirit Aerosystems, Inc. 3.85%, 6/15/26, Callable 3/15/26 @ 100 | 5,000 | 4,998 | |||||||||
4.60%, 6/15/28, Callable 3/15/28 @ 100 | 12,000 | 12,310 | |||||||||
The Timken Co., 4.50%, 12/15/28, Callable 9/15/28 @ 100 (i) | 5,658 | 6,281 | |||||||||
United Airlines Pass Through Trust 4.63%, 3/3/24 | 4,386 | 4,535 | |||||||||
4.30%, 2/15/27 | 3,763 | 4,084 | |||||||||
3.50%, 11/1/29 | 5,000 | 5,116 | |||||||||
US Airways Pass Through Trust 6.25%, 10/22/24 | 2,256 | 2,460 | |||||||||
7.13%, 4/22/25 (i) | 1,478 | 1,677 | |||||||||
3.95%, 5/15/27 | 6,524 | 6,954 | |||||||||
US Airways(INS-MBIA Insurance Corp.), 7.08%, 9/20/22 | 261 | 271 | |||||||||
Verisk Analytics, Inc., 4.13%, 3/15/29, Callable 12/15/28 @ 100 | 2,833 | 3,183 | |||||||||
Waste Pro USA, Inc., 5.50%, 2/15/26, Callable 2/15/21 @ 104.13 (b) | 1,000 | 1,030 | |||||||||
149,429 | |||||||||||
Information Technology (1.0%): | |||||||||||
Amphenol Corp., 2.80%, 2/15/30, Callable 11/15/29 @ 100 | 5,000 | 5,101 | |||||||||
Broadcom, Inc., 4.75%, 4/15/29, Callable 1/15/29 @ 100 (b) | 3,000 | 3,359 | |||||||||
CDK Global, Inc., 5.25%, 5/15/29, Callable 5/15/24 @ 102.63 (b) | 1,000 | 1,071 | |||||||||
Dell International LLC/EMC Corp., 5.30%, 10/1/29, Callable 7/1/29 @ 100 (b) | 3,000 | 3,452 | |||||||||
Fiserv, Inc., 3.50%, 7/1/29, Callable 4/1/29 @ 100 | 5,000 | 5,385 | |||||||||
Global Payments, Inc., 3.20%, 8/15/29, Callable 5/15/29 @ 100 | 4,000 | 4,197 | |||||||||
Jabil, Inc., 3.95%, 1/12/28, Callable 10/12/27 @ 100 | 5,000 | 5,352 | |||||||||
Keysight Technologies, Inc. 4.60%, 4/6/27, Callable 1/6/27 @ 100 | 2,604 | 2,952 | |||||||||
3.00%, 10/30/29, Callable 7/30/29 @ 100 | 2,632 | 2,714 | |||||||||
VMware, Inc., 3.90%, 8/21/27, Callable 5/21/27 @ 100 | 5,000 | 5,313 | |||||||||
38,896 | |||||||||||
Materials (1.2%): | |||||||||||
Alcoa Nederland Holdings, 6.75%, 9/30/24, Callable 3/9/20 @ 105.06 (b) | 1,000 | 1,051 | |||||||||
Cabot Corp., 4.00%, 7/1/29, Callable 4/1/29 @ 100 | 4,000 | 4,323 | |||||||||
Carpenter Technology Corp. 5.20%, 7/15/21, Callable 4/15/21 @ 100 (i) | 2,000 | 2,062 | |||||||||
4.45%, 3/1/23, Callable 12/1/22 @ 100 | 2,272 | 2,379 | |||||||||
CF Industries, Inc., 4.50%, 12/1/26 (b) | 5,000 | 5,523 | |||||||||
CRH America, Inc., 5.75%, 1/15/21 | 3,000 | 3,105 | |||||||||
FMC Corp., 3.20%, 10/1/26, Callable 8/1/26 @ 100 | 5,000 | 5,250 | |||||||||
Huntsman International LLC, 4.50%, 5/1/29, Callable 2/1/29 @ 100 | 5,000 | 5,441 | |||||||||
Southern Copper Corp., 3.88%, 4/23/25 | 3,000 | 3,196 | |||||||||
The Mosaic Co., 4.05%, 11/15/27, Callable 8/15/27 @ 100 | 5,000 | 5,338 |
See notes to financial statements.
17
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Vulcan Materials Co., 3.90%, 4/1/27, Callable 1/1/27 @ 100 | $ | 1,000 | $ | 1,088 | |||||||
Westlake Chemical Corp., 3.60%, 8/15/26, Callable 5/15/26 @ 100 | 7,000 | 7,406 | |||||||||
WRKCo., Inc., 4.20%, 6/1/32, Callable 3/1/32 @ 100 | 2,000 | 2,262 | |||||||||
48,424 | |||||||||||
Real Estate (2.1%): | |||||||||||
Alexandria Real Estate Equities, Inc., 2.75%, 12/15/29, Callable 9/15/29 @ 100 | 5,000 | 5,096 | |||||||||
American Tower Corp., 3.95%, 3/15/29, Callable 12/15/28 @ 100 | 5,000 | 5,484 | |||||||||
Boston Properties LP, 2.90%, 3/15/30, Callable 12/15/29 @ 100 | 10,000 | 10,301 | |||||||||
Columbia Property Trust Operating Partnership, 3.65%, 8/15/26, Callable 5/15/26 @ 100 | 7,500 | 7,862 | |||||||||
Crown Castle International Corp., 4.30%, 2/15/29, Callable 11/15/28 @ 100 | 5,000 | 5,651 | |||||||||
Equinix, Inc., 5.38%, 5/15/27, Callable 5/15/22 @ 102.69 | 5,000 | 5,428 | |||||||||
GLP Capital LP/GLP Financing II, Inc., 4.00%, 1/15/30, Callable 10/15/29 @ 100 | 5,000 | 5,279 | |||||||||
Highwoods Realty LP, 4.20%, 4/15/29, Callable 1/15/29 @ 100 | 5,409 | 6,017 | |||||||||
Hudson Pacific Properties LP, 3.95%, 11/1/27 | 5,000 | 5,394 | |||||||||
Keenan Development Associates of Tennessee LLC(INS-XL Capital Assurance), 5.02%, 7/15/28 (b) | 370 | 395 | |||||||||
Nationwide Health Properties, Inc., 6.90%, 10/1/37, (Put Date 10/1/27), MTN (k) | 2,000 | 2,655 | |||||||||
Physicians Realty LP, 4.30%, 3/15/27, Callable 12/15/26 @ 100 | 7,500 | 8,192 | |||||||||
Realty Income Corp., 3.00%, 1/15/27, Callable 10/15/26 @ 100 | 3,000 | 3,145 | |||||||||
Sabra Health Care LP, 5.13%, 8/15/26, Callable 5/15/26 @ 100 | 4,000 | 4,372 | |||||||||
VICI Properties LP/VICI Note Co., Inc., 4.13%, 8/15/30, Callable 2/15/25 @ 102.06 (b) (c) | 1,250 | 1,266 | |||||||||
Washington Real Estate Investment Trust, 3.95%, 10/15/22, Callable 7/15/22 @ 100 | 5,000 | 5,196 | |||||||||
81,733 | |||||||||||
Utilities (2.7%): | |||||||||||
Aquarion Co., 4.00%, 8/15/24, Callable 5/15/24 @ 100 (b) | 10,000 | 10,645 | |||||||||
Black Hills Corp., 3.95%, 1/15/26, Callable 7/15/25 @ 100 | 5,000 | 5,403 | |||||||||
Cleco Corporate Holdings LLC, 3.74%, 5/1/26, Callable 2/1/26 @ 100 | 10,000 | 10,504 | |||||||||
DPL, Inc., 7.25%, 10/15/21, Callable 7/15/21 @ 100 | 1,608 | 1,704 | |||||||||
Duke Energy Corp., 3.40%, 6/15/29, Callable 3/15/29 @ 100 | 3,000 | 3,222 | |||||||||
Duquesne Light Holdings, Inc. 5.90%, 12/1/21 (b) | 3,500 | 3,723 | |||||||||
3.62%, 8/1/27, Callable 5/1/27 @ 100 (b) | 13,000 | 13,355 | |||||||||
Georgia Power Co., 3.25%, 4/1/26, Callable 1/1/26 @ 100 | 5,000 | 5,294 | |||||||||
ITC Holdings Corp., 3.35%, 11/15/27, Callable 8/15/27 @ 100 | 3,750 | 4,000 | |||||||||
National Fuel Gas Co. 3.75%, 3/1/23, Callable 12/1/22 @ 100 | 10,000 | 10,412 | |||||||||
3.95%, 9/15/27, Callable 6/15/27 @ 100 | 4,000 | 4,114 | |||||||||
Spire, Inc., 3.54%, 2/27/24, Callable 12/27/23 @ 100 | 6,120 | 6,359 | |||||||||
The Southern Co., 3.25%, 7/1/26, Callable 4/1/26 @ 100 | 10,000 | 10,645 | |||||||||
Vistra Operations Co. LLC, 4.30%, 7/15/29, Callable 4/15/29 @ 100 (b) | 10,000 | 10,300 |
See notes to financial statements.
18
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
WEC Energy Group, Inc., 4.02% (LIBOR03M+211bps), 5/15/67, Callable 3/16/20 @ 100 (a) | $ | 4,500 | $ | 4,239 | |||||||
Xcel Energy, Inc., 3.30%, 6/1/25, Callable 12/1/24 @ 100 | 5,000 | 5,295 | |||||||||
109,214 | |||||||||||
Total Corporate Bonds (Cost $1,367,950) | 1,457,274 | ||||||||||
Yankee Dollar (11.1%) | |||||||||||
Communication Services (0.1%): | |||||||||||
Tencent Holdings Ltd., 3.98%, 4/11/29, Callable 1/11/29 @ 100 (b) | 3,000 | 3,308 | |||||||||
Consumer Discretionary (0.0%): | |||||||||||
IHO Verwaltungs GMBH PIK, 6.38%, 5/15/29, Callable 5/15/24 @ 103.19 (b) | 1,000 | 1,093 | |||||||||
MGM China Holdings Ltd., 5.88%, 5/15/26, Callable 5/15/22 @ 102.94 (b) | 1,460 | 1,500 | |||||||||
2,593 | |||||||||||
Consumer Staples (0.9%): | |||||||||||
Alimentation Couche-Tard, Inc., 3.55%, 7/26/27, Callable 4/26/27 @ 100 (b) | 3,334 | 3,549 | |||||||||
Bacardi Ltd., 2.75%, 7/15/26, Callable 4/15/26 @ 100 (b) | 5,000 | 5,013 | |||||||||
Becle SAB de CV, 3.75%, 5/13/25 (b) | 10,000 | 10,394 | |||||||||
Imperial Brands Finance PLC 4.25%, 7/21/25, Callable 4/21/25 @ 100 (b) | 10,000 | 10,765 | |||||||||
3.50%, 7/26/26, Callable 5/26/26 @ 100 (b) | 5,000 | 5,172 | |||||||||
34,893 | |||||||||||
Energy (0.8%): | |||||||||||
Aker BP ASA 6.00%, 7/1/22, Callable 3/9/20 @ 103 (b) | 2,750 | 2,832 | |||||||||
4.75%, 6/15/24, Callable 6/15/21 @ 102.38 (b) | 1,000 | 1,039 | |||||||||
Canadian National Resources, 3.85%, 6/1/27, Callable 3/1/27 @ 100 | 4,500 | 4,810 | |||||||||
Petroleos Mexicanos 4.50%, 1/23/26 | 5,000 | 5,103 | |||||||||
6.50%, 3/13/27 | 5,000 | 5,414 | |||||||||
Saudi Arabian Oil Co., 3.50%, 4/16/29 (b) | 5,000 | 5,304 | |||||||||
Transocean Guardian Ltd., 5.88%, 1/15/24, Callable 7/15/21 @ 102.94 (b) | 835 | 853 | |||||||||
Transocean Poseidon Ltd., 6.88%, 2/1/27, Callable 2/1/22 @ 105.16 (b) | 1,500 | 1,584 | |||||||||
Transocean Sentry Ltd., 5.38%, 5/15/23, Callable 5/16/21 @ 102.67 (b) | 1,500 | 1,522 | |||||||||
Transocean, Inc., 7.25%, 11/1/25, Callable 11/1/21 @ 103.63 (b) | 1,000 | 931 | |||||||||
Woodside Finance Ltd., 4.60%, 5/10/21, Callable 2/10/21 @ 100 (b) | 2,000 | 2,051 | |||||||||
31,443 | |||||||||||
Financials (4.7%): | |||||||||||
ABN AMRO Bank NV 4.75%, 7/28/25 (b) | 10,000 | 11,077 | |||||||||
4.80%, 4/18/26 (b) | 10,000 | 11,171 | |||||||||
Allied World Assurance Co. Holdings Ltd., 4.35%, 10/29/25, Callable 7/29/25 @ 100 | 5,000 | 5,378 | |||||||||
Amcor Finance USA, Inc., 3.63%, 4/28/26, Callable 1/28/26 @ 100 (b) | 5,000 | 5,285 | |||||||||
Athene Holding Ltd., 4.13%, 1/12/28, Callable 10/12/27 @ 100 | 5,000 | 5,318 | |||||||||
Australia & New Zealand Banking Group Ltd., 4.40%, 5/19/26 (b) | 10,000 | 11,017 | |||||||||
Bank of Montreal, 3.80%(USSW5+143bps), 12/15/32, Callable 12/15/27 @ 100 (a) | 3,750 | 4,019 |
See notes to financial statements.
19
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Barclays PLC, 4.84%, 5/9/28, Callable 5/7/27 @ 100 | $ | 3,000 | $ | 3,339 | |||||||
BNP Paribas SA, 4.38%, 5/12/26 (b) | 5,000 | 5,467 | |||||||||
Brookfield Finance, Inc., 4.85%, 3/29/29, Callable 12/29/28 @ 100 | 1,000 | 1,188 | |||||||||
Credit Suisse Group AG, 2.59%(SOFR+156bps), 9/11/25, Callable 9/11/24 @ 100 (a) (b) | 3,000 | 3,046 | |||||||||
Danske Bank A/S, 3.24% (LIBOR03M+159bps), 12/20/25, Callable 12/20/24 @ 100 (a) (b) | 3,500 | 3,612 | |||||||||
Deutsche Bank AG, 5.00%, 2/14/22 | 6,000 | 6,284 | |||||||||
Enel Finance International NV, 3.63%, 5/25/27 (b) | 5,000 | 5,324 | |||||||||
HSBC Holdings PLC, 3.90%, 5/25/26 | 10,000 | 10,863 | |||||||||
ING Groep NV, 3.95%, 3/29/27 | 5,900 | 6,520 | |||||||||
Lloyds Banking Group PLC, 3.57% (LIBOR03M+121bps), 11/7/28, Callable 11/7/27 @ 100 (a) | 5,000 | 5,324 | |||||||||
Nationwide Building Society, 4.00%, 9/14/26 (b) | 5,000 | 5,351 | |||||||||
Nordea Bank Abp, 4.25%, 9/21/22 (b) | 5,000 | 5,274 | |||||||||
QBE Capital Funding III Ltd., 7.25%(USSW10+405bps), 5/24/41, Callable 5/24/21 @ 100 (a) (b) | 10,056 | 10,622 | |||||||||
Royal Bank of Scotland Group PLC 6.13%, 12/15/22 | 10,000 | 10,960 | |||||||||
5.08% (LIBOR03M+191bps), 1/27/30, Callable 1/27/29 @ 100 (a) | 2,000 | 2,352 | |||||||||
Santander UK PLC, 5.00%, 11/7/23 (b) | 12,000 | 13,087 | |||||||||
Societe Generale SA, 3.88%, 3/28/24 (b) | 7,500 | 7,977 | |||||||||
Standard Chartered PLC, 4.87% (LIBOR03M+197bps), 3/15/33, Callable 3/15/28 @ 100 (a) (b) | 7,500 | 8,325 | |||||||||
Westpac Banking Corp., 4.11%(H15T5Y+200bps), 7/24/34, Callable 7/24/29 @ 100 (a) | 10,000 | 10,771 | |||||||||
XLIT Ltd., 4.45%, 3/31/25 | 10,000 | 11,066 | |||||||||
190,017 | |||||||||||
Health Care (0.7%): | |||||||||||
Mylan NV 3.75%, 12/15/20, Callable 11/15/20 @ 100 | 514 | 520 | |||||||||
3.95%, 6/15/26, Callable 3/15/26 @ 100 | 8,000 | 8,532 | |||||||||
Teva Pharmaceutical Finance Netherlands BV, 3.15%, 10/1/26 | 18,000 | 15,427 | |||||||||
Teva Pharmaceutical Finance Netherlands III BV, 4.10%, 10/1/46 | 3,000 | 2,306 | |||||||||
26,785 | |||||||||||
Industrials (1.8%): | |||||||||||
Air Canada Pass Through Trust 5.00%, 3/15/20 (b) | 5,000 | 5,015 | |||||||||
5.38%, 11/15/22 (b) | 2,695 | 2,775 | |||||||||
3.88%, 9/15/24 (b) | 7,010 | 7,140 | |||||||||
4.13%, 11/15/26 (b) | 7,138 | 7,672 | |||||||||
3.75%, 6/15/29 (b) | 4,987 | 5,369 | |||||||||
Ashtead Capital, Inc., 4.13%, 8/15/25, Callable 8/15/20 @ 103.09 (b) | 2,500 | 2,573 | |||||||||
Avolon Holdings Funding Ltd., 4.38%, 5/1/26, Callable 3/1/26 @ 100 (b) | 1,000 | 1,081 | |||||||||
CK Hutchison International Ltd., 2.75%, 9/6/29, Callable 6/6/29 @ 100 (b) | 5,000 | 5,086 | |||||||||
CK Hutchison International Ltd., 2.75%, 10/3/26 (b) | 7,500 | 7,679 | |||||||||
Experian Finance PLC, 2.75%, 3/8/30, Callable 12/8/29 @ 100 (b) | 5,000 | 5,081 | |||||||||
Ferguson Finance PLC, 4.50%, 10/24/28, Callable 7/24/28 @ 100 (b) | 6,125 | 6,855 | |||||||||
Heathrow Funding Ltd., 4.88%, 7/15/21 (b) | 10,000 | 10,374 |
See notes to financial statements.
20
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Latam Airlines Pass Through Trust, 4.20%, 8/15/29 | $ | 2,668 | $ | 2,751 | |||||||
Sydney Airport Finance Co. Pty Ltd., 3.63%, 4/28/26, Callable 1/28/26 @ 100 (b) | 2,000 | 2,131 | |||||||||
71,582 | |||||||||||
Materials (1.3%): | |||||||||||
Anglo American Capital PLC 3.75%, 4/10/22 (b) | 2,500 | 2,582 | |||||||||
4.00%, 9/11/27 (b) | 4,000 | 4,270 | |||||||||
CCL Industries, Inc., 3.25%, 10/1/26, Callable 7/1/26 @ 100 (b) | 7,500 | 7,608 | |||||||||
Fresnillo PLC, 5.50%, 11/13/23 (b) | 10,000 | 10,925 | |||||||||
Kinross Gold Corp., 4.50%, 7/15/27, Callable 4/15/27 @ 100 | 3,000 | 3,193 | |||||||||
LYB International Finance II BV, 3.50%, 3/2/27, Callable 12/2/26 @ 100 (l) | 3,850 | 4,081 | |||||||||
POSCO, 2.38%, 1/17/23 (b) (i) | 5,000 | 5,024 | |||||||||
Teck Resources Ltd. 3.75%, 2/1/23, Callable 11/1/22 @ 100 | 5,000 | 5,143 | |||||||||
6.13%, 10/1/35 | 3,000 | 3,562 | |||||||||
Yara International ASA, 3.80%, 6/6/26, Callable 3/6/26 @ 100 (b) | 4,000 | 4,179 | |||||||||
50,567 | |||||||||||
Real Estate (0.1%): | |||||||||||
Ontario Teachers' Cadillac Fairview Properties Trust, 4.13%, 2/1/29, Callable 11/1/28 @ 100 (b) | 4,167 | 4,724 | |||||||||
Sovereign Bond (0.2%): | |||||||||||
Republic of Italy Government International Bond, 5.38%, 6/15/33 | 5,000 | 6,074 | |||||||||
Utilities (0.5%): | |||||||||||
Comision Federal de Electricidad, 4.75%, 2/23/27 (b) | 5,000 | 5,415 | |||||||||
Empresa Electrica Cochrane SpA, 5.50%, 5/14/27 (b) | 2,500 | 2,608 | |||||||||
Fortis, Inc., 3.06%, 10/4/26, Callable 7/4/26 @ 100 | 6,192 | 6,464 | |||||||||
Infraestructura Energetica Nova SAB de CV, 3.75%, 1/14/28 (b) | 5,000 | 5,051 | |||||||||
Transelec SA, 3.88%, 1/12/29, Callable 10/16/28 @ 100 (b) | 3,500 | 3,668 | |||||||||
23,206 | |||||||||||
Total Yankee Dollar (Cost $419,355) | 445,192 | ||||||||||
Municipal Bonds (4.8%) | |||||||||||
Alabama (0.1%): | |||||||||||
The Water Works Board of The City of Birmingham Revenue, 2.60%, 1/1/27 | 2,000 | 2,048 | |||||||||
Arizona (0.0%): (m) | |||||||||||
City of Phoenix Civic Improvement Corp. Revenue, 2.37%, 7/1/25 | 1,500 | 1,531 | |||||||||
California (0.3%): | |||||||||||
Long Beach Unified School District, GO, 5.91%, 8/1/25 | 3,000 | 3,451 | |||||||||
Los Alamitos Unified School District, GO, 6.19%, 2/1/26 | 3,000 | 3,736 | |||||||||
San Jose Redevelopment Agency Successor Agency Tax Allocation, Series A-T, 3.23%, 8/1/27 | 5,000 | 5,468 | |||||||||
12,655 | |||||||||||
Colorado (0.0%): (m) | |||||||||||
Board of Governors of Colorado State University System Revenue, Build America Bond, 4.90%, 3/1/21 | 1,000 | 1,032 |
See notes to financial statements.
21
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Park Creek Metropolitan District Revenue Series B, 2.89%, 12/1/27 | $ | 660 | $ | 683 | |||||||
Series B, 2.99%, 12/1/28 | 1,000 | 1,044 | |||||||||
2,759 | |||||||||||
Connecticut (0.2%): | |||||||||||
City of New Haven, GO, Series A, 4.43%, 8/1/28 | 1,250 | 1,425 | |||||||||
Connecticut State Development Authority Revenue, 5.50%, 4/1/21 | 3,000 | 3,139 | |||||||||
State of Connecticut, GO, Series A, 3.69%, 9/15/24 | 2,200 | 2,378 | |||||||||
6,942 | |||||||||||
Florida (0.3%): | |||||||||||
County of Miami-Dade Transit System Revenue, Build America Bond, Series B, 4.59%, 7/1/21 | 3,300 | 3,413 | |||||||||
Palm Beach County School District Certificate participation, 5.40%, 8/1/25 | 4,000 | 4,673 | |||||||||
Tohopekaliga Water Authority Revenue, Series A, 5.25%, 10/1/36, Pre-refunded 10/1/21 @ 100 | 2,500 | 2,673 | |||||||||
10,759 | |||||||||||
Hawaii (0.5%): | |||||||||||
State of Hawaii Department of Business Economic Development & Tourism Revenue, Series A2, 3.24%, 1/1/31 | 15,000 | 15,709 | |||||||||
Illinois (0.1%): | |||||||||||
Chicago Midway International Airport Revenue, Series A, 5.00%, 1/1/25, Continuously Callable @100 | 2,470 | 2,816 | |||||||||
Illinois Finance Authority Revenue, 5.45%, 8/1/38 | 1,500 | 1,721 | |||||||||
4,537 | |||||||||||
Indiana (0.0%): (m) | |||||||||||
Indiana Finance Authority Revenue 3.08%, 9/15/27 | 1,130 | 1,127 | |||||||||
3.18%, 9/15/28 | 1,000 | 997 | |||||||||
2,124 | |||||||||||
Maryland (0.4%): | |||||||||||
Baltimore Board of School Commissioners Revenue, 5.69%, 12/15/25 | 3,000 | 3,601 | |||||||||
Maryland Economic Development Corp. Revenue Series B, 4.05%, 6/1/27 | 2,295 | 2,444 | |||||||||
Series B, 4.15%, 6/1/28 | 2,390 | 2,566 | |||||||||
Series B, 4.25%, 6/1/29 | 2,490 | 2,696 | |||||||||
Series B, 4.35%, 6/1/30 | 1,330 | 1,453 | |||||||||
Series B, 4.40%, 6/1/31 | 1,385 | 1,522 | |||||||||
14,282 | |||||||||||
Massachusetts (0.0%): (m) | |||||||||||
Massachusetts Development Finance Agency Revenue, Series B, 4.00%, 6/1/24 | 750 | 770 | |||||||||
Michigan (0.1%): | |||||||||||
Michigan Finance Authority Revenue, 2.95%, 12/1/30 | 2,500 | 2,603 |
See notes to financial statements.
22
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
New Jersey (0.8%): | |||||||||||
City of Atlantic, GO Series A, 4.23%, 9/1/25 | $ | 2,525 | $ | 2,745 | |||||||
Series A, 4.29%, 9/1/26 | 2,410 | 2,646 | |||||||||
Economic Development Authority Revenue, Series C, 5.71%, 6/15/30 | 2,500 | 2,966 | |||||||||
New Jersey Economic Development Authority Revenue Series NNN, 3.47%, 6/15/27 | 5,000 | 5,170 | |||||||||
Series YY, 4.45%, 6/15/20 | 10,000 | 10,054 | |||||||||
New Jersey Transportation Trust Fund Authority Revenue, 2.63%, 6/15/24 | 1,100 | 1,124 | |||||||||
New Jersey Transportation Trust Fund Authority Revenue, Build America Bond, Series C, 5.75%, 12/15/28 | 3,000 | 3,591 | |||||||||
South Jersey Transportation Authority Revenue Series B, 3.12%, 11/1/26 | 450 | 454 | |||||||||
Series B, 3.36%, 11/1/28 | 1,375 | 1,405 | |||||||||
30,155 | |||||||||||
New York (0.5%): | |||||||||||
City of New York, GO, Build America Bond, Series B, 6.27%, 12/1/37 | 5,000 | 7,229 | |||||||||
Metropolitan Transportation Authority Revenue, Build America Bond, 6.73%, 11/15/30 | 5,000 | 6,562 | |||||||||
New York State Thruway Authority Revenue, 2.50%, 1/1/27 | 1,200 | 1,220 | |||||||||
State of New York Mortgage Agency Revenue, 4.20%, 10/1/27, Continuously Callable @100 | 3,500 | 3,615 | |||||||||
Town of Oyster Bay, GO 3.80%, 2/1/20 | 1,825 | 1,825 | |||||||||
3.95%, 2/1/21 | 1,500 | 1,521 | |||||||||
21,972 | |||||||||||
North Carolina (0.1%): | |||||||||||
City of Kannapolis NC Tax Allocation, Build America Bond, Series B, 7.28%, 3/1/27, Continuously Callable @100 | 3,000 | 3,012 | |||||||||
City of Winston-Salem NC Revenue, Series B, 2.64%, 6/1/29 | 1,140 | 1,177 | |||||||||
4,189 | |||||||||||
Ohio (0.2%): | |||||||||||
City of Cleveland Airport System Revenue, Series A, 2.69%, 1/1/27 | 5,000 | 5,187 | |||||||||
Miami University Revenue, Build America Bond, 6.67%, 9/1/28 | 3,000 | 3,858 | |||||||||
9,045 | |||||||||||
Oklahoma (0.2%): | |||||||||||
Oklahoma Development Finance Authority Revenue, Series C, 5.45%, 8/15/28 | 7,951 | 9,142 | |||||||||
Pennsylvania (0.2%): | |||||||||||
City of Bethlehem, GO(NBGA-Federal Agricultural Mortgage Corporation) Series A, 2.46%, 10/1/26 | 2,570 | 2,626 | |||||||||
Series A, 2.55%, 10/1/27 | 2,655 | 2,719 | |||||||||
City of Philadelphia, GO, Series A, 2.71%, 7/15/29 | 1,000 | 1,034 | |||||||||
Pennsylvania Economic Development Financing Authority Revenue 2.62%, 3/1/29 | 1,855 | 1,890 | |||||||||
Series B, 3.20%, 11/15/27 | 1,000 | 1,051 | |||||||||
9,320 |
See notes to financial statements.
23
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
South Dakota (0.1%): | |||||||||||
South Dakota Health & Educational Facilities Authority Revenue Series B, 2.59%, 7/1/25 | $ | 1,000 | $ | 1,026 | |||||||
Series B, 2.80%, 7/1/26 | 2,735 | 2,824 | |||||||||
3,850 | |||||||||||
Texas (0.5%): | |||||||||||
Austin Community College District Public Facility Corp. Revenue, Build America Bond, Series A, 6.76%, 8/1/30, Pre-refunded 8/1/20 @ 100 | 3,430 | 3,514 | |||||||||
Ector County Hospital District Revenue, Build America Bond, 6.80%, 9/15/25, Continuously Callable @100 | 4,350 | 4,408 | |||||||||
Gainesville Hospital District, GO, 4.56%, 8/15/21 | 1,480 | 1,510 | |||||||||
Harris County Cultural Education Facilities Finance Corp. Revenue Series B, 2.71%, 5/15/27 | 1,600 | 1,630 | |||||||||
Series B, 2.76%, 5/15/28 | 2,000 | 2,037 | |||||||||
Harris County-Houston Sports Authority Revenue, 4.45%, 11/15/31 | 3,900 | 4,119 | |||||||||
Texas State University System Revenue, Series B, 2.54%, 3/15/28 | 2,775 | 2,854 | |||||||||
20,072 | |||||||||||
Wisconsin (0.2%): | |||||||||||
State of Wisconsin Revenue, Series A, 2.35%, 5/1/29 (c) | 6,000 | 6,057 | |||||||||
Total Municipal Bonds (Cost $175,966) | 190,521 | ||||||||||
U.S. Government Agency Mortgages (8.6%) | |||||||||||
Federal Home Loan Mortgage Corp. 5.00%, 9/1/20 | 17 | 17 | |||||||||
Series K017 Class X1, 1.44%, 12/25/21 (d) (f) | 35,058 | 635 | |||||||||
Series K019 Class X1, 1.73%, 3/25/22 (d) (f) | 19,855 | 518 | |||||||||
Series K023 Class X1, 1.37%, 8/25/22 (d) (f) | 65,861 | 1,650 | |||||||||
Series K025 Class X1, 0.94%, 10/25/22 (d) (f) | 64,032 | 1,134 | |||||||||
Series KC02 Class A2, 3.37%, 7/25/25 (l) | 10,000 | 10,741 | |||||||||
Series K055 Class A2, 2.67%, 3/25/26 (l) | 10,000 | 10,529 | |||||||||
Series KIR1 Class A2, 2.85%, 3/25/26 (l) | 12,000 | 12,646 | |||||||||
Series K058 Class A2, 2.65%, 8/25/26 (l) | 20,000 | 21,001 | |||||||||
Series K062 Class A2, 3.41%, 12/25/26 (l) | 5,000 | 5,506 | |||||||||
Series K063 Class A2, 3.43%, 1/25/27 (d) | 5,000 | 5,511 | |||||||||
Series K070 Class A2, 3.30%, 11/25/27 (d) | 2,922 | 3,200 | |||||||||
Series K075 Class A2, 3.65%, 2/25/28 (d) | 3,000 | 3,363 | |||||||||
Series K087 Class A2, 3.77%, 12/25/28 (l) | 10,000 | 11,364 | |||||||||
Series K089 Class A2, 3.56%, 1/25/29 | 3,171 | 3,562 | |||||||||
Series K088 Class A2, 3.69%, 1/25/29 | 5,000 | 5,657 | |||||||||
Series K090 Class A2, 3.42%, 2/25/29 | 3,000 | 3,341 | |||||||||
Series K091 Class A2, 3.51%, 3/25/29 | 9,857 | 11,051 | |||||||||
Series K095 Class A2, 2.79%, 6/25/29 | 5,000 | 5,340 | |||||||||
Series K099 Class A2, 2.60%, 9/25/29 | 50,000 | 52,680 | |||||||||
Series K154 Class A3, 3.46%, 11/25/32 | 891 | 992 | |||||||||
Series K-1510 Class A3, 3.79%, 1/25/34 | 4,800 | 5,596 | |||||||||
5.50%, 4/1/36 | 47 | 53 | |||||||||
176,087 |
See notes to financial statements.
24
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Federal National Mortgage Association Series 2012-M4 Class X1, 0.53%, 4/25/22 (d) (f) | $ | 62,441 | $ | 333 | |||||||
Series 2017-M2 Class A2, 2.89%, 2/25/27 (d) | 3,500 | 3,725 | |||||||||
Series M7 Class A2, 2.96%, 2/25/27 (d) | 2,500 | 2,686 | |||||||||
2.50%, 7/1/27 (l) | 5,053 | 5,152 | |||||||||
Series M4 Class A2, 3.15%, 3/25/28 (d) | 3,553 | 3,847 | |||||||||
2.50%, 11/1/34 (l) | 19,345 | 19,697 | |||||||||
4.00%, 8/1/49 (l) | 9,267 | 9,694 | |||||||||
3.50%, 9/1/49 (l) | 33,507 | 34,583 | |||||||||
Series MA39074.00%, 1/1/50 | 49,850 | 52,148 | |||||||||
3.50%, 2/1/50 | 5,000 | 5,161 | |||||||||
4.00%, 2/1/50 | 30,000 | 31,383 | |||||||||
168,409 | |||||||||||
Total U.S. Government Agency Mortgages (Cost $333,965) | 344,496 | ||||||||||
U.S. Treasury Obligations (9.5%) | |||||||||||
U.S. Treasury Bonds 3.50%, 2/15/39 (l) | 15,000 | 19,064 | |||||||||
2.75%, 8/15/42 (l) | 7,000 | 7,977 | |||||||||
2.50%, 2/15/45 (l) | 50,000 | 54,570 | |||||||||
3.38%, 11/15/48 (l) | 60,000 | 77,906 | |||||||||
2.25%, 8/15/49 | 12,000 | 12,626 | |||||||||
U.S. Treasury Notes 1.63%, 11/30/26 | 15,000 | 15,192 | |||||||||
2.38%, 5/15/27 (l) | 55,900 | 59,516 | |||||||||
3.13%, 11/15/28 (l) | 20,000 | 22,681 | |||||||||
1.63%, 8/15/29 (l) | 110,000 | 111,084 | |||||||||
Total U.S. Treasury Obligations (Cost $354,277) | 380,616 | ||||||||||
Commercial Paper (4.9%) | |||||||||||
Albemarle Corp., 2.63%, 2/6/20 (b) (n) | 8,000 | 7,996 | |||||||||
Amilln, 1.68%, 2/3/20 (b) (n) | 28,400 | 28,397 | |||||||||
Broadcom, Inc., 2.54%, 2/20/20 (b) (n) | 10,000 | 9,986 | |||||||||
Canadian Pacific Railway Ltd., 1.76%, 2/18/20 (b) (n) | 5,400 | 5,395 | |||||||||
CSLB Holdings, Inc., 1.73%, 2/5/20 (b) (n) | 6,000 | 5,999 | |||||||||
DTE Energy Co. 1.70%, 2/7/20 (b) (n) | 12,000 | 11,996 | |||||||||
1.77%, 2/24/20 (b) (n) | 15,000 | 14,982 | |||||||||
Eversource Energy, 1.83%, 2/12/20 (b) (n) | 20,000 | 19,988 | |||||||||
Glencore Funding LLC, 1.89%, 2/10/20 (b) (n) | 10,500 | 10,494 | |||||||||
Hyundai Capital America 1.68%, 2/4/20 (b) (n) | 10,250 | 10,248 | |||||||||
1.69%, 2/5/20 (b) (n) | 6,900 | 6,898 | |||||||||
1.70%, 2/7/20 (b) (n) | 1,086 | 1,086 | |||||||||
1.72%, 2/10/20 (b) (n) | 10,000 | 9,995 | |||||||||
1.73%, 2/11/20 (b) (n) | 6,500 | 6,497 | |||||||||
JM Smucker Co., 1.68%, 2/4/20 (b) (n) | 4,050 | 4,049 | |||||||||
Manhattan Asset Funding Co. LLC, 1.62%, 2/14/20 (b) (n) | 4,500 | 4,497 | |||||||||
Mylan, Inc., 2.54%, 2/27/20 (b) (n) | 1,025 | 1,023 |
See notes to financial statements.
25
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Plains All American Pipeline LP, 1.68%, 2/4/20 (b) (n) | $ | 15,900 | $ | 15,897 | |||||||
Royal Caribbean Cruises Ltd., 2.05%, 2/27/20 (b) (n) | 6,656 | 6,646 | |||||||||
Union Electric Co., 1.72%, 2/3/20 (b) (n) | 12,500 | 12,498 | |||||||||
Total Commercial Paper (Cost $194,581) | 194,567 | ||||||||||
Collateral for Securities Loaned^ (0.2%) | |||||||||||
HSBC U.S. Government Money Market Fund, I Shares, 1.52% (o) | 6,631,830 | 6,632 | |||||||||
Total Collateral for Securities Loaned (Cost $6,632) | 6,632 | ||||||||||
Total Investments (Cost $3,828,500) — 100.3% | 4,008,973 | ||||||||||
Liabilities in excess of other assets — (0.3)% | (7,350 | ) | |||||||||
NET ASSETS — 100.00% | $ | 4,001,623 |
^ Purchased with cash collateral from securities on loan.
(a) Variable or Floating-Rate Security. Rate disclosed is as of January 31, 2020.
(b) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid based upon procedures approved by the Board of Trustees. As of January 31, 2020, the fair value of these securities was $1,449,743 thousand and amounted to 36.2% of net assets.
(c) Security purchased on a when-issued basis.
(d) The rate for certain asset-backed and mortgage backed securities may vary based on factors relating to the pool of assets underlying the security. The rate disclosed is the rate in effect at January 31, 2020.
(e) Security was fair valued based upon procedures approved by the Board of Trustees and represents 0.01% of the Fund's net assets as of January 31, 2020. This security is classified as Level 3 within the fair value hierarchy. (See Note 2)
(f) Security is interest only.
(g) Security is perpetual and has no final maturity date but may be subject to calls at various dates in the future.
(h) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of January 31, 2020, illiquid securities were 0.2% of the Fund's net assets.
(i) All or a portion of this security is on loan.
(j) Variable Rate Demand Notes that provide the rights to sell the security at face value on either that day or within the rate-reset period. The interest rate is reset on the put date at a stipulated daily, weekly, monthly, quarterly, or other specified time interval to reflect current market conditions. These securities do not indicate a reference rate and spread in their description.
(k) Put Bond.
(l) All or a portion of this security has been designated as collateral for futures contracts and/or when-issued securities
(m) Amount represents less than 0.05% of net assets.
(n) Rate represents the effective yield at January 31, 2020.
See notes to financial statements.
26
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Unaudited)
(o) Rate disclosed is the daily yield on January 31, 2020.
(p) The rates for this senior secured loan will be known on settlement date of the loan, subsequent to this reports' date. Senior secured loans have rates that will fluctuate over time in line with prevailing interest rates.
AMBAC — American Municipal Bond Assurance Corporation
bps — Basis points
GO — General Obligation
H15T5Y — 5 Year Treasury Constant Maturity Rate
LIBOR — London InterBank Offered Rate
LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LIBOR02M — 2 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LIBOR06M — 6 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LLC — Limited Liability Company
LP — Limited Partnership
MBIA — Municipal Bond Insurance Association
MTN — Medium Term Note
PIK — Payment in-kind
PLC — Public Limited Company
SOFR — Secured Overnight Financing Rate
USSW10 — USD 10 Year Swap Rate, rate disclosed as of January 31, 2020
USSW5 — USD 5 Year Swap Rate, rate disclosed as of January 31, 2020
Credit Enhancements — Adds 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 enhancements 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 the name listed. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons, and there is no assurance that the insurance company will meet its obligations.
NBGA Principal and interest payments or, under certain circumstances, underlying mortgages, are guaranteed by a nonbank guarantee agreement from the name listed.
See notes to financial statements.
27
USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Unaudited)
Futures Contracts Purchased
(Amounts not in thousands)
Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation (Depreciation) | |||||||||||||||||||
10-Year U.S. Treasury Note Future | 60 | 3/20/20 | $ | 7,771,089 | $ | 7,899,375 | $ | 128,286 | |||||||||||||||
30-Year U.S. Treasury Bond Future | 80 | 3/20/20 | 12,727,706 | 13,082,500 | 354,794 | ||||||||||||||||||
$ | 483,080 | ||||||||||||||||||||||
| Total unrealized appreciation | $ | 483,080 | ||||||||||||||||||||
| Total unrealized depreciation | — | |||||||||||||||||||||
| Total net unrealized appreciation(depreciation) | $ | 483,080 |
See notes to financial statements.
28
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Intermediate- Term Bond Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $3,828,500) | $ | 4,008,973 | (a) | ||||
Cash and cash equivalents | 1,832 | ||||||
Deposits with brokers for futures contracts | 1,477 | ||||||
Receivables: | |||||||
Interest and dividends | 27,783 | ||||||
Capital shares issued | 3,691 | ||||||
Investments sold | 20,427 | ||||||
Variation margin on open futures contracts | 71 | ||||||
From Adviser | 89 | ||||||
Prepaid expenses | 11 | ||||||
Total assets | 4,064,354 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 6,632 | ||||||
Distributions payable | 382 | ||||||
Investments purchased | 50,546 | ||||||
Capital shares redeemed | 3,199 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 1,013 | ||||||
Administration fees | 419 | ||||||
Custodian fees | 126 | ||||||
Transfer agent fees | 229 | ||||||
Compliance fees | 1 | ||||||
12b-1 fees | 5 | ||||||
Other accrued expenses | 179 | ||||||
Total liabilities | 62,731 | ||||||
Net Assets: | |||||||
Capital | 3,792,947 | ||||||
Total distributable earnings/(loss) | 208,676 | ||||||
Net assets | $ | 4,001,623 | |||||
Net Assets: | |||||||
Fund Shares | $ | 2,033,250 | |||||
Institutional Shares | 1,894,587 | ||||||
Adviser Shares | 48,966 | ||||||
R6 Shares | 24,820 | ||||||
Total | $ | 4,001,623 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 185,496 | ||||||
Institutional Shares | 172,813 | ||||||
Adviser Shares | 4,472 | ||||||
R6 Shares | 2,264 | ||||||
Total | 365,045 | ||||||
Net asset value, offering and redemption price per share: (b) | |||||||
Fund Shares | $ | 10.96 | |||||
Institutional Shares | 10.96 | ||||||
Adviser Shares | 10.95 | ||||||
R6 Shares | 10.96 |
(a) Includes $6,579 of securities on loan.
(b) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
29
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA Intermediate- Term Bond Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 2,080 | |||||
Interest | 75,717 | ||||||
Securities lending (net of fees) | 80 | ||||||
Foreign tax withholding | (1 | ) | |||||
Total Income | 77,876 | ||||||
Expenses: | |||||||
Investment advisory fees | 5,920 | ||||||
Administration fees — Fund Shares | 1,500 | ||||||
Administration fees — Institutional Shares | 918 | ||||||
Administration fees — Adviser Shares | 38 | ||||||
Administration fees — R6 Shares | 3 | ||||||
Sub-Administration Fees | 14 | ||||||
12b-1 fees — Adviser Shares | 63 | ||||||
Custodian fees | 139 | ||||||
Transfer agent fees — Fund Shares | 1,036 | ||||||
Transfer agent fees — Institutional Shares | 918 | ||||||
Transfer agent fees — Adviser Shares | 26 | ||||||
Transfer agent fees — R6 Shares | 1 | ||||||
Trustees' fees | 22 | ||||||
Compliance fees | 12 | ||||||
Legal and audit fees | 58 | ||||||
State registration and filing fees | 179 | ||||||
Interest expense on Interfund lending | 9 | ||||||
Other expenses | 48 | ||||||
Total Expenses | 10,904 | ||||||
Expenses waived/reimbursed by Adviser | (155 | ) | |||||
Net Expenses | 10,749 | ||||||
Net Investment Income (Loss) | 67,127 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 69,444 | ||||||
Net realized gains (losses) from futures contracts | 2,982 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | 45,875 | ||||||
Net change in unrealized appreciation/depreciation on futures contracts | (903 | ) | |||||
Net realized/unrealized gains (losses) on investments | 117,398 | ||||||
Change in net assets resulting from operations | $ | 184,525 |
See notes to financial statements.
30
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Intermediate- Term Bond Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 67,127 | $ | 140,180 | |||||||
Net realized gains (losses) from investments | 72,426 | 9,486 | |||||||||
Net change in unrealized appreciation (depreciation) on investments | 44,972 | 150,446 | |||||||||
Change in net assets resulting from operations | 184,525 | 300,112 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (60,620 | ) | (69,671 | ) | |||||||
Institutional Shares | (56,250 | ) | (68,783 | ) | |||||||
Adviser Shares | (1,429 | ) | (1,653 | ) | |||||||
R6 Shares | (268 | ) | (205 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (118,567 | ) | (140,312 | ) | |||||||
Change in net assets resulting from capital transactions | 131,117 | (285,872 | ) | ||||||||
Change in net assets | 197,075 | (126,072 | ) | ||||||||
Net Assets: | |||||||||||
Beginning of period | 3,804,548 | 3,930,620 | |||||||||
End of period | $ | 4,001,623 | $ | 3,804,548 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 189,698 | $ | 341,437 | |||||||
Distributions reinvested | 58,917 | 66,889 | |||||||||
Cost of shares redeemed | (198,758 | ) | (446,353 | ) | |||||||
Total Fund Shares | $ | 49,857 | $ | (38,027 | ) | ||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 203,759 | $ | 482,475 | |||||||
Distributions reinvested | 55,351 | 65,556 | |||||||||
Cost of shares redeemed | (193,915 | ) | (791,794 | ) | |||||||
Total Institutional Shares | $ | 65,195 | $ | (243,763 | ) | ||||||
Adviser Shares | |||||||||||
Proceeds from shares issued | $ | 2,595 | $ | 6,834 | |||||||
Distributions reinvested | 1,417 | 1,624 | |||||||||
Cost of shares redeemed | (6,783 | ) | (12,828 | ) | |||||||
Total Adviser Shares | $ | (2,771 | ) | $ | (4,370 | ) | |||||
R6 Shares | |||||||||||
Proceeds from shares issued | $ | 19,149 | $ | 316 | |||||||
Distributions reinvested | 19 | — | (a) | ||||||||
Cost of shares redeemed | (332 | ) | (28 | ) | |||||||
Total R6 Shares | $ | 18,836 | $ | 288 | |||||||
Change in net assets resulting from capital transactions | $ | 131,117 | $ | (285,872 | ) |
(a) Rounds to less than $1 thousand.
(continues on next page)
See notes to financial statements.
31
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands) (continued)
USAA Intermediate- Term Bond Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 17,436 | 32,829 | |||||||||
Reinvested | 5,436 | 6,420 | |||||||||
Redeemed | (18,265 | ) | (43,105 | ) | |||||||
Total Fund Shares | 4,607 | (3,856 | ) | ||||||||
Institutional Shares | |||||||||||
Issued | 18,740 | 45,934 | |||||||||
Reinvested | 5,107 | 6,291 | |||||||||
Redeemed | (17,817 | ) | (75,621 | ) | |||||||
Total Institutional Shares | 6,030 | (23,396 | ) | ||||||||
Adviser Shares | |||||||||||
Issued | 238 | 644 | |||||||||
Reinvested | 131 | 156 | |||||||||
Redeemed | (623 | ) | (1,242 | ) | |||||||
Total Adviser Shares | (254 | ) | (442 | ) | |||||||
R6 Shares | |||||||||||
Issued | 1,782 | 31 | |||||||||
Reinvested | 2 | — | (a) | ||||||||
Redeemed | (31 | ) | (3 | ) | |||||||
Total R6 Shares | 1,753 | 28 | |||||||||
Change in Shares | 12,136 | (27,666 | ) |
(a) Represents less than 500 shares.
See notes to financial statements.
32
This page is intentionally left blank.
33
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains From Investments | ||||||||||||||||||||||
USAA Intermediate-Term Bond Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 10.78 | 0.19 | (d) | 0.32 | 0.51 | (0.19 | ) | (0.14 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 10.33 | 0.38 | 0.46 | 0.84 | (0.39 | ) | — | |||||||||||||||||||
Year Ended July 31, 2018 | $ | 10.70 | 0.37 | (0.37 | ) | — | (0.37 | ) | — | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 10.71 | 0.38 | (0.01 | ) | 0.37 | (0.38 | ) | — | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 10.58 | 0.42 | 0.14 | 0.56 | (0.42 | ) | (0.01 | ) | ||||||||||||||||||
Year Ended July 31, 2015 | $ | 10.96 | 0.43 | (0.36 | ) | 0.07 | (0.43 | ) | (0.02 | ) | |||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 10.78 | 0.19 | (d) | 0.33 | 0.52 | (0.20 | ) | (0.14 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 10.33 | 0.39 | 0.45 | 0.84 | (0.39 | ) | — | |||||||||||||||||||
Year Ended July 31, 2018 | $ | 10.70 | 0.38 | (0.37 | ) | 0.01 | (0.38 | ) | — | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 10.72 | 0.39 | (0.02 | ) | 0.37 | (0.39 | ) | — | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 10.58 | 0.43 | 0.15 | 0.58 | (0.43 | ) | (0.01 | ) | ||||||||||||||||||
Year Ended July 31, 2015 | $ | 10.96 | 0.44 | (0.36 | ) | 0.08 | (0.44 | ) | (0.02 | ) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
See notes to financial statements.
34
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Intermediate-Term Bond Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (0.33 | ) | $ | 10.96 | 4.83 | % | 0.59 | % | 3.42 | % | 0.59 | % | $ | 2,033,250 | 37 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (0.39 | ) | $ | 10.78 | 8.28 | % | 0.64 | % | 3.71 | % | 0.64 | % | $ | 1,949,989 | 35 | % | |||||||||||||||||||
Year Ended July 31, 2018 | (0.37 | ) | $ | 10.33 | (0.03 | )% | 0.63 | % | 3.50 | % | 0.63 | % | $ | 1,907,941 | 15 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.38 | ) | $ | 10.70 | 3.52 | % | 0.63 | % | 3.57 | % | 0.63 | % | $ | 1,949,102 | 13 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (0.43 | ) | $ | 10.71 | 5.55 | % | 0.62 | % | 4.08 | % | 0.62 | % | $ | 1,812,716 | 18 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (0.45 | ) | $ | 10.58 | 0.58 | % | 0.68 | % | 3.96 | % | 0.68 | % | $ | 2,079,610 | 13 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (0.34 | ) | $ | 10.96 | 4.86 | % | 0.51 | % | 3.50 | % | 0.52 | % | $ | 1,894,587 | 37 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (0.39 | ) | $ | 10.78 | 8.35 | % | 0.58 | % | 3.77 | % | 0.58 | % | $ | 1,798,154 | 35 | % | |||||||||||||||||||
Year Ended July 31, 2018 | (0.38 | ) | $ | 10.33 | 0.04 | % | 0.56 | % | 3.57 | % | 0.56 | % | $ | 1,964,377 | 15 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.39 | ) | $ | 10.70 | 3.51 | % | 0.56 | % | 3.64 | % | 0.56 | % | $ | 2,049,723 | 13 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (0.44 | ) | $ | 10.72 | 5.72 | % | 0.54 | % | 4.13 | % | 0.54 | % | $ | 1,771,357 | 18 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (0.46 | ) | $ | 10.58 | 0.68 | % | 0.58 | % | 4.07 | % | 0.58 | % | $ | 1,280,804 | 13 | % |
(continues on next page)
See notes to financial statements.
35
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period (continued)
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains From Investments | ||||||||||||||||||||||
USAA Intermediate-Term Bond Fund | |||||||||||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 10.77 | 0.17 | (d) | 0.33 | 0.50 | (0.18 | ) | (0.14 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 10.32 | 0.35 | 0.45 | 0.80 | (0.35 | ) | — | |||||||||||||||||||
Year Ended July 31, 2018 | $ | 10.69 | 0.34 | (0.37 | ) | (0.03 | ) | (0.34 | ) | — | |||||||||||||||||
Year Ended July 31, 2017 | $ | 10.70 | 0.35 | (0.01 | ) | 0.34 | (0.35 | ) | — | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 10.58 | 0.40 | 0.13 | 0.53 | (0.40 | ) | (0.01 | ) | ||||||||||||||||||
Year Ended July 31, 2015 | $ | 10.95 | 0.41 | (0.35 | ) | 0.06 | (0.41 | ) | (0.02 | ) | |||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 10.79 | 0.19 | (d) | 0.32 | 0.51 | (0.20 | ) | (0.14 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 10.33 | 0.41 | 0.46 | 0.87 | (0.41 | ) | — | |||||||||||||||||||
Year Ended July 31, 2018 | $ | 10.71 | 0.39 | (0.38 | ) | 0.01 | (0.39 | ) | — | ||||||||||||||||||
December 1, 2016 (f) through July 31, 2017 | $ | 10.38 | 0.26 | 0.33 | 0.59 | (0.26 | ) | — |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Prior to December 1, 2014, USAA Asset Management Company ("AMCO") (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Adviser Shares to 0.95% of the Adviser Shares' average daily net assets.
(f) Commencement of operations.
See notes to financial statements.
36
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Intermediate-Term Bond Fund | |||||||||||||||||||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (0.32 | ) | $ | 10.95 | 4.68 | % | 0.87 | % | 3.14 | % | 0.88 | % | $ | 48,966 | 37 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (0.35 | ) | $ | 10.77 | 7.97 | % | 0.93 | % | 3.42 | % | 0.93 | % | $ | 50,892 | 35 | % | |||||||||||||||||||
Year Ended July 31, 2018 | (0.34 | ) | $ | 10.32 | (0.31 | )% | 0.90 | % | 3.22 | % | 0.90 | % | $ | 53,308 | 15 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.35 | ) | $ | 10.69 | 3.28 | % | 0.87 | % | 3.44 | % | 0.87 | % | $ | 74,377 | 13 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (0.41 | ) | $ | 10.70 | 5.19 | % | 0.86 | % | 3.85 | % | 0.86 | % | $ | 98,835 | 18 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (0.43 | ) | $ | 10.58 | 0.46 | % | 0.89 | %(e) | 3.74 | % | 0.89 | % | $ | 118,753 | 13 | % | |||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (0.34 | ) | $ | 10.96 | 4.83 | % | 0.39 | % | 3.56 | % | 0.54 | % | $ | 24,820 | 37 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (0.41 | ) | $ | 10.79 | 8.66 | % | 0.39 | % | 3.96 | % | 0.74 | % | $ | 5,513 | 35 | % | |||||||||||||||||||
Year Ended July 31, 2018 | (0.39 | ) | $ | 10.33 | 0.12 | % | 0.39 | % | 3.74 | % | 0.80 | % | $ | 4,994 | 15 | % | |||||||||||||||||||
December 1, 2016 (f) through July 31, 2017 | (0.26 | ) | $ | 10.71 | 5.79 | % | 0.39 | % | 3.78 | % | 1.07 | % | $ | 5,158 | 13 | % |
See notes to financial statements.
37
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Intermediate-Term Bond Fund (the "Fund"). The Fund offers four classes of shares: Fund Shares, Institutional Shares, Adviser Shares, and R6 Shares. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges except with respect to fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or
38
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
system where the security is principally traded, if available, or the over-the-counter markets, are valued at the last sales price or official closing price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations typically are categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at net asset value. These valuations typically are categorized as Level 1 in the fair value hierarchy.
Debt securities of United States ("U.S.") issuers, along with corporate and municipal securities, including short-term investments maturing in 60 days or less, may be valued using evaluated bid or the last sales price to price securities by dealers or an independent pricing service approved by the Board. These valuations are typically categorized as Level 2 in the fair value hierarchy.
Futures are valued at the settlement price at the close of market on the principal exchange on which they are traded or, in the absence of any transactions that day, the last sale on the prior trading date. These valuations typically are categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. These valuations typically are categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's net asset value ("NAV") to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's net asset value is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. These valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of January 31, 2020, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands):
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
Asset Backed Securities | $ | — | $ | 265,958 | $ | — | $ | 265,958 | |||||||||||
Collateralized Mortgage Obligations | — | 585,320 | — | 585,320 | |||||||||||||||
Preferred Stocks | 19,467 | 30,713 | 500 | 50,680 | |||||||||||||||
Convertible Corporate Bonds | — | 2,465 | — | 2,465 | |||||||||||||||
Senior Secured Loans | — | 85,252 | — | 85,252 | |||||||||||||||
Corporate Bonds | — | 1,902,466 | — | 1,902,466 | |||||||||||||||
Municipal Bonds | — | 190,521 | — | 190,521 | |||||||||||||||
U.S. Government Agency Mortgages | — | 344,496 | — | 344,496 | |||||||||||||||
U.S. Treasury Obligations | — | 380,616 | — | 380,616 | |||||||||||||||
Commercial Paper | — | 194,567 | — | 194,567 | |||||||||||||||
Collateral for Securities Loaned | 6,632 | — | — | 6,632 | |||||||||||||||
Total | $ | 26,099 | $ | 3,982,374 | $ | 500 | $ | 4,008,973 | |||||||||||
Other Financial Investments^: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Futures Contracts | 483 | — | — | 483 | |||||||||||||||
Total | $ | 483 | $ | — | $ | — | $ | 483 |
^ Futures Contracts are valued at the unrealized appreciation (depreciation) on the investment.
For the six-months ended January 31, 2020, there were no transfers in or out of the Level 3 fair value hierarchy.
39
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs. ETFs are a type of index fund, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Derivative Instruments:
Futures Contracts:
The Fund may enter into contracts for the future delivery of securities or foreign currencies and futures contracts based on a specific security, class of securities, foreign currency or an index, and purchase or sell options on any such futures contracts. A futures contract on a securities index is an agreement obligating either party to pay, and entitling the other party to receive, while the contract is outstanding, cash payments based on the level of a specified securities index. No physical delivery of the underlying asset is made. The Fund may use futures contracts to gain exposure to, or hedge against, changes in the value of equities, interest rates, or foreign currencies. The acquisition of put and call options on futures contracts will give the Fund the right (but not the obligation), for a specified price, to sell or to purchase the underlying futures contract, upon exercise of the option, at any time during the option period. Futures transactions involve brokerage costs and require the Fund to segregate assets to cover contracts that would require it to purchase securities or currencies. A good faith margin deposit, known as initial margin, of cash or government securities with a broker or custodian is required to initiate and maintain open positions in futures contracts. Subsequent payments, known as variation margin, are made or received by the Fund based on the change in the market value of the position and are recorded as unrealized appreciation or depreciation until the contract is closed out, at which time the gain or loss is realized. The Fund may lose the expected benefit of futures transactions if interest rates, exchange rates or securities prices change in an unanticipated manner. Such unanticipated changes may also result in lower overall performance than if the Fund had not entered into any futures transactions. In addition, the value of the Fund's futures positions may not prove to be perfectly or even highly correlated with the value of its portfolio securities or foreign currencies, limiting the Fund's ability to hedge effectively against interest rate, exchange rate and/or market risk and giving rise to additional risks. There is no assurance of liquidity in the secondary market for purposes of closing out futures positions. With exchange-listed futures contracts, counterparty credit risk to the Fund is limited to the exchange's clearinghouse which, as counterparty to all exchange-traded futures contracts, guarantees the transactions against default from the actual counterparty to the transaction. The Fund's derivative agreements held at January 31, 2020, did not include master netting provisions.
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Summary of Derivative Instruments:
The following table summarizes the fair values of derivative instruments on the Statement of Assets and Liabilities, categorized by risk exposure, as of January 31, 2020 (amounts in thousands):
Assets | |||||||
Variation Margin Receivable on Open Futures Contracts* | |||||||
Interest Rate Risk Exposure: | $ | 483 |
* Includes cumulative appreciation/depreciation of futures contracts as reported on the Schedule of Portfolio Investments. Only current day's variation margin for futures contracts are reported within the Statement of Assets and Liabilities.
The following table presents the effect of derivative instruments on the Statement of Operations, categorized by risk exposure, for the six-months ended January 31, 2020 (amounts in thousands):
Net Realized Gains (Losses) on Derivatives Recognized as a Result from Operations | Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized as a Result of Operations | ||||||||||
Net Realized Gains (Losses) from Futures Contracts | Net Change in Unrealized Appreciation/Depreciation on Futures Contracts | ||||||||||
Interest Rate Risk Exposure: | $ | 2,982 | $ | (903 | ) |
All open derivative positions at period end are reflected in the Fund's Schedule of Portfolio Investments. The underlying face value of open derivative positions relative to the Fund's net assets at period end is generally representative of the notional amount of open positions to net assets throughout the period.
Securities Purchased on a Delayed-Delivery or When-Issued Basis:
The Fund may purchase securities on a delayed-delivery or when-issued basis. Delivery and payment for securities that have been purchased by the Fund on a delayed-delivery, when-issued basis, or for delayed draws on loans can take place a month or more after the trade date. At the time the Fund makes the commitment to purchase a security on a delayed-delivery or when-issued basis, the Fund records the transaction and reflects the value of the security in determining net asset value. No interest accrues to the Fund until the transaction settles and payment takes place. A segregated account is established and the Fund maintains cash and/or marketable securities at least equal in value to commitments for delayed-delivery or when-issued securities. If the Fund owns delayed-delivery or when-issued securities, these values are included in "Payable for investments purchased" on the accompanying Statement of Assets and Liabilities and the segregated assets are identified in the Schedule of Portfolio Investments.
Municipal Obligations:
The values of municipal obligations can fluctuate and may be affected by adverse tax, legislative, or political changes, and by financial developments affecting municipal issuers. Payment of municipal obligations may depend on a relatively limited source of revenue, resulting in greater credit risk. Future changes in federal tax laws or the activity of an issuer may adversely affect the tax-exempt status of municipal obligations.
Mortgage- and Asset-Backed Securities:
The values of some mortgage-related or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Fund to a lower rate of return upon reinvestment of principal. The values of mortgage and asset-backed securities depend in part on the credit quality and adequacy of the underlying assets or collateral and may fluctuate in response to the market's perception of these factors as well as current
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and future repayment rates. Some mortgage-backed securities are backed by the full faith and credit of the U.S. government (e.g., mortgage-backed securities issued by the Government National Mortgage Association, commonly known as "Ginnie Mae"), while other mortgage-backed securities (e.g., mortgage-backed securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, commonly known as "Fannie Mae" and "Freddie Mac"), are backed only by the credit of the government entity issuing them. In addition, some mortgage-backed securities are issued by private entities and, as such, are not guaranteed by the U.S. government or any agency or instrumentality of the U.S. government.
Leveraged Loans:
The Fund may invest in leveraged loans, a type of bank loan. Leveraged loans are adjustable-rate bank loans made to companies rated below investment grade. The interest rates on leveraged loans are reset periodically based upon the fluctuations of a base interest rate such as LIBOR and a "spread" above that base interest rate that represents a risk premium to the lending banks and/or other participating investors. Many bank loans bear an adjustable rate of interest; however, leveraged loans provide for a greater "spread" over the base interest rate than other bank loans because they are considered to represent a greater credit risk. Because they are perceived to represent a greater credit risk, leveraged loans possess certain attributes that are similar to high-yield securities. However, because they are often secured by collateral of the borrower, leveraged loans possess certain attributes that are similar to other bank loans.
Below Investment Grade Securities:
The Fund may invest in below investment grade securities (i.e. lower-quality, "junk" debt), which are subject to various risks. Lower-quality debt is considered to be speculative because it is less certain that the issuer will be able to pay interest or repay the principal than in the case of investment grade debt. These securities can involve a substantially greater risk of default than higher-rated securities, and their values can decline significantly over short periods of time. Lower-quality debt securities tend to be more sensitive to adverse news about their issuers, the market and the economy in general, than higher-quality debt securities. The market for these securities can be less liquid, especially during periods of recession or general market decline.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Securities Lending:
The Fund, through a securities lending agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income, net of income retained by Citibank. Borrowers are required to secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are cured the next business day once the shortfall exceeds $100 thousand. Collateral may be cash, U.S. government securities, or other securities as permitted by SEC guidelines. Cash collateral may be invested in high-quality short-term investments, primarily open-end investment companies. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
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between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Risks relating to securities-lending transactions include that the borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower. The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy borrower default. Cash collateral is listed in the Fund's Portfolio of Investments and Financial Statements while non-cash collateral is not included. The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2020:
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 6,579 | $ | — | $ | 6,632 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as net change in unrealized appreciation/depreciation on investments and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as net realized gains or losses from investment transactions and foreign currency translations on the Statement of Operations.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, distribution and service 12b-1 fees, and printing fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
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3. Purchases and Sales:
Cost of purchases and proceeds from sales/maturities of securities (excluding securities maturing less than one year from acquisition) for the six-months ended January 31, 2020, were as follows for the Fund (amounts in thousands):
Purchases (excluding U.S. Government Securities) | Sales (excluding U.S. Government Securities) | Purchases of U.S. Government Securities | Sales of U.S Government Securities | ||||||||||||
$ | 1,019,317 | $ | 1,334,317 | $ | 386,975 | $ | 41,175 |
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA funds. The USAA fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi-annual reports may be viewed at usaa.com. As of January 31, 2020, certain USAA fund-of-funds owned total outstanding shares of the Fund:
USAA Cornerstone Conservative Fund | 0.9 | % | |||||
USAA Target Retirement 2020 Fund | 0.0 | %* | |||||
USAA Target Retirement 2030 Fund | 0.0 | %* | |||||
USAA Target Retirement 2040 Fund | 0.0 | %* | |||||
USAA Target Retirement 2050 Fund | 0.0 | %* | |||||
USAA Target Retirement 2060 Fund | 0.0 | %* |
* Amount is less than 0.05%.
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or "Adviser") a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee, which is accrued daily and paid monthly, is computed as a percentage of the Fund's average daily net assets at annualized rates of 0.50% of the first $50 million of average daily net assets, 0.40% of that portion of average daily net assets over $50 million but not over $100 million, and 0.30% of that portion of average daily net assets over $100 million. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
No performance adjustments will be made for periods beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter will be utilized in calculating future performance adjustments.
The performance adjustment will be calculated monthly by comparing each class' performance to that of the Lipper Core Plus Bond Funds Index. The Lipper Core Plus Bond Funds Index tracks the total return performance of each class within the Lipper Core Plus Bond Funds category.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
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The performance period for each share class will consist of the current month plus the previous number of months beginning July 1, 2019. The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points) | Annual Adjustment Rate (in basis points)(1) | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
(1) Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of the class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Core Plus Bond Funds Index over that period, even if the class has overall negative returns during the performance period.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six-months ended January 31, 2020, the Fund had no subadvisors.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15% of average daily net assets of the Fund Shares and Adviser Shares, 0.10% of average daily net assets of the Institutional Shares, and 0.05% of average daily net assets of the R6 Shares. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
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Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. VCTA, an affiliate of the Adviser, provides transfer agent services to the Fund Shares and Adviser Shares based on an annual charge of $25.50 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares and R6 Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10% and 0.01%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the Adviser Shares pursuant to a Distribution Agreement between the Distributor and the Trust. Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, at an annual rate of up to 0.25% of the average daily net assets of the Adviser Shares. Amounts incurred are reflected on the Statement of Operations as 12b-1 Fees.
Adviser Shares are offered and sold without imposition of an initial sales charge or a contingent deferred sales charge.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
The expense limits (excluding voluntary waivers) are 0.59%, 0.52%, 0.87%, and 0.39% for Fund Shares, Institutional Shares, Adviser Shares, and R6 Shares, respectively. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||
$ | 155 |
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
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Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
The value of a debt security or other income-producing security changes in response to various factors, including, for example, market-related factors (such as changes in interest rates or changes in the risk appetite of investors generally) and changes in the actual or perceived ability of the issuer (or of issuers generally) to meet its (or their) obligations.
Bond prices generally are linked to the prevailing market interest rates. In general, when interest rates rise, bond prices fall; conversely, when interest rates fall, bond prices rise. The price volatility of a bond also depends on its duration. Generally, the longer the duration of a bond, the greater is its sensitivity to interest rates. To compensate investors for this higher interest rate risk, bonds with longer durations generally offer higher yields than bonds with shorter durations.
The fixed-income securities in the Fund's portfolio are subject to credit risk, which is the possibility that an issuer of a fixed-income security will fail to make timely interest and/or principal payments on its securities or that negative market perceptions of the issuer's ability to make such payments will cause the price of that security to decline. The Fund accepts some credit risk as a recognized means to enhance an investor's return. All fixed-income securities, varying from the highest quality to the very speculative, have some degree of credit risk.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six-months ended January 31, 2020.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Fund in the Victory Fund Complex relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period is presented on the Statement of Operations under Interest expense on Interfund lending. As a Lender, interest earned by the Fund, if any, during the period is reflected on the Statement of Operations under Income on Interfund lending.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
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The average borrowing and lending for the days outstanding and average interest rate for the Fund during the six-months ended January 31, 2020 were as follows (amounts in thousands):
Amount Borrower or Lender | Outstanding at January 31, 2020 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||||||
USAA Intermediate-Term Bond Fund | Borrower | $ | — | $ | 5,268 | 27 | 2.30 | % | $ | 10,811 |
*For the six-months ended January 31, 2020, based on the number of days borrowings were outstanding.
8. Federal Income Tax Information:
The Fund intends to declare daily and distribute monthly any net investment income. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
9. Subsequent Event
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
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USAA Mutual Funds Trust | Supplemental Information January 31, 2020 |
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Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019, through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,048.30 | $ | 1,022.17 | $ | 3.04 | $ | 3.00 | 0.59 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,048.60 | 1,022.57 | 2.63 | 2.59 | 0.51 | % | ||||||||||||||||||||
Adviser Shares | 1,000.00 | 1,046.80 | 1,020.76 | 4.48 | 4.42 | 0.87 | % | ||||||||||||||||||||
R6 Shares | 1,000.00 | 1,048.30 | 1,023.18 | 2.01 | 1.98 | 0.39 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's web site at www.sec.gov.
49
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800 | ) 235-8396 |
40049-0320
JANUARY 31, 2020
Semi Annual Report
USAA Money Market Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 3 | ||||||
Statement of Assets and Liabilities | 10 | ||||||
Statement of Operations | 11 | ||||||
Statements of Changes in Net Assets | 12 | ||||||
Financial Highlights | 14 | ||||||
Notes to Financial Statements | 16 | ||||||
Supplemental Information | 22 | ||||||
Expense Examples | 22 | ||||||
Proxy Voting | 22 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
USAA Mutual Funds Trust
1
USAA Mutual Funds Trust USAA Money Market Fund | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA Money Market Fund seeks the highest income consistent with preservation of capital and the maintenance of liquidity.
Portfolio Mix*:
1/31/20
(% of Net Assets)
*Percentages are of the net assets of the Fund and may not equal 100%.
2
USAA Mutual Funds Trust USAA Money Market Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Corporate Bonds (9.1%) | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Cattail Creek Country Club, Inc.(LOC-Manufacturers & Traders Trust Co.), 2.10%, 3/1/31 (a) | $ | 3,270 | $ | 3,270 | |||||||
Consumer Staples (1.8%): | |||||||||||
AARP, Inc.(LOC-Bank of America Corp.), 1.60%, 5/1/31 (a) | 50,000 | 50,000 | |||||||||
Altoona-Blair County Development Corp.(LOC-PNC Financial Services Group), 1.64%, 4/1/35, Callable 2/18/20 @ 100 (a) (b) | 20,000 | 20,000 | |||||||||
Harvest Time Tabernacle, Inc.(LOC-Federal Home Loan Bank of Dallas), 1.78%, 8/1/37 (a) | 4,355 | 4,355 | |||||||||
Labcon North America(LOC-BNP Paribas), 1.65%, 6/1/44 (a) | 7,220 | 7,220 | |||||||||
Tallahassee Orthopedic Center LC(LOC-Wells Fargo & Co.), 1.68%, 4/3/34 (a) | 1,920 | 1,920 | |||||||||
83,495 | |||||||||||
Financials (6.9%): | |||||||||||
ASC Admiral Way LLC(LOC-Federal Home Loan Bank of San Francisco), 1.62%, 8/1/56, Callable 2/18/20 @ 100 (a) | 14,270 | 14,270 | |||||||||
Bass Pro Rossford Development Co. LLC(LOC-Fifth Third Bank), 1.76%, 11/1/27 (a) | 23,090 | 23,090 | |||||||||
Carol Allen Family Liquidity Trust(LOC-Comerica Bank, N.A.), 1.62%, 3/1/48, Callable 3/9/20 @ 100 (a) | 25,000 | 25,000 | |||||||||
CEI Capital LLC(LOC-Fifth Third Bank), 1.76%, 3/1/33 (a) | 8,490 | 8,490 | |||||||||
Chad J Himmel Irrevocable Trust(LOC-Federal Home Loan Bank of Dallas), 1.62%, 7/1/48, Callable 3/9/20 @ 100 (a) | 5,290 | 5,290 | |||||||||
Columbus Hotel Investment One LLC(LOC-Federal Home Loan Bank of New York), 1.62%, 10/1/48, Callable 3/9/20 @ 100 (a) | 6,535 | 6,535 | |||||||||
David S Pearl II Irrevocable Trust(LOC-Federal Home Loan Bank of Dallas), 1.68%, 11/1/36, Callable 3/9/20 @ 100 (a) | 2,670 | 2,670 | |||||||||
Delos LLC(LOC-Wells Fargo & Co.), 1.76%, 3/1/37 (a) | 9,510 | 9,510 | |||||||||
Desert Vistas LP(LOC-Federal Home Loan Bank of San Francisco), 1.62%, 9/1/55 (a) | 7,000 | 7,000 | |||||||||
Elsinore Properties LP(LOC-Fifth Third Bank), 1.76%, 2/1/37 (a) | 4,125 | 4,125 | |||||||||
Fiore Capital LLC(LOC-Wells Fargo & Co.), 1.60%, 8/1/45 (a) | 25,000 | 25,000 | |||||||||
Foster/Schweihofer Real Estate Holding Co. LLC(LOC-Comerica Bank, N.A.), 1.67%, 9/20/33 (a) | 4,975 | 4,975 | |||||||||
Gerald J Rubin Special Trust No 1(LOC-Goldman Sachs Bank USA), 1.62%, 12/1/48, Callable 3/9/20 @ 100 (a) | 14,215 | 14,215 | |||||||||
Gillean Family Trust(LOC-Federal Home Loan Bank of Dallas), 1.62%, 12/1/39, (Put Date 12/11/19) (c) | 6,140 | 6,140 | |||||||||
Herman & Kittle Capital LLC(LOC-Federal Home Loan Bank of Cincinnati), 1.62%, 2/1/37 (a) | 3,635 | 3,635 | |||||||||
Housing Venture I LP(LOC-Federal Home Loan Bank of San Francisco), 1.62%, 12/1/55 (a) | 9,345 | 9,345 | |||||||||
JPMorgan Chase & Co., 4.95%, 3/25/20 | 10,000 | 10,031 | |||||||||
Lamar Avenue Trust(LOC-Federal Home Loan Bank of Dallas), 1.62%, 12/1/37, Callable 3/9/20 @ 100 (a) | 4,445 | 4,445 | |||||||||
Lavonia O Frick Family Trust(LOC-Federal Home Loan Bank of Atlanta), 1.62%, 8/1/48, Callable 3/9/20 @ 100 (a) | 6,000 | 6,000 | |||||||||
Mark E Potteiger Irrevocable Life Insurance Trust(LOC-Federal Home Loan Bank of Dallas), 1.62%, 6/1/48, Callable 3/9/20 @ 100 (a) | 4,025 | 4,025 |
See notes to financial statements.
3
USAA Mutual Funds Trust USAA Money Market Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Medilucent MOB I LP(LOC-PNC Financial Services Group), 1.64%, 8/1/30 (a) | $ | 6,255 | $ | 6,255 | |||||||
NLS Irrevocable Trust(LOC-Bank of Oklahoma, N.A.), 1.64%, 12/1/39, Callable 3/9/20 @ 100 (a) | 11,260 | 11,260 | |||||||||
Opler Irrevocable Trust(LOC-Bank of Oklahoma, N.A.), 1.64%, 11/1/39, Callable 3/9/20 @ 100 (a) | 9,280 | 9,280 | |||||||||
OSF Finance Co. LLC(LOC-PNC Financial Services Group), 1.64%, 12/1/37 (a) | 21,565 | 21,565 | |||||||||
Partisan Property, Inc.(LOC-Wells Fargo & Co.), 1.65%, 9/1/44 (a) | 3,085 | 3,085 | |||||||||
Pinnacle Properties Development Group LLC(LOC-Federal Home Loan Bank of Cincinnati), 1.62%, 6/15/41 (a) | 11,159 | 11,159 | |||||||||
Rathbone LLC(LOC-Comerica Bank, N.A.), 1.81%, 1/1/38 (a) | 4,695 | 4,695 | |||||||||
Stivers Realty LC(LOC-Federal Home Loan Bank of Dallas), 1.62%, 7/1/43, Callable 3/9/20 @ 100 (a) | 6,930 | 6,930 | |||||||||
Stobro Co. LP(LOC-Federal Home Loan Bank of Pittsburgh), 1.90%, 1/1/32 (a) | 10,305 | 10,305 | |||||||||
Sugar Creek Finance Co. LLC(LOC-Northern Trust Corp.), 1.64%, 6/1/42 (a) | 17,755 | 17,755 | |||||||||
The Debra B Kennedy Irrevocable Trust(LOC-Federal Home Loan Bank of Dallas), 1.62%, 5/1/48, Callable 3/9/20 @ 100 (a) | 4,420 | 4,420 | |||||||||
The Dennis Wesley Co., Inc.(LOC-Federal Home Loan Bank of Indianapolis) 1.62%, 6/15/34, Callable 3/9/20 @ 100 (a) | 2,250 | 2,250 | |||||||||
1.62%, 11/15/39, Callable 3/9/20 @ 100 (a) | 10,125 | 10,125 | |||||||||
The Jacob Rosenstein Irrevocable Life Insurance Trust(LOC-Bank of Oklahoma, N.A.), 1.64%, 8/1/37, Callable 3/9/20 @ 100 (a) | 5,800 | 5,800 | |||||||||
The Linda E Krejsek Life Insurance Trust(LOC-Federal Home Loan Bank of Dallas), 1.62%, 9/1/37 (a) | 5,490 | 5,490 | |||||||||
324,165 | |||||||||||
Industrials (0.3%): | |||||||||||
Opus Inspection, Inc.(LOC-Swedbank AB), 1.67%, 1/1/34, Callable 3/9/20 @ 100 (a) | 15,000 | 15,000 | |||||||||
Total Corporate Bonds (Cost $425,930) | 425,930 | ||||||||||
Yankee Dollars (1.3%) | |||||||||||
Financials (0.5%): | |||||||||||
Westpac Banking Corp., 1.95%(FEDL01+35bps), 9/21/20 (d) | 25,000 | 25,000 | |||||||||
Materials (0.8%): | |||||||||||
SSAB AB(LOC-Credit Agricole Corp. Inv. Bank), 1.62%, 5/1/34, Callable 3/9/20 @ 100 (a) | 15,000 | 15,000 | |||||||||
SSAB AB(LOC-Swedbank AB), 1.62%, 4/1/34 (a) | 20,000 | 20,000 | |||||||||
35,000 | |||||||||||
Total Yankee Dollar (Cost $60,000) | 60,000 | ||||||||||
Municipal Bonds (4.6%) | |||||||||||
Arizona (0.6%): | |||||||||||
Yavapai County IDA Revenue (LOC-Bank of Nova Scotia), 1.65%, 9/1/35, Continuously Callable @ 100 (a) | 26,625 | 26,625 | |||||||||
Arkansas (0.6%): | |||||||||||
County of Union Revenue(LOC-Bank of America Corp.), Series R, 1.59%, 10/1/27, Callable 3/2/20 @ 100 (a) | 29,000 | 29,000 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Money Market Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Colorado (0.2%): | |||||||||||
Traer Creek Metropolitan District Revenue(LOC-BNP Paribas), 1.75%, 10/1/30, Continuously Callable @ 100 (a) | $ | 8,976 | $ | 8,976 | |||||||
Connecticut (0.1%): | |||||||||||
Connecticut State Development Authority Revenue(LOC-Toronto-Dominion Bank), 1.67%, 12/1/28, Continuously Callable @ 100 (a) | 4,330 | 4,330 | |||||||||
Illinois (0.1%): | |||||||||||
Illinois Finance Authority Revenue(LOC-Federal Home Loan Bank of Chicago), 1.64%, 7/1/40, Continuously Callable @ 100 (a) | 3,015 | 3,015 | |||||||||
Indiana (0.3%): | |||||||||||
City of Knox Revenue(LOC-SunTrust Bank), 1.61%, 2/1/46, Continuously Callable @ 100 (a) | 11,300 | 11,300 | |||||||||
City of Marion Revenue(LOC-Key Bank, N.A.), Series A, 1.78%, 2/1/35, Continuously Callable @ 100 (a) | 4,400 | 4,400 | |||||||||
15,700 | |||||||||||
Lousiana (0.1%): | |||||||||||
Parish of St. Charles Revenue(LOC-Federal Home Loan Bank of Atlanta), 1.63%, 9/1/24, Continuously Callable @ 100 (a) | 2,975 | 2,975 | |||||||||
Michigan (0.6%): | |||||||||||
Michigan Finance Authority Revenue(LOC-Bank of America Corp.), 1.63%, 9/1/49, (Put Date 12/11/19) (c) | 29,000 | 29,000 | |||||||||
Mississippi (0.0%): (e) | |||||||||||
Mississippi Business Finance Corp. Revenue(LOC-Federal Home Loan Bank of Dallas), Series R-1, 1.86%, 8/1/21, Continuously Callable @ 100 (a) | 2,250 | 2,250 | |||||||||
New York (1.8%): | |||||||||||
New York State Housing Finance Agency Revenue(LOC-JPMorgan Chase & Co.), Series B, 1.57%, 11/1/48, Continuously Callable @ 100 (a) | 25,450 | 25,450 | |||||||||
New York State Housing Finance Agency Revenue(LOC-Landesbank Hessen-Thuringen) 1.60%, 5/1/42, Continuously Callable @ 100 (a) | 20,000 | 20,000 | |||||||||
Series B, 1.67%, 11/1/44 (a) | 28,400 | 28,400 | |||||||||
Saratoga County Industrial Development Agency Revenue(LOC-JPMorgan Chase & Co.), 1.81%, 11/1/21, Continuously Callable @ 100 (a) | 13,755 | 13,755 | |||||||||
87,605 | |||||||||||
Pennsylvania (0.2%): | |||||||||||
Allegheny County IDA Revenue(LOC-PNC Financial Services Group), 1.64%, 11/1/27, Callable 3/2/20 @ 100 (a) | 4,736 | 4,736 | |||||||||
Pennsylvania Economic Development Financing Authority Revenue(LOC-PNC Financial Services Group), 1.64%, 4/1/35 (a) | 3,245 | 3,245 | |||||||||
7,981 | |||||||||||
Total Municipal Bonds (Cost $217,457) | 217,457 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Money Market Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Certificates of Deposit (34.9%) | |||||||||||
Bank of Montreal 1.84%, 4/27/20 (LIBOR01M+18bps) (d) | $ | 50,000 | $ | 50,000 | |||||||
1.91%, 7/13/20 (FED01+31bps) (d) | 40,000 | 40,000 | |||||||||
1.84%, 8/3/20 (SOFR+26bps) (d) | 40,000 | 40,000 | |||||||||
1.95%, 8/3/20 (FEDL01+35bps) (d) | 40,000 | 40,000 | |||||||||
Bank of Nova Scotia 1.86%, 4/17/20 (FEDL01+26bps) (d) | 50,000 | 50,000 | |||||||||
1.88%, 4/29/20 (FEDL01+28bps) (d) | 50,000 | 50,000 | |||||||||
1.90%, 5/1/20 (FEDL01+30bps) (d) | 50,000 | 50,000 | |||||||||
2.05%, 10/23/20 (FEDL01+45bps) (d) | 25,000 | 25,000 | |||||||||
Canadian Imperial Bank of Commerce 1.86%, 5/18/20 (FEDL01+26bps) (d) | 30,000 | 30,000 | |||||||||
1.89%, 7/17/20 (FEDL01+29bps) (d) | 30,000 | 30,000 | |||||||||
1.93%, 8/20/20 (FEDL01+33bps) (d) | 30,000 | 30,000 | |||||||||
1.96%, 9/1/20 (FEDL01+36bps) (d) | 40,000 | 40,000 | |||||||||
2.00%, 10/9/20 (FEDL01+40bps) (d) | 30,000 | 30,000 | |||||||||
Credit Agricole Corporate and Investment Bank 1.90%, 5/29/20 (LIBOR01M+25bps) (d) | 30,000 | 30,000 | |||||||||
2.04%, 7/6/20 (FEDL01+44bps) (d) | 40,000 | 40,000 | |||||||||
Credit Industriel ET Commercial 1.85%, 2/19/20 (FEDL01+25bps) (d) | 25,000 | 25,000 | |||||||||
2.00%, 7/17/20 (FEDL01+40bps) (d) | 40,000 | 40,000 | |||||||||
Credit Suisse AG 1.80%, 2/14/20 (SOFR+22bps) (d) | 25,000 | 25,000 | |||||||||
1.92%, 2/18/20 (FEDL01+32bps) (d) | 40,000 | 40,000 | |||||||||
1.80%, 4/27/20 (SOFR+22bps) (d) | 40,000 | 40,000 | |||||||||
1.98%, 7/22/20 (SOFR+40bps) (d) | 25,000 | 25,000 | |||||||||
2.05%, 12/3/20 (FEDL01+45bps) (d) | 25,000 | 25,000 | |||||||||
Natixis SA, 1.98%(LIBOR01M+29bps), 6/8/20 (d) | 30,000 | 30,000 | |||||||||
Royal Bank of Canada 1.78%, 4/14/20 (SOFR+20bps) (d) | 40,000 | 40,000 | |||||||||
1.92%, 6/1/20 (FEDL01+32bps) (d) | 40,000 | 40,000 | |||||||||
1.87%, 7/16/20 (SOFR+29bps) (d) | 40,000 | 40,000 | |||||||||
1.95%, 7/24/20 (FEDL01+35bps) (d) | 40,000 | 40,000 | |||||||||
2.01%, 10/19/20 (FEDL01+41bps) (d) | 40,000 | 40,000 | |||||||||
Skandinav Enskilda Banken AB, 1.92%, 4/23/20 | 40,000 | 40,000 | |||||||||
Societe Generale 1.90%, 2/14/20 (LIBOR01M+22bps) (d) | 40,000 | 40,000 | |||||||||
1.95%, 3/4/20 (LIBOR01M+31bps) (d) | 40,000 | 40,000 | |||||||||
2.00%, 5/14/20 (LIBOR01M+32bps) (d) | 40,000 | 40,000 | |||||||||
2.04%, 8/17/20 (FEDL01+44bps) (d) | 40,000 | 40,000 | |||||||||
2.09%, 9/8/20 (FEDL01+49bps) (d) | 40,000 | 40,000 | |||||||||
Toronto Dominion Bank 1.90%, 2/27/20 (FEDL01+30bps) (d) | 25,000 | 25,000 | |||||||||
1.90%, 7/15/20 (FEDL01+30bps) (d) | 30,000 | 30,000 | |||||||||
1.95%, 8/3/20 (FEDL01+35bps) (d) | 50,000 | 50,000 | |||||||||
1.95%, 8/7/20 (FEDL01+35bps) (d) | 40,000 | 40,000 | |||||||||
Toronto-Dominion Bank, 2.00%(SOFR+42bps), 9/30/20 (d) | 25,000 | 25,000 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Money Market Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Wells Fargo Bank NA 1.90%, 3/3/20 (FEDL01+30bps) (d) | $ | 25,000 | $ | 25,000 | |||||||
1.84%, 4/24/20 (LIBOR01M+18bps) (d) | 25,000 | 25,000 | |||||||||
1.90%, 5/15/20 (FEDL01+30bps) (d) | 40,000 | 40,000 | |||||||||
1.94%, 8/14/20 (FEDL01+34bps) (d) | 40,000 | 40,000 | |||||||||
Westpac Banking Corp. 2.00%, 10/26/20 (FEDL01+40bps) (d) | 40,000 | 40,000 | |||||||||
2.00%, 11/2/20 (FEDL01+40bps) (d) | 40,000 | 40,000 | |||||||||
Total Certificates of Deposit (Cost $1,645,000) | 1,645,000 | ||||||||||
Commercial Paper (44.3%) | |||||||||||
AutoZone, Inc., 1.45%, 2/7/20 (f) | 50,000 | 49,986 | |||||||||
Barclays Bank PLC 1.76%, 4/23/20 (b) (f) | 50,000 | 49,798 | |||||||||
1.79%, 5/5/20 (b) (f) | 50,000 | 49,765 | |||||||||
1.73%, 5/11/20 (b) (f) | 50,000 | 49,758 | |||||||||
Barton Capital Corp. 1.70%, 4/2/20 (b) (f) | 45,300 | 45,168 | |||||||||
1.75%, 4/14/20 (b) (f) | 50,000 | 49,821 | |||||||||
Bayerische Landesbk Giro, 1.67%, 5/11/20 (b) (f) | 32,000 | 31,851 | |||||||||
Coca-Cola Co. 1.83%, 2/21/20 (b) (f) | 25,000 | 24,973 | |||||||||
1.76%, 3/17/20 (b) (f) | 22,250 | 22,200 | |||||||||
Commonwealth Edison Co., 1.11%, 2/3/20 (b) (f) | 100,000 | 99,992 | |||||||||
Crown Point Capital Co., 1.36%, 2/3/20 (b) (f) | 40,000 | 39,995 | |||||||||
Dairy Farmers of America, Inc., 1.12%, 2/3/20 (b) (f) | 150,000 | 149,987 | |||||||||
Duke Energy Corp. 1.29%, 2/3/20 (b) (f) | 25,000 | 24,997 | |||||||||
1.73%, 4/3/20 (b) (f) | 25,000 | 24,925 | |||||||||
1.73%, 4/7/20 (b) (f) | 25,000 | 24,920 | |||||||||
DUPont EI DE Nemours Co. 1.85%, 3/6/20 (b) (f) | 30,000 | 29,946 | |||||||||
1.75%, 4/15/20 (b) (f) | 30,000 | 29,891 | |||||||||
1.75%, 4/17/20 (b) (f) | 30,000 | 29,888 | |||||||||
Evergy Metro, Inc. 1.19%, 2/3/20 (b) (f) | 25,000 | 24,998 | |||||||||
1.36%, 2/4/20 (b) (f) | 50,000 | 49,992 | |||||||||
1.44%, 2/5/20 (b) (f) | 30,000 | 29,994 | |||||||||
Glencore Funding LLC 1.88%, 2/13/20 (b) (f) | 25,000 | 24,983 | |||||||||
1.77%, 2/20/20 (b) (f) | 25,000 | 24,975 | |||||||||
Gotham Funding Corp., 1.66%, 4/1/20 (f) | 42,700 | 42,580 | |||||||||
Great Bridge Capital Co. LLC 1.97%, 2/26/20 (b) (f) | 50,000 | 49,929 | |||||||||
2.00%, 3/11/20 (b) (f) | 50,000 | 49,889 | |||||||||
1.89%, 4/28/20 (b) (f) | 50,000 | 49,770 | |||||||||
1.77%, 5/12/20 (b) (f) | 50,000 | 49,750 | |||||||||
Hannover Funding Co. LLC 1.19%, 2/3/20 (b) (f) | 130,000 | 129,987 | |||||||||
1.91%, 3/16/20 (b) (f) | 25,000 | 24,940 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Money Market Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Hyundai Capital America 1.11%, 2/3/20 (b) (f) | $ | 60,000 | $ | 59,994 | |||||||
1.88%, 2/14/20 (b) (f) | 25,000 | 24,982 | |||||||||
Lloyds Bank PLC, 1.96%(LIBOR01M+30bps), 4/20/20 (d) | 40,000 | 40,000 | |||||||||
LMA Americas LLC 1.90%, 2/20/20 (b) (f) | 25,000 | 24,974 | |||||||||
1.95%, 3/3/20 (b) (f) | 25,000 | 24,957 | |||||||||
1.79%, 5/5/20 (b) (f) | 50,000 | 49,764 | |||||||||
Lyondellbasell Industries N.V., 1.60%, 2/6/20 (b) (f) | 25,000 | 24,993 | |||||||||
Motiva Enterprises LLC 1.34%, 2/4/20 (b) (f) | 25,000 | 24,996 | |||||||||
1.85%, 3/9/20 (b) (f) | 25,000 | 24,951 | |||||||||
Nissan Motor Acceptance Corp. 2.11%, 2/28/20 (b) (f) | 20,000 | 19,967 | |||||||||
1.96%, 3/20/20 (b) (f) | 25,000 | 24,933 | |||||||||
1.89%, 5/12/20 (b) (f) | 30,000 | 29,841 | |||||||||
Nutrien Ltd. 1.80%, 2/10/20 (b) (f) | 26,000 | 25,987 | |||||||||
1.61%, 2/19/20 (b) (f) | 50,000 | 49,958 | |||||||||
Ridgefield Funding Co. LLC, 1.98%, 3/12/20 (b) (f) | 40,000 | 39,910 | |||||||||
Sheffield Receivables Corp. 1.86%, 2/12/20 (b) (f) | 25,000 | 24,984 | |||||||||
1.82%, 3/9/20 (b) (f) | 50,000 | 49,904 | |||||||||
1.96%, 3/16/20 (b) (f) | 50,000 | 49,878 | |||||||||
1.78%, 4/2/20 (b) (f) | 50,000 | 49,848 | |||||||||
Victory Receivables Corp., 1.77%, 3/18/20 (b) (f) | 40,000 | 39,908 | |||||||||
Total Commercial Paper (Cost $2,084,377) | 2,083,901 | ||||||||||
Repurchase Agreements (5.7%) | |||||||||||
Fixed Income Clearing Corporation-State Street Bank & Trust Co., 1.57%, 2/3/20, Purchased on 1/31/20, with maturity value of $270,035, collateralized by U.S. Treasury Notes, 2.75%, 2/12/28, fair value $275,404 | 270,000,000 | 270,000 | |||||||||
Total Repurchase Agreements (Cost $270,000) | 270,000 | ||||||||||
Total Investments (Cost $4,702,764) — 99.9% | 4,702,764 | ||||||||||
Other assets in excess of liabilities — 0.1% | 2,525 | ||||||||||
NET ASSETS — 100.00% | $ | 4,705,289 |
(a) Variable Rate Demand Notes that provide the rights to sell the security at face value on either that day or within the rate-reset period. The interest rate is reset on the put date at a stipulated daily, weekly, monthly, quarterly, or other specified time interval to reflect current market conditions. These securities do not indicate a reference rate and spread in their description.
(b) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid based upon procedures approved by the Board of Trustees. As of January 31, 2020, the fair value of these securities was $2,103,901 thousand and amounted to 44.7% of net assets.
(c) Put Bond.
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Money Market Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Unaudited)
(d) Variable or Floating-Rate Security. Rate disclosed is as of January 31, 2020.
(e) Amount represents less than 0.05% of net assets.
(f) Rate represents the effective yield at January 31, 2020.
bps — Basis points
FEDL01 — Effective Federal Fund Rate
IDA — Industrial Development Authority
LIBOR — London InterBank Offered Rate
LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LLC — Limited Liability Company
LOC — Principal and interest payments are guaranteed by a bank letter of credit or other bank credit agreement
LP — Limited Partnership
PLC — Public Limited Company
SOFR — Secured Overnight Financing Rate
Credit Enhancements — Adds 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 enhancements 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.
See notes to financial statements.
9
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Money Market Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $4,702,764) | $ | 4,702,764 | |||||
Cash and cash equivalents | 1,157 | ||||||
Receivables: | |||||||
Interest and dividends | 4,173 | ||||||
Capital shares issued | 3 | ||||||
Prepaid expenses | 19 | ||||||
Total assets | 4,708,116 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Distributions | 87 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 973 | ||||||
Administration fees | 398 | ||||||
Transfer agent fees | 962 | ||||||
Custodian fees | 17 | ||||||
Compliance fees | 1 | ||||||
Other accrued expenses | 389 | ||||||
Total liabilities | 2,827 | ||||||
Net Assets: | |||||||
Capital | 4,705,226 | ||||||
Total distributable earnings | 63 | ||||||
Net assets | $ | 4,705,289 | |||||
Net Assets: | |||||||
Fund Shares | $ | 4,705,289 | |||||
Total | $ | 4,705,289 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 4,705,748 | ||||||
Total | 4,705,748 | ||||||
Net asset value, offering and redemption price per share: (a) | |||||||
Fund Shares | $ | 1.00 |
(a) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
10
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA Money Market Fund | |||||||
Investment Income: | |||||||
Interest | $ | 51,488 | |||||
Total Income | 51,488 | ||||||
Expenses: | |||||||
Investment advisory fees | 5,753 | ||||||
Administration fees | 2,397 | ||||||
Sub-Administration fees | 15 | ||||||
Custodian fees | 182 | ||||||
Transfer agent fees | 5,996 | ||||||
Trustees' fees | 22 | ||||||
Compliance fees | 15 | ||||||
Legal and audit fees | 41 | ||||||
State registration and filing fees | 38 | ||||||
Other expenses | 377 | ||||||
Total Expenses | 14,836 | ||||||
Expenses waived/reimbursed by Adviser | (6 | ) | |||||
Net Expenses | 14,830 | ||||||
Net Investment Income | 36,658 | ||||||
Realized/Unrealized Gains from Investments: | |||||||
Net realized gains from investment securities | 65 | ||||||
Net realized/unrealized gains on investments | 65 | ||||||
Change in net assets resulting from operations | $ | 36,723 |
See notes to financial statements.
11
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Money Market Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income | $ | 36,658 | $ | 94,412 | |||||||
Net realized gains from investments | 65 | 6 | |||||||||
Change in net assets resulting from operations | 36,723 | 94,418 | |||||||||
Distributions to Shareholders: | (36,658 | ) | (94,412 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (36,658 | ) | (94,412 | ) | |||||||
Change in net assets resulting from capital transactions | (173,419 | ) | 255,027 | ||||||||
Change in net assets | (173,354 | ) | 255,033 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 4,878,643 | 4,623,610 | |||||||||
End of period | $ | 4,705,289 | $ | 4,878,643 | |||||||
Capital Transactions: | |||||||||||
Proceeds from shares issued | $ | 2,670,649 | $ | 6,144,694 | |||||||
Distributions reinvested | 36,437 | 93,847 | |||||||||
Cost of shares redeemed | (2,880,505 | ) | (5,983,514 | ) | |||||||
Total Fund Shares | $ | (173,419 | ) | $ | 255,027 | ||||||
Change in net assets resulting from capital transactions | $ | (173,419 | ) | $ | 255,027 | ||||||
Share Transactions: | |||||||||||
Issued | 2,670,649 | 6,144,694 | |||||||||
Reinvested | 36,437 | 93,847 | |||||||||
Redeemed | (2,880,505 | ) | (5,983,514 | ) | |||||||
Total Fund Shares | (173,419 | ) | 255,027 | ||||||||
Change in Shares | (173,419 | ) | 255,027 |
See notes to financial statements.
12
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13
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income | Net Realized and Unrealized Gains | Total from Investment Activities | Net Investment Income | Realized Capital Gains | ||||||||||||||||||||||
USAA Money Market Fund | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 1.00 | 0.01 | (c) | — | (d) | 0.01 | (0.01 | ) | — | |||||||||||||||||
Year Ended July 31, 2019 | $ | 1.00 | 0.02 | — | (d) | 0.02 | (0.02 | ) | — | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 1.00 | 0.01 | — | (d) | 0.01 | (0.01 | ) | — | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 1.00 | — | (d) | — | (d) | — | (d) | — | (d) | — | (d) | |||||||||||||||
Year Ended July 31, 2016 | $ | 1.00 | — | (d) | — | (d) | — | (d) | — | (d) | — | (d) | |||||||||||||||
Year Ended July 31, 2015 | $ | 1.00 | — | (d) | — | (d) | — | (d) | — | (d) | — |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two-year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Per share net investment income has been calculated using the average daily shares method.
(d) Represents less than $0.005.
(e) USAA Asset Management Company ("AMCO") (previous Investment Adviser) voluntarily agreed, on a temporary basis, to reimburse management, administrative, or other fees to limit the Fund's expenses and attempt to prevent a negative yield.
(f) Reflects total annual operating expenses of the Fund before reductions of any expenses paid indirectly. The Fund's expenses paid indirectly decreased the expense ratios by less than 0.01%.
See notes to financial statements.
14
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | |||||||||||||||||||||||||
USAA Money Market Fund | |||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (0.01 | ) | $ | 1.00 | 0.77 | % | 0.62 | % | 1.53 | % | 0.62 | % | $ | 4,705,289 | |||||||||||||||||
Year Ended July 31, 2019 | (0.02 | ) | $ | 1.00 | 1.97 | % | 0.62 | % | 1.95 | % | 0.62 | % | $ | 4,878,643 | |||||||||||||||||
Year Ended July 31, 2018 | (0.01 | ) | $ | 1.00 | 1.13 | % | 0.62 | % | 1.12 | % | 0.62 | % | $ | 4,623,610 | |||||||||||||||||
Year Ended July 31, 2017 | — | (d) | $ | 1.00 | 0.31 | %(e) | 0.63 | %(e)(f) | 0.29 | % | 0.63 | %(f) | $ | 4,513,270 | |||||||||||||||||
Year Ended July 31, 2016 | — | (d) | $ | 1.00 | 0.01 | %(e) | 0.41 | %(e)(f) | 0.01 | % | 0.67 | %(f) | $ | 5,606,434 | |||||||||||||||||
Year Ended July 31, 2015 | — | (d) | $ | 1.00 | 0.01 | %(e) | 0.24 | %(e)(f) | 0.01 | % | 0.65 | %(f) | $ | 5,289,252 |
See notes to financial statements.
15
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Money Market Fund (the "Fund"). The Fund is classified as diversified under the 1940 Act.
The Fund operates as a retail money market fund in compliance with the requirements of Rule 2a-7 under the 1940 Act; and as a retail money market fund, shares of the Fund are available for sale only to accounts that are beneficially owned by natural persons.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The inputs or methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. For example, money market securities are valued using amortized cost, in accordance with rules under the 1940 Act. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.
Securities for which amortized cost valuations are considered unreliable or whose values have been materially affected by a significant event are valued in good faith, at fair value, using methods determined by the Committee, under procedures to stabilize net assets and valuation procedures approved by the Board.
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
16
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Repurchase agreements are valued at cost.
All securities held in the Fund are short-term debt securities, which are valued pursuant to Rule 2a-7 under the 1940 Act. This method values a security at its purchase price, and thereafter, assumes a constant amortization to maturity of any premiums or discounts.
The Fund operates as a retail money market fund in compliance with the requirements of Rule 2a-7 under the 1940 Act; and as a retail money market fund, shares of the Fund are available for sale only to accounts that are beneficially owned by natural persons.
Repurchase Agreements:
The Fund may enter into repurchase agreements with commercial banks or recognized security dealers pursuant to the terms of a Master Repurchase Agreement. A repurchase agreement is an arrangement wherein the Fund purchases securities and the seller agrees to repurchase the securities at an agreed upon time and at an agreed upon price. The purchased securities are marked-to-market daily to ensure their value is equal to at least 102% of principal including 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. Master Repurchase Agreements typically contain netting provisions, which provide for the net settlement of all transactions and collateral with the Fund through a single payment in the event of default or termination. 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.
Investments in repurchase agreements as presented on the Portfolio of Investments are not net settlement amounts but gross. At January 31, 2020, the value of the related collateral exceeded the value of the repurchase agreements, reducing the net settlement amount to zero. Details on the collateral are included on the Portfolio of Investments.
Securities Purchased on a Delayed-Delivery or When-Issued Basis:
The Fund may purchase securities on a delayed-delivery or when-issued basis. Delivery and payment for securities that have been purchased by the Fund on a delayed-delivery, when-issued basis, or for delayed draws on loans can take place a month or more after the trade date. At the time the Fund makes the commitment to purchase a security on a delayed-delivery or when-issued basis, the Fund records the transaction and reflects the value of the security in determining net asset value. No interest accrues to the Fund until the transaction settles and payment takes place. A segregated account is established and the Fund maintains cash and/or marketable securities at least equal in value to commitments for delayed-delivery or when-issued securities. If the Fund owns delayed-delivery or when-issued securities, these values are included in "Payable for investments purchased" on the accompanying Statement of Assets and Liabilities and the segregated assets are identified in the Schedule of Portfolio Investments.
Municipal Obligations:
The values of municipal obligations can fluctuate and may be affected by adverse tax, legislative, or political changes, and by financial developments affecting municipal issuers. Payment of municipal obligations may depend on a relatively limited source of revenue, resulting in greater credit risk. Future changes in federal tax laws or the activity of an issuer may adversely affect the tax-exempt status of municipal obligations.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on
17
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Fees Paid Indirectly:
Expense offsets to custody fees that arise from credits on cash balances maintained on deposit are reflected on the Statement of Operations, as applicable, as "Fees paid indirectly".
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.24% of the Fund's average daily net assets. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six-months ended January 31, 2020, the Fund had no subadvisors.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.10% of average daily net assets of the Fund. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. Transfer agent's fees for the Fund are paid monthly based on a fee accrued daily at an annualized rate of 0.25% of average daily net assets, plus out-of-pocket expenses. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust. The Distributor received no fees or other compensation for such distribution services.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by the Fund in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limit.
The expense limit (excluding voluntary waivers) is 0.62% for the Fund. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limit in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||
$ | 6 |
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not
19
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
Effective March 23, 2020 the Adviser agreed to further reimburse fees in excess of the Fund's expense limit agreement of 0.62% dated July 1, 2019. These voluntary reductions, to the extent necessary, are to maintain a certain minimum net yield of the Fund. Under this agreement to reimburse additional fees, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, to the extent any repayments would not cause the Fund's net yield to fall below the Fund's minimum yield at the time of: (a) the original waiver or expense reimbursement; or (b) the expense limit in effect at the time of the extra waiver.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
When interest rates rise, debt security prices generally fall. The opposite also generally is true: debt security prices rise when interest rates fall. Interest rate changes are influenced by a number of factors including government policy, monetary policy, inflation expectations, perceptions of risk, and supply and demand of debt securities. The Fund's yield will vary. A sharp and unexpected rise in interest rates could cause the Fund's share price to drop below a dollar. A low interest rate environment may prevent the Fund from providing a positive yield and could also impair the Fund's ability to maintain a stable net asset value ("NAV").
Credit risk is expected to be low for the Fund because it invests primarily in securities that are considered to be of high quality. However, there is the possibility that an issuer will fail to make timely interest and principal payments on its securities or that negative perceptions of the issuer's ability to make such payments will cause the price of that security to decline.
The Fund is actively managed, and the investment techniques and risk analyses used by the Fund's portfolio managers may not produce the desired results.
The Fund may impose liquidity fees on redemptions and/or temporarily suspend redemptions (gates) if the Fund's weekly liquid assets fall below certain thresholds, such as during times of market stress. The imposition of a liquidity fee would reduce the amount you would receive upon redemption of your shares of the Fund. The imposition of a redemption gate also would delay your ability to redeem your investments in the Fund.
6. Borrowing:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six-months ended January 31, 2020.
20
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
7. Federal Income Tax Information:
The Fund intends to declare daily and distribute monthly any net investment income. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
8. Subsequent Event:
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
21
USAA Mutual Funds Trust | Supplemental Information January 31, 2020 |
(Unaudited)
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019 through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,007.70 | $ | 1,022.02 | $ | 3.13 | $ | 3.15 | 0.62 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
22
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800 | ) 235-8396 |
23428-0320
JANUARY 31, 2020
Semi Annual Report
USAA Science & Technology Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
JANUARY 31, 2020
Semi Annual Report
USAA Science & Technology Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 4 | ||||||
Statement of Assets and Liabilities | 10 | ||||||
Statement of Operations | 11 | ||||||
Statements of Changes in Net Assets | 12 | ||||||
Financial Highlights | 14 | ||||||
Notes to Financial Statements | 16 | ||||||
Supplemental Information | 25 | ||||||
Expense Examples | 25 | ||||||
Proxy Voting and Portfolio Holdings Information | 25 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
1
USAA Mutual Funds Trust USAA Science & Technology Fund | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA Science & Technology Fund seeks long-term capital appreciation.
Top 10 Holdings*
1/31/20
(% of Net Assets)
Microsoft Corp. | 5.2 | % | |||||
RingCentral, Inc. Class A | 3.4 | % | |||||
Amazon.com, Inc. | 3.0 | % | |||||
Visa, Inc. Class A | 2.9 | % | |||||
Facebook, Inc. Class A | 2.8 | % | |||||
Global Payments, Inc. | 2.6 | % | |||||
ServiceNow, Inc. | 2.3 | % | |||||
Wix.com Ltd. | 1.8 | % | |||||
Bluebird Bio, Inc. | 1.7 | % | |||||
Marvell Technology Group Ltd. | 1.7 | % |
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Science & Technology Fund (continued) | January 31, 2020 |
(Unaudited)
Sector Allocation*:
1/31/20
(% of Net Assets)
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
3
USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (98.4%) | |||||||||||
Communication Services (7.4%): | |||||||||||
Alphabet, Inc. Class A (a) | 12,744 | $ | 18,259 | ||||||||
Boingo Wireless, Inc. (a) | 1,199,233 | 13,479 | |||||||||
Electronic Arts, Inc. (a) | 27,049 | 2,919 | |||||||||
Facebook, Inc. Class A (a) | 208,286 | 42,055 | |||||||||
Match Group, Inc. (a) (b) | 173,958 | 13,607 | |||||||||
Nexon Co. Ltd. (a) | 218,000 | 2,952 | |||||||||
Take-Two Interactive Software, Inc. (a) | 84,700 | 10,557 | |||||||||
Tencent Holdings Ltd. | 126,002 | 6,009 | |||||||||
109,837 | |||||||||||
Communications Equipment (2.2%): | |||||||||||
Lumentum Holdings, Inc. (a) | 263,309 | 19,951 | |||||||||
Viavi Solutions, Inc. (a) | 847,900 | 11,955 | |||||||||
31,906 | |||||||||||
Consumer Discretionary (4.7%): | |||||||||||
Alibaba Group Holding Ltd., ADR (a) | 37,867 | 7,823 | |||||||||
Amazon.com, Inc. (a) | 22,271 | 44,736 | |||||||||
Arco Platform Ltd., Class A (a) | 212,100 | 11,004 | |||||||||
Mercadolibre, Inc. (a) | 3,541 | 2,348 | |||||||||
Trip.com Group Ltd., ADR (a) | 61,899 | 1,989 | |||||||||
67,900 | |||||||||||
Electronic Equipment, Instruments & Components (2.6%): | |||||||||||
Airgain, Inc. (a) | 24,102 | 228 | |||||||||
Fabrinet (a) | 225,631 | 14,224 | |||||||||
Flex Ltd. (a) | 466,792 | 6,138 | |||||||||
Keysight Technologies, Inc. (a) | 95,507 | 8,881 | |||||||||
Rogers Corp. (a) | 72,102 | 8,490 | |||||||||
37,961 | |||||||||||
Financials (0.5%): | |||||||||||
LendingTree, Inc. (a) | 25,900 | 8,060 | |||||||||
Health Care (24.9%): | |||||||||||
10X Genomics, Inc. Class A (a) (b) | 106,822 | 9,762 | |||||||||
89bio, Inc. (a) (b) | 3,300 | 88 | |||||||||
Abbott Laboratories | 19,487 | 1,698 | |||||||||
Acadia Healthcare Co., Inc. (a) | 8,521 | 274 | |||||||||
Adaptive Biotechnologies Corp. (a) | 99,228 | 2,968 | |||||||||
Adverum Biotechnologies, Inc. (a) | 541,602 | 5,346 | |||||||||
Aimmune Therapeutics, Inc. (a) (b) | 343,606 | 10,669 | |||||||||
Albireo Pharma, Inc. (a) | 97,030 | 2,203 | |||||||||
Alkermes PLC (a) | 19,360 | 337 | |||||||||
Allakos, Inc. (a) (b) | 55,049 | 3,975 | |||||||||
Alnylam Pharmaceuticals, Inc. (a) | 2,985 | 343 | |||||||||
Amedisys, Inc. (a) | 1,113 | 196 | |||||||||
Amicus Therapeutics, Inc. (a) | 333,671 | 2,950 | |||||||||
Amneal Pharmaceuticals, Inc. (a) | 13,699 | 62 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Anthem, Inc. | 3,525 | $ | 935 | ||||||||
Apellis Pharmaceuticals, Inc. (a) (b) | 442,108 | 18,175 | |||||||||
Arena Pharmaceuticals, Inc. (a) | 85,022 | 3,885 | |||||||||
Argenx SE, ADR (a) | 565 | 82 | |||||||||
Ascendis Pharma A/S, ADR (a) | 55,652 | 7,519 | |||||||||
Assembly Biosciences, Inc. (a) | 400,691 | 7,036 | |||||||||
AstraZeneca PLC, ADR | 21,568 | 1,050 | |||||||||
Atreca, Inc. Class A (a) | 206,700 | 3,799 | |||||||||
AtriCure, Inc. (a) | 5,169 | 201 | |||||||||
Autolus Therapeutics PLC, ADR (a) (b) | 237,177 | 2,329 | |||||||||
Avrobio, Inc. (a) | 271,248 | 5,894 | |||||||||
Baxter International, Inc. | 8,556 | 763 | |||||||||
Becton Dickinson & Co. | 1,326 | 365 | |||||||||
BeiGene Ltd., ADR (a) | 26,646 | 4,060 | |||||||||
Biogen, Inc. (a) | 1,430 | 384 | |||||||||
Bio-Techne Corp. | 926 | 194 | |||||||||
Black Diamond Therapeutics, Inc. (a) | 1,100 | 41 | |||||||||
Bluebird Bio, Inc. (a) | 319,908 | 25,494 | |||||||||
Blueprint Medicines Corp. (a) | 82,166 | 5,213 | |||||||||
Boston Scientific Corp. (a) | 27,325 | 1,144 | |||||||||
Botanix Pharmaceuticals Ltd. (a) (b) | 17,749,559 | 1,027 | |||||||||
Bristol-Myers Squibb Co. | 203,230 | 12,793 | |||||||||
Celyad SA, ADR (a) (b) | 215,478 | 2,327 | |||||||||
Centene Corp. (a) | 7,617 | 478 | |||||||||
Centogene NV (a) | 237,190 | 2,315 | |||||||||
Chugai Pharmaceutical Co. Ltd. | 2,730 | 280 | |||||||||
Coherus Biosciences, Inc. (a) | 7,183 | 130 | |||||||||
Constellation Pharmaceuticals, Inc. (a) | 5,362 | 177 | |||||||||
Contra Clementia Pharmaceuticals (c) (d) | 14,251 | 15 | |||||||||
Crinetics Pharmaceuticals, Inc. (a) (b) | 122,922 | 2,640 | |||||||||
Cryoport, Inc. (a) (b) | 575,183 | 10,302 | |||||||||
CytomX Therapeutics, Inc. Class A (a) | 538,711 | 3,997 | |||||||||
Daiichi Sankyo Co. Ltd. | 5,250 | 355 | |||||||||
Danaher Corp. | 6,505 | 1,046 | |||||||||
Editas Medicine, Inc. (a) | 118,479 | 3,131 | |||||||||
Edwards Lifesciences Corp. (a) | 2,529 | 556 | |||||||||
Eidos Therapeutics, Inc. (a) (b) | 108,798 | 5,797 | |||||||||
Eisai Co. Ltd. | 6,115 | 460 | |||||||||
Elanco Animal Health, Inc. (a) | 7,530 | 233 | |||||||||
Eli Lilly & Co. | 10,165 | 1,419 | |||||||||
Encompass Health Corp. | 3,695 | 285 | |||||||||
Epizyme, Inc. (a) | 305,770 | 6,400 | |||||||||
Equillium, Inc. (a) | 472,383 | 2,159 | |||||||||
Evelo Biosciences, Inc. Class B (a) (b) | 29,954 | 176 | |||||||||
Exact Sciences Corp. (a) | 90,484 | 8,440 | |||||||||
Exagen, Inc. (a) (b) | 303,892 | 6,276 | |||||||||
Fate Therapeutics, Inc. (a) | 806,831 | 20,462 | |||||||||
Forty Seven, Inc. (a) | 16,486 | 608 | |||||||||
G1 Therapeutics, Inc. (a) | 9,701 | 188 | |||||||||
Galapagos NV (a) | 992 | 222 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Genmab A/S (a) | 1,551 | $ | 357 | ||||||||
Genus PLC | 4,311 | 175 | |||||||||
Global Blood Therapeutics, Inc. (a) | 5,635 | 368 | |||||||||
Glycomimetics, Inc. (a) | 11,378 | 49 | |||||||||
Gossamer Bio, Inc. (a) | 146,973 | 1,952 | |||||||||
Gritstone Oncology, Inc. (a) (b) | 90,674 | 803 | |||||||||
GW Pharmaceuticals PLC, ADR (a) (b) | 69,337 | 8,011 | |||||||||
HCA Healthcare, Inc. | 5,287 | 734 | |||||||||
Heron Therapeutics, Inc. (a) | 5,793 | 121 | |||||||||
Hikma Pharmaceuticals PLC | 1,427 | 34 | |||||||||
Hill-Rom Holdings, Inc. | 1,593 | 170 | |||||||||
HMS Holdings Corp. (a) | 8,843 | 242 | |||||||||
Homology Medicines, Inc. (a) | 224,491 | 3,513 | |||||||||
Humana, Inc. | 1,744 | 586 | |||||||||
Hutchison China Meditech, Ltd., ADR (a) | 2,829 | 69 | |||||||||
ICON PLC (a) | 2,221 | 375 | |||||||||
Illumina, Inc. (a) | 28,271 | 8,201 | |||||||||
ImmunoGen, Inc. (a) | 26,500 | 125 | |||||||||
Incyte Pharmaceuticals, Inc. (a) | 2,905 | 212 | |||||||||
Invitae Corp. (a) (b) | 218,382 | 4,073 | |||||||||
Iovance Biotherapeutics, Inc. (a) | 306,490 | 6,663 | |||||||||
Ironwood Pharmaceuticals, Inc. (a) | 22,768 | 275 | |||||||||
Kaleido Biosciences, Inc. (a) (b) | 41,784 | 359 | |||||||||
KalVista Pharmaceuticals, Inc. (a) | 163,383 | 2,500 | |||||||||
Kezar Life Sciences, Inc. (a) | 786,964 | 2,416 | |||||||||
Kodiak Sciences, Inc. (a) | 2,744 | 168 | |||||||||
Kura Oncology, Inc. (a) | 538,541 | 6,322 | |||||||||
Laboratorios Farmaceuticos Rovi SA | 3,444 | 95 | |||||||||
MacroGenics, Inc. (a) | 213,500 | 1,975 | |||||||||
Madrigal Pharmaceuticals, Inc. (a) | 2,430 | 202 | |||||||||
Matinas BioPharma Holdings, Inc. (a) (b) | 2,609,330 | 3,523 | |||||||||
Mediwound, Ltd. (a) | 19,677 | 59 | |||||||||
Medtronic PLC | 13,876 | 1,602 | |||||||||
Mirati Therapeutics, Inc. (a) | 60,062 | 5,215 | |||||||||
Molina Healthcare, Inc. (a) | 1,190 | 146 | |||||||||
Momenta Pharmaceuticals, Inc. (a) | 16,623 | 482 | |||||||||
Mylan NV (a) | 16,364 | 351 | |||||||||
MyoKardia, Inc. (a) | 57,578 | 3,917 | |||||||||
Myovant Sciences Ltd. (a) | 374,722 | 4,759 | |||||||||
NeoGenomics, Inc. (a) | 193,372 | 6,232 | |||||||||
Neurocrine Biosciences, Inc. (a) | 25,213 | 2,523 | |||||||||
NMC Health PLC | 1,817 | 31 | |||||||||
Notre Dame Intermedica Participacoes SA | 13,600 | 223 | |||||||||
Novartis AG | 2,671 | 252 | |||||||||
NuVasive, Inc. (a) | 5,269 | 406 | |||||||||
Odonate Therapeutics, Inc. (a) | 7,233 | 211 | |||||||||
ONO Pharmaceutical Co. Ltd. | 8,130 | 187 | |||||||||
Pfizer, Inc. | 53,880 | 2,006 | |||||||||
Pharmaron Beijing Co., Ltd. Class H (a) (e) | 25,187 | 162 | |||||||||
PhaseBio Pharmaceuticals, Inc. (a) (b) | 10,474 | 52 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Portola Pharmaceuticals, Inc. (a) (b) | 15,989 | $ | 204 | ||||||||
PRA Health Sciences, Inc. (a) | 3,760 | 381 | |||||||||
Precision BioSciences, Inc. (a) | 373,374 | 3,021 | |||||||||
Qiagen NV (a) | 8,500 | 284 | |||||||||
Quotient Ltd. (a) | 486,600 | 3,628 | |||||||||
R1 RCM, Inc. (a) | 11,684 | 146 | |||||||||
Radius Health, Inc. (a) | 3,888 | 68 | |||||||||
Replimune Group, Inc. (a) | 215,914 | 3,433 | |||||||||
Revance Therapeutics, Inc. (a) | 7,739 | 173 | |||||||||
Rigel Pharmaceuticals, Inc. (a) | 36,826 | 83 | |||||||||
Sage Therapeutics, Inc. (a) | 85,339 | 5,656 | |||||||||
Satsuma Pharmaceuticals, Inc. (a) | 3,478 | 86 | |||||||||
Scholar Rock Holding Corp. (a) | 159,523 | 1,961 | |||||||||
Seattle Genetics, Inc. (a) | 5,675 | 615 | |||||||||
Shockwave Medical, Inc. (a) | 4,978 | 216 | |||||||||
Smith & Nephew PLC | 24,274 | 584 | |||||||||
SpringWorks Therapeutics, Inc. (a) | 98,209 | 3,092 | |||||||||
Stoke Therapeutics, Inc. (a) | 123,508 | 3,453 | |||||||||
Syndax Pharmaceuticals, Inc. (a) | 13,167 | 124 | |||||||||
Takeda Pharmaceutical Co. Ltd. | 2,365 | 91 | |||||||||
Tecan Group AG | 713 | 202 | |||||||||
Teladoc Health, Inc. (a) | 990 | 101 | |||||||||
Teva Pharmaceutical Industries Ltd., ADR (a) | 9,773 | 101 | |||||||||
Theravance BioPharma, Inc. (a) | 5,183 | 145 | |||||||||
Thermo Fisher Scientific, Inc. | 4,241 | 1,328 | |||||||||
Tricida, Inc. (a) | 6,972 | 246 | |||||||||
Turning Point Therapeutics, Inc. (a) | 71,667 | 4,192 | |||||||||
Twist Bioscience Corp. (a) | 217,355 | 5,399 | |||||||||
UCB SA | 3,322 | 306 | |||||||||
UnitedHealth Group, Inc. | 4,048 | 1,103 | |||||||||
UroGen Pharma Ltd. (a) (b) | 5,026 | 148 | |||||||||
Veeva Systems, Inc. Class A (a) | 74,400 | 10,907 | |||||||||
Venus MedTech Hangzhou, Inc. Class H (a) (e) | 5,000 | 26 | |||||||||
Vertex Pharmaceuticals, Inc. (a) | 3,921 | 890 | |||||||||
Wave Life Sciences, Ltd. (a) (b) | 5,895 | 42 | |||||||||
Wuxi Apptec Co., Ltd. (e) | 13,760 | 166 | |||||||||
Zai Lab Ltd., ADR (a) | 5,841 | 298 | |||||||||
Zealand Pharma A/S, ADR (a) (b) (d) | 1,761 | 67 | |||||||||
Zimmer Biomet Holdings, Inc. | 2,519 | 373 | |||||||||
Zymeworks, Inc. (a) | 172,503 | 7,528 | |||||||||
368,479 | |||||||||||
Industrials (0.9%): | |||||||||||
Equifax, Inc. | 30,145 | 4,519 | |||||||||
L3Harris Technologies, Inc. | 16,287 | 3,605 | |||||||||
TransUnion | 34,164 | 3,133 | |||||||||
Uber Technologies, Inc. (a) | 68,615 | 2,490 | |||||||||
13,747 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
IT Services (13.3%): | |||||||||||
Euronet Worldwide, Inc. (a) | 94,634 | $ | 14,918 | ||||||||
FleetCor Technologies, Inc. (a) | 31,825 | 10,032 | |||||||||
Genpact Ltd. | 167,528 | 7,416 | |||||||||
Global Payments, Inc. | 194,110 | 37,939 | |||||||||
GoDaddy, Inc. Class A (a) | 208,676 | 14,025 | |||||||||
PayPal Holdings, Inc. (a) | 89,700 | 10,216 | |||||||||
Twilio, Inc. Class A (a) (b) | 168,400 | 20,939 | |||||||||
VeriSign, Inc. (a) | 12,317 | 2,564 | |||||||||
Visa, Inc. Class A | 217,096 | 43,195 | |||||||||
WEX, Inc. (a) | 40,197 | 8,720 | |||||||||
Wix.com Ltd. (a) | 183,319 | 26,157 | |||||||||
196,121 | |||||||||||
Semiconductors & Semiconductor Equipment (17.0%): | |||||||||||
Advanced Micro Devices, Inc. (a) | 269,304 | 12,657 | |||||||||
BE Semiconductor Industries NV | 89,585 | 3,793 | |||||||||
Cohu, Inc. | 893,900 | 19,997 | |||||||||
FormFactor, Inc. (a) | 130,105 | 3,293 | |||||||||
Globalwafers Co. Ltd. | 105,000 | 1,354 | |||||||||
Inphi Corp. (a) | 71,028 | 5,395 | |||||||||
KLA Corp. | 124,352 | 20,610 | |||||||||
Lam Research Corp. | 65,911 | 19,655 | |||||||||
Lattice Semiconductor Corp. (a) | 974,055 | 18,117 | |||||||||
MACOM Technology Solutions Holdings, Inc. (a) | 697,501 | 19,823 | |||||||||
Marvell Technology Group Ltd. | 1,039,677 | 24,994 | |||||||||
Micron Technology, Inc. (a) | 164,872 | 8,753 | |||||||||
MKS Instruments, Inc. | 143,900 | 15,084 | |||||||||
Monolithic Power Systems, Inc. | 78,700 | 13,471 | |||||||||
NVIDIA Corp. | 57,880 | 13,685 | |||||||||
Renesas Electronics Corp. (a) | 1,191,200 | 7,495 | |||||||||
Semtech Corp. (a) | 81,755 | 3,940 | |||||||||
SK Hynix, Inc. | 49,139 | 3,739 | |||||||||
Skyworks Solutions, Inc. | 149,793 | 16,949 | |||||||||
STMicroelectronics NV, NYS (b) | 283,993 | 7,908 | |||||||||
Tokyo Electron Ltd. | 20,000 | 4,399 | |||||||||
Ultra Clean Holdings, Inc. (a) | 267,598 | 6,157 | |||||||||
251,268 | |||||||||||
Software (24.3%): | |||||||||||
Adobe, Inc. (a) | 17,097 | 6,003 | |||||||||
Anaplan, Inc. (a) | 91,581 | 5,274 | |||||||||
Avaya Holdings Corp. (a) | 252,521 | 3,225 | |||||||||
Cornerstone OnDemand, Inc. (a) | 301,110 | 17,705 | |||||||||
Coupa Software, Inc. (a) | 98,426 | 15,861 | |||||||||
DocuSign, Inc. Class A (a) | 202,694 | 15,914 | |||||||||
Domo, Inc. (a) | 418,686 | 10,141 | |||||||||
Dropbox, Inc. (a) | 580,776 | 9,885 | |||||||||
Fair Isaac Corp. (a) | 30,500 | 12,273 | |||||||||
Guidewire Software, Inc. (a) | 60,352 | 6,790 | |||||||||
Microsoft Corp. | 453,817 | 77,253 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Paycom Software, Inc. (a) | 61,433 | $ | 19,546 | ||||||||
Proofpoint, Inc. (a) | 114,200 | 14,025 | |||||||||
RingCentral, Inc. Class A (a) | 241,314 | 49,610 | |||||||||
Salesforce.com, Inc. (a) | 82,672 | 15,072 | |||||||||
ServiceNow, Inc. (a) | 98,623 | 33,357 | |||||||||
Slack Technologies, Inc. Class A (a) (b) | 139,937 | 2,901 | |||||||||
Splunk, Inc. (a) | 48,566 | 7,540 | |||||||||
SVMK Inc. (a) | 149,681 | 2,642 | |||||||||
Varonis Systems, Inc. (a) | 156,984 | 13,133 | |||||||||
Workday, Inc. Class A (a) | 57,717 | 10,656 | |||||||||
Zendesk, Inc. (a) | 138,685 | 11,982 | |||||||||
360,788 | |||||||||||
Technology Hardware, Storage & Peripherals (0.6%): | |||||||||||
Pure Storage, Inc. (a) | 97,851 | 1,742 | |||||||||
Western Digital Corp. | 101,090 | 6,621 | |||||||||
8,363 | |||||||||||
Total Common Stocks (Cost $1,123,773) | 1,454,430 | ||||||||||
Collateral for Securities Loaned^ (3.9%) | |||||||||||
HSBC U.S. Government Money Market Fund, I Shares, 1.52% (f) | 58,192,874 | 58,193 | |||||||||
Total Collateral for Securities Loaned (Cost $58,193) | 58,193 | ||||||||||
Total Investments (Cost $1,181,966) — 102.3% | 1,512,623 | ||||||||||
Liabilities in excess of other assets — (2.3)% | (34,075 | ) | |||||||||
NET ASSETS — 100.00% | $ | 1,478,548 |
^ Purchased with cash collateral from securities on loan.
(a) Non-income producing security.
(b) All or a portion of this security is on loan.
(c) Security was fair valued based upon procedures approved by the Board of Trustees and represents less than 0.05% of the Fund's net assets as of January 31, 2020. This security is classified as Level 3 within the fair value hierarchy. (See Note 2 in the Notes to Financial Statements)
(d) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of January 31, 2020, illiquid securities were 0.01% of the Fund's net assets.
(e) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid based upon procedures approved by the Board of Trustees. As of January 31, 2020, the fair value of these securities was $354 thousand and amounted to 0.02% of net assets.
(f) Rate disclosed is the daily yield on January 31, 2020.
ADR — American Depositary Receipt
NYS — New York Registered Shares
PLC — Public Limited Company
See notes to financial statements.
9
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Science & Technology Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,181,966) | $ | 1,512,623 | (a) | ||||
Cash and cash equivalents | 27,249 | ||||||
Foreign currency, at value (Cost $687) | 687 | ||||||
Receivables: | |||||||
Interest and dividends | 239 | ||||||
Capital shares issued | 709 | ||||||
Investments sold | 13,307 | ||||||
Reclaims | 20 | ||||||
From Adviser | 1 | ||||||
Prepaid expenses | 4 | ||||||
Total Assets | 1,554,839 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 58,193 | ||||||
Investments purchased | 15,408 | ||||||
Capital shares redeemed | 1,267 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 960 | ||||||
Administration fees | 192 | ||||||
Custodian fees | 55 | ||||||
Compliance fees | — | (b) | |||||
Transfer agent fees | 107 | ||||||
12b-1 fees | 11 | ||||||
Other accrued expenses | 98 | ||||||
Total Liabilities | 76,291 | ||||||
Net Assets: | |||||||
Capital | 1,128,865 | ||||||
Total distributable earnings/(loss) | 349,683 | ||||||
Net Assets | $ | 1,478,548 | |||||
Net Assets: | |||||||
Fund Shares | $ | 1,385,967 | |||||
Adviser Shares | 92,581 | ||||||
Total | $ | 1,478,548 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 57,903 | ||||||
Adviser Shares | 4,033 | ||||||
Total | 61,936 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 23.94 | |||||
Adviser Shares | 22.96 |
(a) Includes $54,626 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
10
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA Science & Technology Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 2,001 | |||||
Interest | 225 | ||||||
Securities lending (net of fees) | 375 | ||||||
Foreign tax withholding | (15 | ) | |||||
Total Income | 2,586 | ||||||
Expenses: | |||||||
Investment advisory fees | 5,380 | ||||||
Administration fees — Fund Shares | 1,002 | ||||||
Administration fees — Adviser Shares | 74 | ||||||
Sub-Administration fees | 19 | ||||||
12b-1 fees — Adviser Shares | 120 | ||||||
Custodian fees | 39 | ||||||
Transfer agent fees — Fund Shares | 722 | ||||||
Transfer agent fees — Adviser Shares | 63 | ||||||
Trustees' fees | 21 | ||||||
Compliance fees | 4 | ||||||
Legal and audit fees | 100 | ||||||
State registration and filing fees | 34 | ||||||
Interest expense on interfund lending | — | (a) | |||||
Other expenses | 78 | ||||||
Total Expenses | 7,656 | ||||||
Expenses waived/reimbursed by Adviser | (1 | ) | |||||
Net Expenses | 7,655 | ||||||
Net Investment Income (Loss) | (5,069 | ) | |||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities and foreign currency translations | 37,273 | ||||||
Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations | 79,964 | ||||||
Net realized/unrealized gains (losses) on investments | 117,237 | ||||||
Change in net assets resulting from operations | $ | 112,168 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
11
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Science & Technology Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | (5,069 | ) | $ | (5,689 | ) | |||||
Net realized gains (losses) from investments | 37,273 | 369,112 | |||||||||
Net change in unrealized appreciation/depreciation on investments | 79,964 | (199,041 | ) | ||||||||
Change in net assets resulting from operations | 112,168 | 164,382 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (301,847 | ) | (162,096 | ) | |||||||
Adviser Shares | (22,501 | ) | (13,848 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (324,348 | ) | (175,944 | ) | |||||||
Change in net assets resulting from capital transactions | 201,999 | 56,982 | |||||||||
Change in net assets | (10,181 | ) | 45,420 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 1,488,729 | 1,443,309 | |||||||||
End of period | $ | 1,478,548 | $ | 1,488,729 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 52,339 | $ | 123,560 | |||||||
Distributions reinvested | 296,794 | 159,454 | |||||||||
Cost of shares redeemed | (149,945 | ) | (218,810 | ) | |||||||
Total Fund Shares | $ | 199,188 | $ | 64,204 | |||||||
Adviser Shares | |||||||||||
Proceeds from shares issued | $ | 3,527 | $ | 10,908 | |||||||
Distributions reinvested | 21,872 | 13,485 | |||||||||
Cost of shares redeemed | (22,588 | ) | (31,615 | ) | |||||||
Total Adviser Shares | $ | 2,811 | $ | (7,222 | ) | ||||||
Change in net assets resulting from capital transactions | $ | 201,999 | $ | 56,982 | |||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 2,013 | 4,641 | |||||||||
Reinvested | 12,870 | 6,997 | |||||||||
Redeemed | (5,721 | ) | (8,391 | ) | |||||||
Total Fund Shares | 9,162 | 3,247 | |||||||||
Adviser Shares | |||||||||||
Issued | 142 | 425 | |||||||||
Reinvested | 989 | 609 | |||||||||
Redeemed | (904 | ) | (1,272 | ) | |||||||
Total Adviser Shares | 227 | (238 | ) | ||||||||
Change in Shares | 9,389 | 3,009 |
See notes to financial statements.
12
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13
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Science & Technology Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 28.39 | (0.09 | )(d) | 2.19 | 2.10 | — | (6.55 | ) | ||||||||||||||||||
Year Ended July 31, 2019 | $ | 29.19 | 0.01 | 2.83 | 2.84 | — | (3.64 | ) | |||||||||||||||||||
Year Ended July 31, 2018 | $ | 26.89 | — | (g) | 4.50 | 4.50 | — | (2.20 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 22.03 | 0.05 | 5.68 | 5.73 | — | (0.87 | ) | |||||||||||||||||||
Year Ended July 31, 2016 | $ | 23.07 | (0.01 | ) | 0.37 | 0.36 | — | (1.40 | ) | ||||||||||||||||||
Year Ended July 31, 2015 | $ | 20.96 | 0.27 | 4.35 | 4.62 | (0.31 | ) | (2.20 | ) | ||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 27.53 | (0.13 | )(d) | 2.11 | 1.98 | — | (6.55 | ) | ||||||||||||||||||
Year Ended July 31, 2019 | $ | 28.49 | (0.07 | ) | 2.75 | 2.68 | — | (3.64 | ) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 26.36 | (0.08 | ) | 4.41 | 4.33 | — | (2.20 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 21.67 | (0.02 | ) | 5.58 | 5.56 | — | (0.87 | ) | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 22.77 | (0.07 | ) | 0.37 | 0.30 | — | (1.40 | ) | ||||||||||||||||||
Year Ended July 31, 2015 | $ | 20.78 | 0.13 | (d) | 4.39 | 4.52 | (0.33 | ) | (2.20 | ) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two-year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects total annual operating expenses of the shares before reductions of any expenses paid indirectly. The shares' expenses paid indirectly decreased the expense ratio by less than 0.01%.
See notes to financial statements.
14
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Science & Technology Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (6.55 | ) | $ | 23.94 | 8.24 | % | 1.05 | % | (0.69 | )% | 1.05 | % | $ | 1,385,967 | 27 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (3.64 | ) | $ | 28.39 | 12.79 | % | 1.02 | %(e) | (0.39 | )% | 1.02 | %(e) | $ | 1,383,956 | 109 | %(f) | |||||||||||||||||||
Year Ended July 31, 2018 | (2.20 | ) | $ | 29.19 | 17.55 | % | 1.04 | %(e) | (0.31 | )% | 1.04 | %(e) | $ | 1,328,080 | 56 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.87 | ) | $ | 26.89 | 27.05 | % | 1.14 | %(e) | (0.28 | )% | 1.14 | %(e) | $ | 1,137,256 | 75 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (1.40 | ) | $ | 22.03 | 1.74 | % | 1.17 | %(e) | (0.24 | )% | 1.17 | %(e) | $ | 901,629 | 83 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (2.51 | ) | $ | 23.07 | 23.45 | % | 1.18 | %(e) | 0.52 | % | 1.18 | %(e) | $ | 853,755 | 73 | % | |||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (6.55 | ) | $ | 22.96 | 8.06 | % | 1.34 | % | (0.98 | )% | 1.34 | % | $ | 92,581 | 27 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (3.64 | ) | $ | 27.53 | 12.52 | % | 1.29 | %(e)(h) | (0.65 | )% | 1.29 | %(e) | $ | 104,773 | 109 | %(f) | |||||||||||||||||||
Year Ended July 31, 2018 | (2.20 | ) | $ | 28.49 | 17.24 | % | 1.31 | %(e)(i) | (0.57 | )% | 1.31 | %(e) | $ | 115,229 | 56 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.87 | ) | $ | 26.36 | 26.71 | % | 1.41 | %(e)(j) | (0.55 | )% | 1.42 | %(e) | $ | 115,559 | 75 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (1.40 | ) | $ | 21.67 | 1.48 | % | 1.42 | %(e) | (0.50 | )% | 1.42 | %(e) | $ | 122,430 | 83 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (2.53 | ) | $ | 22.77 | 23.18 | % | 1.42 | %(e) | 0.59 | % | 1.42 | %(e) | $ | 122,019 | 73 | % |
(f) Reflects increased trading activity due to current year transition or asset allocation shift.
(g) Amount is less than $0.01 per share.
(h) Prior to December 1, 2018, USAA Asset Management Company ("AMCO") (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Adviser Shares to 1.35% of the Adviser Shares' average daily net assets.
(i) Prior to December 1, 2017, AMCO (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Adviser Shares to 1.35% of the Adviser Shares' average daily net assets.
(j) Prior to December 1, 2016, AMCO (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Adviser Shares to 1.40% of the Adviser Shares' average daily net assets.
See notes to financial statements.
15
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Science & Technology Fund (the "Fund"). The Fund offers two classes of shares: Fund Shares and Adviser Shares. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges except with respect to fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
16
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or the over-the-counter markets, are valued at the last sales price or official closing price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations typically are categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at net asset value. These valuations typically are categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. These valuations typically are categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's net asset value ("NAV") to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's net asset value is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. These valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of January 31, 2020, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 1,419,566 | $ | 34,849 | $ | 15 | $ | 1,454,430 | |||||||||||
Collateral for Securities Loaned | 58,193 | — | 58,193 | ||||||||||||||||
Total | $ | 1,477,759 | $ | 34,849 | $ | 15 | $ | 1,512,623 |
For the six-months ended January 31, 2020, there were no transfers in or out of the Level 3 fair value hierarchy.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs. ETFs are a type of index fund, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
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Foreign Exchange Currency Contracts:
The Fund may enter into foreign exchange currency contracts to convert U.S. dollars to and from various foreign currencies. A foreign exchange currency contract is an obligation by the Fund to purchase or sell a specific currency at a future date at a price (in U.S. dollars) set at the time of the contract. The Fund does not engage in "cross-currency" foreign exchange contracts (i.e., contracts to purchase or sell one foreign currency in exchange for another foreign currency). The Fund's foreign exchange currency contracts might be considered spot contracts (typically a contract of one week or less) or forward contracts (typically a contract term over one week). A spot contract is entered into for purposes of hedging against foreign currency fluctuations relating to a specific portfolio transaction, such as the delay between a security transaction trade date and settlement date. Forward contracts are entered into for purposes of hedging portfolio holdings or concentrations of such holdings. Each foreign exchange currency contract is adjusted daily by the prevailing spot or forward rate of the underlying currency, and any appreciation or depreciation is recorded for financial statement purposes as unrealized until the contract settlement date, at which time the Fund records realized gains or losses equal to the difference between the value of a contract at the time it was opened and the value at the time it was closed. The Fund could be exposed to risk if a counterparty is unable to meet the terms of a foreign exchange currency contract or if the value of the foreign currency changes unfavorably. In addition, the use of foreign exchange currency contracts does not eliminate fluctuations in the underlying prices of the securities. As of January 31, 2020, the Fund had no open forward foreign exchange currency contracts.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a securities lending agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income, net of income retained by Citibank. Borrowers are required to secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are cured the next business day once the shortfall exceeds $100 thousand. Collateral may be cash, U.S. government securities, or other securities as permitted by SEC guidelines. Cash collateral may be invested in high-quality short-term investments, primarily open-end investment companies. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Risks relating to securities-lending transactions include 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
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
the borrower. The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy borrower default. Cash collateral is listed in the Fund's Portfolio of Investments and Financial Statements while non-cash collateral is not included. The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2020.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 54,626 | $ | — | $ | 58,193 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as net change in unrealized appreciation/depreciation on investments and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as net realized gains or losses from investment transactions and foreign currency translations on the Statement of Operations.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, distribution and service 12b-1 fees, and printing fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
3. Purchases and Sales:
Cost of purchases and proceeds from sales/maturities of securities (excluding securities maturing less than one year from acquisition) for the six-months ended January 31, 2020, were as follows for the Fund (amounts in thousands):
Excluding U.S Government Securities | |||||||||||
Purchases | Sales | ||||||||||
$ | 371,926 | $ | 475,728 |
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
There were no purchases and sales of U.S. government securities during the six-months ended January 31, 2020.
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Management, Inc. ("VCM" or "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive 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 daily net assets. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
No performance adjustments will be made for periods beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter will be utilized in calculating future performance adjustments.
The performance adjustment will be calculated monthly by comparing each class' performance to that of the Lipper Science & Technology Funds Index. The Lipper Science & Technology Funds Index tracks the total return performance of each class within the Lipper Science & Technology Funds category.
The performance period for each share class will consist of the current month plus the previous number of months beginning July 1, 2019. The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)1 | Annual Adjustment Rate (in basis points)1 | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
1 Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of the class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Science & Technology Funds Index over that period, even if the class has overall negative returns during the performance period.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets.
VCM has entered into a Subadvisory Agreement with Wellington Management Company LLP ("Wellington Management"). Under which Wellington directs the investment and reinvestment of a portion of the Fund's assets (as allocated from time to time by VCM). This arrangement provides for monthly fees that are paid by VCM. VCM (not the Fund) pays the subadviser fees.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15% of average daily net assets of the Fund Shares and Adviser Shares, respectively. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. VCTA, an affiliate of the Adviser, provides transfer agent services to the Fund Shares and Adviser Shares based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the Adviser Shares pursuant to a Distribution Agreement between the Distributor and the Trust. Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, at an annual rate of up to 0.25% of the average daily net assets of the Adviser Shares. Amounts incurred are reflected on the Statement of Operations as 12b-1 Fees.
Adviser Shares are offered and sold without imposition of an initial sales charge or a contingent deferred sales charge.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the
21
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
The expense limits (excluding voluntary waivers) are 1.06% and 1.34% for Fund Shares and Adviser Shares, respectively. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||
$ | 1 |
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Overall stock market risks may affect the value of the Fund. Factors such as domestic and international economic growth and market conditions, interest rate levels, and political events affect the securities market.
The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected. Price changes may be temporary or last for extended periods.
Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market.
A mutual fund portfolio consisting of investments related to the fields of science and technology is likely to be more volatile than a portfolio that is more widely diversified in other economic sectors. There is a possibility that the Fund's investments in companies whose values are highly dependent on scientific and technological developments may be more volatile because of the short life cycles and competitive pressures of many of the products or services of these companies. Because of the competitiveness and rapid changes in the fields of science and technology, many of the companies in the Fund's portfolio are subject to distinctive risks. The products and services of these companies may not be economically successful or may quickly become outdated. Additionally, many of these companies must comply with significant governmental regulations and may need governmental approval of their products and services.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to
22
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
$600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six-months ended January 31, 2020.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Fund in the Victory Fund Complex relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period is presented on the Statement of Operations under Interest expense on Interfund lending. As a Lender, interest earned by the Fund, if any, during the period is reflected on the Statement of Operations under Income on Interfund lending.
The average borrowing and lending for the days outstanding and average interest rate for the Fund during the six-months ended January 31, 2020 were as follows (amounts in thousands):
Borrower or Lender | Amount Outstanding at January 31, 2020 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
Borrower | $ | — | $ | 2,266 | 3 | 2.11 | % | $ | 3,398 |
* For the six-months ended January 31, 2020, based on the number of days borrowings were outstanding.
7. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund, if any, may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
23
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
8. Subsequent Event:
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
24
USAA Mutual Funds Trust | Supplemental Information January 31, 2020 |
(Unaudited)
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019 through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,082.40 | $ | 1,019.86 | $ | 5.50 | $ | 5.33 | 1.05 | % | |||||||||||||||
Adviser Shares | 1,000.00 | 1,080.60 | 1,018.40 | 7.01 | 6.80 | 1.34 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's web site at www.sec.gov.
25
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800) 235-8396 |
31704-0320
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800) 235-8396 |
31704-0320
JANUARY 31, 2020
Semi Annual Report
USAA Short-Term Bond Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 4 | ||||||
Statement of Assets and Liabilities | 28 | ||||||
Statement of Operations | 29 | ||||||
Statements of Changes in Net Assets | 30 | ||||||
Financial Highlights | 32 | ||||||
Notes to Financial Statements | 36 | ||||||
Supplemental Information | 47 | ||||||
Expense Examples | 47 | ||||||
Proxy Voting and Portfolio Holdings Information | 47 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
1
USAA Mutual Funds Trust USAA Short-Term Bond Fund | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA Short-Term Bond Fund seeks high current income consistent with preservation of principal.
Asset Allocation*:
1/31/20
(% of Net Assets)
Percentages are of the net assets of the Fund and may not equal 100%.
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral
from securities loaned.
2
USAA Mutual Funds Trust USAA Short-Term Bond Fund (continued) | January 31, 2020 |
(Unaudited)
Portfolio Ratings Mix*
1/31/20
(% of Net Assets)
This chart reflects the highest long-term rating from a Nationally Recognized Statistical Rating Organization (NRSRO), with the four highest long-term credit ratings labeled, in descending order of credit quality, AAA, AA, A, and BBB. These categories represent investment-grade quality. NRSRO ratings are shown because they provide independent analysis of the credit quality of the Fund's investments. Victory Capital Management, Inc. ("Adviser") also performs its own fundamental credit analysis of each security. As part of its fundamental credit analysis, the Adviser considers various criteria, including industry specific actions, peer comparisons, payment ranking, and structure specific characteristics. Any of the Fund's securities that are not rated by an NRSRO appear in the chart above as "Unrated," but these securities are analyzed and monitored by the Adviser on an ongoing basis. Government securities that are issued or guaranteed as to principal and interest by the U.S. government and pre-refunded and escrowed-to-maturity municipal bonds that are not rated are treated as AAA for credit quality purposes.
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
3
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Asset Backed Securities (18.5%) | |||||||||||
Americredit Automobile Receivables Trust, Series 2018-2 Class A3, 3.15%, 3/20/23, Callable 11/18/22 @ 100 | $ | 2,857 | $ | 2,892 | |||||||
AmeriCredit Automobile Receivables Trust, Series 2017-4 Class C, 2.60%, 9/18/23, Callable 2/18/22 @ 100 | 5,000 | 5,061 | |||||||||
AmeriCredit Automobile Receivables Trust, Series 2016-3 Class C, 2.24%, 4/8/22, Callable 3/8/21 @ 100 (a) | 10,000 | 10,016 | |||||||||
AmeriCredit Automobile Receivables Trust, Series 2016-2 Class D, 3.65%, 5/9/22, Callable 10/8/20 @ 100 | 5,000 | 5,056 | |||||||||
ARI Fleet Lease Trust, Series 2019-A Class A3, 2.53%, 11/15/27, Callable 2/15/23 @ 100 (b) | 5,000 | 5,096 | |||||||||
ARI Fleet Lease Trust, Series 2018-A Class A2, 2.55%, 10/15/26, Callable 11/15/21 @ 100 (b) | 1,621 | 1,626 | |||||||||
ARI Fleet Lease Trust, Series 2018-A Class A3, 2.84%, 10/15/26, Callable 11/15/21 @ 100 (b) | 6,063 | 6,154 | |||||||||
ARL Second LLC, Series 2014-1A Class A1, 2.92%, 6/15/44, Callable 6/15/24 @ 100 (b) | 495 | 496 | |||||||||
Ascentium Equipment Receivables Trust, Series 2019-1A Class B, 2.99%, 5/12/25, Callable 5/10/23 @ 100 (b) | 1,000 | 1,025 | |||||||||
Ascentium Equipment Receivables Trust, Series 2018-2A Class B, 3.76%, 5/10/24, Callable 12/10/22 @ 100 (b) | 3,245 | 3,374 | |||||||||
Ascentium Equipment Receivables Trust, Series 2017-1A Class B, 2.85%, 10/10/21, Callable 6/10/21 @ 100 (b) | 7,764 | 7,833 | |||||||||
Avis Budget Rental Car Funding Aesop LLC, Series 2020- 1A Class B, 2.68%, 8/20/26 (b) | 4,000 | 4,054 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2016-1A Class C, 4.94%, 6/20/22 (b) | 2,827 | 2,905 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2019-3A Class A, 2.36%, 3/20/26 (b) | 5,000 | 5,073 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2019-2A Class A, 3.35%, 9/22/25 (b) | 3,300 | 3,493 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2016-2A Class B, 3.36%, 11/20/22 (b) | 5,000 | 5,083 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2019-1A Class B, 3.70%, 3/20/23 (b) | 2,200 | 2,262 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2014-2A Class B, 3.29%, 2/20/21, Callable 2/20/20 @ 100 (b) | 583 | 584 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2014-2A Class A, 2.50%, 2/20/21, Callable 2/20/20 @ 100 (b) | 564 | 564 | |||||||||
Avis Budget Rental Car Funding Aseop LLC, Series 2019-1A Class A, 3.45%, 3/20/23 (b) | 4,967 | 5,115 | |||||||||
Bank of The West Auto Trust, Series 2019-1 Class B, 2.76%, 1/15/25, Callable 5/15/23 @ 100 (b) | 3,300 | 3,389 | |||||||||
Bank of The West Auto Trust, Series 2019-1 Class C, 2.90%, 4/15/25, Callable 5/15/23 @ 100 (b) | 1,400 | 1,439 | |||||||||
Bank of The West Auto Trust, Series 2018-1 Class A4, 3.59%, 12/15/23, Callable 11/15/21 @ 100 (b) | 5,000 | 5,162 | |||||||||
Bank of The West Auto Trust, Series 2017-1 Class C, 2.96%, 2/15/24, Callable 12/15/21 @ 100 (b) | 5,000 | 5,103 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Bank of The West Auto Trust, Series 2017-1 Class A4, 2.33%, 9/15/23, Callable 12/15/21 @ 100 (b) | $ | 5,455 | $ | 5,517 | |||||||
Bank of The West Auto Trust, Series 2019-1 Class A4, 2.51%, /15/25, Callable 5/15/23 @ 100 (b) | 7,500 | 7,664 | |||||||||
BCC Funding LLC, Series 2016-1 Class D, 4.78%, 8/20/22, Callable 5/20/20 @ 100 (b) | 1,951 | 1,965 | |||||||||
BCC Funding LLC, Series 2018-1A Class A2, 2.96%, 6/20/23, Callable 10/20/21 @ 100 (b) | 3,620 | 3,637 | |||||||||
Cabela's Credit Card Master Note Trust, Series 2013-1A Class A, 2.71%, 2/17/26 (b) | 5,000 | 5,151 | |||||||||
Canadian Pacer Auto Receivables Trust, Series 2018-1 Class B, 3.47%, 2/19/23, Callable 4/19/21 @ 100 (b) | 5,000 | 5,105 | |||||||||
Canadian Pacer Auto Receivables Trust, Series 2018-1A Class C, 3.82%, 4/19/24, Callable 4/19/21 @ 100 (b) | 10,000 | 10,221 | |||||||||
Canadian Pacer Auto Receivables Trust, Series 2020-1A Class C, 2.49%, 5/19/26, Callable 12/19/23 @ 100 (b) (c) | 2,000 | 2,010 | |||||||||
Canadian Pacer Auto Receivables Trust, Series 2018-2A Class B, 3.63%, 1/19/24, Callable 1/19/22 @ 100 (b) | 1,250 | 1,289 | |||||||||
Canadian Pacer Auto Receivables Trust, Series 2018-2A Class A4, 3.44%, 8/21/23, Callable 1/19/22 @ 100 (b) | 5,135 | 5,301 | |||||||||
Canadian Pacer Auto Receivables Trust, Series 2020-1A Class B, 2.00%, 7/21/25, Callable 12/19/23 @ 100 (b) (c) | 2,000 | 2,010 | |||||||||
Canadian Pacer Auto Receivables Trust, Series 2018-2A Class C, 4.07%, 3/19/25, Callable 1/19/22 @ 100 (b) | 5,000 | 5,181 | |||||||||
CarMax Auto Owner Trust, Series 2020-1 Class C, 2.34%, 11/17/25, Callable 1/15/24 @ 100 | 3,270 | 3,307 | |||||||||
CarMax Auto Owner Trust, Series 2020-1 Class B, 2.21%, 9/15/25, Callable 1/15/24 @ 100 | 3,188 | 3,223 | |||||||||
CARS LP, Series 2020-1A Class A1, 2.69%, 2/15/50 (b) | 4,348 | 4,348 | |||||||||
CCG Receivables Trust, Series 2019-2 Class B, 2.55%, 3/15/27, Callable 6/14/23 @ 100 (b) | 3,500 | 3,532 | |||||||||
Centre Point Funding LLC, Series 2012-2A Class 1, 2.61%, 8/20/21 (b) | 424 | 423 | |||||||||
Chesapeake Funding LLC, Series 2018-A1 Class A1, 3.04%, 4/15/30 (b) | 1,817 | 1,841 | |||||||||
Chesapeake Funding LLC, Series 2019-1A Class B, 3.11%, 4/15/31, Callable 6/15/22 @ 100 (b) | 6,000 | 6,140 | |||||||||
Chesapeake Funding LLC, Series 2018-2A Class A1, 3.23%, 8/15/30, Callable 8/15/21 @ 100 (b) | 3,492 | 3,539 | |||||||||
CNH Equipment Trust, Series 2017-B Class B, 2.47%, 12/16/24, Callable 8/15/21 @ 100 | 1,200 | 1,211 | |||||||||
College Loan Corp Trust I, Series 2005-2 Class B, 2.32% (LIBOR03M+49bps), 1/15/37, Callable 7/15/28 @ 100 (d) | 1,413 | 1,327 | |||||||||
Conn's Receivables Funding LLC, Series 2019-B Class A, 2.66%, 6/17/24, Callable 11/15/21 @ 100 (b) | 2,933 | 2,938 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2017-3 Class B, 3.21%, 8/17/26 (b) | 1,500 | 1,520 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2017-2 Class A, 2.55%, 2/17/26 (b) | 1,142 | 1,144 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2017-2 Class C, 3.35%, 6/15/26, Callable 1/15/21 @ 100 (b) | 4,850 | 4,897 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2019- 3A Class A, 2.38%, 11/15/28 (b) | 2,250 | 2,272 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Credit Acceptance Auto Loan Trust, Series 2018-1 Class A, 3.01%, 2/16/27, Callable 2/15/21 @ 100 (b) | $ | 3,030 | $ | 3,044 | |||||||
Credit Acceptance Auto Loan Trust, Series 2018-3A Class A, 3.55%, 8/15/27, Callable 10/15/21 @ 100 (b) | 2,348 | 2,390 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2019-3A Class B, 2.86%, 1/16/29 (b) | 7,330 | 7,489 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2018-1A Class B, 3.60%, 4/15/27, Callable 6/15/21 @ 100 (b) | 16,000 | 16,339 | |||||||||
Dell Equipment Finance Trust, Series 2017-1 Class D, 3.44%, 4/24/23, Callable 2/22/20 @ 100 (b) | 1,185 | 1,186 | |||||||||
Dell Equipment Finance Trust, Series 2019-2 Class C, 2.18%, 10/22/24, Callable 7/22/22 @ 100 (b) | 2,700 | 2,703 | |||||||||
Dell Equipment Finance Trust, Series 2017-2 Class C, 2.73%, 10/24/22, Callable 8/22/20 @ 100 (b) | 1,750 | 1,757 | |||||||||
Dell Equipment Finance Trust, Series 2017-1 Class C, 2.95%, 4/22/22, Callable 2/22/20 @ 100 (b) | 471 | 471 | |||||||||
Drive Auto Receivables Trust, Series 2018-2 Class D, 4.14%, 8/15/24, Callable 12/15/21 @ 100 | 5,000 | 5,137 | |||||||||
Drive Auto Receivables Trust, Series 2018-3 Class D, 4.30%, 9/16/24, Callable 11/15/21 @ 100 | 2,805 | 2,892 | |||||||||
Drive Auto Receivables Trust, Series 2018-1 Class C, 3.22%, 3/15/23, Callable 8/15/21 @ 100 | 4,704 | 4,717 | |||||||||
Drive Auto Receivables Trust, Series 2018-1 Class D, 3.81%, 5/15/24, Callable 8/15/21 @ 100 | 6,000 | 6,108 | |||||||||
Drive Auto Receivables Trust, Series 2018-5 Class B, 3.68%, 7/15/23, Callable 12/15/21 @ 100 | 5,000 | 5,044 | |||||||||
Drive Auto Receivables Trust, Series 2018-4 Class C, 3.66%, 11/15/24, Callable 10/15/21 @ 100 | 3,500 | 3,534 | |||||||||
DT Auto Owner Trust, Series 2018-2A Class C, 3.67%, 3/15/24, Callable 8/15/21 @ 100 (b) | 5,000 | 5,042 | |||||||||
Element Rail Leasing I LLC, Series 2014-1A Class A2, 3.67%, 4/19/44 (b) | 12,000 | 12,124 | |||||||||
Element Rail Leasing LLC, Series 2014-1A Class A1, 2.30%, 4/19/44 (b) | 921 | 920 | |||||||||
Enterprise Fleet Financing LLC, Series 2017-2 Class A2, 1.97%, 1/20/23 (b) | 300 | 300 | |||||||||
Enterprise Fleet Financing LLC, Series 2016-2 Class A3, 2.04%, 2/22/22 (b) | 1,240 | 1,241 | |||||||||
Enterprise Fleet Financing LLC, Series 2017-1 Class A2, 2.13%, 7/20/22, Callable 4/20/20 @ 100 (b) | 415 | 415 | |||||||||
Enterprise Fleet Financing LLC, Series 2017-1 Class A3, 2.60%, 7/20/22, Callable 5/20/20 @ 100 (b) | 10,000 | 10,020 | |||||||||
Enterprise Fleet Financing LLC, Series 2017-3 Class A3, 2.36%, 5/20/23 (b) | 2,344 | 2,363 | |||||||||
Evergreen Credit Card Trust, Series 2019-1 Class B, 3.59%, 1/15/23 (b) | 3,740 | 3,785 | |||||||||
Evergreen Credit Card Trust, Series 2019-1 Class C, 3.98%, 1/15/23 (b) | 4,000 | 4,051 | |||||||||
Evergreen Credit Card Trust, Series 2019-2 Class B, 2.27%, 9/15/24 (b) | 3,562 | 3,586 | |||||||||
Exeter Automobile Receivables Trust, Series 2018-1 Class B, 2.75%, 4/15/22, Callable 12/15/21 @ 100 (b) | 727 | 728 | |||||||||
Exeter Automobile Receivables Trust, Series 2017-2 Class B, 2.82%, 5/16/22, Callable 10/15/21 @ 100 (b) | 1,012 | 1,014 | |||||||||
Exeter Automobile Receivables Trust, Series 2018-4 Class C, 3.97%, 9/15/23, Callable 4/15/22 @ 100 (b) | 4,000 | 4,073 | |||||||||
Exeter Automobile Receivables Trust, Series 2018-3 Class D, 4.35%, 6/17/24, Callable 6/15/22 @ 100 (b) | 2,500 | 2,593 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Exeter Automobile Receivables Trust, Series 2019-4 Class C, 2.44%, 9/16/24, Callable 7/15/24 @ 100 (b) | $ | 4,000 | $ | 4,015 | |||||||
Exeter Automobile Receivables Trust, Series 2019-3 Class C, 2.79%, 5/15/24, Callable 11/15/22 @ 100 (b) | 3,490 | 3,536 | |||||||||
Exeter Automobile Receivables Trust, Series 2018-3A Class B, 3.46%, 10/17/22, Callable 6/15/22 @ 100 (b) | 923 | 926 | |||||||||
Exeter Automobile Receivables Trust, Series 2018-2 Class B, 3.27%, 5/16/22, Callable 2/15/22 @ 100 (b) | 1,631 | 1,634 | |||||||||
Exeter Automobile Receivables Trust, Series 2020-1A Class B, 2.26%, 4/15/24, Callable 3/15/24 @ 100 (b) | 2,566 | 2,577 | |||||||||
Exeter Automobile Receivables Trust, Series 2020-1A Class C, 2.49%, 1/15/25, Callable 3/15/24 @ 100 (b) | 4,545 | 4,581 | |||||||||
Exeter Automobile Receivables Trust, Series 2019-2A Class C, 3.30%, 3/15/24, Callable 8/15/22 @ 100 (b) | 6,496 | 6,617 | |||||||||
First Investors Auto Owner Trust, Series 2017-2 Class D, 3.56%, 9/15/23, Callable 11/15/21 @ 100 (b) | 5,695 | 5,823 | |||||||||
First Investors Auto Owner Trust, Series 2019-2A Class C, 2.71%, 12/15/25, Callable 10/15/23 @ 100 (b) | 7,403 | 7,555 | |||||||||
First Investors Auto Owner Trust, Series 2019-2 Class B, 2.47%, 1/15/25, Callable 10/15/23 @ 100 (b) | 3,640 | 3,662 | |||||||||
Flagship Credit Auto Trust, Series 2017-1 Class D, 4.23%, 5/15/23, Callable 11/15/21 @ 100 (b) | 5,760 | 5,922 | |||||||||
Ford Credit Auto Lease Trust, Series 2020-A Class B, 2.05%, 6/15/23, Callable 8/15/22 @ 100 | 5,000 | 5,026 | |||||||||
Goal Capital Funding Trust, Series 2005-2 Class A4, 2.11% (LIBOR03M+20bps), 8/25/44, Callable 8/25/20 @ 100 (d) | 4,764 | 4,640 | |||||||||
Great American Auto Leasing, Inc., Series 2019-1 Class A4, 3.21%, 2/18/25, Callable 12/15/22 @ 100 (b) | 1,000 | 1,033 | |||||||||
GreatAmerica Leasing Receivables Funding LLC, Series 2018-1 Class A4, 2.83%, 6/17/24, Callable 11/15/21 @ 100 (b) | 5,000 | 5,072 | |||||||||
Hertz Vehicle Financing LP, Series 2019-1A Class A, 3.71%, 3/25/23 (b) | 5,000 | 5,186 | |||||||||
Hertz Vehicle Financing LP, Series 2016-4A Class A, 2.65%, 7/25/22 (b) | 2,000 | 2,018 | |||||||||
Hertz Vehicle Financing LP, Series 2019-1A Class B, 4.10%, 3/25/23 (b) | 870 | 901 | |||||||||
HPEFS Equipment Trust, Series 2019-1A Class C, 2.49%, 9/20/29, Callable 5/20/22 @ 100 (b) | 1,350 | 1,358 | |||||||||
HPEFS Equipment Trust, Series 2019-1A Class B, 2.32%, 9/20/29, Callable 5/20/22 @ 100 (b) | 1,750 | 1,757 | |||||||||
Iowa Student Loan Liquidity Corp., Series 2005-1 Class B, 2.46% (LIBOR03M+35bps), 9/25/37, Callable 12/25/21 @ 100 (d) | 2,043 | 1,858 | |||||||||
Master Credit Card Trust, Series 2020-1A Class B, 2.27%, 9/23/24 (b) | 833 | 839 | |||||||||
Master Credit Card Trust, Series 2019-2A Class B, 2.39%, 7/21/21 (b) | 5,000 | 5,016 | |||||||||
Master Credit Card Trust, Series 2019-2A Class C, 2.83%, 7/21/21 (b) | 2,750 | 2,758 | |||||||||
Master Credit Card Trust, Series 2020-1A Class C, 2.59%, 9/23/24 (b) | 2,125 | 2,140 | |||||||||
MMAF Equipment Finance LLC, Series 2017-A Class A4, 2.41%, 8/16/24, Callable 6/16/29 @ 100 (b) | 2,900 | 2,928 | |||||||||
Nelnet Student Loan Trust, Series 2005-3 Class B, 2.21% (LIBOR03M+28bps), 9/22/37, Callable 3/22/20 @ 100 (d) | 1,048 | 1,033 | |||||||||
NP SPE II LLC, Series 2019-2A Class A1, 2.86%, 11/19/49 (b) | 4,165 | 4,175 | |||||||||
NP SPE LLC, Series 2017-1A Class A1, 3.37%, 10/21/47, Callable 10/20/27 @ 100 (b) | 2,313 | 2,366 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
OneMain Direct Auto Receivables Trust, Series 2017-2 Class B, 2.55%, 11/14/23, Callable 8/14/20 @ 100 (b) | $ | 8,000 | $ | 8,004 | |||||||
OSCAR US Funding Trust LLC, Series 2017-2A Class A3, 2.45%, 12/10/21 (b) | 2,836 | 2,842 | |||||||||
OSCAR US Funding Trust LLC, Series 2018-2A Class A3, 3.39%, 9/12/22 (b) | 5,000 | 5,069 | |||||||||
OSCAR US Funding Trust LLC, Series 2017-1A Class A4, 3.30%, 5/10/24 (b) | 4,000 | 4,054 | |||||||||
OSCAR US Funding Trust LLC, Series 2018-1A Class A3, 3.23%, 5/10/22 (b) | 5,000 | 5,042 | |||||||||
OSCAR US Funding Trust LLC, Series 2018-2A Class A2A, 3.15%, 8/10/21 (b) | 1,379 | 1,382 | |||||||||
Pawnee Equipment Receivables Series 1 LLC, Series 2019-1 Class A2, 2.29%, 10/15/24, Callable 5/15/23 @ 100 (b) | 5,000 | 5,013 | |||||||||
Prestige Auto Receivables Trust, Series 2016-2 Class C, 2.88%, 11/15/22, Callable 11/15/20 @ 100 (b) | 2,005 | 2,010 | |||||||||
Prestige Auto Receivables Trust, Series 2017-1 Class B, 2.39%, 5/16/22, Callable 5/15/21 @ 100 (b) | 2,147 | 2,148 | |||||||||
Santander Drive Auto Receivables Trust, Series 2018-5 Class B, 3.52%, 12/15/22, Callable 12/15/21 @ 100 | 4,792 | 4,819 | |||||||||
Santander Drive Auto Receivables Trust, Series 2016-2 Class C, 2.66%, 11/15/21, Callable 10/15/20 @ 100 | 495 | 495 | |||||||||
SCF Equipment Leasing LLC, Series 2017-2A Class A, 3.41%, 12/20/23, Callable 2/20/20 @ 100 (b) | 2,430 | 2,442 | |||||||||
SCF Equipment Leasing LLC, Series 2017-1 Class A, 3.77%, 1/20/23, Callable 12/20/21 @ 100 (b) | 5,708 | 5,774 | |||||||||
SCF Equipment Leasing LLC, Series 2019-1A Class B, 3.49%, 1/20/26, Callable 4/20/20 @ 100 (b) | 5,500 | 5,687 | |||||||||
SCF Equipment Leasing LLC, Series 2019-2 Class B, 2.76%, 8/20/26, Callable 2/20/25 @ 100 (b) | 2,000 | 2,028 | |||||||||
SCF Equipment Leasing LLC, Series 2019-1 Class A2, 3.23%, 10/20/24, Callable 4/20/20 @ 100 (b) | 3,000 | 3,027 | |||||||||
Securitized Term Auto Receivables Trust, Series 2017-2 Class A4, 2.29%, 3/25/22, Callable 12/25/20 @ 100 (b) | 3,906 | 3,918 | |||||||||
Securitized Term Auto Receivables Trust, Series 2019-CRTA Class B, 2.45%, 3/25/26, Callable 2/25/23 @ 100 (b) | 1,568 | 1,583 | |||||||||
Securitized Term Auto Receivables Trust, Series 2017-1 Class A4, 2.21%, 6/25/21, Callable 5/25/20 @ 100 (b) | 3,199 | 3,201 | |||||||||
Securitized Term Auto Receivables Trust, Series 2019-CRTA Class C, 2.85%, 3/25/26, Callable 2/25/23 @ 100 (b) | 2,240 | 2,270 | |||||||||
Synchrony Credit Card Master Note Trust, Series 2017-1 Class C, 2.56%, 6/15/23 | 15,000 | 15,020 | |||||||||
Synchrony Credit Card Master Note Trust, Series 2018-2 Class C, 3.87%, 5/15/26 | 5,000 | 5,273 | |||||||||
Synchrony Credit Card Master Note Trust, Series 2016-2 Class C, 2.95%, 5/15/24 | 4,565 | 4,608 | |||||||||
TCF Auto Receivables Owner Trust, Series 2016-PT1 Class B, 2.92%, 10/17/22, Callable 1/15/21 @ 100 (b) | 5,000 | 5,049 | |||||||||
Trillium Credit Card Trust, Series 2019-2A Class A, 3.04%, 1/26/24 (b) | 5,000 | 5,067 | |||||||||
Trillium Credit Card Trust II, Series 2020-1A Class B, 2.33%, 12/27/24 (b) | 2,913 | 2,913 | |||||||||
Trinity Rail Leasing LLC, Series 2019-2A Class A1, 2.39%, 10/18/49, Callable 10/17/20 @ 100 (b) | 2,440 | 2,415 | |||||||||
Trinity Rail Leasing LP, Series 2012-1A Class A1, 2.27%, 1/15/43, Callable 1/15/23 @ 100 (b) | 2,095 | 2,092 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
United Auto Credit Securitization Trust, Series 2018-1 Class D, 3.52%, 11/10/22, Callable 10/10/20 @ 100 (b) | $ | 4,000 | $ | 4,014 | |||||||
United Auto Credit Securitization Trust, Series 2019-1 Class B, 3.03%, 4/10/24, Callable 7/10/21 @ 100 (b) | 4,250 | 4,275 | |||||||||
VB-S1 Issuer LLC, Series 2016-1A Class C, 3.07%, 6/15/46, Callable 6/15/20 @ 100 (b) | 2,520 | 2,538 | |||||||||
Westlake Automobile Receivables Trust, Series 2017-1 Class C, 2.70%, 10/17/22, Callable 8/15/20 @ 100 (b) | 164 | 164 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-3 Class C, 3.61%, 10/16/23, Callable 2/15/22 @ 100 (b) | 3,000 | 3,053 | |||||||||
Westlake Automobile Receivables Trust, Series 2017-2 Class D, 3.28%, 12/15/22, Callable 2/15/21 @ 100 (b) | 2,000 | 2,021 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-1 Class B, 2.67%, 5/17/21, Callable 6/15/21 @ 100 (b) | 935 | 935 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-1 Class E, 4.53%, 5/15/23, Callable 6/15/21 @ 100 (b) | 5,000 | 5,138 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-2A Class D, 4.00%, 1/16/24, Callable 11/15/21 @ 100 (b) | 14,450 | 14,845 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-3A Class D, 4.00%, 10/16/23, Callable 2/15/22 @ 100 (b) | 3,900 | 4,027 | |||||||||
World Omni Auto Receivables Trust, Series 2018-D Class C, 3.87%, 8/15/25, Callable 10/15/22 @ 100 | 4,000 | 4,212 | |||||||||
World Omni Select Auto Trust, Series 2018-1 Class B, 3.68%, 7/15/23, Callable 3/15/22 @ 100 (b) | 5,000 | 5,079 | |||||||||
Total Asset Backed Securities (Cost $559,116) | 565,132 | ||||||||||
Collateralized Mortgage Obligations (5.4%) | |||||||||||
American Money Management Corp., Series 2016-19A Class AR, 2.97% (LIBOR03M+114bps), 10/16/28, Callable 7/15/20 @ 100 (b) (d) | 1,500 | 1,501 | |||||||||
Annisa CLO Ltd, Series 2016-2 Class AR, 2.92% (LIBOR03M+110bps), 7/20/31, Callable 7/20/20 @ 100 (b) (d) | 3,000 | 2,987 | |||||||||
Aventura Mall Trust, Series 2013-AVM Class A, 3.87%, 12/5/32 (b) (e) | 3,705 | 3,728 | |||||||||
BTH Mortgage-Backed Securities Trust, Series 2018-21 Class A, 4.28% (LIBOR01M+250bps), 10/7/21 (b) (d) | 4,000 | 4,005 | |||||||||
Citigroup Commercial Mortgage Trust, Series 2019-PRM Class A, 3.34%, 5/10/36 (b) | 7,338 | 7,714 | |||||||||
Citigroup Commercial Mortgage Trust, Series 2019-SMRT Class B, 4.38%, 1/10/36 (b) | 7,600 | 8,183 | |||||||||
COMM Mortgage Trust, Series 2012-CCRE2 Class XA, 1.80%, 8/15/45 (e) (f) | 59,284 | 1,923 | |||||||||
COMM Mortgage Trust, Series 2012-CCRE4 Class XA, 1.85%, 10/15/45 (e) (f) | 54,399 | 1,912 | |||||||||
COMM Mortgage Trust, Series 2020-CBM Class A2, 2.90%, 11/13/39 (b) (c) | 5,620 | 5,788 | |||||||||
COMM Mortgage Trust, Series 2020-CBM Class B, 3.10%, 11/13/39 (b) (c) | 5,000 | 5,150 | |||||||||
COMM Mortgage Trust, Series 2015-PC1 Class B, 4.58%, 7/10/50 (e) | 3,366 | 3,667 | |||||||||
COMM Mortgage Trust, Series 2020-CBM Class C, 3.40%, 11/13/39 (b) (c) | 2,625 | 2,704 | |||||||||
Commercial Mortgage Trust, Series 2006-GG7 Class AM, 5.81%, 7/10/38 (e) | 1,252 | 1,276 | |||||||||
FREMF Mortgage Trust, Series 2016-K504 Class B, 3.08%, 9/25/20 (b) (e) | 1,293 | 1,294 | |||||||||
FREMF Mortgage Trust, Series 2017-K724 Class B, 3.60%, 11/25/23 (b) (e) | 4,000 | 4,149 | |||||||||
GS Mortgage Securities Corp Trust, Series 2017-GPTX Class A, 2.86%, 5/10/34 (b) | 10,000 | 10,061 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
GS Mortgage Securities Corp Trust, Series 2017-SLP Class A, 3.42%, 10/10/32 (b) | $ | 4,730 | $ | 4,893 | |||||||
GS Mortgage Securities Trust, Series 2012-GC6 Class AS, 4.95%, 1/10/45 (b) | 5,297 | 5,558 | |||||||||
GS Mortgage Securities Trust, Series 2012-GCJ9 Class XA, 2.10%, 11/10/45 (e) (f) | 22,750 | 1,006 | |||||||||
GS Mortgage Securities Trust, Series 2012-GCJ7 Class XA, 2.35%, 5/10/45 (e) | 23,009 | 625 | |||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2012-C8 Class XA, 1.91%, 10/15/45 (e) (f) | 20,147 | 721 | |||||||||
LSTAR Commercial Mortgage Trust, Series 2017-5 Class A1, 2.42%, 3/10/50 (b) | 623 | 623 | |||||||||
Madison Park Funding Ltd., Series 2013-11A Class AR, 2.97% (LIBOR03M+116bps), 7/23/29, Callable 4/23/20 @ 100 (b) (d) | 6,750 | 6,753 | |||||||||
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2012-C6 Class XA, 1.77%, 11/15/45 (b) (e) (f) | 19,187 | 655 | |||||||||
Morgan Stanley Capital I Trust, Series 2019-NUGS Class B, 2.98% (LIBOR01M+130bps), 12/15/21 (b) (d) | 3,846 | 3,858 | |||||||||
Oaktree EIF Ltd., Series 2016-IIIA Class B, 3.82% (LIBOR03M+200bps), 10/20/27, Callable 4/20/20 @ 100 (b) (d) | 10,500 | 10,519 | |||||||||
Palmer Square Loan Funding Ltd., Series 2018-5A Class A1, 2.67% (LIBOR03M+85bps), 1/20/27, Callable 4/20/20 @ 100 (b) (d) | 3,632 | 3,630 | |||||||||
Palmer Square Loan Funding Ltd., Series 2018-2A Class A1, 2.48% (LIBOR03M+65bps), 7/15/26, Callable 4/15/20 @ 100 (b) (d) | 2,875 | 2,872 | |||||||||
Palmer Square Loan Funding Ltd., Series 2019-3 Class A1, 2.75% (LIBOR03M+85bps), 8/20/27, Callable 8/20/20 @ 100 (b) (d) | 4,742 | 4,744 | |||||||||
Palmer Square Loan Funding Ltd., Series 2019-2 Class A1, 2.79% (LIBOR03M+97bps), 4/20/27, Callable 7/20/20 @ 100 (b) (d) | 2,471 | 2,472 | |||||||||
Palmer Square Loan Funding Ltd., Series 2020-1A Class A1 (LIBOR3M+80bps), 2/20/28 (b) (c) (d) | 5,000 | 5,000 | |||||||||
Palmer Square Loan Funding Ltd., Series 2020-1A Class A2 (LIBOR3M+135bps), 2/20/28 (b) (c) (d) | 4,600 | 4,600 | |||||||||
Palmer Square Loan Funding Ltd., Series 2018-2A Class A2, 2.88% (LIBOR03M+105bps), 7/15/26, Callable 4/15/20 @ 100 (b) (d) | 1,970 | 1,961 | |||||||||
Race Point CLO Ltd., Series 2016-10A Class A1R, 2.89% (LIBOR03M+110bps), 7/25/31, Callable 7/25/20 @ 100 (b) (d) | 4,500 | 4,485 | |||||||||
Sequoia Mortgage Trust, Series 2013-5 Class A2, 3.00%, 5/25/43, Callable 12/25/33 @ 100 (b) (e) | 2,375 | 2,414 | |||||||||
TIAA CLO Ltd., Series 2017-1A Class A, 3.10% (LIBOR03M+128bps), 4/20/29, Callable 4/20/20 @ 100 (b) (d) | 2,500 | 2,501 | |||||||||
Trinitas CLO Ltd., Series 2017-6A Class AR, 2.96% (LIBOR03M+117bps), 7/25/29, Callable 4/25/20 @ 100 (b) (d) | 5,000 | 5,001 | |||||||||
Trinitas CLO Ltd., Series 2016-5A Class AR, 3.18% (LIBOR03M+139bps), 10/25/28, Callable 4/25/20 @ 100 (b) (d) | 3,250 | 3,250 | |||||||||
UBS Commercial Mortgage Trust, Series 2012-C1 Class XA, 2.26%, 5/10/45 (b) (e) (f) | 84,171 | 2,945 | |||||||||
UBS-Barclays Commercial Mortgage Trust, Series 2012-C3 Class A3, 2.73%, 8/10/49 | 51 | 51 | |||||||||
UBS-Barclays Commercial Mortgage Trust, Series 2012-C3 Class XA, 1.99%, 8/10/49 (b) (e) (f) | 23,545 | 938 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares Principal Amount | Value | |||||||||
Wells Fargo Commercial Mortgage Trust, Series 2012-LC5 Class XA, 1.91%, 10/15/45 (b) (e) (f) | $ | 23,507 | $ | 890 | |||||||
WFRBS Commercial Mortgage Trust, Series 2011-C4 Class A4, 4.90%, 6/15/44 (b) (e) | 15,000 | 15,574 | |||||||||
Total Collateralized Mortgage Obligations (Cost $155,548) | 164,581 | ||||||||||
Preferred Stocks (1.1%) | |||||||||||
Communication Services (0.7%): | |||||||||||
Centaur Funding Corp., cumulative redeemable, 9.08%, 4/21/20 (b) | 23,029 | 23,697 | |||||||||
Financials (0.2%): | |||||||||||
Citigroup Capital, cumulative redeemable, 8.14% (LIBOR03M+637bps), 10/30/40 (d) | 200,000 | 5,636 | |||||||||
Real Estate (0.2%): | |||||||||||
SunTrust Real Estate Investment Corp., non-cumulative, 9.00% (b) (g) (h) (i) | 50 | 5,475 | |||||||||
Total Preferred Stocks (Cost $35,640) | 34,808 | ||||||||||
Convertible Corporate Bonds (0.9%) | |||||||||||
Energy (0.4%): | |||||||||||
PDC Energy, Inc., 1.13%, 9/15/21 | 5,000 | 4,683 | |||||||||
Whiting Petroleum Corp., 1.25%, 4/1/20 | 9,006 | 8,880 | |||||||||
13,563 | |||||||||||
Health Care (0.5%): | |||||||||||
Teva Pharmaceutical Finance LLC, 0.25%, 2/1/26, Callable 2/28/20 @ 100 | 15,105 | 14,464 | |||||||||
Total Convertible Corporate Bonds (Cost $27,421) | 28,027 | ||||||||||
Senior Secured Loans (0.5%) | |||||||||||
GLP Capital LP, Term Loan A1, 3.28%(LIBOR01M+150bps), 4/28/21 (d) | 8,552 | 8,520 | |||||||||
PetSmart, Inc., 1st Lien Term Loan B2, 5.67% (LIBOR01M+400bps), 3/10/22 (d) | 5,365 | 5,349 | |||||||||
Total Senior Secured Loans (Cost $13,760) | 13,869 | ||||||||||
Corporate Bonds (46.5%) | |||||||||||
Communication Services (2.1%): | |||||||||||
AMC Networks, Inc., 4.75%, 12/15/22, Callable 3/9/20 @ 100.79 | 4,634 | 4,666 | |||||||||
AT&T, Inc., 2.45%, 6/30/20, Callable 5/30/20 @ 100 (a) | 10,000 | 10,020 | |||||||||
CenturyLink, Inc., 6.45%, 6/15/21 | 3,600 | 3,779 | |||||||||
Charter Communications Operating LLC, 3.58%, 7/23/20, Callable 6/23/20 @ 100 | 18,000 | 18,103 | |||||||||
Sprint Communications, Inc., 7.00%, 3/1/20 (b) | 12,000 | 12,037 | |||||||||
Sprint Spectrum, 3.36%, 3/20/23 (b) | 6,825 | 6,884 | |||||||||
Time Warner Cable, Inc., 5.00%, 2/1/20 | 3,233 | 3,233 | |||||||||
T-Mobile USA, Inc., 6.50%, 1/15/24, Callable 2/18/20 @ 102.17 | 5,000 | 5,134 | |||||||||
63,856 |
See notes to financial statements.
11
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Consumer Discretionary (1.7%): | |||||||||||
Association of American Medical Colleges 2.27%, 10/1/25 | $ | 4,145 | $ | 4,167 | |||||||
2.39%, 10/1/26 | 4,275 | 4,297 | |||||||||
Duke University Health System, Inc., 2.26%, 6/1/26 | 700 | 708 | |||||||||
Horace Mann School, 2.48%, 7/1/22 | 2,500 | 2,513 | |||||||||
Howard University 2.64%, 10/1/21 (c) | 500 | 500 | |||||||||
2.80%, 10/1/23 (c) | 1,000 | 1,001 | |||||||||
2.42%, 10/1/24 (c) | 1,350 | 1,352 | |||||||||
2.52%, 10/1/25 (c) | 1,000 | 1,001 | |||||||||
Lennar Corp., 2.95%, 11/29/20, Callable 9/29/20 @ 100 | 10,000 | 10,038 | |||||||||
McDonald's Corp., 3.35%, 4/1/23, Callable 3/1/23 @ 100 | 5,000 | 5,241 | |||||||||
MDC Holdings, Inc., 5.63%, 2/1/20 | 2,000 | 2,000 | |||||||||
QVC, Inc., 4.38%, 3/15/23 | 6,770 | 7,009 | |||||||||
Volkswagen Group of America Finance LLC 2.50%, 9/24/21 (b) | 5,000 | 5,052 | |||||||||
2.70%, 9/26/22 (b) | 5,000 | 5,084 | |||||||||
YMCA of Greater New York 2.21%, 8/1/20 | 325 | 325 | |||||||||
2.26%, 8/1/21 | 300 | 301 | |||||||||
50,589 | |||||||||||
Consumer Staples (4.2%): | |||||||||||
Anheuser-Busch InBev Worldwide, Inc., 4.15%, 1/23/25, Callable 12/23/24 @ 100 | 5,000 | 5,516 | |||||||||
BAT Capital Corp., 2.76%, 8/15/22, Callable 7/15/22 @ 100 | 10,000 | 10,197 | |||||||||
Cargill, Inc., 3.25%, 3/1/23 (b) | 2,500 | 2,604 | |||||||||
ConAgra Brands, Inc., 2.55% (LIBOR03M+75bps), 10/22/20, Callable 2/18/20 @ 100 (d) | 5,000 | 5,000 | |||||||||
Constellation Brands, Inc. 2.70%, 5/9/22, Callable 4/9/22 @ 100 | 2,600 | 2,646 | |||||||||
2.65%, 11/7/22, Callable 10/7/22 @ 100 | 7,896 | 8,059 | |||||||||
3.20%, 2/15/23, Callable 1/15/23 @ 100 | 3,000 | 3,106 | |||||||||
First Quality Finance Co., Inc., 5.00%, 7/1/25 (b) | 13,310 | 13,949 | |||||||||
Kraft Heinz Foods Co., 4.88%, 2/15/25, Callable 3/16/20 @ 102.44 (b) | 20,000 | 20,525 | |||||||||
McCormick & Co., Inc., 2.70%, 8/15/22, Callable 7/15/22 @ 100 | 5,000 | 5,102 | |||||||||
Mead Johnson Nutrition Co., 3.00%, 11/15/20 | 5,000 | 5,044 | |||||||||
Nestle Holdings, Inc., 3.35%, 9/24/23, Callable 8/24/23 @ 100 (b) | 5,000 | 5,278 | |||||||||
Philip Morris International, Inc. 2.63%, 2/18/22, Callable 1/18/22 @ 100 | 10,000 | 10,161 | |||||||||
2.38%, 8/17/22, Callable 7/17/22 @ 100 | 5,000 | 5,071 | |||||||||
Smithfield Foods, Inc., 2.65%, 10/3/21, Callable 9/3/21 @ 100 (b) | 13,425 | 13,427 | |||||||||
Tyson Foods, Inc., 4.50%, 6/15/22, Callable 3/15/22 @ 100 | 2,605 | 2,749 | |||||||||
Walmart, Inc. 2.85%, 7/8/24, Callable 6/8/24 @ 100 | 5,000 | 5,245 | |||||||||
3.55%, 6/26/25, Callable 4/26/25 @ 100 | 5,000 | 5,438 | |||||||||
129,117 |
See notes to financial statements.
12
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Energy (7.4%): | |||||||||||
Antero Resources Corp., 5.13%, 12/1/22, Callable 3/9/20 @ 101.28 | $ | 2,582 | $ | 2,227 | |||||||
Apache Corp., 3.63%, 2/1/21, Callable 11/1/20 @ 100 | 2,679 | 2,709 | |||||||||
Buckeye Partners LP 4.88%, 2/1/21, Callable 11/1/20 @ 100 | 9,500 | 9,641 | |||||||||
4.15%, 7/1/23, Callable 4/1/23 @ 100 | 5,000 | 5,058 | |||||||||
Continental Resources, Inc., 5.00%, 9/15/22, Callable 3/16/20 @ 100 | 8,335 | 8,372 | |||||||||
DCP Midstream Operating LP 5.35%, 3/15/20 (b) | 5,624 | 5,634 | |||||||||
4.75%, 9/30/21, Callable 6/30/21 @ 100 (b) | 5,000 | 5,129 | |||||||||
Enable Midstream Partners LP, 3.90%, 5/15/24, Callable 2/15/24 @ 100 | 10,000 | 10,286 | |||||||||
Enable Oklahoma Intrastate Transmission LLC, 6.25%, 3/15/20 (b) | 14,881 | 14,947 | |||||||||
Energy Transfer Operating LP 4.15%, 10/1/20 | 5,000 | 5,053 | |||||||||
4.20%, 9/15/23, Callable 8/15/23 @ 100 | 5,000 | 5,311 | |||||||||
Energy Transfer Partners LP/Regency Energy Finance Corp., 5.75%, 9/1/20 | 12,110 | 12,243 | |||||||||
EQM Midstream Partners LP 4.75%, 7/15/23, Callable 6/15/23 @ 100 | 5,000 | 4,920 | |||||||||
4.00%, 8/1/24, Callable 5/1/24 @ 100 | 9,645 | 9,210 | |||||||||
EQT Corp. 2.68% (LIBOR03M+77bps), 10/1/20 (d) | 2,000 | 2,000 | |||||||||
3.00%, 10/1/22, Callable 9/1/22 @ 100 (j) | 15,000 | 14,446 | |||||||||
6.13%, 2/1/25, Callable 1/1/25 @ 100 | 7,000 | 6,349 | |||||||||
Exxon Mobil Corp., 2.40%, 3/6/22, Callable 1/6/22 @ 100 | 1,500 | 1,525 | |||||||||
Holly Energy Partners LP/Holly Energy Finance Co., 6.00%, 8/1/24 (b) | 5,000 | 5,225 | |||||||||
Kinder Morgan Energy Partners LP, 6.85%, 2/15/20 | 3,908 | 3,913 | |||||||||
Marathon Petroleum Corp. 5.38%, 10/1/22, Callable 3/9/20 @ 100.9 | 5,105 | 5,159 | |||||||||
5.13%, 4/1/24, Callable 3/9/20 @ 102.56 | 5,000 | 5,105 | |||||||||
Midwest Connector Capital Co. LLC, 3.63%, 4/1/22, Callable 3/1/22 @ 100 (b) | 10,000 | 10,308 | |||||||||
MPLX LP 2.79%(LIBOR03M+90bps), 9/9/21, Callable 9/9/20 @ 100 (d) | 5,000 | 5,026 | |||||||||
6.25%, 10/15/22, Callable 2/24/20 @ 101.56 (b) | 4,607 | 4,683 | |||||||||
3.50%, 12/1/22, Callable 11/1/22 @ 100 (b) | 5,691 | 5,908 | |||||||||
Nustar Logistics LP 4.80%, 9/1/20 | 5,113 | 5,157 | |||||||||
6.75%, 2/1/21 | 1,700 | 1,756 | |||||||||
Occidental Petroleum Corp. 3.15%(LIBOR03M+125bps), 8/13/21, Callable 8/13/20 @ 100 (d) | 4,000 | 4,027 | |||||||||
2.70%, 8/15/22 | 5,000 | 5,079 | |||||||||
2.90%, 8/15/24, Callable 7/15/24 @ 100 | 5,000 | 5,107 | |||||||||
Rockies Express Pipeline LLC, 5.63%, 4/15/20 (b) | 13,556 | 13,627 | |||||||||
Sabine Pass Liquefaction LLC, 5.63%, 2/1/21, Callable 11/1/20 @ 100 | 4,700 | 4,824 | |||||||||
Targa Resources Partners LP/Targa Resources Partners Finance Corp., 5.25%, 5/1/23, Callable 3/9/20 @ 100.88 | 4,000 | 4,040 | |||||||||
Western Midstream Operating LP 4.00%, 7/1/22, Callable 4/1/22 @ 100 | 5,000 | 5,148 | |||||||||
3.10%, 2/1/25, Callable 1/1/25 @ 100 | 8,421 | 8,472 | |||||||||
227,624 |
See notes to financial statements.
13
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Financials (13.8%): | |||||||||||
Ally Financial, Inc., 4.13%, 3/30/20 | $ | 6,600 | $ | 6,621 | |||||||
Ares Capital Corp., 3.25%, 7/15/25 | 5,000 | 5,046 | |||||||||
Associated Bank NA, 3.50%, 8/13/21, Callable 7/13/21 @ 100 | 5,000 | 5,094 | |||||||||
Assurant, Inc. 3.20% (LIBOR03M+125bps), 3/26/21, Callable 2/24/20 @ 100 (d) (j) | 834 | 832 | |||||||||
4.20%, 9/27/23, Callable 8/27/23 @ 100 | 5,000 | 5,322 | |||||||||
BancorpSouth Bank, 4.13% (LIBOR03M+247bps), 11/20/29, Callable 11/20/24 @ 100 (d) | 8,571 | 8,710 | |||||||||
Bank of America Corp. 5.00%, 5/13/21, MTN | 10,000 | 10,415 | |||||||||
2.37% (LIBOR03M+66bps), 7/21/21, Callable 7/21/20 @ 100 (d) | 5,000 | 5,014 | |||||||||
2.33% (LIBOR03M+63bps), 10/1/21, Callable 10/1/20 @ 100 (a) (d) | 5,000 | 5,017 | |||||||||
3.12% (LIBOR03M+116bps), 1/20/23, Callable 1/20/22 @ 100, MTN (d) | 5,000 | 5,121 | |||||||||
BB&T Corp., 4.25%, 9/30/24 | 1,955 | 2,137 | |||||||||
BBVA USA 5.50%, 4/1/20 | 2,874 | 2,890 | |||||||||
2.88%, 6/29/22, Callable 5/29/22 @ 100 | 3,750 | 3,828 | |||||||||
Cadence BanCorp, 4.75% (LIBOR03M+303bps), 6/30/29, Callable 6/30/24 @ 100 (d) | 7,167 | 7,312 | |||||||||
Capital One Financial Corp. 2.50%, 5/12/20, Callable 4/12/20 @ 100 (a) | 5,000 | 5,006 | |||||||||
3.05%, 3/9/22, Callable 2/9/22 @ 100 | 5,000 | 5,120 | |||||||||
Citigroup, Inc., 3.14% (LIBOR03M+72bps), 1/24/23, Callable 1/24/22 @ 100 (d) | 5,000 | 5,116 | |||||||||
Citizens Bank NA, 2.55%, 5/13/21, MTN, Callable 4/13/21 @ 100 | 15,000 | 15,142 | |||||||||
Citizens Financial Group, Inc., 4.15%, 9/28/22 (b) | 1,283 | 1,348 | |||||||||
City National Bank, 5.38%, 7/15/22 | 2,000 | 2,160 | |||||||||
DAE Funding LLC 4.00%, 8/1/20, Callable 3/9/20 @ 102 (b) | 11,612 | 11,678 | |||||||||
5.25%, 11/15/21, Callable 10/15/21 @ 100 (b) | 5,000 | 5,200 | |||||||||
4.50%, 8/1/22, Callable 3/9/20 @ 102.25 (b) | 2,370 | 2,418 | |||||||||
Flagstar Bancorp, Inc., 6.13%, 7/15/21, Callable 6/15/21 @ 100 | 500 | 518 | |||||||||
Ford Motor Credit Co. LLC 3.20%, 1/15/21 | 4,000 | 4,031 | |||||||||
3.35%, 11/1/22 | 5,000 | 5,074 | |||||||||
Fulton Financial Corp., 3.60%, 3/16/22 | 9,750 | 9,960 | |||||||||
HSBC Finance Corp., 6.68%, 1/15/21 | 9,912 | 10,310 | |||||||||
Hyundai Capital America 2.75%, 9/18/20 (b) | 5,000 | 5,022 | |||||||||
3.00%, 6/20/22 (b) | 5,000 | 5,093 | |||||||||
2.85%, 11/1/22 (b) | 5,000 | 5,088 | |||||||||
Infinity Property & Casualty Corp., 5.00%, 9/19/22 | 21,955 | 23,386 | |||||||||
JPMorgan Chase & Co., 2.78% (LIBOR03M+94bps), 4/25/23, Callable 4/25/22 @ 100 (d) | 5,000 | 5,102 | |||||||||
KeyBank NA, 2.30%, 9/14/22 | 5,000 | 5,075 | |||||||||
Main Street Capital Corp., 5.20%, 5/1/24 | 5,200 | 5,625 | |||||||||
Manufacturers & Traders Trust Co., 2.05%, 8/17/20, Callable 7/17/20 @ 100 | 5,000 | 5,007 | |||||||||
MB Financial Bank NA, 4.00% (LIBOR03M+187bps), 12/1/27, Callable 12/1/22 @ 100 (d) | 3,000 | 3,057 |
See notes to financial statements.
14
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
New York Community Bancorp, Inc., 5.90% (LIBOR03M+278bps), 11/6/28, Callable 11/6/23 @ 100 (d) | $ | 3,242 | $ | 3,412 | |||||||
People's United Financial, Inc., 3.65%, 12/6/22, Callable 9/6/22 @ 100 | 9,500 | 9,926 | |||||||||
Pinnacle Financial Partners, Inc., 5.25% (LIBOR03M+388bps), 11/16/26, Callable 11/16/21 @ 100 (b) (d) | 3,800 | 3,904 | |||||||||
PNC Bank NA, 2.63%, 2/17/22, Callable 1/18/22 @ 100 | 10,000 | 10,180 | |||||||||
Protective Life Global Funding, 3.10%, 4/15/24 (b) | 5,000 | 5,236 | |||||||||
Regions Bank, 2.75%, 4/1/21, Callable 3/1/21 @ 100 | 5,000 | 5,052 | |||||||||
Reliance Standard Life Global Funding II, 3.85%, 9/19/23 (b) | 5,000 | 5,329 | |||||||||
Santander Holdings USA, Inc. 4.45%, 12/3/21, Callable 11/3/21 @ 100 | 9,500 | 9,910 | |||||||||
3.70%, 3/28/22, Callable 2/28/22 @ 100 | 15,000 | 15,480 | |||||||||
Signature Bank, 4.13% (LIBOR03M+256bps), 11/1/29, Callable 11/1/24 @ 100 (d) | 11,650 | 11,860 | |||||||||
SL Green Operating Partnership LP, 3.25%, 10/15/22, Callable 9/15/22 @ 100 | 2,612 | 2,686 | |||||||||
StanCorp Financial Group, Inc., 5.00%, 8/15/22 | 5,366 | 5,675 | |||||||||
Starwood Property Trust, Inc., 3.63%, 2/1/21, Callable 11/1/20 @ 100 | 6,250 | 6,257 | |||||||||
Sterling Bancorp 3.50%, 6/8/20, Callable 5/8/20 @ 100 | 14,700 | 14,635 | |||||||||
4.00%(SOFR+253bps), 12/30/29, Callable 12/30/24 @ 100 (d) | 8,750 | 8,867 | |||||||||
Sterling National Bank, 5.25% (LIBOR03M+394bps), 4/1/26, Callable 4/1/21 @ 100 (d) | 3,750 | 3,817 | |||||||||
SunTrust Bank 3.00%, 2/2/23, Callable 1/2/23 @ 100 | 10,000 | 10,357 | |||||||||
3.20%, 4/1/24, Callable 3/1/24 @ 100 | 5,000 | 5,260 | |||||||||
Synchrony Financial, 2.70%, 2/3/20 | 5,000 | 5,000 | |||||||||
TCF National Bank, 4.13% (LIBOR03M+238bps), 7/2/29, Callable 7/2/24 @ 100 (d) | 4,000 | 3,963 | |||||||||
The Bank of New York Mellon Corp., 2.15%, 2/24/20, MTN | 1,975 | 1,975 | |||||||||
The Huntington National Bank, 2.38%, 3/10/20, Callable 2/10/20 @ 100 | 5,000 | 5,000 | |||||||||
TIAA FSB Holdings, Inc., 6.00% (LIBOR03M+470bps), 3/15/26, Callable 3/15/21 @ 100 (d) | 5,718 | 6,096 | |||||||||
United Financial Bancorp, Inc., 5.75%, 10/1/24 | 3,120 | 3,367 | |||||||||
US Bank NA 2.85%, 1/23/23, Callable 12/23/22 @ 100 | 10,000 | 10,342 | |||||||||
2.05%, 1/21/25, Callable 12/20/24 @ 100 | 5,000 | 5,057 | |||||||||
WEA Finance LLC, 3.15%, 4/5/22, Callable 3/5/22 @ 100 (b) | 5,000 | 5,139 | |||||||||
Wells Fargo & Co., 3.07%, 1/24/23, Callable 1/24/22 @ 100 | 10,000 | 10,226 | |||||||||
Wells Fargo Bank NA, 2.60%, 1/15/21 | 5,000 | 5,043 | |||||||||
Zions Bancorp NA, 3.35%, 3/4/22, Callable 2/4/22 @ 100 (a) | 3,900 | 4,009 | |||||||||
421,955 | |||||||||||
Health Care (2.7%): | |||||||||||
AbbVie, Inc., 2.30%, 5/14/21, Callable 4/14/21 @ 100 (a) | 10,000 | 10,062 | |||||||||
Amgen, Inc., 2.25%, 8/19/23, Callable 6/19/23 @ 100 | 5,000 | 5,077 | |||||||||
Bristol-Myers Squibb Co. 2.75%, 2/15/23, Callable 1/15/23 @ 100 (b) | 10,000 | 10,286 | |||||||||
3.25%, 2/20/23, Callable 1/20/23 @ 100 (b) | 5,000 | 5,213 | |||||||||
Centene Corp., 4.75%, 1/15/25, Callable 3/9/20 @ 103.56 (b) | 930 | 964 | |||||||||
Cigna Corp., 3.00%, 7/15/23, Callable 5/16/23 @ 100 (b) | 5,000 | 5,153 |
See notes to financial statements.
15
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
CVS Health Corp. 3.70%, 3/9/23, Callable 2/9/23 @ 100 | $ | 10,000 | $ | 10,498 | |||||||
2.63%, 8/15/24, Callable 7/15/24 @ 100 | 5,000 | 5,122 | |||||||||
Elanco Animal Health, Inc. 3.91%, 8/27/21 | 4,500 | 4,625 | |||||||||
4.27%, 8/28/23, Callable 7/28/23 @ 100 | 1,667 | 1,775 | |||||||||
Fresenius Medical Care US Finance II, Inc., 4.13%, 10/15/20, Callable 7/17/20 @ 100 (b) | 5,326 | 5,372 | |||||||||
Fresenius US Finance II, Inc., 4.50%, 1/15/23, Callable 10/17/22 @ 100 (b) | 4,000 | 4,225 | |||||||||
Laboratory Corp. of America Holdings, 3.20%, 2/1/22 | 8,200 | 8,410 | |||||||||
SSM Health Care Corp., 3.69%, 6/1/23, Callable 3/1/23 @ 100 | 4,330 | 4,567 | |||||||||
81,349 | |||||||||||
Industrials (4.3%): | |||||||||||
Air Lease Corp. 3.50%, 1/15/22 | 5,000 | 5,152 | |||||||||
2.25%, 1/15/23 | 5,000 | 5,040 | |||||||||
Aircastle Ltd., 4.25%, 6/15/26, Callable 4/15/26 @ 100 | 5,000 | 5,383 | |||||||||
American Airlines Pass Through Trust 4.38%, 4/1/24 (j) | 3,904 | 4,022 | |||||||||
4.40%, 3/22/25 | 7,499 | 7,839 | |||||||||
4.38%, 12/15/25 (b) | 6,205 | 6,421 | |||||||||
Arconic, Inc. 6.15%, 8/15/20 | 4,984 | 5,077 | |||||||||
5.40%, 4/15/21, Callable 1/15/21 @ 100 | 5,025 | 5,165 | |||||||||
British Airways Pass Through Trust, 5.63%, 12/20/21 (b) | 2,775 | 2,797 | |||||||||
Continental Airlines Pass Through Trust 6.25%, 4/11/20 | 1,169 | 1,176 | |||||||||
5.50%, 4/29/22 | 6,393 | 6,510 | |||||||||
Delta Air Lines, Inc., 2.88%, 3/13/20 | 10,000 | 10,007 | |||||||||
General Dynamics Corp., 1.88%, 8/15/23, Callable 6/15/23 @ 100 | 5,000 | 5,048 | |||||||||
Molex Electronic Technologies LLC, 2.88%, 4/15/20, Callable 3/15/20 @ 100 (b) | 11,892 | 11,903 | |||||||||
Nielsen Finance LLC, 4.50%, 10/1/20, Callable 3/9/20 @ 100 | 6,793 | 6,802 | |||||||||
Prime Security Services Borrower LLC/Prime Finance, Inc., 9.25%, 5/15/23, Callable 2/15/20 @ 104.63 (b) | 4,020 | 4,214 | |||||||||
Ryder System, Inc. 2.50%, 5/11/20, Callable 4/11/20 @ 100, MTN | 1,266 | 1,267 | |||||||||
3.50%, 6/1/21, MTN (a) | 1,000 | 1,021 | |||||||||
2.80%, 3/1/22, Callable 2/1/22 @ 100, MTN | 5,000 | 5,087 | |||||||||
2.50%, 9/1/22, Callable 8/1/22 @ 100, MTN | 5,000 | 5,069 | |||||||||
3.40%, 3/1/23, Callable 2/1/23 @ 100, MTN | 4,706 | 4,902 | |||||||||
United Airlines Pass Through Trust 5.38%, 2/15/23 | 2,704 | 2,792 | |||||||||
4.63%, 3/3/24 | 984 | 1,017 | |||||||||
US Airways, 5.38%, 5/15/23 | 10,762 | 11,197 | |||||||||
US Airways(INS-MBIA Insurance Corp.), 7.08%, 9/20/22 | 261 | 271 | |||||||||
Wabtec Corp., 3.19% (LIBOR03M+105bps), 9/15/21, Callable 2/24/20 @ 100 (d) | 7,417 | 7,416 | |||||||||
132,595 |
See notes to financial statements.
16
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Information Technology (0.8%): | |||||||||||
Broadcom, Inc., 3.13%, 4/15/21 (b) | $ | 5,000 | $ | 5,072 | |||||||
FLIR Systems, Inc., 3.13%, 6/15/21, Callable 5/15/21 @ 100 (a) | 5,000 | 5,053 | |||||||||
Jabil, Inc., 5.63%, 12/15/20 | 1,700 | 1,751 | |||||||||
Leidos Holdings, Inc., 4.45%, 12/1/20, Callable 9/1/20 @ 100 | 3,261 | 3,304 | |||||||||
Oracle Corp., 2.40%, 9/15/23, Callable 7/15/23 @ 100 | 10,000 | 10,259 | |||||||||
25,439 | |||||||||||
Materials (1.2%): | |||||||||||
Albemarle Corp., 2.50%(LIBOR03M+105bps), 11/15/22, Callable 11/15/20 @ 100 (b) (d) | 6,364 | 6,388 | |||||||||
Carpenter Technology Corp., 5.20%, 7/15/21, Callable 4/15/21 @ 100 | 9,350 | 9,639 | |||||||||
Dowdupont, Inc., 3.77%, 11/15/20 | 5,000 | 5,075 | |||||||||
Reliance Steel & Aluminum Co., 4.50%, 4/15/23, Callable 1/15/23 @ 100 | 8,403 | 8,953 | |||||||||
The Mosaic Co., 3.25%, 11/15/22, Callable 10/15/22 @ 100 | 5,000 | 5,149 | |||||||||
35,204 | |||||||||||
Real Estate (2.7%): | |||||||||||
American Tower Trust 1, 3.07%, 3/15/48, Callable 9/15/21 @ 100 (b) | 3,760 | 3,806 | |||||||||
Boston Properties LP, 4.13%, 5/15/21, Callable 2/15/21 @ 100 | 5,398 | 5,531 | |||||||||
Corecivic, Inc., 5.00%, 10/15/22, Callable 7/15/22 @ 100 | 12,437 | 12,678 | |||||||||
Essex Portfolio LP, 5.20%, 3/15/21, Callable 12/15/20 @ 100 | 2,500 | 2,573 | |||||||||
Nationwide Health Properties, Inc., 6.90%, 10/1/37, (Put Date 10/1/27), MTN (k) | 2,950 | 3,917 | |||||||||
Realty Income Corp., 3.25%, 10/15/22, Callable 7/15/22 @ 100 | 10,000 | 10,366 | |||||||||
SBA Tower Trust 2.84%, 1/15/25 (b) | 6,923 | 6,984 | |||||||||
3.45%, 3/15/48 (b) | 10,000 | 10,393 | |||||||||
Senior Housing Properties Trust 6.75%, 4/15/20, Callable 3/9/20 @ 100 (j) | 12,612 | 12,636 | |||||||||
6.75%, 12/15/21, Callable 6/15/21 @ 100 | 6,890 | 7,259 | |||||||||
SL Green Realty Corp., 4.50%, 12/1/22, Callable 9/1/22 @ 100 (j) | 5,000 | 5,289 | |||||||||
VICI Properties LP/VICI Note Co., Inc., 3.50%, 2/15/25, Callable 2/15/22 @ 101.75 (b) (c) | 1,818 | 1,844 | |||||||||
83,276 | |||||||||||
Utilities (5.6%): | |||||||||||
AEP Texas, Inc., 2.40%, 10/1/22, Callable 9/1/22 @ 100 | 9,167 | 9,304 | |||||||||
Alliant Energy Finance LLC, 3.75%, 6/15/23, Callable 5/15/23 @ 100 (b) | 5,000 | 5,267 | |||||||||
CenterPoint Energy, Inc., 2.50%, 9/1/22, Callable 8/1/22 @ 100 | 3,000 | 3,043 | |||||||||
Delmarva Power & Light Co., 3.50%, 11/15/23, Callable 8/15/23 @ 100 | 5,858 | 6,200 | |||||||||
Dominion Energy, Inc. 2.58%, 7/1/20 | 5,000 | 5,014 | |||||||||
2.72%, 8/15/21 | 5,000 | 5,052 | |||||||||
DPL, Inc., 7.25%, 10/15/21, Callable 7/15/21 @ 100 | 14,580 | 15,453 | |||||||||
Duke Energy Corp., 2.40%, 8/15/22, Callable 7/15/22 @ 100 | 5,000 | 5,074 | |||||||||
Eversource Energy, 2.75%, 3/15/22, Callable 2/15/22 @ 100 | 2,600 | 2,649 | |||||||||
Exelon Generation Co. LLC, 4.00%, 10/1/20, Callable 7/1/20 @ 100 | 7,975 | 8,038 | |||||||||
Georgia Power Co., 2.00%, 9/8/20 | 5,000 | 5,010 | |||||||||
Ipalco Enterprises, Inc., 3.45%, 7/15/20, Callable 6/15/20 @ 100 | 8,496 | 8,519 |
See notes to financial statements.
17
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Mississippi Power Co., 2.60% (LIBOR03M+65bps), 3/27/20, Callable 3/9/20 @ 100 (d) | $ | 5,347 | $ | 5,345 | |||||||
National Fuel Gas Co., 4.90%, 12/1/21, Callable 9/1/21 @ 100 | 5,000 | 5,223 | |||||||||
National Grid North America, Inc., 2.38%, 9/30/20 | 3,400 | 3,396 | |||||||||
NextEra Energy Capital Holdings, Inc., 3.34%, 9/1/20 | 3,333 | 3,360 | |||||||||
Public Service Electric & Gas Co., 3.25%, 9/1/23, MTN, Callable 8/1/23 @ 100 | 5,000 | 5,261 | |||||||||
Sempra Energy 2.40%, 3/15/20, Callable 3/9/20 @ 100 | 10,000 | 10,004 | |||||||||
2.90%, 2/1/23, Callable 1/1/23 @ 100 | 3,600 | 3,705 | |||||||||
Sierra Pacific Power Co., 3.38%, 8/15/23, Callable 5/15/23 @ 100 | 4,299 | 4,504 | |||||||||
Southern Co. Gas Capital Corp., 2.45%, 10/1/23, Callable 8/1/23 @ 100 | 10,000 | 10,168 | |||||||||
Southern Power Co. 2.38%, 6/1/20, Callable 5/1/20 @ 100 | 10,000 | 10,010 | |||||||||
2.75%, 9/20/23, Callable 7/20/23 @ 100 | 9,500 | 9,666 | |||||||||
System Energy Resources, Inc., 4.10%, 4/1/23, Callable 1/1/23 @ 100 | 3,630 | 3,845 | |||||||||
The AES Corp., 4.00%, 3/15/21 | 5,379 | 5,458 | |||||||||
Virginia Electric & Power Co., 2.75%, 3/15/23, Callable 12/15/22 @ 100 | 5,000 | 5,136 | |||||||||
Vistra Operations Co. LLC, 3.70%, 1/30/27, Callable 11/30/26 @ 100 (b) | 5,000 | 5,024 | |||||||||
WGL Holdings, Inc., 2.44% (LIBOR3M+55bps), 3/12/20 (d) | 1,575 | 1,575 | |||||||||
170,303 | |||||||||||
Total Corporate Bonds (Cost $1,397,647) | 1,421,307 | ||||||||||
Yankee Dollar (12.1%) | |||||||||||
Communication Services (0.4%): | |||||||||||
Deutsche Telekom International Finance BV, 2.82%, 1/19/22, Callable 12/19/21 @ 100 (b) | 5,000 | 5,096 | |||||||||
Pearson Funding Four PLC, 3.75%, 5/8/22 (b) | 7,250 | 7,346 | |||||||||
12,442 | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Fiat Chrysler Automobiles NV, 4.50%, 4/15/20 | 2,873 | 2,885 | |||||||||
Consumer Staples (2.4%): | |||||||||||
Alimentation Couche-Tard, Inc., 2.70%, 7/26/22, Callable 6/26/22 @ 100 (b) | 5,000 | 5,094 | |||||||||
Avon International Capital PLC, 6.50%, 8/15/22, Callable 3/16/20 @ 103.94 (b) | 10,470 | 10,852 | |||||||||
Grupo Bimbo Sab de CV, 4.50%, 1/25/22 (b) | 18,588 | 19,430 | |||||||||
Imperial Brands Finance PLC, 2.95%, 7/21/20 (b) | 10,000 | 10,044 | |||||||||
Mondelez International Holdings Netherlands BV, 2.00%, 10/28/21, Callable 9/28/21 @ 100 (b) | 11,792 | 11,833 | |||||||||
Reckitt Benckiser Treasury Services PLC, 2.38%, 6/24/22, Callable 5/24/22 @ 100 (b) | 15,000 | 15,190 | |||||||||
72,443 | |||||||||||
Energy (0.3%): | |||||||||||
Aker BP ASA 6.00%, 7/1/22, Callable 3/9/20 @ 103 (b) | 8,300 | 8,549 | |||||||||
5.88%, 3/31/25, Callable 3/31/21 @ 102.94 (b) | 2,000 | 2,100 | |||||||||
10,649 |
See notes to financial statements.
18
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Financials (3.4%): | |||||||||||
BBVA Bancomer SA 6.50%, 3/10/21 | $ | 3,000 | $ | 3,128 | |||||||
6.50%, 3/10/21 (b) | 15,000 | 15,640 | |||||||||
Lloyds Banking Group PLC, 2.91% (LIBOR03M+81bps), 11/7/23, Callable 11/7/22 @ 100 (d) | 10,000 | 10,203 | |||||||||
NA Development Bank, 4.38%, 2/11/20 | 1,250 | 1,252 | |||||||||
ORIX Corp., 2.90%, 7/18/22 | 10,000 | 10,210 | |||||||||
Park Aerospace Holdings Ltd. 3.63%, 3/15/21, Callable 2/15/21 @ 100 (b) | 2,000 | 2,030 | |||||||||
5.25%, 8/15/22, Callable 7/15/22 @ 100 (b) | 8,000 | 8,557 | |||||||||
Royal Bank of Scotland Group PLC, 6.13%, 12/15/22 | 13,000 | 14,248 | |||||||||
Santander UK Group Holdings PLC 3.57%, 1/10/23, Callable 1/10/22 @ 100 | 5,000 | 5,139 | |||||||||
3.37%(LIBOR03M+108bps), 1/5/24, Callable 1/5/23 @ 100 (d) | 5,000 | 5,164 | |||||||||
Silversea Cruise Finance, 7.25%, 2/1/25, Callable 2/18/20 @ 105.44 (a) (b) | 22,790 | 24,051 | |||||||||
Standard Chartered PLC, 2.25%, 4/17/20 (b) | 5,000 | 5,003 | |||||||||
104,625 | |||||||||||
Health Care (0.4%): | |||||||||||
Hikma Pharmaceuticals PLC, 4.25%, 4/10/20 | 12,669 | 12,673 | |||||||||
Industrials (2.3%): | |||||||||||
Air Canada Pass Through Trust 5.00%, 3/15/20 (b) | 20,350 | 20,409 | |||||||||
5.38%, 11/15/22 (b) | 2,695 | 2,775 | |||||||||
Aircastle Ltd., 4.40%, 9/25/23, Callable 8/25/23 @ 100 | 5,000 | 5,366 | |||||||||
Avolon Holdings Funding Ltd. 3.95%, 7/1/24, Callable 6/1/24 @ 100 (b) | 5,000 | 5,265 | |||||||||
2.88%, 2/15/25, Callable 1/15/25 @ 100 (b) | 10,000 | 10,079 | |||||||||
CK Hutchison International Ltd. 2.25%, 9/29/20 (b) | 5,000 | 5,007 | |||||||||
1.88%, 10/3/21 (b) | 10,000 | 9,964 | |||||||||
2.88%, 4/5/22 (b) | 5,000 | 5,081 | |||||||||
Smiths Group PLC, 3.63%, 10/12/22 (b) | 7,306 | 7,509 | |||||||||
71,455 | |||||||||||
Information Technology (0.2%): | |||||||||||
Tyco Electronics Group SA, 2.34% (LIBOR03M+45bps), 6/5/20 (d) | 5,000 | 5,004 | |||||||||
Materials (1.1%): | |||||||||||
AngloGold Ashanti Holdings PLC, 5.38%, 4/15/20 | 13,654 | 13,722 | |||||||||
Braskem Netherlands Finance BV, 3.50%, 1/10/23 (b) | 5,000 | 5,092 | |||||||||
Fresnillo PLC, 5.50%, 11/13/23 (b) | 5,000 | 5,463 | |||||||||
POSCO, 2.38%, 1/17/23 (b) | 5,000 | 5,024 | |||||||||
Syngenta Finance NV, 3.70%, 4/24/20 (b) | 5,000 | 5,013 | |||||||||
34,314 | |||||||||||
Real Estate (0.3%): | |||||||||||
Scentre Group Trust 1/Scentre Group Trust 2, 2.38%, 4/28/21, Callable 3/29/21 @ 100 (b) | 7,995 | 8,038 |
See notes to financial statements.
19
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Sovereign Bond (0.5%): | |||||||||||
Province of Alberta Canada, 3.35%, 11/1/23 (j) | $ | 5,000 | $ | 5,334 | |||||||
Province of Canada, 2.45%, 6/29/22 | 5,000 | 5,112 | |||||||||
Province of Quebec Canada, 2.63%, 2/13/23 | 5,000 | 5,175 | |||||||||
15,621 | |||||||||||
Utilities (0.7%): | |||||||||||
Comision Federal de Electricidad 4.88%, 5/26/21 | 10,000 | 10,331 | |||||||||
4.88%, 5/26/21 (b) | 5,000 | 5,165 | |||||||||
EDP Finance BV, 5.25%, 1/14/21 (b) | 5,000 | 5,150 | |||||||||
20,646 | |||||||||||
Total Yankee Dollar (Cost $364,989) | 370,795 | ||||||||||
Municipal Bonds (8.3%) | |||||||||||
Alabama (0.1%): | |||||||||||
The Water Works Board of The City of Birmingham Revenue 2.20%, 1/1/24 | 1,000 | 1,012 | |||||||||
2.36%, 1/1/25 | 2,000 | 2,035 | |||||||||
3,047 | |||||||||||
Arizona (0.2%): | |||||||||||
Arizona Department of Transportation State Highway Fund Revenue, 2.17%, 7/1/26 (c) | 4,000 | 4,090 | |||||||||
City of Phoenix Civic Improvement Corp. Revenue, 2.37%, 7/1/25 | 1,500 | 1,531 | |||||||||
5,621 | |||||||||||
California (0.2%): | |||||||||||
San Jose Redevelopment Agency Successor Agency Tax Allocation, Series A-T, 2.63%, 8/1/22 | 4,750 | 4,872 | |||||||||
Sequoia Union High School District, GO, 1.74%, 7/1/25 (c) | 1,250 | 1,250 | |||||||||
6,122 | |||||||||||
Colorado (0.6%): | |||||||||||
City of Loveland Electric & Communications Enterprise Revenue, 2.97%, 12/1/24 | 2,280 | 2,373 | |||||||||
Colorado Health Facilities Authority Revenue Series B, 2.24%, 11/1/22 | 530 | 535 | |||||||||
Series B, 2.40%, 11/1/23 | 1,250 | 1,269 | |||||||||
Series B, 2.50%, 11/1/24 | 1,250 | 1,279 | |||||||||
Denver City & County Housing Authority Revenue 2.15%, 12/1/24 | 3,850 | 3,891 | |||||||||
2.30%, 12/1/25 | 2,000 | 2,033 | |||||||||
Metro Wastewater Reclamation District Revenue, Series B, 2.27%, 4/1/26 | 4,790 | 4,898 | |||||||||
Park Creek Metropolitan District Revenue, Series B, 2.53%, 12/1/24 | 500 | 510 | |||||||||
University of Colorado Revenue, Series A, 2.35%, 6/1/25 | 2,500 | 2,576 | |||||||||
19,364 | |||||||||||
Connecticut (0.3%): | |||||||||||
Connecticut State Health & Educational Facilities Authority Revenue, 3.32%, 7/1/20 | 3,185 | 3,189 |
See notes to financial statements.
20
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
State of Connecticut, GO Series A, 3.75%, 9/15/20 | $ | 3,700 | $ | 3,742 | |||||||
Series A, 3.67%, 8/15/22 | 3,900 | 4,090 | |||||||||
11,021 | |||||||||||
Florida (0.1%): | |||||||||||
County of Lee Florida Water & Sewer Revenue, 2.01%, 10/1/24 | 1,360 | 1,375 | |||||||||
Florida Municipal Power Agency Revenue Series B, 2.20%, 10/1/20 | 1,375 | 1,377 | |||||||||
Series B, 2.38%, 10/1/21 | 2,500 | 2,522 | |||||||||
5,274 | |||||||||||
Georgia (0.2%): | |||||||||||
Athens Housing Authority Revenue 2.13%, 12/1/24 | 1,850 | 1,871 | |||||||||
2.32%, 12/1/25 | 3,215 | 3,268 | |||||||||
5,139 | |||||||||||
Illinois (0.1%): | |||||||||||
City of Chicago Wastewater Transmission Revenue, 4.31%, 1/1/21 | 2,520 | 2,559 | |||||||||
Indiana (0.2%): | |||||||||||
Indiana Finance Authority Revenue 2.66%, 3/1/25 | 1,675 | 1,702 | |||||||||
2.76%, 3/1/26 | 1,850 | 1,886 | |||||||||
3,588 | |||||||||||
Kentucky (0.0%): (m) | |||||||||||
Kentucky State Property & Building Commission Revenue Series C, 2.56%, 5/1/21 | 1,060 | 1,067 | |||||||||
Series C, 2.76%, 5/1/22 | 250 | 254 | |||||||||
1,321 | |||||||||||
Maryland (0.3%): | |||||||||||
Maryland Economic Development Corp. Revenue Series B, 2.80%, 6/1/20 | 3,625 | 3,622 | |||||||||
Series B, 3.05%, 6/1/21 | 3,670 | 3,679 | |||||||||
Series B, 3.30%, 6/1/22 | 3,795 | 3,842 | |||||||||
11,143 | |||||||||||
Massachusetts (0.6%): | |||||||||||
Massachusetts Development Finance Agency Revenue, Series B, 4.00%, 6/1/24 | 750 | 770 | |||||||||
Massachusetts School Building Authority Revenue Series B, 2.13%, 10/15/24 | 4,520 | 4,589 | |||||||||
Series B, 2.28%, 10/15/25 | 4,820 | 4,918 | |||||||||
Massachusetts Water Resources Authority Revenue, Series F, 2.08%, 8/1/25 | 5,000 | 5,060 | |||||||||
15,337 | |||||||||||
Michigan (0.8%): | |||||||||||
Clintondale Community Schools, GO 2.61%, 5/1/21 | 5,395 | 5,453 | |||||||||
2.84%, 5/1/22 | 4,000 | 4,104 |
See notes to financial statements.
21
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Ecorse Public School District, GO 2.00%, 5/1/24 | $ | 1,250 | $ | 1,258 | |||||||
2.09%, 5/1/25 | 2,200 | 2,214 | |||||||||
Michigan Finance Authority Revenue 2.21%, 12/1/23 | 1,565 | 1,582 | |||||||||
2.31%, 12/1/24 | 895 | 907 | |||||||||
2.37%, 9/1/49, (Put Date 9/1/23) (k) | 5,944 | 6,042 | |||||||||
Mount Clemens Community School District, GO, Series B, 2.46%, 5/1/20 | 3,635 | 3,639 | |||||||||
25,199 | |||||||||||
Minnesota (0.0%): (m) | |||||||||||
Western Minnesota Municipal Power Agency Revenue Series A, 2.28%, 1/1/25 | 1,000 | 1,018 | |||||||||
Series A, 2.38%, 1/1/26 | 1,000 | 1,021 | |||||||||
2,039 | |||||||||||
Mississippi (0.2%): | |||||||||||
Mississippi Development Bank Revenue 2.31%, 1/1/25 | 2,235 | 2,274 | |||||||||
2.36%, 1/1/26 | 2,000 | 2,047 | |||||||||
4,321 | |||||||||||
Nebraska (0.0%): (m) | |||||||||||
Papio-Missouri River Natural Resource District Special Tax, 2.09%, 12/15/24, Continuously Callable @100 | 1,000 | 1,011 | |||||||||
New Jersey (0.9%): | |||||||||||
Economic Development Authority Revenue, Series B, 3.50%, 6/15/20 | 850 | 853 | |||||||||
New Jersey Economic Development Authority Revenue 3.70%, 6/15/21 | 550 | 560 | |||||||||
Series B, 3.52%, 7/1/20 | 625 | 627 | |||||||||
Series B, 3.65%, 7/1/21 | 495 | 503 | |||||||||
Series NNN, 2.78%, 6/15/23 | 2,042 | 2,065 | |||||||||
Series YY, 4.45%, 6/15/20 | 12,500 | 12,566 | |||||||||
New Jersey Educational Facilities Authority Revenue 2.25%, 9/1/20 | 2,615 | 2,614 | |||||||||
2.47%, 9/1/21 | 7,450 | 7,482 | |||||||||
North Hudson Sewerage Authority Revenue 2.43%, 6/1/24 | 1,200 | 1,221 | |||||||||
2.59%, 6/1/25 | 1,000 | 1,023 | |||||||||
29,514 | |||||||||||
New York (0.7%): | |||||||||||
Dormitory Authority Revenue, Series B, 3.18%, 3/15/22 | 2,000 | 2,064 | |||||||||
Madison County Capital Resource Corp. Revenue 2.23%, 7/1/24 | 1,200 | 1,229 | |||||||||
2.39%, 7/1/25 | 2,670 | 2,759 | |||||||||
2.52%, 7/1/26 | 3,050 | 3,167 | |||||||||
New York State Dormitory Authority Revenue 2.24%, 7/1/20 | 1,270 | 1,271 | |||||||||
2.44%, 7/1/21 | 1,550 | 1,560 | |||||||||
Series A, 2.57%, 7/1/20 | 5,125 | 5,115 |
See notes to financial statements.
22
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
New York State Thruway Authority Revenue, Series M, 2.26%, 1/1/25 | $ | 1,000 | $ | 1,011 | |||||||
Town of Oyster Bay, GO, 3.80%, 2/1/20 | 1,830 | 1,830 | |||||||||
20,006 | |||||||||||
North Carolina (0.0%): (m) | |||||||||||
City of Winston-Salem NC Revenue, Series B, 2.33%, 6/1/26 | 500 | 509 | |||||||||
Ohio (0.2%): | |||||||||||
City of Cleveland Airport System Revenue 2.49%, 1/1/25 | 2,000 | 2,043 | |||||||||
2.59%, 1/1/26 | 2,000 | 2,056 | |||||||||
4,099 | |||||||||||
Pennsylvania (0.4%): | |||||||||||
Pennsylvania IDA Revenue, 2.97%, 7/1/21 (b) | 3,265 | 3,288 | |||||||||
Scranton School District, GO Series A, 3.15%, 6/15/34, (Put Date 6/15/24) (b) (k) | 2,805 | 2,856 | |||||||||
Series B, 3.15%, 6/15/34, (Put Date 6/15/24) (b) (k) | 1,415 | 1,443 | |||||||||
Scranton School District, GO(INS-Build America Mutual Assurance Co.) 2.50%, 4/1/23 | 1,815 | 1,831 | |||||||||
2.60%, 4/1/24 | 1,730 | 1,755 | |||||||||
2.72%, 4/1/25 | 900 | 921 | |||||||||
2.82%, 4/1/26 | 1,000 | 1,033 | |||||||||
State Public School Building Authority Revenue, 2.75%, 4/1/25 | 1,500 | 1,518 | |||||||||
14,645 | |||||||||||
Rhode Island (0.1%): | |||||||||||
Rhode Island Commerce Corp. Revenue, 2.86%, 5/1/24 | 2,065 | 2,150 | |||||||||
South Dakota (0.0%): | |||||||||||
South Dakota Health & Educational Facilities Authority Revenue Series B, 2.31%, 7/1/23 | 1,500 | 1,520 | |||||||||
Series B, 2.38%, 7/1/24 | 1,350 | 1,372 | |||||||||
2,892 | |||||||||||
Tennessee (0.1%): | |||||||||||
The Metropolitan Nashville Airport Authority Revenue(LOC-Regions Bank), 1.78%, 4/1/30, Callable 2/14/20 @ 100 (l) | 2,835 | 2,835 | |||||||||
Texas (0.8%): | |||||||||||
City of Houston, GO 2.62%, 3/1/21 | 1,690 | 1,704 | |||||||||
2.77%, 3/1/22 | 1,240 | 1,266 | |||||||||
2.98%, 3/1/23 | 1,900 | 1,972 | |||||||||
City of Lubbock Water & Wastewater System Revenue, 2.06%, 2/15/25 | 5,000 | 5,039 | |||||||||
Harris County Cultural Education Facilities Finance Corp. Revenue, Series B, 2.47%, 5/15/25 | 1,000 | 1,015 | |||||||||
Texas A&M University Revenue Series A, 2.89%, 5/15/22 | 5,000 | 5,159 | |||||||||
Series A, 2.95%, 5/15/23 | 1,585 | 1,659 | |||||||||
Series B, 2.12%, 5/15/24 | 3,845 | 3,935 | |||||||||
21,749 |
See notes to financial statements.
23
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Virginia (0.6%): | |||||||||||
City of Norfolk VA, GO, Series B, 2.03%, 10/1/24 | $ | 3,950 | $ | 3,999 | |||||||
Virginia Resources Authority Revenue, 2.26%, 11/1/25 | 1,818 | 1,855 | |||||||||
Virginia Small Business Financing Authority Revenue, 3.00%, 7/1/50, (Put Date 12/31/20) (b) (k) | 10,000 | 9,999 | |||||||||
15,853 | |||||||||||
Wisconsin (0.6%): | |||||||||||
Public Finance Authority Revenue(LOC-Citizens Financial Group) 2.75%, 6/1/20, Continuously Callable @100 | 5,400 | 5,399 | |||||||||
3.75%, 2/1/22, Continuously Callable @100 | 6,500 | 6,502 | |||||||||
State of Wisconsin Revenue Series A, 1.90%, 5/1/25 (c) | 2,000 | 2,012 | |||||||||
Series A, 2.10%, 5/1/26 (c) | 1,000 | 1,007 | |||||||||
State of Wisconsin, GO, Series 2, 1.88%, 5/1/25 (c) | 2,500 | 2,526 | |||||||||
17,446 | |||||||||||
Total Municipal Bonds (Cost $250,324) | 253,804 | ||||||||||
U.S. Government Agency Mortgages (0.8%) | |||||||||||
Federal Home Loan Mortgage Corp. 5.00%, 5/1/20 | 6 | 6 | |||||||||
5.00%, 9/1/20 | 18 | 18 | |||||||||
5.50%, 4/1/21 | 58 | 59 | |||||||||
Series K023 Class X1, 1.37%, 8/25/22 (e) (f) | 65,861 | 1,650 | |||||||||
4.49%(LIBOR12M+163bps), 4/1/35 (d) | 443 | 456 | |||||||||
2,189 | |||||||||||
Federal National Mortgage Association 5.50%, 12/1/20 | 31 | 31 | |||||||||
5.00%, 12/1/21 | 16 | 17 | |||||||||
Series 2012-M8 Class X2, 0.74%, 5/25/22 (e) (f) | 56,426 | 602 | |||||||||
Series 2013-M1 Class X2, 0.64%, 8/25/22 (e) (f) | 47,570 | 462 | |||||||||
6.00%, 10/1/22 | 87 | 91 | |||||||||
6.00%, 1/1/23 | 116 | 121 | |||||||||
6.00%, 1/1/23 | 227 | 236 | |||||||||
5.50%, 2/1/23 | 89 | 93 | |||||||||
4.50%, 5/1/23 | 72 | 75 | |||||||||
5.00%, 6/1/23 | 84 | 87 | |||||||||
5.50%, 6/1/23 | 222 | 231 | |||||||||
6.00%, 7/1/23 | 88 | 92 | |||||||||
5.00%, 9/1/23 | 12 | 13 | |||||||||
5.50%, 9/1/23 | 50 | 53 | |||||||||
4.50%, 2/1/24 | 33 | 34 | |||||||||
5.00%, 2/1/24 | 128 | 134 | |||||||||
5.50%, 6/1/24 | 205 | 213 | |||||||||
2.50%, 4/1/27 | 2,459 | 2,506 | |||||||||
2.50%, 5/1/27 | 7,007 | 7,144 | |||||||||
2.50%, 8/1/27 | 4,206 | 4,288 |
See notes to financial statements.
24
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares Principal Amount | Value | |||||||||
2.50%, 8/1/27 | $ | 3,319 | $ | 3,384 | |||||||
Series 2012-104 Class HC, 1.25%, 9/25/27 | 2,488 | 2,443 | |||||||||
22,350 | |||||||||||
Total U.S. Government Agency Mortgages (Cost $23,549) | 24,539 | ||||||||||
U.S. Treasury Obligations (5.0%) | |||||||||||
U.S. Treasury Notes 1.38%, 2/29/20 | 14,000 | 13,996 | |||||||||
1.38%, 3/31/20 (a) | 28,000 | 27,989 | |||||||||
1.38%, 9/30/20 (a) | 34,550 | 34,508 | |||||||||
1.63%, 11/30/20 (a) | 25,000 | 25,017 | |||||||||
1.38%, 1/31/21 | 5,000 | 4,994 | |||||||||
1.13%, 2/28/21 | 5,000 | 4,980 | |||||||||
1.88%, 11/30/21 | 15,000 | 15,139 | |||||||||
1.88%, 8/31/22 | 5,000 | 5,071 | |||||||||
1.38%, 6/30/23 | 10,080 | 10,101 | |||||||||
1.75%, 6/30/24 | 5,000 | 5,091 | |||||||||
1.50%, 11/30/24 | 5,000 | 5,041 | |||||||||
Total U.S. Treasury Obligations (Cost $151,193) | 151,927 | ||||||||||
Commercial Paper (1.9%) | |||||||||||
Broadcom, Inc. 2.54%, 2/20/20 (b) (n) | 1,608 | 1,606 | |||||||||
2.58%, 3/10/20 (b) (n) | 10,000 | 9,972 | |||||||||
Crown Castle International Corp., 2.65%, 2/4/20 (b) (n) | 20,000 | 19,993 | |||||||||
CSLB Holdings, Inc., 1.83%, 2/6/20 (b) (n) | 7,500 | 7,498 | |||||||||
Eversource Energy, 1.80%, 2/7/20 (b) (n) | 1,400 | 1,400 | |||||||||
Hyundai Capital America 1.68%, 2/4/20 (b) (n) | 5,000 | 4,999 | |||||||||
1.69%, 2/5/20 (b) (n) | 5,700 | 5,699 | |||||||||
ViacomCBS, Inc., 1.68%, 2/3/20 (b) (n) | 6,500 | 6,499 | |||||||||
Total Commercial Paper (Cost $57,675) | 57,666 | ||||||||||
Collateral for Securities Loaned^(0.6%) | |||||||||||
HSBC U.S. Government Money Market Fund, I Shares, 1.52% (o) | 18,715,457 | 18,715 | |||||||||
Total Collateral for Securities Loaned (Cost $18,715) | 18,715 | ||||||||||
Total Investments (Cost $3,055,577) — 101.6% | 3,105,170 | ||||||||||
Liabilities in excess of other assets — (1.6)% | (45,986 | ) | |||||||||
NET ASSETS — 100.00% | $ | 3,059,184 |
^ Purchased with cash collateral from securities on loan.
(a) All or a portion of this security has been designated as collateral for futures contracts and/or securities purchased on a when issued basis.
See notes to financial statements.
25
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Unaudited)
(b) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid, unless noted otherwise, based upon procedures approved by the Board of Trustees. As of January 31, 2020, the fair value of these securities was $1,279,380 thousand and amounted to 39.9% of net assets.
(c) Security purchased on a when-issued basis.
(d) Variable or Floating-Rate Security. Rate disclosed is as of January 31, 2020.
(e) The rate for certain asset-backed and mortgage backed securities may vary based on factors relating to the pool of assets underlying the security. The rate disclosed is the rate in effect at January 31, 2020.
(f) Security is interest only.
(g) Security was fair valued based upon procedures approved by the Board of Trustees and represents 0.2% of the Fund's net assets as of January 31, 2020. This security is classified as Level 3 within the fair value hierarchy. (See Note 2)
(h) Security is perpetual and has no final maturity date but may be subject to calls at various dates in the future.
(i) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. At January 31, 2020, illiquid securities were 0.2% of the Fund's net assets.
(j) All or a portion of this security is on loan.
(k) Put Bond.
(l) Variable Rate Demand Notes that provide the rights to sell the security at face value on either that day or within the rate-reset period. The interest rate is reset on the put date at a stipulated daily, weekly, monthly, quarterly, or other specified time interval to reflect current market conditions. These securities do not indicate a reference rate and spread in their description.
(m) Amount represents less than 0.05% of net assets.
(n) Rate represents the effective yield at January 31, 2020.
(o) Rate disclosed is the daily yield on January 31, 2020.
bps — Basis points
GO — General Obligation
IDA — Industrial Development Authority
LIBOR — London InterBank Offered Rate
LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LIBOR12M — 12 Month US Dollar LIBOR, rate disclosed as of January 31, 2020, based on the last reset date of the security
LLC — Limited Liability Company
LOC — Line Letter of Credit
LP — Limited Partnership
MBIA — Municipal Bond Insurance Association
MTN — Medium Term Note
See notes to financial statements.
26
USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Unaudited)
PLC — Public Limited Company
SOFR — Secured Overnight Financing Rate
Credit Enhancements — Adds 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 the name listed. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons, and there is no assurance that the insurance company will meet its obligations.
Futures Contracts Purchased
(Amounts not in thousands)
Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation (Depreciation) | |||||||||||||||||||
5-Year U.S. Treasury Note Future | 300 | 3/31/20 | $ | 35,696,039 | $ | 36,096,094 | $ | 400,055 | |||||||||||||||
| Total unrealized appreciation | $ | 400,055 | ||||||||||||||||||||
| Total unrealized depreciation | — | |||||||||||||||||||||
| Total net unrealized appreciation(depreciation) | $ | 400,055 |
See notes to financial statements.
27
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Short-Term Bond Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $3,055,577) | $ | 3,105,170 | (a) | ||||
Cash and cash equivalents | 5,812 | ||||||
Deposits with brokers for futures contracts | 741 | ||||||
Receivables: | |||||||
Interest and dividends | 22,913 | ||||||
Capital shares issued | 2,447 | ||||||
Investments sold | 380 | ||||||
Variation margin on open futures contracts | 77 | ||||||
From Adviser | 8 | ||||||
Prepaid expenses | 9 | ||||||
Total assets | 3,137,557 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 18,715 | ||||||
Distributions payable | 359 | ||||||
Investments purchased | 55,837 | ||||||
Capital shares redeemed | 2,046 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 515 | ||||||
Administration fees | 306 | ||||||
Custodian fees | 130 | ||||||
Transfer agent fees | 271 | ||||||
Compliance fees | — | (b) | |||||
12b-1 fees | 1 | ||||||
Other accrued expenses | 193 | ||||||
Total liabilities | 78,373 | ||||||
Net Assets: | |||||||
Capital | 3,007,238 | ||||||
Total distributable earnings/(loss) | 51,946 | ||||||
Net assets | $ | 3,059,184 | |||||
Net Assets: | |||||||
Fund Shares | $ | 1,150,713 | |||||
Institutional Shares | 1,888,924 | ||||||
Adviser Shares | 12,016 | ||||||
R6 Shares | 7,531 | ||||||
Total | $ | 3,059,184 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 124,031 | ||||||
Institutional Shares | 203,703 | ||||||
Adviser Shares | 1,295 | ||||||
R6 Shares | 811 | ||||||
Total | 329,840 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 9.28 | |||||
Institutional Shares | 9.27 | ||||||
Adviser Shares | 9.28 | ||||||
R6 Shares | 9.28 |
(a) Includes $18,172 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
28
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA Short-Term Bond Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 1,487 | |||||
Interest | 48,457 | ||||||
Securities lending (net of fees) | 11 | ||||||
Total Income | 49,955 | ||||||
Expenses: | |||||||
Investment advisory fees | 3,034 | ||||||
Administration fees — Fund Shares | 879 | ||||||
Administration fees — Institutional Shares | 921 | ||||||
Administration fees — Adviser Shares | 10 | ||||||
Administration fees — R6 Shares | 2 | ||||||
Sub-Administration fees | 14 | ||||||
12b-1 fees — Adviser Shares | 17 | ||||||
Custodian fees | 101 | ||||||
Transfer agent fees — Fund Shares | 850 | ||||||
Transfer agent fees — Institutional Shares | 921 | ||||||
Transfer agent fees — Adviser Shares | 3 | ||||||
Transfer agent fees — R6 Shares | — | (a) | |||||
Trustees' fees | 22 | ||||||
Compliance fees | 9 | ||||||
Legal and audit fees | 55 | ||||||
State registration and filing fees | 61 | ||||||
Interest expense on interfund lending | — | (a) | |||||
Other expenses | 171 | ||||||
Total Expenses | 7,070 | ||||||
Expenses waived/reimbursed by Adviser | (13 | ) | |||||
Net Expenses | 7,057 | ||||||
Net Investment Income (Loss) | 42,898 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from unaffiliated investment securities | 3,455 | ||||||
Net realized gains (losses) from affiliated security transactions | 12 | ||||||
Net realized gains (losses) from futures contracts | (213 | ) | |||||
Net change in unrealized appreciation/depreciation on investment securities | 20,104 | ||||||
Net change in unrealized appreciation/depreciation on futures contracts | 400 | ||||||
Net realized/unrealized gains (losses) on investments | 23,758 | ||||||
Change in net assets resulting from operations | $ | 66,656 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
29
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Short-Term Bond Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 42,898 | $ | 88,630 | |||||||
Net realized gains (losses) from investments | 3,254 | (354 | ) | ||||||||
Net change in unrealized appreciation (depreciation) on investments | 20,504 | 51,945 | |||||||||
Change in net assets resulting from operations | 66,656 | 140,221 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (16,595 | ) | (31,432 | ) | |||||||
Institutional Shares | (27,020 | ) | (57,077 | ) | |||||||
Adviser Shares | (175 | ) | (417 | ) | |||||||
R6 Shares | (107 | ) | (150 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (43,897 | ) | (89,076 | ) | |||||||
Change in net assets resulting from capital transactions | 25,018 | (281,820 | ) | ||||||||
Change in net assets | 47,777 | (230,675 | ) | ||||||||
Net Assets: | |||||||||||
Beginning of period | 3,011,407 | 3,242,082 | |||||||||
End of period | $ | 3,059,184 | $ | 3,011,407 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 98,176 | $ | 231,270 | |||||||
Distributions reinvested | 16,317 | 30,563 | |||||||||
Cost of shares redeemed | (140,444 | ) | (300,518 | ) | |||||||
Total Fund Shares | $ | (25,951 | ) | $ | (38,685 | ) | |||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 205,354 | $ | 419,712 | |||||||
Distributions reinvested | 26,806 | 53,713 | |||||||||
Cost of shares redeemed | (179,914 | ) | (708,728 | ) | |||||||
Total Institutional Shares | $ | 52,246 | $ | (235,303 | ) | ||||||
Adviser Shares | |||||||||||
Proceeds from shares issued | $ | 1,386 | $ | 2,697 | |||||||
Distributions reinvested | 86 | 212 | |||||||||
Cost of shares redeemed | (4,777 | ) | (10,972 | ) | |||||||
Total Adviser Shares | $ | (3,305 | ) | $ | (8,063 | ) | |||||
R6 Shares | |||||||||||
Proceeds from shares issued | $ | 2,370 | $ | 226 | |||||||
Distributions reinvested | 32 | 6 | |||||||||
Cost of shares redeemed | (374 | ) | (1 | ) | |||||||
Total R6 Shares | $ | 2,028 | $ | 231 | |||||||
Change in net assets resulting from capital transactions | $ | 25,018 | $ | (281,820 | ) |
(continues on next page)
See notes to financial statements.
30
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands) (continued)
USAA Short-Term Bond Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 10,627 | 25,391 | |||||||||
Reinvested | 1,765 | 3,351 | |||||||||
Redeemed | (15,202 | ) | (33,004 | ) | |||||||
Total Fund Shares | (2,810 | ) | (4,262 | ) | |||||||
Institutional Shares | |||||||||||
Issued | 22,238 | 46,093 | |||||||||
Reinvested | 2,901 | 5,894 | |||||||||
Redeemed | (19,486 | ) | (77,547 | ) | |||||||
Total Institutional Shares | 5,653 | (25,560 | ) | ||||||||
Adviser Shares | |||||||||||
Issued | 150 | 296 | |||||||||
Reinvested | 9 | 23 | |||||||||
Redeemed | (517 | ) | (1,207 | ) | |||||||
Total Adviser Shares | (358 | ) | (888 | ) | |||||||
R6 Shares | |||||||||||
Issued | 257 | 24 | |||||||||
Reinvested | 3 | 1 | |||||||||
Redeemed | (41 | ) | — | (a) | |||||||
Total R6 Shares | 219 | 25 | |||||||||
Change in Shares | 2,704 | (30,685 | ) |
(a) Represents less than 500 shares.
See notes to financial statements.
31
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains From Investments | ||||||||||||||||||||||
USAA Short-Term Bond Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 9.21 | 0.13 | (d) | 0.07 | 0.20 | (0.13 | ) | — | (e) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 9.06 | 0.24 | 0.15 | 0.39 | (0.24 | ) | — | (e) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 9.21 | 0.20 | (0.15 | ) | 0.05 | (0.20 | ) | — | (e) | |||||||||||||||||
Year Ended July 31, 2017 | $ | 9.20 | 0.17 | 0.01 | 0.18 | (0.17 | ) | — | |||||||||||||||||||
Year Ended July 31, 2016 | $ | 9.15 | 0.16 | 0.05 | 0.21 | (0.16 | ) | — | |||||||||||||||||||
Year Ended July 31, 2015 | $ | 9.23 | 0.15 | (0.08 | ) | 0.07 | (0.15 | ) | — | (e) | |||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 9.20 | 0.13 | (d) | 0.08 | 0.21 | (0.14 | ) | — | (e) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 9.06 | 0.25 | 0.14 | 0.39 | (0.25 | ) | — | (e) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 9.21 | 0.21 | (0.15 | ) | 0.06 | (0.21 | ) | — | (e) | |||||||||||||||||
Year Ended July 31, 2017 | $ | 9.20 | 0.18 | 0.01 | 0.19 | (0.18 | ) | — | |||||||||||||||||||
Year Ended July 31, 2016 | $ | 9.15 | 0.17 | 0.05 | 0.22 | (0.17 | ) | — | |||||||||||||||||||
Year Ended July 31, 2015 | $ | 9.23 | 0.16 | (0.08 | ) | 0.08 | (0.16 | ) | — | (e) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Amount is less than $0.005.
See notes to financial statements.
32
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Short-Term Bond Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (0.13 | ) | $ | 9.28 | 2.21 | % | 0.53 | % | 2.77 | % | 0.53 | % | $ | 1,150,713 | 26 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (0.24 | ) | $ | 9.21 | 4.43 | % | 0.57 | % | 2.68 | % | 0.57 | % | $ | 1,167,973 | 48 | % | |||||||||||||||||||
Year Ended July 31, 2018 | (0.20 | ) | $ | 9.06 | 0.54 | % | 0.59 | % | 2.18 | % | 0.59 | % | $ | 1,188,259 | 39 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.17 | ) | $ | 9.21 | 2.02 | % | 0.63 | % | 1.90 | % | 0.63 | % | $ | 1,301,428 | 31 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (0.16 | ) | $ | 9.20 | 2.34 | % | 0.61 | % | 1.76 | % | 0.61 | % | $ | 1,400,054 | 22 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (0.15 | ) | $ | 9.15 | 0.83 | % | 0.62 | % | 1.65 | % | 0.62 | % | $ | 1,823,922 | 31 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (0.14 | ) | $ | 9.27 | 2.26 | % | 0.43 | % | 2.87 | % | 0.43 | % | $ | 1,888,924 | 26 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (0.25 | ) | $ | 9.20 | 4.42 | % | 0.47 | % | 2.78 | % | 0.47 | % | $ | 1,822,756 | 48 | % | |||||||||||||||||||
Year Ended July 31, 2018 | (0.21 | ) | $ | 9.06 | 0.65 | % | 0.48 | % | 2.29 | % | 0.48 | % | $ | 2,025,651 | 39 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.18 | ) | $ | 9.21 | 2.13 | % | 0.53 | % | 2.00 | % | 0.53 | % | $ | 1,954,307 | 31 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (0.17 | ) | $ | 9.20 | 2.44 | % | 0.51 | % | 1.87 | % | 0.51 | % | $ | 1,942,385 | 22 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (0.16 | ) | $ | 9.15 | 0.95 | % | 0.50 | % | 1.76 | % | 0.50 | % | $ | 2,237,771 | 31 | % |
(continues on next page)
See notes to financial statements.
33
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period (continued)
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains From Investments | ||||||||||||||||||||||
USAA Short-Term Bond Fund | |||||||||||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 9.21 | 0.12 | (d) | 0.07 | 0.19 | (0.12 | ) | — | (e) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 9.06 | 0.22 | 0.15 | 0.37 | (0.22 | ) | — | (e) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 9.21 | 0.18 | (0.15 | ) | 0.03 | (0.18 | ) | — | (e) | |||||||||||||||||
Year Ended July 31, 2017 | $ | 9.20 | 0.16 | 0.01 | 0.17 | (0.16 | ) | — | |||||||||||||||||||
Year Ended July 31, 2016 | $ | 9.15 | 0.14 | 0.05 | 0.19 | (0.14 | ) | — | |||||||||||||||||||
Year Ended July 31, 2015 | $ | 9.23 | 0.13 | (0.08 | ) | 0.05 | (0.13 | ) | — | (e) | |||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 9.21 | 0.14 | (d) | 0.07 | 0.21 | (0.14 | ) | — | (e) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 9.07 | 0.26 | 0.14 | 0.40 | (0.26 | ) | — | (e) | ||||||||||||||||||
Year Ended July 31, 2018 | $ | 9.21 | 0.22 | (0.14 | ) | 0.08 | (0.22 | ) | — | (e) | |||||||||||||||||
December 1, 2016 (g) through July 31, 2017 | $ | 9.12 | 0.13 | 0.09 | 0.22 | (0.13 | ) | — |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Amount is less than $0.005.
(f) Prior to December 1, 2014, USAA Asset Management Company ("AMCO") (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Adviser Shares to 0.90% of the Adviser Shares' average daily net assets.
(g) Commencement of operations.
See notes to financial statements.
34
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Short-Term Bond Fund | |||||||||||||||||||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (0.12 | ) | $ | 9.28 | 2.10 | % | 0.73 | % | 2.57 | % | 0.84 | % | $ | 12,016 | 26 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (0.22 | ) | $ | 9.21 | 4.17 | % | 0.82 | % | 2.43 | % | 0.82 | % | $ | 15,222 | 48 | % | |||||||||||||||||||
Year Ended July 31, 2018 | (0.18 | ) | $ | 9.06 | 0.38 | % | 0.74 | % | 2.02 | % | 0.74 | % | $ | 23,030 | 39 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.16 | ) | $ | 9.21 | 1.82 | % | 0.82 | % | 1.70 | % | 0.82 | % | $ | 21,532 | 31 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (0.14 | ) | $ | 9.20 | 2.08 | % | 0.86 | % | 1.52 | % | 0.86 | % | $ | 12,747 | 22 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (0.13 | ) | $ | 9.15 | 0.59 | % | 0.85 | %(f) | 1.41 | % | 0.85 | % | $ | 13,304 | 31 | % | |||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (0.14 | ) | $ | 9.28 | 2.28 | % | 0.39 | % | 2.91 | % | 0.56 | % | $ | 7,531 | 26 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (0.26 | ) | $ | 9.21 | 4.50 | % | 0.39 | % | 2.86 | % | 0.71 | % | $ | 5,456 | 48 | % | |||||||||||||||||||
Year Ended July 31, 2018 | (0.22 | ) | $ | 9.07 | 0.85 | % | 0.39 | % | 2.38 | % | 0.67 | % | $ | 5,142 | 39 | % | |||||||||||||||||||
December 1, 2016 (g) through July 31, 2017 | (0.13 | ) | $ | 9.21 | 2.43 | % | 0.39 | % | 2.14 | % | 1.02 | % | $ | 5,129 | 31 | % |
See notes to financial statements.
35
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Short Term Bond Fund (the "Fund"). The Fund offers four classes of shares: Fund Shares, Institutional Shares, Adviser Shares, and R6 Shares. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges except with respect to fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or
36
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
system where the security is principally traded, if available, or the over-the-counter markets, are valued at the last sales price or official closing price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations typically are categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at net asset value. These valuations typically are categorized as Level 1 in the fair value hierarchy.
Debt securities of United States ("U.S.") issuers, along with corporate and municipal securities, including short-term investments maturing in 60 days or less, may be valued using evaluated bid or the last sales price to price securities by dealers or an independent pricing service approved by the Board. These valuations are typically categorized as Level 2 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. These valuations typically are categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's net asset value ("NAV") to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2020, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Asset Backed Securities | $ | — | $ | 565,132 | $ | — | $ | 565,132 | |||||||||||
Collateralized Mortgage Obligations | — | 164,581 | — | 164,581 | |||||||||||||||
Preferred Stocks | 5,636 | 23,697 | 5,475 | 34,808 | |||||||||||||||
Convertible Corporate Bonds | — | 28,027 | — | 28,027 | |||||||||||||||
Senior Secured Loans | — | 13,869 | — | 13,869 | |||||||||||||||
Corporate Bonds | — | 1,792,102 | — | 1,792,102 | |||||||||||||||
Municipal Bonds | — | 253,804 | — | 253,804 | |||||||||||||||
U.S. Government Agency Mortgages | — | 24,539 | — | 24,539 | |||||||||||||||
U.S. Treasury Obligations | — | 151,927 | — | 151,927 | |||||||||||||||
Commercial Paper | — | 57,666 | — | 57,666 | |||||||||||||||
Collateral for Securities Loaned | 18,715 | — | — | 18,715 | |||||||||||||||
Total | $ | 24,351 | $ | 3,075,344 | $ | 5,475 | $ | 3,105,170 | |||||||||||
Other Financial Investments^: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Futures Contracts | 400 | — | — | 400 | |||||||||||||||
Total | $ | 400 | $ | — | $ | — | $ | 400 |
^ Futures Contracts are valued at the unrealized appreciation (depreciation) on the investment.
For the six-months ended January 31, 2020, there were no transfers in or out of the Level 3 fair value hierarchy.
37
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs. ETFs are a type of index fund, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Derivative Instruments:
Futures Contracts:
The Fund may enter into contracts for the future delivery of securities or foreign currencies and futures contracts based on a specific security, class of securities, foreign currency or an index, and purchase or sell options on any such futures contracts. A futures contract on a securities index is an agreement obligating either party to pay, and entitling the other party to receive, while the contract is outstanding, cash payments based on the level of a specified securities index. No physical delivery of the underlying asset is made. The Fund may use futures contracts to gain exposure to, or hedge against, changes in the value of equities, interest rates, or foreign currencies. The acquisition of put and call options on futures contracts will give the Fund the right (but not the obligation), for a specified price, to sell or to purchase the underlying futures contract, upon exercise of the option, at any time during the option period. Futures transactions involve brokerage costs and require the Fund to segregate assets to cover contracts that would require it to purchase securities or currencies. A good faith margin deposit, known as initial margin, of cash or government securities with a broker or custodian is required to initiate and maintain open positions in futures contracts. Subsequent payments, known as variation margin, are made or received by the Fund based on the change in the market value of the position and are recorded as unrealized appreciation or depreciation until the contract is closed out, at which time the gain or loss is realized. The Fund may lose the expected benefit of futures transactions if interest rates, exchange rates or securities prices change in an unanticipated manner. Such unanticipated changes may also result in lower overall performance than if the Fund had not entered into any futures transactions. In addition, the value of the Fund's futures positions may not prove to be perfectly or even highly correlated with the value of its portfolio securities or foreign currencies, limiting the Fund's ability to hedge effectively against interest rate, exchange rate and/or market risk and giving rise to additional risks. There is no assurance of liquidity in the secondary market for purposes of closing out futures positions. With exchange-listed futures contracts, counterparty credit risk to the Fund is limited
38
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
to the exchange's clearinghouse which, as counterparty to all exchange-traded futures contracts, guarantees the transactions against default from the actual counterparty to the transaction. The Fund's derivative agreements held at January 31, 2020, did not include master netting provisions.
Summary of Derivative Instruments:
The following table summarizes the fair values of derivative instruments on the Statement of Assets and Liabilities, categorized by risk exposure, as of January 31, 2020 (amounts in thousands):
Assets | |||||||
Variation Margin Receivable on Open Futures Contracts* | |||||||
Interest Rate Risk Exposure: | $ | 400 |
* Includes cumulative appreciation/depreciation of futures contracts as reported on the Schedule of Portfolio Investments. Only current day's variation margin for futures contracts are reported within the Statement of Assets and Liabilities.
The following table presents the effect of derivative instruments on the Statement of Operations, categorized by risk exposure, for the six-months ended January 31, 2020 (amounts in thousands):
Net Realized Gains (Losses) on Derivatives Recognized as a Result from Operations | Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized as a Result of Operations | ||||||||||
Net Realized Gains (Losses) from Futures Contracts | Net Change in Unrealized Appreciation/Depreciation on Futures Contracts | ||||||||||
Interest Rate Risk Exposure: | $ | (213 | ) | $ | 400 |
All open derivative positions at period end are reflected in the Fund's Schedule of Portfolio Investments. The underlying face value of open derivative positions relative to the Fund's net assets at period end is generally representative of the notional amount of open positions to net assets throughout the period.
Securities Purchased on a Delayed-Delivery or When-Issued Basis:
The Fund may purchase securities on a delayed-delivery or when-issued basis. Delivery and payment for securities that have been purchased by the Fund on a delayed-delivery, when-issued basis, or for delayed draws on loans can take place a month or more after the trade date. At the time the Fund makes the commitment to purchase a security on a delayed-delivery or when-issued basis, the Fund records the transaction and reflects the value of the security in determining net asset value. No interest accrues to the Fund until the transaction settles and payment takes place. A segregated account is established and the Fund maintains cash and/or marketable securities at least equal in value to commitments for delayed-delivery or when-issued securities. If the Fund owns delayed-delivery or when-issued securities, these values are included in "Payable for investments purchased" on the accompanying Statement of Assets and Liabilities and the segregated assets are identified in the Schedule of Portfolio Investments.
Municipal Obligations:
The values of municipal obligations can fluctuate and may be affected by adverse tax, legislative, or political changes, and by financial developments affecting municipal issuers. Payment of municipal obligations may depend on a relatively limited source of revenue, resulting in greater credit risk. Future changes in federal tax laws or the activity of an issuer may adversely affect the tax-exempt status of municipal obligations.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Mortgage- and Asset-Backed Securities:
The values of some mortgage-related or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Fund to a lower rate of return upon reinvestment of principal. The values of mortgage and asset-backed securities depend in part on the credit quality and adequacy of the underlying assets or collateral and may fluctuate in response to the market's perception of these factors as well as current and future repayment rates. Some mortgage-backed securities are backed by the full faith and credit of the U.S. government (e.g., mortgage-backed securities issued by the Government National Mortgage Association, commonly known as "Ginnie Mae"), while other mortgage-backed securities (e.g., mortgage-backed securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, commonly known as "Fannie Mae" and "Freddie Mac"), are backed only by the credit of the government entity issuing them. In addition, some mortgage-backed securities are issued by private entities and, as such, are not guaranteed by the U.S. government or any agency or instrumentality of the U.S. government.
Leveraged Loans:
The Fund may invest in leveraged loans, a type of bank loan. Leveraged loans are adjustable-rate bank loans made to companies rated below investment grade. The interest rates on leveraged loans are reset periodically based upon the fluctuations of a base interest rate such as LIBOR and a "spread" above that base interest rate that represents a risk premium to the lending banks and/or other participating investors. Many bank loans bear an adjustable rate of interest; however, leveraged loans provide for a greater "spread" over the base interest rate than other bank loans because they are considered to represent a greater credit risk. Because they are perceived to represent a greater credit risk, leveraged loans possess certain attributes that are similar to high-yield securities. However, because they are often secured by collateral of the borrower, leveraged loans possess certain attributes that are similar to other bank loans.
Below Investment Grade Securities:
The Fund may invest in below investment grade securities (i.e. lower-quality, "junk" debt), which are subject to various risks. Lower-quality debt is considered to be speculative because it is less certain that the issuer will be able to pay interest or repay the principal than in the case of investment grade debt. These securities can involve a substantially greater risk of default than higher-rated securities, and their values can decline significantly over short periods of time. Lower-quality debt securities tend to be more sensitive to adverse news about their issuers, the market and the economy in general, than higher-quality debt securities. The market for these securities can be less liquid, especially during periods of recession or general market decline.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Securities Lending:
The Fund, through a securities lending agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income, net of income retained by Citibank. Borrowers are required to secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are cured the next business day once the shortfall exceeds $100 thousand.
40
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Collateral may be cash, U.S. government securities, or other securities as permitted by SEC guidelines. Cash collateral may be invested in high-quality short-term investments, primarily open-end investment companies. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Risks relating to securities-lending transactions include that the borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower. The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy borrower default. Cash collateral is listed in the Fund's Portfolio of Investments and Financial Statements while non-cash collateral is not included. The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2020:
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 18,172 | $ | — | $ | 18,715 |
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, distribution and service 12b-1 fees, and printing fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
Cross-Trade Transactions:
Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades, which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For
41
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
the six-months ended January 31, 2020, the Fund engaged in the following securities transactions with affiliated funds, which resulted in the following net realized gains (losses) (amounts in thousands):
Purchases | Sales | Net Realized Gains (Losses) | |||||||||||||
$ | 11,203 | $ | 2,798 | $ | 12 |
3. Purchases and Sales:
Cost of purchases and proceeds from sales/maturities of securities (excluding securities maturing less than one year from acquisition) for the six-months ended January 31, 2020, were as follows for the Fund (amounts in thousands):
Purchases (excluding U.S. Government Securities) | Sales (excluding U.S. Government Securities) | Purchases of U.S. Government Securities | Sales of U.S Government Securities | ||||||||||||
$ | 916,545 | $ | 690,745 | $ | 31,335 | $ | 64,684 |
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA funds. The USAA fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi-annual reports may be viewed at usaa.com. As of January 31, 2020, certain USAA fund-of-funds owned total outstanding shares of the Fund:
USAA Cornerstone Conservative Fund | 0.2 | % | |||||
USAA Target Retirement Income Fund | 1.6 | % | |||||
USAA Target Retirement 2020 Fund | 2.6 | % | |||||
USAA Target Retirement 2030 Fund | 1.9 | % | |||||
USAA Target Retirement 2040 Fund | 0.7 | % | |||||
USAA Target Retirement 2050 Fund | 0.2 | % | |||||
USAA Target Retirement 2060 Fund | 0.0 | %* |
* Amount is less than 0.05%.
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.20% of the Fund's average daily net assets. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
No performance adjustments will be made for periods beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter will be utilized in calculating future performance adjustments.
The performance adjustment will be calculated monthly by comparing each class' performance to that of the Lipper Short Investment Grade Debt Funds Index. The Lipper Short Investment Grade Debt Funds Index tracks the total return performance of each class within the Lipper Short Investment Grade Debt Funds category.
42
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The performance period for each class will consist of the current month plus the previous number of months beginning July 1, 2019. The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)(1) | Annual Adjustment Rate (in basis points)(1) | ||||||
+/- 20 to 50 | +/- 4 | ||||||
+/- 51 to 100 | +/- 5 | ||||||
+/- 101 and greater | +/- 6 |
(1) Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of the class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Short Investment Grade Debt Funds Index over that period, even if the class has overall negative returns during the performance period.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six-months ended January 31, 2020, the Fund had no subadvisors.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15% of average daily net assets of the Fund Shares and Adviser Shares, 0.10% of average daily net assets of the Institutional Shares, and 0.05% of average daily net assets of the R6 Shares. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
43
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. VCTA, an affiliate of the Adviser, provides transfer agent services to the Fund Shares and Adviser Shares based on an annual charge of $25.50 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares and R6 Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10% and 0.01%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the Adviser Shares pursuant to a Distribution Agreement between the Distributor and the Trust. Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, at an annual rate of up to 0.25% of the average daily net assets of the Adviser Shares. Amounts incurred are reflected on the Statement of Operations as 12b-1 Fees.
Adviser Shares are offered and sold without imposition of an initial sales charge or a contingent deferred sales charge.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
The expense limits (excluding voluntary waivers) are 0.53%, 0.43%, 0.73%, and 0.39% for Fund Shares, Institutional Shares, Adviser Shares, and R6 Shares, respectively. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||
$ | 13 |
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
44
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
The value of a debt security or other income-producing security changes in response to various factors, including, for example, market-related factors (such as changes in interest rates or changes in the risk appetite of investors generally) and changes in the actual or perceived ability of the issuer (or of issuers generally) to meet its (or their) obligations.
Bond prices generally are linked to the prevailing market interest rates. In general, when interest rates rise, bond prices fall; conversely, when interest rates fall, bond prices rise. The price volatility of a bond also depends on its duration. Generally, the longer the duration of a bond, the greater is its sensitivity to interest rates. To compensate investors for this higher interest rate risk, bonds with longer durations generally offer higher yields than bonds with shorter durations.
The fixed-income securities in the Fund's portfolio are subject to credit risk, which is the possibility that an issuer of a fixed-income security will fail to make timely interest and/or principal payments on its securities or that negative market perceptions of the issuer's ability to make such payments will cause the price of that security to decline. The Fund accepts some credit risk as a recognized means to enhance an investor's return. All fixed-income securities, varying from the highest quality to the very speculative, have some degree of credit risk.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six-months ended January 31, 2020.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Fund in the Victory Fund Complex relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period is presented on the Statement of Operations under Interest expense on Interfund lending. As a Lender, interest earned by the Fund, if any, during the period is reflected on the Statement of Operations under Income on Interfund lending.
45
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The average borrowing and lending for the days outstanding and average interest rate for the Fund during the six-months ended January 31, 2020 were as follows (amounts in thousands):
Amount Borrower or Lender | Outstanding at January 31, 2020 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||||||
USAA Short-Term Bond Fund | Borrower | $ | — | $ | 5,136 | 1 | 2.67 | % | $ | 5,136 |
*For the six-months ended January 31, 2020, based on the number of days borrowings were outstanding.
8. Federal Income Tax Information:
The Fund intends to declare daily and distribute monthly any net investment income. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
9. Subsequent Event:
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
46
USAA Mutual Funds Trust | Supplemental Information January 31, 2020 |
(Unaudited)
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019, through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,022.10 | $ | 1,022.47 | $ | 2.69 | $ | 2.69 | 0.53 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,022.60 | 1,022.97 | 2.19 | 2.19 | 0.43 | % | ||||||||||||||||||||
Adviser Shares | 1,000.00 | 1,021.00 | 1,021.47 | 3.71 | 3.71 | 0.73 | % | ||||||||||||||||||||
R6 Shares | 1,000.00 | 1,022.80 | 1,023.18 | 1.98 | 1.98 | 0.39 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's web site at www.sec.gov.
47
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800) 235-8396 |
23426-0320
JANUARY 31, 2020
Semi Annual Report
USAA Small Cap Stock Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 4 | ||||||
Statement of Assets and Liabilities | 18 | ||||||
Statement of Operations | 19 | ||||||
Statements of Changes in Net Assets | 20 | ||||||
Financial Highlights | 22 | ||||||
Notes to Financial Statements | 24 | ||||||
Supplemental Information | 33 | ||||||
Expense Examples | 33 | ||||||
Proxy Voting and Portfolio Holdings Information | 33 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
1
USAA Mutual Funds Trust USAA Small Cap Stock Fund | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA Small Cap Stock Fund seeks long-term growth of capital.
Top 10 Holdings*
1/31/20
(% of Net Assets)
Radian Group, Inc. | 0.8 | % | |||||
Enphase Energy, Inc. | 0.7 | % | |||||
Portland General Electric Co. | 0.7 | % | |||||
NorthWestern Corp. | 0.7 | % | |||||
WNS Holdings Ltd. | 0.7 | % | |||||
International Bancshares Corp. | 0.6 | % | |||||
Exact Sciences Corp. | 0.6 | % | |||||
Repligen Corp. | 0.6 | % | |||||
Limelight Networks, Inc. | 0.6 | % | |||||
Cathay General Bancorp | 0.5 | % |
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Small Cap Stock Fund (continued) | January 31, 2020 |
(Unaudited)
Sector Allocation*
1/31/20
(% of Net Assets)
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
3
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (98.8%) | |||||||||||
Communication Services (2.2%): | |||||||||||
ANGI Homeservices, Inc. Class A (a) (b) | 25,426 | $ | 204 | ||||||||
Cogent Communications Holdings, Inc. | 31,454 | 2,231 | |||||||||
Gray Television, Inc. (a) | 286,635 | 5,813 | |||||||||
Liberty Broadband Corp. Class A (a) | 18,139 | 2,387 | |||||||||
Liberty TripAdvisor Holdings, Inc. (a) | 125,405 | 739 | |||||||||
Live Nation Entertainment, Inc. (a) | 3,392 | 231 | |||||||||
Match Group, Inc. (a) (b) | 2,948 | 231 | |||||||||
Meredith Corp. (b) | 52,089 | 1,565 | |||||||||
MSG Networks, Inc. Class A (a) (b) | 108,038 | 1,643 | |||||||||
Sinclair Broadcast Group, Inc. Class A | 64,404 | 1,927 | |||||||||
TechTarget, Inc. (a) | 93,500 | 2,374 | |||||||||
TEGNA, Inc. | 326,710 | 5,522 | |||||||||
The E.W. Scripps Co. Class A | 49,500 | 601 | |||||||||
Vonage Holdings Corp. (a) | 830,550 | 7,367 | |||||||||
Yelp, Inc. (a) | 52,300 | 1,704 | |||||||||
34,539 | |||||||||||
Consumer Discretionary (8.7%): | |||||||||||
Aaron's, Inc. | 62,352 | 3,701 | |||||||||
Afya Ltd. Class A (a) | 72,481 | 2,164 | |||||||||
American Axle & Manufacturing Holdings, Inc. (a) | 227,700 | 2,104 | |||||||||
American Eagle Outfitters, Inc. | 358,265 | 5,159 | |||||||||
American Outdoor Brands Corp. (a) | 130,600 | 1,230 | |||||||||
Bed Bath & Beyond, Inc. (b) | 252,516 | 3,598 | |||||||||
Big Lots, Inc. | 49,974 | 1,352 | |||||||||
Bright Horizons Family Solutions, Inc. (a) | 19,300 | 3,160 | |||||||||
Burlington Stores, Inc. (a) | 7,914 | 1,721 | |||||||||
Carriage Services, Inc. | 32,800 | 776 | |||||||||
Cavco Industries, Inc. (a) (b) | 7,096 | 1,590 | |||||||||
Century Communities, Inc. (a) | 21,800 | 647 | |||||||||
Chegg, Inc. (a) | 164,654 | 6,789 | |||||||||
Chewy, Inc. (a) | 30,751 | 815 | |||||||||
Clarus Corp. | 88,217 | 1,166 | |||||||||
Cooper Tire & Rubber Co. | 109,257 | 2,894 | |||||||||
Cracker Barrel Old Country Store, Inc. (b) | 11,400 | 1,743 | |||||||||
Crocs, Inc. (a) | 59,206 | 2,244 | |||||||||
Dana, Inc. | 231,053 | 3,560 | |||||||||
Designer Brands, Inc. Class A | 39,932 | 569 | |||||||||
Dillard's, Inc. Class A (b) | 29,600 | 1,798 | |||||||||
Etsy, Inc. (a) | 80,561 | 3,932 | |||||||||
Five Below, Inc. (a) | 14,640 | 1,658 | |||||||||
Gentherm, Inc. (a) | 108,202 | 4,990 | |||||||||
G-III Apparel Group Ltd. (a) | 30,500 | 830 | |||||||||
Grand Canyon Education, Inc. (a) | 3,391 | 265 | |||||||||
Green Brick Partners, Inc. (a) | 68,800 | 797 | |||||||||
Group 1 Automotive, Inc. | 53,147 | 5,355 | |||||||||
Helen of Troy Ltd. (a) | 7,553 | 1,428 | |||||||||
Jack in the Box, Inc. | 33,883 | 2,770 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
KB Home | 165,392 | $ | 6,210 | ||||||||
Kontoor Brands, Inc. | 64,333 | 2,453 | |||||||||
Laureate Education, Inc. (a) | 28,000 | 584 | |||||||||
Levi Strauss & Co. Class A (b) | 198,265 | 3,895 | |||||||||
Lithia Motors, Inc. Class A | 13,400 | 1,818 | |||||||||
Luckin Coffee, Inc., ADR (a) (b) | 96,427 | 3,133 | |||||||||
M/I Homes, Inc. (a) | 50,900 | 2,259 | |||||||||
Motorcar Parts of America, Inc. (a) | 132,917 | 2,640 | |||||||||
Murphy USA, Inc. (a) | 5,100 | 521 | |||||||||
Office Depot, Inc. | 1,011,617 | 2,246 | |||||||||
OneSpaWorld Holdings Ltd. (b) | 78,759 | 1,182 | |||||||||
Planet Fitness, Inc. Class A (a) | 20,050 | 1,620 | |||||||||
RH (a) | 14,100 | 2,943 | |||||||||
RumbleON, Inc. Class B (a) | 97,600 | 50 | |||||||||
Sally Beauty Holdings, Inc. (a) | 56,654 | 870 | |||||||||
Signet Jewelers Ltd. | 109,422 | 2,660 | |||||||||
Skyline Champion Corp. (a) | 101,620 | 2,922 | |||||||||
Stamps.com, Inc. (a) | 8,980 | 669 | |||||||||
Steven Madden Ltd. | 76,100 | 2,934 | |||||||||
Strategic Education, Inc. | 6,577 | 1,067 | |||||||||
Taylor Morrison Home Corp. Class A (a) | 263,610 | 6,823 | |||||||||
Texas Roadhouse, Inc. | 49,657 | 3,104 | |||||||||
The Cato Corp. Class A | 45,472 | 729 | |||||||||
The Cheesecake Factory, Inc. (b) | 40,400 | 1,551 | |||||||||
The Children's Place, Inc. (b) | 33,326 | 1,989 | |||||||||
TRI Pointe Group, Inc. (a) | 152,526 | 2,480 | |||||||||
ZAGG, Inc. (a) (b) | 94,878 | 717 | |||||||||
130,874 | |||||||||||
Consumer Staples (2.1%): | |||||||||||
B&G Foods, Inc. (b) | 77,900 | 1,251 | |||||||||
C&C Group PLC | 366,674 | 1,734 | |||||||||
Cal-Maine Foods, Inc. | 34,000 | 1,213 | |||||||||
Cranswick PLC | 50,255 | 2,369 | |||||||||
Edgewell Personal Care Co. (a) | 127,873 | 3,302 | |||||||||
Grocery Outlet Holding Corp. (a) (b) | 67,664 | 2,215 | |||||||||
Hostess Brands, Inc. (a) | 124,712 | 1,674 | |||||||||
Medifast, Inc. (b) | 11,000 | 1,063 | |||||||||
Performance Food Group Co. (a) | 117,291 | 6,075 | |||||||||
Sanderson Farms, Inc. | 9,100 | 1,253 | |||||||||
Spectrum Brands Holdings, Inc. | 42,220 | 2,593 | |||||||||
The Boston Beer Co., Inc. Class A (a) | 5,500 | 1,960 | |||||||||
The Simply Good Foods Co. (a) | 63,600 | 1,461 | |||||||||
Universal Corp. | 32,146 | 1,709 | |||||||||
29,872 | |||||||||||
Energy (3.8%): | |||||||||||
Arch Coal, Inc. Class A | 62,896 | 3,241 | |||||||||
Archrock, Inc. | 58,000 | 484 | |||||||||
Bonanza Creek Energy, Inc. (a) | 45,600 | 829 | |||||||||
Cactus, Inc. | 68,400 | 1,971 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Callon Petroleum Co. (a) | 947,585 | $ | 2,843 | ||||||||
CNX Resources Corp. (a) | 413,987 | 2,993 | |||||||||
CONSOL Energy, Inc. (a) | 42,792 | 348 | |||||||||
CVR Energy, Inc. | 64,994 | 2,249 | |||||||||
Delek US Holdings, Inc. | 159,300 | 4,374 | |||||||||
DHT Holdings, Inc. | 148,700 | 837 | |||||||||
Dorian LPG Ltd. (a) | 126,625 | 1,661 | |||||||||
Dril-Quip, Inc. (a) | 72,057 | 2,948 | |||||||||
Era Group, Inc. (a) | 294,637 | 2,929 | |||||||||
Kosmos Energy Ltd. | 331,230 | 1,693 | |||||||||
Magnolia Oil & Gas Corp. (a) | 255,546 | 2,688 | |||||||||
Montage Resources Corp. (a) (b) | 77,700 | 284 | |||||||||
Nordic American Tankers Ltd. | 168,800 | 571 | |||||||||
Parsley Energy, Inc. Class A | 125,995 | 2,097 | |||||||||
Peabody Energy Corp. | 177,987 | 1,203 | |||||||||
Propetro Holding Corp. (a) | 271,998 | 2,649 | |||||||||
Renewable Energy Group, Inc. (a) (b) | 102,028 | 2,681 | |||||||||
REX American Resources Corp. (a) | 17,559 | 1,323 | |||||||||
Ring Energy, Inc. (a) (b) | 1,483,220 | 3,204 | |||||||||
Scorpio Tankers, Inc. | 128,859 | 3,008 | |||||||||
SEACOR Holdings, Inc. (a) | 90,528 | 3,403 | |||||||||
SEACOR Marine Holdings, Inc. (a) | 177,851 | 1,856 | |||||||||
Talos Energy, Inc. (a) | 74,049 | 1,625 | |||||||||
Transocean Ltd. (a) | 92,100 | 420 | |||||||||
World Fuel Services Corp. | 31,100 | 1,217 | |||||||||
57,629 | |||||||||||
Financials (18.9%): | |||||||||||
1st Source Corp. (b) | 143,596 | 6,777 | |||||||||
Amerant Bancorp, Inc. (a) | 66,986 | 1,248 | |||||||||
American Equity Investment Life Holding Co. | 199,100 | 5,259 | |||||||||
AMERISAFE, Inc. | 25,247 | 1,727 | |||||||||
Argo Group International Holdings Ltd. | 25,757 | 1,690 | |||||||||
Atlantic Union Bankshares Corp. | 61,020 | 2,056 | |||||||||
Banc of California, Inc. | 151,774 | 2,422 | |||||||||
Banco Latinoamericano Comercio Exterior SA Class E | 19,001 | 383 | |||||||||
Bank OZK Class A | 119,224 | 3,241 | |||||||||
BGC Partners, Inc. Class A | 591,029 | 3,410 | |||||||||
Boston Private Financial Holdings, Inc. | 123,562 | 1,409 | |||||||||
Brighthouse Financial, Inc. (a) | 33,900 | 1,319 | |||||||||
Brightsphere Investment Group | 218,138 | 2,009 | |||||||||
Cannae Holdings, Inc. (a) | 39,800 | 1,618 | |||||||||
Cathay General Bancorp | 230,772 | 8,323 | |||||||||
Centerstate Banks, Inc. | 66,000 | 1,489 | |||||||||
Central Pacific Financial Corp. | 67,075 | 1,860 | |||||||||
CNO Financial Group, Inc. | 250,600 | 4,407 | |||||||||
Community Bank System, Inc. | 83,354 | 5,524 | |||||||||
ConnectOne Bancorp, Inc. Class A | 80,542 | 1,901 | |||||||||
Customers Bancorp, Inc. Class A (a) | 144,911 | 3,099 | |||||||||
eHealth, Inc. (a) | 28,718 | 3,020 | |||||||||
Encore Capital Group, Inc. (a) | 53,603 | 1,820 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Enova International, Inc. (a) | 159,985 | $ | 4,009 | ||||||||
Enterprise Financial Services Corp. | 41,800 | 1,819 | |||||||||
Essent Group Ltd. | 67,319 | 3,340 | |||||||||
FBL Financial Group, Inc. Class A | 3,164 | 170 | |||||||||
Federal Agricultural Mortgage Corp. | 7,375 | 563 | |||||||||
FGL Holdings | 334,289 | 3,226 | |||||||||
Financial Institutions, Inc. | 12,500 | 385 | |||||||||
First Bancorp, Inc. | 356,677 | 3,306 | |||||||||
First Busey Corp. | 176,481 | 4,500 | |||||||||
First Financial Corp. Class A | 22,984 | 959 | |||||||||
First Internet Bancorp | 42,600 | 1,129 | |||||||||
First Merchants Corp. | 58,200 | 2,313 | |||||||||
First Midwest Bancorp, Inc. | 160,254 | 3,195 | |||||||||
Flagstar Bancorp, Inc. Class A | 50,800 | 1,790 | |||||||||
Flushing Financial Corp. | 256,227 | 5,091 | |||||||||
Fulton Financial Corp. | 488,239 | 8,042 | |||||||||
Great Ajax Corp. | 82,600 | 1,246 | |||||||||
Great Western Bancorp, Inc. | 180,330 | 5,329 | |||||||||
Green Dot Corp. Class A (a) | 57,153 | 1,719 | |||||||||
Hallmark Financial Services, Inc. (a) | 77,300 | 1,330 | |||||||||
Hancock Whitney Corp. Class B | 124,900 | 4,964 | |||||||||
Hanmi Financial Corp. | 67,519 | 1,136 | |||||||||
Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 21,300 | 726 | |||||||||
HBT Financial, Inc. (a) | 113,434 | 2,193 | |||||||||
Hope Bancorp, Inc. | 208,018 | 2,892 | |||||||||
Independent Bank Group, Inc. | 16,000 | 856 | |||||||||
International Bancshares Corp. | 235,679 | 9,285 | |||||||||
Invesco Mortgage Capital, Inc. | 73,700 | 1,290 | |||||||||
James River Group Holdings Ltd. | 44,036 | 1,891 | |||||||||
Kemper Corp. | 31,183 | 2,321 | |||||||||
Kinsale Capital Group, Inc. | 32,218 | 3,679 | |||||||||
Lakeland Financial Corp. | 54,000 | 2,562 | |||||||||
Luther Burbank Corp. | 59,700 | 616 | |||||||||
Meridian Bancorp, Inc. | 77,370 | 1,392 | |||||||||
Metropolitan Bank Holding Corp. (a) | 6,700 | 329 | |||||||||
MGIC Investment Corp. | 413,414 | 5,701 | |||||||||
Mid Penn BanCorp, Inc. | 15,700 | 377 | |||||||||
Morningstar, Inc. | 20,331 | 3,190 | |||||||||
National General Holdings Corp. | 86,591 | 1,885 | |||||||||
Navient Corp. | 81,800 | 1,176 | |||||||||
NBT Bancorp, Inc. | 42,760 | 1,616 | |||||||||
Northwest Bancshares, Inc. | 237,825 | 3,740 | |||||||||
OFG Bancorp | 69,400 | 1,368 | |||||||||
Onemain Holdings, Inc. | 48,000 | 2,034 | |||||||||
Oppenheimer Holdings, Inc. | 39,223 | 1,081 | |||||||||
Pacific Premier Bancorp, Inc. | 33,100 | 986 | |||||||||
Park National Corp. | 20,584 | 1,955 | |||||||||
Pennymac Financial Services | 67,100 | 2,263 | |||||||||
Pennymac Mortgage Investment Trust | 44,300 | 1,030 | |||||||||
Piper Sandler Cos. | 32,571 | 2,685 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Preferred Bank | 46,871 | $ | 2,817 | ||||||||
Primerica, Inc. | 21,961 | 2,604 | |||||||||
ProAssurance Corp. | 74,800 | 2,272 | |||||||||
Provident Financial Services, Inc. | 117,440 | 2,679 | |||||||||
Radian Group, Inc. | 509,336 | 12,472 | |||||||||
RBB Bancorp | 61,500 | 1,210 | |||||||||
Ready Capital Corp. | 65,900 | 1,075 | |||||||||
Renasant Corp. | 32,500 | 1,038 | |||||||||
S&T Bancorp, Inc. | 61,483 | 2,311 | |||||||||
ServisFirst Bancshares, Inc. | 58,352 | 2,144 | |||||||||
Simmons First National Corp. Class A | 32,200 | 772 | |||||||||
SLM Corp. | 286,739 | 3,131 | |||||||||
Solar Capital Ltd. | 187,083 | 3,845 | |||||||||
South State Corp. | 15,100 | 1,142 | |||||||||
Southside Bancshares, Inc. | 45,942 | 1,612 | |||||||||
Stifel Financial Corp. | 85,404 | 5,525 | |||||||||
Stock Yards Bancorp, Inc. | 8,718 | 338 | |||||||||
Synovus Financial Corp. | 118,604 | 4,153 | |||||||||
Texas Capital Bancshares, Inc. (a) | 51,517 | 2,831 | |||||||||
The Bancorp, Inc. (a) | 32,000 | 379 | |||||||||
The Bank of NT Butterfield & Son Ltd. | 185,769 | 6,171 | |||||||||
The First of Long Island Corp. | 13,400 | 296 | |||||||||
Tompkins Financial Corp. (b) (c) | 24,070 | 2,072 | |||||||||
Tradeweb Markets, Inc. Class A | 118,833 | 5,487 | |||||||||
TrustCo Bank Corp. | 184,318 | 1,462 | |||||||||
Trustmark Corp. | 103,267 | 3,302 | |||||||||
UMB Financial Corp. | 53,589 | 3,562 | |||||||||
United Community Banks, Inc. | 47,900 | 1,337 | |||||||||
Universal Insurance Holdings, Inc. | 53,200 | 1,295 | |||||||||
Valley National Bancorp | 179,100 | 1,886 | |||||||||
Virtus Investment Partners, Inc. | 17,200 | 2,116 | |||||||||
Waddell & Reed Financial, Inc. Class A (b) | 331,784 | 5,302 | |||||||||
Walker & Dunlop, Inc. | 89,749 | 5,957 | |||||||||
Washington Federal, Inc. | 132,600 | 4,508 | |||||||||
Washington Trust Bancorp, Inc. | 5,582 | 264 | |||||||||
Western Asset Mortgage Capital Corp. | 50,200 | 533 | |||||||||
White Mountains Insurance Group Ltd. | 1,230 | 1,374 | |||||||||
World Acceptance Corp. (a) | 20,100 | 1,738 | |||||||||
289,703 | |||||||||||
Health Care (13.6%): | |||||||||||
10X Genomics, Inc. Class A (a) | 546 | 50 | |||||||||
1Life Healthcare, Inc. (a) | 17,520 | 387 | |||||||||
ABIOMED, Inc. (a) | 22,249 | 4,145 | |||||||||
Acceleron Pharma, Inc. (a) | 42,159 | 3,828 | |||||||||
Adaptive Biotechnologies Corp. (a) | 23,059 | 690 | |||||||||
Aerie Pharmaceuticals, Inc. (a) (b) | 169,125 | 3,464 | |||||||||
Akero Therapeutics, Inc. (a) | 30,654 | 757 | |||||||||
Allscripts Healthcare Solutions, Inc. (a) | 248,515 | 2,132 | |||||||||
Amedisys, Inc. (a) | 32,000 | 5,647 | |||||||||
AMN Healthcare Services, Inc. (a) | 22,683 | 1,528 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Aprea Therapeutics, Inc. (a) | 19,523 | $ | 749 | ||||||||
Argenx SE, ADR (a) | 42,381 | 6,115 | |||||||||
Arrowhead Pharmaceuticals, Inc. (a) | 41,883 | 1,755 | |||||||||
Athenex, Inc. (a) (b) | 40,446 | 542 | |||||||||
AtriCure, Inc. (a) | 22,695 | 883 | |||||||||
Aurinia Pharmaceuticals, Inc. (a) | 185,949 | 3,404 | |||||||||
Avid Bioservices, Inc. (a) | 46,100 | 305 | |||||||||
Avrobio, Inc. (a) | 27,153 | 590 | |||||||||
Axogen, Inc. (a) | 49,424 | 611 | |||||||||
Bicycle Therapeutics Ltd. (a) (b) | 24,619 | 270 | |||||||||
Biodelivery Sciences International, Inc. (a) | 123,200 | 647 | |||||||||
Black Diamond Therapeutics, Inc. (a) | 9,643 | 362 | |||||||||
Bluebird Bio, Inc. (a) | 7,182 | 572 | |||||||||
Cabaletta Bio, Inc. (a) | 68,072 | 1,118 | |||||||||
Cara Therapeutics, Inc. (a) (b) | 47,628 | 767 | |||||||||
Cardiovascular Systems, Inc. (a) | 55,735 | 2,530 | |||||||||
Castle Biosciences, Inc. (a) (b) | 59,125 | 1,823 | |||||||||
Cellectis SA, ADR (a) | 14,000 | 217 | |||||||||
Collegium Pharmaceutical, Inc. (a) | 127,131 | 2,557 | |||||||||
CONMED Corp. | 33,298 | 3,386 | |||||||||
CRISPR Therapeutics AG (a) | 8,978 | 466 | |||||||||
Cryoport, Inc. (a) (b) | 163,350 | 2,926 | |||||||||
Cymabay Therapeutics, Inc. (a) | 71,534 | 110 | |||||||||
CytomX Therapeutics, Inc. Class A (a) | 27,423 | 203 | |||||||||
Cytosorbents Corp. (a) (b) | 301,767 | 1,490 | |||||||||
Deciphera Pharmaceuticals, Inc. (a) | 29,579 | 1,853 | |||||||||
DexCom, Inc. (a) | 14,152 | 3,407 | |||||||||
Dicerna Pharmaceuticals, Inc. (a) | 30,361 | 599 | |||||||||
Enanta Pharmaceuticals, Inc. (a) | 31,946 | 1,646 | |||||||||
Encompass Health Corp. | 24,287 | 1,871 | |||||||||
Endo International PLC (a) | 106,105 | 602 | |||||||||
Esperion Therapeutics, Inc. (a) (b) | 52,745 | 2,852 | |||||||||
Evolent Health, Inc. (a) | 176,145 | 1,776 | |||||||||
Exact Sciences Corp. (a) | 95,791 | 8,936 | |||||||||
Fennec Pharmaceuticals, Inc. (a) (b) | 173,245 | 1,154 | |||||||||
Flexion Therapeutics, Inc. (a) (b) | 81,644 | 1,430 | |||||||||
Fluidigm Corp. (a) | 117,722 | 452 | |||||||||
Genfit, ADR (a) (b) | 29,658 | 504 | |||||||||
Globus Medical, Inc. (a) | 51,828 | 2,710 | |||||||||
Guardant Health, Inc. (a) | 18,050 | 1,373 | |||||||||
HealthEquity, Inc. (a) | 75,966 | 5,018 | |||||||||
HMS Holdings Corp. (a) | 36,300 | 992 | |||||||||
Immunomedics, Inc. (a) | 159,729 | 2,966 | |||||||||
Insmed, Inc. (a) | 126,576 | 2,600 | |||||||||
Inspire Medical System, Inc. (a) | 36,289 | 2,714 | |||||||||
Insulet Corp. (a) | 21,431 | 4,157 | |||||||||
Intercept Pharmaceuticals, Inc. (a) | 10,317 | 953 | |||||||||
Invacare Corp. | 5,398 | 42 | |||||||||
Ionis Pharmaceuticals, Inc. (a) | 3,164 | 185 | |||||||||
Iovance Biotherapeutics, Inc. (a) | 54,433 | 1,183 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Jounce Therapeutics, Inc. (a) | 20,712 | $ | 130 | ||||||||
Lannett Co., Inc. (a) (b) | 50,500 | 411 | |||||||||
Lantheus Holdings, Inc. (a) | 39,420 | 690 | |||||||||
Lexicon Pharmaceuticals (a) (b) | 46,021 | 142 | |||||||||
Ligand Pharmaceuticals, Inc. (a) (b) | 24,385 | 2,141 | |||||||||
LivaNova PLC (a) | 43,100 | 2,929 | |||||||||
MacroGenics, Inc. (a) | 38,368 | 355 | |||||||||
Mallinckrodt PLC (a) | 108,949 | 500 | |||||||||
Merit Medical Systems, Inc. (a) | 94,465 | 3,440 | |||||||||
Myriad Genetics, Inc. (a) | 42,339 | 1,171 | |||||||||
Natera, Inc. (a) | 52,058 | 1,823 | |||||||||
Natus Medical, Inc. (a) | 32,755 | 1,025 | |||||||||
NeoGenomics, Inc. (a) | 106,381 | 3,429 | |||||||||
NextCure, Inc. (a) | 45,789 | 1,957 | |||||||||
NGM Biopharmaceuticals, Inc. (a) (b) | 33,377 | 540 | |||||||||
Novocure Ltd. (a) | 47,727 | 3,888 | |||||||||
Nupathe, Inc. (a) (d) | 133,709 | — | |||||||||
Orchard Therapeutics PLC, ADR (a) | 122,515 | 1,521 | |||||||||
Organogenesis Holdings, Inc. (a) | 222,300 | 994 | |||||||||
Orthopediatrics Corp. (a) | 74,441 | 3,419 | |||||||||
Oxford Immunotec Global PLC (a) | 122,667 | 1,899 | |||||||||
Oyster Point Pharma, Inc. (a) | 9,076 | 286 | |||||||||
Pacira BioSciences, Inc. (a) | 71,726 | 3,100 | |||||||||
Portola Pharmaceuticals, Inc. (a) (b) | 55,755 | 713 | |||||||||
Principia Biopharma, Inc. (a) | 23,283 | 1,226 | |||||||||
Quanterix Corp. (a) (b) | 80,500 | 2,182 | |||||||||
RadNet, Inc. (a) | 71,742 | 1,619 | |||||||||
Reata Pharmaceuticals, Inc. Class A (a) | 15,944 | 3,488 | |||||||||
Repligen Corp. (a) | 88,800 | 8,915 | |||||||||
SI-BONE, Inc. (a) | 113,215 | 2,390 | |||||||||
Sientra, Inc. (a) | 325,767 | 1,974 | |||||||||
Silk Road Medical, Inc. (a) | 49,659 | 2,311 | |||||||||
Stemline Therapeutics, Inc. (a) (b) | 56,121 | 372 | |||||||||
Stoke Therapeutics, Inc. (a) | 26,265 | 734 | |||||||||
Sutro Biopharma Inc. (a) | 53,901 | 552 | |||||||||
Syneos Health, Inc. (a) | 18,600 | 1,141 | |||||||||
TCR2 Therapeutics, Inc. (a) | 71,284 | 1,046 | |||||||||
Teladoc Health, Inc. (a) (b) | 46,497 | 4,729 | |||||||||
Tenet Healthcare Corp. (a) | 27,212 | 861 | |||||||||
TG Therapeutics, Inc. (a) (b) | 51,503 | 732 | |||||||||
The Ensign Group, Inc. | 73,162 | 3,307 | |||||||||
The Pennant Group, Inc. (a) | 17,307 | 457 | |||||||||
Triple-S Management Corp. (a) | 53,802 | 948 | |||||||||
UroGen Pharma Ltd. (a) (b) | 27,217 | 800 | |||||||||
Veeva Systems, Inc. Class A (a) | 2,940 | 431 | |||||||||
Veracyte, Inc. (a) | 241,426 | 6,338 | |||||||||
Vericel Corp. (a) | 282,757 | 4,638 | |||||||||
Viking Therapeutics, Inc. (a) (b) | 134,098 | 842 | |||||||||
West Pharmaceutical Services, Inc. | 14,329 | 2,235 | |||||||||
Xencor, Inc. (a) | 47,169 | 1,600 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Xenon Pharmaceuticals, Inc. (a) | 87,319 | $ | 1,278 | ||||||||
Zai Lab Ltd., ADR (a) | 24,854 | 1,267 | |||||||||
203,917 | |||||||||||
Industrials (16.5%): | |||||||||||
ACCO Brands Corp. | 709,674 | 6,131 | |||||||||
AECOM (a) | 42,400 | 2,045 | |||||||||
Aerojet Rocketdyne Holdings, Inc. (a) | 50,925 | 2,652 | |||||||||
Albany International Corp. | 10,048 | 701 | |||||||||
American Woodmark Corp. (a) | 30,550 | 3,350 | |||||||||
Apogee Enterprises, Inc. | 59,407 | 1,890 | |||||||||
ASGN, Inc. (a) | 75,700 | 5,124 | |||||||||
Astronics Corp. (a) | 48,476 | 1,222 | |||||||||
Atkore International Group, Inc. (a) | 51,113 | 2,029 | |||||||||
Axon Enterprise, Inc. (a) (b) | 71,188 | 5,467 | |||||||||
Beacon Roofing Supply, Inc. (a) | 97,617 | 3,232 | |||||||||
Brady Corp. Class A | 32,932 | 1,823 | |||||||||
Brightview Holdings, Inc. (a) | 65,954 | 1,042 | |||||||||
Builders FirstSource, Inc. (a) | 51,500 | 1,277 | |||||||||
BWX Technologies, Inc. | 32,036 | 2,037 | |||||||||
Casella Waste Systems, Inc. (a) | 134,443 | 6,882 | |||||||||
CBIZ, Inc. (a) | 24,770 | 669 | |||||||||
Chart Industries, Inc. (a) | 91,851 | 5,877 | |||||||||
CIRCOR International, Inc. (a) | 15,200 | 631 | |||||||||
Columbus McKinnon Corp. | 90,201 | 3,156 | |||||||||
Comfort Systems USA, Inc. | 31,427 | 1,458 | |||||||||
Commercial Vehicle Group, Inc. (a) | 51,400 | 256 | |||||||||
Construction Partners, Inc. (a) | 136,068 | 2,283 | |||||||||
Continental Building Products, Inc. (a) | 41,647 | 1,541 | |||||||||
Deluxe Corp. | 118,300 | 5,703 | |||||||||
DMC Global, Inc. (b) | 145,376 | 6,082 | |||||||||
Douglas Dynamics, Inc. | 64,151 | 3,363 | |||||||||
Dycom Industries, Inc. (a) | 32,200 | 1,302 | |||||||||
EMCOR Group, Inc. | 41,780 | 3,433 | |||||||||
Enphase Energy, Inc. (a) (b) | 345,361 | 10,885 | |||||||||
EnPro Industries, Inc. | 42,753 | 2,498 | |||||||||
ESCO Technologies, Inc. | 44,003 | 4,223 | |||||||||
Forrester Research, Inc. (a) | 93,357 | 3,862 | |||||||||
Forward Air Corp. | 59,840 | 3,917 | |||||||||
Franklin Electric Co., Inc. | 33,729 | 1,946 | |||||||||
FTI Consulting, Inc. (a) | 2,510 | 301 | |||||||||
GATX Corp. | 27,098 | 2,063 | |||||||||
Gibraltar Industries, Inc. (a) | 15,900 | 867 | |||||||||
GMS, Inc. (a) | 126,980 | 3,392 | |||||||||
Griffon Corp. | 32,200 | 669 | |||||||||
Hawaiian Holdings, Inc. | 87,400 | 2,437 | |||||||||
Headhunter Group PLC, ADR | 68,780 | 1,465 | |||||||||
Heartland Express, Inc. | 69,600 | 1,301 | |||||||||
Hillenbrand, Inc. | 46,344 | 1,345 | |||||||||
Hudson Technologies, Inc. (a) (b) | 120,238 | 99 | |||||||||
Huron Consulting Group, Inc. (a) | 50,503 | 3,272 |
See notes to financial statements.
11
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
ICF International, Inc. | 22,509 | $ | 1,972 | ||||||||
Insperity, Inc. | 25,484 | 2,227 | |||||||||
John Bean Technologies Corp. | 23,337 | 2,637 | |||||||||
Kelly Services, Inc. Class A | 145,800 | 2,590 | |||||||||
Kornit Digital Ltd. (a) | 155,101 | 6,481 | |||||||||
Kratos Defense & Security Solutions, Inc. (a) | 115,853 | 2,125 | |||||||||
Luxfer Holdings PLC | 347,906 | 5,550 | |||||||||
Marten Transport Ltd. | 66,130 | 1,373 | |||||||||
Masonite International Corp. (a) | 61,530 | 4,622 | |||||||||
Matthews International Corp. Class A | 56,475 | 2,108 | |||||||||
McGrath RentCorp | 22,639 | 1,750 | |||||||||
Meritor, Inc. (a) | 95,357 | 2,089 | |||||||||
Mesa Air Group, Inc. (a) | 65,100 | 556 | |||||||||
Mistras Group, Inc. (a) | 111,630 | 1,236 | |||||||||
Mobile Mini, Inc. | 62,500 | 2,609 | |||||||||
MSA Safety, Inc. | 21,364 | 2,897 | |||||||||
Mueller Industries, Inc. | 148,588 | 4,335 | |||||||||
NN, Inc. | 47,100 | 406 | |||||||||
Northwest Pipe Co. (a) | 47,200 | 1,545 | |||||||||
Owens Corning, Inc. | 35,911 | 2,172 | |||||||||
Parsons Corp. (a) | 84,580 | 3,459 | |||||||||
PGT Innovations, Inc. (a) | 118,228 | 1,833 | |||||||||
Primoris Services Corp. | 157,784 | 3,365 | |||||||||
Proto Labs, Inc. (a) | 17,400 | 1,801 | |||||||||
Quanta Services, Inc. | 19,600 | 767 | |||||||||
RBC Bearings, Inc. (a) | 36,219 | 5,633 | |||||||||
Rexnord Corp. (a) | 34,524 | 1,127 | |||||||||
Rush Enterprises, Inc. Class A | 154,699 | 6,652 | |||||||||
Saia, Inc. (a) | 14,020 | 1,221 | |||||||||
Simpson Manufacturing Co., Inc. | 30,300 | 2,505 | |||||||||
SkyWest, Inc. | 17,800 | 982 | |||||||||
SP Plus Corp. (a) | 102,224 | 4,274 | |||||||||
Spirit Airlines, Inc. (a) | 77,666 | 3,189 | |||||||||
Steelcase, Inc. Class A | 83,976 | 1,563 | |||||||||
Terex Corp. | 80,031 | 2,029 | |||||||||
Tetra Tech, Inc. | 36,300 | 3,107 | |||||||||
The Greenbrier Cos., Inc. | 61,900 | 1,491 | |||||||||
The Manitowoc Co., Inc. (a) | 44,100 | 637 | |||||||||
The Timken Co. | 29,400 | 1,544 | |||||||||
Thermon Group Holdings, Inc. (a) | 201,651 | 4,780 | |||||||||
Titan Machinery, Inc. (a) | 177,578 | 2,169 | |||||||||
TriMas Corp. (a) | 114,100 | 3,278 | |||||||||
Triton International Ltd. | 6,200 | 233 | |||||||||
TrueBlue, Inc. (a) | 80,090 | 1,755 | |||||||||
Tutor Perini Corp. (a) | 142,027 | 1,600 | |||||||||
Tyman PLC | 698,218 | 2,510 | |||||||||
Universal Forest Products, Inc. | 37,900 | 1,815 | |||||||||
Valmont Industries, Inc. | 16,420 | 2,333 | |||||||||
Vicor Corp. (a) | 3,400 | 170 | |||||||||
VSE Corp. | 23,215 | 722 |
See notes to financial statements.
12
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Wabash National Corp. | 99,636 | $ | 1,156 | ||||||||
Watts Water Technologies, Inc. Class A | 17,391 | 1,734 | |||||||||
249,914 | |||||||||||
Information Technology (18.7%): | |||||||||||
2u, Inc. (a) (b) | 50,886 | 1,008 | |||||||||
Adesto Technologies Corp. (a) (b) | 767,323 | 5,447 | |||||||||
Advanced Energy Industries, Inc. (a) | 8,247 | 577 | |||||||||
Akamai Technologies, Inc. (a) | 14,167 | 1,322 | |||||||||
Akoustis Technologies, Inc. (a) (b) | 109,750 | 807 | |||||||||
Alteryx, Inc. Class A (a) | 20,224 | 2,821 | |||||||||
Amkor Technology, Inc. (a) | 101,067 | 1,137 | |||||||||
Anixter International, Inc. (a) | 27,569 | 2,691 | |||||||||
Badger Meter, Inc. | 19,947 | 1,178 | |||||||||
Belden, Inc. | 113,600 | 5,598 | |||||||||
Benchmark Electronics, Inc. | 54,171 | 1,667 | |||||||||
Bill.com Holdings, Inc. (a) | 1,007 | 51 | |||||||||
Blackbaud, Inc. | 34,409 | 2,695 | |||||||||
Brooks Automation, Inc. | 149,201 | 5,681 | |||||||||
CACI International, Inc. Class A (a) | 5,100 | 1,364 | |||||||||
Cardtronics PLC Class A (a) (b) | 56,942 | 2,562 | |||||||||
Ciena Corp. (a) | 24,850 | 1,011 | |||||||||
Cirrus Logic, Inc. (a) | 87,761 | 6,740 | |||||||||
Cloudera, Inc. (a) (b) | 444,938 | 4,579 | |||||||||
Cloudflare, Inc. Class A (a) (b) | 136,120 | 2,431 | |||||||||
Coherent, Inc. (a) | 8,650 | 1,223 | |||||||||
Cornerstone OnDemand, Inc. (a) | 72,067 | 4,237 | |||||||||
Coupa Software, Inc. (a) | 6,287 | 1,013 | |||||||||
CSG Systems International, Inc. | 42,463 | 2,116 | |||||||||
CTS Corp. | 145,215 | 4,256 | |||||||||
CyberArk Software Ltd. (a) | 18,700 | 2,585 | |||||||||
Datadog, Inc. Class A (a) | 38,587 | 1,783 | |||||||||
Digital Turbine, Inc. (a) | 532,488 | 3,323 | |||||||||
DocuSign, Inc. Class A (a) | 28,650 | 2,249 | |||||||||
Dropbox, Inc. (a) | 111,532 | 1,898 | |||||||||
Ebix, Inc. | 33,100 | 1,140 | |||||||||
Elastic NV (a) | 22,019 | 1,429 | |||||||||
EPAM Systems, Inc. (a) | 23,248 | 5,304 | |||||||||
Euronet Worldwide, Inc. (a) | 32,729 | 5,159 | |||||||||
EVERTEC, Inc. | 52,547 | 1,764 | |||||||||
Five9, Inc. (a) | 15,783 | 1,132 | |||||||||
Globant SA (a) | 35,814 | 4,394 | |||||||||
GoDaddy, Inc. Class A (a) | 25,705 | 1,728 | |||||||||
Ichor Holdings Ltd. (a) | 21,300 | 711 | |||||||||
Inphi Corp. (a) | 31,800 | 2,416 | |||||||||
Insight Enterprises, Inc. (a) | 46,986 | 3,094 | |||||||||
InterDigital, Inc. | 61,659 | 3,407 | |||||||||
j2 Global, Inc. | 26,207 | 2,512 | |||||||||
Jabil, Inc. | 30,700 | 1,194 | |||||||||
KBR, Inc. | 31,400 | 854 | |||||||||
Lattice Semiconductor Corp. (a) | 69,300 | 1,289 |
See notes to financial statements.
13
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Limelight Networks, Inc. (a) | 1,680,918 | $ | 8,389 | ||||||||
LivePerson, Inc. (a) | 101,925 | 4,181 | |||||||||
Lumentum Holdings, Inc. (a) | 20,885 | 1,582 | |||||||||
Marvell Technology Group Ltd. | 36,383 | 875 | |||||||||
MAXIMUS, Inc. | 61,201 | 4,391 | |||||||||
Methode Electronics, Inc. | 33,800 | 1,107 | |||||||||
Mimecast Ltd. (a) | 67,972 | 3,469 | |||||||||
Mix Telematics Ltd., ADR | 16,764 | 219 | |||||||||
Monolithic Power Systems, Inc. | 9,000 | 1,541 | |||||||||
Napco Security Technologies, Inc (a) | 84,478 | 2,484 | |||||||||
NetScout Systems, Inc. (a) | 67,852 | 1,744 | |||||||||
New Relic, Inc. (a) | 46,342 | 3,059 | |||||||||
Nutanix, Inc. Class A (a) | 88,329 | 2,868 | |||||||||
Okta, Inc. (a) | 21,100 | 2,702 | |||||||||
ON Semiconductor Corp. (a) | 148,652 | 3,441 | |||||||||
OneSpan, Inc. (a) | 63,074 | 1,048 | |||||||||
Onto Innovation, Inc. (a) | 116,739 | 4,429 | |||||||||
OSI Systems, Inc. (a) | 35,243 | 3,050 | |||||||||
PagerDuty, Inc. (a) (b) | 67,083 | 1,564 | |||||||||
Paycom Software, Inc. (a) | 1,752 | 557 | |||||||||
PC Connection, Inc. | 18,900 | 942 | |||||||||
Perficient, Inc. (a) | 102,900 | 5,114 | |||||||||
Perspecta, Inc. | 249,013 | 6,989 | |||||||||
Ping Identity Holding Corp. (a) (b) | 161,709 | 3,922 | |||||||||
Plexus Corp. (a) | 13,849 | 985 | |||||||||
Pluralsight, Inc. (a) | 163,753 | 3,176 | |||||||||
Power Integrations, Inc. | 12,650 | 1,236 | |||||||||
Progress Software Corp. | 34,729 | 1,567 | |||||||||
Proofpoint, Inc. (a) | 31,729 | 3,896 | |||||||||
PROS Holdings, Inc. (a) | 50,200 | 3,012 | |||||||||
PTC, Inc. (a) | 29,500 | 2,452 | |||||||||
Pure Storage, Inc. (a) | 338,818 | 6,031 | |||||||||
QAD, Inc. | 44,129 | 2,270 | |||||||||
Qualys, Inc. (a) | 30,000 | 2,572 | |||||||||
Radware Ltd. (a) | 103,700 | 2,642 | |||||||||
Rambus, Inc. (a) | 117,675 | 1,868 | |||||||||
Rapid7, Inc. (a) | 54,940 | 3,262 | |||||||||
RealPage, Inc. (a) | 26,518 | 1,547 | |||||||||
Rogers Corp. (a) | 3,800 | 447 | |||||||||
Sanmina Corp. (a) | 102,700 | 3,270 | |||||||||
Sapiens International Corp. NV | 45,001 | 1,144 | |||||||||
Semtech Corp. (a) | 43,527 | 2,098 | |||||||||
SharpSpring, Inc. (a) (b) | 99,126 | 1,225 | |||||||||
ShotSpotter, Inc. (a) (b) | 30,204 | 829 | |||||||||
Silicon Laboratories, Inc. (a) | 14,850 | 1,460 | |||||||||
Smartsheet, Inc. Class A (a) | 74,941 | 3,634 | |||||||||
Sprout Social, Inc. Class A (a) | 89,442 | 1,836 | |||||||||
SPS Commerce, Inc. (a) | 43,283 | 2,460 | |||||||||
Sykes Enterprises, Inc. (a) | 45,344 | 1,523 | |||||||||
SYNNEX Corp. | 18,400 | 2,535 |
See notes to financial statements.
14
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Tech Data Corp. (a) | 32,683 | $ | 4,705 | ||||||||
Teradyne, Inc. | 26,200 | 1,729 | |||||||||
The Hackett Group, Inc. | 66,921 | 1,034 | |||||||||
The Rubicon Project, Inc. (a) | 855,884 | 8,012 | |||||||||
The Trade Desk, Inc. Class A (a) | 536 | 144 | |||||||||
TransAct Technologies, Inc. | 34,403 | 362 | |||||||||
Twilio, Inc. Class A (a) | 28,622 | 3,559 | |||||||||
Upland Software, Inc. (a) | 11,050 | 431 | |||||||||
Varonis Systems, Inc. (a) | 8,140 | 681 | |||||||||
Viavi Solutions, Inc. (a) | 71,000 | 1,001 | |||||||||
Virtusa Corp. (a) | 119,771 | 4,987 | |||||||||
Vishay Intertechnology, Inc. | 98,234 | 1,993 | |||||||||
Wix.com Ltd. (a) | 1,950 | 278 | |||||||||
WNS Holdings Ltd., ADR (a) | 140,883 | 10,053 | |||||||||
Zendesk, Inc. (a) | 18,712 | 1,617 | |||||||||
Zix Corp. (a) | 436,896 | 2,949 | |||||||||
Zscaler, Inc. (a) (b) | 54,701 | 3,068 | |||||||||
288,824 | |||||||||||
Materials (3.2%): | |||||||||||
Commercial Metals Co. | 177,002 | 3,637 | |||||||||
Eldorado Gold Corp. (a) | 70,500 | 513 | |||||||||
Element Solutions, Inc. (a) | 10,010 | 117 | |||||||||
Ferro Corp. (a) | 96,600 | 1,321 | |||||||||
FMC Corp. | 25,799 | 2,466 | |||||||||
Louisiana-Pacific Corp. | 146,960 | 4,509 | |||||||||
Materion Corp. | 41,047 | 2,229 | |||||||||
Minerals Technologies, Inc. | 61,592 | 3,335 | |||||||||
Neenah, Inc. | 34,816 | 2,320 | |||||||||
Olympic Steel, Inc. | 24,700 | 363 | |||||||||
Orion Engineered Carbons SA | 147,206 | 2,311 | |||||||||
PolyOne Corp. | 73,400 | 2,435 | |||||||||
Quaker Chemical Corp. | 12,506 | 2,076 | |||||||||
Ryerson Holding Corp. (a) | 36,100 | 370 | |||||||||
Schweitzer-Mauduit International, Inc. | 31,051 | 1,088 | |||||||||
Sensient Technologies Corp. | 20,012 | 1,196 | |||||||||
Stepan Co. | 38,530 | 3,801 | |||||||||
Summit Materials, Inc. Class A (a) | 115,671 | 2,541 | |||||||||
Trinseo SA | 90,332 | 2,594 | |||||||||
Verso Corp. Class A (a) | 69,874 | 1,177 | |||||||||
Warrior Met Coal, Inc. | 100,398 | 1,894 | |||||||||
Worthington Industries, Inc. | 95,655 | 3,518 | |||||||||
Yamana Gold, Inc. | 310,000 | 1,262 | |||||||||
47,073 | |||||||||||
Real Estate (7.7%): | |||||||||||
Agree Realty Corp. | 28,480 | 2,162 | |||||||||
Alexander & Baldwin, Inc. | 112,720 | 2,464 | |||||||||
Alexander's, Inc. | 5,000 | 1,613 | |||||||||
American Assets Trust, Inc. | 37,680 | 1,717 | |||||||||
Ashford Hospitality Trust, Inc. | 279,600 | 688 |
See notes to financial statements.
15
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Braemar Hotels & Resorts, Inc. | 119,044 | $ | 950 | ||||||||
Brandywine Realty Trust | 151,510 | 2,367 | |||||||||
Chatham Lodging Trust | 111,640 | 1,825 | |||||||||
Community Healthcare Trust, Inc. | 17,900 | 844 | |||||||||
CoreCivic, Inc. | 229,167 | 3,656 | |||||||||
CorEnergy Infrastructure Trust, Inc. | 47,064 | 2,146 | |||||||||
Corporate Office Properties Trust | 83,195 | 2,477 | |||||||||
DiamondRock Hospitality Co. | 463,704 | 4,484 | |||||||||
First Industrial Realty Trust, Inc. | 61,097 | 2,609 | |||||||||
Firstservice Corp. | 19,679 | 1,934 | |||||||||
Forestar Group, Inc. (a) | 30,300 | 614 | |||||||||
Global Medical REIT, Inc. | 148,954 | 2,175 | |||||||||
Healthcare Realty Trust, Inc. | 82,325 | 2,969 | |||||||||
Independence Realty Trust, Inc. | 102,600 | 1,505 | |||||||||
Industrial Logistics Properties Trust | 103,406 | 2,367 | |||||||||
Innovative Industrial Properties, Inc. | 25,083 | 2,245 | |||||||||
Lexington Realty Trust | 470,668 | 5,209 | |||||||||
National Health Investors, Inc. | 31,047 | 2,620 | |||||||||
Newmark Group, Inc. | 468,897 | 5,519 | |||||||||
NexPoint Residential Trust, Inc. | 12,900 | 630 | |||||||||
Office Properties Income Trust | 60,200 | 2,049 | |||||||||
Physicians Realty Trust | 341,547 | 6,608 | |||||||||
Piedmont Office Realty Trust, Inc. | 161,597 | 3,746 | |||||||||
PotlatchDeltic Corp. | 64,913 | 2,791 | |||||||||
PS Business Parks, Inc. | 5,399 | 905 | |||||||||
QTS Realty Trust, Inc. Class A (b) | 64,304 | 3,657 | |||||||||
Retail Opportunity Investments Corp. | 91,757 | 1,520 | |||||||||
Rexford Industrial Realty, Inc. | 60,241 | 2,903 | |||||||||
RLJ Lodging Trust | 214,325 | 3,335 | |||||||||
RPT Realty | 210,907 | 2,942 | |||||||||
Sabra Health Care REIT, Inc. | 181,648 | 3,906 | |||||||||
Safehold, Inc. (b) | 20,700 | 931 | |||||||||
Spirit Realty Capital, Inc. | 31,200 | 1,647 | |||||||||
STAG Industrial, Inc. | 131,434 | 4,238 | |||||||||
Summit Hotel Properties, Inc. | 316,160 | 3,506 | |||||||||
Sun Communities, Inc. | 9,498 | 1,540 | |||||||||
Sunstone Hotel Investors, Inc. | 279,802 | 3,548 | |||||||||
The GEO Group, Inc. | 120,420 | 1,903 | |||||||||
UMH Properties, Inc. | 144,298 | 2,280 | |||||||||
Universal Health Realty Income Trust | 19,560 | 2,413 | |||||||||
Urban Edge Properties | 88,282 | 1,624 | |||||||||
Xenia Hotels & Resorts, Inc. | 172,531 | 3,225 | |||||||||
119,006 | |||||||||||
Utilities (3.4%): | |||||||||||
ALLETE, Inc. | 99,280 | 8,288 | |||||||||
Avista Corp. | 116,725 | 5,935 | |||||||||
Black Hills Corp. | 18,800 | 1,561 | |||||||||
Clearway Energy, Inc. | 63,757 | 1,319 | |||||||||
IDACORP, Inc. | 31,621 | 3,548 | |||||||||
New Jersey Resources Corp. | 27,958 | 1,155 |
See notes to financial statements.
16
USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
NorthWestern Corp. | 132,784 | $ | 10,221 | ||||||||
Otter Tail Corp. | 50,851 | 2,724 | |||||||||
Portland General Electric Co. | 175,117 | 10,769 | |||||||||
Southwest Gas Holdings, Inc. | 10,100 | 763 | |||||||||
Spire, Inc. | 55,086 | 4,645 | |||||||||
50,928 | |||||||||||
Total Common Stocks (Cost $1,271,596) | 1,502,279 | ||||||||||
Exchange-Traded Funds (0.5%) | |||||||||||
iShares Russell 2000 Growth ETF | 23,142 | 4,905 | |||||||||
Vanguard Small-Cap Value ETF (b) | 22,020 | 2,917 | |||||||||
Total Exchange-Traded Funds (Cost $7,935) | 7,822 | ||||||||||
Collateral for Securities Loaned^ (5.4%) | |||||||||||
HSBC U.S. Government Money Market Fund, I Shares, 1.52% (e) | 76,760,985 | 76,761 | |||||||||
Invesco Government & Agency Portfolio, Institutional Shares, 1.48% (e) | 5,567,418 | 5,567 | |||||||||
Total Collateral for Securities Loaned (Cost $82,328) | 82,328 | ||||||||||
Total Investments (Cost $1,361,859) — 104.7% | 1,592,429 | ||||||||||
Liabilities in excess of other assets — (4.7)% | (70,948 | ) | |||||||||
NET ASSETS — 100.00% | $ | 1,521,481 |
^ Purchased with cash collateral from securities on loan.
(a) Non-income producing security.
(b) All or a portion of this security is on loan.
(c) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of January 31, 2020, illiquid securities were 0.1% of the Fund's net assets.
(d) Security was fair valued based upon procedures approved by the Board of Trustees and represents 0.0% of the Fund's net assets as of January 31, 2020. This security is classified as Level 3 within the fair value hierarchy. (See Note 2 in the Notes to Financial Statements)
(e) Rate disclosed is the daily yield on January 31, 2020.
ADR — American Depositary Receipt
ETF — Exchange-Traded Fund
PLC — Public Limited Company
REIT — Real Estate Investment Trust
See notes to financial statements.
17
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Small Cap Stock Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,361,859) | $ | 1,592,429 | (a) | ||||
Cash and cash equivalents | 13,793 | ||||||
Receivables: | |||||||
Interest and dividends | 553 | ||||||
Capital shares issued | 872 | ||||||
Investments sold | 12,493 | ||||||
Reclaims | — | (a) | |||||
From Adviser | 17 | ||||||
Prepaid expenses | 5 | ||||||
Total assets | 1,620,162 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 82,328 | ||||||
Investments purchased | 13,888 | ||||||
Capital shares redeemed | 922 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 1,033 | ||||||
Administration fees | 168 | ||||||
Custodian fees | 69 | ||||||
Transfer agent fees | 141 | ||||||
Compliance fees | — | (b) | |||||
Other accrued expenses | 132 | ||||||
Total liabilities | 98,681 | ||||||
Net Assets: | |||||||
Capital | 1,261,065 | ||||||
Total distributable earnings/(loss) | 260,416 | ||||||
Net assets | $ | 1,521,481 | |||||
Net Asset: | |||||||
Fund Shares | $ | 695,381 | |||||
Institutional Shares | 826,100 | ||||||
Total | $ | 1,521,481 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 43,535 | ||||||
Institutional Shares | 51,133 | ||||||
Total | 94,668 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 15.97 | |||||
Institutional Shares | 16.16 |
(a) Includes $77,550 of securities on loan
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
18
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA Small Cap Stock Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 11,437 | |||||
Interest | 138 | ||||||
Securities lending (net of fees) | 737 | ||||||
Foreign tax withholding | (14 | ) | |||||
Total Income | 12,298 | ||||||
Expenses: | |||||||
Investment advisory fees | 5,936 | ||||||
Administration fees — Fund Shares | 520 | ||||||
Administration fees — Institutional Shares | 445 | ||||||
Sub-Administration fees | 40 | ||||||
Custodian fees | 43 | ||||||
Transfer agent fees — Fund Shares | 510 | ||||||
Transfer agent fees — Institutional Shares | 445 | ||||||
Trustees' fees | 22 | ||||||
Compliance fees | 5 | ||||||
Legal and audit fees | 55 | ||||||
State registration and filing fees | 32 | ||||||
Interest expense on interfund lending | — | (a) | |||||
Other expenses | 95 | ||||||
Total Expenses | 8,148 | ||||||
Expenses waived/reimbursed by Adviser | (22 | ) | |||||
Net Expenses | 8,126 | ||||||
Net Investment Income (Loss) | 4,172 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities and foreign currency translations | 72,973 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | 2,501 | ||||||
Net realized/unrealized gains (losses) on investments | 75,474 | ||||||
Change in net assets resulting from operations | $ | 79,646 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
19
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Small Cap Stock Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 4,172 | $ | 10,051 | |||||||
Net realized gains (losses) from investments | 72,973 | 137,832 | |||||||||
Net change in unrealized appreciation/depreciation on investments | 2,501 | (184,256 | ) | ||||||||
Change in net assets resulting from operations | 79,646 | (36,373 | ) | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (65,537 | ) | (75,659 | ) | |||||||
Institutional Shares | (82,906 | ) | (95,199 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (148,443 | ) | (170,858 | ) | |||||||
Change in net assets resulting from capital transactions | (8,718 | ) | 51,769 | ||||||||
Change in net assets | (77,515 | ) | (155,462 | ) | |||||||
Net Assets: | |||||||||||
Beginning of period | 1,598,996 | 1,754,458 | |||||||||
End of period | $ | 1,521,481 | $ | 1,598,996 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 34,347 | $ | 79,969 | |||||||
Distributions reinvested | 64,623 | 74,755 | |||||||||
Cost of shares redeemed | (65,667 | ) | (124,566 | ) | |||||||
Total Fund Shares | $ | 33,303 | $ | 30,158 | |||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 29,206 | $ | 111,029 | |||||||
Distributions reinvested | 82,899 | 95,182 | |||||||||
Cost of shares redeemed | (154,126 | ) | (184,600 | ) | |||||||
Total Institutional Shares | $ | (42,021 | ) | $ | 21,611 | ||||||
Change in net assets resulting from capital transactions | $ | (8,718 | ) | $ | 51,769 | ||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 2,076 | 4,681 | |||||||||
Reinvested | 3,974 | 5,005 | |||||||||
Redeemed | (3,973 | ) | (7,448 | ) | |||||||
Total Fund Shares | 2,077 | 2,238 | |||||||||
Institutional Shares | |||||||||||
Issued | 1,758 | 6,605 | |||||||||
Reinvested | 5,038 | 6,312 | |||||||||
Redeemed | (9,178 | ) | (10,506 | ) | |||||||
Total Institutional Shares | (2,382 | ) | 2,411 | ||||||||
Change in Shares | (305 | ) | 4,649 |
See notes to financial statements.
20
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21
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Small Cap Stock Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 16.74 | 0.04 | (d) | 0.82 | 0.86 | (0.03 | ) | (1.60 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 19.33 | 0.07 | (0.71 | ) | (0.64 | ) | (0.04 | ) | (1.91 | ) | ||||||||||||||||
Year Ended July 31, 2018 | $ | 18.02 | 0.05 | 3.19 | 3.24 | (0.07 | ) | (1.86 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 16.17 | 0.08 | 1.99 | 2.07 | (0.03 | ) | (0.19 | ) | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 17.77 | 0.02 | (0.22 | ) | (0.20 | ) | (0.05 | ) | (1.35 | ) | ||||||||||||||||
Year Ended July 31, 2015 | $ | 18.14 | 0.02 | 1.63 | 1.65 | (0.02 | ) | (2.00 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 16.91 | 0.05 | (d) | 0.83 | 0.88 | (0.03 | ) | (1.60 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 19.50 | 0.08 | (0.71 | ) | (0.63 | ) | (0.05 | ) | (1.91 | ) | ||||||||||||||||
Year Ended July 31, 2018 | $ | 18.16 | 0.07 | 3.22 | 3.29 | (0.09 | ) | (1.86 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 16.30 | 0.09 | 2.02 | 2.11 | (0.06 | ) | (0.19 | ) | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 17.89 | 0.07 | (0.24 | ) | (0.17 | ) | (0.07 | ) | (1.35 | ) | ||||||||||||||||
Year Ended July 31, 2015 | $ | 18.24 | 0.05 | 1.65 | 1.70 | (0.05 | ) | (2.00 | ) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two-year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects total annual operating expenses of the shares before reductions of any expenses paid indirectly. The Fund's expenses paid indirectly decreased the expense ratios by less than 0.01%.
See notes to financial statements.
22
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Small Cap Stock Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (1.63 | ) | $ | 15.97 | 4.96 | % | 1.09 | % | 0.46 | % | 1.09 | % | $ | 695,381 | 28 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (1.95 | ) | $ | 16.74 | (2.07 | )% | 1.06 | %(e) | 0.58 | % | 1.06 | %(e) | $ | 694,015 | 84 | % | |||||||||||||||||||
Year Ended July 31, 2018 | (1.93 | ) | $ | 19.33 | 19.21 | % | 1.06 | %(e) | 0.31 | % | 1.06 | %(e) | $ | 758,065 | 68 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.22 | ) | $ | 18.02 | 12.81 | % | 1.09 | %(e) | 0.42 | % | 1.09 | %(e) | $ | 658,038 | 53 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (1.40 | ) | $ | 16.17 | (0.75 | )% | 1.15 | %(e) | 0.18 | % | 1.15 | %(e) | $ | 586,438 | 52 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (2.02 | ) | $ | 17.77 | 9.67 | % | 1.15 | %(e) | 0.06 | % | 1.15 | %(e) | $ | 835,256 | 45 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (1.63 | ) | $ | 16.16 | 5.00 | % | 0.98 | % | 0.58 | % | 0.99 | % | $ | 826,100 | 28 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (1.96 | ) | $ | 16.91 | (1.98 | )% | 0.96 | %(e) | 0.67 | % | 0.96 | %(e) | $ | 904,981 | 84 | % | |||||||||||||||||||
Year Ended July 31, 2018 | (1.95 | ) | $ | 19.50 | 19.36 | % | 0.95 | %(e) | 0.42 | % | 0.95 | %(e) | $ | 996,393 | 68 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.25 | ) | $ | 18.16 | 12.92 | % | 0.97 | %(e) | 0.52 | % | 0.97 | %(e) | $ | 892,691 | 53 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (1.42 | ) | $ | 16.30 | (0.55 | )% | 0.99 | %(e) | 0.35 | % | 0.99 | %(e) | $ | 884,187 | 52 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (2.05 | ) | $ | 17.89 | 9.85 | % | 0.99 | %(e) | 0.22 | % | 0.99 | %(e) | $ | 676,490 | 45 | % |
See notes to financial statements.
23
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Small Cap Stock Fund (the "Fund"). The Fund offers two classes of shares: Fund Shares and Institutional Shares. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges except with respect to fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or
24
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
system where the security is principally traded, if available, or the over-the-counter markets, are valued at the last sales price or official closing price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations typically are categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at net asset value. These valuations typically are categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. These valuations typically are categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's net asset value ("NAV") to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's net asset value is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. These valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of January 31, 2020, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 1,495,666 | $ | 6,613 | $ | — | (a) | $ | 1,502,279 | ||||||||||
Exchange-Traded Funds | 7,822 | — | — | 7,822 | |||||||||||||||
Collateral for Securities Loaned | 82,328 | — | — | 82,328 | |||||||||||||||
Total | $ | 1,585,816 | $ | 6,613 | $ | — | $ | 1,592,429 |
(a) Amount is less than $1 thousand.
For the six-months ended January 31, 2020, there were no transfers in or out of the Level 3 fair value hierarchy.
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs. ETFs are a type of index fund, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of
25
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Foreign Exchange Currency Contracts:
The Fund may enter into foreign exchange currency contracts to convert U.S. dollars to and from various foreign currencies. A foreign exchange currency contract is an obligation by the Fund to purchase or sell a specific currency at a future date at a price (in U.S. dollars) set at the time of the contract. The Fund does not engage in "cross-currency" foreign exchange contracts (i.e., contracts to purchase or sell one foreign currency in exchange for another foreign currency). The Fund's foreign exchange currency contracts might be considered spot contracts (typically a contract of one week or less) or forward contracts (typically a contract term over one week). A spot contract is entered into for purposes of hedging against foreign currency fluctuations relating to a specific portfolio transaction, such as the delay between a security transaction trade date and settlement date. Forward contracts are entered into for purposes of hedging portfolio holdings or concentrations of such holdings. Each foreign exchange currency contract is adjusted daily by the prevailing spot or forward rate of the underlying currency, and any appreciation or depreciation is recorded for financial statement purposes as unrealized until the contract settlement date, at which time the Fund records realized gains or losses equal to the difference between the value of a contract at the time it was opened and the value at the time it was closed. The Fund could be exposed to risk if a counterparty is unable to meet the terms of a foreign exchange currency contract or if the value of the foreign currency changes unfavorably. In addition, the use of foreign exchange currency contracts does not eliminate fluctuations in the underlying prices of the securities. As of January 31, 2020, the Fund had no open forward foreign exchange currency contracts.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a securities lending agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income, net of income retained by Citibank. Borrowers are required to secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are cured the next business day once the shortfall exceeds $100 thousand. Collateral may be cash, U.S. government securities, or other securities as permitted by SEC guidelines. Cash collateral may be invested in high-quality short-term investments, primarily open-end investment companies. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the
26
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Risks relating to securities-lending transactions include that the borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower. The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy borrower default. Cash collateral is listed in the Fund's Portfolio of Investments and Financial Statements while non-cash collateral is not included. The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2020.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||||||
$ | 77,550 | $ | — | $ | 82,328 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as net change in unrealized appreciation/depreciation on investments and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as net realized gains or losses from investment transactions and foreign currency translations on the Statement of Operations.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, and printing fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
27
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
3. Purchases and Sales:
Cost of purchases and proceeds from sales/maturities of securities (excluding securities maturing less than one year from acquisition) for the six-months ended January 31, 2020, were as follows for the Fund (amounts in thousands):
Excluding U.S Government Securities | |||||||||||
Purchases | Sales | ||||||||||
$ | 441,279 | $ | 572,929 |
There were no purchases and sales of U.S. government securities during the six-months ended January 31, 2020.
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA funds. The USAA fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi-annual reports may be viewed at usaa.com. As of January 31, 2020, certain USAA fund-of-funds owned total outstanding shares of the Fund:
USAA Cornerstone Conservative Fund | 0.1 | % | |||||
USAA Cornerstone Equity Fund | 0.5 | % | |||||
USAA Target Retirement Income Fund | 0.2 | % | |||||
USAA Target Retirement 2020 Fund | 0.3 | % | |||||
USAA Target Retirement 2030 Fund | 1.1 | % | |||||
USAA Target Retirement 2040 Fund | 1.6 | % | |||||
USAA Target Retirement 2050 Fund | 1.0 | % | |||||
USAA Target Retirement 2060 Fund | 0.1 | % |
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive 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 daily net assets. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
No performance adjustments will be made for periods beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter will be utilized in calculating future performance adjustments.
The performance adjustment will be calculated monthly by comparing each class' performance to that of the Lipper Small-Cap Core Funds Index. The Lipper Small-Cap Core Funds Index tracks the total return performance of each class within the Lipper Small-Cap Core Funds category.
28
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The performance period for each share class will consist of the current month plus the previous number of months beginning July 1, 2019. The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)1 | Annual Adjustment Rate (in basis points)1 | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
1 Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of the class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Small-Cap Core Funds Index over that period, even if the class has overall negative returns during the performance period.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets.
VCM has entered into a Subadvisory Agreement with ClariVest Asset Management LLC ("ClariVest"), Granahan Investment Management, Inc. ("GIMI"), and Wellington Management Company LLP ("Wellington Management"), under which ClariVest, GIMI, and Wellington Management each direct the investment and reinvestment of a portion of the Fund's assets (as allocated from time to time by VCM). These arrangements provide for monthly fees that are paid by VCM. VCM (not the Fund) pays the subadviser fees.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15% and 0.10% of average daily net assets of the Fund Shares and Institutional Shares, respectively. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
29
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. VCTA, an affiliate of the Adviser, provides transfer agent services to the Fund Shares based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10% of average daily net assets, plus out-of-pocket expenses. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust. The Distributor received no fees or other compensation for such distribution services.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
The expense limits (excluding voluntary waivers) are 1.10% and 0.98% for Fund Shares and Institutional Shares, respectively. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||||||
$ | 22 |
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
30
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
The Fund is subject to small-cap company risk, which is the greater risk of investing in smaller, less well-known companies, as opposed to investing in established companies with proven track records. Small-cap companies also may have limited product lines, markets, or financial resources. Securities of such companies may be less liquid and more volatile than securities of larger companies or the market in general and, therefore, may involve greater risk than investing in the securities of larger companies.
Overall stock market risks may affect the value of the Fund. Factors such as domestic and international economic growth and market conditions, interest rate levels, and political events affect the securities market.
The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected. Price changes may be temporary or last for extended periods.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six-months ended January 31, 2020.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Fund in the Victory Fund Complex relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period is presented on the Statement of Operations under Interest expense on Interfund lending. As a Lender, interest earned by the Fund, if any, during the period is reflected on the Statement of Operations under Income on Interfund lending.
31
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
The average borrowing and lending for the days outstanding and average interest rate for the Fund during the six-months ended January 31, 2020 were as follows (amounts in thousands):
Borrower or Lender | Amount Outstanding at January 31, 2020 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
Borrower | $ | — | $ | 1,689 | 2 | 2.56 | % | $ | 1,877 |
* For the six-months ended January 31, 2020, based on the number of days borrowings were outstanding.
8. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
9. Subsequent Event:
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
32
USAA Mutual Funds Trust | Supplemental Information January 31, 2020 |
(Unaudited)
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019 through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,049.60 | $ | 1,019.66 | $ | 5.62 | $ | 5.53 | 1.09 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,050.00 | 1,020.21 | 5.05 | 4.98 | 0.98 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's web site at www.sec.gov.
33
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800) 235-8396 |
40053-0320
JANUARY 31, 2020
Semi Annual Report
USAA Value Fund
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on usaa.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by notifying your financial intermediary directly, or if you are a direct investor, by calling (800) 235-8396 or logging on to usaa.com. Your election to receive reports in paper will apply to all funds held with the USAA family of funds or your financial intermediary.
Victory Capital means Victory Capital Management Inc., the investment manager of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Advisers, Inc., a broker dealer registered with FINRA and an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Financial Statements | |||||||
Schedule of Portfolio Investments | 4 | ||||||
Statement of Assets and Liabilities | 9 | ||||||
Statement of Operations | 10 | ||||||
Statements of Changes in Net Assets | 11 | ||||||
Financial Highlights | 14 | ||||||
Notes to Financial Statements | 18 | ||||||
Supplemental Information | 26 | ||||||
Expense Examples | 26 | ||||||
Proxy Voting and Portfolio Holdings Information | 26 | ||||||
Privacy Policy (inside back cover) |
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 Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
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 tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. 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.
1
USAA Mutual Funds Trust USAA Value Fund | January 31, 2020 |
(Unaudited)
Investment Objective & Portfolio Holdings:
The USAA Value Fund seeks long-term growth of capital.
Top 10 Holdings*
1/31/20
(% of Net Assets)
Cboe Global Markets, Inc. | 2.4 | % | |||||
Citigroup, Inc. | 2.4 | % | |||||
The Progressive Corp. | 2.2 | % | |||||
Aflac, Inc. | 2.2 | % | |||||
Facebook, Inc. Class A | 2.2 | % | |||||
Alphabet, Inc. Class A | 2.0 | % | |||||
Exelon Corp. | 1.9 | % | |||||
Pfizer, Inc. | 1.8 | % | |||||
Johnson & Johnson | 1.8 | % | |||||
Vistra Energy Corp. | 1.8 | % |
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Value Fund (continued) | January 31, 2020 |
(Unaudited)
Sector Allocation*
1/31/20
(% of Net Assets)
*Does not include futures, money market instruments, and short-term investments purchased with cash collateral from securities
Percentages are of the net assets of the Fund and may not equal 100%.
3
USAA Mutual Funds Trust USAA Value Fund | Schedule of Portfolio Investments January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (98.1%) | |||||||||||
Banks (12.0%): | |||||||||||
Bank of America Corp. | 152,617 | $ | 5,010 | ||||||||
Bank OZK Class A | 127,708 | 3,471 | |||||||||
Citigroup, Inc. | 374,729 | 27,883 | |||||||||
Citizens Financial Group, Inc. | 133,541 | 4,978 | |||||||||
Fifth Third Bancorp | 178,839 | 5,088 | |||||||||
First Citizens BancShares, Inc. Class A | 8,407 | 4,429 | |||||||||
Huntington Bancshares, Inc. | 344,590 | 4,676 | |||||||||
JPMorgan Chase & Co. | 156,159 | 20,670 | |||||||||
M&T Bank Corp. | 36,333 | 6,123 | |||||||||
PacWest Bancorp | 88,861 | 3,115 | |||||||||
Regions Financial Corp. | 344,075 | 5,357 | |||||||||
SVB Financial Group (a) | 16,600 | 3,989 | |||||||||
The PNC Financial Services Group, Inc. | 97,094 | 14,423 | |||||||||
U.S. Bancorp | 253,100 | 13,470 | |||||||||
Wells Fargo & Co. | 271,561 | 12,747 | |||||||||
Zions Bancorp NA | 100,021 | 4,550 | |||||||||
139,979 | |||||||||||
Capital Markets (5.0%): | |||||||||||
Ameriprise Financial, Inc. | 33,358 | 5,518 | |||||||||
Cboe Global Markets, Inc. | 228,072 | 28,103 | |||||||||
E*TRADE Financial Corp. | 268,964 | 11,463 | |||||||||
Franklin Resources, Inc. | 59,432 | 1,504 | |||||||||
Invesco Ltd. | 189,503 | 3,278 | |||||||||
LPL Financial Holdings, Inc. | 37,406 | 3,446 | |||||||||
T. Rowe Price Group, Inc. | 37,889 | 5,059 | |||||||||
58,371 | |||||||||||
Communication Services (8.2%): | |||||||||||
Alphabet, Inc. Class A (a) | 16,739 | 23,983 | |||||||||
AMC Networks, Inc. Class A (a) (b) | 51,024 | 1,867 | |||||||||
AT&T, Inc. | 382,702 | 14,397 | |||||||||
CenturyLink, Inc. | 351,942 | 4,808 | |||||||||
Comcast Corp. Class A | 184,935 | 7,988 | |||||||||
Discovery, Inc. Class A (a) (b) | 77,731 | 2,274 | |||||||||
DISH Network Corp. Class A (a) | 64,102 | 2,356 | |||||||||
Facebook, Inc. Class A (a) | 127,900 | 25,825 | |||||||||
Omnicom Group, Inc. | 29,120 | 2,193 | |||||||||
Take-Two Interactive Software, Inc. (a) | 26,439 | 3,295 | |||||||||
The Walt Disney Co. | 46,032 | 6,367 | |||||||||
TripAdvisor, Inc. | 56,930 | 1,555 | |||||||||
96,908 | |||||||||||
Consumer Discretionary (5.3%): | |||||||||||
Aramark | 157,691 | 6,960 | |||||||||
Best Buy Co., Inc. | 30,300 | 2,566 | |||||||||
Booking Holdings, Inc. (a) | 1,300 | 2,380 | |||||||||
Carnival Corp. | 45,600 | 1,985 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Value Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Dick's Sporting Goods, Inc. | 79,000 | $ | 3,494 | ||||||||
Foot Locker, Inc. | 46,494 | 1,765 | �� | ||||||||
Ford Motor Co. | 342,080 | 3,017 | |||||||||
Harley-Davidson, Inc. | 87,495 | 2,922 | |||||||||
Las Vegas Sands Corp. | 85,301 | 5,571 | |||||||||
LKQ Corp. (a) | 343,224 | 11,218 | |||||||||
Lowe's Cos., Inc. | 28,605 | 3,325 | |||||||||
McDonald's Corp. | 26,900 | 5,756 | |||||||||
PulteGroup, Inc. | 101,100 | 4,514 | |||||||||
The Home Depot, Inc. | 20,670 | 4,716 | |||||||||
Toll Brothers, Inc. | 70,200 | 3,114 | |||||||||
63,303 | |||||||||||
Consumer Finance (2.0%): | |||||||||||
American Express Co. | 16,431 | 2,134 | |||||||||
Capital One Financial Corp. | 71,739 | 7,160 | |||||||||
Discover Financial Services | 57,339 | 4,308 | |||||||||
Onemain Holdings, Inc. | 55,186 | 2,338 | |||||||||
Synchrony Financial | 249,483 | 8,085 | |||||||||
24,025 | |||||||||||
Consumer Staples (6.9%): | |||||||||||
Campbell Soup Co. | 61,314 | 2,967 | |||||||||
Colgate-Palmolive Co. | 33,602 | 2,479 | |||||||||
Keurig Dr Pepper, Inc. | 355,992 | 10,156 | |||||||||
Mondelez International, Inc. Class A | 351,600 | 20,175 | |||||||||
Nu Skin Enterprises, Inc. Class A | 65,300 | 2,128 | |||||||||
Pilgrim's Pride Corp. (a) | 113,357 | 2,953 | |||||||||
Post Holdings, Inc. (a) | 35,200 | 3,681 | |||||||||
Spectrum Brands Holdings, Inc. | 62,646 | 3,847 | |||||||||
Sprouts Farmers Markets, Inc. (a) | 61,285 | 958 | |||||||||
Sysco Corp. | 28,224 | 2,318 | |||||||||
The Coca-Cola Co. | 42,120 | 2,460 | |||||||||
The JM Smucker Co. | 24,900 | 2,580 | |||||||||
The Procter & Gamble Co. | 35,934 | 4,478 | |||||||||
Tyson Foods, Inc. Class A | 95,598 | 7,899 | |||||||||
Walgreens Boots Alliance, Inc. | 109,654 | 5,576 | |||||||||
Walmart, Inc. | 56,330 | 6,449 | |||||||||
81,104 | |||||||||||
Diversified Financial Services (0.2%): | |||||||||||
Berkshire Hathaway, Inc. Class B (a) | 8,300 | 1,863 | |||||||||
Energy (8.7%): | |||||||||||
Chevron Corp. | 171,826 | 18,410 | |||||||||
Cimarex Energy Co. | 37,200 | 1,633 | |||||||||
ConocoPhillips | 54,467 | 3,237 | |||||||||
Continental Resources, Inc. | 69,500 | 1,892 | |||||||||
Diamondback Energy, Inc. | 159,868 | 11,894 | |||||||||
Enterprise Products Partners LP | 525,424 | 13,540 | |||||||||
Exxon Mobil Corp. | 237,702 | 14,766 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Value Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
HollyFrontier Corp. | 67,154 | $ | 3,017 | ||||||||
Marathon Petroleum Corp. | 52,453 | 2,859 | |||||||||
Noble Energy, Inc. | 528,800 | 10,454 | |||||||||
Occidental Petroleum Corp. | 63,933 | 2,539 | |||||||||
PBF Energy, Inc. Class A | 89,600 | 2,446 | |||||||||
Phillips 66 | 45,911 | 4,195 | |||||||||
Suncor Energy, Inc. | 195,000 | 5,965 | |||||||||
Valero Energy Corp. | 51,517 | 4,343 | |||||||||
101,190 | |||||||||||
Health Care (12.5%): | |||||||||||
Abbott Laboratories | 25,933 | 2,260 | |||||||||
AbbVie, Inc. | 50,012 | 4,052 | |||||||||
AmerisourceBergen Corp. | 48,900 | 4,184 | |||||||||
Amgen, Inc. | 24,265 | 5,243 | |||||||||
Biogen, Inc. (a) | 10,533 | 2,832 | |||||||||
Cardinal Health, Inc. | 93,977 | 4,813 | |||||||||
Cerner Corp. | 38,022 | 2,731 | |||||||||
Cigna Corp. | 27,500 | 5,290 | |||||||||
CVS Health Corp. | 121,500 | 8,240 | |||||||||
Eli Lilly & Co. | 21,264 | 2,969 | |||||||||
Gilead Sciences, Inc. | 63,013 | 3,982 | |||||||||
Humana, Inc. | 37,588 | 12,638 | |||||||||
Johnson & Johnson | 139,632 | 20,787 | |||||||||
Laboratory Corp. of America Holdings (a) | 16,600 | 2,912 | |||||||||
McKesson Corp. | 38,154 | 5,441 | |||||||||
Medtronic PLC | 14,674 | 1,694 | |||||||||
Merck & Co., Inc. | 71,172 | 6,081 | |||||||||
Pfizer, Inc. | 572,320 | 21,313 | |||||||||
Quest Diagnostics, Inc. | 43,700 | 4,836 | |||||||||
UnitedHealth Group, Inc. | 29,700 | 8,092 | |||||||||
Universal Health Services, Inc. Class B | 20,200 | 2,770 | |||||||||
Zimmer Biomet Holdings, Inc. | 101,164 | 14,962 | |||||||||
148,122 | |||||||||||
Industrials (8.4%): | |||||||||||
3M Co. | 49,962 | 7,927 | |||||||||
Air Canada (a) | 260,968 | 8,763 | |||||||||
Alaska Air Group, Inc. | 21,729 | 1,403 | |||||||||
C.H. Robinson Worldwide, Inc. | 17,356 | 1,253 | |||||||||
Caterpillar, Inc. | 17,992 | 2,363 | |||||||||
Cummins, Inc. | 51,564 | 8,249 | |||||||||
Delta Air Lines, Inc. | 51,754 | 2,885 | |||||||||
Eaton Corp. PLC | 152,511 | 14,408 | |||||||||
Fortune Brands Home & Security, Inc. | 45,949 | 3,157 | |||||||||
Honeywell International, Inc. | 26,994 | 4,676 | |||||||||
ManpowerGroup, Inc. | 29,100 | 2,662 | |||||||||
Masco Corp. | 160,046 | 7,606 | |||||||||
Parker-Hannifin Corp. | 56,400 | 11,037 | |||||||||
Raytheon Co. | 42,800 | 9,456 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Value Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Southwest Airlines Co. | 78,180 | $ | 4,298 | ||||||||
Union Pacific Corp. | 33,510 | 6,012 | |||||||||
United Airlines Holdings, Inc. (a) | 25,933 | 1,940 | |||||||||
United Technologies Corp. | 17,835 | 2,679 | |||||||||
100,774 | |||||||||||
Information Technology (4.8%): | |||||||||||
Apple, Inc. | 18,413 | 5,699 | |||||||||
Applied Materials, Inc. | 44,806 | 2,598 | |||||||||
Cisco Systems, Inc. | 34,717 | 1,596 | |||||||||
HP, Inc. | 166,726 | 3,555 | |||||||||
International Business Machines Corp. | 22,326 | 3,209 | |||||||||
Lam Research Corp. | 13,043 | 3,890 | |||||||||
Mastercard, Inc. Class A | 8,031 | 2,537 | |||||||||
Microsoft Corp. | 20,010 | 3,406 | |||||||||
NCR Corp. (a) | 49,055 | 1,654 | |||||||||
NXP Semiconductor NV | 23,545 | 2,987 | |||||||||
Oracle Corp. | 116,498 | 6,111 | |||||||||
QUALCOMM, Inc. | 34,930 | 2,980 | |||||||||
Texas Instruments, Inc. | 20,226 | 2,440 | |||||||||
Visa, Inc. Class A | 72,371 | 14,400 | |||||||||
57,062 | |||||||||||
Insurance (8.1%): | |||||||||||
Aflac, Inc. | 500,918 | 25,832 | |||||||||
Brown & Brown, Inc. | 404,134 | 18,146 | |||||||||
Everest Re Group Ltd. | 20,551 | 5,684 | |||||||||
Lincoln National Corp. | 40,598 | 2,212 | |||||||||
MetLife, Inc. | 117,710 | 5,851 | |||||||||
Principal Financial Group, Inc. | 67,474 | 3,573 | |||||||||
RenaissanceRe Holdings Ltd. | 44,998 | 8,524 | |||||||||
The Progressive Corp. | 324,051 | 26,148 | |||||||||
95,970 | |||||||||||
Materials (3.8%): | |||||||||||
Dow, Inc. | 83,529 | 3,848 | |||||||||
Ferroglobe PLC (a) (c) | 545,600 | — | |||||||||
Freeport-McMoRan, Inc. | 1,016,641 | 11,285 | |||||||||
Huntsman Corp. | 195,300 | 4,016 | |||||||||
LyondellBasell Industries NV Class A | 91,724 | 7,142 | |||||||||
Sealed Air Corp. | 410,729 | 14,581 | |||||||||
Westrock Co. | 79,863 | 3,115 | |||||||||
43,987 | |||||||||||
Real Estate (5.2%): | |||||||||||
AvalonBay Communities, Inc. | 6,890 | 1,493 | |||||||||
CBRE Group, Inc. Class A (a) | 41,535 | 2,536 | |||||||||
Crown Castle International Corp. | 12,441 | 1,864 | |||||||||
Digital Realty Trust, Inc. | 11,455 | 1,409 | |||||||||
Equity Commonwealth | 398,831 | 13,078 | |||||||||
Equity Residential | 17,057 | 1,417 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Value Fund | Schedule of Portfolio Investments — continued January 31, 2020 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Essex Property Trust, Inc. | 4,511 | $ | 1,397 | ||||||||
Host Hotels & Resorts, Inc. | 135,260 | 2,210 | |||||||||
Invitation Homes, Inc. | 575,673 | 18,116 | |||||||||
Jones Lang LaSalle, Inc. | 14,367 | 2,440 | |||||||||
Park Hotels & Resorts, Inc. | 79,291 | 1,740 | |||||||||
Prologis, Inc. | 40,230 | 3,737 | |||||||||
Public Storage | 8,520 | 1,906 | |||||||||
Realty Income Corp. | 19,178 | 1,504 | |||||||||
Simon Property Group, Inc. | 12,628 | 1,681 | |||||||||
The Macerich Co. (b) | 60,761 | 1,356 | |||||||||
Ventas, Inc. | 19,937 | 1,154 | |||||||||
Welltower, Inc. | 16,192 | 1,375 | |||||||||
Weyerhaeuser Co. | 52,855 | 1,530 | |||||||||
61,943 | |||||||||||
Utilities (7.0%): | |||||||||||
AES Corp. | 106,557 | 2,116 | |||||||||
Dominion Energy, Inc. | 62,067 | 5,322 | |||||||||
Duke Energy Corp. | 97,940 | 9,562 | |||||||||
Exelon Corp. | 475,387 | 22,624 | |||||||||
FirstEnergy Corp. | 238,160 | 12,096 | |||||||||
NextEra Energy, Inc. | 13,465 | 3,611 | |||||||||
PPL Corp. | 179,417 | 6,493 | |||||||||
Vistra Energy Corp. | 922,686 | 20,779 | |||||||||
82,603 | |||||||||||
Total Common Stocks (Cost $1,076,911) | 1,157,204 | ||||||||||
Collateral for Securities Loaned^ (0.2%) | |||||||||||
HSBC U.S. Government Money Market Fund, I Shares, 1.52% (d) | 2,617,149 | 2,617 | |||||||||
Total Collateral for Securities Loaned (Cost $2,617) | 2,617 | ||||||||||
Total Investments (Cost $1,079,528) — 98.3% | 1,159,821 | ||||||||||
Other assets in excess of liabilities — 1.7% | 20,020 | ||||||||||
NET ASSETS — 100.00% | $ | 1,179,841 |
^ Purchased with cash collateral from securities on loan.
(a) Non-income producing security.
(b) All or a portion of this security is on loan.
(c) Security was fair valued based upon procedures approved by the Board of Trustees and represents 0.0% of the Fund's net assets as of January 31, 2020. This security is classified as Level 3 within the fair value hierarchy. (See Note 2 in the Notes to Financial Statements)
(d) Rate disclosed is the daily yield on January 31, 2020.
LP — Limited Partnership
PLC — Public Limited Company
See notes to financial statements.
8
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2020 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Value Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,079,528) | $ | 1,159,821 | (a) | ||||
Cash and cash equivalents | 21,837 | ||||||
Receivables: | |||||||
Interest and dividends | 1,419 | ||||||
Capital shares issued | 340 | ||||||
Investments sold | 910 | ||||||
From Adviser | 16 | ||||||
Prepaid expenses | 4 | ||||||
Total assets | 1,184,347 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 2,617 | ||||||
Capital shares redeemed | 853 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 674 | ||||||
Administration fees | 144 | ||||||
Custodian fees | 37 | ||||||
Transfer agent fees | 84 | ||||||
Compliance fees | — | (b) | |||||
12b-1 fees | 1 | ||||||
Other accrued expenses | 96 | ||||||
Total liabilities | 4,506 | ||||||
Net Assets: | |||||||
Capital | 1,095,191 | ||||||
Total distributable earnings/(loss) | 84,650 | ||||||
Net assets | $ | 1,179,841 | |||||
Net Assets: | |||||||
Fund Shares | $ | 916,872 | |||||
Institutional Shares | 256,008 | ||||||
Adviser Shares | 6,961 | ||||||
Total | $ | 1,179,841 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 58,930 | ||||||
Institutional Shares | 16,442 | ||||||
Adviser Shares | 450 | ||||||
Total | 75,822 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 15.56 | |||||
Institutional Shares | 15.57 | ||||||
Adviser Shares | 15.47 |
(a) Includes $2,492 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
9
USAA Mutual Funds Trust | Statement of Operations For the Six-Months Ended January 31, 2020 |
(Amounts in Thousands) (Unaudited)
USAA Value Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 16,429 | |||||
Interest | 208 | ||||||
Securities lending (net of fees) | 4 | ||||||
Foreign tax withholding | (3 | ) | |||||
Total Income | 16,638 | ||||||
Expenses: | |||||||
Investment advisory fees | 3,861 | ||||||
Administration fees — Fund Shares | 708 | ||||||
Administration fees — Institutional Shares | 118 | ||||||
Administration fees — Adviser Shares | 6 | ||||||
Sub-Administration Fees | 23 | ||||||
12b-1 fees — Adviser Shares | 10 | ||||||
Custodian fees | 29 | ||||||
Transfer agent fees | — | (a) | |||||
Transfer agent fees — Fund Shares | 570 | ||||||
Transfer agent fees — Institutional Shares | 118 | ||||||
Transfer agent fees — Adviser Shares | — | (a) | |||||
Trustees' fees | 22 | ||||||
Compliance fees | 4 | ||||||
Legal and audit fees | 53 | ||||||
State registration and filing fees | 43 | ||||||
Other expenses | 63 | ||||||
Total Expenses | 5,628 | ||||||
Expenses waived/reimbursed by Adviser | (21 | ) | |||||
Net Expenses | 5,607 | ||||||
Net Investment Income (Loss) | 11,031 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities and foreign currency translations | (448 | ) | |||||
Net change in unrealized appreciation/depreciation on investment securities | 34,221 | ||||||
Net realized/unrealized gains (losses) on investments | 33,773 | ||||||
Change in net assets resulting from operations | $ | 44,804 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
10
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Value Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 11,031 | $ | 18,657 | |||||||
Net realized gains (losses) from investments | (448 | ) | 347,939 | ||||||||
Net change in unrealized appreciation (depreciation) on investments | 34,221 | (386,678 | ) | ||||||||
Change in net assets resulting from operations | 44,804 | (20,082 | ) | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (220,280 | ) | (109,577 | ) | |||||||
Institutional Shares | (61,101 | ) | (48,387 | ) | |||||||
Adviser Shares | (2,057 | ) | (1,038 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (283,438 | ) | (159,002 | ) | |||||||
Change in net assets resulting from capital transactions | 246,646 | (306,887 | ) | ||||||||
Change in net assets | 8,012 | (485,971 | ) | ||||||||
Net Assets: | |||||||||||
Beginning of period | 1,171,829 | 1,657,800 | |||||||||
End of period | $ | 1,179,841 | $ | 1,171,829 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 25,471 | $ | 77,101 | |||||||
Distributions reinvested | 217,411 | 108,344 | |||||||||
Cost of shares redeemed | (82,115 | ) | (138,626 | ) | |||||||
Total Fund Shares | $ | 160,767 | $ | 46,819 | |||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 43,832 | $ | 39,778 | |||||||
Distributions reinvested | 61,090 | 48,382 | |||||||||
Cost of shares redeemed | (19,081 | ) | (441,867 | ) | |||||||
Total Institutional Shares | $ | 85,841 | $ | (353,707 | ) | ||||||
Adviser Shares | |||||||||||
Proceeds from shares issued | $ | 19 | $ | 35 | |||||||
Distributions reinvested | 26 | 14 | |||||||||
Cost of shares redeemed | (7 | ) | (48 | ) | |||||||
Total Adviser Shares | $ | 38 | $ | 1 | |||||||
Change in net assets resulting from capital transactions | $ | 246,646 | $ | (306,887 | ) |
(continues on next page)
See notes to financial statements.
11
USAA Mutual Funds Trust | Statements of Changes in Net Assets — continued |
(Amounts in Thousands)
USAA Value Fund | |||||||||||
Six-Months Ended January 31, 2020 (unaudited) | Year Ended July 31, 2019 | ||||||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,395 | 3,912 | |||||||||
Reinvested | 13,458 | 6,172 | |||||||||
Redeemed | (4,600 | ) | (7,186 | ) | |||||||
Total Fund Shares | 10,253 | 2,898 | |||||||||
Institutional Shares | |||||||||||
Issued | 2,228 | 2,071 | |||||||||
Reinvested | 3,777 | 2,755 | |||||||||
Redeemed | (1,084 | ) | (22,405 | ) | |||||||
Total Institutional Shares | 4,921 | (17,579 | ) | ||||||||
Adviser Shares | |||||||||||
Issued | — | (a) | 2 | ||||||||
Reinvested | 2 | 1 | |||||||||
Redeemed | — | (a) | (3 | ) | |||||||
Total Adviser Shares | 2 | — | (a) | ||||||||
Change in Shares | 15,176 | (14,681 | ) |
(a) Represents less than 500 shares.
See notes to financial statements.
12
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13
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Value Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 19.32 | 0.17 | (d) | 0.69 | 0.86 | (0.21 | ) | (4.41 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 22.01 | 0.25 | (0.54 | ) | (0.29 | ) | (0.24 | ) | (2.16 | ) | ||||||||||||||||
Year Ended July 31, 2018 | $ | 21.55 | 0.21 | 1.84 | 2.05 | (0.21 | ) | (1.38 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 19.41 | 0.27 | 2.74 | 3.01 | (0.29 | ) | (0.58 | ) | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 20.50 | 0.23 | (0.31 | ) | (0.08 | ) | (0.23 | ) | (0.78 | ) | ||||||||||||||||
Year Ended July 31, 2015 | $ | 20.00 | 0.20 | 1.28 | 1.48 | (0.25 | ) | (0.73 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 19.33 | 0.18 | (d) | 0.68 | 0.86 | (0.21 | ) | (4.41 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 22.00 | 0.28 | (d) | (0.55 | ) | (0.27 | ) | (0.24 | ) | (2.16 | ) | |||||||||||||||
Year Ended July 31, 2018 | $ | 21.54 | 0.23 | 1.84 | 2.07 | (0.23 | ) | (1.38 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 19.40 | 0.30 | 2.73 | 3.03 | (0.31 | ) | (0.58 | ) | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 20.49 | 0.25 | (0.31 | ) | (0.06 | ) | (0.25 | ) | (0.78 | ) | ||||||||||||||||
Year Ended July 31, 2015 | $ | 20.00 | 0.26 | (d) | 1.24 | 1.50 | (0.28 | ) | (0.73 | ) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two-year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects total annual operating expenses of the shares before reductions of any expenses paid indirectly. The expenses paid indirectly decreased the expense ratio by less than 0.01%.
See notes to financial statements.
14
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Value Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (4.62 | ) | $ | 15.56 | 3.85 | % | 0.96 | % | 1.85 | % | 0.96 | % | $ | 916,872 | 19 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (2.40 | ) | $ | 19.32 | (0.11 | )% | 0.96 | % | 1.35 | % | 0.96 | % | $ | 940,515 | 108 | %(f) | |||||||||||||||||||
Year Ended July 31, 2018 | (1.59 | ) | $ | 22.01 | 9.69 | % | 0.99 | % | 1.10 | % | 0.99 | % | $ | 1,007,712 | 29 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.87 | ) | $ | 21.55 | 15.72 | % | 1.08 | %(e) | 1.37 | % | 1.08 | %(e) | $ | 936,630 | 27 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (1.01 | ) | $ | 19.41 | (0.14 | )% | 1.11 | %(e) | 1.28 | % | 1.11 | %(e) | $ | 807,052 | 20 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (0.98 | ) | $ | 20.50 | 7.47 | % | 1.09 | % | 1.06 | % | 1.09 | % | $ | 960,925 | 30 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (4.62 | ) | $ | 15.57 | 3.88 | % | 0.88 | % | 1.90 | % | 0.89 | % | $ | 256,008 | 19 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (2.40 | ) | $ | 19.33 | (0.02 | )% | 0.88 | % | 1.42 | % | 0.88 | % | $ | 222,701 | 108 | %(f) | |||||||||||||||||||
Year Ended July 31, 2018 | (1.61 | ) | $ | 22.00 | 9.79 | % | 0.91 | % | 1.18 | % | 0.91 | % | $ | 640,281 | 29 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.89 | ) | $ | 21.54 | 15.86 | % | 0.98 | %(e) | 1.48 | % | 0.98 | %(e) | $ | 591,384 | 27 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (1.03 | ) | $ | 19.40 | (0.04 | )% | 0.98 | %(e) | 1.41 | % | 0.98 | %(e) | $ | 522,721 | 20 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (1.01 | ) | $ | 20.49 | 7.57 | % | 0.98 | % | 1.23 | % | 0.98 | % | $ | 299,990 | 30 | % |
(f) Reflects increased trading activity due to current year transition or asset allocation shift.
(continues on next page)
See notes to financial statements.
15
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Value Fund | |||||||||||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | $ | 19.24 | 0.15 | (d) | 0.67 | 0.82 | (0.18 | ) | (4.41 | ) | |||||||||||||||||
Year Ended July 31, 2019 | $ | 21.91 | 0.20 | (0.55 | ) | (0.35 | ) | (0.16 | ) | (2.16 | ) | ||||||||||||||||
Year Ended July 31, 2018 | $ | 21.46 | 0.15 | 1.83 | 1.98 | (0.15 | ) | (1.38 | ) | ||||||||||||||||||
Year Ended July 31, 2017 | $ | 19.32 | 0.23 | 2.72 | 2.95 | (0.23 | ) | (0.58 | ) | ||||||||||||||||||
Year Ended July 31, 2016 | $ | 20.43 | 0.17 | (0.32 | ) | (0.15 | ) | (0.18 | ) | (0.78 | ) | ||||||||||||||||
Year Ended July 31, 2015 | $ | 19.94 | 0.17 | 1.26 | 1.43 | (0.21 | ) | (0.73 | ) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a two-year period beginning July 1, 2019, and in effect through June 30, 2021, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects total annual operating expenses of the shares before reductions of any expenses paid indirectly. The expenses paid indirectly decreased the expense ratio by less than 0.01%.
See notes to financial statements.
16
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Value Fund | |||||||||||||||||||||||||||||||||||
Adviser Shares | |||||||||||||||||||||||||||||||||||
Six-Months Ended January 31, 2020 (unaudited) | (4.59 | ) | $ | 15.47 | 3.67 | % | 1.27 | % | 1.58 | % | 1.37 | % | $ | 6,961 | 19 | % | |||||||||||||||||||
Year Ended July 31, 2019 | (2.32 | ) | $ | 19.24 | (0.44 | )% | 1.27 | %(g) | 1.03 | % | 1.31 | % | $ | 8,613 | 108 | %(f) | |||||||||||||||||||
Year Ended July 31, 2018 | (1.53 | ) | $ | 21.91 | 9.41 | % | 1.30 | % | 0.79 | % | 1.30 | % | $ | 9,807 | 29 | % | |||||||||||||||||||
Year Ended July 31, 2017 | (0.81 | ) | $ | 21.46 | 15.46 | % | 1.33 | %(e)(h) | 1.13 | % | 1.38 | %(e) | $ | 9,626 | 27 | % | |||||||||||||||||||
Year Ended July 31, 2016 | (0.96 | ) | $ | 19.32 | (0.52 | )% | 1.42 | %(e) | 0.97 | % | 1.42 | %(e) | $ | 8,767 | 20 | % | |||||||||||||||||||
Year Ended July 31, 2015 | (0.94 | ) | $ | 20.43 | 7.22 | % | 1.34 | % | 0.82 | % | 1.34 | % | $ | 9,269 | 30 | % |
(f) Reflects increased trading activity due to current year transition or asset allocation shift.
(g) Prior to December 1, 2018, USAA Asset Management Company ("AMCO") (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Adviser Shares to 1.30% of the Adviser Shares' average daily net assets.
(h) Effective December 1, 2016, AMCO (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Adviser Shares to 1.30% of the Adviser Shares' average daily net assets.
See notes to financial statements.
17
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2020 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 47 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Value Fund (the "Fund"). The Fund offers three classes of shares: Fund Shares, Institutional Shares, and Adviser Shares. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges except with respect to fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
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 Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. 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 valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.
The Trust's Board of Trustees (the "Board") has established the Pricing and Liquidity Committee (the "Committee") and, subject to Board oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or the over-the-counter markets, are valued at the last sales price or official closing price. If there have been no sales for that day on the exchange
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations typically are categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at net asset value. These valuations typically are categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, are not reflective of market value, or a significant event has been recognized in relation to a security or class of securities, the securities are valued in good faith by the Committee in accordance with valuation procedures approved by the Board. These valuations typically are categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's net asset value ("NAV") to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's net asset value is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. These valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of January 31, 2020, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands):
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
Common Stocks | $ | 1,157,204 | $ | — | $ | — | (a) | $ | 1,157,204 | ||||||||||
Collateral for Securities Loaned | 2,617 | — | — | 2,617 | |||||||||||||||
Total | $ | 1,159,821 | $ | — | $ | — | $ | 1,159,821 |
(a) Amount is less than $1 thousand.
For the six-months ended January 31, 2020, there were no transfers in or out of the Level 3 fair value hierarchy.
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs. ETFs are a type of index fund, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
19
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discount. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a securities lending agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income, net of income retained by Citibank. Borrowers are required to secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are cured the next business day once the shortfall exceeds $100 thousand. Collateral may be cash, U.S. government securities, or other securities as permitted by SEC guidelines. Cash collateral may be invested in high-quality short-term investments, primarily open-end investment companies. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Risks relating to securities-lending transactions include that the borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower. The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy borrower default. Cash collateral is listed in the Fund's Portfolio of Investments and Financial Statements while non-cash collateral is not included. The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2020.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 2,492 | $ | — | $ | 2,617 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations
20
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
are disclosed as net change in unrealized appreciation/depreciation on investments and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as net realized gains or losses from investment transactions and foreign currency translations on the Statement of Operations.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of July 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax year ends and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, distribution and service 12b-1 fees, and printing fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
3. Purchases and Sales:
Cost of purchases and proceeds from sales/maturities of securities (excluding securities maturing less than one year from acquisition) for the six-months ended January 31, 2020, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 222,841 | $ | 249,548 |
There were no purchases and sales of U.S. government securities during the six-months ended January 31, 2020.
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA funds. The USAA fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi annual reports may be viewed at usaa.com. As of January 31, 2020, certain USAA fund-of-funds owned total outstanding shares of the Fund:
USAA Cornerstone Conservative Fund | 0.2 | % | |||||
USAA Cornerstone Equity Fund | 0.8 | % |
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory and Management Fees:
Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or "Adviser"), a New York corporation registered as an investment adviser with the Securities and
21
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
Exchange Commission ("SEC"). The Adviser is a wholly-owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly-owned direct subsidiary of Victory Capital Operating, LLC. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.65% of the Fund's average daily net assets. Amounts incurred and paid to VCM are reflected on the Statement of Operations as Investment Advisory fees.
No performance adjustments will be made for periods beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter will be utilized in calculating future performance adjustments.
The performance adjustment will be calculated monthly by comparing each class' performance to that of the Lipper Multi-Cap Value Funds Index. The Lipper Multi-Cap Value Funds Index tracks the total return performance of each class within the Lipper Multi-Cap Value Funds category.
The performance period for each share class will consist of the current month plus the previous number of months beginning July 1, 2019. The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)1 | Annual Adjustment Rate (in basis points)1 | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
1 Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of the class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Multi-Cap Value Funds Index over that period, even if the class has overall negative returns during the performance period.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six-months ended January 31, 2020, the Fund had no subadvisors.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15% of average daily net assets of the Fund Shares and Adviser Shares and 0.10% of average daily net assets of Institutional Shares, respectively. Amounts incurred are reflected on the Statement of Operations as Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of
22
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred are reflected on the Statement of Operations as Compliance fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Funds, under the Fund Administration, Servicing, and Accounting Agreement. Amounts incurred are reflected on the Statement of Operations as Sub-Administration fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), provides transfer agency services to the Fund. VCTA, an affiliate of the Adviser, provides transfer agent services to the Fund Shares and Adviser Shares based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10% of average daily net assets, plus out-of-pocket expenses. Amounts incurred are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the Adviser Shares pursuant to a Distribution Agreement between the Distributor and the Trust. Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, at an annual rate of up to 0.25% of the average daily net assets of the Adviser Shares. Amounts incurred are reflected on the Statement of Operations as 12b-1 Fees.
Adviser Shares are offered and sold without imposition of an initial sales charge or a contingent deferred sales charge.
Other Fees:
Citibank, N.A., serves as the Fund's custodian.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2021. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
The expense limits (excluding voluntary waivers) are 0.96%, 0.88%, and 1.27% for Fund Shares, Institutional Shares, and Adviser Shares, respectively. Under this expense limitation agreement, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. As of January 31, 2020, the following amounts are available to be repaid to the Adviser (amounts in thousands). Amounts
23
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
repaid to the Adviser during the six-months ended January 31, 2020, if any, are reflected on the Statement of Operations as "Expenses waived/reimbursed by Adviser."
Expires July 31, 2023 | |||
$ | 21 |
The Adviser, may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six-months ended January 31, 2020.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Sub-Administrator, Sub-Fund Accountant, and Legal.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Overall stock market risks may affect the value of the Fund. Factors such as domestic and international economic growth and market conditions, interest rate levels, and political events affect the securities market.
The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected. Price changes may be temporary or last for extended periods.
Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market.
The Fund uses a value-oriented investment strategy to select investments. The strategy may be out of favor or may not produce the intended results over short or longer time periods. The strategy may, at times, substantially underperform Funds that utilize other investment strategies, such as growth.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participate in a short-term, demand note "Line of Credit" agreement with Citibank. Under the agreement with Citibank, the Victory Funds Complex could borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs. Citibank receives an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund, if any, during the period is presented on the Statement of Operations under line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six-months ended January 31, 2020.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Fund in the Victory Fund Complex relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes. The interfund loan rate is
24
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2020 |
(Unaudited)
determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period is presented on the Statement of Operations under Interest expense on Interfund lending. As a Lender, interest earned by the Fund, if any, during the period is reflected on the Statement of Operations under Income on Interfund lending.
The Fund did not utilize or participate in the Facility during the six-months ended January 31, 2020.
8. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending July 31, 2020.
As of the most recent tax year ended July 31, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.
9. Subsequent Event:
An outbreak of respiratory disease called COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant travel restrictions and disruptions, significant disruptions to business operations, supply chains and consumer activity, significant challenges in healthcare service preparation and delivery, and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment and that occurred subsequent to year end may have a significant negative impact on the operations and profitability of the Funds' investments. These impacts have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession. Public health crises may exacerbate other pre-existing political, social, economic, market and financial risks. The extent of the impact to the financial performance of the Funds' investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.
25
USAA Mutual Funds Trust | Supplemental Information January 31, 2020 |
(Unaudited)
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2019 through January 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide 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 you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. If these transactional costs were included, your costs would have been higher.
Beginning Account Value 8/1/19 | Actual Ending Account Value 1/31/20 | Hypothetical Ending Account Value 1/31/20 | Actual Expenses Paid During Period 8/1/19- 1/31/20* | Hypothetical Expenses Paid During Period 8/1/19- 1/31/20* | Annualized Expense Ratio During Period 8/1/19- 1/31/20 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,038.50 | $ | 1,020.31 | $ | 4.92 | $ | 4.88 | 0.96 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,038.80 | 1,020.71 | 4.51 | 4.47 | 0.88 | % | ||||||||||||||||||||
Adviser Shares | 1,000.00 | 1,036.70 | 1,018.75 | 6.50 | 6.44 | 1.27 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/366 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Forms N-PORT are available on the SEC's web site at www.sec.gov.
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Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
15935 La Cantera Pkwy
Building Two
San Antonio, Texas 78256
Visit our website at: | Call | ||||||
usaa.com | (800) 235-8396 |
40847-0320
Item 2. Code of Ethics.
Not applicable — only for annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable — only for annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable — only for annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Not applicable.
(b) Not applicable.
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 trustees. The Corporate Governance Committee has adopted procedures to consider Board candidates suggested by shareholders. The procedures are initiated by the receipt of nominations submitted by a fund shareholder sent to Board member(s) at the address specified in fund disclosure documents or as received by the Adviser or a fund officer. Any recommendations for a nomination by a shareholder, to be considered by the Board, must include at least the following information: name; date of birth; contact information; education; business profession and other expertise; affiliations; experience relating to serving on the Board; and references. The Corporate Governance Committee gives shareholder recommendations the same consideration as any other candidate.
Item 11. Controls and Procedures.
(a)The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
(b)There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
(a)(1) Not applicable.
(a)(2) Not applicable.
(a)(3) Not applicable.
(a)(4) Not applicable.
(b) Not applicable.
Item 13. Exhibits.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) are attached hereto.
(a)(3) Not applicable.
(a)(4) Change in the registrant’s independent public accountant is attached hereto.
(b) Certifications pursuant to Rule 30a-2(b) are attached hereto.
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 Fund Trust |
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By (Signature and Title)* | /s/ James K. De Vries |
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| James K. De Vries, Principal Financial Officer |
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Date | April 6, 2020 |
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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 (Signature and Title)* | /s/ Christopher K. Dyer |
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| Christopher K. Dyer, Principal Executive Officer |
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Date | April 6, 2020 |
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By (Signature and Title)* | /s/ James K. De Vries |
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| James K. De Vries, Principal Financial Officer |
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Date | April 6, 2020 |
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