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
USAA Mutual Funds Trust
(Exact name of registrant as specified in charter)
15935 La Cantera Pkwy, Building Two, San Antonio,Texas 78256
(Address of principal executive offices) (Zip code)
Citi Fund Services Ohio, Inc., 4400 Easton Commons, Suite 200, Columbus, Ohio 43219
(Name and address of agent for service)
Registrant’s telephone number, including area code: 800-235-8396
Date of fiscal year end: July 31
Date of reporting period: January 31, 2022
Item 1. Reports to Stockholders.
January 31, 2022
Semi Annual Report
USAA Capital Growth Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 23 | ||||||
Statement of Operations | 24 | ||||||
Statements of Changes in Net Assets | 25 | ||||||
Financial Highlights | 26 | ||||||
Notes to Financial Statements | 28 | ||||||
Supplemental Information | 37 | ||||||
Proxy Voting and Portfolio Holdings Information | 37 | ||||||
Expense Examples | 37 | ||||||
Advisory Contract Approval | 38 | ||||||
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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA Capital Growth Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks capital appreciation.
Top 10 Equity Holdings*:
January 31, 2022
(% of Net Assets)
Apple, Inc. | 3.4 | % | |||||
Microsoft Corp. | 2.6 | % | |||||
Alphabet, Inc. Class C | 2.0 | % | |||||
Nestle SA Registered Shares | 1.1 | % | |||||
Toyota Motor Corp. | 1.1 | % | |||||
Johnson & Johnson | 1.0 | % | |||||
UnitedHealth Group, Inc. | 1.0 | % | |||||
Roche Holding AG | 0.9 | % | |||||
LVMH Moet Hennessy Louis Vuitton SE | 0.9 | % | |||||
The Home Depot, Inc. | 0.9 | % | |||||
Sector Allocation*:
January 31, 2022
(% of Net Assets)
* Does not include futures contracts, 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%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (99.1%) | |||||||||||
Australia (2.1%): | |||||||||||
Consumer Discretionary (0.3%): | |||||||||||
Aristocrat Leisure Ltd. | 91,410 | $ | 2,649 | ||||||||
Energy (0.1%): | |||||||||||
Santos Ltd. | 102,492 | 522 | |||||||||
Woodside Petroleum Ltd. | 29,239 | 522 | |||||||||
1,044 | |||||||||||
Financials (0.5%): | |||||||||||
Australia & New Zealand Banking Group Ltd. | 57,377 | 1,084 | |||||||||
Macquarie Group Ltd. | 25,007 | 3,268 | |||||||||
4,352 | |||||||||||
Health Care (0.4%): | |||||||||||
CSL Ltd. | 13,836 | 2,563 | |||||||||
Sonic Healthcare Ltd. | 27,313 | 735 | |||||||||
3,298 | |||||||||||
Materials (0.5%): | |||||||||||
BHP Group Ltd. (a) | 98,005 | 3,142 | |||||||||
Rio Tinto Ltd. | 12,070 | 960 | |||||||||
4,102 | |||||||||||
Real Estate (0.3%): | |||||||||||
Charter Hall Group | 48,889 | 585 | |||||||||
Scentre Group | 724,605 | 1,504 | |||||||||
Stockland | 176,854 | 510 | |||||||||
2,599 | |||||||||||
Utilities (0.0%): (b) | |||||||||||
Origin Energy Ltd. | 123,897 | 496 | |||||||||
18,540 | |||||||||||
Austria (0.1%): | |||||||||||
Financials (0.0%): (b) | |||||||||||
Raiffeisen Bank International AG | 22,450 | 631 | |||||||||
Industrials (0.1%): | |||||||||||
ANDRITZ AG | 12,097 | 644 | |||||||||
1,275 | |||||||||||
Belgium (0.3%): | |||||||||||
Information Technology (0.2%): | |||||||||||
Melexis NV | 17,960 | 1,883 | |||||||||
Materials (0.1%): | |||||||||||
Titan Cement International SA | 21,754 | 340 | |||||||||
2,223 | |||||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Brazil (0.3%): | |||||||||||
Consumer Discretionary (0.0%): (b) | |||||||||||
Vibra Energia SA | 61,400 | $ | 265 | ||||||||
Consumer Staples (0.1%): | |||||||||||
Sendas Distribuidora SA | 132,491 | 313 | |||||||||
SLC Agricola SA | 51,040 | 442 | |||||||||
755 | |||||||||||
Financials (0.1%): | |||||||||||
Banco ABC Brasil SA Preference Shares | 123,600 | 369 | |||||||||
Health Care (0.0%): (b) | |||||||||||
Blau Farmaceutica SA | 36,149 | 252 | |||||||||
Industrials (0.1%): | |||||||||||
Randon SA Implementos e Participacoes Preference Shares | 181,700 | 412 | |||||||||
SIMPAR SA | 195,516 | 407 | |||||||||
819 | |||||||||||
Materials (0.0%): (b) | |||||||||||
Dexco SA | 109,230 | 307 | |||||||||
Utilities (0.0%): (b) | |||||||||||
Neoenergia SA | 105,900 | 328 | |||||||||
3,095 | |||||||||||
Canada (2.3%): | |||||||||||
Consumer Staples (0.2%): | |||||||||||
Alimentation Couche-Tard, Inc. | 59,430 | 2,397 | |||||||||
Energy (0.3%): | |||||||||||
Canacol Energy Ltd. (a) | 80,136 | 211 | |||||||||
Parex Resources, Inc. | 105,762 | 2,250 | |||||||||
2,461 | |||||||||||
Financials (1.0%): | |||||||||||
Manulife Financial Corp. | 143,261 | 2,984 | |||||||||
National Bank of Canada | 32,656 | 2,613 | |||||||||
The Toronto-Dominion Bank | 38,603 | 3,092 | |||||||||
8,689 | |||||||||||
Industrials (0.3%): | |||||||||||
Canadian Pacific Railway Ltd. | 36,005 | 2,576 | |||||||||
Information Technology (0.3%): | |||||||||||
Constellation Software, Inc. | 1,889 | 3,254 | |||||||||
Materials (0.2%): | |||||||||||
Kirkland Lake Gold Ltd. | 39,921 | 1,504 | |||||||||
20,881 | |||||||||||
Chile (0.1%): | |||||||||||
Industrials (0.1%): | |||||||||||
Quinenco SA | 133,664 | 348 | |||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Materials (0.0%): (b) | |||||||||||
CAP SA | 27,906 | $ | 314 | ||||||||
662 | |||||||||||
China (0.6%): | |||||||||||
Communication Services (0.2%): | |||||||||||
Tencent Holdings Ltd. | 26,200 | 1,642 | |||||||||
Consumer Discretionary (0.1%): | |||||||||||
JD.com, Inc. Class A (c) | 1,024 | 39 | |||||||||
Jiumaojiu International Holdings Ltd. (d) | 140,000 | 302 | |||||||||
Minth Group Ltd. | 60,000 | 278 | |||||||||
619 | |||||||||||
Consumer Staples (0.1%): | |||||||||||
Chacha Food Co. Ltd. Class A | 41,900 | 362 | |||||||||
Chlitina Holding Ltd. | 50,000 | 380 | |||||||||
742 | |||||||||||
Financials (0.0%): (b) | |||||||||||
Finvolution Group, ADR | 52,612 | 208 | |||||||||
Health Care (0.0%): (b) | |||||||||||
Amoy Diagnostics Co. Ltd. Class A | 21,200 | 193 | |||||||||
China Resources Medical Holdings Co. Ltd. | 264,500 | 149 | |||||||||
342 | |||||||||||
Industrials (0.0%): (b) | |||||||||||
Binjiang Service Group Co. Ltd. | 88,500 | 260 | |||||||||
Xinte Energy Co. Ltd. Class H | 104,400 | 194 | |||||||||
454 | |||||||||||
Information Technology (0.1%): | |||||||||||
Shenzhen Sunline Tech Co. Ltd. Class A | 136,400 | 313 | |||||||||
WUS Printed Circuit Kunshan Co. Ltd. Class A | 168,740 | 464 | |||||||||
777 | |||||||||||
Utilities (0.1%): | |||||||||||
China Tian Lun Gas Holdings Ltd. | 400,000 | 475 | |||||||||
5,259 | |||||||||||
Denmark (0.9%): | |||||||||||
Consumer Discretionary (0.2%): | |||||||||||
Pandora A/S | 18,438 | 2,005 | |||||||||
Consumer Staples (0.4%): | |||||||||||
Carlsberg A/S Class B | 5,074 | 822 | |||||||||
Royal Unibrew A/S | 19,744 | 2,270 | |||||||||
3,092 | |||||||||||
Health Care (0.2%): | |||||||||||
Novo Nordisk A/S Class B | 16,476 | 1,639 | |||||||||
Industrials (0.1%): | |||||||||||
AP Moller — Maersk A/S Class B | 317 | 1,139 | |||||||||
See notes to financial statements.
5
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Utilities (0.0%): (b) | |||||||||||
Orsted A/S (d) | 2,923 | $ | 312 | ||||||||
8,187 | |||||||||||
Finland (0.1%): | |||||||||||
Industrials (0.1%): | |||||||||||
Metso Outotec Oyj | 70,135 | 752 | |||||||||
France (3.3%): | |||||||||||
Communication Services (0.1%): | |||||||||||
Publicis Groupe SA | 11,382 | 771 | |||||||||
Vivendi SE | 33,223 | 435 | |||||||||
1,206 | |||||||||||
Consumer Discretionary (1.1%): | |||||||||||
La Francaise des Jeux SAEM (d) | 42,072 | 1,742 | |||||||||
LVMH Moet Hennessy Louis Vuitton SE | 10,038 | 8,244 | |||||||||
9,986 | |||||||||||
Consumer Staples (0.1%): | |||||||||||
Pernod Ricard SA | 3,768 | 806 | |||||||||
Energy (0.2%): | |||||||||||
Gaztransport Et Technigaz SA | 8,203 | 753 | |||||||||
TotalEnergies SE | 10,255 | 583 | |||||||||
1,336 | |||||||||||
Financials (0.3%): | |||||||||||
Amundi SA (d) | 4,626 | 360 | |||||||||
AXA SA | 30,897 | 978 | |||||||||
BNP Paribas SA | 13,611 | 972 | |||||||||
2,310 | |||||||||||
Health Care (0.0%): (b) | |||||||||||
Sartorius Stedim Biotech | 835 | 366 | |||||||||
Industrials (0.5%): | |||||||||||
Cie de Saint-Gobain | 14,008 | 948 | |||||||||
Eiffage SA | 4,646 | 488 | |||||||||
Safran SA | 17,715 | 2,145 | |||||||||
Teleperformance | 1,499 | 564 | |||||||||
4,145 | |||||||||||
Information Technology (0.6%): | |||||||||||
Capgemini SE | 22,305 | 5,014 | |||||||||
Edenred | 9,136 | 392 | |||||||||
5,406 | |||||||||||
Materials (0.4%): | |||||||||||
Arkema SA | 26,631 | 3,937 | |||||||||
29,498 | |||||||||||
See notes to financial statements.
6
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Germany (2.2%): | |||||||||||
Communication Services (0.2%): | |||||||||||
Deutsche Telekom AG | 66,681 | $ | 1,259 | ||||||||
Consumer Discretionary (0.3%): | |||||||||||
Volkswagen AG Preference Shares | 13,381 | 2,787 | |||||||||
Financials (0.6%): | |||||||||||
Allianz SE Registered Shares | 18,914 | 4,856 | |||||||||
Hannover Rueck SE | 4,062 | 819 | |||||||||
5,675 | |||||||||||
Health Care (0.1%): | |||||||||||
Merck KGaA | 5,529 | 1,212 | |||||||||
Industrials (0.2%): | |||||||||||
Deutsche Post AG Registered Shares | 18,801 | 1,131 | |||||||||
Siemens AG Registered Shares | 3,113 | 494 | |||||||||
1,625 | |||||||||||
Information Technology (0.5%): | |||||||||||
Infineon Technologies AG | 15,677 | 651 | |||||||||
SAP SE | 32,450 | 4,071 | |||||||||
4,722 | |||||||||||
Materials (0.1%): | |||||||||||
Covestro AG (d) | 14,223 | 853 | |||||||||
Real Estate (0.1%): | |||||||||||
LEG Immobilien SE | 3,651 | 484 | |||||||||
Utilities (0.1%): | |||||||||||
E.ON SE | 67,943 | 937 | |||||||||
19,554 | |||||||||||
Greece (0.1%): | |||||||||||
Financials (0.1%): | |||||||||||
National Bank of Greece SA (c) | 157,409 | 619 | |||||||||
Industrials (0.0%): (b) | |||||||||||
Mytilineos SA | 25,706 | 440 | |||||||||
1,059 | |||||||||||
Hong Kong (0.8%): | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Chow Tai Fook Jewellery Group Ltd. | 216,400 | 380 | |||||||||
| EC Healthcare | 212,000 | 244 | |||||||||
Pou Sheng International Holdings Ltd. (c) | 1,688,000 | 271 | |||||||||
895 | |||||||||||
Consumer Staples (0.0%): (b) | |||||||||||
WH Group Ltd. (d) | 388,307 | 260 | |||||||||
See notes to financial statements.
7
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Financials (0.2%): | |||||||||||
AIA Group Ltd. | 150,400 | $ | 1,570 | ||||||||
CSSC Hong Kong Shipping Co. Ltd. | 2,094,000 | 302 | |||||||||
1,872 | |||||||||||
Industrials (0.1%): | |||||||||||
LK Technology Holdings Ltd. | 172,500 | 264 | |||||||||
Real Estate (0.4%): | |||||||||||
CK Asset Holdings Ltd. | 485,000 | 3,238 | |||||||||
Sun Hung Kai Properties Ltd. | 38,000 | 463 | |||||||||
3,701 | |||||||||||
6,992 | |||||||||||
India (0.9%): | |||||||||||
Consumer Discretionary (0.2%): | |||||||||||
Asahi India Glass Ltd. | 56,148 | 421 | |||||||||
Balkrishna Industries Ltd. | 13,987 | 441 | |||||||||
Garware Technical Fibres Ltd. | 8,727 | 373 | |||||||||
Orient Electric Ltd. | 87,829 | 393 | |||||||||
1,628 | |||||||||||
Energy (0.1%): | |||||||||||
Hindustan Petroleum Corp. Ltd. | 109,449 | 463 | |||||||||
Financials (0.1%): | |||||||||||
Cholamandalam Investment & Finance Co. Ltd. | 54,539 | 464 | |||||||||
UTI Asset Management Co. Ltd. | 30,158 | 364 | |||||||||
828 | |||||||||||
Health Care (0.0%): (b) | |||||||||||
Alkem Laboratories Ltd. | 6,750 | 321 | |||||||||
Industrials (0.2%): | |||||||||||
Ashoka Buildcon Ltd. (c) | 225,252 | 300 | |||||||||
Craftsman Automation Ltd. (c) | 12,216 | 338 | |||||||||
Somany Ceramics Ltd. | 58,135 | 693 | |||||||||
1,331 | |||||||||||
Information Technology (0.1%): | |||||||||||
Mphasis Ltd. | 16,655 | 699 | |||||||||
WNS Holdings Ltd., ADR (c) | 3,666 | 309 | |||||||||
1,008 | |||||||||||
Materials (0.2%): | |||||||||||
APL Apollo Tubes Ltd. (c) | 32,646 | 381 | |||||||||
Dalmia Bharat Ltd. | 21,193 | 510 | |||||||||
Finolex Industries Ltd. | 149,741 | 339 | |||||||||
JK Lakshmi Cement Ltd. | 67,037 | 509 | |||||||||
Supreme Industries Ltd. | 12,200 | 343 | |||||||||
2,082 | |||||||||||
See notes to financial statements.
8
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Utilities (0.0%): (b) | |||||||||||
PTC India Ltd. | 275,182 | $ | 354 | ||||||||
8,015 | |||||||||||
Indonesia (0.1%): | |||||||||||
Financials (0.0%): (b) | |||||||||||
Bank CIMB Niaga Tbk PT | 4,500,500 | 298 | |||||||||
Health Care (0.0%): (b) | |||||||||||
Medikaloka Hermina TBK PT | 4,059,800 | 309 | |||||||||
Industrials (0.0%): (b) | |||||||||||
PT Buana Lintas Lautan Tbk (c) | 7,931,700 | 81 | |||||||||
Real Estate (0.1%): | |||||||||||
PT Puradelta Lestari Tbk | 24,920,300 | 324 | |||||||||
1,012 | |||||||||||
Ireland (1.5%): | |||||||||||
Health Care (0.1%): | |||||||||||
ICON PLC (c) | 4,555 | 1,210 | |||||||||
Industrials (0.7%): | |||||||||||
DCC PLC | 9,911 | 833 | |||||||||
Eaton Corp. PLC | 15,986 | 2,533 | |||||||||
Johnson Controls International PLC | 35,720 | 2,596 | |||||||||
5,962 | |||||||||||
Information Technology (0.7%): | |||||||||||
Accenture PLC Class A | 18,824 | 6,656 | |||||||||
13,828 | |||||||||||
Isle of Man (0.0%): (b) | |||||||||||
Real Estate (0.0%): | |||||||||||
NEPI Rockcastle PLC | 1 | — | (e) | ||||||||
Israel (0.1%): | |||||||||||
Information Technology (0.1%): | |||||||||||
Check Point Software Technologies Ltd. (c) | 3,983 | 482 | |||||||||
Italy (1.0%): | |||||||||||
Health Care (0.3%): | |||||||||||
Recordati Industria Chimica e Farmaceutica SpA | 40,787 | 2,285 | |||||||||
Industrials (0.0%): (b) | |||||||||||
Leonardo SpA (c) | 50,460 | 364 | |||||||||
Information Technology (0.1%): | |||||||||||
Nexi SpA (c) (d) | 39,292 | 575 | |||||||||
Utilities (0.6%): | |||||||||||
ACEA SpA | 3,072 | 62 | |||||||||
Enel SpA | 443,038 | 3,409 | |||||||||
See notes to financial statements.
9
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Iren SpA | 131,235 | $ | 395 | ||||||||
Snam SpA | 333,237 | 1,867 | |||||||||
5,733 | |||||||||||
8,957 | |||||||||||
Japan (6.8%): | |||||||||||
Communication Services (0.4%): | |||||||||||
Capcom Co. Ltd. | 62,300 | 1,504 | |||||||||
Kakaku.com, Inc. | 63,000 | 1,305 | |||||||||
Nippon Telegraph & Telephone Corp. | 36,200 | 1,036 | |||||||||
3,845 | |||||||||||
Consumer Discretionary (1.7%): | |||||||||||
Sony Group Corp. | 27,600 | 3,088 | |||||||||
Toyo Tire Corp. | 25,000 | 354 | |||||||||
Toyota Motor Corp. | 482,300 | 9,534 | |||||||||
ZOZO, Inc. | 64,400 | 1,716 | |||||||||
14,692 | |||||||||||
Consumer Staples (0.3%): | |||||||||||
Ajinomoto Co., Inc. | 24,800 | 692 | |||||||||
Asahi Group Holdings Ltd. | 12,700 | 519 | |||||||||
Seven & i Holdings Co. Ltd. | 10,600 | 539 | |||||||||
Toyo Suisan Kaisha Ltd. | 29,300 | 1,201 | |||||||||
2,951 | |||||||||||
Financials (0.8%): | |||||||||||
JAFCO Group Co. Ltd. | 44,700 | 714 | |||||||||
Mitsubishi UFJ Financial Group, Inc. | 433,600 | 2,629 | |||||||||
Mizuho Financial Group, Inc. | 52,920 | 717 | |||||||||
ORIX Corp. | 61,200 | 1,263 | |||||||||
Sumitomo Mitsui Financial Group, Inc. | 19,500 | 702 | |||||||||
Tokio Marine Holdings, Inc. | 23,700 | 1,414 | |||||||||
7,439 | |||||||||||
Health Care (0.7%): | |||||||||||
Hoya Corp. | 27,300 | 3,540 | |||||||||
Otsuka Holdings Co. Ltd. | 10,600 | 362 | |||||||||
Shionogi & Co. Ltd. | 33,400 | 1,904 | |||||||||
5,806 | |||||||||||
Industrials (1.7%): | |||||||||||
AGC, Inc. | 12,300 | 565 | |||||||||
en Japan, Inc. | 44,300 | 1,068 | |||||||||
Fuji Electric Co. Ltd. | 69,200 | 3,699 | |||||||||
Hitachi Ltd. | 16,500 | 858 | |||||||||
ITOCHU Corp. | 37,600 | 1,208 | |||||||||
Komatsu Ltd. | 16,200 | 407 | |||||||||
Mitsubishi Electric Corp. | 33,200 | 416 | |||||||||
Mitsui & Co. Ltd. | 33,500 | 836 | |||||||||
Nippon Yusen KK | 35,000 | 2,744 | |||||||||
OKUMA Corp. | 30,500 | 1,331 | |||||||||
See notes to financial statements.
10
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Sanwa Holdings Corp. | 170,900 | $ | 1,851 | ||||||||
Yamato Holdings Co. Ltd. | 16,500 | 351 | |||||||||
15,334 | |||||||||||
Information Technology (0.8%): | |||||||||||
Fujitsu Ltd. | 20,900 | 2,764 | |||||||||
Murata Manufacturing Co. Ltd. | 8,700 | 654 | |||||||||
NTT Data Corp. | 30,000 | 575 | |||||||||
Tokyo Electron Ltd. | 2,400 | 1,174 | |||||||||
Ulvac, Inc. | 30,500 | 1,552 | |||||||||
6,719 | |||||||||||
Materials (0.2%): | |||||||||||
Rengo Co. Ltd. | 62,800 | 469 | |||||||||
Shin-Etsu Chemical Co. Ltd. | 4,100 | 686 | |||||||||
Tosoh Corp. | 24,400 | 382 | |||||||||
1,537 | |||||||||||
Real Estate (0.1%): | |||||||||||
Daiwa House Industry Co. Ltd. | 18,400 | 537 | |||||||||
Open House Group Co. Ltd. | 10,200 | 528 | |||||||||
1,065 | |||||||||||
Utilities (0.1%): | |||||||||||
Chubu Electric Power Co., Inc. | 60,400 | 605 | |||||||||
Osaka Gas Co. Ltd. | 30,000 | 510 | |||||||||
1,115 | |||||||||||
60,503 | |||||||||||
Korea, Republic Of (0.8%): | |||||||||||
Communication Services (0.1%): | |||||||||||
AfreecaTV Co. Ltd. | 5,409 | 710 | |||||||||
JYP Entertainment Corp. | 8,855 | 310 | |||||||||
1,020 | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Danawa Co. Ltd. | 9,672 | 190 | |||||||||
Handsome Co. Ltd. (c) | 10,298 | 291 | |||||||||
Hyosung TNC Corp. | 730 | 259 | |||||||||
Shinsegae, Inc. | 1,795 | 353 | |||||||||
1,093 | |||||||||||
Financials (0.1%): | |||||||||||
DB Insurance Co. Ltd. | 7,995 | 401 | |||||||||
JB Financial Group Co. Ltd. | 58,374 | 398 | |||||||||
KIWOOM Securities Co. Ltd. (c) | 3,125 | 235 | |||||||||
1,034 | |||||||||||
Health Care (0.1%): | |||||||||||
Classys, Inc. | 19,691 | 257 | |||||||||
Hugel, Inc. | 2,115 | 242 | |||||||||
See notes to financial statements.
11
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
InBody Co. Ltd. | 12,563 | $ | 218 | ||||||||
I-Sens, Inc. | 9,544 | 223 | |||||||||
940 | |||||||||||
Industrials (0.1%): | |||||||||||
CJ Corp. | 3,267 | 219 | |||||||||
Hanwha Aerospace Co. Ltd. | 13,303 | 539 | |||||||||
Samsung Engineering Co. Ltd. (c) | 16,882 | 309 | |||||||||
1,067 | |||||||||||
Information Technology (0.2%): | |||||||||||
Hana Materials, Inc. | 9,284 | 440 | |||||||||
Innox Advanced Materials Co. Ltd. | 11,578 | 497 | |||||||||
Samwha Capacitor Co. Ltd. (c) | 5,768 | 318 | |||||||||
TES Co. Ltd. | 14,764 | 314 | |||||||||
1,569 | |||||||||||
Materials (0.1%): | |||||||||||
Kolon Industries, Inc. | 4,699 | 244 | |||||||||
PI Advanced Materials Co. Ltd. | 8,555 | 296 | |||||||||
540 | |||||||||||
7,263 | |||||||||||
Luxembourg (0.1%): | |||||||||||
Energy (0.1%): | |||||||||||
Tenaris SA | 49,207 | 600 | |||||||||
Materials (0.0%): (b) | |||||||||||
ArcelorMittal SA | 18,681 | 555 | |||||||||
1,155 | |||||||||||
Malaysia (0.1%): | |||||||||||
Financials (0.0%): (b) | |||||||||||
Hong Leong Financial Group Bhd | 85,000 | 371 | |||||||||
Information Technology (0.1%): | |||||||||||
Inari Amertron Bhd | 557,000 | 445 | |||||||||
816 | |||||||||||
Mexico (0.2%): | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Alsea SAB de CV (c) | 189,014 | 388 | |||||||||
Consumer Staples (0.0%): (b) | |||||||||||
Industrias Bachoco SAB de CV Class B | 92,822 | 319 | |||||||||
Financials (0.1%): | |||||||||||
Regional SAB de CV (a) | 69,571 | 399 | |||||||||
Industrials (0.0%): (b) | |||||||||||
Grupo Traxion SAB de CV (c) (d) | 176,359 | 281 | |||||||||
Real Estate (0.0%): (b) | |||||||||||
Corp Inmobiliaria Vesta SAB de CV | 198,732 | 376 | |||||||||
1,763 | |||||||||||
See notes to financial statements.
12
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Netherlands (1.8%): | |||||||||||
Communication Services (0.3%): | |||||||||||
Koninklijke KPN NV | 752,795 | $ | 2,483 | ||||||||
Consumer Staples (0.1%): | |||||||||||
Koninklijke Ahold Delhaize NV | 34,910 | 1,132 | |||||||||
Financials (0.5%): | |||||||||||
ING Groep NV | 279,326 | 4,131 | |||||||||
NN Group NV | 12,446 | 696 | |||||||||
4,827 | |||||||||||
Health Care (0.1%): | |||||||||||
QIAGEN NV (c) | 10,765 | 532 | |||||||||
Information Technology (0.5%): | |||||||||||
ASM International NV | 9,207 | 3,163 | |||||||||
STMicroelectronics NV | 23,773 | 1,117 | |||||||||
4,280 | |||||||||||
Materials (0.3%): | |||||||||||
LyondellBasell Industries NV Class A | 29,098 | 2,815 | |||||||||
16,069 | |||||||||||
New Zealand (0.2%): | |||||||||||
Health Care (0.2%): | |||||||||||
Fisher & Paykel Healthcare Corp. Ltd. | 91,213 | 1,678 | |||||||||
Norway (0.4%): | |||||||||||
Energy (0.2%): | |||||||||||
Aker BP ASA | 47,901 | 1,660 | |||||||||
Equinor ASA | 21,885 | 604 | |||||||||
2,264 | |||||||||||
Financials (0.2%): | |||||||||||
SpareBank 1 SMN | 87,042 | 1,442 | |||||||||
3,706 | |||||||||||
Peru (0.1%): | |||||||||||
Financials (0.1%): | |||||||||||
Intercorp Financial Services, Inc. | 15,272 | 482 | |||||||||
Philippines (0.0%): (b) | |||||||||||
Real Estate (0.0%): | |||||||||||
Filinvest Land, Inc. | 17,251,000 | 369 | |||||||||
Russian Federation (0.1%): | |||||||||||
Consumer Discretionary (0.0%): (b) | |||||||||||
Detsky Mir PJSC (d) | 214,920 | 285 | |||||||||
Financials (0.0%): (b) | |||||||||||
Bank St Petersburg PJSC | 372,110 | 379 | |||||||||
See notes to financial statements.
13
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Industrials (0.1%): | |||||||||||
Globaltrans Investment PLC Registered Shares, GDR | 54,896 | $ | 387 | ||||||||
1,051 | |||||||||||
Saudi Arabia (0.1%): | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Leejam Sports Co. JSC | 13,835 | 439 | |||||||||
United Electronics Co. | 9,365 | 350 | |||||||||
789 | |||||||||||
Singapore (0.2%): | |||||||||||
Consumer Staples (0.1%): | |||||||||||
Wilmar International Ltd. | 206,400 | 657 | |||||||||
Financials (0.1%): | |||||||||||
DBS Group Holdings Ltd. | 33,400 | 877 | |||||||||
1,534 | |||||||||||
South Africa (0.0%): (b) | |||||||||||
Industrials (0.0%): | |||||||||||
Raubex Group Ltd. | 145,480 | 354 | |||||||||
Spain (0.5%): | |||||||||||
Consumer Discretionary (0.0%): (b) | |||||||||||
Industria de Diseno Textil SA | 14,335 | 435 | |||||||||
Financials (0.4%): | |||||||||||
Banco Bilbao Vizcaya Argentaria SA | 443,340 | 2,830 | |||||||||
Banco Santander SA | 177,589 | 623 | |||||||||
3,453 | |||||||||||
Utilities (0.1%): | |||||||||||
Acciona SA | 3,119 | 543 | |||||||||
4,431 | |||||||||||
Sweden (1.1%): | |||||||||||
Consumer Staples (0.1%): | |||||||||||
Swedish Match AB | 113,532 | 879 | |||||||||
Financials (0.1%): | |||||||||||
Skandinaviska Enskilda Banken AB Class A | 46,979 | 608 | |||||||||
Health Care (0.0%): (b) | |||||||||||
Getinge AB B Shares | 12,589 | 492 | |||||||||
Industrials (0.7%): | |||||||||||
Atlas Copco AB Class B | 75,267 | 3,851 | |||||||||
Nibe Industrier AB Class B | 118,863 | 1,130 | |||||||||
Sandvik AB | 27,986 | 737 | |||||||||
Volvo AB Class B | 24,134 | 545 | |||||||||
6,263 | |||||||||||
Information Technology (0.1%): | |||||||||||
Telefonaktiebolaget LM Ericsson Class B | 52,993 | 662 | |||||||||
See notes to financial statements.
14
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Materials (0.1%): | |||||||||||
Boliden AB | 17,646 | $ | 715 | ||||||||
9,619 | |||||||||||
Switzerland (4.4%): | |||||||||||
Consumer Discretionary (0.4%): | |||||||||||
Cie Financiere Richemont SA Registered Shares | 7,646 | 1,112 | |||||||||
Garmin Ltd. | 17,884 | 2,225 | |||||||||
3,337 | |||||||||||
Consumer Staples (1.3%): | |||||||||||
Coca-Cola HBC AG | 71,126 | 2,355 | |||||||||
Nestle SA Registered Shares | 75,365 | 9,734 | |||||||||
12,089 | |||||||||||
Financials (0.9%): | |||||||||||
Julius Baer Group Ltd. | 10,470 | 685 | |||||||||
Partners Group Holding AG | 1,144 | 1,595 | |||||||||
Swiss Life Holding AG | 2,852 | 1,836 | |||||||||
UBS Group AG | 206,397 | 3,829 | |||||||||
7,945 | |||||||||||
Health Care (1.5%): | |||||||||||
Lonza Group AG Registered Shares | 611 | 421 | |||||||||
Novartis AG Registered Shares | 53,045 | 4,610 | |||||||||
Roche Holding AG | 21,897 | 8,476 | |||||||||
13,507 | |||||||||||
Industrials (0.2%): | |||||||||||
Adecco Group AG | 42,533 | 2,026 | |||||||||
Materials (0.1%): | |||||||||||
Holcim Ltd. | 9,801 | 531 | |||||||||
39,435 | |||||||||||
Taiwan (0.9%): | |||||||||||
Health Care (0.0%): (b) | |||||||||||
Pegavision Corp. | 19,000 | 275 | |||||||||
Industrials (0.2%): | |||||||||||
Chicony Power Technology Co. Ltd. | 179,000 | 512 | |||||||||
China Airlines Ltd. (c) | 497,000 | 433 | |||||||||
Turvo International Co. Ltd. | 99,000 | 378 | |||||||||
1,323 | |||||||||||
Information Technology (0.6%): | |||||||||||
Gold Circuit Electronics Ltd. | 138,000 | 384 | |||||||||
Holy Stone Enterprise Co. Ltd. | 80,000 | 338 | |||||||||
King Yuan Electronics Co. Ltd. | 338,000 | 560 | |||||||||
Lelon Electronics Corp. | 156,000 | 366 | |||||||||
Macronix International Co. Ltd. | 378,000 | 577 | |||||||||
Parade Technologies Ltd. | 10,000 | 738 | |||||||||
Phison Electronics Corp. | 22,000 | 365 | |||||||||
See notes to financial statements.
15
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Powertech Technology, Inc. | 124,000 | $ | 442 | ||||||||
Sigurd Microelectronics Corp. | 206,000 | 427 | |||||||||
Tripod Technology Corp. | 101,000 | 472 | |||||||||
Walsin Technology Corp. | 54,000 | 301 | |||||||||
4,970 | |||||||||||
Materials (0.1%): | |||||||||||
China General Plastics Corp. | 303,450 | 366 | |||||||||
Taiwan Hon Chuan Enterprise Co. Ltd. | 155,000 | 401 | |||||||||
Tung Ho Steel Enterprise Corp. | 216,410 | 534 | |||||||||
1,301 | |||||||||||
7,869 | |||||||||||
Thailand (0.1%): | |||||||||||
Financials (0.0%): (b) | |||||||||||
AEON Thana Sinsap Thailand PCL-NVDR | 58,700 | 324 | |||||||||
Health Care (0.0%): (b) | |||||||||||
Mega Lifesciences PCL | 286,300 | 401 | |||||||||
Real Estate (0.1%): | |||||||||||
AP Thailand PCL | 1,756,800 | 540 | |||||||||
1,265 | |||||||||||
Turkey (0.0%): (b) | |||||||||||
Industrials (0.0%): | |||||||||||
Turkiye Sise ve Cam Fabrikalari A/S | 280,561 | 292 | |||||||||
United Arab Emirates (0.1%): | |||||||||||
Industrials (0.1%): | |||||||||||
RAS Al Khaimah Ceramics | 526,426 | 430 | |||||||||
United Kingdom (5.4%): | |||||||||||
Communication Services (0.3%): | |||||||||||
ITV PLC (c) | 914,407 | 1,399 | |||||||||
Vodafone Group PLC | 509,690 | 895 | |||||||||
WPP PLC | 34,021 | 533 | |||||||||
2,827 | |||||||||||
Consumer Discretionary (0.4%): | |||||||||||
Barratt Developments PLC | 61,287 | 510 | |||||||||
Next PLC | 15,607 | 1,590 | |||||||||
Stellantis NV | 89,727 | 1,732 | |||||||||
3,832 | |||||||||||
Consumer Staples (0.8%): | |||||||||||
Diageo PLC | 67,428 | 3,402 | |||||||||
Imperial Brands PLC | 101,295 | 2,401 | |||||||||
Tesco PLC | 243,363 | 977 | |||||||||
Unilever PLC | 9,897 | 508 | |||||||||
7,288 | |||||||||||
See notes to financial statements.
16
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Energy (0.9%): | |||||||||||
| BP PLC | 715,731 | $ | 3,710 | ||||||||
Harbour Energy PLC (c) | 92,458 | 451 | |||||||||
Shell PLC | 136,073 | 3,495 | |||||||||
7,656 | |||||||||||
Financials (1.1%): | |||||||||||
| 3i Group PLC | 59,491 | 1,108 | |||||||||
Aon PLC Class A | 9,170 | 2,535 | |||||||||
Barclays PLC | 742,575 | 1,992 | |||||||||
Intermediate Capital Group PLC | 33,631 | 868 | |||||||||
Legal & General Group PLC | 661,592 | 2,586 | |||||||||
Standard Chartered PLC | 69,574 | 507 | |||||||||
9,596 | |||||||||||
Health Care (0.2%): | |||||||||||
AstraZeneca PLC | 6,557 | 763 | |||||||||
CVS Group PLC | 31,010 | 823 | |||||||||
Hikma Pharmaceuticals PLC | 19,900 | 559 | |||||||||
2,145 | |||||||||||
Industrials (0.6%): | |||||||||||
Ashtead Group PLC | 45,400 | 3,247 | |||||||||
Bunzl PLC | 12,697 | 476 | |||||||||
Ferguson PLC | 4,840 | 761 | |||||||||
Royal Mail PLC | 101,833 | 608 | |||||||||
5,092 | |||||||||||
Materials (1.0%): | |||||||||||
Anglo American PLC | 38,398 | 1,692 | |||||||||
Croda International PLC | 13,991 | 1,511 | |||||||||
Evraz PLC | 259,803 | 1,765 | |||||||||
Rio Tinto PLC | 59,061 | 4,162 | |||||||||
9,130 | |||||||||||
Real Estate (0.1%): | |||||||||||
Safestore Holdings PLC | 29,232 | 501 | |||||||||
48,067 | |||||||||||
United States (58.9%): | |||||||||||
Communication Services (4.3%): | |||||||||||
Alphabet, Inc. Class C (c) | 6,655 | 18,062 | |||||||||
AT&T, Inc. | 135,229 | 3,448 | |||||||||
Comcast Corp. Class A | 133,527 | 6,675 | |||||||||
Match Group, Inc. (c) | 16,796 | 1,893 | |||||||||
Netflix, Inc. (c) | 5,682 | 2,427 | |||||||||
Sirius XM Holdings, Inc. (a) | 384,489 | 2,445 | |||||||||
Verizon Communications, Inc. | 67,189 | 3,577 | |||||||||
Zillow Group, Inc. Class C (c) | 2,917 | 147 | |||||||||
38,674 | |||||||||||
See notes to financial statements.
17
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Consumer Discretionary (4.9%): | |||||||||||
AutoZone, Inc. (c) | 1,401 | $ | 2,783 | ||||||||
Best Buy Co., Inc. | 19,340 | 1,920 | |||||||||
eBay, Inc. | 37,976 | 2,281 | |||||||||
Ford Motor Co. | 286,309 | 5,812 | |||||||||
General Motors Co. (c) | 49,799 | 2,626 | |||||||||
Lennar Corp. Class A | 25,276 | 2,429 | |||||||||
Lowe's Cos., Inc. | 27,106 | 6,434 | |||||||||
McDonald's Corp. | 13,041 | 3,384 | |||||||||
O'Reilly Automotive, Inc. (c) | 4,094 | 2,668 | |||||||||
Target Corp. | 23,552 | 5,192 | |||||||||
The Home Depot, Inc. | 22,324 | 8,192 | |||||||||
43,721 | |||||||||||
Consumer Staples (3.8%): | |||||||||||
Altria Group, Inc. | 65,775 | 3,347 | |||||||||
Archer-Daniels-Midland Co. | 41,131 | 3,085 | |||||||||
Colgate-Palmolive Co. | 34,717 | 2,862 | |||||||||
Costco Wholesale Corp. | 6,781 | 3,425 | |||||||||
PepsiCo, Inc. | 21,117 | 3,664 | |||||||||
Philip Morris International, Inc. | 65,940 | 6,782 | |||||||||
The Clorox Co. | 15,238 | 2,558 | |||||||||
The Estee Lauder Cos., Inc. | 8,177 | 2,550 | |||||||||
Tyson Foods, Inc. Class A | 33,087 | 3,007 | |||||||||
Walgreens Boots Alliance, Inc. | 55,971 | 2,785 | |||||||||
34,065 | |||||||||||
Energy (2.7%): | |||||||||||
Chevron Corp. | 30,547 | 4,012 | |||||||||
ConocoPhillips | 77,945 | 6,907 | |||||||||
Devon Energy Corp. | 59,502 | 3,009 | |||||||||
EOG Resources, Inc. | 27,639 | 3,081 | |||||||||
Exxon Mobil Corp. | 57,012 | 4,331 | |||||||||
Marathon Petroleum Corp. | 39,969 | 2,868 | |||||||||
24,208 | |||||||||||
Financials (8.2%): | |||||||||||
AGNC Investment Corp. | 6,846 | 102 | |||||||||
Annaly Capital Management, Inc. | 18,240 | 144 | |||||||||
Bank of America Corp. | 85,885 | 3,963 | |||||||||
Berkshire Hathaway, Inc. Class B (c) | 14,673 | 4,593 | |||||||||
Blackstone, Inc. | 19,956 | 2,634 | |||||||||
Capital One Financial Corp. | 36,590 | 5,369 | |||||||||
Citigroup, Inc. | 46,915 | 3,055 | |||||||||
First Republic Bank | 12,133 | 2,106 | |||||||||
Marsh & McLennan Cos., Inc. | 17,296 | 2,657 | |||||||||
MetLife, Inc. | 44,366 | 2,975 | |||||||||
Morgan Stanley | 62,882 | 6,448 | |||||||||
MSCI, Inc. | 4,093 | 2,194 | |||||||||
Prudential Financial, Inc. | 49,993 | 5,578 | |||||||||
Regions Financial Corp. | 104,494 | 2,397 | |||||||||
See notes to financial statements.
18
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
S&P Global, Inc. | 6,310 | $ | 2,620 | ||||||||
SVB Financial Group (c) | 7,058 | 4,121 | |||||||||
Synchrony Financial | 55,099 | 2,347 | |||||||||
T. Rowe Price Group, Inc. | 12,087 | 1,867 | |||||||||
The Allstate Corp. | 46,286 | 5,585 | |||||||||
The Goldman Sachs Group, Inc. | 15,438 | 5,476 | |||||||||
The Progressive Corp. | 28,083 | 3,051 | |||||||||
Wells Fargo & Co. | 69,502 | 3,739 | |||||||||
73,021 | |||||||||||
Health Care (10.0%): | |||||||||||
AbbVie, Inc. | 29,918 | 4,095 | |||||||||
Agilent Technologies, Inc. | 16,918 | 2,357 | |||||||||
Amgen, Inc. | 28,426 | 6,457 | |||||||||
Anthem, Inc. | 7,070 | 3,118 | |||||||||
Biogen, Inc. (c) | 10,249 | 2,316 | |||||||||
Bristol-Myers Squibb Co. | 53,098 | 3,446 | |||||||||
Cigna Corp. | 13,456 | 3,101 | |||||||||
CVS Health Corp. | 33,548 | 3,573 | |||||||||
Danaher Corp. | 11,063 | 3,162 | |||||||||
Eli Lilly & Co. | 25,754 | 6,320 | |||||||||
Gilead Sciences, Inc. | 44,541 | 3,059 | |||||||||
HCA Healthcare, Inc. | 11,288 | 2,710 | |||||||||
IDEXX Laboratories, Inc. (c) | 8,575 | 4,350 | |||||||||
Intuitive Surgical, Inc. (c) | 8,361 | 2,376 | |||||||||
IQVIA Holdings, Inc. (c) | 10,730 | 2,628 | |||||||||
Johnson & Johnson | 53,279 | 9,179 | |||||||||
Merck & Co., Inc. | 82,338 | 6,709 | |||||||||
Mettler-Toledo International, Inc. (c) | 1,668 | 2,456 | |||||||||
Pfizer, Inc. | 78,540 | 4,138 | |||||||||
UnitedHealth Group, Inc. | 18,833 | 8,900 | |||||||||
Waters Corp. (c) | 7,242 | 2,318 | |||||||||
West Pharmaceutical Services, Inc. | 6,344 | 2,495 | |||||||||
89,263 | |||||||||||
Industrials (5.1%): | |||||||||||
3M Co. | 32,696 | 5,428 | |||||||||
Carrier Global Corp. | 49,064 | 2,339 | |||||||||
Cummins, Inc. | 11,607 | 2,564 | |||||||||
Fastenal Co. | 43,986 | 2,493 | |||||||||
General Dynamics Corp. | 13,810 | 2,929 | |||||||||
Illinois Tool Works, Inc. | 11,745 | 2,747 | |||||||||
Lockheed Martin Corp. | 17,019 | 6,623 | |||||||||
Northrop Grumman Corp. | 15,266 | 5,647 | |||||||||
Old Dominion Freight Line, Inc. | 7,514 | 2,269 | |||||||||
Otis Worldwide Corp. | 30,984 | 2,647 | |||||||||
PACCAR, Inc. | 30,840 | 2,868 | |||||||||
Republic Services, Inc. | 19,705 | 2,516 | |||||||||
Rockwell Automation, Inc. | 7,774 | 2,248 | |||||||||
W.W. Grainger, Inc. | 5,257 | 2,603 | |||||||||
45,921 | |||||||||||
See notes to financial statements.
19
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Information Technology (15.7%): | |||||||||||
Adobe, Inc. (c) | 5,680 | $ | 3,035 | ||||||||
Apple, Inc. | 174,507 | 30,500 | |||||||||
Applied Materials, Inc. | 40,349 | 5,575 | |||||||||
Broadcom, Inc. | 12,584 | 7,373 | |||||||||
Cisco Systems, Inc. | 123,376 | 6,868 | |||||||||
Cognizant Technology Solutions Corp. Class A | 34,470 | 2,945 | |||||||||
EPAM Systems, Inc. (c) | 3,722 | 1,772 | |||||||||
Fortinet, Inc. (c) | 7,743 | 2,302 | |||||||||
Gartner, Inc. (c) | 7,725 | 2,270 | |||||||||
HP, Inc. | 169,234 | 6,216 | |||||||||
Intel Corp. | 67,767 | 3,308 | |||||||||
International Business Machines Corp. | 25,256 | 3,374 | |||||||||
Intuit, Inc. | 5,231 | 2,904 | |||||||||
Mastercard, Inc. Class A | 10,832 | 4,185 | |||||||||
Micron Technology, Inc. | 39,079 | 3,215 | |||||||||
Microsoft Corp. | 75,204 | 23,387 | |||||||||
Motorola Solutions, Inc. | 10,732 | 2,489 | |||||||||
NVIDIA Corp. | 18,682 | 4,575 | |||||||||
Oracle Corp. | 69,695 | 5,657 | |||||||||
QUALCOMM, Inc. | 39,764 | 6,989 | |||||||||
Texas Instruments, Inc. | 33,713 | 6,051 | |||||||||
VeriSign, Inc. (c) | 10,894 | 2,366 | |||||||||
VMware, Inc. Class A | 21,015 | 2,700 | |||||||||
140,056 | |||||||||||
Materials (1.1%): | |||||||||||
Avery Dennison Corp. | 11,113 | 2,283 | |||||||||
Nucor Corp. | 23,292 | 2,362 | |||||||||
PPG Industries, Inc. | 16,143 | 2,521 | |||||||||
The Sherwin-Williams Co. | 8,618 | 2,469 | |||||||||
9,635 | |||||||||||
Real Estate (1.6%): | |||||||||||
Alexandria Real Estate Equities, Inc. | 1,828 | 356 | |||||||||
American Tower Corp. | 5,931 | 1,492 | |||||||||
AvalonBay Communities, Inc. | 1,821 | 445 | |||||||||
Boston Properties, Inc. | 1,934 | 217 | |||||||||
Camden Property Trust | 1,274 | 204 | |||||||||
CBRE Group, Inc. Class A (c) | 4,378 | 444 | |||||||||
Crown Castle International Corp. | 5,637 | 1,029 | |||||||||
Digital Realty Trust, Inc. | 3,673 | 548 | |||||||||
Duke Realty Corp. | 4,867 | 281 | |||||||||
Equinix, Inc. | 1,168 | 847 | |||||||||
Equity LifeStyle Properties, Inc. | 2,259 | 177 | |||||||||
Equity Residential | 4,634 | 411 | |||||||||
Essex Property Trust, Inc. | 848 | 282 | |||||||||
Extra Space Storage, Inc. | 1,744 | 346 | |||||||||
Healthpeak Properties, Inc. | 7,029 | 248 | |||||||||
Host Hotels & Resorts, Inc. (c) | 9,209 | 160 | |||||||||
Invitation Homes, Inc. | 7,404 | 311 | |||||||||
See notes to financial statements.
20
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Iron Mountain, Inc. | 3,766 | $ | 173 | ||||||||
Medical Properties Trust, Inc. | 7,672 | 174 | |||||||||
Mid-America Apartment Communities, Inc. | 1,493 | 308 | |||||||||
Omega Healthcare Investors, Inc. | 3,070 | 97 | |||||||||
Prologis, Inc. | 9,649 | 1,513 | |||||||||
Public Storage | 2,054 | 736 | |||||||||
Realty Income Corp. | 6,960 | 483 | �� | ||||||||
Regency Centers Corp. | 1,994 | 143 | |||||||||
SBA Communications Corp. | 1,426 | 464 | |||||||||
Simon Property Group, Inc. | 4,285 | 631 | |||||||||
Sun Communities, Inc. | 1,459 | 276 | |||||||||
UDR, Inc. | 3,872 | 220 | |||||||||
Ventas, Inc. | 5,132 | 272 | |||||||||
VICI Properties, Inc. (a) | 8,008 | 229 | |||||||||
Vornado Realty Trust | 2,123 | 87 | |||||||||
Welltower, Inc. | 5,407 | 468 | |||||||||
Weyerhaeuser Co. | 9,772 | 395 | |||||||||
WP Carey, Inc. | 2,321 | 180 | |||||||||
14,647 | |||||||||||
Utilities (1.5%): | |||||||||||
Exelon Corp. | 50,311 | 2,915 | |||||||||
FirstEnergy Corp. | 67,518 | 2,833 | |||||||||
NRG Energy, Inc. | 71,097 | 2,839 | |||||||||
The AES Corp. | 105,138 | 2,332 | |||||||||
UGI Corp. | 55,691 | 2,526 | |||||||||
13,445 | |||||||||||
526,656 | |||||||||||
Total Common Stocks (Cost $686,330) | 885,867 | ||||||||||
Exchange-Traded Funds (0.2%) | |||||||||||
United States (0.2%): | |||||||||||
iShares Core MSCI EAFE ETF | 24,072 | 1,724 | |||||||||
Total Exchange-Traded Funds (Cost $1,809) | 1,724 | ||||||||||
Collateral for Securities Loaned (0.7%)^ | |||||||||||
United States (0.7%): | |||||||||||
| Fidelity Investments Money Market Government Portfolio, Institutional Shares, 0.01% (f) | 6,151,557 | 6,152 | |||||||||
Total Collateral for Securities Loaned (Cost $6,152) | 6,152 | ||||||||||
Total Investments (Cost $694,291) — 100.0% | 893,743 | ||||||||||
Other assets in excess of liabilities — 0.0% (b) | 182 | ||||||||||
NET ASSETS — 100.00% | $ | 893,925 | |||||||||
^ Purchased with cash collateral from securities on loan.
(a) All or a portion of this security is on loan.
See notes to financial statements.
21
| USAA Mutual Funds Trust USAA Capital Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Unaudited)
(b) Amount represents less than 0.05% of net assets.
(c) Non-income producing security.
(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 (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of January 31, 2022, the fair value of these securities was $4,970 (thousands) and amounted to 0.6% of net assets.
(e) Rounds to less than $1 thousand.
(f) Rate disclosed is the daily yield on January 31, 2022.
ADR — American Depositary Receipt
ETF — Exchange-Traded Fund
GDR — Global Depositary Receipt
NVDR — Non-Voting Depository Receipt
PCL — Public Company Limited
PLC — Public Limited Company
See notes to financial statements.
22
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA Capital Growth Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $694,291) | $ | 893,743 | (a) | ||||
Foreign currency, at value (Cost $694) | 688 | ||||||
Cash | 5,291 | ||||||
Receivables: | |||||||
Interest and dividends | 721 | ||||||
Capital shares issued | 452 | ||||||
Investments sold | 61 | ||||||
Reclaims | 987 | ||||||
From Adviser | 2 | ||||||
Prepaid expenses | 15 | ||||||
Total Assets | 901,960 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 6,152 | ||||||
Investments purchased | 59 | ||||||
Capital shares redeemed | 605 | ||||||
Accrued foreign capital gains taxes | 282 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 581 | ||||||
Administration fees | 116 | ||||||
Custodian fees | 26 | ||||||
Transfer agent fees | 176 | ||||||
Compliance fees | — | (b) | |||||
Trustees' fees | 1 | ||||||
Other accrued expenses | 37 | ||||||
Total Liabilities | 8,035 | ||||||
Net Assets: | |||||||
Capital | 672,910 | ||||||
Total accumulated earnings/(loss) | 221,015 | ||||||
Net Assets | $ | 893,925 | |||||
Net Assets | |||||||
Fund Shares | $ | 891,843 | |||||
Institutional Shares | 2,082 | ||||||
Total | $ | 893,925 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 72,444 | ||||||
Institutional Shares | 168 | ||||||
Total | 72,612 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 12.31 | |||||
Institutional Shares | 12.42 | ||||||
(a) Includes $5,905 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.
23
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended January 31, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA Capital Growth Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 10,484 | |||||
Interest | 1 | ||||||
Securities lending (net of fees) | 41 | ||||||
Foreign tax withholding | (440 | ) | |||||
Total Income | 10,086 | ||||||
Expenses: | |||||||
Investment advisory fees | 3,301 | ||||||
Administration fees — Fund Shares | 687 | ||||||
Administration fees — Institutional Shares | 1 | ||||||
Sub-Administration fees | 39 | ||||||
Custodian fees | 91 | ||||||
Transfer agent fees — Fund Shares | 552 | ||||||
Transfer agent fees — Institutional Shares | 1 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 3 | ||||||
Legal and audit fees | 42 | ||||||
State registration and filing fees | 24 | ||||||
Other expenses | 64 | ||||||
Recoupment of prior expenses waived/reimbursed by Adviser | 56 | ||||||
Total Expenses | 4,885 | ||||||
Expenses waived/reimbursed by Adviser | (7 | ) | |||||
Net Expenses | 4,878 | ||||||
Net Investment Income (Loss) | 5,208 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities and foreign currency transactions | 48,301 | ||||||
Foreign taxes on realized gains | (102 | ) | |||||
| Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations | (39,235 | ) | |||||
Net change in accrued foreign taxes on unrealized gains | 157 | ||||||
Net realized/unrealized gains (losses) on investments | 9,121 | ||||||
Change in net assets resulting from operations | $ | 14,329 | |||||
See notes to financial statements.
24
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands)
USAA Capital Growth Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 5,208 | $ | 8,666 | |||||||
Net realized gains (losses) from investments | 48,199 | 90,229 | |||||||||
Net change in unrealized appreciation/depreciation on investments | (39,078 | ) | 136,449 | ||||||||
Change in net assets resulting from operations | 14,329 | 235,344 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (105,732 | ) | (24,838 | ) | |||||||
Institutional Shares | (271 | ) | (206 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (106,003 | ) | (25,044 | ) | |||||||
Change in net assets resulting from capital transactions | 84,066 | (75,428 | ) | ||||||||
Change in net assets | (7,608 | ) | 134,872 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 901,533 | 766,661 | |||||||||
End of period | $ | 893,925 | $ | 901,533 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 30,919 | $ | 53,898 | |||||||
Distributions reinvested | 105,029 | 24,634 | |||||||||
Cost of shares redeemed | (52,428 | ) | (142,355 | ) | |||||||
Total Fund Shares | $ | 83,520 | $ | (63,823 | ) | ||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 822 | $ | 1,635 | |||||||
Distributions reinvested | 264 | 32 | |||||||||
Cost of shares redeemed | (540 | ) | (13,272 | ) | |||||||
Total Institutional Shares | $ | 546 | $ | (11,605 | ) | ||||||
Change in net assets resulting from capital transactions | $ | 84,066 | $ | (75,428 | ) | ||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 2,302 | 4,393 | |||||||||
Reinvested | 8,241 | 2,105 | |||||||||
Redeemed | (3,902 | ) | (11,813 | ) | |||||||
Total Fund Shares | 6,641 | (5,315 | ) | ||||||||
Institutional Shares | |||||||||||
Issued | 61 | 128 | |||||||||
Reinvested | 20 | 3 | |||||||||
Redeemed | (41 | ) | (1,087 | ) | |||||||
Total Institutional Shares | 40 | (956 | ) | ||||||||
Change in Shares | 6,681 | (6,271 | ) | ||||||||
See notes to financial statements.
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 Capital Growth Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 13.67 | 0.08 | (d) | 0.17 | 0.25 | (0.16 | ) | (1.45 | ) | |||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 10.62 | 0.13 | (d) | 3.28 | 3.41 | (0.12 | ) | (0.24 | ) | |||||||||||||||||
2020 | $ | 11.36 | 0.14 | (d) | 0.13 | 0.27 | (0.17 | ) | (0.84 | ) | |||||||||||||||||
2019 | $ | 12.63 | 0.16 | (0.48 | ) | (0.32 | ) | (0.17 | ) | (0.78 | ) | ||||||||||||||||
2018 | $ | 11.67 | 0.15 | 1.21 | 1.36 | (0.12 | ) | (0.28 | ) | ||||||||||||||||||
2017 | $ | 9.97 | 0.14 | 1.71 | 1.85 | (0.15 | ) | — | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 13.81 | 0.10 | (d) | 0.18 | 0.28 | (0.22 | ) | (1.45 | ) | |||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 10.66 | 0.15 | (d) | 3.35 | 3.50 | (0.11 | ) | (0.24 | ) | |||||||||||||||||
2020 | $ | 11.39 | 0.14 | (d) | 0.14 | 0.28 | (0.17 | ) | (0.84 | ) | |||||||||||||||||
2019 | $ | 12.66 | 0.23 | (d) | (0.55 | ) | (0.32 | ) | (0.17 | ) | (0.78 | ) | |||||||||||||||
2018 | $ | 11.70 | 0.17 | 1.20 | 1.37 | (0.13 | ) | (0.28 | ) | ||||||||||||||||||
2017 | $ | 9.98 | 0.15 | 1.71 | 1.86 | (0.14 | ) | — | |||||||||||||||||||
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019, and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(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.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects a return to normal trading levels after a prior year transition.
(f) Reflects increased trading activity due to current year transition or asset allocation shift.
(g) Reflects overall increase in purchases and sales of securities.
(h) Reflects overall decrease in purchases and sales of securities.
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 | 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, 2022 (Unaudited): | (1.61 | ) | $ | 12.31 | 1.59 | % | 1.06 | % | 1.13 | % | 1.06 | % | $ | 891,843 | 33 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.36 | ) | $ | 13.67 | 32.74 | % | 1.07 | % | 1.04 | % | 1.07 | % | $ | 899,767 | 67 | %(e) | |||||||||||||||||||
2020 | (1.01 | ) | $ | 10.62 | 2.14 | % | 1.12 | % | 1.35 | % | 1.13 | % | $ | 755,102 | 152 | %(f) | |||||||||||||||||||
2019 | (0.95 | ) | $ | 11.36 | (1.82 | )% | 1.13 | % | 1.43 | % | 1.13 | % | $ | 826,325 | 54 | %(g) | |||||||||||||||||||
2018 | (0.40 | ) | $ | 12.63 | 11.76 | % | 1.15 | % | 1.25 | % | 1.15 | % | $ | 902,670 | 22 | %(h) | |||||||||||||||||||
2017 | (0.15 | ) | $ | 11.67 | 18.75 | % | 1.21 | % | 1.27 | % | 1.21 | % | $ | 836,515 | 55 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (1.67 | ) | $ | 12.42 | 1.76 | % | 0.72 | % | 1.48 | % | 1.33 | % | $ | 2,082 | 33 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.35 | ) | $ | 13.81 | 33.45 | % | 0.77 | % | 1.30 | % | 0.92 | % | $ | 1,766 | 67 | %(e) | |||||||||||||||||||
2020 | (1.01 | ) | $ | 10.66 | 2.20 | % | 1.01 | % | 1.31 | % | 1.01 | % | $ | 11,559 | 152 | %(f) | |||||||||||||||||||
2019 | (0.95 | ) | $ | 11.39 | (1.77 | )% | 1.03 | % | 2.04 | % | 1.03 | % | $ | 110,430 | 54 | %(g) | |||||||||||||||||||
2018 | (0.41 | ) | $ | 12.66 | 11.84 | % | 1.10 | % | 1.38 | % | 1.21 | % | $ | 7,961 | 22 | %(h) | |||||||||||||||||||
2017 | (0.14 | ) | $ | 11.70 | 18.79 | % | 1.10 | % | 1.38 | % | 1.47 | % | $ | 5,762 | 55 | % | |||||||||||||||||||
See notes to financial statements.
27
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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 U.S. Generally Accepted Accounting Principles ("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 risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
28
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs") and American Depositary Receipts ("ADRs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq 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 are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically 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 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 NAV is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. The valuations are categorized as Level 2 in the fair value hierarchy.
A summary of the valuations as of January 31, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 574,444 | $ | 311,423 | $ | — | $ | 885,867 | |||||||||||
Exchange-Traded Funds | 1,724 | — | — | 1,724 | |||||||||||||||
Collateral for Securities Loaned | 6,152 | — | — | 6,152 | |||||||||||||||
Total | $ | 582,320 | $ | 311,423 | $ | — | $ | 893,743 | |||||||||||
For the six months ended January 31, 2022, there were no transfers in or out of Level 3 in the 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, 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 often 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 the ETF is 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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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
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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, 2022, 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 or 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 discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
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 and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially 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 generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund effectively does not have control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. 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
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
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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. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk 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 repledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2022.
| Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
| $ | 5,905 | $ | — | $ | 6,152 | ||||||
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 investment securities and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, are disclosed as Net realized gains (losses) from investment securities and foreign currency transactions 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.
The Fund filed for additional European Union reclaims related to prior years. These reclaims are recorded when the amount is known and there are no significant uncertainties on collectability. For the six months ended January 31, 2022, the Fund has $174 thousand receivable for previously recognized reclaims, of which $4 thousand is related to interest on the filed reclaims.
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.
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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 years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
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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 an 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:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended January 31, 2022, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 293,487 | $ | 310,541 | ||||
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The 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 www.vcm.com. As of January 31, 2022, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Equity Fund | 0.0 | * | |||||
USAA Target Retirement Income Fund | 0.0 | * | |||||
* Amount is less than 0.05%
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
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The performance adjustment for each share class is accrued daily and 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 the largest funds within the Lipper Global Funds category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
| Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
| +/- 100 to 400 | +/- 4 | ||||||
| +/- 401 to 700 | +/- 5 | ||||||
| +/- 701 and greater | +/- 6 | ||||||
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective 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.
For the period August 1, 2021, to January 31, 2022, performance adjustments were $(136) and $(4) for Fund Shares and Institutional Shares, in thousands, respectively. Performance adjustments were (0.03)% and (0.38)% for Fund Shares and Institutional Shares, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
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, 2022, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15% and 0.10%, which is based on the Fund's average daily net assets of the Fund Shares and of the Institutional Shares, respectively. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
the Adviser, which pays the compensation of the CCO and support staff. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA 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 fees for the 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 and paid to VCTA for the six months ended January 31, 2022, 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 Services, 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 and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 limits for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, 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. As of January 31, 2022, the expense limits (excluding voluntary waivers) were 1.12% and 1.10% for Fund Shares and Institutional Shares, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of January 31, 2022, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at January 31, 2022.
| Expires 2024 | Expires 2025 | Total | |||||||||
| $ | 10 | $ | 7 | $ | 17 | ||||||
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
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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, 2022.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
Equity Risk — The values of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general market, economic and political conditions and other factors. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or may last for extended periods.
Foreign Securities Risk — 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. Global markets, or those in a particular region, may all react in similar fashion to important political, economic, or other developments. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable and make such investments riskier and more volatile.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended January 31, 2022, Citibank received 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 London Interbank Offered Rate ("LIBOR") plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
The Fund had no borrowings under the Line of Credit agreement during the six months ended January 31, 2022.
Interfund Lending:
The Trust and the 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 Funds Complex that is permitted to participate in the Facility, 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, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. 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, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending.
The Fund did not utilize or participate in the Facility during the six months ended January 31, 2022.
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, 2022.
As of July 31, 2021, the Fund had no capital loss carryforwards for federal income tax purposes.
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USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
(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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
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. Form N-PORT is available on the SEC's website at www.sec.gov.
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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21- 1/31/22* | Hypothetical Expenses Paid During Period 8/1/21- 1/31/22* | Annualized Expense Ratio During Period 8/1/21- 1/31/22 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,015.90 | $ | 1,019.86 | $ | 5.39 | $ | 5.40 | 1.06 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,017.60 | 1,021.58 | 3.66 | 3.67 | 0.72 | % | ||||||||||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
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USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
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Considerations of the Board in Continuing the Investment Advisory Agreement
USAA Capital Growth Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement was approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and the Adviser, and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser. At the meeting at which the renewal of the Advisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder
38
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services and the effects of any performance adjustment1, as well as any fee waivers and reimbursements — was below the median of its expense group and its expense universe. The data indicated that the Fund's total expenses, including after any reimbursements, were equal to the median of its expense group and below the median of its expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund.
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total returns relative to its Lipper index and other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was below the average of its performance universe for the one- and three-year periods ended September 30, 2021, and was above the average of its performance universe for the five- and ten-year periods ended September 30, 2021, and was below its Lipper index for the one-year period ended September 30, 2021, and was above its Lipper index for the three-, five- and ten-year periods ended September 30, 2021.
1 The Adviser previously agreed that no performance adjustment (positive or negative) would be made to the amount payable to the Adviser from July 1, 2019, through June 30, 2020.
39
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser reimbursed or waived a portion of its management fees to the Fund. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board considered whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in any economies of scale. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board also considered the effect of the change in size, if any, of each of the Fund's classes on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800) 235-8396 | ||||||
36843-0322
January 31, 2022
Semi Annual Report
USAA Aggressive Growth Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 6 | ||||||
Statement of Operations | 7 | ||||||
Statements of Changes in Net Assets | 8 | ||||||
Financial Highlights | 10 | ||||||
Notes to Financial Statements | 12 | ||||||
Supplemental Information | 20 | ||||||
Proxy Voting and Portfolio Holdings Information | 20 | ||||||
Expense Examples | 20 | ||||||
Advisory Contract Approval | 21 | ||||||
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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA Aggressive Growth Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks capital appreciation.
Top 10 Equity Holdings*:
January 31, 2022
(% of Net Assets)
Microsoft Corp. | 7.8 | % | |||||
Alphabet, Inc. Class C | 7.5 | % | |||||
Amazon.com, Inc. | 6.0 | % | |||||
Apple, Inc. | 5.4 | % | |||||
NVIDIA Corp. | 5.3 | % | |||||
Visa, Inc. Class A | 4.2 | % | |||||
ServiceNow, Inc. | 3.1 | % | |||||
Meta Platforms, Inc. Class A | 2.4 | % | |||||
Zoetis, Inc. | 2.3 | % | |||||
Tesla, Inc. | 2.2 | % | |||||
Sector Allocation*:
January 31, 2022
(% of Net Assets)
* Does not include futures contracts, 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%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA Aggressive Growth Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (97.3%) | |||||||||||
Communication Services (10.8%): | |||||||||||
Alphabet, Inc. Class C (a) | 56,037 | $ | 152,083 | ||||||||
Meta Platforms, Inc. Class A (a) | 153,086 | 47,956 | |||||||||
Netflix, Inc. (a) | 21,334 | 9,112 | |||||||||
Twitter, Inc. (a) | 278,383 | 10,442 | |||||||||
219,593 | |||||||||||
Communications Equipment (1.2%): | |||||||||||
Arista Networks, Inc. (a) | 60,899 | 7,570 | |||||||||
Motorola Solutions, Inc. | 74,920 | 17,377 | |||||||||
24,947 | |||||||||||
Consumer Discretionary (20.0%): | |||||||||||
Airbnb, Inc. Class A (a) | 135,710 | 20,895 | |||||||||
Amazon.com, Inc. (a) | 40,759 | 121,929 | |||||||||
Aptiv PLC (a) | 235,719 | 32,194 | |||||||||
Burlington Stores, Inc. (a) | 83,690 | 19,829 | |||||||||
Chipotle Mexican Grill, Inc. (a) | 5,884 | 8,741 | |||||||||
Lululemon Athletica, Inc. (a) | 128,579 | 42,915 | |||||||||
NIKE, Inc. Class B | 198,568 | 29,402 | |||||||||
O'Reilly Automotive, Inc. (a) | 39,601 | 25,810 | |||||||||
Target Corp. | 52,822 | 11,644 | |||||||||
Tesla, Inc. (a) | 46,607 | 43,658 | |||||||||
The Home Depot, Inc. | 90,204 | 33,103 | |||||||||
Ulta Beauty, Inc. (a) | 43,281 | 15,743 | |||||||||
405,863 | |||||||||||
Consumer Staples (0.7%): | |||||||||||
Constellation Brands, Inc. Class A | 62,356 | 14,825 | |||||||||
Electronic Equipment, Instruments & Components (0.9%): | |||||||||||
CDW Corp. | 96,024 | 18,153 | |||||||||
Energy (0.6%): | |||||||||||
Diamondback Energy, Inc. | 88,283 | 11,138 | |||||||||
Financials (2.3%): | |||||||||||
LPL Financial Holdings, Inc. | 104,448 | 17,999 | |||||||||
MSCI, Inc. | 51,524 | 27,623 | |||||||||
45,622 | |||||||||||
Health Care (11.7%): | |||||||||||
Align Technology, Inc. (a) | 66,725 | 33,026 | |||||||||
Charles River Laboratories International, Inc. (a) | 35,902 | 11,839 | |||||||||
Dexcom, Inc. (a) | 57,468 | 24,739 | |||||||||
Jazz Pharmaceuticals PLC (a) | 81,376 | 11,304 | |||||||||
Tenet Healthcare Corp. (a) | 96,305 | 7,138 | |||||||||
Thermo Fisher Scientific, Inc. | 69,262 | 40,262 | |||||||||
Veeva Systems, Inc. Class A (a) | 93,509 | 22,118 | |||||||||
Vertex Pharmaceuticals, Inc. (a) | 107,882 | 26,221 | |||||||||
West Pharmaceutical Services, Inc. | 35,557 | 13,982 | |||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA Aggressive Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Zoetis, Inc. | 228,035 | $ | 45,559 | ||||||||
236,188 | |||||||||||
Industrials (6.3%): | |||||||||||
Carrier Global Corp. | 231,263 | 11,027 | |||||||||
CoStar Group, Inc. (a) | 241,718 | 16,959 | |||||||||
Generac Holdings, Inc. (a) | 114,340 | 32,287 | |||||||||
IDEX Corp. | 79,036 | 17,028 | |||||||||
IHS Markit Ltd. | 104,652 | 12,222 | |||||||||
Kornit Digital Ltd. (a) | 122,685 | 12,889 | |||||||||
Uber Technologies, Inc. (a) | 693,480 | 25,936 | |||||||||
128,348 | |||||||||||
IT Services (9.5%): | |||||||||||
EPAM Systems, Inc. (a) | 51,323 | 24,437 | |||||||||
Gartner, Inc. (a) | 39,922 | 11,733 | |||||||||
PayPal Holdings, Inc. (a) | 233,868 | 40,211 | |||||||||
Shopify, Inc. Class A (a) | 18,936 | 18,259 | |||||||||
Twilio, Inc. Class A (a) | 56,458 | 11,637 | |||||||||
Visa, Inc. Class A | 380,300 | 86,012 | |||||||||
192,289 | |||||||||||
Real Estate (0.8%): | |||||||||||
Extra Space Storage, Inc. | 41,158 | 8,157 | |||||||||
SBA Communications Corp. | 23,099 | 7,517 | |||||||||
15,674 | |||||||||||
Semiconductors & Semiconductor Equipment (7.6%): | |||||||||||
Advanced Micro Devices, Inc. (a) | 81,964 | 9,365 | |||||||||
Lam Research Corp. | 38,083 | 22,466 | |||||||||
Marvell Technology, Inc. | 208,574 | 14,892 | |||||||||
NVIDIA Corp. | 439,206 | 107,544 | |||||||||
154,267 | |||||||||||
Software (19.5%): | |||||||||||
Adobe, Inc. (a) | 68,917 | 36,822 | |||||||||
AppLovin Corp. Class A (a) (b) | 137,208 | 8,839 | |||||||||
Cadence Design Systems, Inc. (a) | 179,431 | 27,299 | |||||||||
Crowdstrike Holdings, Inc. Class A (a) | 84,236 | 15,216 | |||||||||
Fair Isaac Corp. (a) | 25,843 | 12,792 | |||||||||
Microsoft Corp. | 506,314 | 157,453 | |||||||||
Palo Alto Networks, Inc. (a) | 35,566 | 18,402 | |||||||||
RingCentral, Inc. Class A (a) | 51,899 | 9,160 | |||||||||
ServiceNow, Inc. (a) | 107,531 | 62,989 | |||||||||
Synopsys, Inc. (a) | 50,611 | 15,715 | |||||||||
The Trade Desk, Inc. Class A (a) | 201,302 | 13,999 | |||||||||
Workday, Inc. Class A (a) | 63,593 | 16,090 | |||||||||
394,776 | |||||||||||
Technology Hardware, Storage & Peripherals (5.4%): | |||||||||||
Apple, Inc. | 624,708 | 109,187 | |||||||||
Total Common Stocks (Cost $1,153,123) | 1,970,870 | ||||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA Aggressive Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Collateral for Securities Loaned (0.3%)^ | |||||||||||
| Fidelity Investments Money Market Government Portfolio, Institutional Shares, 0.01% (c) | 5,896,800 | $ | 5,897 | ||||||||
Total Collateral for Securities Loaned (Cost $5,897) | 5,897 | ||||||||||
Total Investments (Cost $1,159,020) — 97.6% | 1,976,767 | ||||||||||
Other assets in excess of liabilities — 2.4% | 48,332 | ||||||||||
NET ASSETS — 100.00% | $ | 2,025,099 | |||||||||
At January 31, 2022, the Fund's investments in foreign securities were 6.4% of net assets.
^ 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, 2022.
PLC — Public Limited Company
See notes to financial statements.
5
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA Aggressive Growth Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,159,020) | $ | 1,976,767 | (a) | ||||
Cash | 68,949 | ||||||
Receivables: | |||||||
Interest and dividends | 137 | ||||||
Capital shares issued | 1,191 | ||||||
Investments sold | 10,927 | ||||||
From Adviser | 1 | ||||||
Prepaid expenses | 26 | ||||||
Total Assets | 2,057,998 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 5,897 | ||||||
Investments purchased | 24,368 | ||||||
Capital shares redeemed | 1,367 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 660 | ||||||
Administration fees | 266 | ||||||
Custodian fees | 15 | ||||||
Transfer agent fees | 254 | ||||||
Compliance fees | 1 | ||||||
Trustees' fees | — | (b) | |||||
Other accrued expenses | 71 | ||||||
Total Liabilities | 32,899 | ||||||
Net Assets: | |||||||
Capital | 1,213,184 | ||||||
Total accumulated earnings/(loss) | 811,915 | ||||||
Net Assets | $ | 2,025,099 | |||||
Net Assets | |||||||
Fund Shares | $ | 2,007,090 | |||||
Institutional Shares | 18,009 | ||||||
Total | $ | 2,025,099 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 40,689 | ||||||
Institutional Shares | 358 | ||||||
Total | 41,047 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 49.33 | |||||
Institutional Shares | 50.26 | ||||||
(a) Includes $6,030 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.
6
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended January 31, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA Aggressive Growth Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 2,753 | |||||
Interest | 5 | ||||||
Securities lending (net of fees) | 9 | ||||||
Total Income | 2,767 | ||||||
Expenses: | |||||||
Investment advisory fees | 4,290 | ||||||
Administration fees — Fund Shares | 1,719 | ||||||
Administration fees — Institutional Shares | 11 | ||||||
Sub-Administration fees | 20 | ||||||
Custodian fees | 49 | ||||||
Transfer agent fees — Fund Shares | 793 | ||||||
Transfer agent fees — Institutional Shares | 11 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 8 | ||||||
Legal and audit fees | 31 | ||||||
State registration and filing fees | 35 | ||||||
Interfund lending fees | — | (a) | |||||
Other expenses | 98 | ||||||
Total Expenses | 7,089 | ||||||
Expenses waived/reimbursed by Adviser | (3 | ) | |||||
Net Expenses | 7,086 | ||||||
Net Investment Income (Loss) | (4,319 | ) | |||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 62,967 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | (284,104 | ) | |||||
Net realized/unrealized gains (losses) on investments | (221,137 | ) | |||||
Change in net assets resulting from operations | $ | (225,456 | ) | ||||
(a) Rounds to less than $1 thousand.
See notes to financial statements.
7
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands)
USAA Aggressive Growth Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | (4,319 | ) | $ | (5,807 | ) | |||||
Net realized gains (losses) from investments | 62,967 | 236,099 | |||||||||
| Net change in unrealized appreciation/depreciation on investments | (284,104 | ) | 369,249 | ||||||||
Change in net assets resulting from operations | (225,456 | ) | 599,541 | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (234,710 | ) | (3,755 | ) | |||||||
Institutional Shares | (2,113 | ) | (25 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (236,823 | ) | (3,780 | ) | |||||||
Change in net assets resulting from capital transactions | 159,710 | (141,662 | ) | ||||||||
Change in net assets | (302,569 | ) | 454,099 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 2,327,668 | 1,873,569 | |||||||||
End of period | $ | 2,025,099 | $ | 2,327,668 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 75,137 | $ | 177,645 | |||||||
Distributions reinvested | 231,580 | 3,705 | |||||||||
Cost of shares redeemed | (148,767 | ) | (326,682 | ) | |||||||
Total Fund Shares | $ | 157,950 | $ | (145,332 | ) | ||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 2,409 | $ | 8,395 | |||||||
Distributions reinvested | 2,069 | 24 | |||||||||
Cost of shares redeemed | (2,718 | ) | (4,749 | ) | |||||||
Total Institutional Shares | $ | 1,760 | $ | 3,670 | |||||||
Change in net assets resulting from capital transactions | $ | 159,710 | $ | (141,662 | ) | ||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,269 | 3,315 | |||||||||
Reinvested | 4,259 | 70 | |||||||||
Redeemed | (2,525 | ) | (6,148 | ) | |||||||
Total Fund Shares | 3,003 | (2,763 | ) | ||||||||
Institutional Shares | |||||||||||
Issued | 38 | 159 | |||||||||
Reinvested | 37 | — | (a) | ||||||||
Redeemed | (45 | ) | (93 | ) | |||||||
Total Institutional Shares | 30 | 66 | |||||||||
Change in Shares | 3,033 | (2,697 | ) | ||||||||
(a) Rounds to less than 1 thousand shares.
See notes to financial statements.
8
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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, 2022 (Unaudited): | $ | 61.22 | (0.11 | )(d) | (5.42 | ) | (5.53 | ) | — | (6.36 | ) | ||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 46.02 | (0.15 | )(d) | 15.45 | 15.30 | — | (0.10 | ) | ||||||||||||||||||
2020 | $ | 43.91 | (0.07 | )(d) | 9.82 | 9.75 | (0.04 | ) | (7.60 | ) | |||||||||||||||||
2019 | $ | 48.92 | 0.13 | 1.72 | 1.85 | (0.08 | ) | (6.78 | ) | ||||||||||||||||||
2018 | $ | 43.96 | 0.19 | 8.79 | 8.98 | (0.19 | ) | (3.83 | ) | ||||||||||||||||||
2017 | $ | 40.02 | 0.36 | 6.30 | 6.66 | (0.33 | ) | (2.39 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 62.27 | (0.13 | )(d) | (5.52 | ) | (5.65 | ) | — | (6.36 | ) | ||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 46.82 | (0.17 | )(d) | 15.72 | 15.55 | — | (0.10 | ) | ||||||||||||||||||
2020 | $ | 44.54 | (0.05 | )(d) | 9.98 | 9.93 | (0.05 | ) | (7.60 | ) | |||||||||||||||||
2019 | $ | 49.55 | 0.14 | (d) | 1.75 | 1.89 | (0.12 | ) | (6.78 | ) | |||||||||||||||||
2018 | $ | 44.36 | 0.14 | (d) | 8.93 | 9.07 | (0.05 | ) | (3.83 | ) | |||||||||||||||||
2017 | $ | 40.39 | 0.21 | (d) | 6.52 | 6.73 | (0.37 | ) | (2.39 | ) | |||||||||||||||||
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019, and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(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.
(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, 2022 (Unaudited): | (6.36 | ) | $ | 49.33 | (9.99 | )% | 0.61 | % | (0.37 | )% | 0.61 | % | $ | 2,007,090 | 26 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.10 | ) | $ | 61.22 | 33.27 | % | 0.63 | % | (0.28 | )% | 0.63 | % | $ | 2,307,263 | 46 | % | |||||||||||||||||||
2020 | (7.64 | ) | $ | 46.02 | 26.30 | % | 0.72 | % | (0.17 | )% | 0.72 | % | $ | 1,861,282 | 64 | % | |||||||||||||||||||
2019 | (6.86 | ) | $ | 43.91 | 5.53 | % | 0.72 | % | 0.30 | % | 0.72 | % | $ | 1,624,319 | 78 | % | |||||||||||||||||||
2018 | (4.02 | ) | $ | 48.92 | 21.57 | % | 0.75 | %(e) | 0.32 | % | 0.75 | %(e) | $ | 1,592,944 | 57 | % | |||||||||||||||||||
2017 | (2.72 | ) | $ | 43.96 | 17.92 | % | 0.81 | %(e) | 0.57 | % | 0.81 | %(e) | $ | 1,340,385 | 51 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (6.36 | ) | $ | 50.26 | (10.02 | )% | 0.67 | % | (0.43 | )% | 0.70 | % | $ | 18,009 | 26 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.10 | ) | $ | 62.27 | 33.24 | % | 0.66 | % | (0.32 | )% | 0.73 | % | $ | 20,405 | 46 | % | |||||||||||||||||||
2020 | (7.65 | ) | $ | 46.82 | 26.33 | % | 0.70 | % | (0.13 | )% | 0.81 | % | $ | 12,287 | 64 | % | |||||||||||||||||||
2019 | (6.90 | ) | $ | 44.54 | 5.56 | % | 0.70 | % | 0.32 | % | 0.83 | % | $ | 11,841 | 78 | % | |||||||||||||||||||
2018 | (3.88 | ) | $ | 49.55 | 21.54 | % | 0.75 | %(e)(f) | 0.30 | % | 0.94 | %(e) | $ | 11,379 | 57 | % | |||||||||||||||||||
2017 | (2.76 | ) | $ | 44.36 | 17.94 | % | 0.73 | %(e) | 0.54 | % | 0.73 | %(e) | $ | 5,587 | 51 | % | |||||||||||||||||||
See notes to financial statements.
11
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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 U.S. Generally Accepted Accounting Principles ("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 risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "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"), are valued at the closing price on the exchange or system where the security is principally traded,
12
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
if available, or at the Nasdaq 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 are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically 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 NAV to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 1,970,870 | $ | — | $ | — | $ | 1,970,870 | |||||||||||
Collateral for Securities Loaned | 5,897 | — | — | 5,897 | |||||||||||||||
Total | $ | 1,976,767 | $ | — | $ | — | $ | 1,976,767 | |||||||||||
For the six months ended January 31, 2022, there were no transfers in or out of Level 3 in the 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:
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 or 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 discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
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 and banks, to earn additional
13
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
income, net of income retained by Citibank. Borrowers are required to initially 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 generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund effectively does not have control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. 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. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk 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 repledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2022.
| Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
| $ | 6,030 | $ | — | $ | 5,897 | ||||||
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.
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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 years, which includes the current fiscal tax year end). 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 an 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.
14
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended January 31, 2022, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 588,705 | $ | 689,833 | ||||
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The 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 www.vcm.com. As of January 31, 2022, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 0.1 | ||||||
USAA Cornerstone Equity Fund | 0.5 | ||||||
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned 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 first $750 million of the Fund's average daily net assets, 0.40% of that portion of the Fund's average daily net assets over $750 million but not over $1.5 billion, and 0.33% of that portion of the Fund's average daily net assets over $1.5 billion. Amounts incurred and paid to VCM for the six months ended January 31, 2022, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and 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 the largest funds within the Lipper Large-Cap Growth Funds category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
| Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
| +/- 100 to 400 | +/- 4 | ||||||
| +/- 401 to 700 | +/- 5 | ||||||
| +/- 701 and greater | +/- 6 | ||||||
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
15
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective 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.
For the period August 1, 2021, to January 31, 2022, performance adjustments were $(444) and $(3) for Fund Shares and Institutional Shares, in thousands, respectively. Performance adjustments were (0.04)% and (0.03)% for Fund Shares and Institutional Shares, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
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, 2022, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15% and 0.10%, which is based on the Fund's average daily net assets of the Fund Shares and of the Institutional Shares, respectively. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA 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 fees for the 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 and paid to VCTA for the six months ended January 31, 2022, are reflected on the Statement of Operations as Transfer agent fees.
16
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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 Services, 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 and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 limits for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, 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. As of January 31, 2022, the expense limits (excluding voluntary waivers) were 0.75% and 0.70% for Fund Shares and Institutional Shares, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of January 31, 2022, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at January 31, 2022.
| Expires 2022 | Expires 2023 | Expires 2024 | Expires 2025 | Total | |||||||||||||||
| $ | 3 | $ | 13 | $ | 10 | $ | 3 | $ | 29 | ||||||||||
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, 2022.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other
17
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
Equity Risk — The values of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general market, economic and political conditions and other factors. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or may last for extended periods.
Large-Capitalization Stock Risk — 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.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended January 31, 2022, Citibank received 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 London Interbank Offered Rate ("LIBOR") plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected 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, 2022.
Interfund Lending:
The Trust and the 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 Funds Complex that is permitted to participate in the Facility, 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, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. 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, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
by the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending.
The average borrowing or lending for the days outstanding and average interest rate for the Fund during the six months ended January 31, 2022, were as follows (amounts in thousands):
| Borrower or Lender | Amount Outstanding at January 31, 2022 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
| Borrower | $ | — | $ | 1,682 | 1 | 0.57 | % | $ | 1,682 | ||||||||||||||
* For the six months ended January 31, 2022, 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, 2022.
As of July 31, 2021, the Fund had no capital loss carryforwards for federal income tax purposes.
19
USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
(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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
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. Form N-PORT is available on the SEC's website at www.sec.gov.
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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21- 1/31/22* | Hypothetical Expenses Paid During Period 8/1/21- 1/31/22* | Annualized Expense Ratio During Period 8/1/21- 1/31/22 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 900.10 | $ | 1,022.13 | $ | 2.92 | $ | 3.11 | 0.61 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 899.80 | 1,021.83 | 3.21 | 3.41 | 0.67 | % | ||||||||||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
20
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Considerations of the Board in Continuing the Investment Advisory Agreement
USAA Aggressive Growth Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement was approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and the Adviser, and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser. At the meeting at which the renewal of the Advisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.
21
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services and the effects of any performance adjustment1, as well as any fee waivers and reimbursements — was below the median of its expense group and its expense universe. The data indicated that the Fund's total expenses, including after any reimbursements, were below the median of its expense group and its expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund.
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total returns relative to its Lipper index and other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was below the average of its performance universe and its Lipper index for the one-, three-, five- and ten-year periods ended September 30, 2021. The Board took into account management's discussion of the Fund's performance, including the reasons for the Fund's underperformance.
1 The Adviser previously agreed that no performance adjustment (positive or negative) would be made to the amount payable to the Adviser from July 1, 2019, through June 30, 2020.
22
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser reimbursed or waived a portion of its management fees to the Fund. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board noted that the Fund has advisory fee breakpoints that allow the Fund to participate in economies of scale and that such economies of scale were currently reflected in the advisory fee. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board also considered the effect of the change in size, if any, of each of the Fund's classes on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices and the Adviser is appropriately monitoring the Fund's performance; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
23
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800) 235-8396 | ||||||
23418-0322
JANUARY 31, 2022
Semi Annual Report
USAA Growth Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 6 | ||||||
Statement of Operations | 7 | ||||||
Statements of Changes in Net Assets | 8 | ||||||
Financial Highlights | 10 | ||||||
Notes to Financial Statements | 12 | ||||||
Supplemental Information | 21 | ||||||
Proxy Voting and Portfolio Holdings Information | 21 | ||||||
Expense Examples | 21 | ||||||
Advisory Contract Approval | 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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA Growth Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks long-term growth of capital.
Top 10 Equity Holdings*:
January 31, 2022
(% of Net Assets)
Microsoft Corp. | 6.6 | % | |||||
Alphabet, Inc. Class C | 5.8 | % | |||||
Amazon.com, Inc. | 5.6 | % | |||||
NVIDIA Corp. | 5.5 | % | |||||
Visa, Inc. Class A | 4.6 | % | |||||
Apple, Inc. | 3.6 | % | |||||
Meta Platforms, Inc. Class A | 3.5 | % | |||||
ServiceNow, Inc. | 1.9 | % | |||||
Vertex Pharmaceuticals, Inc. | 1.8 | % | |||||
The Boeing Co. | 1.7 | % | |||||
Sector Allocation*:
January 31, 2022
(% of Net Assets)
* Does not include futures contracts, 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%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA Growth Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (93.6%) | |||||||||||
Communication Services (12.6%): | |||||||||||
Alphabet, Inc. Class A (a) | 16,099 | $ | 43,565 | ||||||||
Alphabet, Inc. Class C (a) | 69,721 | 189,221 | |||||||||
Meta Platforms, Inc. Class A (a) | 363,584 | 113,897 | |||||||||
Netflix, Inc. (a) | 39,119 | 16,709 | |||||||||
The Walt Disney Co. (a) | 282,788 | 40,430 | |||||||||
Twitter, Inc. (a) | 234,286 | 8,788 | |||||||||
412,610 | |||||||||||
Communications Equipment (1.3%): | |||||||||||
Arista Networks, Inc. (a) | 55,947 | 6,955 | |||||||||
Cisco Systems, Inc. | 303,830 | 16,914 | |||||||||
Motorola Solutions, Inc. | 78,258 | 18,151 | |||||||||
42,020 | |||||||||||
Consumer Discretionary (16.1%): | |||||||||||
Airbnb, Inc. Class A (a) | 143,064 | 22,028 | |||||||||
Alibaba Group Holding Ltd., ADR (a) | 151,594 | 19,069 | |||||||||
Amazon.com, Inc. (a) | 60,960 | 182,360 | |||||||||
Aptiv PLC (a) | 233,428 | 31,882 | |||||||||
Burlington Stores, Inc. (a) | 86,980 | 20,608 | |||||||||
Chipotle Mexican Grill, Inc. (a) | 5,268 | 7,826 | |||||||||
Lululemon Athletica, Inc. (a) | 130,022 | 43,396 | |||||||||
NIKE, Inc. Class B | 208,735 | 30,907 | |||||||||
O'Reilly Automotive, Inc. (a) | 38,818 | 25,300 | |||||||||
Starbucks Corp. | 256,293 | 25,199 | |||||||||
Target Corp. | 59,324 | 13,077 | |||||||||
Tesla, Inc. (a) | 41,084 | 38,484 | |||||||||
The Home Depot, Inc. | 82,090 | 30,125 | |||||||||
Ulta Beauty, Inc. (a) | 39,761 | 14,463 | |||||||||
Yum China Holdings, Inc. | 153,983 | 7,417 | |||||||||
Yum! Brands, Inc. | 117,544 | 14,713 | |||||||||
526,854 | |||||||||||
Consumer Staples (1.9%): | |||||||||||
Colgate-Palmolive Co. | 166,798 | 13,752 | |||||||||
Constellation Brands, Inc. Class A | 52,403 | 12,459 | |||||||||
Monster Beverage Corp. (a) | 395,550 | 34,302 | |||||||||
60,513 | |||||||||||
Electronic Equipment, Instruments & Components (0.6%): | |||||||||||
CDW Corp. | 99,730 | 18,854 | |||||||||
Energy (0.9%): | |||||||||||
Diamondback Energy, Inc. | 80,363 | 10,138 | |||||||||
Schlumberger NV | 525,128 | 20,517 | |||||||||
30,655 | |||||||||||
Financials (2.4%): | |||||||||||
FactSet Research Systems, Inc. | 44,656 | 18,840 | |||||||||
LPL Financial Holdings, Inc. | 93,794 | 16,163 | |||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
MSCI, Inc. | 54,730 | $ | 29,342 | ||||||||
SEI Investments Co. | 252,219 | 14,782 | |||||||||
79,127 | |||||||||||
Health Care (12.6%): | |||||||||||
Align Technology, Inc. (a) | 66,362 | 32,847 | |||||||||
Charles River Laboratories International, Inc. (a) | 31,124 | 10,263 | |||||||||
Dexcom, Inc. (a) | 54,936 | 23,649 | |||||||||
Illumina, Inc. (a) | 76,109 | 26,548 | |||||||||
Intuitive Surgical, Inc. (a) | 50,659 | 14,396 | |||||||||
Jazz Pharmaceuticals PLC (a) | 74,055 | 10,287 | |||||||||
Novartis AG, ADR | 377,030 | 32,768 | |||||||||
NOVO Nordisk A/S, ADR | 123,047 | 12,289 | |||||||||
Regeneron Pharmaceuticals, Inc. (a) | 52,722 | 32,086 | |||||||||
Roche Holdings Ltd., ADR | 611,928 | 29,734 | |||||||||
Tenet Healthcare Corp. (a) | 85,677 | 6,350 | |||||||||
Thermo Fisher Scientific, Inc. | 73,081 | 42,482 | |||||||||
Veeva Systems, Inc. Class A (a) | 99,162 | 23,456 | |||||||||
Vertex Pharmaceuticals, Inc. (a) | 239,119 | 58,118 | |||||||||
West Pharmaceutical Services, Inc. | 31,158 | 12,252 | |||||||||
Zoetis, Inc. | 231,525 | 46,256 | |||||||||
413,781 | |||||||||||
Industrials (7.1%): | |||||||||||
Carrier Global Corp. | 198,954 | 9,486 | |||||||||
CoStar Group, Inc. (a) | 254,560 | 17,860 | |||||||||
Deere & Co. | 80,912 | 30,455 | |||||||||
Expeditors International of Washington, Inc. | 188,413 | 21,570 | |||||||||
Generac Holdings, Inc. (a) | 116,714 | 32,958 | |||||||||
IDEX Corp. | 68,474 | 14,752 | |||||||||
IHS Markit Ltd. | 92,315 | 10,781 | |||||||||
Kornit Digital Ltd. (a) | 128,391 | 13,489 | |||||||||
The Boeing Co. (a) | 270,215 | 54,108 | |||||||||
Uber Technologies, Inc. (a) | 727,373 | 27,204 | |||||||||
232,663 | |||||||||||
IT Services (8.0%): | |||||||||||
Automatic Data Processing, Inc. | 40,113 | 8,270 | |||||||||
EPAM Systems, Inc. (a) | 53,375 | 25,414 | |||||||||
Gartner, Inc. (a) | 33,410 | 9,819 | |||||||||
PayPal Holdings, Inc. (a) | 233,707 | 40,184 | |||||||||
Shopify, Inc. Class A (a) | 20,092 | 19,373 | |||||||||
Twilio, Inc. Class A (a) | 51,361 | 10,587 | |||||||||
Visa, Inc. Class A | 661,967 | 149,717 | |||||||||
263,364 | |||||||||||
Real Estate (0.4%): | |||||||||||
Extra Space Storage, Inc. | 37,492 | 7,431 | |||||||||
SBA Communications Corp. | 19,630 | 6,388 | |||||||||
13,819 | |||||||||||
Semiconductors & Semiconductor Equipment (7.6%): | |||||||||||
Advanced Micro Devices, Inc. (a) | 75,299 | 8,603 | |||||||||
Lam Research Corp. | 33,882 | 19,988 | |||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA Growth Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Marvell Technology, Inc. | 168,733 | $ | 12,047 | ||||||||
NVIDIA Corp. | 731,474 | 179,109 | |||||||||
QUALCOMM, Inc. | 157,980 | 27,766 | |||||||||
247,513 | |||||||||||
Software (18.4%): | |||||||||||
Adobe, Inc. (a) | 72,724 | 38,856 | |||||||||
AppLovin Corp. Class A (a) | 122,396 | 7,885 | |||||||||
Autodesk, Inc. (a) | 177,363 | 44,304 | |||||||||
Cadence Design Systems, Inc. (a) | 197,266 | 30,012 | |||||||||
Crowdstrike Holdings, Inc. Class A (a) | 87,360 | 15,781 | |||||||||
Fair Isaac Corp. (a) | 23,511 | 11,638 | |||||||||
Microsoft Corp. | 692,686 | 215,411 | |||||||||
Oracle Corp. | 611,111 | 49,598 | |||||||||
Palo Alto Networks, Inc. (a) | 32,356 | 16,741 | |||||||||
RingCentral, Inc. Class A (a) | 47,243 | 8,338 | |||||||||
salesforce.com, Inc. (a) | 185,117 | 43,064 | |||||||||
ServiceNow, Inc. (a) | 105,465 | 61,779 | |||||||||
Synopsys, Inc. (a) | 42,974 | 13,343 | |||||||||
The Trade Desk, Inc. Class A (a) | 209,073 | 14,539 | |||||||||
Workday, Inc. Class A (a) | 122,163 | 30,908 | |||||||||
602,197 | |||||||||||
Technology Hardware, Storage & Peripherals (3.7%): | |||||||||||
Apple, Inc. | 683,564 | 119,473 | |||||||||
Total Common Stocks (Cost $1,592,916) | 3,063,443 | ||||||||||
Exchange-Traded Funds (3.8%) | |||||||||||
Vanguard Mega Cap Growth ETF | 531,929 | 126,705 | |||||||||
Total Exchange-Traded Funds (Cost $132,711) | 126,705 | ||||||||||
Total Investments (Cost $1,725,627) — 97.4% | 3,190,148 | ||||||||||
Other assets in excess of liabilities — 2.6% | 83,693 | ||||||||||
NET ASSETS — 100.00% | $ | 3,273,841 | |||||||||
At January 31, 2022, the Fund's investments in foreign securities were 7.0% of net assets.
(a) Non-income producing security.
ADR — American Depositary Receipt
ETF — Exchange-Traded Fund
PLC — Public Limited Company
See notes to financial statements.
5
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA Growth Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,725,627) | $ | 3,190,148 | |||||
Cash | 96,204 | ||||||
Receivables: | |||||||
Interest and dividends | 308 | ||||||
Capital shares issued | 3,203 | ||||||
Investments sold | 17,949 | ||||||
Reclaims | 842 | ||||||
Prepaid expenses | 25 | ||||||
Total Assets | 3,308,679 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Investments purchased | 30,723 | ||||||
Capital shares redeemed | 1,625 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 1,729 | ||||||
Administration fees | 372 | ||||||
Custodian fees | 7 | ||||||
Transfer agent fees | 308 | ||||||
Compliance fees | 2 | ||||||
Other accrued expenses | 72 | ||||||
Total Liabilities | 34,838 | ||||||
Net Assets: | |||||||
Capital | 1,786,764 | ||||||
Total accumulated earnings/(loss) | 1,487,077 | ||||||
Net Assets | $ | 3,273,841 | |||||
Net Assets | |||||||
Fund Shares | $ | 1,969,326 | |||||
Institutional Shares | 1,304,515 | ||||||
Total | $ | 3,273,841 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 60,227 | ||||||
Institutional Shares | 40,001 | ||||||
Total | 100,228 | ||||||
Net asset value, offering and redemption price per share: (a) | |||||||
Fund Shares | $ | 32.70 | |||||
Institutional Shares | 32.61 | ||||||
(a) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
6
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended January 31, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA Growth Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 5,691 | |||||
Interest | 6 | ||||||
Securities lending (net of fees) | 7 | ||||||
Total Income | 5,704 | ||||||
Expenses: | |||||||
Investment advisory fees | 10,891 | ||||||
Administration fees — Fund Shares | 1,656 | ||||||
Administration fees — Institutional Shares | 689 | ||||||
Sub-Administration fees | 28 | ||||||
Custodian fees | 82 | ||||||
Transfer agent fees — Fund Shares | 633 | ||||||
Transfer agent fees — Institutional Shares | 689 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 12 | ||||||
Legal and audit fees | 32 | ||||||
State registration and filing fees | 30 | ||||||
Interfund lending fees | — | (a) | |||||
Other expenses | 152 | ||||||
Total Expenses | 14,918 | ||||||
Net Investment Income (Loss) | (9,214 | ) | |||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 139,174 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | (416,982 | ) | |||||
Net realized/unrealized gains (losses) on investments | (277,808 | ) | |||||
Change in net assets resulting from operations | $ | (287,022 | ) | ||||
(a) Rounds to less than $1 thousand.
See notes to financial statements.
7
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands)
USAA Growth Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | (9,214 | ) | $ | (12,184 | ) | |||||
Net realized gains (losses) from investments | 139,174 | 369,266 | |||||||||
| Net change in unrealized appreciation/depreciation on investments | (416,982 | ) | 569,910 | ||||||||
Change in net assets resulting from operations | (287,022 | ) | 926,992 | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (207,204 | ) | (85,081 | ) | |||||||
Institutional Shares | (139,551 | ) | (52,266 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (346,755 | ) | (137,347 | ) | |||||||
Change in net assets resulting from capital transactions | 344,803 | (243,688 | ) | ||||||||
Change in net assets | (288,974 | ) | 545,957 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 3,562,815 | 3,016,858 | |||||||||
End of period | $ | 3,273,841 | $ | 3,562,815 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 49,651 | $ | 122,264 | |||||||
Distributions reinvested | 204,327 | 83,901 | |||||||||
Cost of shares redeemed | (132,137 | ) | (313,290 | ) | |||||||
Total Fund Shares | $ | 121,841 | $ | (107,125 | ) | ||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 308,098 | $ | 68,924 | |||||||
Distributions reinvested | 139,296 | 52,208 | |||||||||
Cost of shares redeemed | (224,432 | ) | (257,695 | ) | |||||||
Total Institutional Shares | $ | 222,962 | $ | (136,563 | ) | ||||||
Change in net assets resulting from capital transactions | $ | 344,803 | $ | (243,688 | ) | ||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,301 | 3,519 | |||||||||
Reinvested | 5,764 | 2,483 | |||||||||
Redeemed | (3,479 | ) | (9,059 | ) | |||||||
Total Fund Shares | 3,586 | (3,057 | ) | ||||||||
Institutional Shares | |||||||||||
Issued | 7,946 | 1,950 | |||||||||
Reinvested | 3,940 | 1,549 | |||||||||
Redeemed | (6,058 | ) | (7,520 | ) | |||||||
Total Institutional Shares | 5,828 | (4,021 | ) | ||||||||
Change in Shares | 9,414 | (7,078 | ) | ||||||||
See notes to financial statements.
8
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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, 2022 (Unaudited): | $ | 39.27 | (0.10 | )(d) | (2.72 | ) | (2.82 | ) | — | (3.75 | ) | ||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 30.85 | (0.13 | )(d) | 10.03 | 9.90 | — | (1.48 | ) | ||||||||||||||||||
2020 | $ | 31.54 | (0.05 | )(d) | 6.18 | 6.13 | (0.08 | ) | (6.74 | ) | |||||||||||||||||
2019 | $ | 32.15 | 0.12 | 2.80 | 2.92 | (0.09 | ) | (3.44 | ) | ||||||||||||||||||
2018 | $ | 28.65 | 0.07 | 4.18 | 4.25 | (0.05 | ) | (0.70 | ) | ||||||||||||||||||
2017 | $ | 25.53 | 0.09 | 4.31 | 4.40 | (0.05 | ) | (1.23 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 39.17 | (0.10 | )(d) | (2.71 | ) | (2.81 | ) | — | (3.75 | ) | ||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 30.77 | (0.13 | )(d) | 10.01 | 9.88 | — | (1.48 | ) | ||||||||||||||||||
2020 | $ | 31.47 | (0.04 | )(d) | 6.16 | 6.12 | (0.08 | ) | (6.74 | ) | |||||||||||||||||
2019 | $ | 32.08 | 0.15 | 2.78 | 2.93 | (0.10 | ) | (3.44 | ) | ||||||||||||||||||
2018 | $ | 28.59 | 0.09 | 4.18 | 4.27 | (0.08 | ) | (0.70 | ) | ||||||||||||||||||
2017 | $ | 25.48 | 0.12 | 4.30 | 4.42 | (0.08 | ) | (1.23 | ) | ||||||||||||||||||
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019 and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(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.
(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 ratio by less than 0.01%.
(f) Reflects increased trading activity due to current year transition or asset allocation shift.
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, 2022 (Unaudited): | (3.75 | ) | $ | 32.70 | (7.92 | )% | 0.83 | % | (0.52 | )% | 0.83 | % | $ | 1,969,326 | 30 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (1.48 | ) | $ | 39.27 | 32.87 | % | 0.84 | % | (0.38 | )% | 0.84 | % | $ | 2,224,130 | 40 | % | |||||||||||||||||||
2020 | (6.82 | ) | $ | 30.85 | 23.71 | % | 0.91 | % | (0.16 | )% | 0.91 | % | $ | 1,841,547 | 59 | % | |||||||||||||||||||
2019 | (3.53 | ) | $ | 31.54 | 10.90 | % | 0.90 | %(e) | 0.41 | % | 0.90 | %(e) | $ | 1,676,470 | 70 | %(f) | |||||||||||||||||||
2018 | (0.75 | ) | $ | 32.15 | 14.99 | % | 0.97 | %(e) | 0.33 | % | 0.97 | %(e) | $ | 1,581,693 | 19 | % | |||||||||||||||||||
2017 | (1.28 | ) | $ | 28.65 | 18.04 | % | 1.09 | %(e) | 0.36 | % | 1.09 | %(e) | $ | 1,375,305 | 17 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (3.75 | ) | $ | 32.61 | (7.91 | )% | 0.83 | % | (0.51 | )% | 0.83 | % | $ | 1,304,515 | 30 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (1.48 | ) | $ | 39.17 | 32.89 | % | 0.83 | % | (0.36 | )% | 0.83 | % | $ | 1,338,685 | 40 | % | |||||||||||||||||||
2020 | (6.82 | ) | $ | 30.77 | 23.75 | % | 0.87 | % | (0.13 | )% | 0.87 | % | $ | 1,175,311 | 59 | % | |||||||||||||||||||
2019 | (3.54 | ) | $ | 31.47 | 10.94 | % | 0.85 | %(e) | 0.47 | % | 0.85 | %(e) | $ | 1,083,799 | 70 | %(f) | |||||||||||||||||||
2018 | (0.78 | ) | $ | 32.08 | 15.07 | % | 0.92 | %(e) | 0.39 | % | 0.92 | %(e) | $ | 1,324,054 | 19 | % | |||||||||||||||||||
2017 | (1.31 | ) | $ | 28.59 | 18.14 | % | 1.01 | %(e) | 0.43 | % | 1.01 | %(e) | $ | 1,299,751 | 17 | % | |||||||||||||||||||
See notes to financial statements.
11
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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 U.S. Generally Accepted Accounting Principles ("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 risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
12
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs") and American Depositary Receipts ("ADRs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq 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 are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically 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 NAV to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 3,063,443 | $ | — | $ | — | $ | 3,063,443 | |||||||||||
Exchange-Traded Funds | 126,705 | — | — | 126,705 | |||||||||||||||
Total | $ | 3,190,148 | $ | — | $ | — | $ | 3,190,148 | |||||||||||
For the six months ended January 31, 2022, there were no transfers in or out of Level 3 in the 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, 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 often 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 the ETF is 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
13
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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 or 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 discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
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 and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially 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 generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund effectively does not have control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. 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. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk 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 repledged, except to satisfy borrower default.
As of January 31, 2022, the Fund did not have any securities on loan.
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.
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
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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 years, which includes the current fiscal tax year end). 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 an 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:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended January 31, 2022, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 1,030,811 | $ | 1,078,105 | ||||
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The 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 www.vcm.com. As of January 31, 2022, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 0.1 | ||||||
USAA Cornerstone Equity Fund | 0.3 | ||||||
USAA Target Retirement Income Fund | 0.4 | ||||||
USAA Target Retirement 2030 Fund | 1.4 | ||||||
USAA Target Retirement 2040 Fund | 2.3 | ||||||
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 Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and 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 the largest funds within the Lipper Large-Cap Growth Funds category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
| Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
| +/- 100 to 400 | +/- 4 | ||||||
| +/- 401 to 700 | +/- 5 | ||||||
| +/- 701 and greater | +/- 6 | ||||||
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective 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.
For the period August 1, 2021, to January 31, 2022, performance adjustments were $(472) and $(294) for Fund Shares and Institutional Shares, in thousands, respectively. Performance adjustments were (0.04)% and (0.04)% for Fund Shares and Institutional Shares, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
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"), under which Loomis Sayles 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 also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15% and 0.10%, which is based on the Fund's average
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
daily net assets of the Fund Shares and of the Institutional Shares, respectively. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA 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 fees for the 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 and paid to VCTA for the six months ended January 31, 2022, 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 Services, 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 and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 limits for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, 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. As of January 31, 2022, the expense limits (excluding voluntary waivers) were 0.92% and 0.88% for Fund Shares and Institutional Shares, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of January 31, 2022, there are no amounts to be repaid to the Adviser.
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, 2022.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
Equity Risk — The values of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general market, economic and political conditions and other factors. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or may last for extended periods.
Foreign Securities Risk — 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. Global markets, or those in a particular region, may all react in similar fashion to important political, economic, or other developments. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable and make such investments riskier and more volatile.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
ended January 31, 2022, Citibank received 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 London InterBank Offered Rate ("LIBOR") plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected 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, 2022, were as follows (amounts in thousands):
| Amount Outstanding at January 31, 2022 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | |||||||||||||||
| $ | — | $ | 18,600 | 4 | 1.21 | % | $ | 18,600 | |||||||||||
* For the six months ended January 31, 2022, based on the number of days borrowings were outstanding.
Interfund Lending:
The Trust and the 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 Funds Complex that is permitted to participate in the Facility, 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, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. 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, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending.
The average borrowing or lending for the days outstanding and average interest rate for the Fund during the six months ended January 31, 2022, were as follows (amounts in thousands):
| Borrower or Lender | Amount Outstanding at January 31, 2022 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
| Borrower | $ | — | $ | 4,387 | 2 | 0.58 | % | $ | 5,525 | ||||||||||||||
* For the six months ended January 31, 2022, 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
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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, 2022.
As of July 31, 2021, the Fund had no capital loss carryforwards for federal income tax purposes.
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USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
(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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
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. Form N-PORT is available on the SEC's website at www.sec.gov.
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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21- 1/31/22* | Hypothetical Expenses Paid During Period 8/1/21- 1/31/22* | Annualized Expense Ratio During Period 8/1/21- 1/31/22 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 920.80 | $ | 1,021.02 | $ | 4.02 | $ | 4.23 | 0.83 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 920.90 | 1,021.02 | 4.02 | 4.23 | 0.83 | % | ||||||||||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
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USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Considerations of the Board in Continuing the Investment Advisory Agreement
USAA Growth Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") and the Subadvisory Agreement between the Adviser and Loomis, Sayles & Company, LP (the "Subadviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement and Subadvisory Agreement were approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement and Subadvisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and Subadvisory Agreement and the Adviser and the Subadviser and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's and the Subadviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement and Subadvisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement and the Subadvisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement and the Subadvisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
The Board considered the Advisory Agreement and the Subadvisory Agreement separately in the course of its review. In doing so, the Board noted the respective roles of the Adviser and the Subadviser in providing services to the Fund.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser and the Subadviser. At the meeting at which the renewal of the Advisory Agreement and Subadvisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser and the Subadviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement and Subadvisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser and Subadviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management
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USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The Board considered the Adviser's process for monitoring the performance of the Subadviser and the Adviser's timeliness in responding to performance issues. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services and the effects of any performance adjustment1 was below the median of its expense group and above the median of its expense universe. The data indicated that the Fund's total expenses were above the median of its expense group and below the median of its expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund. The Board also took into account that the subadvisory fees under the Subadvisory Agreement are paid by the Adviser. The Board also considered and discussed information about the Subadviser's fees, including the amount of management fees retained by the Adviser after payment of the subadvisory fees.
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total returns relative to its Lipper index and
1 The Adviser previously agreed that no performance adjustment (positive or negative) would be made to the amount payable to the Adviser from July 1, 2019, through June 30, 2020.
23
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was below the average of its performance universe and its Lipper index for the one-, three-, five- and ten-year periods ended September 30, 2021. The Board took into account management's discussion of the Fund's performance, including the reasons for the Fund's underperformance.
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser pays the Fund's subadvisory fees. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board considered whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in any economies of scale. The Board took into account management's discussion of the current advisory fee structure. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board considered the fact that the Adviser also pays the Fund's subadvisory fees. The Board also considered the effect of the change in size, if any, of each of the Fund's classes on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices and the Adviser is appropriately monitoring the Fund's performance; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
Subadvisory Agreement
In approving the Subadvisory Agreement with respect to the Fund, the Board considered various factors, among them: (i) the nature, extent, and quality of services provided to the Fund by the Subadviser, including the personnel providing services; (ii) the Subadviser's compensation and any other benefits derived from the subadvisory relationship; (iii) comparisons, to the extent applicable, of subadvisory fees and performance to comparable investment companies; and (iv) the terms of the Subadvisory Agreement. A summary of the Board's analysis of these factors is set forth below. After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Subadvisory Agreement. In approving the Subadvisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
24
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Nature, Extent, and Quality of Services Provided; Investment Personnel — The Trustees considered information provided to them regarding the services provided by the Subadviser, including information presented periodically throughout the previous year. The Board considered the Subadviser's level of knowledge and investment style. The Board reviewed the experience and credentials of the investment personnel who are responsible for managing the investment of portfolio securities with respect to the Fund and the Subadviser's level of staffing. The Trustees considered, based on the materials provided to them by the Subadviser, whether the method of compensating portfolio managers is reasonable and includes mechanisms to prevent a manager with underperformance from taking undue risks. The Trustees also noted the Subadviser's brokerage practices. The Board also considered the Subadviser's regulatory and compliance history. The Board also took into account the Subadviser's risk management processes. The Board noted that the Adviser's monitoring processes of the Subadviser include: (i) regular telephonic meetings to discuss, among other matters, investment strategies, and to review portfolio performance; (ii) quarterly portfolio compliance checklists and quarterly compliance certifications to the Board; and (iii) due diligence visits to the Subadviser.
Subadviser Compensation — The Board also took into consideration the financial condition of the Subadviser. In considering the cost of services to be provided by the Subadviser and the profitability to the Subadviser of its relationship with the Fund, the Trustees noted that the fees under the Subadvisory Agreement were paid by the Adviser. The Trustees also relied on the ability of the Adviser to negotiate the Subadvisory Agreement and the fees thereunder at arm's length. For the above reasons, the Board determined that the profitability of the Subadviser from its relationship with the Fund was not a material factor in its deliberations with respect to the consideration of the approval of the Subadvisory Agreement. For similar reasons, the Board concluded that the potential for economies of scale in the Subadviser's management of the Fund was not a material factor in considering the Subadvisory Agreement.
Subadvisory Fees and Fund Performance — The Board compared the subadvisory fees for the Fund with the fees that the Subadviser charges to comparable clients, as applicable. The Board considered that the Fund pays a management fee to the Adviser and that, in turn, the Adviser pays a subadvisory fee to the Subadviser. As noted above, the Board considered the Fund's performance during the one-, three-, five-, and ten-year periods ended September 30, 2021, as compared to the Fund's peer group and noted that the Board reviews at its regularly scheduled meetings information about the Fund's performance results. The Board also considered the performance of the Subadviser. The Board noted the Adviser's experience and resources in monitoring the performance, investment style, and risk-adjusted performance of the Subadviser. The Board was mindful of the Adviser's focus on the Subadviser's performance. The Board also noted the Subadviser's performance record for similar accounts, as applicable.
Conclusions — The Board reached the following conclusions regarding the Subadvisory Agreement: (i) the Subadviser is qualified to manage the Fund's assets in accordance with its investment objectives and policies; (ii) the Subadviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and relevant indices and the Adviser is appropriately monitoring the Fund's performance; and (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser and the Subadviser. Based on its conclusions, the Board determined that approval of the Subadvisory Agreement with respect to the Fund would be in the best interests of the Fund and its shareholders.
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800 | ) 235-8396 | |||||
23420-0322
January 31, 2022
Semi Annual Report
USAA Growth & Income Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 9 | ||||||
Statement of Operations | 10 | ||||||
Statements of Changes in Net Assets | 11 | ||||||
Financial Highlights | 14 | ||||||
Notes to Financial Statements | 16 | ||||||
Supplemental Information | 24 | ||||||
Proxy Voting and Portfolio Holdings Information | 24 | ||||||
Expense Examples | 24 | ||||||
Advisory Contract Approval | 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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA Growth & Income Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks capital growth with a secondary investment objective of current income.
Top 10 Equity Holdings*:
January 31, 2022
(% of Net Assets)
Microsoft Corp. | 7.4 | % | |||||
Apple, Inc. | 5.7 | % | |||||
Alphabet, Inc. Class C | 4.1 | % | |||||
Amazon.com, Inc. | 2.3 | % | |||||
Tesla, Inc. | 1.9 | % | |||||
The Home Depot, Inc. | 1.7 | % | |||||
Visa, Inc. Class A | 1.6 | % | |||||
NVIDIA Corp. | 1.6 | % | |||||
Verizon Communications, Inc. | 1.2 | % | |||||
Meta Platforms, Inc. Class A | 1.2 | % | |||||
Sector Allocation*:
January 31, 2022
(% of Net Assets)
* Does not include futures contracts, 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%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA Growth & Income Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (99.2%) | |||||||||||
Communication Services (9.8%): | |||||||||||
Alphabet, Inc. Class C (a) | 27,959 | $ | 75,880 | ||||||||
AT&T, Inc. | 150,412 | 3,835 | |||||||||
Comcast Corp. Class A | 252,213 | 12,608 | |||||||||
Fox Corp. Class A | 75,364 | 3,061 | |||||||||
Meta Platforms, Inc. Class A (a) | 72,931 | 22,846 | |||||||||
Netflix, Inc. (a) | 17,334 | 7,404 | |||||||||
Omnicom Group, Inc. | 183,376 | 13,819 | |||||||||
Sirius XM Holdings, Inc. (b) | 1,081,569 | 6,879 | |||||||||
The Interpublic Group of Cos., Inc. | 124,031 | 4,408 | |||||||||
Twitter, Inc. (a) | 205,863 | 7,722 | |||||||||
Verizon Communications, Inc. | 432,618 | 23,028 | |||||||||
World Wrestling Entertainment, Inc. Class A | 26,262 | 1,312 | |||||||||
182,802 | |||||||||||
Communications Equipment (1.9%): | |||||||||||
Arista Networks, Inc. (a) | 49,527 | 6,157 | |||||||||
Cisco Systems, Inc. | 396,698 | 22,084 | |||||||||
Juniper Networks, Inc. | 118,109 | 4,113 | |||||||||
Motorola Solutions, Inc. | 13,281 | 3,080 | |||||||||
35,434 | |||||||||||
Consumer Discretionary (12.0%): | |||||||||||
Amazon.com, Inc. (a) | 14,125 | 42,254 | |||||||||
Aptiv PLC (a) | 82,783 | 11,306 | |||||||||
Best Buy Co., Inc. | 73,945 | 7,341 | |||||||||
Chipotle Mexican Grill, Inc. (a) | 4,759 | 7,070 | |||||||||
Garmin Ltd. | 21,814 | 2,714 | |||||||||
Genuine Parts Co. | 30,724 | 4,093 | |||||||||
H&R Block, Inc. | 113,737 | 2,600 | |||||||||
Lennar Corp. Class A | 12,555 | 1,207 | |||||||||
Lowe's Cos., Inc. | 38,502 | 9,138 | |||||||||
Lululemon Athletica, Inc. (a) | 27,770 | 9,269 | |||||||||
O'Reilly Automotive, Inc. (a) | 15,670 | 10,213 | |||||||||
PulteGroup, Inc. | 50,912 | 2,683 | |||||||||
Target Corp. | 78,523 | 17,309 | |||||||||
Tesla, Inc. (a) | 37,321 | 34,959 | |||||||||
The Home Depot, Inc. | 87,302 | 32,038 | |||||||||
Toll Brothers, Inc. | 45,272 | 2,670 | |||||||||
Ulta Beauty, Inc. (a) | 35,198 | 12,803 | |||||||||
Whirlpool Corp. | 26,527 | 5,576 | |||||||||
Williams-Sonoma, Inc. | 32,302 | 5,186 | |||||||||
Yum! Brands, Inc. | 32,844 | 4,111 | |||||||||
224,540 | |||||||||||
Consumer Staples (6.3%): | |||||||||||
Altria Group, Inc. | 292,785 | 14,897 | |||||||||
Colgate-Palmolive Co. | 116,181 | 9,579 | |||||||||
Constellation Brands, Inc. Class A | 45,235 | 10,755 | |||||||||
Costco Wholesale Corp. | 10,816 | 5,463 | |||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA Growth & Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
General Mills, Inc. | 107,683 | $ | 7,396 | ||||||||
Ingredion, Inc. | 32,240 | 3,053 | |||||||||
Kimberly-Clark Corp. | 56,354 | 7,757 | |||||||||
PepsiCo, Inc. | 46,501 | 8,069 | |||||||||
Philip Morris International, Inc. | 90,462 | 9,304 | |||||||||
The Clorox Co. | 23,104 | 3,878 | |||||||||
The Hershey Co. | 16,535 | 3,259 | |||||||||
The J.M. Smucker Co. (b) | 15,917 | 2,238 | |||||||||
The Kroger Co. | 87,599 | 3,818 | |||||||||
The Procter & Gamble Co. | 73,209 | 11,746 | |||||||||
Tyson Foods, Inc. Class A | 87,167 | 7,923 | |||||||||
Walgreens Boots Alliance, Inc. | 61,340 | 3,052 | |||||||||
Walmart, Inc. | 41,362 | 5,783 | |||||||||
117,970 | |||||||||||
Energy (2.2%): | |||||||||||
Chevron Corp. | 40,497 | 5,318 | |||||||||
ConocoPhillips | 91,874 | 8,142 | |||||||||
Coterra Energy, Inc. | 222,892 | 4,881 | |||||||||
Devon Energy Corp. | 135,983 | 6,877 | |||||||||
Diamondback Energy, Inc. | 71,728 | 9,049 | |||||||||
EOG Resources, Inc. | 23,043 | 2,569 | |||||||||
HollyFrontier Corp. | 82,184 | 2,890 | |||||||||
Phillips 66 | 27,429 | 2,326 | |||||||||
42,052 | |||||||||||
Financials (10.7%): | |||||||||||
Aflac, Inc. | 82,180 | 5,163 | |||||||||
American Express Co. | 21,235 | 3,818 | |||||||||
American Financial Group, Inc. | 35,475 | 4,622 | |||||||||
Ameriprise Financial, Inc. | 24,845 | 7,561 | |||||||||
Annaly Capital Management, Inc. | 737,279 | 5,824 | |||||||||
Bank of America Corp. | 258,306 | 11,918 | |||||||||
Capital One Financial Corp. | 19,383 | 2,844 | |||||||||
Comerica, Inc. | 54,486 | 5,055 | |||||||||
Discover Financial Services | 42,623 | 4,934 | |||||||||
Everest Re Group Ltd. | 8,864 | 2,512 | |||||||||
FactSet Research Systems, Inc. | 9,206 | 3,884 | |||||||||
Fidelity National Financial, Inc. | 130,874 | 6,590 | |||||||||
Fifth Third Bancorp | 153,619 | 6,856 | |||||||||
First American Financial Corp. | 27,202 | 2,027 | |||||||||
First Horizon Corp. | 391,248 | 6,694 | |||||||||
Jefferies Financial Group, Inc. | 158,863 | 5,821 | |||||||||
JPMorgan Chase & Co. | 34,924 | 5,190 | |||||||||
KeyCorp | 208,283 | 5,220 | |||||||||
LPL Financial Holdings, Inc. | 84,644 | 14,586 | |||||||||
M&T Bank Corp. | 10,451 | 1,770 | |||||||||
Marsh & McLennan Cos., Inc. | 25,967 | 3,990 | |||||||||
MetLife, Inc. | 82,471 | 5,530 | |||||||||
Morgan Stanley | 37,781 | 3,874 | |||||||||
Popular, Inc. | 21,697 | 1,935 | |||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA Growth & Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Principal Financial Group, Inc. | 102,768 | $ | 7,508 | ||||||||
Prudential Financial, Inc. | 43,759 | 4,882 | |||||||||
Regions Financial Corp. | 347,139 | 7,963 | |||||||||
SEI Investments Co. | 32,301 | 1,893 | |||||||||
Synchrony Financial | 100,898 | 4,297 | |||||||||
T. Rowe Price Group, Inc. | 47,704 | 7,367 | |||||||||
The Allstate Corp. | 70,194 | 8,470 | |||||||||
The Goldman Sachs Group, Inc. | 24,507 | 8,692 | |||||||||
The Hanover Insurance Group, Inc. | 20,591 | 2,841 | |||||||||
The Hartford Financial Services Group, Inc. | 32,571 | 2,341 | |||||||||
The PNC Financial Services Group, Inc. | 30,007 | 6,181 | |||||||||
The Travelers Cos., Inc. | 18,895 | 3,140 | |||||||||
Western Alliance Bancorp | 11,727 | 1,163 | |||||||||
Zions Bancorp NA | 92,836 | 6,296 | |||||||||
201,252 | |||||||||||
Health Care (12.5%): | |||||||||||
Abbott Laboratories | 27,652 | 3,525 | |||||||||
AbbVie, Inc. | 45,169 | 6,183 | |||||||||
Align Technology, Inc. (a) | 14,487 | 7,171 | |||||||||
AmerisourceBergen Corp. | 15,049 | 2,050 | |||||||||
Amgen, Inc. | 45,784 | 10,399 | |||||||||
Anthem, Inc. | 12,997 | 5,732 | |||||||||
Bristol-Myers Squibb Co. | 88,209 | 5,724 | |||||||||
Cardinal Health, Inc. | 74,848 | 3,860 | |||||||||
Cerner Corp. | 36,601 | 3,338 | |||||||||
Charles River Laboratories International, Inc. (a) | 27,861 | 9,187 | |||||||||
Chemed Corp. | 7,967 | 3,736 | |||||||||
CVS Health Corp. | 78,472 | 8,358 | |||||||||
Danaher Corp. | 11,872 | 3,393 | |||||||||
Dexcom, Inc. (a) | 12,909 | 5,557 | |||||||||
Eli Lilly & Co. | 40,539 | 9,948 | |||||||||
Gilead Sciences, Inc. | 53,959 | 3,706 | |||||||||
Jazz Pharmaceuticals PLC (a) | 66,124 | 9,185 | |||||||||
Johnson & Johnson | 131,800 | 22,708 | |||||||||
Medtronic PLC | 41,177 | 4,261 | |||||||||
Merck & Co., Inc. | 138,284 | 11,267 | |||||||||
PerkinElmer, Inc. | 5,654 | 973 | |||||||||
Pfizer, Inc. | 163,398 | 8,609 | |||||||||
Quest Diagnostics, Inc. | 23,667 | 3,196 | |||||||||
Tenet Healthcare Corp. (a) | 77,444 | 5,740 | |||||||||
Thermo Fisher Scientific, Inc. | 8,899 | 5,173 | |||||||||
UnitedHealth Group, Inc. | 34,869 | 16,478 | |||||||||
Vertex Pharmaceuticals, Inc. (a) | 87,736 | 21,324 | |||||||||
West Pharmaceutical Services, Inc. | 36,615 | 14,398 | |||||||||
Zoetis, Inc. | 91,351 | 18,251 | |||||||||
233,430 | |||||||||||
Industrials (8.2%): | |||||||||||
3M Co. | 39,048 | 6,483 | |||||||||
Carrier Global Corp. | 177,418 | 8,459 | |||||||||
See notes to financial statements.
5
| USAA Mutual Funds Trust USAA Growth & Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Cintas Corp. | 12,746 | $ | 4,991 | ||||||||
Cummins, Inc. | 26,122 | 5,770 | |||||||||
Eaton Corp. PLC | 53,255 | 8,437 | |||||||||
Emerson Electric Co. | 56,356 | 5,182 | |||||||||
Fastenal Co. | 118,425 | 6,712 | |||||||||
Generac Holdings, Inc. (a) | 26,670 | 7,531 | |||||||||
General Dynamics Corp. | 31,173 | 6,612 | |||||||||
Huntington Ingalls Industries, Inc. | 19,923 | 3,730 | |||||||||
IDEX Corp. | 61,294 | 13,205 | |||||||||
IHS Markit Ltd. | 83,784 | 9,785 | |||||||||
Illinois Tool Works, Inc. | 44,698 | 10,456 | |||||||||
Johnson Controls International PLC | 22,014 | 1,600 | |||||||||
Knight-Swift Transportation Holdings, Inc. | 38,294 | 2,167 | |||||||||
Lennox International, Inc. | 8,753 | 2,483 | |||||||||
Lockheed Martin Corp. | 22,122 | 8,608 | |||||||||
ManpowerGroup, Inc. | 36,532 | 3,831 | |||||||||
Masco Corp. | 53,565 | 3,392 | |||||||||
MSC Industrial Direct Co., Inc. | 17,087 | 1,395 | |||||||||
Oshkosh Corp. | 14,347 | 1,633 | |||||||||
Owens Corning | 29,101 | 2,581 | |||||||||
Robert Half International, Inc. | 39,691 | 4,495 | |||||||||
Rockwell Automation, Inc. | 27,687 | 8,008 | |||||||||
Snap-on, Inc. | 18,061 | 3,761 | |||||||||
United Parcel Service, Inc. Class B | 28,111 | 5,684 | |||||||||
W.W. Grainger, Inc. | 11,656 | 5,771 | |||||||||
152,762 | |||||||||||
IT Services (4.2%): | |||||||||||
Accenture PLC Class A | 14,847 | 5,250 | |||||||||
Cognizant Technology Solutions Corp. Class A | 50,176 | 4,286 | |||||||||
Gartner, Inc. (a) | 28,469 | 8,367 | |||||||||
International Business Machines Corp. | 68,061 | 9,091 | |||||||||
PayPal Holdings, Inc. (a) | 51,498 | 8,854 | |||||||||
The Western Union Co. | 146,802 | 2,776 | |||||||||
Twilio, Inc. Class A (a) | 45,877 | 9,456 | |||||||||
Visa, Inc. Class A | 132,965 | 30,073 | |||||||||
78,153 | |||||||||||
Materials (1.7%): | |||||||||||
Avery Dennison Corp. | 16,454 | 3,380 | |||||||||
International Paper Co. | 140,856 | 6,796 | |||||||||
LyondellBasell Industries NV Class A | 24,581 | 2,378 | |||||||||
Nucor Corp. | 42,219 | 4,281 | |||||||||
Packaging Corp. of America | 32,584 | 4,908 | |||||||||
PPG Industries, Inc. | 33,326 | 5,206 | |||||||||
Reliance Steel & Aluminum Co. | 11,670 | 1,784 | |||||||||
Steel Dynamics, Inc. | 21,594 | 1,199 | |||||||||
The Sherwin-Williams Co. | 6,427 | 1,841 | |||||||||
31,773 | |||||||||||
See notes to financial statements.
6
| USAA Mutual Funds Trust USAA Growth & Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Real Estate (3.3%): | |||||||||||
Alexandria Real Estate Equities, Inc. | 6,505 | $ | 1,267 | ||||||||
AvalonBay Communities, Inc. | 17,172 | 4,194 | |||||||||
Boston Properties, Inc. | 28,795 | 3,227 | |||||||||
Equity Residential | 33,576 | 2,979 | |||||||||
Essex Property Trust, Inc. | 9,382 | 3,119 | |||||||||
Extra Space Storage, Inc. | 33,457 | 6,631 | |||||||||
Healthpeak Properties, Inc. | 122,522 | 4,334 | |||||||||
Kimco Realty Corp. | 103,186 | 2,503 | |||||||||
National Retail Properties, Inc. | 43,884 | 1,948 | |||||||||
Prologis, Inc. | 13,592 | 2,131 | |||||||||
Realty Income Corp. | 46,994 | 3,262 | |||||||||
Regency Centers Corp. | 22,544 | 1,618 | |||||||||
SBA Communications Corp. | 17,555 | 5,713 | |||||||||
Simon Property Group, Inc. | 32,029 | 4,715 | |||||||||
Ventas, Inc. | 80,100 | 4,247 | |||||||||
VICI Properties, Inc. (b) | 194,896 | 5,578 | |||||||||
Welltower, Inc. | 48,177 | 4,174 | |||||||||
61,640 | |||||||||||
Semiconductors & Semiconductor Equipment (5.4%): | |||||||||||
Advanced Micro Devices, Inc. (a) | 66,658 | 7,616 | |||||||||
Intel Corp. | 301,343 | 14,711 | |||||||||
Lam Research Corp. | 30,627 | 18,067 | |||||||||
Marvell Technology, Inc. | 150,862 | 10,771 | |||||||||
NVIDIA Corp. | 120,688 | 29,552 | |||||||||
Texas Instruments, Inc. | 118,740 | 21,313 | |||||||||
102,030 | |||||||||||
Software (12.0%): | |||||||||||
AppLovin Corp. Class A (a) | 110,679 | 7,130 | |||||||||
Fair Isaac Corp. (a) | 21,000 | 10,395 | |||||||||
Microsoft Corp. | 442,908 | 137,736 | |||||||||
Oracle Corp. | 48,193 | 3,911 | |||||||||
Palo Alto Networks, Inc. (a) | 28,900 | 14,953 | |||||||||
RingCentral, Inc. Class A (a) | 42,167 | 7,442 | |||||||||
ServiceNow, Inc. (a) | 31,614 | 18,519 | |||||||||
Synopsys, Inc. (a) | 37,650 | 11,690 | |||||||||
Workday, Inc. Class A (a) | 51,668 | 13,072 | |||||||||
224,848 | |||||||||||
Technology Hardware, Storage & Peripherals (6.3%): | |||||||||||
Apple, Inc. | 612,431 | 107,041 | |||||||||
HP, Inc. | 108,973 | 4,002 | |||||||||
NetApp, Inc. | 83,804 | 7,250 | |||||||||
118,293 | |||||||||||
Utilities (2.7%): | |||||||||||
DTE Energy Co. | 46,922 | 5,651 | |||||||||
Duke Energy Corp. | 54,159 | 5,690 | |||||||||
Evergy, Inc. | 76,188 | 4,949 | |||||||||
Exelon Corp. | 183,694 | 10,645 | |||||||||
See notes to financial statements.
7
| USAA Mutual Funds Trust USAA Growth & Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
OGE Energy Corp. | 78,921 | $ | 2,993 | ||||||||
Pinnacle West Capital Corp. | 36,220 | 2,521 | |||||||||
PPL Corp. | 86,554 | 2,569 | |||||||||
Public Service Enterprise Group, Inc. | 104,265 | 6,937 | |||||||||
The Southern Co. | 106,261 | 7,384 | |||||||||
UGI Corp. | 23,031 | 1,044 | |||||||||
50,383 | |||||||||||
Total Common Stocks (Cost $1,312,368) | 1,857,362 | ||||||||||
Collateral for Securities Loaned (0.7%)^ | |||||||||||
| Fidelity Investments Money Market Government Portfolio, Institutional Shares, 0.01% (c) | 6,528,054 | 6,528 | |||||||||
HSBC U.S. Government Money Market Fund, I Shares, 0.03% (c) | 6,139,598 | 6,140 | |||||||||
Total Collateral for Securities Loaned (Cost $12,668) | 12,668 | ||||||||||
Total Investments (Cost $1,325,036) — 99.9% | 1,870,030 | ||||||||||
Other assets in excess of liabilities — 0.1% | 1,644 | ||||||||||
NET ASSETS — 100.00% | $ | 1,871,674 | |||||||||
^ 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, 2022.
PLC — Public Limited Company
See notes to financial statements.
8
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA Growth & Income Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,325,036) | $ | 1,870,030 | (a) | ||||
Cash | 26,940 | ||||||
Receivables: | |||||||
Interest and dividends | 1,307 | ||||||
Capital shares issued | 479 | ||||||
Investments sold | 7,653 | ||||||
From Adviser | 6 | ||||||
Prepaid expenses | 23 | ||||||
Total Assets | 1,906,438 | ||||||
Liabilities: | |||||||
Payables: | �� | ||||||
Collateral received on loaned securities | 12,668 | ||||||
Investments purchased | 19,835 | ||||||
Capital shares redeemed | 825 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 911 | ||||||
Administration fees | 244 | ||||||
Custodian fees | 15 | ||||||
Transfer agent fees | 213 | ||||||
Compliance fees | 1 | ||||||
Trustees' fees | 1 | ||||||
| 12b-1 fees | — | (b) | |||||
Other accrued expenses | 51 | ||||||
Total Liabilities | 34,764 | ||||||
Net Assets: | |||||||
Capital | 1,239,917 | ||||||
Total accumulated earnings/(loss) | 631,757 | ||||||
Net Assets | $ | 1,871,674 | |||||
Net Assets | |||||||
Fund Shares | $ | 1,864,834 | |||||
Institutional Shares | 6,001 | ||||||
Class A | 839 | ||||||
Total | $ | 1,871,674 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 77,850 | ||||||
Institutional Shares | 250 | ||||||
Class A | 35 | ||||||
Total | 78,135 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 23.95 | |||||
| Institutional Shares | 24.03 | ||||||
| Class A | 23.85 | ||||||
Maximum Sales Charge — Class A | 5.75 | % | |||||
| Maximum offering price (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 25.31 | |||||
(a) Includes $12,473 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, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA Growth & Income Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 15,473 | |||||
Interest | 1 | ||||||
Securities lending (net of fees) | 33 | ||||||
Foreign tax withholding | (1 | ) | |||||
Total Income | 15,506 | ||||||
Expenses: | |||||||
Investment advisory fees | 5,805 | ||||||
Administration fees — Fund Shares | 1,472 | ||||||
Administration fees — Institutional Shares | 57 | ||||||
Administration fees — Class A | 1 | ||||||
Sub-Administration fees | 20 | ||||||
| 12b-1 fees — Class A | 1 | ||||||
Custodian fees | 46 | ||||||
Transfer agent fees — Fund Shares | 671 | ||||||
Transfer agent fees — Institutional Shares | 57 | ||||||
Transfer agent fees — Class A | — | (a) | |||||
Trustees' fees | 24 | ||||||
Compliance fees | 7 | ||||||
Legal and audit fees | 31 | ||||||
State registration and filing fees | 36 | ||||||
Interfund lending fees | — | (a) | |||||
Other expenses | 100 | ||||||
Total Expenses | 8,328 | ||||||
Expenses waived/reimbursed by Adviser | (11 | ) | |||||
Net Expenses | 8,317 | ||||||
Net Investment Income (Loss) | 7,189 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 156,583 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | (149,588 | ) | |||||
Net realized/unrealized gains (losses) on investments | 6,995 | ||||||
Change in net assets resulting from operations | $ | 14,184 | |||||
(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 Growth & Income Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 7,189 | $ | 12,509 | |||||||
Net realized gains (losses) from investments | 156,583 | 185,553 | |||||||||
| Net change in unrealized appreciation/depreciation on investments | (149,588 | ) | 351,183 | ||||||||
Change in net assets resulting from operations | 14,184 | 549,245 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (209,606 | ) | (13,267 | ) | |||||||
Institutional Shares | (963 | ) | (1,508 | ) | |||||||
Class A | (92 | ) | (44 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (210,661 | ) | (14,819 | ) | |||||||
Change in net assets resulting from capital transactions | (79,910 | ) | (172,686 | ) | |||||||
Change in net assets | (276,387 | ) | 361,740 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 2,148,061 | 1,786,321 | |||||||||
End of period | $ | 1,871,674 | $ | 2,148,061 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 43,370 | $ | 94,079 | |||||||
Distributions reinvested | 206,349 | 13,054 | |||||||||
Cost of shares redeemed | (112,566 | ) | (257,314 | ) | |||||||
Total Fund Shares | $ | 137,153 | $ | (150,181 | ) | ||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 2,782 | $ | 8,819 | |||||||
Distributions reinvested | 961 | 1,507 | |||||||||
Cost of shares redeemed | (220,965 | ) | (22,817 | ) | |||||||
Total Institutional Shares | $ | (217,222 | ) | $ | (12,491 | ) | |||||
Class A | |||||||||||
Proceeds from shares issued | $ | 102 | $ | 200 | |||||||
Distributions reinvested | 78 | 2 | |||||||||
Cost of shares redeemed | (21 | ) | (10,216 | ) | |||||||
Total Class A | $ | 159 | $ | (10,014 | ) | ||||||
Change in net assets resulting from capital transactions | $ | (79,910 | ) | $ | (172,686 | ) | |||||
(continues on next page)
See notes to financial statements.
11
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands) (continued)
USAA Growth & Income Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,636 | 3,934 | |||||||||
Reinvested | 8,234 | 579 | |||||||||
Redeemed | (4,236 | ) | (10,945 | ) | |||||||
Total Fund Shares | 5,634 | (6,432 | ) | ||||||||
Institutional Shares | |||||||||||
Issued | 103 | 372 | |||||||||
Reinvested | 38 | 67 | |||||||||
Redeemed | (7,854 | ) | (953 | ) | |||||||
Total Institutional Shares | (7,713 | ) | (514 | ) | |||||||
Class A | |||||||||||
Issued | 4 | 9 | |||||||||
Reinvested | 3 | — | (a) | ||||||||
Redeemed | (1 | ) | (399 | ) | |||||||
Total Class A | 6 | (390 | ) | ||||||||
Change in Shares | (2,073 | ) | (7,336 | ) | |||||||
(a) Rounds to less than 1 thousand shares.
See notes to financial statements.
12
This page is intentionally left blank.
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, 2022 (Unaudited): | $ | 26.78 | 0.09 | (d) | 0.05 | 0.14 | (0.11 | ) | (2.86 | ) | |||||||||||||||||
| Year Ended July 31: 2021 | $ | 20.41 | 0.15 | (d) | 6.40 | 6.55 | (0.18 | ) | — | ||||||||||||||||||
2020 | $ | 23.70 | 0.22 | (d) | 1.45 | 1.67 | (0.23 | ) | (4.73 | ) | |||||||||||||||||
2019 | $ | 26.19 | 0.25 | (0.24 | ) | 0.01 | (0.24 | ) | (2.26 | ) | |||||||||||||||||
2018 | $ | 24.25 | 0.19 | 3.03 | 3.22 | (0.18 | ) | (1.10 | ) | ||||||||||||||||||
2017 | $ | 20.39 | 0.21 | 3.94 | 4.15 | (0.22 | ) | (0.07 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 26.75 | 0.08 | (d) | 0.10 | 0.18 | (0.04 | ) | (2.86 | ) | |||||||||||||||||
| Year Ended July 31: 2021 | $ | 20.38 | 0.15 | (d) | 6.40 | 6.55 | (0.18 | ) | — | ||||||||||||||||||
2020 | $ | 23.68 | 0.23 | (d) | 1.44 | 1.67 | (0.24 | ) | (4.73 | ) | |||||||||||||||||
2019 | $ | 26.17 | 0.26 | (0.24 | ) | 0.02 | (0.25 | ) | (2.26 | ) | |||||||||||||||||
2018 | $ | 24.23 | 0.20 | 3.03 | 3.23 | (0.19 | ) | (1.10 | ) | ||||||||||||||||||
2017 | $ | 20.38 | 0.22 | 3.94 | 4.16 | (0.24 | ) | (0.07 | ) | ||||||||||||||||||
Class A | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 26.69 | 0.10 | (d) | 0.04 | 0.14 | (0.12 | ) | (2.86 | ) | |||||||||||||||||
| Year Ended July 31: 2021 | $ | 20.31 | 0.08 | (d) | 6.40 | 6.48 | (0.10 | ) | — | ||||||||||||||||||
2020 | $ | 23.61 | 0.16 | (d) | 1.45 | 1.61 | (0.18 | ) | (4.73 | ) | |||||||||||||||||
2019 | $ | 26.10 | 0.19 | (0.25 | ) | (0.06 | ) | (0.17 | ) | (2.26 | ) | ||||||||||||||||
2018 | $ | 24.17 | 0.12 | 3.02 | 3.14 | (0.11 | ) | (1.10 | ) | ||||||||||||||||||
2017 | $ | 20.32 | 0.15 | 3.91 | 4.06 | (0.14 | ) | (0.07 | ) | ||||||||||||||||||
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019, and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(a) Not annualized for periods less than one year.
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 (Excludes Sales Charge)*(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, 2022 (Unaudited): | (2.97 | ) | $ | 23.95 | 0.06 | % | 0.80 | % | 0.70 | % | 0.80 | % | $ | 1,864,834 | 28 | % | |||||||||||||||||||
| Year Ended July 31: 2021 | (0.18 | ) | $ | 26.78 | 32.24 | % | 0.81 | % | 0.63 | % | 0.81 | % | $ | 1,934,246 | 62 | % | |||||||||||||||||||
2020 | (4.96 | ) | $ | 20.41 | 7.81 | % | 0.87 | % | 1.05 | % | 0.87 | % | $ | 1,605,020 | 74 | % | |||||||||||||||||||
2019 | (2.50 | ) | $ | 23.70 | 0.89 | % | 0.88 | % | 1.04 | % | 0.88 | % | $ | 1,673,033 | 93 | %(e) | |||||||||||||||||||
2018 | (1.28 | ) | $ | 26.19 | 13.59 | % | 0.88 | % | 0.80 | % | 0.88 | % | $ | 1,756,259 | 23 | % | |||||||||||||||||||
2017 | (0.29 | ) | $ | 24.25 | 20.49 | % | 0.91 | % | 0.89 | % | 0.91 | % | $ | 1,605,220 | 21 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (2.90 | ) | $ | 24.03 | 0.24 | % | 0.77 | % | 0.60 | % | 0.77 | % | $ | 6,001 | 28 | % | |||||||||||||||||||
| Year Ended July 31: 2021 | (0.18 | ) | $ | 26.75 | 32.32 | % | 0.79 | % | 0.65 | % | 0.79 | % | $ | 213,041 | 62 | % | |||||||||||||||||||
2020 | (4.97 | ) | $ | 20.38 | 7.86 | % | 0.83 | % | 1.09 | % | 0.83 | % | $ | 172,787 | 74 | % | |||||||||||||||||||
2019 | (2.51 | ) | $ | 23.68 | 0.94 | % | 0.83 | %(f) | 1.09 | % | 0.83 | % | $ | 165,137 | 93 | %(e) | |||||||||||||||||||
2018 | (1.29 | ) | $ | 26.17 | 13.66 | % | 0.84 | % | 0.85 | % | 0.84 | % | $ | 159,148 | 23 | % | |||||||||||||||||||
2017 | (0.31 | ) | $ | 24.23 | 20.54 | % | 0.85 | % | 0.95 | % | 0.85 | % | $ | 139,866 | 21 | % | |||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (2.98 | ) | $ | 23.85 | 0.08 | % | 0.76 | % | 0.74 | % | 3.17 | % | $ | 839 | 28 | % | |||||||||||||||||||
| Year Ended July 31: 2021 | (0.10 | ) | $ | 26.69 | 32.04 | % | 1.09 | % | 0.35 | % | 1.49 | % | $ | 774 | 62 | % | |||||||||||||||||||
2020 | (4.91 | ) | $ | 20.31 | 7.52 | % | 1.14 | % | 0.79 | % | 1.14 | % | $ | 8,514 | 74 | % | |||||||||||||||||||
2019 | (2.43 | ) | $ | 23.61 | 0.62 | % | 1.15 | % | 0.77 | % | 1.23 | % | $ | 9,912 | 93 | %(e) | |||||||||||||||||||
2018 | (1.21 | ) | $ | 26.10 | 13.28 | % | 1.17 | %(g) | 0.52 | % | 1.20 | % | $ | 10,858 | 23 | % | |||||||||||||||||||
2017 | (0.21 | ) | $ | 24.17 | 20.10 | % | 1.20 | % | 0.60 | % | 1.24 | % | $ | 9,987 | 21 | % | |||||||||||||||||||
(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.
(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) Prior to December 1, 2017, AMCO voluntarily agreed to limit the annual expenses of Class A to 1.20% of the Class A average daily net assets.
See notes to financial statements.
15
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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 Class A. 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 sales charges, 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 U.S. Generally Accepted Accounting Principles ("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 risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "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, 2022 | ||||||
(Unaudited)
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq 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 are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically 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 NAV to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 1,857,362 | $ | — | $ | — | $ | 1,857,362 | |||||||||||
Collateral for Securities Loaned | 12,668 | — | — | 12,668 | |||||||||||||||
Total | $ | 1,870,030 | $ | — | $ | — | $ | 1,870,030 | |||||||||||
For the six months ended January 31, 2022, there were no transfers in or out of Level 3 in the 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:
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 or 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 discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
Withholding taxes on interest, dividends and gains as a result of certain investments in ADRs by the Funds have been provided for in accordance with each investment's applicable country's tax rules and rates.
17
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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 and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially 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 generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund effectively does not have control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. 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. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk 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 repledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2022.
| Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
| $ | 12,473 | $ | — | $ | 12,668 | ||||||
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.
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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 years, which includes the current fiscal tax year end). 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 an affiliated trust based upon net assets or another appropriate basis.
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, printing fees, and 12b-1 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:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended January 31, 2022, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 579,614 | $ | 866,671 | ||||
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and 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 the largest funds within the Lipper Multi-Cap Core Funds category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
| Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
| +/- 100 to 400 | +/- 4 | ||||||
| +/- 401 to 700 | +/- 5 | ||||||
| +/- 701 and greater | +/- 6 | ||||||
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
19
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective 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.
For the period August 1, 2021, to January 31, 2022, performance adjustments were $(387), $(40), and $(2) for Fund Shares, Institutional Shares, and Class A, in thousands, respectively. Performance adjustments were (0.04)%, (0.07)%, and (0.39)% for Fund Shares, Institutional Shares, and Class A, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
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, 2022, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, 0.10% and 0.15%, which is based on the Fund's average daily net assets of the Fund Shares, of the Institutional Shares and of the Class A, respectively. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA 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 fees for Institutional Shares and Class A are paid monthly based on a fee accrued daily at an annualized rate of 0.10% and 0.10%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred and paid to VCTA for the six months ended January 31, 2022, are reflected on the Statement of Operations as Transfer agent fees.
20
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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 Services, 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.
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 Class A. The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A. Amounts incurred and paid to the Distributor for the six months ended January 31, 2022, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions in connection with sales of Class A. For the six months ended January 31, 2022, the Distributor did not receive any commissions.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 limits for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, 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. As of January 31, 2022, the expense limits (excluding voluntary waivers) were 0.88%, 0.84%, and 1.15% for Fund Shares, Institutional Shares, and Class A, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of January 31, 2022, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at January 31, 2022.
| Expires 2022 | Expires 2024 | Expires 2025 | Total | ||||||||||||
| $ | 4 | $ | 29 | $ | 11 | $ | 44 | ||||||||
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, 2022.
21
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
Equity Risk — The values of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general market, economic and political conditions and other factors. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or may last for extended periods.
Foreign Securities Risk — 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. Global markets, or those in a particular region, may all react in similar fashion to important political, economic, or other developments. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable and make such investments riskier and more volatile.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended January 31, 2022, Citibank received 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 London Interbank Offered Rate ("LIBOR") plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected 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, 2022.
22
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Interfund Lending:
The Trust and the 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 Funds Complex that is permitted to participate in the Facility, 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, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. 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, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending.
The average borrowing or lending for the days outstanding and average interest rate for the Fund during the six months ended January 31, 2022, were as follows (amounts in thousands):
| Borrower or Lender | Amount Outstanding at January 31, 2022 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
| Borrower | $ | — | $ | 2,364 | 6 | 0.60 | % | $ | 3,590 | ||||||||||||||
* For the six months ended January 31, 2022, 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, 2022.
As of July 31, 2021, the Fund had no capital loss carryforwards for federal income tax purposes.
23
USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
(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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
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. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; 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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21- 1/31/22* | Hypothetical Expenses Paid During Period 8/1/21- 1/31/22* | Annualized Expense Ratio During Period 8/1/21- 1/31/22 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,000.60 | $ | 1,021.17 | $ | 4.03 | $ | 4.08 | 0.80 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,002.40 | 1,021.32 | 3.89 | 3.92 | 0.77 | % | ||||||||||||||||||||
Class A | 1,000.00 | 1,000.80 | 1,021.37 | 3.83 | 3.87 | 0.76 | % | ||||||||||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
24
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Considerations of the Board in Continuing the Investment Advisory Agreement
USAA Growth & Income Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement was approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and the Adviser, and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser. At the meeting at which the renewal of the Advisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder
25
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.,
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services and the effects of any performance adjustment1, as well as any fee waivers and reimbursements — was below the median of its expense group and its expense universe. The data indicated that the Fund's total expenses, including after any reimbursements, were below the median of its expense group and its expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund.
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total returns relative to its Lipper index and other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was below the average of its performance universe and its Lipper index for the one-, three-, five- and ten-year periods ended September 30, 2021. The Board took into account management's discussion of the Fund's performance, including the reasons for the Fund's underperformance for the three-year period ended September 30, 2021.
1 The Adviser previously agreed that no performance adjustment (positive or negative) would be made to the amount payable to the Adviser from July 1, 2019, through June 30, 2020.
26
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser reimbursed or waived a portion of its management fees to the Fund. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board considered whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in any economies of scale. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board also considered the effect of the change in size, if any, of each of the Fund's classes on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices and the Adviser is appropriately monitoring the Fund's performance; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
27
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800) 235-8396 | ||||||
23432-0322
January 31, 2022
Semi Annual Report
USAA Income Stock Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 8 | ||||||
Statement of Operations | 9 | ||||||
Statements of Changes in Net Assets | 10 | ||||||
Financial Highlights | 12 | ||||||
Notes to Financial Statements | 14 | ||||||
Supplemental Information | 23 | ||||||
Proxy Voting and Portfolio Holdings Information | 23 | ||||||
Expense Examples | 23 | ||||||
Advisory Contract Approval | 24 |
| |||||
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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA Income Stock Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks current income with the prospect of increasing dividend income and the potential for capital appreciation.
Top 10 Equity Holdings*:
January 31, 2022
(% of Net Assets)
Johnson & Johnson | 2.3 | % | |||||
UnitedHealth Group, Inc. | 2.1 | % | |||||
Cisco Systems, Inc. | 2.0 | % | |||||
Microsoft Corp. | 2.0 | % | |||||
The Procter & Gamble Co. | 1.7 | % | |||||
Philip Morris International, Inc. | 1.7 | % | |||||
Intel Corp. | 1.6 | % | |||||
Altria Group, Inc. | 1.3 | % | |||||
Apple, Inc. | 1.3 | % | |||||
Merck & Co., Inc. | 1.3 | % | |||||
Sector Allocation*:
January 31, 2022
(% of Net Assets)
* Does not include futures contracts, 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%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA Income Stock Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (99.8%) | |||||||||||
Communication Services (5.7%): | |||||||||||
AT&T, Inc. | 926,632 | $ | 23,629 | ||||||||
Comcast Corp. Class A | 579,453 | 28,967 | |||||||||
Fox Corp. Class A | 289,056 | 11,739 | |||||||||
Omnicom Group, Inc. | 460,171 | 34,678 | |||||||||
Sirius XM Holdings, Inc. (a) | 2,976,180 | 18,929 | |||||||||
The Interpublic Group of Cos., Inc. | 341,150 | 12,124 | |||||||||
Verizon Communications, Inc. | 641,185 | 34,130 | |||||||||
164,196 | |||||||||||
Consumer Discretionary (6.5%): | |||||||||||
Best Buy Co., Inc. | 203,390 | 20,192 | |||||||||
Garmin Ltd. | 78,267 | 9,738 | |||||||||
Genuine Parts Co. | 60,820 | 8,103 | |||||||||
H&R Block, Inc. | 278,682 | 6,371 | |||||||||
Lennar Corp. Class A | 162,567 | 15,624 | |||||||||
Lowe's Cos., Inc. | 71,882 | 17,061 | |||||||||
McDonald's Corp. | 68,495 | 17,771 | |||||||||
PulteGroup, Inc. | 229,895 | 12,113 | |||||||||
Target Corp. | 161,727 | 35,649 | |||||||||
Toll Brothers, Inc. | 101,299 | 5,974 | |||||||||
Whirlpool Corp. (a) | 36,332 | 7,637 | |||||||||
Williams-Sonoma, Inc. | 88,848 | 14,264 | |||||||||
Yum! Brands, Inc. | 162,247 | 20,308 | |||||||||
190,805 | |||||||||||
Consumer Staples (11.0%): | |||||||||||
Altria Group, Inc. | 754,148 | 38,371 | |||||||||
Colgate-Palmolive Co. | 319,699 | 26,359 | |||||||||
Costco Wholesale Corp. | 29,765 | 15,035 | |||||||||
General Mills, Inc. | 84,245 | 5,786 | |||||||||
Ingredion, Inc. | 88,717 | 8,401 | |||||||||
Kimberly-Clark Corp. | 69,141 | 9,517 | |||||||||
PepsiCo, Inc. | 86,176 | 14,953 | |||||||||
Philip Morris International, Inc. | 468,499 | 48,185 | |||||||||
The Clorox Co. | 63,576 | 10,672 | |||||||||
The Coca-Cola Co. | 160,548 | 9,795 | |||||||||
The Hershey Co. | 45,500 | 8,967 | |||||||||
The J.M. Smucker Co. (a) | 43,800 | 6,157 | |||||||||
The Kroger Co. | 426,786 | 18,604 | |||||||||
The Procter & Gamble Co. | 306,110 | 49,116 | |||||||||
Tyson Foods, Inc. Class A | 190,996 | 17,360 | |||||||||
Walgreens Boots Alliance, Inc. | 282,675 | 14,066 | |||||||||
Walmart, Inc. | 113,818 | 15,913 | |||||||||
317,257 | |||||||||||
Energy (2.9%): | |||||||||||
Chevron Corp. | 111,438 | 14,635 | |||||||||
Coterra Energy, Inc. | 862,934 | 18,898 | |||||||||
Devon Energy Corp. | 278,246 | 14,071 | |||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA Income Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
EOG Resources, Inc. | 216,464 | $ | 24,132 | ||||||||
HollyFrontier Corp. | 166,954 | 5,870 | |||||||||
Phillips 66 | 75,215 | 6,377 | |||||||||
83,983 | |||||||||||
Financials (18.6%): | |||||||||||
Aflac, Inc. | 226,138 | 14,206 | |||||||||
American Express Co. | 74,563 | 13,408 | |||||||||
American Financial Group, Inc. | 76,815 | 10,007 | |||||||||
Ameriprise Financial, Inc. | 68,367 | 20,805 | |||||||||
Annaly Capital Management, Inc. | 2,187,186 | 17,279 | |||||||||
Bank of America Corp. | 408,307 | 18,839 | |||||||||
Capital One Financial Corp. | 33,823 | 4,963 | |||||||||
Comerica, Inc. | 229,326 | 21,277 | |||||||||
Discover Financial Services | 122,893 | 14,224 | |||||||||
Everest Re Group Ltd. | 13,435 | 3,807 | |||||||||
FactSet Research Systems, Inc. | 14,741 | 6,219 | |||||||||
Fidelity National Financial, Inc. | 399,964 | 20,138 | |||||||||
Fifth Third Bancorp | 422,717 | 18,866 | |||||||||
First American Financial Corp. | 56,332 | 4,197 | |||||||||
First Horizon Corp. | 914,267 | 15,643 | |||||||||
Jefferies Financial Group, Inc. | 424,196 | 15,543 | |||||||||
JPMorgan Chase & Co. | 214,446 | 31,867 | |||||||||
KeyCorp | 1,363,646 | 34,173 | |||||||||
M&T Bank Corp. | 47,334 | 8,017 | |||||||||
Marsh & McLennan Cos., Inc. | 52,974 | 8,139 | |||||||||
MetLife, Inc. | 226,939 | 15,219 | |||||||||
Morgan Stanley | 103,964 | 10,660 | |||||||||
Principal Financial Group, Inc. | 239,028 | 17,463 | |||||||||
Prudential Financial, Inc. | 153,662 | 17,144 | |||||||||
Regions Financial Corp. | 1,107,966 | 25,417 | |||||||||
Synchrony Financial | 277,644 | 11,825 | |||||||||
Synovus Financial Corp. | 91,919 | 4,574 | |||||||||
T. Rowe Price Group, Inc. | 117,520 | 18,149 | |||||||||
The Allstate Corp. | 193,156 | 23,309 | |||||||||
The Goldman Sachs Group, Inc. | 83,313 | 29,549 | |||||||||
The Hanover Insurance Group, Inc. | 56,661 | 7,817 | |||||||||
The Hartford Financial Services Group, Inc. | 89,628 | 6,442 | |||||||||
The PNC Financial Services Group, Inc. | 50,902 | 10,485 | |||||||||
The Travelers Cos., Inc. | 128,042 | 21,278 | |||||||||
Zions Bancorp NA | 209,713 | 14,223 | |||||||||
535,171 | |||||||||||
Health Care (17.0%): | |||||||||||
Abbott Laboratories | 76,091 | 9,698 | |||||||||
AbbVie, Inc. | 188,229 | 25,767 | |||||||||
AmerisourceBergen Corp. | 41,413 | 5,640 | |||||||||
Amgen, Inc. | 153,796 | 34,933 | |||||||||
Anthem, Inc. | 35,765 | 15,772 | |||||||||
Bristol-Myers Squibb Co. | 242,729 | 15,751 | |||||||||
Chemed Corp. | 18,013 | 8,446 | |||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA Income Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
CVS Health Corp. | 215,753 | $ | 22,980 | ||||||||
Danaher Corp. | 13,784 | 3,939 | |||||||||
Eli Lilly & Co. | 128,730 | 31,589 | |||||||||
Gilead Sciences, Inc. | 454,608 | 31,222 | |||||||||
Johnson & Johnson | 383,488 | 66,071 | |||||||||
McKesson Corp. | 91,572 | 23,508 | |||||||||
Medtronic PLC | 49,725 | 5,146 | |||||||||
Merck & Co., Inc. | 460,670 | 37,535 | |||||||||
PerkinElmer, Inc. | 31,681 | 5,455 | |||||||||
Pfizer, Inc. | 621,487 | 32,746 | |||||||||
Quest Diagnostics, Inc. | 89,228 | 12,048 | |||||||||
Thermo Fisher Scientific, Inc. | 24,490 | 14,236 | |||||||||
UnitedHealth Group, Inc. | 127,980 | 60,480 | |||||||||
West Pharmaceutical Services, Inc. | 23,370 | 9,190 | |||||||||
Zoetis, Inc. | 58,996 | 11,787 | |||||||||
483,939 | |||||||||||
Industrials (11.0%): | |||||||||||
Cintas Corp. | 44,201 | 17,306 | |||||||||
Cummins, Inc. | 71,883 | 15,878 | |||||||||
Eaton Corp. PLC | 109,718 | 17,383 | |||||||||
Emerson Electric Co. | 88,327 | 8,122 | |||||||||
Fastenal Co. | 325,873 | 18,470 | |||||||||
General Dynamics Corp. | 83,325 | 17,673 | |||||||||
Huntington Ingalls Industries, Inc. | 54,824 | 10,263 | |||||||||
Illinois Tool Works, Inc. | 109,690 | 25,658 | |||||||||
Knight-Swift Transportation Holdings, Inc. | 180,677 | 10,223 | |||||||||
Lennox International, Inc. | 48,962 | 13,887 | |||||||||
Lockheed Martin Corp. | 76,512 | 29,773 | |||||||||
ManpowerGroup, Inc. | 100,528 | 10,542 | |||||||||
Masco Corp. | 307,972 | 19,504 | |||||||||
Northrop Grumman Corp. | 26,409 | 9,769 | |||||||||
Oshkosh Corp. | 61,256 | 6,972 | |||||||||
Owens Corning | 98,175 | 8,708 | |||||||||
Robert Half International, Inc. | 173,175 | 19,614 | |||||||||
Rockwell Automation, Inc. | 64,673 | 18,704 | |||||||||
Snap-on, Inc. | 27,589 | 5,745 | |||||||||
United Parcel Service, Inc. Class B | 77,356 | 15,642 | |||||||||
W.W. Grainger, Inc. | 32,075 | 15,881 | |||||||||
315,717 | |||||||||||
Information Technology (13.2%): | |||||||||||
Accenture PLC Class A | 42,887 | 15,164 | |||||||||
Apple, Inc. | 217,404 | 37,998 | |||||||||
Automatic Data Processing, Inc. | 38,153 | 7,866 | |||||||||
Cisco Systems, Inc. | 1,050,632 | 58,488 | |||||||||
Hewlett Packard Enterprise Co. | 517,225 | 8,446 | |||||||||
HP, Inc. | 289,868 | 10,647 | |||||||||
Intel Corp. | 941,264 | 45,953 | |||||||||
International Business Machines Corp. | 123,358 | 16,477 | |||||||||
Juniper Networks, Inc. | 325,006 | 11,317 | |||||||||
See notes to financial statements.
5
| USAA Mutual Funds Trust USAA Income Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Microsoft Corp. | 187,386 | $ | 58,273 | ||||||||
Motorola Solutions, Inc. | 47,338 | 10,980 | |||||||||
NetApp, Inc. | 263,652 | 22,809 | |||||||||
Oracle Corp. | 89,361 | 7,253 | |||||||||
QUALCOMM, Inc. | 179,258 | 31,506 | |||||||||
Texas Instruments, Inc. | 168,151 | 30,181 | |||||||||
The Western Union Co. | 403,960 | 7,639 | |||||||||
380,997 | |||||||||||
Materials (4.0%): | |||||||||||
Avery Dennison Corp. | 82,680 | 16,984 | |||||||||
LyondellBasell Industries NV Class A | 185,843 | 17,977 | |||||||||
Nucor Corp. | 163,728 | 16,602 | |||||||||
Packaging Corp. of America | 144,025 | 21,695 | |||||||||
PPG Industries, Inc. | 91,705 | 14,324 | |||||||||
Reliance Steel & Aluminum Co. | 32,092 | 4,906 | |||||||||
Steel Dynamics, Inc. | 184,942 | 10,268 | |||||||||
The Sherwin-Williams Co. | 54,746 | 15,686 | |||||||||
118,442 | |||||||||||
Real Estate (4.6%): | |||||||||||
AvalonBay Communities, Inc. | 47,254 | 11,541 | |||||||||
Boston Properties, Inc. | 79,203 | 8,877 | |||||||||
Equity Residential | 92,392 | 8,198 | |||||||||
Essex Property Trust, Inc. | 25,817 | 8,584 | |||||||||
Kimco Realty Corp. | 283,818 | 6,885 | |||||||||
National Retail Properties, Inc. | 120,758 | 5,359 | |||||||||
Prologis, Inc. | 156,072 | 24,475 | |||||||||
Realty Income Corp. | 129,317 | 8,976 | |||||||||
Regency Centers Corp. | 62,035 | 4,451 | |||||||||
Ventas, Inc. | 165,613 | 8,781 | |||||||||
VICI Properties, Inc. (a) | 536,301 | 15,349 | |||||||||
Welltower, Inc. | 132,572 | 11,485 | |||||||||
Weyerhaeuser Co. | 268,061 | 10,838 | |||||||||
133,799 | |||||||||||
Utilities (5.3%): | |||||||||||
Duke Energy Corp. | 149,031 | 15,657 | |||||||||
Evergy, Inc. | 299,514 | 19,456 | |||||||||
Exelon Corp. | 530,956 | 30,769 | |||||||||
OGE Energy Corp. | 217,169 | 8,235 | |||||||||
PPL Corp. | 238,174 | 7,069 | |||||||||
Public Service Enterprise Group, Inc. | 410,158 | 27,288 | |||||||||
The Southern Co. | 468,088 | 32,528 | |||||||||
UGI Corp. | 330,712 | 14,998 | |||||||||
156,000 | |||||||||||
Total Common Stocks (Cost $2,264,424) | 2,880,306 | ||||||||||
See notes to financial statements.
6
| USAA Mutual Funds Trust USAA Income Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Collateral for Securities Loaned (1.3%)^ | |||||||||||
| Fidelity Investments Money Market Government Portfolio, Institutional Shares, 0.01% (b) | 6,943,735 | $ | 6,944 | ||||||||
HSBC U.S. Government Money Market Fund, I Shares, 0.03% (b) | 31,310,772 | 31,311 | |||||||||
Total Collateral for Securities Loaned (Cost $38,255) | 38,255 | ||||||||||
Total Investments (Cost $2,302,679) — 101.1% | 2,918,561 | ||||||||||
Liabilities in excess of other assets — (1.1)% | (30,995 | ) | |||||||||
NET ASSETS — 100.00% | $ | 2,887,566 | |||||||||
^ Purchased with cash collateral from securities on loan.
(a) All or a portion of this security is on loan.
(b) Rate disclosed is the daily yield on January 31, 2022.
PLC — Public Limited Company
See notes to financial statements.
7
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA Income Stock Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $2,302,679) | $ | 2,918,561 | (a) | ||||
Cash | 6,341 | ||||||
Receivables: | |||||||
Interest and dividends | 3,209 | ||||||
Capital shares issued | 290 | ||||||
Reclaims | 454 | ||||||
From Adviser | 9 | ||||||
Prepaid expenses | 26 | ||||||
Total Assets | 2,928,890 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 38,255 | ||||||
Capital shares redeemed | 1,222 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 1,162 | ||||||
Administration fees | 327 | ||||||
Custodian fees | 20 | ||||||
Transfer agent fees | 265 | ||||||
Compliance fees | 2 | ||||||
Trustees' fees | — | (b) | |||||
Other accrued expenses | 71 | ||||||
Total Liabilities | 41,324 | ||||||
Net Assets: | |||||||
Capital | 2,157,232 | ||||||
Total accumulated earnings/(loss) | 730,334 | ||||||
Net Assets | $ | 2,887,566 | |||||
Net Assets | |||||||
Fund Shares | $ | 1,765,680 | |||||
Institutional Shares | 1,121,854 | ||||||
R6 Shares | 32 | ||||||
Total | $ | 2,887,566 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 90,660 | ||||||
Institutional Shares | 57,695 | ||||||
R6 Shares | 2 | ||||||
Total | 148,357 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 19.48 | |||||
| Institutional Shares | 19.44 | ||||||
| R6 Shares | 19.63 | ||||||
(a) Includes $37,750 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.
8
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended January 31, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA Income Stock Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 38,522 | |||||
Interest | 1 | ||||||
Securities lending (net of fees) | 76 | ||||||
Total Income | 38,599 | ||||||
Expenses: | |||||||
Investment advisory fees | 6,737 | ||||||
Administration fees — Fund Shares | 1,335 | ||||||
Administration fees — Institutional Shares | 565 | ||||||
Administration fees — R6 Shares | — | (a) | |||||
Sub-Administration fees | 14 | ||||||
Custodian fees | 61 | ||||||
Transfer agent fees — Fund Shares | 522 | ||||||
Transfer agent fees — Institutional Shares | 565 | ||||||
Transfer agent fees — R6 Shares | — | (a) | |||||
Trustees' fees | 24 | ||||||
Compliance fees | 10 | ||||||
Legal and audit fees | 31 | ||||||
State registration and filing fees | 37 | ||||||
Interfund lending fees | — | (a) | |||||
Other expenses | 138 | ||||||
Total Expenses | 10,039 | ||||||
Expenses waived/reimbursed by Adviser | (22 | ) | |||||
Net Expenses | 10,017 | ||||||
Net Investment Income (Loss) | 28,582 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 166,365 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | (38,461 | ) | |||||
Net realized/unrealized gains (losses) on investments | 127,904 | ||||||
Change in net assets resulting from operations | $ | 156,486 | |||||
(a) Rounds to less than $1 thousand.
See notes to financial statements.
9
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands)
USAA Income Stock Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 28,582 | $ | 51,269 | |||||||
Net realized gains (losses) from investments | 166,365 | 268,859 | |||||||||
| Net change in unrealized appreciation/depreciation on investments | (38,461 | ) | 400,765 | ||||||||
Change in net assets resulting from operations | 156,486 | 720,893 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (156,402 | ) | (30,164 | ) | |||||||
Institutional Shares | (104,502 | ) | (20,309 | ) | |||||||
R6 Shares | (3 | ) | (82 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (260,907 | ) | (50,555 | ) | |||||||
Change in net assets resulting from capital transactions | 172,674 | (371,084 | ) | ||||||||
Change in net assets | 68,253 | 299,254 | |||||||||
Net Assets: | |||||||||||
Beginning of period | 2,819,313 | 2,520,059 | |||||||||
End of period | $ | 2,887,566 | $ | 2,819,313 | |||||||
See notes to financial statements.
10
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands) (continued)
USAA Income Stock Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 41,544 | $ | 78,038 | |||||||
Distributions reinvested | 151,251 | 28,973 | |||||||||
Cost of shares redeemed | (107,430 | ) | (248,698 | ) | |||||||
Total Fund Shares | $ | 85,365 | $ | (141,687 | ) | ||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 164,416 | $ | 31,528 | |||||||
Distributions reinvested | 104,415 | 20,293 | |||||||||
Cost of shares redeemed | (181,528 | ) | (271,821 | ) | |||||||
Total Institutional Shares | $ | 87,303 | $ | (220,000 | ) | ||||||
R6 Shares | |||||||||||
Proceeds from shares issued | $ | 3 | $ | 31 | |||||||
Distributions reinvested | 3 | 6 | |||||||||
Cost of shares redeemed | — | (a) | (9,434 | ) | |||||||
Total R6 Shares | $ | 6 | $ | (9,397 | ) | ||||||
Change in net assets resulting from capital transactions | $ | 172,674 | $ | (371,084 | ) | ||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 2,039 | 4,259 | |||||||||
Reinvested | 7,651 | 1,633 | |||||||||
Redeemed | (5,285 | ) | (13,926 | ) | |||||||
Total Fund Shares | 4,405 | (8,034 | ) | ||||||||
Institutional Shares | |||||||||||
Issued | 7,932 | 1,763 | |||||||||
Reinvested | 5,290 | 1,148 | |||||||||
Redeemed | (9,048 | ) | (14,897 | ) | |||||||
Total Institutional Shares | 4,174 | (11,986 | ) | ||||||||
R6 Shares | |||||||||||
Issued | 1 | 2 | |||||||||
Reinvested | — | (b) | — | (b) | |||||||
Redeemed | — | (b) | (529 | ) | |||||||
Total R6 Shares | 1 | (527 | ) | ||||||||
Change in Shares | 8,580 | (20,547 | ) | ||||||||
(a) Rounds to less than $1 thousand.
(b) Rounds to less than 1,000 shares.
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, 2022 (Unaudited): | $ | 20.18 | 0.20 | (d) | 0.94 | 1.14 | (0.23 | ) | (1.61 | ) | |||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 15.73 | 0.34 | (d) | 4.45 | 4.79 | (0.33 | ) | (0.01 | ) | |||||||||||||||||
2020 | $ | 19.78 | 0.40 | (d) | (0.87 | ) | (0.47 | ) | (0.36 | ) | (3.22 | ) | |||||||||||||||
2019 | $ | 20.24 | 0.43 | 0.70 | 1.13 | (0.44 | ) | (1.15 | ) | ||||||||||||||||||
2018 | $ | 19.68 | 0.40 | 1.74 | 2.14 | (0.40 | ) | (1.18 | ) | ||||||||||||||||||
2017 | $ | 18.18 | 0.42 | 1.51 | 1.93 | (0.43 | ) | — | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 20.15 | 0.20 | (d) | 0.93 | 1.13 | (0.23 | ) | (1.61 | ) | |||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 15.71 | 0.34 | (d) | 4.44 | 4.78 | (0.33 | ) | (0.01 | ) | |||||||||||||||||
2020 | $ | 19.76 | 0.40 | (d) | (0.86 | ) | (0.46 | ) | (0.37 | ) | (3.22 | ) | |||||||||||||||
2019 | $ | 20.22 | 0.43 | 0.70 | 1.13 | (0.44 | ) | (1.15 | ) | ||||||||||||||||||
2018 | $ | 19.66 | 0.41 | 1.73 | 2.14 | (0.40 | ) | (1.18 | ) | ||||||||||||||||||
2017 | $ | 18.16 | 0.43 | 1.50 | 1.93 | (0.43 | ) | — | |||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 20.76 | 0.36 | (d) | 0.96 | 1.32 | (0.84 | ) | (1.61 | ) | |||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 15.72 | 0.35 | (d) | 5.05 | 5.40 | (0.35 | ) | (0.01 | ) | |||||||||||||||||
2020 | $ | 19.77 | 0.42 | (d) | (0.87 | ) | (0.45 | ) | (0.38 | ) | (3.22 | ) | |||||||||||||||
2019 | $ | 20.23 | 0.45 | 0.69 | 1.14 | (0.45 | ) | (1.15 | ) | ||||||||||||||||||
2018 | $ | 19.67 | 0.47 | 1.69 | 2.16 | (0.42 | ) | (1.18 | ) | ||||||||||||||||||
| December 1, 2016(i) 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.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019, and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(a) Not annualized for periods less than one year.
(b) 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, 2022 (Unaudited): | (1.84 | ) | $ | 19.48 | 5.63 | % | 0.69 | % | 1.95 | % | 0.69 | % | $ | 1,765,680 | 29 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.34 | ) | $ | 20.18 | 30.75 | % | 0.70 | % | 1.90 | % | 0.70 | % | $ | 1,740,731 | 53 | % | |||||||||||||||||||
2020 | (3.58 | ) | $ | 15.73 | (3.84 | )% | 0.74 | % | 2.31 | % | 0.74 | % | $ | 1,482,959 | 64 | % | |||||||||||||||||||
2019 | (1.59 | ) | $ | 19.78 | 6.26 | % | 0.75 | % | 2.44 | % | 0.75 | % | $ | 1,707,034 | 86 | %(e) | |||||||||||||||||||
2018 | (1.58 | ) | $ | 20.24 | 11.16 | % | 0.76 | %(f) | 2.19 | % | 0.76 | %(f) | $ | 1,713,558 | 23 | % | |||||||||||||||||||
2017 | (0.43 | ) | $ | 19.68 | 10.71 | % | 0.77 | %(f) | 2.24 | % | 0.77 | %(f) | $ | 1,651,374 | 23 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (1.84 | ) | $ | 19.44 | 5.59 | % | 0.68 | % | 1.98 | % | 0.68 | % | $ | 1,121,854 | 29 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.34 | ) | $ | 20.15 | 30.75 | % | 0.68 | % | 1.91 | % | 0.69 | % | $ | 1,078,555 | 53 | % | |||||||||||||||||||
2020 | (3.59 | ) | $ | 15.71 | (3.81 | )% | 0.72 | % | 2.34 | % | 0.72 | % | $ | 1,028,803 | 64 | % | |||||||||||||||||||
2019 | (1.59 | ) | $ | 19.76 | 6.30 | % | 0.73 | % | 2.47 | % | 0.73 | % | $ | 1,088,446 | 86 | %(e) | |||||||||||||||||||
2018 | (1.58 | ) | $ | 20.22 | 11.21 | % | 0.72 | %(f) | 2.22 | % | 0.72 | %(f) | $ | 1,034,842 | 23 | % | |||||||||||||||||||
2017 | (0.43 | ) | $ | 19.66 | 10.76 | % | 0.73 | %(f) | 2.30 | % | 0.73 | %(f) | $ | 1,097,164 | 23 | % | |||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (2.45 | ) | $ | 19.63 | 6.42 | % | 0.80 | %(g) | 3.43 | % | 66.07 | %(h) | $ | 32 | 29 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.36 | ) | $ | 20.76 | 34.71 | % | 0.56 | % | 2.02 | % | 0.94 | % | $ | 27 | 53 | % | |||||||||||||||||||
2020 | (3.60 | ) | $ | 15.72 | (3.77 | )% | 0.65 | % | 2.40 | % | 0.72 | % | $ | 8,297 | 64 | % | |||||||||||||||||||
2019 | (1.60 | ) | $ | 19.77 | 6.37 | % | 0.65 | % | 2.54 | % | 0.73 | % | $ | 12,038 | 86 | %(e) | |||||||||||||||||||
2018 | (1.60 | ) | $ | 20.23 | 11.31 | % | 0.65 | %(f) | 2.33 | % | 0.90 | %(f) | $ | 12,746 | 23 | % | |||||||||||||||||||
| December 1, 2016(i) through July 31, 2017 | (0.37 | ) | $ | 19.67 | 10.36 | % | 0.65 | %(f) | 2.13 | % | 1.24 | %(f) | $ | 5,412 | 23 | % | |||||||||||||||||||
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares.
(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) For the period ended January 31, 2022, the R6 Shares net expense ratio includes the impact of the performance fee adjustment. If the performance fee adjustment of (1.45)% was not applied to the R6 Shares net expense ratio, the R6 Shares net expense ratio would have been 0.65%.
(h) The class specific expenses have significantly impacted the gross expense ratio due to fluctuations in the R6 Shares net assets.
(i) Commencement of operations.
See notes to financial statements.
13
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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 U.S. Generally Accepted Accounting Principles ("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 risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
14
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq 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 are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically 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 NAV to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 2,880,306 | $ | — | $ | — | $ | 2,880,306 | |||||||||||
Collateral for Securities Loaned | 38,255 | — | — | 38,255 | |||||||||||||||
Total | $ | 2,918,561 | $ | — | $ | — | $ | 2,918,561 | |||||||||||
For the six months ended January 31, 2022, there were no transfers in or out of Level 3 in the 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:
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 or 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 discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
15
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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 and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially 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 generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund effectively does not have control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. 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. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk 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 repledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2022.
| Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
| $ | 37,750 | $ | — | $ | 38,255 | ||||||
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.
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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 years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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 an 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:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended January 31, 2022, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 824,505 | $ | 881,599 | ||||
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The 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 www.vcm.com. As of January 31, 2022, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 0.1 | ||||||
USAA Cornerstone Equity Fund | 0.4 | ||||||
USAA Target Retirement Income Fund | 0.2 | ||||||
USAA Target Retirement 2030 Fund | 0.8 | ||||||
USAA Target Retirement 2040 Fund | 1.2 | ||||||
USAA Target Retirement 2050 Fund | 0.9 | ||||||
USAA Target Retirement 2060 Fund | 0.1 | ||||||
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019,
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and 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 the largest funds within the Lipper Equity Income Funds category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
| Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
| +/- 100 to 400 | +/- 4 | ||||||
| +/- 401 to 700 | +/- 5 | ||||||
| +/- 701 and greater | +/- 6 | ||||||
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective 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.
For the period August 1, 2021, to January 31, 2022, performance adjustments were $(328), $(211), and less than $1 for Fund Shares, Institutional Shares, and R6 Shares, in thousands, respectively. Performance adjustments were (0.04)%, (0.04)%, and (1.45)% for Fund Shares, Institutional Shares, and R6 Shares, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
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, 2022, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, 0.10% and 0.05%, which is based on the Fund's average daily net assets of the Fund Shares, of the Institutional Shares and of the R6 Shares, respectively. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA 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 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 and paid to VCTA for the six months ended January 31, 2022, 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 Services, 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 and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 limits for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, 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. As of January 31, 2022, the expense limits (excluding voluntary waivers) were 0.76%, 0.72%, and 0.65% for Fund Shares, Institutional Shares, and R6 Shares, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
19
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
As of January 31, 2022, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at January 31, 2022.
| Expires 2022 | Expires 2023 | Expires 2024 | Expires 2025 | Total | |||||||||||||||
| $ | 4 | $ | 21 | $ | 52 | $ | 22 | $ | 99 | ||||||||||
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, 2022.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
Equity Risk — The values of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general market, economic and political conditions and other factors. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or may last for extended periods.
Financials Sectors Risk — The Fund's investments in companies within the financials sector means that market or economic factors impacting that sector could have a significant effect on the value of the Fund's investments and could make the Fund's performance more volatile. Financial companies, such as retail and commercial banks, insurance companies, and financial services companies, are especially subject to the adverse effects of economic recession, currency exchange rates, extensive government regulation, decreases in the availability of capital, volatile interest rates, portfolio concentrations in geographic markets, industries or products (such as commercial and residential real estate loans), and competition from new entrants in their fields of business.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount.
20
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended January 31, 2022, Citibank received 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 London Interbank Offered Rate ("LIBOR") plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected 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, 2022.
Interfund Lending:
The Trust and the 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 Funds Complex that is permitted to participate in the Facility, 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, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. 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, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending.
The average borrowing or lending for the days outstanding and average interest rate for the Fund during the six months ended January 31, 2022, were as follows (amounts in thousands):
| Borrower or Lender | Amount Outstanding at January 31, 2022 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
| Borrower | $ | — | $ | 3,867 | 2 | 0.58 | % | $ | 5,030 | ||||||||||||||
* For the six months ended January 31, 2022, 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, 2022.
21
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
As of July 31, 2021, the Fund had no capital loss carryforwards for federal income tax purposes.
9. Subsequent Events:
On December 10, 2021, the Board approved a Plan of Liquidation for the USAA Income Stock Fund R6 Shares, which will be liquidated on or about February 28, 2022. Effective January 3, 2022, the USAA Income Stock Fund R6 Shares closed to new investors.
22
USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
(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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
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. Form N-PORT is available on the SEC's website at www.sec.gov.
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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21- 1/31/22* | Hypothetical Expenses Paid During Period 8/1/21- 1/31/22* | Annualized Expense Ratio During Period 8/1/21- 1/31/22 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,056.30 | $ | 1,021.73 | $ | 3.58 | $ | 3.52 | 0.69 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,055.90 | 1,021.78 | 3.52 | 3.47 | 0.68 | % | ||||||||||||||||||||
R6 Shares** | 1,000.00 | 1,064.20 | 1,021.93 | 3.38 | 3.31 | 0.65 | % | ||||||||||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
** The expense ratio for the six-month period could potentially change due to performance fee adjustments.
23
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Considerations of the Board in Continuing the Investment Advisory Agreement
USAA Income Stock Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement was approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and the Adviser, and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser. At the meeting at which the renewal of the Advisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.
24
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services and the effects of any performance adjustment1, as well as any fee waivers and reimbursements — was below the median of its expense group and its expense universe. The data indicated that the Fund's total expenses, including after any reimbursements, were below the median of its expense group and its expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund.
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total returns relative to its Lipper index and other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was below the average of its performance universe for the one-, three-, five-year periods ended September 30, 2021, and was above the average of its performance universe for the ten-year period ended September 30, 2021, and was below its Lipper index for the one-, three-, five- and ten-year periods ended September 30, 2021. The Board took into account management's discussion of the Fund's performance, including the reasons for the Fund's underperformance.
1 The Adviser previously agreed that no performance adjustment (positive or negative) would be made to the amount payable to the Adviser from July 1, 2019, through June 30, 2020.
25
USAA Mutual Funds Trust | Supplemental Information ��� continued January 31, 2022 | ||||||
(Unaudited)
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser reimbursed or waived a portion of its management fees to the Fund. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board considered whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in any economies of scale. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board also considered the effect of the change in size, if any, of each of the Fund's classes on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than some expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices and the Adviser is appropriately monitoring the Fund's performance; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
26
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800) 235-8396 | ||||||
23422-0322
January 31, 2022
Semi Annual Report
USAA Science & Technology Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 12 | ||||||
Statement of Operations | 13 | ||||||
Statements of Changes in Net Assets | 14 | ||||||
Financial Highlights | 16 | ||||||
Notes to Financial Statements | 18 | ||||||
Supplemental Information | 27 | ||||||
Proxy Voting and Portfolio Holdings Information | 27 | ||||||
Expense Examples | 27 | ||||||
Advisory Contract Approval | 28 | ||||||
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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA Science & Technology Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks long-term capital appreciation.
Top 10 Equity Holdings*:
January 31, 2022
(% of Net Assets)
Microsoft Corp. | 8.3 | % | |||||
Amazon.com, Inc. | 4.8 | % | |||||
RingCentral, Inc. Class A | 2.7 | % | |||||
Meta Platforms, Inc. Class A | 2.6 | % | |||||
Alphabet, Inc. Class A | 2.3 | % | |||||
NVIDIA Corp. | 2.3 | % | |||||
Marvell Technology, Inc. | 2.2 | % | |||||
ServiceNow, Inc. | 2.0 | % | |||||
MACOM Technology Solutions Holdings, Inc. | 2.0 | % | |||||
Visa, Inc. Class A | 1.9 | % | |||||
Sector Allocation*:
January 31, 2022
(% of Net Assets)
* Does not include futures contracts, 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%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (98.2%) | |||||||||||
Australia (0.1%): | |||||||||||
Health Care (0.1%): | |||||||||||
Opthea Ltd., ADR (a) | 305,881 | $ | 2,010 | ||||||||
Belgium (0.0%): (b) | |||||||||||
Health Care (0.0%): | |||||||||||
UCB SA | 1,645 | 164 | |||||||||
Brazil (0.3%): | |||||||||||
Consumer Discretionary (0.3%): | |||||||||||
Arco Platform Ltd. Class A (a) (c) | 196,980 | 4,166 | |||||||||
Health Care (0.0%): (b) | |||||||||||
Hypera SA | 33,100 | 194 | |||||||||
Notre Dame Intermedica Participacoes SA | 12,100 | 162 | |||||||||
356 | |||||||||||
4,522 | |||||||||||
Canada (0.6%): | |||||||||||
Health Care (0.2%): | |||||||||||
Fusion Pharmaceuticals, Inc. (a) | 362,387 | 2,772 | |||||||||
Information Technology (0.4%): | |||||||||||
Shopify, Inc. Class A (a) | 5,925 | 5,713 | |||||||||
8,485 | |||||||||||
China (0.1%): | |||||||||||
Health Care (0.1%): | |||||||||||
Everest Medicines Ltd. (a) (d) | 28,000 | 93 | |||||||||
Gracell Biotechnologies, Inc., ADR (a) (c) | 8,959 | 32 | |||||||||
InnoCare Pharma Ltd. (a) (d) | 26,000 | 38 | |||||||||
Shandong Weigao Group Medical Polymer Co. Ltd. Class H | 72,000 | 89 | |||||||||
Venus MedTech Hangzhou, Inc. Class H (a) (d) | 26,500 | 102 | |||||||||
Wuxi AppTec Co. Ltd. Class H (d) | 11,276 | 162 | |||||||||
Zai Lab Ltd. (a) | 400 | 19 | |||||||||
Zai Lab Ltd., ADR (a) | 5,574 | 277 | |||||||||
812 | |||||||||||
Denmark (0.0%): (b) | |||||||||||
Health Care (0.0%): | |||||||||||
Ascendis Pharma A/S, ADR (a) | 1,599 | 195 | |||||||||
Zealand Pharma A/S, ADR (a) (c) (e) | 1,429 | 28 | |||||||||
223 | |||||||||||
Finland (0.3%): | |||||||||||
Information Technology (0.3%): | |||||||||||
Nokia Oyj, ADR (a) | 828,310 | 4,887 | |||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Germany (0.0%): (b) | |||||||||||
Health Care (0.0%): | |||||||||||
BioNTech SE, ADR (a) | 633 | $ | 109 | ||||||||
Hong Kong (0.0%): (b) | |||||||||||
Health Care (0.0%): | |||||||||||
CSPC Pharmaceutical Group Ltd. | 58,000 | 70 | |||||||||
Hutchison China Meditech Ltd., ADR (a) | 1,647 | 45 | |||||||||
Hutchmed China Ltd. (a) | 6,649 | 35 | |||||||||
150 | |||||||||||
Ireland (0.0%): (b) | |||||||||||
Health Care (0.0%): | |||||||||||
Alkermes PLC (a) | 11,467 | 292 | |||||||||
Israel (1.6%): | |||||||||||
Information Technology (1.6%): | |||||||||||
ironSource Ltd. Class A (a) (c) | 675,951 | 4,671 | |||||||||
Wix.com Ltd. (a) | 153,031 | 20,103 | |||||||||
24,774 | |||||||||||
Italy (0.0%): (b) | |||||||||||
Health Care (0.0%): | |||||||||||
DiaSorin SpA | 1,486 | 229 | |||||||||
Japan (0.8%): | |||||||||||
Health Care (0.5%): | |||||||||||
Astellas Pharma, Inc. | 5,400 | 87 | |||||||||
Chugai Pharmaceutical Co. Ltd. | 6,000 | 195 | |||||||||
Daiichi Sankyo Co. Ltd. | 13,950 | 314 | |||||||||
Eisai Co. Ltd. | 4,615 | 231 | |||||||||
Hoya Corp. | 51,600 | 6,692 | |||||||||
Kyowa Kirin Co. Ltd. | 8,000 | 199 | |||||||||
Ono Pharmaceutical Co. Ltd. | 10,130 | 246 | |||||||||
7,964 | |||||||||||
Information Technology (0.3%): | |||||||||||
Money Forward, Inc. (a) | 49,800 | 2,267 | |||||||||
Sansan, Inc. (a) | 150,800 | 1,672 | |||||||||
3,939 | |||||||||||
11,903 | |||||||||||
Korea, Republic Of (0.6%): | |||||||||||
Consumer Discretionary (0.2%): | |||||||||||
Coupang, Inc. (a) (c) | 103,133 | 2,147 | |||||||||
Information Technology (0.4%): | |||||||||||
Koh Young Technology, Inc. | 153,630 | 2,646 | |||||||||
SK Hynix, Inc. | 38,182 | 3,953 | |||||||||
6,599 | |||||||||||
8,746 | |||||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Netherlands (0.8%): | |||||||||||
Health Care (0.3%): | |||||||||||
Argenx SE, ADR (a) | 633 | $ | 171 | ||||||||
Koninklijke Philips NV | 7,689 | 256 | |||||||||
Merus NV (a) (c) | 168,642 | 4,150 | |||||||||
4,577 | |||||||||||
Information Technology (0.5%): | |||||||||||
BE Semiconductor Industries NV | 90,405 | 7,579 | |||||||||
12,156 | |||||||||||
Singapore (0.4%): | |||||||||||
Information Technology (0.4%): | |||||||||||
Flex Ltd. (a) | 316,174 | 5,116 | |||||||||
Switzerland (0.0%): (b) | |||||||||||
Health Care (0.0%): | |||||||||||
Novartis AG Registered Shares | 2,197 | 191 | |||||||||
Tecan Group AG Class R | 359 | 174 | |||||||||
365 | |||||||||||
United Kingdom (1.1%): | |||||||||||
Consumer Discretionary (0.3%): | |||||||||||
Farfetch Ltd. Class A (a) | 150,149 | 3,260 | |||||||||
Trainline PLC (a) (d) | 710,181 | 2,150 | |||||||||
5,410 | |||||||||||
Health Care (0.8%): | |||||||||||
Abcam PLC (a) | 11,379 | 205 | |||||||||
AstraZeneca PLC, ADR | 9,129 | 531 | |||||||||
Bicycle Therapeutics PLC, ADR (a) | 161,473 | 7,885 | |||||||||
Compass Pathways PLC, ADR (a) (c) | 154,858 | 2,439 | |||||||||
Genus PLC | 3,531 | 182 | |||||||||
Hikma Pharmaceuticals PLC | 4,407 | 124 | |||||||||
Myovant Sciences Ltd. (a) (c) | 4,532 | 59 | |||||||||
Smith & Nephew PLC | 14,047 | 239 | |||||||||
11,664 | |||||||||||
17,074 | |||||||||||
United States (91.5%): | |||||||||||
Communication Services (9.4%): | |||||||||||
Alphabet, Inc. Class A (a) | 13,095 | 35,436 | |||||||||
Cargurus, Inc. (a) | 134,102 | 4,278 | |||||||||
Chicken Soup For The Soul Entertainment, Inc. (a) (c) | 222,549 | 2,263 | |||||||||
Electronic Arts, Inc. | 34,373 | 4,560 | |||||||||
IAC/InterActiveCorp (a) | 53,592 | 7,317 | |||||||||
Match Group, Inc. (a) | 137,239 | 15,467 | |||||||||
Meta Platforms, Inc. Class A (a) | 126,270 | 39,555 | |||||||||
ROBLOX Corp. Class A (a) | 28,922 | 1,905 | |||||||||
Roku, Inc. (a) | 15,684 | 2,573 | |||||||||
Snap, Inc. Class A (a) | 79,226 | 2,578 | |||||||||
See notes to financial statements.
5
| USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Take-Two Interactive Software, Inc. (a) | 77,874 | $ | 12,720 | ||||||||
Twitter, Inc. (a) | 401,001 | 15,042 | |||||||||
Vimeo, Inc. (a) | 83,740 | 1,227 | |||||||||
144,921 | |||||||||||
Consumer Discretionary (6.7%): | |||||||||||
Airbnb, Inc. Class A (a) | 27,155 | 4,181 | |||||||||
Amazon.com, Inc. (a) | 24,508 | 73,315 | |||||||||
Booking Holdings, Inc. (a) | 5,960 | 14,639 | |||||||||
Etsy, Inc. (a) | 29,145 | 4,578 | |||||||||
Peloton Interactive, Inc. Class A (a) | 197,005 | 5,384 | |||||||||
102,097 | |||||||||||
Financials (1.2%): | |||||||||||
DA32 Life Science Tech Acquisition Corp. Class A (a) | 887,074 | 8,534 | |||||||||
MedTech Acquisition Corp. (a) | 8,811 | 88 | |||||||||
Omega Alpha SPAC Class A (a) | 344,839 | 3,369 | |||||||||
Orion Acquisition Corp. (a) | 2,790 | 27 | |||||||||
Oscar Health, Inc. Class A (a) (c) | 5,598 | 37 | |||||||||
Panacea Acquisition Corp. II (a) (c) | 710,663 | 6,844 | |||||||||
18,899 | |||||||||||
Health Care (17.4%): | |||||||||||
89bio, Inc. (a) | 14,387 | 85 | |||||||||
Absci Corp. (a) (c) | 223,765 | 1,506 | |||||||||
AdaptHealth Corp. (a) | 4,578 | 87 | |||||||||
Agilent Technologies, Inc. | 4,923 | 686 | |||||||||
Agilon Health, Inc. (a) | 8,053 | 134 | |||||||||
Align Technology, Inc. (a) | 805 | 398 | |||||||||
Alnylam Pharmaceuticals, Inc. (a) | 1,276 | 176 | |||||||||
Alpha Teknova, Inc. (a) | 195,728 | 3,089 | |||||||||
Amedisys, Inc. (a) | 1,224 | 165 | |||||||||
Amicus Therapeutics, Inc. (a) | 23,726 | 223 | |||||||||
Apellis Pharmaceuticals, Inc. (a) | 383,944 | 15,461 | |||||||||
Aptinyx, Inc. (a) | 117,246 | 375 | |||||||||
Ardelyx, Inc. (a) (c) | 747,439 | 618 | |||||||||
Avantor, Inc. (a) | 220,997 | 8,250 | |||||||||
Aveanna Healthcare Holdings, Inc. (a) | 9,502 | 52 | |||||||||
Baxter International, Inc. | 6,168 | 527 | |||||||||
Beam Therapeutics, Inc. (a) | 101,796 | 7,045 | |||||||||
Becton Dickinson & Co. | 3,360 | 854 | |||||||||
Better Therapeutics, Inc. (a) | 924,000 | 3,622 | |||||||||
BioAtla, Inc. (a) | 1,552 | 15 | |||||||||
BioCryst Pharmaceuticals, Inc. (a) | 507,423 | 7,840 | |||||||||
Bio-Techne Corp. | 460 | 173 | |||||||||
Blueprint Medicines Corp. (a) | 65,712 | 5,066 | |||||||||
Boston Scientific Corp. (a) | 26,049 | 1,118 | |||||||||
Bridgebio Pharma, Inc. (a) (c) | 219,852 | 2,170 | |||||||||
Bristol-Myers Squibb Co. | 23,225 | 1,507 | |||||||||
Cabaletta Bio, Inc. (a) | 557,024 | 1,682 | |||||||||
Cano Health, Inc. (a) | 10,600 | 61 | |||||||||
See notes to financial statements.
6
| USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Celcuity, Inc. (a) | 202,187 | $ | 2,248 | ||||||||
Celldex Therapeutics, Inc. (a) | 4,836 | 150 | |||||||||
Centene Corp. (a) | 7,289 | 567 | |||||||||
Codexis, Inc. (a) | 259,321 | 5,316 | |||||||||
Codiak Biosciences, Inc. (a) | 296,859 | 1,965 | |||||||||
Covetrus, Inc. (a) | 10,817 | 195 | |||||||||
Crinetics Pharmaceuticals, Inc. (a) | 270,346 | 5,107 | |||||||||
CryoPort, Inc. (a) | 179,874 | 7,513 | |||||||||
Cullinan Oncology, Inc. (a) (c) | 78,215 | 1,054 | |||||||||
Danaher Corp. | 5,039 | 1,440 | |||||||||
DermTech, Inc. (a) (c) | 319,853 | 4,097 | |||||||||
Edwards Lifesciences Corp. (a) | 9,056 | 989 | |||||||||
Elanco Animal Health, Inc. (a) | 4,209 | 110 | |||||||||
Eli Lilly & Co. | 9,062 | 2,224 | |||||||||
Encompass Health Corp. | 4,551 | 282 | |||||||||
Entrada Therapeutics, Inc. (a) | 9,440 | 104 | |||||||||
Equillium, Inc. (a) | 888,607 | 3,483 | |||||||||
Exact Sciences Corp. (a) | 4,418 | 337 | |||||||||
Fate Therapeutics, Inc. (a) | 159,750 | 6,631 | |||||||||
Ginkgo Bioworks Holdings, Inc. (a) (c) | 617,745 | 3,694 | |||||||||
Glaukos Corp. (a) | 3,891 | 207 | |||||||||
Haemonetics Corp. (a) | 1,692 | 82 | |||||||||
HCA Healthcare, Inc. | 2,651 | 636 | |||||||||
Hologic, Inc. (a) | 4,658 | 327 | |||||||||
Humana, Inc. | 2,430 | 954 | |||||||||
Ikena Oncology, Inc. (a) (c) | 272,214 | 2,649 | |||||||||
Illumina, Inc. (a) | 1,378 | 481 | |||||||||
ImmunoGen, Inc. (a) | 26,061 | 147 | |||||||||
Inari Medical, Inc. (a) | 2,639 | 194 | |||||||||
Inhibrx, Inc. (a) (c) | 227,418 | 6,040 | |||||||||
Insulet Corp. (a) | 1,786 | 443 | |||||||||
Integra LifeSciences Holdings Corp. (a) | 2,577 | 167 | |||||||||
Intellia Therapeutics, Inc. (a) | 107,863 | 10,201 | |||||||||
Intra-Cellular Therapies, Inc. (a) | 4,524 | 215 | |||||||||
Invitae Corp. (a) (c) | 7,554 | 85 | |||||||||
Iovance Biotherapeutics, Inc. (a) | 502,854 | 8,373 | |||||||||
Ironwood Pharmaceuticals, Inc. (a) | 14,904 | 166 | |||||||||
Karuna Therapeutics, Inc. (a) | 64,075 | 7,116 | |||||||||
Karyopharm Therapeutics, Inc. (a) | 345,724 | 3,077 | |||||||||
Kezar Life Sciences, Inc. (a) | 849,365 | 11,195 | |||||||||
Kinnate Biopharma, Inc. (a) | 233,175 | 2,560 | |||||||||
Kodiak Sciences, Inc. (a) | 2,079 | 122 | |||||||||
Kymera Therapeutics, Inc. (a) | 3,361 | 141 | |||||||||
Laboratory Corp. of America Holdings (a) | 1,380 | 374 | |||||||||
Lyell Immunopharma, Inc. (a) (c) | 463,562 | 2,633 | |||||||||
Madrigal Pharmaceuticals, Inc. (a) | 3,006 | 173 | |||||||||
Marinus Pharmaceuticals, Inc. (a) | 274,574 | 2,801 | |||||||||
Masimo Corp. (a) | 398 | 88 | |||||||||
Moderna, Inc. (a) | 671 | 114 | |||||||||
Molina Healthcare, Inc. (a) | 1,241 | 360 | |||||||||
See notes to financial statements.
7
| USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
NanoString Technologies, Inc. (a) | 4,901 | $ | 170 | ||||||||
NeoGenomics, Inc. (a) | 5,379 | 121 | |||||||||
Nurix Therapeutics, Inc. (a) | 6,579 | 122 | |||||||||
Nuvalent, Inc. Class A (a) (c) | 170,304 | 2,297 | |||||||||
Omega Therapeutics, Inc. (a) (c) | 273,548 | 3,108 | |||||||||
ORIC Pharmaceuticals, Inc. (a) | 474,188 | 4,690 | |||||||||
Owens & Minor, Inc. | 5,072 | 213 | |||||||||
PerkinElmer, Inc. | 31,221 | 5,375 | |||||||||
Pfizer, Inc. | 47,819 | 2,520 | |||||||||
PMV Pharmaceuticals, Inc. (a) (c) | 119,907 | 1,926 | |||||||||
Quidel Corp. (a) | 1,234 | 128 | |||||||||
Rain Therapeutics, Inc. (a) (c) | 259,083 | 2,223 | |||||||||
Regulus Therapeutics, Inc. (a) (c) | 6,270,099 | 1,547 | |||||||||
Replimune Group, Inc. (a) | 105,794 | 2,098 | |||||||||
Rubius Therapeutics, Inc. (a) | 269,608 | 1,820 | |||||||||
Sage Therapeutics, Inc. (a) | 2,528 | 100 | |||||||||
Sarepta Therapeutics, Inc. (a) | 106,565 | 7,627 | |||||||||
Scholar Rock Holding Corp. (a) | 244,325 | 4,351 | |||||||||
Science 37, Inc. (a) | 621,680 | 5,011 | |||||||||
Seagen, Inc. (a) | 2,331 | 314 | |||||||||
Shattuck Labs, Inc. (a) | 482,104 | 3,331 | |||||||||
Singular Genomics Systems, Inc. (a) | 420,625 | 3,260 | |||||||||
SpringWorks Therapeutics, Inc. (a) | 128,324 | 7,145 | |||||||||
Stryker Corp. | 3,981 | 987 | |||||||||
Surface Oncology, Inc. (a) | 480,643 | 1,802 | |||||||||
Syneos Health, Inc. (a) | 7,179 | 650 | |||||||||
Teleflex, Inc. | 1,330 | 413 | |||||||||
Tricida, Inc. (a) | 200,849 | 2,039 | |||||||||
UnitedHealth Group, Inc. | 7,960 | 3,762 | |||||||||
Vaxcyte, Inc. (a) (c) | 225,991 | 4,303 | |||||||||
Veeva Systems, Inc. Class A (a) | 34,792 | 8,230 | |||||||||
Veracyte, Inc. (a) | 5,366 | 163 | |||||||||
Vertex Pharmaceuticals, Inc. (a) | 46,337 | 11,262 | |||||||||
Verve Therapeutics, Inc. (a) (c) | 2,851 | 82 | |||||||||
Waters Corp. (a) | 858 | 275 | |||||||||
Zoetis, Inc. | 4,792 | 957 | |||||||||
267,034 | |||||||||||
Industrials (0.2%): | |||||||||||
Uber Technologies, Inc. (a) | 69,251 | 2,590 | |||||||||
Information Technology (56.4%): | |||||||||||
Adobe, Inc. (a) | 11,806 | 6,308 | |||||||||
Advanced Micro Devices, Inc. (a) | 126,731 | 14,479 | |||||||||
Ambarella, Inc. (a) | 144,240 | 20,215 | |||||||||
Applied Materials, Inc. | 139,639 | 19,295 | |||||||||
AppLovin Corp. Class A (a) | 177,440 | 11,431 | |||||||||
Arista Networks, Inc. (a) | 56,421 | 7,014 | |||||||||
Avalara, Inc. (a) | 23,990 | 2,630 | |||||||||
Avaya Holdings Corp. (a) | 608,478 | 11,086 | |||||||||
Backblaze, Inc. Class A (a) (c) | 311,445 | 4,120 | |||||||||
See notes to financial statements.
8
| USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Block, Inc. (a) | 42,629 | $ | 5,213 | ||||||||
Ceridian HCM Holding, Inc. (a) | 69,457 | 5,266 | |||||||||
Confluent, Inc. Class A (a) | 10,625 | 695 | |||||||||
Coupa Software, Inc. (a) | 41,243 | 5,538 | |||||||||
Datadog, Inc. Class A (a) | 57,156 | 8,351 | |||||||||
DocuSign, Inc. (a) | 88,186 | 11,091 | |||||||||
Domo, Inc. Class B (a) | 217,121 | 10,196 | |||||||||
Dropbox, Inc. Class A (a) | 500,479 | 12,387 | |||||||||
F5, Inc. (a) | 48,859 | 10,144 | |||||||||
Fair Isaac Corp. (a) | 25,291 | 12,519 | |||||||||
FleetCor Technologies, Inc. (a) | 29,938 | 7,133 | |||||||||
Genpact Ltd. | 170,008 | 8,458 | |||||||||
Gitlab, Inc. Class A (a) (c) | 107,734 | 6,896 | |||||||||
Global Payments, Inc. | 81,901 | 12,275 | |||||||||
GoDaddy, Inc. Class A (a) | 150,407 | 11,387 | |||||||||
Guidewire Software, Inc. (a) | 43,490 | 4,386 | |||||||||
HashiCorp., Inc. Class A (a) (c) | 119,734 | 7,949 | |||||||||
Ichor Holdings Ltd. (a) | 201,088 | 8,530 | |||||||||
Impinj, Inc. (a) | 328,412 | 26,073 | |||||||||
KLA Corp. | 27,705 | 10,785 | |||||||||
Lam Research Corp. | 47,193 | 27,840 | |||||||||
Lattice Semiconductor Corp. (a) | 281,815 | 15,562 | |||||||||
MACOM Technology Solutions Holdings, Inc. (a) | 488,644 | 29,910 | |||||||||
Marvell Technology, Inc. | 477,803 | 34,115 | |||||||||
Micron Technology, Inc. | 107,325 | 8,830 | |||||||||
Microsoft Corp. | 408,438 | 127,016 | |||||||||
MKS Instruments, Inc. | 133,641 | 20,758 | |||||||||
Monolithic Power Systems, Inc. | 35,526 | 14,314 | |||||||||
NVIDIA Corp. | 144,563 | 35,398 | |||||||||
Palo Alto Networks, Inc. (a) | 7,811 | 4,041 | |||||||||
Paycom Software, Inc. (a) | 46,932 | 15,736 | |||||||||
PayPal Holdings, Inc. (a) | 75,065 | 12,907 | |||||||||
QUALCOMM, Inc. | 38,515 | 6,769 | |||||||||
Qualtrics International, Inc. Class A (a) | 68,363 | 2,001 | |||||||||
Rapid7, Inc. (a) | 23,819 | 2,294 | |||||||||
RingCentral, Inc. Class A (a) | 232,443 | 41,024 | |||||||||
salesforce.com, Inc. (a) | 68,043 | 15,829 | |||||||||
SentinelOne, Inc. Class A (a) (c) | 31,292 | 1,400 | |||||||||
ServiceNow, Inc. (a) | 51,910 | 30,408 | |||||||||
SiTime Corp. (a) | 64,265 | 14,980 | |||||||||
Skyworks Solutions, Inc. | 28,672 | 4,201 | |||||||||
Snowflake, Inc. Class A (a) | 11,436 | 3,155 | |||||||||
Teradyne, Inc. | 64,950 | 7,627 | |||||||||
Texas Instruments, Inc. | 109,307 | 19,620 | |||||||||
Twilio, Inc. Class A (a) | 93,570 | 19,287 | |||||||||
UiPath, Inc. Class A (a) | 63,422 | 2,317 | |||||||||
Varonis Systems, Inc. (a) | 516,736 | 19,254 | |||||||||
Visa, Inc. Class A | 125,799 | 28,452 | |||||||||
WEX, Inc. (a) | 35,542 | 5,722 | |||||||||
Workday, Inc. Class A (a) | 43,766 | 11,073 | |||||||||
863,690 | |||||||||||
See notes to financial statements.
9
| USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Materials (0.2%): | |||||||||||
Kronos Bio, Inc. (a) (c) | 279,070 | $ | 2,540 | ||||||||
1,401,771 | |||||||||||
Total Common Stocks (Cost $1,065,296) | 1,503,788 | ||||||||||
Rights (0.0%) | |||||||||||
United States (0.0%): | |||||||||||
Health Care (0.0%): | |||||||||||
Contra Clementia Pharmaceuticals (a) (e) (f) | 14,251 | — | |||||||||
Total Rights (Cost $19) | — | ||||||||||
Warrants (0.0%) (b) | |||||||||||
United States (0.0%): | |||||||||||
Health Care (0.0%): | |||||||||||
Nuvation Bio, Inc. | 165,496 | 182 | |||||||||
Regulus Therapeutics, Inc. (a) (e) (g) (j) (k) | 4,702,574 | — | (h) | ||||||||
182 | |||||||||||
Total Warrants (Cost $588) | 182 | ||||||||||
Collateral for Securities Loaned (2.0%)^ | |||||||||||
United States (2.0%): | |||||||||||
| Fidelity Investments Money Market Government Portfolio, Institutional Shares, 0.01% (i) | 26,010,819 | 26,011 | |||||||||
HSBC U.S. Government Money Market Fund, I Shares, 0.03% (i) | 5,115,124 | 5,115 | |||||||||
Total Collateral for Securities Loaned (Cost $31,126) | 31,126 | ||||||||||
Total Investments (Cost $1,097,029) — 100.2% | 1,535,096 | ||||||||||
Liabilities in excess of other assets — (0.2)% | (2,789 | ) | |||||||||
NET ASSETS — 100.00% | $ | 1,532,307 | |||||||||
^ Purchased with cash collateral from securities on loan.
(a) Non-income producing security.
(b) Amount represents less than 0.05% of net assets.
(c) All or a portion of this security is on loan.
(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 (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of January 31, 2022, the fair value of these securities was $2,545 (thousands) and amounted to 0.2% of net assets.
(e) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of January 31, 2022, illiquid securities were less than 0.05% of the Fund's net assets.
See notes to financial statements.
10
| USAA Mutual Funds Trust USAA Science & Technology Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Unaudited)
(f) Security was fair valued based upon procedures approved by the Board of Trustees and represents 0.0% of net assets as of January 31, 2022. This security is classified as Level 3 within the fair value hierarchy. (See Note 2 in the Notes to Financial Statements)
(g) Security was fair valued based upon procedures approved by the Board of Trustees and represents less than 0.05% of net assets as of January 31, 2022. (See Note 2 in the Notes to Financial Statements)
(h) Rounds to less than $1 thousand.
(i) Rate disclosed is the daily yield on January 31, 2022.
(j) Restricted security that is not registered under the Securities Act of 1933.
(k) The following table details the acquisition date and cost of the Fund's restricted securities at January 31, 2022 (amount in thousands):
Security Name | Acquisition Date | Cost | |||||||||
Regulus Therapeutics, Inc. | 12/3/2020 | $ | 588 | ||||||||
ADR — American Depositary Receipt
PLC — Public Limited Company
See notes to financial statements.
11
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA Science & Technology Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,097,029) | $ | 1,535,096 | (a) | ||||
Foreign currency, at value (Cost $8) | 8 | ||||||
Cash | 34,134 | ||||||
Receivables: | |||||||
Interest and dividends | 256 | ||||||
Capital shares issued | 769 | ||||||
Investments sold | 4,384 | ||||||
Reclaims | 64 | ||||||
Prepaid expenses | 21 | ||||||
Total Assets | 1,574,732 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 31,126 | ||||||
Investments purchased | 8,515 | ||||||
Capital shares redeemed | 1,328 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 943 | ||||||
Administration fees | 206 | ||||||
Custodian fees | 27 | ||||||
Transfer agent fees | 200 | ||||||
Compliance fees | 1 | ||||||
Trustees' fees | — | (b) | |||||
| 12b-1 fees | 8 | ||||||
Other accrued expenses | 71 | ||||||
Total Liabilities | 42,425 | ||||||
Net Assets: | |||||||
Capital | 1,104,596 | ||||||
Total accumulated earnings/(loss) | 427,711 | ||||||
Net Assets | $ | 1,532,307 | |||||
Net Assets | |||||||
Fund Shares | $ | 1,454,016 | |||||
Class A | 78,291 | ||||||
Total | $ | 1,532,307 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 57,220 | ||||||
Class A | 3,266 | ||||||
Total | 60,486 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 25.41 | |||||
| Class A | 23.97 | ||||||
Maximum Sales Charge — Class A | 5.75 | % | |||||
| Maximum offering price (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 25.43 | |||||
(a) Includes $31,809 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.
12
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended January 31, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA Science & Technology Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 1,935 | |||||
Interest | 7 | ||||||
Securities lending (net of fees) | 554 | ||||||
Foreign tax withholding | (18 | ) | |||||
Total Income | 2,478 | ||||||
Expenses: | |||||||
Investment advisory fees | 6,678 | ||||||
Administration fees — Fund Shares | 1,356 | ||||||
Administration fees — Class A | 75 | ||||||
Sub-Administration fees | 20 | ||||||
| 12b-1 fees — Class A | 125 | ||||||
Custodian fees | 61 | ||||||
Transfer agent fees — Fund Shares | 617 | ||||||
Transfer agent fees — Class A | 50 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 7 | ||||||
Legal and audit fees | 35 | ||||||
State registration and filing fees | 36 | ||||||
Interfund lending fees | — | (a) | |||||
Other expenses | 90 | ||||||
Total Expenses | 9,174 | ||||||
Net Investment Income (Loss) | (6,696 | ) | |||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
| Net realized gains (losses) from investment securities and foreign currency transactions | 17,769 | ||||||
| Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations | (390,590 | ) | |||||
Net realized/unrealized gains (losses) on investments | (372,821 | ) | |||||
Change in net assets resulting from operations | $ | (379,517 | ) | ||||
(a) Rounds to less than $1 thousand.
See notes to financial statements.
13
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands)
USAA Science & Technology Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | (6,696 | ) | $ | (15,178 | ) | |||||
Net realized gains (losses) from investments | 17,769 | 319,204 | |||||||||
| Net change in unrealized appreciation/depreciation on investments | (390,590 | ) | 234,446 | ||||||||
Change in net assets resulting from operations | (379,517 | ) | 538,472 | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (232,742 | ) | (99,547 | ) | |||||||
Class A | (13,315 | ) | (6,058 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (246,057 | ) | (105,605 | ) | |||||||
Change in net assets resulting from capital transactions | 125,159 | (53,180 | ) | ||||||||
Change in net assets | (500,415 | ) | 379,687 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 2,032,722 | 1,653,035 | |||||||||
End of period | $ | 1,532,307 | $ | 2,032,722 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 49,941 | $ | 175,554 | |||||||
Distributions reinvested | 228,857 | 98,069 | |||||||||
Cost of shares redeemed | (155,746 | ) | (318,929 | ) | |||||||
Total Fund Shares | $ | 123,052 | $ | (45,306 | ) | ||||||
Class A | |||||||||||
Proceeds from shares issued | $ | 1,986 | $ | 6,285 | |||||||
Distributions reinvested | 12,974 | 5,892 | |||||||||
Cost of shares redeemed | (12,853 | ) | (20,051 | ) | |||||||
Total Class A | $ | 2,107 | $ | (7,874 | ) | ||||||
Change in net assets resulting from capital transactions | $ | 125,159 | $ | (53,180 | ) | ||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,511 | 4,999 | |||||||||
Reinvested | 7,988 | 2,803 | |||||||||
Redeemed | (4,726 | ) | (9,252 | ) | |||||||
Total Fund Shares | 4,773 | (1,450 | ) | ||||||||
Class A | |||||||||||
Issued | 63 | 193 | |||||||||
Reinvested | 480 | 176 | |||||||||
Redeemed | (404 | ) | (628 | ) | |||||||
Total Class A | 139 | (259 | ) | ||||||||
Change in Shares | 4,912 | (1,709 | ) | ||||||||
See notes to financial statements.
14
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15
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 Realized Gains from Investments | Total Distributions | Net Asset Value, End of Period | Total Return (Excludes Sales Charge)*(a) | ||||||||||||||||||||||||||||
USAA Science & Technology Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 36.68 | (0.12 | )(d) | (6.54 | ) | (6.66 | ) | (4.61 | ) | (4.61 | ) | $ | 25.41 | (19.57 | )% | |||||||||||||||||||
| Year Ended July 31: 2021 | $ | 28.93 | (0.26 | )(d) | 9.92 | 9.66 | (1.91 | ) | (1.91 | ) | $ | 36.68 | 33.71 | % | |||||||||||||||||||||
2020 | $ | 28.39 | (0.17 | )(d) | 7.26 | 7.09 | (6.55 | ) | (6.55 | ) | $ | 28.93 | 30.85 | % | |||||||||||||||||||||
2019 | $ | 29.19 | 0.01 | 2.83 | 2.84 | (3.64 | ) | (3.64 | ) | $ | 28.39 | 12.79 | % | ||||||||||||||||||||||
2018 | $ | 26.89 | — | (g) | 4.50 | 4.50 | (2.20 | ) | (2.20 | ) | $ | 29.19 | 17.55 | % | |||||||||||||||||||||
2017 | $ | 22.03 | 0.05 | 5.68 | 5.73 | (0.87 | ) | (0.87 | ) | $ | 26.89 | 27.05 | % | ||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 34.93 | (0.16 | )(d) | (6.19 | ) | (6.35 | ) | (4.61 | ) | (4.61 | ) | $ | 23.97 | (19.67 | )% | |||||||||||||||||||
| Year Ended July 31: 2021 | $ | 27.71 | (0.35 | )(d) | 9.48 | 9.13 | (1.91 | ) | (1.91 | ) | $ | 34.93 | 33.27 | % | |||||||||||||||||||||
2020 | $ | 27.53 | (0.23 | )(d) | 6.96 | 6.73 | (6.55 | ) | (6.55 | ) | $ | 27.71 | 30.47 | % | |||||||||||||||||||||
2019 | $ | 28.49 | (0.07 | ) | 2.75 | 2.68 | (3.64 | ) | (3.64 | ) | $ | 27.53 | 12.52 | % | |||||||||||||||||||||
2018 | $ | 26.36 | (0.08 | ) | 4.41 | 4.33 | (2.20 | ) | (2.20 | ) | $ | 28.49 | 17.24 | % | |||||||||||||||||||||
2017 | $ | 21.67 | (0.02 | ) | 5.58 | 5.56 | (0.87 | ) | (0.87 | ) | $ | 26.36 | 26.71 | % | |||||||||||||||||||||
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019, and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(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.
(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%.
(f) Reflects increased trading activity due to current year transition or asset allocation shift.
(g) Amount is less than $0.005 per share.
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 | ||||||||||||||||||||||
| 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, 2022 (Unaudited): | 0.95 | % | (0.69 | )% | 0.95 | % | $ | 1,454,016 | 22 | % | |||||||||||||
| Year Ended July 31: 2021 | 0.99 | % | (0.76 | )% | 0.99 | % | $ | 1,923,477 | 43 | % | |||||||||||||
2020 | 1.04 | % | (0.66 | )% | 1.04 | % | $ | 1,559,222 | 44 | % | |||||||||||||
2019 | 1.02 | %(e) | (0.39 | )% | 1.02 | %(e) | $ | 1,383,956 | 109 | %(f) | |||||||||||||
2018 | 1.04 | %(e) | (0.31 | )% | 1.04 | %(e) | $ | 1,328,080 | 56 | % | |||||||||||||
2017 | 1.14 | %(e) | (0.28 | )% | 1.14 | %(e) | $ | 1,137,256 | 75 | % | |||||||||||||
Class A | |||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | 1.25 | % | (0.99 | )% | 1.25 | % | $ | 78,291 | 22 | % | |||||||||||||
| Year Ended July 31: 2021 | 1.30 | % | (1.07 | )% | 1.30 | % | $ | 109,245 | 43 | % | |||||||||||||
2020 | 1.33 | % | (0.94 | )% | 1.33 | % | $ | 93,813 | 44 | % | |||||||||||||
2019 | 1.29 | %(e)(h) | (0.65 | )% | 1.29 | %(e) | $ | 104,773 | 109 | %(f) | |||||||||||||
2018 | 1.31 | %(e)(i) | (0.57 | )% | 1.31 | %(e) | $ | 115,229 | 56 | % | |||||||||||||
2017 | 1.41 | %(e)(j) | (0.55 | )% | 1.42 | %(e) | $ | 115,559 | 75 | % | |||||||||||||
(h) Prior to December 1, 2018, USAA Asset Management Company ("AMCO") (previous Investment Adviser) voluntarily agreed to limit the annual expenses of Class A to 1.35% of the Class A average daily net assets.
(i) Prior to December 1, 2017, AMCO voluntarily agreed to limit the annual expenses of Class A to 1.35% of the Class A average daily net assets.
(j) Prior to December 1, 2016, AMCO voluntarily agreed to limit the annual expenses of Class A to 1.40% of the Class A average daily net assets.
See notes to financial statements.
17
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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 Class A. 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 sales charges, 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 U.S. Generally Accepted Accounting Principles ("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 risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs"), American Depositary Receipts ("ADRs"), Private Investments in Public Equities, and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq 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 are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically 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 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 NAV is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. The valuations are categorized as Level 2 in the fair value hierarchy.
A summary of the valuations as of January 31, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 1,473,185 | $ | 30,603 | $ | — | $ | 1,503,788 | |||||||||||
Rights | — | — | — | (a) | — | ||||||||||||||
Warrants | 182 | — | (b) | — | 182 | ||||||||||||||
Collateral for Securities Loaned | 31,126 | — | — | 31,126 | |||||||||||||||
Total | $ | 1,504,493 | $ | 30,603 | $ | — | $ | 1,535,096 | |||||||||||
(a) Zero market value security.
(b) Rounds to less than $1 thousand.
As of January 31, 2022, there were no significant Level 3 holdings in the fair value hierarchy. For the six months ended January 31, 2022, there were no transfers in or out of Level 3 in the fair value hierarchy.
Investment Companies:
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
19
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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, 2022, 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 or 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 discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
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 and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially 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 generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund effectively does not have control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. 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. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
20
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or repledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2022.
| Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
| $ | 31,809 | $ | — | $ | 31,126 | ||||||
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 investment securities and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, are disclosed as Net realized gains (losses) from investment securities and foreign currency transactions 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.
The Fund filed for additional European Union reclaims related to prior years. These reclaims are recorded when the amount is known and there are no significant uncertainties on collectability. For the six months ended January 31, 2022, the Fund recognized $59 thousand in reclaims, of which $1 thousand of the amount is related to interest on the filed reclaims. These reclaims and interest are reflected on the Statement of Operations as Dividend Income and Interest Income, respectively.
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.
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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 years, which includes the current fiscal tax year end). 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 an 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, printing fees, and 12b-1 fees), and realized and unrealized gains or losses on investments are
21
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended January 31, 2022, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 413,003 | $ | 498,680 | ||||
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and 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 the largest funds within the Lipper Science & Technology Funds category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index | Annual Adjustment Rate | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 | ||||||
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
22
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective 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.
For the period August 1, 2021, to January 31, 2022, performance adjustments were $(448) and $(28) for Fund Shares and Class A, in thousands, respectively. Performance adjustments were (0.05)% and (0.06)% for Fund Shares and Class A, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
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.
Administration and Servicing Fees:
VCM also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15% and 0.15%, which is based on the Fund's average daily net assets of the Fund Shares and of the Class A, respectively. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA 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 fees for Class A 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
23
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
and paid to VCTA for the six months ended January 31, 2022, 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 Services, 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.
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 Class A. The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A. Amounts incurred and paid to the Distributor for the six months ended January 31, 2022, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions in connection with sales of Class A. For the six months ended January 31, 2022, the Distributor received less than $1 thousand from commissions earned in connection with sales of Class A.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 limits for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, 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. As of January 31, 2022, the expense limits (excluding voluntary waivers) were 1.06% and 1.34% for Fund Shares and Class A, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment. As of January 31, 2022, there are no amounts to be repaid to the Adviser.
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, 2022.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
24
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Sector Risk — 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.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
Equity Risk — The values of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general market, economic and political conditions and other factors. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or may last for extended periods.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended January 31, 2022, Citibank received 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 London Interbank Offered Rate ("LIBOR") plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected 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, 2022.
25
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Interfund Lending:
The Trust and the 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 Funds Complex that is permitted to participate in the Facility, 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, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. 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, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending.
The average borrowing or lending for the days outstanding and average interest rate for the Fund during the six months ended January 31, 2022, were as follows (amounts in thousands):
| Borrower or Lender | Amount Outstanding at January 31, 2022 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
| Borrower | $ | — | $ | 2,003 | 1 | 0.59 | % | $ | 2,003 | ||||||||||||||
* For the six months ended January 31, 2022, 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 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, 2022.
As of July 31, 2021, the Fund had no capital loss carryforwards for federal income tax purposes.
26
USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
(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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
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. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; 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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21- 1/31/22* | Hypothetical Expenses Paid During Period 8/1/21- 1/31/22* | Annualized Expense Ratio During Period 8/1/21- 1/31/22 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 804.30 | $ | 1,020.42 | $ | 4.32 | $ | 4.84 | 0.95 | % | |||||||||||||||
Class A | 1,000.00 | 803.30 | 1,018.90 | 5.68 | 6.36 | 1.25 | % | ||||||||||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
27
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Considerations of the Board in Continuing the Investment Advisory Agreement
USAA Science & Technology Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") and the Subadvisory Agreement between the Adviser and Wellington Management Company LLP (the "Subadviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement and Subadvisory Agreement were approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement and Subadvisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and Subadvisory Agreement and the Adviser and the Subadviser, and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's and the Subadviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement and Subadvisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement and the Subadvisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement and the Subadvisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
The Board considered the Advisory Agreement and the Subadvisory Agreement separately in the course of its review. In doing so, the Board noted the respective roles of the Adviser and the Subadviser in providing services to the Fund.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser and the Subadviser. At the meeting at which the renewal of the Advisory Agreement and Subadvisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser and the Subadviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement and Subadvisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management
28
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The Board considered the Adviser's process for monitoring the performance of the Subadviser and the Adviser's timeliness in responding to performance issues. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services and the effects of any performance adjustment1 was above the median of its expense group and its expense universe. The data indicated that the Fund's total expenses were above the median of its expense group and its expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund. The Board also took into account that the subadvisory fees under the Subadvisory Agreement are paid by the Adviser. The Board also considered and discussed information about the Subadviser's fees, including the amount of management fees retained by the Adviser after payment of the subadvisory fees.
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among
1 The Adviser previously agreed that no performance adjustment (positive or negative) would be made to the amount payable to the Adviser from July 1, 2019, through June 30, 2020.
29
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
other information, a comparison of the Fund's average annual total returns relative to its Lipper index and other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was below the average of its performance universe and its Lipper index for the one-, three- and five-year periods ended September 30, 2021, and was above the average of its performance universe and its Lipper index for the ten-year period ended September 30, 2021. The Board took into account management's discussion of the Fund's performance, including the reasons for the Fund's underperformance.
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser pays the Fund's subadvisory fees. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board considered whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in any economies of scale. The Board took into account management's discussion of the current advisory fee structure. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board considered the fact that the Adviser also pays the Fund's subadvisory fees. The Board also considered the effect of the change in size, if any, of each of the Fund's classes on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices and the Adviser is appropriately monitoring the Fund's performance; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
Subadvisory Agreement
In approving the Subadvisory Agreement with respect to the Fund, the Board considered various factors, among them: (i) the nature, extent, and quality of services provided to the Fund by the Subadviser, including the personnel providing services; (ii) the Subadviser's compensation and any other benefits derived from the subadvisory relationship; (iii) comparisons, to the extent applicable, of subadvisory fees and performance to comparable investment companies; and (iv) the terms of the Subadvisory Agreement. A summary of the Board's analysis of these factors is set forth below. After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Subadvisory Agreement. In approving the Subadvisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different
30
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services Provided; Investment Personnel — The Trustees considered information provided to them regarding the services provided by the Subadviser, including information presented periodically throughout the previous year. The Board considered the Subadviser's level of knowledge and investment style. The Board reviewed the experience and credentials of the investment personnel who are responsible for managing the investment of portfolio securities with respect to the Fund and the Subadviser's level of staffing. The Trustees considered, based on the materials provided to them by the Subadviser, whether the method of compensating portfolio managers is reasonable and includes mechanisms to prevent a manager with underperformance from taking undue risks. The Trustees also noted the Subadviser's brokerage practices. The Board also considered the Subadviser's regulatory and compliance history. The Board also took into account the Subadviser's risk management processes. The Board noted that the Adviser's monitoring processes of the Subadviser include: (i) regular telephonic meetings to discuss, among other matters, investment strategies, and to review portfolio performance; (ii) quarterly portfolio compliance checklists and quarterly compliance certifications to the Board; and (iii) due diligence visits to the Subadviser.
Subadviser Compensation — The Board also took into consideration the financial condition of the Subadviser. In considering the cost of services to be provided by the Subadviser and the profitability to the Subadviser of its relationship with the Fund, the Trustees noted that the fees under the Subadvisory Agreement were paid by the Adviser. The Trustees also relied on the ability of the Adviser to negotiate the Subadvisory Agreement and the fees thereunder at arm's length. For the above reasons, the Board determined that the profitability of the Subadviser from its relationship with the Fund was not a material factor in its deliberations with respect to the consideration of the approval of the Subadvisory Agreement. For similar reasons, the Board concluded that the potential for economies of scale in the Subadviser's management of the Fund was not a material factor in considering the Subadvisory Agreement.
Subadvisory Fees and Fund Performance — The Board compared the subadvisory fees for the Fund with the fees that the Subadviser charges to comparable clients, as applicable. The Board considered that the Fund pays a management fee to the Adviser and that, in turn, the Adviser pays a subadvisory fee to the Subadviser. As noted above, the Board considered the Fund's performance during the one-, three-, five-, and ten-year periods ended September 30, 2021, as compared to the Fund's peer group and noted that the Board reviews at its regularly scheduled meetings information about the Fund's performance results. The Board also considered the performance of the Subadviser. The Board noted the Adviser's experience and resources in monitoring the performance, investment style, and risk-adjusted performance of the Subadviser. The Board was mindful of the Adviser's focus on the Subadviser's performance. The Board also noted the Subadviser's performance record for similar accounts, as applicable.
Conclusions — The Board reached the following conclusions regarding the Subadvisory Agreement: (i) the Subadviser is qualified to manage the Fund's assets in accordance with its investment objectives and policies; (ii) the Subadviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and relevant indices and the Adviser is appropriately monitoring the Fund's performance; and (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser and the Subadviser. Based on its conclusions, the Board determined that approval of the Subadvisory Agreement with respect to the Fund would be in the best interests of the Fund and its shareholders.
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800) 235-8396 | ||||||
31704-0322
January 31, 2022
Semi Annual Report
USAA Small Cap Stock Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 17 | ||||||
Statement of Operations | 18 | ||||||
Statements of Changes in Net Assets | 19 | ||||||
Financial Highlights | 20 | ||||||
Notes to Financial Statements | 22 | ||||||
Supplemental Information | 32 | ||||||
Proxy Voting and Portfolio Holdings Information | 32 | ||||||
Expense Examples | 32 | ||||||
Advisory Contract Approval | 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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks long-term growth of capital.
Top 10 Equity Holdings*:
January 31, 2022
(% of Net Assets)
Stifel Financial Corp. | 1.0 | % | |||||
Perficient, Inc. | 0.8 | % | |||||
Home BancShares, Inc. | 0.8 | % | |||||
Euronet Worldwide, Inc. | 0.8 | % | |||||
Kornit Digital Ltd. | 0.8 | % | |||||
First Busey Corp. | 0.7 | % | |||||
Callaway Golf Co. | 0.6 | % | |||||
WillScot Mobile Mini Holdings Corp. | 0.6 | % | |||||
PDC Energy, Inc. | 0.6 | % | |||||
Veracyte, Inc. | 0.6 | % | |||||
Sector Allocation*:
January 31, 2022
(% of Net Assets)
* Does not include futures contracts, 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%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (99.1%) | |||||||||||
Communication Services (2.2%): | |||||||||||
Bumble, Inc. Class A (a) | 5,500 | $ | 162 | ||||||||
Chicken Soup For The Soul Entertainment, Inc. (a) | 58,880 | 599 | |||||||||
Cian PLC, ADR (a) | 914 | 8 | |||||||||
Cinemark Holdings, Inc. (a) (b) | 96,193 | 1,453 | |||||||||
EverQuote, Inc. Class A (a) | 27,175 | 447 | |||||||||
Genius Sports Ltd. (a) (b) | 45,210 | 293 | |||||||||
Gray Television, Inc. | 160,048 | 3,337 | |||||||||
Iridium Communications, Inc. (a) | 31,200 | 1,119 | |||||||||
Lions Gate Entertainment Corp. Class B (a) | 105,800 | 1,543 | |||||||||
Madison Square Garden Sports Corp. (a) | 6,830 | 1,134 | |||||||||
Magnite, Inc. (a) (b) | 347,960 | 4,722 | |||||||||
Radius Global Infrastructure, Inc. Class A (a) | 63,815 | 878 | |||||||||
TechTarget, Inc. (a) | 39,123 | 3,245 | |||||||||
TEGNA, Inc. | 89,418 | 1,731 | |||||||||
The Marcus Corp. (a) (b) | 55,790 | 940 | |||||||||
World Wrestling Entertainment, Inc. Class A | 36,120 | 1,804 | |||||||||
23,415 | |||||||||||
Consumer Discretionary (10.9%): | |||||||||||
2U, Inc. (a) (b) | 68,344 | 1,103 | |||||||||
Abercrombie & Fitch Co. (a) | 48,884 | 1,906 | |||||||||
Academy Sports & Outdoors, Inc. (a) | 43,846 | 1,706 | |||||||||
Adient PLC (a) | 14,610 | 613 | |||||||||
Adtalem Global Education, Inc. (a) | 29,800 | 877 | |||||||||
Asbury Automotive Group, Inc. (a) | 11,887 | 1,913 | |||||||||
Big Lots, Inc. | 32,113 | 1,346 | |||||||||
Bloomin' Brands, Inc. (a) | 81,939 | 1,666 | |||||||||
Bright Horizons Family Solutions, Inc. (a) | 7,227 | 928 | |||||||||
Brinker International, Inc. (a) | 36,500 | 1,212 | |||||||||
Brunswick Corp. | 27,487 | 2,495 | |||||||||
Burlington Stores, Inc. (a) | 5,471 | 1,296 | |||||||||
Callaway Golf Co. (a) (b) | 286,362 | 6,833 | |||||||||
Carter's, Inc. | 24,330 | 2,266 | |||||||||
Cavco Industries, Inc. (a) | 23,010 | 6,200 | |||||||||
Century Communities, Inc. | 26,819 | 1,766 | |||||||||
Chegg, Inc. (a) | 100,219 | 2,653 | |||||||||
Cricut, Inc. Class A (a) (b) | 31,096 | 615 | |||||||||
Dana, Inc. | 153,390 | 3,322 | |||||||||
Dave & Buster's Entertainment, Inc. (a) | 44,939 | 1,608 | |||||||||
Dine Brands Global, Inc. | 25,050 | 1,700 | |||||||||
F45 Training Holdings, Inc. (a) (b) | 78,400 | 981 | |||||||||
First Watch Restaurant Group, Inc. (a) | 13,213 | 199 | |||||||||
Five Below, Inc. (a) | 6,460 | 1,059 | |||||||||
Fox Factory Holding Corp. (a) | 26,495 | 3,526 | |||||||||
Gentherm, Inc. (a) | 2,375 | 207 | |||||||||
Green Brick Partners, Inc. (a) | 88,122 | 2,087 | |||||||||
Group 1 Automotive, Inc. | 20,751 | 3,524 | |||||||||
Installed Building Products, Inc. | 35,745 | 3,960 | |||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
KB Home | 27,369 | $ | 1,156 | ||||||||
Kohl's Corp. | 24,406 | 1,457 | |||||||||
Kura Sushi USA, Inc. Class A (a) | 22,050 | 1,018 | |||||||||
Legacy Housing Corp. (a) | 50,043 | 1,239 | |||||||||
Levi Strauss & Co. Class A (b) | 70,698 | 1,550 | |||||||||
Life Time Group Holdings, Inc. (a) (b) | 27,911 | 419 | |||||||||
Lithia Motors, Inc. | 2,509 | 733 | |||||||||
Macy's, Inc. | 90,336 | 2,313 | |||||||||
MarineMax, Inc. (a) | 37,054 | 1,744 | |||||||||
Marriott Vacations Worldwide Corp. | 11,344 | 1,842 | |||||||||
Meritage Homes Corp. (a) | 26,447 | 2,698 | |||||||||
Motorcar Parts of America, Inc. (a) | 79,317 | 1,311 | |||||||||
Movado Group, Inc. | 137,490 | 5,097 | |||||||||
Murphy USA, Inc. | 6,276 | 1,234 | |||||||||
Overstock.com, Inc. (a) (b) | 13,551 | 650 | |||||||||
Patrick Industries, Inc. | 12,577 | 810 | |||||||||
Polaris, Inc. | 14,467 | 1,629 | |||||||||
Porch Group, Inc. (a) (b) | 180,251 | 1,902 | |||||||||
Portillo's, Inc. Class A (a) (b) | 56,160 | 1,491 | |||||||||
Revolve Group, Inc. (a) | 2,184 | 108 | |||||||||
Signet Jewelers Ltd. | 11,389 | 981 | |||||||||
Skyline Champion Corp. (a) | 49,601 | 3,340 | |||||||||
Steven Madden Ltd. | 113,913 | 4,686 | |||||||||
Stoneridge, Inc. (a) | 28,300 | 534 | |||||||||
Sweetgreen, Inc. Class A (a) (b) | 26,002 | 786 | |||||||||
Taylor Morrison Home Corp. (a) | 68,912 | 2,115 | |||||||||
The Goodyear Tire & Rubber Co. (a) | 69,890 | 1,449 | |||||||||
The Lovesac Co. (a) | 4,450 | 240 | |||||||||
ThredUp, Inc. Class A (a) (b) | 203,644 | 1,888 | |||||||||
Torrid Holdings, Inc. (a) | 94,088 | 866 | |||||||||
Tri Pointe Homes, Inc. (a) | 160,436 | 3,820 | |||||||||
Udemy, Inc. (a) | 914 | 15 | |||||||||
Victoria's Secret & Co. (a) | 30,100 | 1,680 | |||||||||
Visteon Corp. (a) | 15,489 | 1,572 | |||||||||
Winnebago Industries, Inc. | 8,415 | 543 | |||||||||
Wolverine World Wide, Inc. | 112,390 | 2,977 | |||||||||
117,460 | |||||||||||
Consumer Staples (2.0%): | |||||||||||
Albertsons Cos., Inc. Class A | 46,702 | 1,315 | |||||||||
Celsius Holdings, Inc. (a) | 17,265 | 824 | |||||||||
Coty, Inc. Class A (a) | 221,073 | 1,875 | |||||||||
Edgewell Personal Care Co. | 39,414 | 1,805 | |||||||||
Herbalife Nutrition Ltd. (a) | 26,900 | 1,143 | |||||||||
Hostess Brands, Inc. (a) | 53,980 | 1,108 | |||||||||
Nomad Foods Ltd. (a) | 77,140 | 1,990 | |||||||||
Performance Food Group Co. (a) | 85,358 | 3,601 | |||||||||
Sovos Brands, Inc. (a) | 117,453 | 1,723 | |||||||||
Spectrum Brands Holdings, Inc. | 5,940 | 531 | |||||||||
The Chefs' Warehouse, Inc. (a) (b) | 21,150 | 631 | |||||||||
The Simply Good Foods Co. (a) | 41,550 | 1,464 | |||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
The Vita Coco Co., Inc. (a) (b) | 138,884 | $ | 1,515 | ||||||||
TreeHouse Foods, Inc. (a) | 17,861 | 692 | |||||||||
Universal Corp. | 30,908 | 1,682 | |||||||||
21,899 | |||||||||||
Energy (5.2%): | |||||||||||
Antero Resources Corp. (a) | 187,405 | 3,660 | |||||||||
Cactus, Inc. Class A | 97,905 | 4,744 | |||||||||
California Resources Corp. | 56,680 | 2,416 | |||||||||
Chesapeake Energy Corp. | 40,529 | 2,763 | |||||||||
CNX Resources Corp. (a) | 65,279 | 968 | |||||||||
Comstock Resources, Inc. (a) | 155,260 | 1,208 | |||||||||
CONSOL Energy, Inc. (a) | 90,728 | 1,972 | |||||||||
DHT Holdings, Inc. | 70,555 | 344 | |||||||||
Expro Group Holdings NV (a) | 214,635 | 3,361 | |||||||||
Green Plains, Inc. (a) | 71,395 | 2,180 | |||||||||
Magnolia Oil & Gas Corp. Class A | 213,154 | 4,611 | |||||||||
Northern Oil and Gas, Inc. | 34,230 | 805 | |||||||||
Ovintiv, Inc. | 103,157 | 4,003 | |||||||||
PDC Energy, Inc. | 110,616 | 6,556 | |||||||||
Peabody Energy Corp. (a) | 41,738 | 451 | |||||||||
Renewable Energy Group, Inc. (a) | 99,749 | 4,016 | |||||||||
RPC, Inc. (a) | 1,012,656 | 5,985 | |||||||||
Talos Energy, Inc. (a) | 187,147 | 1,991 | |||||||||
Whiting Petroleum Corp. (a) (b) | 43,552 | 3,234 | |||||||||
World Fuel Services Corp. | 44,375 | 1,252 | |||||||||
56,520 | |||||||||||
Financials (17.1%): | |||||||||||
1st Source Corp. | 10,419 | 520 | |||||||||
Alleghany Corp. (a) | 3,080 | 2,045 | |||||||||
American Business Bank (a) | 18,762 | 787 | |||||||||
American Equity Investment Life Holding Co. | 12,146 | 500 | |||||||||
Ameris Bancorp | 62,910 | 3,102 | |||||||||
Apollo Commercial Real Estate Finance, Inc. | 75,734 | 1,034 | |||||||||
Artisan Partners Asset Management, Inc. Class A | 41,050 | 1,774 | |||||||||
Associated Banc-Corp. | 80,540 | 1,925 | |||||||||
Assured Guaranty Ltd. | 25,300 | 1,348 | |||||||||
Atlantic Union Bankshares Corp. | 55,628 | 2,265 | |||||||||
B Riley Financial, Inc. | 11,168 | 688 | |||||||||
Banc of California, Inc. | 86,571 | 1,673 | |||||||||
Banner Corp. | 80,227 | 4,983 | |||||||||
Blackstone Mortgage Trust, Inc. Class A | 113,862 | 3,578 | |||||||||
Brighthouse Financial, Inc. (a) | 25,097 | 1,367 | |||||||||
Cathay General Bancorp | 37,351 | 1,687 | |||||||||
CNO Financial Group, Inc. | 138,336 | 3,450 | |||||||||
Colony Bankcorp, Inc. | 25,372 | 427 | |||||||||
Columbia Banking System, Inc. | 25,000 | 869 | |||||||||
Customers Bancorp, Inc. (a) | 42,226 | 2,462 | |||||||||
Eagle Bancorp, Inc. | 12,229 | 733 | |||||||||
Eastern Bankshares, Inc. | 134,840 | 2,871 | |||||||||
See notes to financial statements.
5
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Employers Holdings, Inc. | 59,892 | $ | 2,342 | ||||||||
Enova International, Inc. (a) | 33,408 | 1,346 | |||||||||
Essent Group Ltd. | 31,210 | 1,424 | |||||||||
FB Financial Corp. | 45,065 | 2,006 | |||||||||
Federated Hermes, Inc. | 152,383 | 5,045 | |||||||||
First Bancorp/Puerto Rico | 360,838 | 5,250 | |||||||||
First Bancorp/Southern Pines NC | 28,500 | 1,251 | |||||||||
First Busey Corp. | 265,319 | 7,397 | |||||||||
First Merchants Corp. | 51,475 | 2,184 | |||||||||
Flushing Financial Corp. | 16,678 | 394 | |||||||||
Genworth Financial, Inc. (a) | 194,972 | 760 | |||||||||
Globe Life, Inc. | 23,680 | 2,422 | |||||||||
Hagerty, Inc. Class A (a) (b) | 68,067 | 971 | |||||||||
Hancock Whitney Corp. | 92,001 | 4,850 | |||||||||
Heartland Financial USA, Inc. | 5,756 | 299 | |||||||||
Heritage Financial Corp. | 35,700 | 866 | |||||||||
Home BancShares, Inc. | 366,599 | 8,637 | |||||||||
Hope Bancorp, Inc. | 126,662 | 2,122 | |||||||||
Horace Mann Educators Corp. | 32,376 | 1,231 | |||||||||
International Bancshares Corp. | 35,244 | 1,481 | |||||||||
James River Group Holdings Ltd. | 160,055 | 4,533 | |||||||||
Kemper Corp. | 30,940 | 1,856 | |||||||||
Kinsale Capital Group, Inc. | 26,988 | 5,406 | |||||||||
Ladder Capital Corp. | 107,071 | 1,273 | |||||||||
LendingTree, Inc. (a) (b) | 24,546 | 2,991 | |||||||||
MGIC Investment Corp. | 120,213 | 1,825 | |||||||||
Morningstar, Inc. | 7,019 | 2,017 | |||||||||
Mr. Cooper Group, Inc. (a) | 30,369 | 1,219 | |||||||||
NMI Holdings, Inc. Class A (a) | 68,401 | 1,692 | |||||||||
OceanFirst Financial Corp. | 34,413 | 781 | |||||||||
Pacific Premier Bancorp, Inc. | 15,060 | 576 | |||||||||
PacWest Bancorp | 58,288 | 2,706 | |||||||||
Palomar Holdings, Inc. (a) | 27,508 | 1,451 | |||||||||
Pennymac Mortgage Investment Trust | 74,339 | 1,325 | |||||||||
Pinnacle Financial Partners, Inc. | 16,190 | 1,566 | |||||||||
Piper Sandler Cos. | 2,860 | 441 | |||||||||
Primerica, Inc. | 19,740 | 3,047 | |||||||||
ProAssurance Corp. | 54,119 | 1,297 | |||||||||
Radian Group, Inc. | 141,587 | 3,170 | |||||||||
Renasant Corp. | 12,961 | 477 | |||||||||
RLI Corp. | 11,382 | 1,193 | |||||||||
Sandy Spring Bancorp, Inc. | 35,750 | 1,691 | |||||||||
Selectquote, Inc. (a) | 107,170 | 792 | |||||||||
Silvercrest Asset Management Group, Inc. Class A | 128,048 | 2,151 | |||||||||
SLM Corp. | 58,747 | 1,077 | |||||||||
SouthState Corp. | 49,394 | 4,169 | |||||||||
Starwood Property Trust, Inc. | 49,721 | 1,231 | |||||||||
StepStone Group, Inc. Class A | 76,336 | 2,672 | |||||||||
Stifel Financial Corp. | 143,512 | 10,749 | |||||||||
Synovus Financial Corp. | 120,307 | 5,986 | |||||||||
See notes to financial statements.
6
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Texas Capital Bancshares, Inc. (a) | 88,291 | $ | 5,536 | ||||||||
The Bank of NT Butterfield & Son Ltd. | 57,300 | 2,100 | |||||||||
Tradeweb Markets, Inc. Class A | 27,495 | 2,331 | |||||||||
Trustmark Corp. | 45,965 | 1,498 | |||||||||
UMB Financial Corp. | 16,150 | 1,590 | |||||||||
United Community Banks, Inc. | 74,400 | 2,633 | |||||||||
Veritex Holdings, Inc. | 53,445 | 2,146 | |||||||||
Washington Federal, Inc. | 10,724 | 376 | |||||||||
Wintrust Financial Corp. | 21,797 | 2,138 | |||||||||
184,074 | |||||||||||
Health Care (15.2%): | |||||||||||
23andMe Holding Co. Class A (a) (b) | 131,345 | 613 | |||||||||
4D Molecular Therapeutics, Inc. (a) (b) | 7,121 | 113 | |||||||||
Aerie Pharmaceuticals, Inc. (a) | 130,066 | 957 | |||||||||
Affimed NV (a) | 167,826 | 685 | |||||||||
Akero Therapeutics, Inc. (a) | 14,961 | 262 | |||||||||
Alkermes PLC (a) | 29,253 | 746 | |||||||||
Alpha Teknova, Inc. (a) | 24,008 | 379 | |||||||||
American Well Corp. Class A (a) | 305,172 | 1,443 | |||||||||
AMN Healthcare Services, Inc. (a) | 12,300 | 1,246 | |||||||||
Annexon, Inc. (a) | 6,432 | 48 | |||||||||
Apellis Pharmaceuticals, Inc. (a) | 25,009 | 1,007 | |||||||||
Arcturus Therapeutics Holdings, Inc. (a) | 5,500 | 144 | |||||||||
Arcus Biosciences, Inc. (a) | 34,100 | 1,050 | |||||||||
Arrowhead Pharmaceuticals, Inc. (a) | 20,444 | 1,079 | |||||||||
Atea Pharmaceuticals, Inc. (a) | 44,276 | 316 | |||||||||
Aurinia Pharmaceuticals, Inc. (a) | 90,758 | 1,512 | |||||||||
Avidity Biosciences, Inc. (a) | 13,310 | 221 | |||||||||
Beam Therapeutics, Inc. (a) (b) | 36,138 | 2,501 | |||||||||
Berkeley Lights, Inc. (a) | 15,375 | 149 | |||||||||
Bicycle Therapeutics PLC, ADR (a) | 42,424 | 2,072 | |||||||||
BioAtla, Inc. (a) | 7,119 | 68 | |||||||||
BioCryst Pharmaceuticals, Inc. (a) | 77,658 | 1,200 | |||||||||
BioLife Solutions, Inc. (a) | 71,037 | 2,120 | |||||||||
BioMarin Pharmaceutical, Inc. (a) | 2,993 | 265 | |||||||||
Biomerica, Inc. (a) (b) | 142,314 | 606 | |||||||||
Blueprint Medicines Corp. (a) | 12,630 | 974 | |||||||||
Brookdale Senior Living, Inc. (a) | 216,933 | 1,148 | |||||||||
C4 Therapeutics, Inc. (a) | 2,657 | 65 | |||||||||
Cabaletta Bio, Inc. (a) | 37,005 | 112 | |||||||||
Castle Biosciences, Inc. (a) | 115,326 | 4,988 | |||||||||
Cerus Corp. (a) | 74,444 | 399 | |||||||||
Codiak Biosciences, Inc. (a) | 66,385 | 439 | |||||||||
Collegium Pharmaceutical, Inc. (a) | 17,343 | 310 | |||||||||
CONMED Corp. | 8,079 | 1,111 | |||||||||
Corcept Therapeutics, Inc. (a) | 47,487 | 891 | |||||||||
CorVel Corp. (a) | 22,268 | 3,922 | |||||||||
Covetrus, Inc. (a) | 63,276 | 1,143 | |||||||||
CRISPR Therapeutics AG (a) (b) | 4,382 | 279 | |||||||||
CryoPort, Inc. (a) | 16,960 | 708 | |||||||||
See notes to financial statements.
7
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
CytoSorbents Corp. (a) (b) | 182,746 | $ | 680 | ||||||||
Definitive Healthcare Corp. (a) (b) | 76,772 | 1,680 | |||||||||
DermTech, Inc. (a) (b) | 46,581 | 597 | |||||||||
Dynavax Technologies Corp. (a) (b) | 91,996 | 1,193 | |||||||||
Enanta Pharmaceuticals, Inc. (a) | 15,487 | 920 | |||||||||
Evolent Health, Inc. Class A (a) | 176,445 | 4,184 | |||||||||
Fate Therapeutics, Inc. (a) | 43,995 | 1,826 | |||||||||
Fulgent Genetics, Inc. (a) | 7,037 | 449 | |||||||||
Fusion Pharmaceuticals, Inc. (a) | 46,129 | 353 | |||||||||
Gamida Cell Ltd. (a) (b) | 91,069 | 303 | |||||||||
Generation Bio Co. (a) | 12,604 | 82 | |||||||||
Genetron Holdings Ltd., ADR (a) (b) | 58,392 | 243 | |||||||||
Globus Medical, Inc. (a) | 22,145 | 1,478 | |||||||||
Halozyme Therapeutics, Inc. (a) | 118,457 | 4,100 | |||||||||
Health Catalyst, Inc. (a) | 61,813 | 1,845 | |||||||||
HealthEquity, Inc. (a) | 47,092 | 2,517 | |||||||||
Heska Corp. (a) (b) | 8,650 | 1,190 | |||||||||
Horizon Therapeutics PLC (a) | 10,501 | 980 | |||||||||
iCAD, Inc. (a) | 143,766 | 804 | |||||||||
ICU Medical, Inc. (a) | 6,202 | 1,323 | |||||||||
IGM Biosciences, Inc. (a) (b) | 8,560 | 152 | |||||||||
Immunocore Holdings PLC, ADR (a) | 7,487 | 169 | |||||||||
ImmunoGen, Inc. (a) | 209,026 | 1,181 | |||||||||
Inari Medical, Inc. (a) | 9,555 | 703 | |||||||||
Inmode Ltd. (a) | 44,852 | 2,163 | |||||||||
Insmed, Inc. (a) | 66,846 | 1,516 | |||||||||
Instil Bio, Inc. (a) (b) | 11,208 | 130 | |||||||||
Insulet Corp. (a) | 5,671 | 1,406 | |||||||||
Integer Holdings Corp. (a) | 31,118 | 2,440 | |||||||||
Intellia Therapeutics, Inc. (a) | 29,466 | 2,787 | |||||||||
IO Biotech, Inc. (a) | 914 | 8 | |||||||||
Iovance Biotherapeutics, Inc. (a) | 26,568 | 442 | |||||||||
Ironwood Pharmaceuticals, Inc. (a) | 46,005 | 513 | |||||||||
Kezar Life Sciences, Inc. (a) | 57,600 | 759 | |||||||||
Kiniksa Pharmaceuticals Ltd. Class A (a) | 109,954 | 1,235 | |||||||||
LHC Group, Inc. (a) | 8,212 | 1,019 | |||||||||
LianBio, ADR (a) | 160,058 | 624 | |||||||||
Ligand Pharmaceuticals, Inc. (a) | 18,923 | 2,358 | |||||||||
Maravai LifeSciences Holdings, Inc. Class A (a) | 11,840 | 342 | |||||||||
Medpace Holdings, Inc. (a) | 26,786 | 4,753 | |||||||||
Merit Medical Systems, Inc. (a) | 38,805 | 2,152 | |||||||||
Mesa Laboratories, Inc. | 4,484 | 1,275 | |||||||||
ModivCare, Inc. (a) | 17,469 | 2,025 | |||||||||
Myriad Genetics, Inc. (a) | 14,708 | 387 | |||||||||
NanoString Technologies, Inc. (a) | 35,628 | 1,237 | |||||||||
Natera, Inc. (a) | 39,796 | 2,812 | |||||||||
Neogen Corp. (a) | 90,024 | 3,283 | |||||||||
NeoGenomics, Inc. (a) | 65,126 | 1,468 | |||||||||
Neurocrine Biosciences, Inc. (a) | 3,574 | 282 | |||||||||
Nupathe, Inc. (a) (c) (d) | 133,709 | — | |||||||||
See notes to financial statements.
8
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Nurix Therapeutics, Inc. (a) | 6,432 | $ | 120 | ||||||||
NuVasive, Inc. (a) | 25,854 | 1,345 | |||||||||
Olink Holding AB, ADR (a) (b) | 58,925 | 953 | |||||||||
Omnicell, Inc. (a) | 20,808 | 3,124 | |||||||||
OPKO Health, Inc. (a) | 139,487 | 437 | |||||||||
Organogenesis Holdings, Inc. (a) | 256,227 | 1,970 | |||||||||
ORIC Pharmaceuticals, Inc. (a) | 40,110 | 397 | |||||||||
OrthoPediatrics Corp. (a) | 44,917 | 2,124 | |||||||||
Oyster Point Pharma, Inc. (a) (b) | 4,427 | 53 | |||||||||
Pacific Biosciences of California, Inc. (a) | 130,487 | 1,459 | |||||||||
Pacira BioSciences, Inc. (a) | 32,655 | 2,050 | |||||||||
Patterson Cos., Inc. | 54,734 | 1,570 | |||||||||
Pliant Therapeutics, Inc. (a) | 42,850 | 503 | |||||||||
PMV Pharmaceuticals, Inc. (a) | 2,987 | 48 | |||||||||
PolyPid Ltd. (a) | 88,426 | 394 | |||||||||
Prothena Corp. PLC (a) | 19,212 | 655 | |||||||||
Pulmonx Corp. (a) | 20,261 | 493 | |||||||||
Pulse Biosciences, Inc. (a) (b) | 84,004 | 1,021 | |||||||||
Quanterix Corp. (a) | 109,938 | 3,347 | |||||||||
RadNet, Inc. (a) | 35,019 | 902 | |||||||||
Reata Pharmaceuticals, Inc. Class A (a) | 7,781 | 219 | |||||||||
Recursion Pharmaceuticals, Inc. Class A (a) (b) | 2,280 | 27 | |||||||||
Renalytix PLC, ADR (a) (b) | 32,839 | 415 | |||||||||
Repligen Corp. (a) | 3,810 | 756 | |||||||||
Revance Therapeutics, Inc. (a) | 62,386 | 832 | |||||||||
Select Medical Holdings Corp. | 48,757 | 1,133 | |||||||||
SI-BONE, Inc. (a) | 87,698 | 1,728 | |||||||||
Silk Road Medical, Inc. (a) | 30,241 | 992 | |||||||||
Singular Genomics Systems, Inc. (a) | 51,646 | 400 | |||||||||
STAAR Surgical Co. (a) | 41,057 | 2,986 | |||||||||
Stoke Therapeutics, Inc. (a) | 16,075 | 305 | |||||||||
Supernus Pharmaceuticals, Inc. (a) | 58,711 | 1,811 | |||||||||
Sutro Biopharma, Inc. (a) | 26,306 | 281 | |||||||||
TCR2 Therapeutics, Inc. (a) | 71,912 | 240 | |||||||||
Tenet Healthcare Corp. (a) | 46,931 | 3,479 | |||||||||
TG Therapeutics, Inc. (a) | 25,140 | 291 | |||||||||
The Ensign Group, Inc. | 63,221 | 4,769 | |||||||||
Tivity Health, Inc. (a) | 75,420 | 1,919 | |||||||||
Veracyte, Inc. (a) | 212,242 | 6,454 | |||||||||
Vericel Corp. (a) | 173,327 | 6,167 | |||||||||
Vir Biotechnology, Inc. (a) | 4,994 | 171 | |||||||||
Xencor, Inc. (a) | 22,632 | 778 | |||||||||
Xenon Pharmaceuticals, Inc. (a) | 44,383 | 1,204 | |||||||||
Zai Lab Ltd., ADR (a) | 8,110 | 403 | |||||||||
164,384 | |||||||||||
Industrials (16.5%): | |||||||||||
AAR Corp. (a) | 55,612 | 2,240 | |||||||||
ABM Industries, Inc. | 38,660 | 1,612 | |||||||||
Acacia Research Corp. (a) | 107,554 | 484 | |||||||||
Alta Equipment Group, Inc. (a) | 76,083 | 1,037 | |||||||||
See notes to financial statements.
9
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Altra Industrial Motion Corp. | 114,977 | $ | 5,551 | ||||||||
Ameresco, Inc. Class A (a) | 3,574 | 181 | |||||||||
Apogee Enterprises, Inc. | 19,193 | 857 | |||||||||
ArcBest Corp. | 13,556 | 1,199 | |||||||||
Array Technologies, Inc. (a) | 313,848 | 3,308 | |||||||||
ASGN, Inc. (a) | 36,000 | 4,135 | |||||||||
Atkore, Inc. (a) | 34,117 | 3,677 | |||||||||
Atlas Air Worldwide Holdings, Inc. (a) | 9,246 | 743 | |||||||||
Axon Enterprise, Inc. (a) | 13,447 | 1,882 | |||||||||
AZZ, Inc. | 25,905 | 1,233 | |||||||||
Beacon Roofing Supply, Inc. (a) | 39,890 | 2,189 | |||||||||
Brady Corp. Class A | 26,929 | 1,398 | |||||||||
BWX Technologies, Inc. | 11,245 | 501 | |||||||||
Casella Waste Systems, Inc. (a) | 56,691 | 4,307 | |||||||||
Chart Industries, Inc. (a) | 30,242 | 3,686 | |||||||||
Clean Harbors, Inc. (a) | 16,413 | 1,519 | |||||||||
Columbus McKinnon Corp. | 86,323 | 3,736 | |||||||||
Construction Partners, Inc. Class A (a) | 19,944 | 523 | |||||||||
Crane Co. | 17,006 | 1,760 | |||||||||
EMCOR Group, Inc. | 49,783 | 5,935 | |||||||||
EnerSys | 6,447 | 483 | |||||||||
Enovix Corp. (a) | 63,435 | 1,022 | |||||||||
EnPro Industries, Inc. | 16,552 | 1,738 | |||||||||
ESCO Technologies, Inc. | 5,933 | 473 | |||||||||
Evoqua Water Technologies Corp. (a) | 67,892 | 2,750 | |||||||||
Exponent, Inc. | 40,152 | 3,814 | |||||||||
Finning International, Inc. | 38,000 | 1,060 | |||||||||
Forward Air Corp. | 31,843 | 3,385 | |||||||||
FTI Consulting, Inc. (a) | 12,427 | 1,812 | |||||||||
Gibraltar Industries, Inc. (a) | 59,472 | 3,259 | |||||||||
GMS, Inc. (a) | 27,476 | 1,406 | |||||||||
GrafTech International Ltd. | 198,710 | 2,082 | |||||||||
Granite Construction, Inc. | 55,100 | 1,983 | |||||||||
H&E Equipment Services, Inc. | 24,460 | 1,018 | |||||||||
Hexcel Corp. (a) | 93,889 | 4,898 | |||||||||
Hub Group, Inc. Class A (a) | 23,482 | 1,778 | |||||||||
Hudson Technologies, Inc. (a) | 113,832 | 425 | |||||||||
Hydrofarm Holdings Group, Inc. (a) | 19,748 | 387 | |||||||||
Hyster-Yale Materials Handling, Inc. | 56,726 | 2,546 | |||||||||
Kaman Corp. | 17,540 | 701 | |||||||||
Kirby Corp. (a) | 22,695 | 1,479 | |||||||||
Korn Ferry | 9,820 | 652 | |||||||||
Kornit Digital Ltd. (a) | 77,402 | 8,132 | |||||||||
Kratos Defense & Security Solutions, Inc. (a) | 69,680 | 1,168 | |||||||||
Landstar System, Inc. | 27,283 | 4,365 | |||||||||
Luxfer Holdings PLC | 43,790 | 748 | |||||||||
ManpowerGroup, Inc. | 14,897 | 1,562 | |||||||||
Matson, Inc. | 3,552 | 347 | |||||||||
Matthews International Corp. Class A | 37,699 | 1,324 | |||||||||
Maxar Technologies, Inc. | 64,700 | 1,683 | |||||||||
See notes to financial statements.
10
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
McGrath RentCorp | 27,380 | $ | 2,087 | ||||||||
Meritor, Inc. (a) | 206,749 | 4,766 | |||||||||
MillerKnoll, Inc. | 44,600 | 1,722 | |||||||||
Mueller Industries, Inc. | 24,294 | 1,255 | |||||||||
nVent Electric PLC | 43,088 | 1,490 | |||||||||
Owens Corning | 21,587 | 1,915 | |||||||||
PGT Innovations, Inc. (a) | 57,703 | 1,096 | |||||||||
Primoris Services Corp. | 110,035 | 2,830 | |||||||||
Proto Labs, Inc. (a) | 28,317 | 1,421 | |||||||||
RBC Bearings, Inc. (a) | 33,566 | 6,058 | |||||||||
Regal Rexnord Corp. | 3,757 | 595 | |||||||||
Rush Enterprises, Inc. Class A | 25,643 | 1,354 | |||||||||
Ryder System, Inc. | 18,369 | 1,344 | |||||||||
Saia, Inc. (a) | 5,231 | 1,487 | |||||||||
Sensata Technologies Holding PLC (a) | 12,895 | 740 | |||||||||
Shoals Technologies Group, Inc. Class A (a) | 87,043 | 1,468 | |||||||||
SkyWest, Inc. (a) | 89,729 | 3,423 | |||||||||
Terex Corp. | 29,700 | 1,239 | |||||||||
The AZEK Co., Inc. (a) | 28,036 | 926 | |||||||||
The Greenbrier Cos., Inc. (b) | 33,068 | 1,335 | |||||||||
Triton International Ltd. | 22,372 | 1,352 | |||||||||
Triumph Group, Inc. (a) | 90,878 | 1,656 | |||||||||
UFP Industries, Inc. | 48,740 | 3,892 | |||||||||
UniFirst Corp. | 12,042 | 2,289 | |||||||||
Univar Solutions, Inc. (a) | 73,828 | 1,956 | |||||||||
Vicor Corp. (a) | 16,157 | 1,524 | |||||||||
Wabash National Corp. | 116,301 | 2,282 | |||||||||
Werner Enterprises, Inc. | 30,322 | 1,352 | |||||||||
WESCO International, Inc. (a) | 18,339 | 2,235 | |||||||||
WillScot Mobile Mini Holdings Corp. (a) | 178,189 | 6,600 | |||||||||
Zurn Water Solutions Corp. | 64,251 | 1,962 | |||||||||
177,824 | |||||||||||
Information Technology (19.5%): | |||||||||||
908 Devices, Inc. (a) (b) | 128,840 | 2,038 | |||||||||
ACV Auctions, Inc. Class A (a) | 3,736 | 50 | |||||||||
Advanced Energy Industries, Inc. | 65,512 | 5,646 | |||||||||
Airgain, Inc. (a) | 153,402 | 1,465 | |||||||||
Akoustis Technologies, Inc. (a) | 337,256 | 2,040 | |||||||||
Allegro MicroSystems, Inc. (a) | 141,996 | 4,030 | |||||||||
Alteryx, Inc. Class A (a) | 4,642 | 265 | |||||||||
Ambarella, Inc. (a) | 20,199 | 2,831 | |||||||||
Amkor Technology, Inc. | 33,220 | 732 | |||||||||
Arteris, Inc. (a) | 78,868 | 1,166 | |||||||||
Avaya Holdings Corp. (a) | 130,057 | 2,370 | |||||||||
AXT, Inc. (a) | 227,646 | 1,705 | |||||||||
Azenta, Inc. | 50,980 | 4,300 | |||||||||
Belden, Inc. | 48,211 | 2,697 | |||||||||
Benchmark Electronics, Inc. | 48,188 | 1,163 | |||||||||
Blackline, Inc. (a) | 22,658 | 2,082 | |||||||||
BM Technologies, Inc. (a) (b) | 7,293 | 69 | |||||||||
See notes to financial statements.
11
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
C3.ai, Inc. Class A (a) | 9,016 | $ | 238 | ||||||||
CEVA, Inc. (a) | 111,585 | 4,203 | |||||||||
Ciena Corp. (a) | 34,817 | 2,309 | |||||||||
Cognyte Software Ltd. (a) | 140,350 | 1,523 | |||||||||
Conduent, Inc. (a) | 180,544 | 854 | |||||||||
Couchbase, Inc. (a) | 3,920 | 92 | |||||||||
Coupa Software, Inc. (a) | 550 | 74 | |||||||||
CS Disco, Inc. (a) (b) | 44,513 | 1,528 | |||||||||
CyberArk Software Ltd. (a) | 6,920 | 949 | |||||||||
Datto Holding Corp. (a) (b) | 61,080 | 1,522 | |||||||||
Diebold Nixdorf, Inc. (a) | 140,581 | 1,313 | |||||||||
Digital Turbine, Inc. (a) | 145,946 | 6,444 | |||||||||
Diodes, Inc. (a) | 52,971 | 4,915 | |||||||||
Domo, Inc. Class B (a) | 14,012 | 658 | |||||||||
DoubleVerify Holdings, Inc. (a) | 3,802 | 105 | |||||||||
Dropbox, Inc. Class A (a) | 18,219 | 451 | |||||||||
Ebix, Inc. | 13,578 | 413 | |||||||||
Elastic NV (a) | 24,018 | 2,240 | |||||||||
Endava PLC, ADR (a) | 10,158 | 1,235 | |||||||||
Enphase Energy, Inc. (a) | 15,779 | 2,217 | |||||||||
ePlus, Inc. (a) | 104,275 | 4,794 | |||||||||
Euronet Worldwide, Inc. (a) | 61,011 | 8,169 | |||||||||
EVERTEC, Inc. | 109,959 | 4,799 | |||||||||
ExlService Holdings, Inc. (a) | 39,639 | 4,777 | |||||||||
Expensify, Inc. Class A (a) | 64,009 | 1,872 | |||||||||
Flywire Corp. (a) (b) | 11,529 | 325 | |||||||||
ForgeRock, Inc. Class A (a) | 3,915 | 56 | |||||||||
FormFactor, Inc. (a) | 124,878 | 5,337 | |||||||||
Freshworks, Inc. Class A (a) | 39,601 | 861 | |||||||||
Globant SA (a) | 9,663 | 2,466 | |||||||||
Harmonic, Inc. (a) | 168,589 | 1,814 | |||||||||
Infinera Corp. (a) | 143,303 | 1,207 | |||||||||
Insight Enterprises, Inc. (a) | 47,220 | 4,446 | |||||||||
Intapp, Inc. (a) | 784 | 16 | |||||||||
InterDigital, Inc. | 10,034 | 693 | |||||||||
Kulicke & Soffa Industries, Inc. | 41,839 | 2,288 | |||||||||
Limelight Networks, Inc. (a) | 830,872 | 3,548 | |||||||||
LivePerson, Inc. (a) | 23,383 | 698 | |||||||||
Mitek Systems, Inc. (a) | 95,139 | 1,557 | |||||||||
Monday.com Ltd. (a) (b) | 392 | 82 | |||||||||
Monolithic Power Systems, Inc. | 2,580 | 1,040 | |||||||||
Napco Security Technologies, Inc. (a) | 149,298 | 3,104 | |||||||||
NCR Corp. (a) | 65,710 | 2,501 | |||||||||
NetScout Systems, Inc. (a) | 42,553 | 1,343 | |||||||||
New Relic, Inc. (a) | 25,581 | 2,690 | |||||||||
Nutanix, Inc. Class A (a) | 72,834 | 1,991 | |||||||||
ON Semiconductor Corp. (a) | 57,262 | 3,378 | |||||||||
Onto Innovation, Inc. (a) | 28,788 | 2,635 | |||||||||
OSI Systems, Inc. (a) | 26,192 | 2,172 | |||||||||
PagerDuty, Inc. (a) | 46,731 | 1,543 | |||||||||
See notes to financial statements.
12
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Perficient, Inc. (a) | 83,442 | $ | 8,746 | ||||||||
Ping Identity Holding Corp. (a) | 37,086 | 734 | |||||||||
Plexus Corp. (a) | 15,791 | 1,224 | |||||||||
Power Integrations, Inc. | 26,878 | 2,169 | |||||||||
PROS Holdings, Inc. (a) | 90,460 | 2,507 | |||||||||
PTC, Inc. (a) | 17,744 | 2,063 | |||||||||
Pure Storage, Inc. Class A (a) | 124,383 | 3,295 | |||||||||
Qualys, Inc. (a) | 15,864 | 2,033 | |||||||||
Radware Ltd. (a) | 79,814 | 2,684 | |||||||||
Rapid7, Inc. (a) | 45,115 | 4,346 | |||||||||
Sanmina Corp. (a) | 37,664 | 1,424 | |||||||||
Sapiens International Corp. NV | 33,309 | 1,061 | |||||||||
Shift4 Payments, Inc. Class A (a) | 15,165 | 800 | |||||||||
ShotSpotter, Inc. (a) | 15,784 | 416 | |||||||||
Silicon Laboratories, Inc. (a) | 10,566 | 1,745 | |||||||||
Silicon Motion Technology Corp., ADR | 8,506 | 672 | |||||||||
SiTime Corp. (a) | 7,388 | 1,722 | |||||||||
Smartsheet, Inc. Class A (a) | 31,586 | 1,965 | |||||||||
Sprout Social, Inc. Class A (a) | 17,865 | 1,230 | |||||||||
SPS Commerce, Inc. (a) | 11,061 | 1,370 | |||||||||
Stratasys Ltd. (a) | 16,378 | 390 | |||||||||
Switch, Inc. Class A | 35,235 | 903 | |||||||||
Synaptics, Inc. (a) | 3,735 | 786 | |||||||||
TaskUS, Inc. Class A (a) | 16,733 | 535 | |||||||||
Telos Corp. (a) | 17,129 | 200 | |||||||||
Ultra Clean Holdings, Inc. (a) | 6,324 | 319 | |||||||||
Varonis Systems, Inc. (a) | 45,690 | 1,702 | |||||||||
Veeco Instruments, Inc. (a) | 128,973 | 3,545 | |||||||||
Verint Systems, Inc. (a) | 102,657 | 5,269 | |||||||||
Veritone, Inc. (a) (b) | 43,950 | 693 | |||||||||
Verra Mobility Corp. (a) | 112,200 | 1,777 | |||||||||
Vishay Intertechnology, Inc. | 141,494 | 2,930 | |||||||||
Vizio Holding Corp. Class A (a) (b) | 62,686 | 901 | |||||||||
Western Digital Corp. (a) | 29,241 | 1,513 | |||||||||
WNS Holdings Ltd., ADR (a) | 61,714 | 5,194 | |||||||||
Workiva, Inc. (a) | 5,820 | 688 | |||||||||
Yext, Inc. (a) | 51,498 | 417 | |||||||||
Zeta Global Holdings Corp. Class A (a) (b) | 61,910 | 573 | |||||||||
210,675 | |||||||||||
Materials (3.6%): | |||||||||||
Arconic Corp. (a) | 42,983 | 1,329 | |||||||||
Avient Corp. | 48,859 | 2,432 | |||||||||
Commercial Metals Co. | 39,979 | 1,337 | |||||||||
Constellium SE (a) | 63,000 | 1,102 | |||||||||
Eagle Materials, Inc. | 31,287 | 4,563 | |||||||||
Franco-Nevada Corp. | 11,433 | 1,512 | |||||||||
Graphic Packaging Holding Co. | 156,420 | 2,958 | |||||||||
Materion Corp. | 15,055 | 1,247 | |||||||||
Minerals Technologies, Inc. | 12,339 | 863 | |||||||||
Neo Performance Materials, Inc. | 36,349 | 511 | |||||||||
See notes to financial statements.
13
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Olin Corp. | 44,120 | $ | 2,236 | ||||||||
Schnitzer Steel Industries, Inc. | 51,935 | 2,033 | |||||||||
Schweitzer-Mauduit International, Inc. | 32,830 | 994 | |||||||||
Stepan Co. | 18,826 | 2,074 | |||||||||
Summit Materials, Inc. Class A (a) | 154,613 | 5,498 | |||||||||
Trinseo PLC | 45,961 | 2,461 | |||||||||
Tronox Holdings PLC Class A | 83,880 | 1,904 | |||||||||
UFP Technologies, Inc. (a) | 29,929 | 2,124 | |||||||||
Warrior Met Coal, Inc. | 37,368 | 979 | |||||||||
Worthington Industries, Inc. | 18,017 | 976 | |||||||||
39,133 | |||||||||||
Real Estate (5.0%): | |||||||||||
Alexander & Baldwin, Inc. | 57,499 | 1,320 | |||||||||
American Assets Trust, Inc. | 30,105 | 1,083 | |||||||||
Apple Hospitality REIT, Inc. | 120,840 | 1,949 | |||||||||
Broadstone Net Lease, Inc. | 58,805 | 1,359 | |||||||||
CareTrust REIT, Inc. | 72,000 | 1,527 | |||||||||
Cushman & Wakefield PLC (a) | 84,450 | 1,773 | |||||||||
DiamondRock Hospitality Co. (a) | 210,323 | 1,966 | |||||||||
DigitalBridge Group, Inc. (a) | 53,331 | 389 | |||||||||
Easterly Government Properties, Inc. | 76,903 | 1,613 | |||||||||
Equity Commonwealth (a) | 97,840 | 2,548 | |||||||||
Essential Properties Realty Trust, Inc. | 63,001 | 1,673 | |||||||||
FirstService Corp. | 9,607 | 1,531 | |||||||||
Four Corners Property Trust, Inc. | 72,170 | 1,954 | |||||||||
Global Medical REIT, Inc. | 49,356 | 835 | |||||||||
Hudson Pacific Properties, Inc. | 64,000 | 1,512 | |||||||||
Industrial Logistics Properties Trust | 46,222 | 1,060 | |||||||||
Innovative Industrial Properties, Inc. | 6,453 | 1,279 | |||||||||
Jones Lang LaSalle, Inc. (a) | 5,610 | 1,407 | |||||||||
Kennedy-Wilson Holdings, Inc. | 60,530 | 1,359 | |||||||||
LXP Industrial Trust | 240,763 | 3,586 | |||||||||
National Health Investors, Inc. | 8,258 | 477 | |||||||||
Newmark Group, Inc. Class A | 37,458 | 573 | |||||||||
Physicians Realty Trust | 71,125 | 1,299 | |||||||||
Piedmont Office Realty Trust, Inc. Class A | 78,029 | 1,386 | |||||||||
PotlatchDeltic Corp. | 9,545 | 513 | |||||||||
Retail Opportunity Investments Corp. | 37,702 | 699 | |||||||||
Rexford Industrial Realty, Inc. | 16,128 | 1,180 | |||||||||
Sabra Health Care REIT, Inc. | 218,758 | 2,977 | |||||||||
SITE Centers Corp. | 143,000 | 2,118 | |||||||||
STAG Industrial, Inc. | 65,003 | 2,777 | |||||||||
Summit Hotel Properties, Inc. (a) | 213,069 | 2,007 | |||||||||
Sunstone Hotel Investors, Inc. (a) | 126,500 | 1,431 | |||||||||
The Macerich Co. | 35,057 | 580 | |||||||||
UMH Properties, Inc. | 70,429 | 1,662 | |||||||||
Urban Edge Properties | 40,555 | 740 | |||||||||
Veris Residential, Inc. (a) | 90,196 | 1,488 | |||||||||
53,630 | |||||||||||
See notes to financial statements.
14
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Utilities (1.9%): | |||||||||||
ALLETE, Inc. | 26,037 | $ | 1,662 | ||||||||
Avista Corp. | 35,204 | 1,565 | |||||||||
Black Hills Corp. | 46,155 | 3,127 | |||||||||
NorthWestern Corp. | 83,697 | 4,864 | |||||||||
ONE Gas, Inc. | 23,483 | 1,829 | |||||||||
Portland General Electric Co. | 72,023 | 3,784 | |||||||||
South Jersey Industries, Inc. | 68,030 | 1,702 | |||||||||
Spire, Inc. | 29,080 | 1,917 | |||||||||
20,450 | |||||||||||
Total Common Stocks (Cost $927,665) | 1,069,464 | ||||||||||
Rights (0.0%) (e) | |||||||||||
Health Care (0.0%): | |||||||||||
Flexion Therapeutics, Inc. (a) (c) (d) | 58,207 | 36 | |||||||||
Total Rights (Cost $36) | 36 | ||||||||||
Exchange-Traded Funds (0.2%) | |||||||||||
iShares Russell 2000 ETF | 10,702 | 2,153 | |||||||||
Total Exchange-Traded Funds (Cost $2,338) | 2,153 | ||||||||||
Collateral for Securities Loaned (2.2%)^ | |||||||||||
| Fidelity Investments Money Market Government Portfolio, Institutional Shares, 0.01% (f) | 19,190,499 | 19,191 | |||||||||
HSBC U.S. Government Money Market Fund, I Shares, 0.03% (f) | 4,790,234 | 4,790 | |||||||||
Total Collateral for Securities Loaned (Cost $23,981) | 23,981 | ||||||||||
Total Investments (Cost $954,020) — 101.5% | 1,095,634 | ||||||||||
Liabilities in excess of other assets — (1.5)% | (16,166 | ) | |||||||||
NET ASSETS — 100.00% | $ | 1,079,468 | |||||||||
At January 31, 2022, the Fund's investments in foreign securities were 6.5% of net assets.
^ 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 net assets as of January 31, 2022. 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. At January 31, 2022, illiquid securities were less than 0.05% of the Fund's net assets.
(e) Amount represents less than 0.05% of net assets.
(f) Rate disclosed is the daily yield on January 31, 2022.
ADR — American Depositary Receipt
See notes to financial statements.
15
| USAA Mutual Funds Trust USAA Small Cap Stock Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Unaudited)
ETF — Exchange-Traded Fund
PLC — Public Limited Company
REIT — Real Estate Investment Trust
See notes to financial statements.
16
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA Small Cap Stock Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $954,020) | $ | 1,095,634 | (a) | ||||
Cash | 9,607 | ||||||
Receivables: | |||||||
Interest and dividends | 184 | ||||||
Capital shares issued | 673 | ||||||
Investments sold | 3,233 | ||||||
From Adviser | 16 | ||||||
Prepaid expenses | 19 | ||||||
Total Assets | 1,109,366 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 23,981 | ||||||
Investments purchased | 4,244 | ||||||
Capital shares redeemed | 531 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 762 | ||||||
Administration fees | 127 | ||||||
Custodian fees | 15 | ||||||
Transfer agent fees | 166 | ||||||
Compliance fees | 1 | ||||||
Trustees' fees | 1 | ||||||
Other accrued expenses | 70 | ||||||
Total Liabilities | 29,898 | ||||||
Net Assets: | |||||||
Capital | 893,563 | ||||||
Total accumulated earnings/(loss) | 185,905 | ||||||
Net Assets | $ | 1,079,468 | |||||
Net Assets | |||||||
Fund Shares | $ | 712,989 | |||||
Institutional Shares | 366,479 | ||||||
Total | $ | 1,079,468 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 52,383 | ||||||
Institutional Shares | 26,408 | ||||||
Total | 78,791 | ||||||
Net asset value, offering and redemption price per share: (b) | |||||||
Fund Shares | $ | 13.61 | |||||
| Institutional Shares | 13.88 | ||||||
(a) Includes $24,738 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.
17
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended January 31, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA Small Cap Stock Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 6,373 | |||||
Interest | — | (a) | |||||
Securities lending (net of fees) | 290 | ||||||
Foreign tax withholding | (12 | ) | |||||
Total Income | 6,651 | ||||||
Expenses: | |||||||
Investment advisory fees | 5,345 | ||||||
Administration fees — Fund Shares | 608 | ||||||
Administration fees — Institutional Shares | 265 | ||||||
Sub-Administration fees | 54 | ||||||
Custodian fees | 40 | ||||||
Transfer agent fees — Fund Shares | 408 | ||||||
Transfer agent fees — Institutional Shares | 265 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 5 | ||||||
Legal and audit fees | 31 | ||||||
State registration and filing fees | 25 | ||||||
Interfund lending fees | — | (a) | |||||
Interest fees | 3 | ||||||
Other expenses | 86 | ||||||
Total Expenses | 7,159 | ||||||
Expenses waived/reimbursed by Adviser | (39 | ) | |||||
Net Expenses | 7,120 | ||||||
Net Investment Income (Loss) | (469 | ) | |||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
| Net realized gains (losses) from investment securities and foreign currency transactions | 135,339 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | (195,690 | ) | |||||
Net realized/unrealized gains (losses) on investments | (60,351 | ) | |||||
Change in net assets resulting from operations | $ | (60,820 | ) | ||||
(a) Rounds to less than $1 thousand.
See notes to financial statements.
18
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands)
USAA Small Cap Stock Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | (469 | ) | $ | (180 | ) | |||||
Net realized gains (losses) from investments | 135,339 | 372,920 | |||||||||
| Net change in unrealized appreciation/depreciation on investments | (195,690 | ) | 210,737 | ||||||||
Change in net assets resulting from operations | (60,820 | ) | 583,477 | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (241,242 | ) | (59,223 | ) | |||||||
Institutional Shares | (116,892 | ) | (51,168 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (358,134 | ) | (110,391 | ) | |||||||
Change in net assets resulting from capital transactions | 35,044 | (161,900 | ) | ||||||||
Change in net assets | (383,910 | ) | 311,186 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 1,463,378 | 1,152,192 | |||||||||
End of period | $ | 1,079,468 | $ | 1,463,378 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 26,875 | $ | 65,154 | |||||||
Distributions reinvested | 238,354 | 58,491 | |||||||||
Cost of shares redeemed | (75,946 | ) | (150,399 | ) | |||||||
Total Fund Shares | $ | 189,283 | $ | (26,754 | ) | ||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 69,900 | $ | 35,252 | |||||||
Distributions reinvested | 116,737 | 51,148 | |||||||||
Cost of shares redeemed | (340,876 | ) | (221,546 | ) | |||||||
Total Institutional Shares | $ | (154,239 | ) | $ | (135,146 | ) | |||||
Change in net assets resulting from capital transactions | $ | 35,044 | $ | (161,900 | ) | ||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,414 | 3,291 | |||||||||
Reinvested | 16,656 | 3,230 | |||||||||
Redeemed | (4,214 | ) | (7,982 | ) | |||||||
Total Fund Shares | 13,856 | (1,461 | ) | ||||||||
Institutional Shares | |||||||||||
Issued | 4,351 | 1,795 | |||||||||
Reinvested | 8,001 | 2,787 | |||||||||
Redeemed | (15,894 | ) | (11,634 | ) | |||||||
Total Institutional Shares | (3,542 | ) | (7,052 | ) | |||||||
Change in Shares | 10,314 | (8,513 | ) | ||||||||
See notes to financial statements.
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 Small Cap Stock Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 21.25 | (0.01 | )(d) | (1.16 | ) | (1.17 | ) | — | (6.47 | ) | ||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 14.88 | (0.01 | )(d) | 7.95 | 7.94 | (0.14 | ) | (1.43 | ) | |||||||||||||||||
2020 | $ | 16.74 | 0.05 | (d) | (0.28 | ) | (0.23 | ) | (0.03 | ) | (1.60 | ) | |||||||||||||||
2019 | $ | 19.33 | 0.07 | (0.71 | ) | (0.64 | ) | (0.04 | ) | (1.91 | ) | ||||||||||||||||
2018 | $ | 18.02 | 0.05 | 3.19 | 3.24 | (0.07 | ) | (1.86 | ) | ||||||||||||||||||
2017 | $ | 16.17 | 0.08 | 1.99 | 2.07 | (0.03 | ) | (0.19 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 21.53 | (0.01 | )(d) | (1.17 | ) | (1.18 | ) | — | (6.47 | ) | ||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 15.06 | (— | )(d)(f) | 8.04 | 8.04 | (0.14 | ) | (1.43 | ) | |||||||||||||||||
2020 | $ | 16.91 | 0.07 | (d) | (0.28 | ) | (0.21 | ) | (0.04 | ) | (1.60 | ) | |||||||||||||||
2019 | $ | 19.50 | 0.08 | (0.71 | ) | (0.63 | ) | (0.05 | ) | (1.91 | ) | ||||||||||||||||
2018 | $ | 18.16 | 0.07 | 3.22 | 3.29 | (0.09 | ) | (1.86 | ) | ||||||||||||||||||
2017 | $ | 16.30 | 0.09 | 2.02 | 2.11 | (0.06 | ) | (0.19 | ) | ||||||||||||||||||
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019, and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(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.
(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 ratio by less than 0.01%.
(f) Amount is less than $0.005 per share.
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 Small Cap Stock Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (6.47 | ) | $ | 13.61 | (7.01 | )% | 1.08 | % | (0.07 | )% | 1.08 | % | $ | 712,989 | 45 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (1.57 | ) | $ | 21.25 | 55.25 | % | 1.10 | % | (0.04 | )% | 1.10 | % | $ | 818,576 | 85 | % | |||||||||||||||||||
2020 | (1.63 | ) | $ | 14.88 | (2.21 | )% | 1.10 | % | 0.33 | % | 1.10 | % | $ | 595,019 | 71 | % | |||||||||||||||||||
2019 | (1.95 | ) | $ | 16.74 | (2.07 | )% | 1.06 | %(e) | 0.58 | % | 1.06 | %(e) | $ | 694,015 | 84 | % | |||||||||||||||||||
2018 | (1.93 | ) | $ | 19.33 | 19.21 | % | 1.06 | %(e) | 0.31 | % | 1.06 | %(e) | $ | 758,065 | 68 | % | |||||||||||||||||||
2017 | (0.22 | ) | $ | 18.02 | 12.81 | % | 1.09 | %(e) | 0.42 | % | 1.09 | %(e) | $ | 658,038 | 53 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (6.47 | ) | $ | 13.88 | (6.96 | )% | 1.04 | % | (0.06 | )% | 1.06 | % | $ | 366,479 | 45 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (1.57 | ) | $ | 21.53 | 55.30 | % | 1.04 | % | 0.02 | % | 1.05 | % | $ | 644,802 | 85 | % | |||||||||||||||||||
2020 | (1.64 | ) | $ | 15.06 | (2.08 | )% | 0.98 | % | 0.45 | % | 0.99 | % | $ | 557,173 | 71 | % | |||||||||||||||||||
2019 | (1.96 | ) | $ | 16.91 | (1.98 | )% | 0.96 | %(e) | 0.67 | % | 0.96 | %(e) | $ | 904,981 | 84 | % | |||||||||||||||||||
2018 | (1.95 | ) | $ | 19.50 | 19.36 | % | 0.95 | %(e) | 0.42 | % | 0.95 | %(e) | $ | 996,393 | 68 | % | |||||||||||||||||||
2017 | (0.25 | ) | $ | 18.16 | 12.92 | % | 0.97 | %(e) | 0.52 | % | 0.97 | %(e) | $ | 892,691 | 53 | % | |||||||||||||||||||
See notes to financial statements.
21
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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 U.S. Generally Accepted Accounting Principles ("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 risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
22
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(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 at the Nasdaq 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 are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically 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 NAV to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 1,069,464 | $ | — | $ | — | $ | 1,069,464 | |||||||||||
Rights | — | — | 36 | 36 | |||||||||||||||
Exchange-Traded Funds | 2,153 | — | — | 2,153 | |||||||||||||||
Collateral for Securities Loaned | 23,981 | — | — | 23,981 | |||||||||||||||
Total | $ | 1,095,598 | $ | — | $ | 36 | $ | 1,095,634 | |||||||||||
As of January 31, 2022, there were no significant Level 3 holdings in the fair value hierarchy. For the six months ended January 31, 2022, there were no transfers in or out of Level 3 in the 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, 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 often 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 the ETF is 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.
23
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(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.
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, 2022, 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 or 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 discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
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 and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially 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 generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund effectively does not have control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. 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
24
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk 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 repledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2022.
| Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
| $ | 24,817 | (a) | $ | — | $ | 23,981 | |||||
(a) Includes $79 thousand of securities on loan that were sold prior to January 31, 2022.
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 investment securities and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, are disclosed as Net realized gains (losses) from investment securities and foreign currency transactions 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.
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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 years, which includes the current fiscal tax year end). 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 an affiliated trust based upon net assets or another appropriate basis.
25
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended January 31, 2022, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 596,623 | $ | 910,410 | ||||
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The 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 www.vcm.com. As of January 31, 2022, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 0.1 | ||||||
USAA Cornerstone Equity Fund | 0.5 | ||||||
USAA Target Retirement Income Fund | 0.5 | ||||||
USAA Target Retirement 2030 Fund | 2.1 | ||||||
USAA Target Retirement 2040 Fund | 2.8 | ||||||
USAA Target Retirement 2050 Fund | 2.0 | ||||||
USAA Target Retirement 2060 Fund | 0.3 | ||||||
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
26
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
The performance adjustment for each share class is accrued daily and 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 the largest funds within the Lipper Small-Cap Core Funds category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
| Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
| +/- 100 to 400 | +/- 4 | ||||||
| +/- 401 to 700 | +/- 5 | ||||||
| +/- 701 and greater | +/- 6 | ||||||
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective 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.
For the period August 1, 2021, to January 31, 2022, performance adjustments were $160 and $160 for Fund Shares and Institutional Shares, in thousands, respectively. Performance adjustments were 0.04% and 0.06% for Fund Shares and Institutional Shares, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
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 Granahan Investment Management, Inc. ("GIMI"), under which GIMI 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 also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15% and 0.10%, which is based on the Fund's average daily net assets of the Fund Shares and of the Institutional Shares, respectively. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses
27
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA 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 fees for the 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 and paid to VCTA for the six months ended January 31, 2022, 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 Services, 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 and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 limits for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, 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. As of January 31, 2022, the expense limits (excluding voluntary waivers) were 1.10% and 0.98% for Fund Shares and Institutional Shares, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal
28
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of January 31, 2022, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at January 31, 2022.
| Expires 2023 | Expires 2024 | Expires 2025 | Total | ||||||||||||
| $ | 64 | $ | 67 | $ | 39 | $ | 170 | ||||||||
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, 2022.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Small-Capitalization Stock Risk — 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.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
Equity Risk — The values of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general market, economic and political conditions and other factors. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or may last for extended periods.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended January 31, 2022, Citibank received 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 London Interbank Offered Rate ("LIBOR") plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected 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, 2022, were as follows (amounts in thousands):
| Amount Outstanding at January 31, 2022 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | |||||||||||||||
| $ | — | $ | 4,033 | 9 | 1.21 | % | $ | 4,800 | |||||||||||
* For the six months ended January 31, 2022, based on the number of days borrowings were outstanding.
Interfund Lending:
The Trust and the 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 Funds Complex that is permitted to participate in the Facility, 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, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. 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, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending.
The average borrowing or lending for the days outstanding and average interest rate for the Fund during the six months ended January 31, 2022, were as follows (amounts in thousands):
| Borrower or Lender | Amount Outstanding at January 31, 2022 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
| Borrower | $ | — | $ | 4,538 | 4 | 0.57 | % | $ | 8,643 | ||||||||||||||
* For the six months ended January 31, 2022, 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
30
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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, 2022.
As of July 31, 2021, the Fund had no capital loss carryforwards for federal income tax purposes.
31
USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
(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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
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. Form N-PORT is available on the SEC's website at www.sec.gov.
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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21- 1/31/22* | Hypothetical Expenses Paid During Period 8/1/21- 1/31/22* | Annualized Expense Ratio During Period 8/1/21- 1/31/22 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 929.90 | $ | 1,019.76 | $ | 5.25 | $ | 5.50 | 1.08 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 930.40 | 1,019.96 | 5.06 | 5.30 | 1.04 | % | ||||||||||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
32
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Considerations of the Board in Continuing the Investment Advisory Agreement
USAA Small Cap Stock Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") and the Subadvisory Agreement between the Adviser and Granahan Investment Management, Inc. (the "Subadviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement and Subadvisory Agreement was approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement and Subadvisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and Subadvisory Agreement and the Adviser and the Subadviser, and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's and the Subadviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement and Subadvisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement and the Subadvisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement and the Subadvisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
The Board considered the Advisory Agreement and the Subadvisory Agreement separately in the course of its review. In doing so, the Board noted the respective roles of the Adviser and the Subadviser in providing services to the Fund.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser and the Subadviser. At the meeting at which the renewal of the Advisory Agreement and Subadvisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser and the Subadviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement and Subadvisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser and Subadviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
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USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The Board considered the Adviser's process for monitoring the performance of the Subadviser and the Adviser's timeliness in responding to performance issues. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services and the effects of any performance adjustment1, as well as any fee waivers and reimbursements — was below the median of its expense group and above the median of its expense universe. The data indicated that the Fund's total expenses, including after any reimbursements, were below the medians of its expense group and expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund. The Board also took into account that the subadvisory fees under the Subadvisory Agreement are paid by the Adviser. The Board also considered and discussed information about the Subadviser's fees, including the amount of management fees retained by the Adviser after payment of the subadvisory fees.
1 The Adviser previously agreed that no performance adjustment (positive or negative) would be made to the amount payable to the Adviser from July 1, 2019, through June 30, 2020.
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USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total returns relative to its Lipper index and other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was above the average of its performance universe for the one-, three-, five- and ten-year periods ended September 30, 2021, and was below its Lipper index for the one-year period ended September 30, 2021, and was above its Lipper index for the three-, five- and ten-year periods ended September 30, 2021.
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser pays the Fund's subadvisory fees and also noted that the Adviser reimbursed or waived a portion of its management fees to the Fund. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board considered whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in any economies of scale. The Board took into account management's discussion of the current advisory fee structure. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board considered the fact that the Adviser also pays the Fund's subadvisory fees. The Board also considered the effect of the change in size, if any, of each of the Fund's classes on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
Subadvisory Agreement
In approving the Subadvisory Agreement with respect to the Fund, the Board considered various factors, among them: (i) the nature, extent, and quality of services provided to the Fund by the Subadviser, including the personnel providing services; (ii) the Subadviser's compensation and any other benefits derived from the subadvisory relationship; (iii) comparisons, to the extent applicable, of subadvisory fees and performance to comparable investment companies; and (iv) the terms of the Subadvisory Agreement. A summary of the Board's analysis of these factors is set forth below. After full consideration of a variety of factors, the Board, including
35
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
the Independent Trustees, voted to approve the Subadvisory Agreement. In approving the Subadvisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services Provided; Investment Personnel — The Trustees considered information provided to them regarding the services provided by the Subadviser, including information presented periodically throughout the previous year. The Board considered the Subadviser's level of knowledge and investment style. The Board reviewed the experience and credentials of the investment personnel who are responsible for managing the investment of portfolio securities with respect to the Fund and the Subadviser's level of staffing. The Trustees considered, based on the materials provided to them by the Subadviser, whether the method of compensating portfolio managers is reasonable and includes mechanisms to prevent a manager with underperformance from taking undue risks. The Trustees also noted the Subadviser's brokerage practices. The Board also considered the Subadviser's regulatory and compliance history. The Board also took into account the Subadviser's risk management processes. The Board noted that the Adviser's monitoring processes of the Subadviser include: (i) regular telephonic meetings to discuss, among other matters, investment strategies, and to review portfolio performance; (ii) quarterly portfolio compliance checklists and quarterly compliance certifications to the Board; and (iii) due diligence visits to the Subadviser.
Subadviser Compensation — The Board also took into consideration the financial condition of the Subadviser. In considering the cost of services to be provided by the Subadviser and the profitability to the Subadviser of its relationship with the Fund, the Trustees noted that the fees under the Subadvisory Agreement were paid by the Adviser. The Trustees also relied on the ability of the Adviser to negotiate the Subadvisory Agreement and the fees thereunder at arm's length. For the above reasons, the Board determined that the profitability of the Subadviser from its relationship with the Fund was not a material factor in its deliberations with respect to the consideration of the approval of the Subadvisory Agreement. For similar reasons, the Board concluded that the potential for economies of scale in the Subadviser's management of the Fund was not a material factor in considering the Subadvisory Agreement.
Subadvisory Fees and Fund Performance — The Board compared the subadvisory fees for the Fund with the fees that the Subadviser charges to comparable clients, as applicable. The Board considered that the Fund pays a management fee to the Adviser and that, in turn, the Adviser pays a subadvisory fee to the Subadviser. As noted above, the Board considered the Fund's performance during the one-, three-, five-, and ten-year periods ended September 30, 2021, as compared to the Fund's peer group and noted that the Board reviews at its regularly scheduled meetings information about the Fund's performance results. The Board also considered the performance of the Subadviser. The Board noted the Adviser's experience and resources in monitoring the performance, investment style, and risk-adjusted performance of the Subadviser. The Board was mindful of the Adviser's focus on the Subadviser's performance. The Board also noted the Subadviser's performance record for similar accounts, as applicable.
Conclusions — The Board reached the following conclusions regarding the Subadvisory Agreement: (i) the Subadviser is qualified to manage the Fund's assets in accordance with its investment objectives and policies; (ii) the Subadviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and relevant indices; and (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser and the Subadviser. Based on its conclusions, the Board determined that approval of the Subadvisory Agreement with respect to the Fund would be in the best interests of the Fund and its shareholders.
36
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800) 235-8396 | ||||||
40053-0322
January 31, 2022
Semi Annual Report
USAA Value Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 8 | ||||||
Statement of Operations | 9 | ||||||
Statements of Changes in Net Assets | 10 | ||||||
Financial Highlights | 12 | ||||||
Notes to Financial Statements | 14 | ||||||
Supplemental Information | 22 | ||||||
Proxy Voting and Portfolio Holdings Information | 22 | ||||||
Expense Examples | 22 | ||||||
Advisory Contract Approval | 23 | ||||||
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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA Value Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks long-term growth of capital.
Top 10 Equity Holdings*:
January 31, 2022
(% of Net Assets)
Johnson & Johnson | 2.3 | % | |||||
The Progressive Corp. | 2.2 | % | |||||
Vistra Corp. | 2.0 | % | |||||
UnitedHealth Group, Inc. | 2.0 | % | |||||
Comerica, Inc. | 2.0 | % | |||||
Exelon Corp. | 1.7 | % | |||||
Willis Towers Watson PLC | 1.6 | % | |||||
Keurig Dr Pepper, Inc. | 1.6 | % | |||||
Global Payments, Inc. | 1.6 | % | |||||
AbbVie, Inc. | 1.5 | % | |||||
Sector Allocation*:
January 31, 2022
(% of Net Assets)
* Does not include futures contracts, 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%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA Value Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (98.5%) | |||||||||||
Communication Services (5.1%): | |||||||||||
Alphabet, Inc. Class A (a) | 6,418 | $ | 17,367 | ||||||||
AT&T, Inc. | 233,667 | 5,958 | |||||||||
Comcast Corp. Class A | 127,427 | 6,370 | |||||||||
DISH Network Corp. Class A (a) | 62,169 | 1,952 | |||||||||
Meta Platforms, Inc. Class A (a) | 46,100 | 14,441 | |||||||||
Omnicom Group, Inc. | 78,472 | 5,914 | |||||||||
Verizon Communications, Inc. | 137,885 | 7,340 | |||||||||
ViacomCBS, Inc. Class B | 80,675 | 2,699 | |||||||||
62,041 | |||||||||||
Consumer Discretionary (6.1%): | |||||||||||
AutoNation, Inc. (a) | 25,027 | 2,728 | |||||||||
Best Buy Co., Inc. | 42,212 | 4,191 | |||||||||
Dick's Sporting Goods, Inc. (b) | 36,315 | 4,191 | |||||||||
eBay, Inc. | 27,040 | 1,624 | |||||||||
Ford Motor Co. | 185,839 | 3,773 | |||||||||
General Motors Co. (a) | 205,507 | 10,836 | |||||||||
Gentex Corp. | 59,489 | 1,868 | |||||||||
Lennar Corp. Class A | 54,525 | 5,240 | |||||||||
LKQ Corp. | 213,804 | 11,736 | |||||||||
O'Reilly Automotive, Inc. (a) | 2,917 | 1,901 | |||||||||
PulteGroup, Inc. | 106,974 | 5,637 | |||||||||
Target Corp. | 45,640 | 10,060 | |||||||||
The Home Depot, Inc. | 8,125 | 2,982 | |||||||||
Tractor Supply Co. | 10,345 | 2,258 | |||||||||
Ulta Beauty, Inc. (a) | 6,005 | 2,184 | |||||||||
Yum! Brands, Inc. | 29,389 | 3,679 | |||||||||
74,888 | |||||||||||
Consumer Staples (8.1%): | |||||||||||
Altria Group, Inc. | 118,867 | 6,048 | |||||||||
Colgate-Palmolive Co. | 45,469 | 3,749 | |||||||||
General Mills, Inc. | 70,359 | 4,832 | |||||||||
Herbalife Nutrition Ltd. (a) | 49,947 | 2,123 | |||||||||
Keurig Dr Pepper, Inc. | 516,092 | 19,586 | |||||||||
Lamb Weston Holdings, Inc. | 101,800 | 6,537 | |||||||||
Mondelez International, Inc. Class A | 201,200 | 13,486 | |||||||||
Nu Skin Enterprises, Inc. Class A | 34,892 | 1,681 | |||||||||
Philip Morris International, Inc. | 89,942 | 9,251 | |||||||||
The Hershey Co. | 14,456 | 2,849 | |||||||||
The Kroger Co. | 84,404 | 3,679 | |||||||||
The Procter & Gamble Co. | 66,949 | 10,742 | |||||||||
Tyson Foods, Inc. Class A | 38,695 | 3,517 | |||||||||
U.S. Foods Holding Corp. (a) | 83,700 | 2,951 | |||||||||
Walmart, Inc. | 50,868 | 7,112 | |||||||||
98,143 | |||||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA Value Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Energy (4.9%): | |||||||||||
Chevron Corp. | 57,442 | $ | 7,544 | ||||||||
ConocoPhillips | 64,077 | 5,679 | |||||||||
Continental Resources, Inc. (b) | 79,887 | 4,149 | |||||||||
Coterra Energy, Inc. | 117,711 | 2,578 | |||||||||
Enterprise Products Partners LP | 446,924 | 10,565 | |||||||||
EOG Resources, Inc. | 51,825 | 5,778 | |||||||||
Exxon Mobil Corp. | 18,792 | 1,427 | |||||||||
Hess Corp. | 96,100 | 8,869 | |||||||||
Pioneer Natural Resources Co. | 43,600 | 9,544 | |||||||||
Valero Energy Corp. | 36,500 | 3,028 | |||||||||
59,161 | |||||||||||
Financials (19.5%): | |||||||||||
Aflac, Inc. | 99,581 | 6,256 | |||||||||
American Financial Group, Inc. | 19,112 | 2,490 | |||||||||
Ameriprise Financial, Inc. | 13,315 | 4,052 | |||||||||
Berkshire Hathaway, Inc. Class B (a) | 9,005 | 2,819 | |||||||||
Capital One Financial Corp. | 26,911 | 3,949 | |||||||||
Cboe Global Markets, Inc. | 117,700 | 13,951 | |||||||||
Citigroup, Inc. | 97,796 | 6,368 | |||||||||
Comerica, Inc. | 256,500 | 23,798 | |||||||||
Discover Financial Services | 27,603 | 3,195 | |||||||||
Evercore, Inc. | 20,653 | 2,578 | |||||||||
Everest Re Group Ltd. | 7,556 | 2,141 | |||||||||
Fifth Third Bancorp | 106,271 | 4,743 | |||||||||
First Horizon Corp. | 381,552 | 6,528 | |||||||||
Interactive Brokers Group, Inc. | 148,800 | 10,147 | |||||||||
JPMorgan Chase & Co. | 74,360 | 11,050 | |||||||||
KeyCorp | 417,045 | 10,451 | |||||||||
LPL Financial Holdings, Inc. | 26,466 | 4,561 | |||||||||
M&T Bank Corp. | 27,482 | 4,655 | |||||||||
MetLife, Inc. | 49,857 | 3,343 | |||||||||
MGIC Investment Corp. | 325,334 | 4,939 | |||||||||
OneMain Holdings, Inc. | 45,937 | 2,373 | |||||||||
Primerica, Inc. | 24,633 | 3,802 | |||||||||
Principal Financial Group, Inc. | 74,420 | 5,437 | |||||||||
Regions Financial Corp. | 239,560 | 5,495 | |||||||||
S&P Global, Inc. | 8,434 | 3,502 | |||||||||
Synchrony Financial | 74,965 | 3,193 | |||||||||
T. Rowe Price Group, Inc. | 16,640 | 2,570 | |||||||||
The Allstate Corp. | 47,645 | 5,749 | |||||||||
The Goldman Sachs Group, Inc. | 12,517 | 4,439 | |||||||||
The Progressive Corp. | 247,577 | 26,902 | |||||||||
U.S. Bancorp | 276,852 | 16,110 | |||||||||
Wells Fargo & Co. | 111,908 | 6,021 | |||||||||
Willis Towers Watson PLC | 84,100 | 19,676 | |||||||||
237,283 | |||||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA Value Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Health Care (17.7%): | |||||||||||
AbbVie, Inc. | 135,114 | $ | 18,496 | ||||||||
Amgen, Inc. | 26,120 | 5,933 | |||||||||
Anthem, Inc. | 7,669 | 3,382 | |||||||||
Biogen, Inc. (a) | 19,313 | 4,365 | |||||||||
Bristol-Myers Squibb Co. | 79,721 | 5,173 | |||||||||
Cigna Corp. | 77,556 | 17,874 | |||||||||
CVS Health Corp. | 41,645 | 4,436 | |||||||||
Eli Lilly & Co. | 11,326 | 2,779 | |||||||||
Gilead Sciences, Inc. | 58,999 | 4,052 | |||||||||
HCA Healthcare, Inc. | 12,662 | 3,040 | |||||||||
Hologic, Inc. (a) | 31,737 | 2,229 | |||||||||
Humana, Inc. | 44,300 | 17,388 | |||||||||
IDEXX Laboratories, Inc. (a) | 9,056 | 4,594 | |||||||||
Jazz Pharmaceuticals PLC (a) | 17,849 | 2,479 | |||||||||
Johnson & Johnson | 159,726 | 27,519 | |||||||||
Laboratory Corp. of America Holdings (a) | 11,503 | 3,121 | |||||||||
McKesson Corp. | 18,363 | 4,714 | |||||||||
Medtronic PLC | 157,759 | 16,326 | |||||||||
Merck & Co., Inc. | 117,717 | 9,592 | |||||||||
Moderna, Inc. (a) | 8,038 | 1,361 | |||||||||
Pfizer, Inc. | 129,724 | 6,835 | |||||||||
Quest Diagnostics, Inc. | 25,023 | 3,379 | |||||||||
Regeneron Pharmaceuticals, Inc. (a) | 5,549 | 3,377 | |||||||||
Sotera Health Co. (a) | 536,800 | 11,547 | |||||||||
Thermo Fisher Scientific, Inc. | 4,446 | 2,584 | |||||||||
UnitedHealth Group, Inc. | 50,735 | 23,976 | |||||||||
Universal Health Services, Inc. Class B | 24,354 | 3,167 | |||||||||
Zoetis, Inc. | 10,775 | 2,153 | |||||||||
215,871 | |||||||||||
Industrials (11.7%): | |||||||||||
3M Co. | 49,786 | 8,266 | |||||||||
CACI International, Inc. Class A (a) | 14,148 | 3,501 | |||||||||
Caterpillar, Inc. | 9,055 | 1,825 | |||||||||
Cintas Corp. | 10,828 | 4,240 | |||||||||
Cummins, Inc. | 23,655 | 5,225 | |||||||||
Eaton Corp. PLC | 32,411 | 5,135 | |||||||||
Emerson Electric Co. | 43,722 | 4,020 | |||||||||
Fastenal Co. | 91,998 | 5,214 | |||||||||
Graco, Inc. | 31,438 | 2,281 | |||||||||
Honeywell International, Inc. | 14,175 | 2,899 | |||||||||
Huntington Ingalls Industries, Inc. | 22,044 | 4,127 | |||||||||
Johnson Controls International PLC | 32,600 | 2,369 | |||||||||
L3Harris Technologies, Inc. | 25,200 | 5,274 | |||||||||
Leidos Holdings, Inc. | 129,983 | 11,627 | |||||||||
Lockheed Martin Corp. | 12,721 | 4,950 | |||||||||
ManpowerGroup, Inc. | 33,492 | 3,512 | |||||||||
Masco Corp. | 71,631 | 4,536 | |||||||||
MasTec, Inc. (a) | 33,204 | 2,860 | |||||||||
See notes to financial statements.
5
| USAA Mutual Funds Trust USAA Value Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
MSC Industrial Direct Co., Inc. | 66,485 | $ | 5,428 | ||||||||
Otis Worldwide Corp. | 39,784 | 3,399 | |||||||||
PACCAR, Inc. | 87,100 | 8,099 | |||||||||
Parker-Hannifin Corp. | 21,300 | 6,603 | |||||||||
Raytheon Technologies Corp. | 65,467 | 5,904 | |||||||||
Robert Half International, Inc. | 37,944 | 4,298 | |||||||||
Sensata Technologies Holding PLC (a) | 142,000 | 8,145 | |||||||||
Union Pacific Corp. | 54,262 | 13,270 | |||||||||
United Parcel Service, Inc. Class B | 13,398 | 2,709 | |||||||||
W.W. Grainger, Inc. | 5,896 | 2,919 | |||||||||
142,635 | |||||||||||
Information Technology (11.0%): | |||||||||||
Amdocs Ltd. | 30,285 | 2,298 | |||||||||
Broadcom, Inc. | 7,647 | 4,480 | |||||||||
CDW Corp. | 16,910 | 3,197 | |||||||||
Cisco Systems, Inc. | 194,250 | 10,814 | |||||||||
Dell Technologies, Inc. Class C (a) | 45,465 | 2,583 | |||||||||
Euronet Worldwide, Inc. (a) | 89,000 | 11,916 | |||||||||
Fidelity National Information Services, Inc. | 103,300 | 12,388 | |||||||||
FleetCor Technologies, Inc. (a) | 35,100 | 8,363 | |||||||||
Fortinet, Inc. (a) | 6,035 | 1,794 | |||||||||
Global Payments, Inc. | 129,200 | 19,364 | |||||||||
HP, Inc. | 160,050 | 5,879 | |||||||||
Intel Corp. | 156,439 | 7,637 | |||||||||
International Business Machines Corp. | 28,711 | 3,835 | |||||||||
Lumentum Holdings, Inc. (a) | 40,953 | 4,156 | |||||||||
Micron Technology, Inc. | 44,107 | 3,629 | |||||||||
NetApp, Inc. | 36,605 | 3,167 | |||||||||
Oracle Corp. | 33,091 | 2,686 | |||||||||
Qorvo, Inc. (a) | 30,410 | 4,175 | |||||||||
Skyworks Solutions, Inc. | 16,366 | 2,398 | |||||||||
Texas Instruments, Inc. | 25,653 | 4,604 | |||||||||
The Western Union Co. | 181,602 | 3,434 | |||||||||
Ubiquiti, Inc. | 8,776 | 2,545 | |||||||||
VMware, Inc. Class A | 26,195 | 3,366 | |||||||||
Vontier Corp. | 102,719 | 2,887 | |||||||||
Zebra Technologies Corp. (a) | 4,153 | 2,114 | |||||||||
133,709 | |||||||||||
Materials (4.6%): | |||||||||||
Celanese Corp. | 17,567 | 2,735 | |||||||||
Dow, Inc. | 50,037 | 2,989 | |||||||||
Eastman Chemical Co. | 28,210 | 3,355 | |||||||||
Freeport-McMoRan, Inc. | 105,500 | 3,927 | |||||||||
International Paper Co. | 59,905 | 2,890 | |||||||||
Louisiana-Pacific Corp. | 61,169 | 4,064 | |||||||||
LyondellBasell Industries NV Class A | 40,264 | 3,895 | |||||||||
Nucor Corp. | 20,735 | 2,103 | |||||||||
PPG Industries, Inc. | 59,140 | 9,238 | |||||||||
See notes to financial statements.
6
| USAA Mutual Funds Trust USAA Value Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Reliance Steel & Aluminum Co. | 33,565 | $ | 5,131 | ||||||||
Sealed Air Corp. | 236,829 | 16,085 | |||||||||
56,412 | |||||||||||
Real Estate (4.0%): | |||||||||||
Alexandria Real Estate Equities, Inc. | 13,419 | 2,614 | |||||||||
AvalonBay Communities, Inc. | 11,824 | 2,888 | |||||||||
Brixmor Property Group, Inc. | 231,017 | 5,859 | |||||||||
Gaming and Leisure Properties, Inc. | 63,205 | 2,856 | |||||||||
Healthpeak Properties, Inc. | 77,404 | 2,738 | |||||||||
Host Hotels & Resorts, Inc. (a) | 790,500 | 13,707 | |||||||||
Orion Office REIT, Inc. (a) | 22,689 | 377 | |||||||||
Prologis, Inc. | 54,387 | 8,529 | |||||||||
Realty Income Corp. | 36,593 | 2,540 | |||||||||
Ventas, Inc. | 54,737 | 2,902 | |||||||||
VICI Properties, Inc. (b) | 129,385 | 3,703 | |||||||||
48,713 | |||||||||||
Utilities (5.8%): | |||||||||||
Evergy, Inc. | 43,728 | 2,840 | |||||||||
Exelon Corp. | 349,241 | 20,238 | |||||||||
FirstEnergy Corp. | 168,460 | 7,069 | |||||||||
NRG Energy, Inc. | 99,048 | 3,955 | |||||||||
PPL Corp. | 132,334 | 3,928 | |||||||||
The AES Corp. | 156,628 | 3,474 | |||||||||
UGI Corp. | 125,387 | 5,686 | |||||||||
Vistra Corp. | 1,099,571 | 23,982 | |||||||||
71,172 | |||||||||||
Total Common Stocks (Cost $990,603) | 1,200,028 | ||||||||||
Collateral for Securities Loaned (0.7%)^ | |||||||||||
| Fidelity Investments Money Market Government Portfolio, Institutional Shares, 0.01% (c) | 3,067,351 | 3,067 | |||||||||
HSBC U.S. Government Money Market Fund, I Shares, 0.03% (c) | 4,809,767 | 4,810 | |||||||||
Total Collateral for Securities Loaned (Cost $7,877) | 7,877 | ||||||||||
Total Investments (Cost $998,480) — 99.2% | 1,207,905 | ||||||||||
Other assets in excess of liabilities — 0.8% | 10,269 | ||||||||||
NET ASSETS — 100.00% | $ | 1,218,174 | |||||||||
^ 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, 2022.
LP — Limited Partnership
PLC — Public Limited Company
REIT — Real Estate Investment Trust
See notes to financial statements.
7
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA Value Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $998,480) | $ | 1,207,905 | (a) | ||||
Cash | 18,905 | ||||||
Receivables: | |||||||
Interest and dividends | 1,040 | ||||||
Capital shares issued | 322 | ||||||
Investments sold | 4,721 | ||||||
From Adviser | 11 | ||||||
Prepaid expenses | 17 | ||||||
Total Assets | 1,232,921 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 7,877 | ||||||
Investments purchased | 5,160 | ||||||
Capital shares redeemed | 690 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 647 | ||||||
Administration fees | 141 | ||||||
Custodian fees | 8 | ||||||
Transfer agent fees | 170 | ||||||
Compliance fees | 1 | ||||||
Trustees' fees | 1 | ||||||
| 12b-1 fees | — | (b) | |||||
Other accrued expenses | 52 | ||||||
Total Liabilities | 14,747 | ||||||
Net Assets: | |||||||
Capital | 988,316 | ||||||
Total accumulated earnings/(loss) | 229,858 | ||||||
Net Assets | $ | 1,218,174 | |||||
Net Assets | |||||||
Fund Shares | $ | 824,279 | |||||
Institutional Shares | 393,800 | ||||||
Class A | 95 | ||||||
Total | $ | 1,218,174 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 44,937 | ||||||
Institutional Shares | 21,466 | ||||||
Class A | 5 | ||||||
Total | 66,408 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 18.34 | |||||
Institutional Shares | 18.35 | ||||||
Class A | 18.66 | ||||||
Maximum Sales Charge — Class A | 5.75 | % | |||||
| Maximum offering price (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 19.80 | |||||
(a) Includes $7,808 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.
8
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended January 31, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA Value Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 13,738 | |||||
Interest | 3 | ||||||
Securities lending (net of fees) | 3 | ||||||
Total Income | 13,744 | ||||||
Expenses: | |||||||
Investment advisory fees | 3,599 | ||||||
Administration fees — Fund Shares | 628 | ||||||
Administration fees — Institutional Shares | 168 | ||||||
Administration fees — Class A | — | (a) | |||||
Sub-Administration fees | 28 | ||||||
| 12b-1 fees — Class A | — | (a) | |||||
Custodian fees | 25 | ||||||
Transfer agent fees — Fund Shares | 425 | ||||||
Transfer agent fees — Institutional Shares | 168 | ||||||
Transfer agent fees — Class A | — | (a) | |||||
Trustees' fees | 24 | ||||||
Compliance fees | 4 | ||||||
Legal and audit fees | 32 | ||||||
State registration and filing fees | 28 | ||||||
Interfund lending fees | — | (a) | |||||
Other expenses | 56 | ||||||
Recoupment of prior expenses waived/reimbursed by Adviser | 48 | ||||||
Total Expenses | 5,233 | ||||||
Expenses waived/reimbursed by Adviser | (11 | ) | |||||
Net Expenses | 5,222 | ||||||
Net Investment Income (Loss) | 8,522 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 70,428 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | (30,819 | ) | |||||
Net realized/unrealized gains (losses) on investments | 39,609 | ||||||
Change in net assets resulting from operations | $ | 48,131 | |||||
(a) Rounds to less than $1 thousand.
See notes to financial statements.
9
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands)
USAA Value Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 8,522 | $ | 13,557 | |||||||
Net realized gains (losses) from investments | 70,428 | 98,636 | |||||||||
| Net change in unrealized appreciation/depreciation on investments | (30,819 | ) | 231,402 | ||||||||
Change in net assets resulting from operations | 48,131 | 343,595 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (48,312 | ) | (11,994 | ) | |||||||
Institutional Shares | (23,853 | ) | (4,219 | ) | |||||||
Class A | (6 | ) | (98 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (72,171 | ) | (16,311 | ) | |||||||
Change in net assets resulting from capital transactions | 135,484 | (153,593 | ) | ||||||||
Change in net assets | 111,444 | 173,691 | |||||||||
Net Assets: | |||||||||||
Beginning of period | 1,106,730 | 933,039 | |||||||||
End of period | $ | 1,218,174 | $ | 1,106,730 | |||||||
(continues on next page)
See notes to financial statements.
10
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands) (continued)
USAA Value Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 24,755 | $ | 54,246 | |||||||
Distributions reinvested | 47,728 | 11,845 | |||||||||
Cost of shares redeemed | (68,651 | ) | (188,167 | ) | |||||||
Total Fund Shares | $ | 3,832 | $ | (122,076 | ) | ||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 132,850 | $ | 8,135 | |||||||
Distributions reinvested | 23,841 | 4,219 | |||||||||
Cost of shares redeemed | (24,998 | ) | (35,937 | ) | |||||||
Total Institutional Shares | $ | 131,693 | $ | (23,583 | ) | ||||||
Class A | |||||||||||
Proceeds from shares issued | $ | 11 | $ | 30 | |||||||
Distributions reinvested | 4 | 1 | |||||||||
Cost of shares redeemed | (56 | ) | (7,965 | ) | |||||||
Total Class A | $ | (41 | ) | $ | (7,934 | ) | |||||
Change in net assets resulting from capital transactions | $ | 135,484 | $ | (153,593 | ) | ||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,318 | 3,277 | |||||||||
Reinvested | 2,599 | 770 | |||||||||
Redeemed | (3,655 | ) | (11,798 | ) | |||||||
Total Fund Shares | 262 | (7,751 | ) | ||||||||
Institutional Shares | |||||||||||
Issued | 6,854 | 523 | |||||||||
Reinvested | 1,297 | 274 | |||||||||
Redeemed | (1,334 | ) | (2,041 | ) | |||||||
Total Institutional Shares | 6,817 | (1,244 | ) | ||||||||
Class A | |||||||||||
Issued | 1 | 2 | |||||||||
Reinvested | — | (a) | — | (a) | |||||||
Redeemed | (3 | ) | (442 | ) | |||||||
Total Class A | (2 | ) | (440 | ) | |||||||
Change in Shares | 7,077 | (9,435 | ) | ||||||||
(a) Rounds to less than 1,000 shares.
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 Value Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 18.65 | 0.14 | (d) | 0.66 | 0.80 | (0.23 | ) | (0.88 | ) | |||||||||||||||||
| Year Ended July 31: 2021 | $ | 13.57 | 0.21 | (d) | 5.12 | 5.33 | (0.19 | ) | (0.06 | ) | |||||||||||||||||
2020 | $ | 19.32 | 0.26 | (d) | (1.39 | ) | (1.13 | ) | (0.21 | ) | (4.41 | ) | |||||||||||||||
2019 | $ | 22.01 | 0.25 | (0.54 | ) | (0.29 | ) | (0.24 | ) | (2.16 | ) | ||||||||||||||||
2018 | $ | 21.55 | 0.21 | 1.84 | 2.05 | (0.21 | ) | (1.38 | ) | ||||||||||||||||||
2017 | $ | 19.41 | 0.27 | 2.74 | 3.01 | (0.29 | ) | (0.58 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 18.67 | 0.14 | (d) | 0.67 | 0.81 | (0.25 | ) | (0.88 | ) | |||||||||||||||||
| Year Ended July 31: 2021 | $ | 13.58 | 0.22 | (d) | 5.13 | 5.35 | (0.20 | ) | (0.06 | ) | |||||||||||||||||
2020 | $ | 19.33 | 0.27 | (d) | (1.39 | ) | (1.12 | ) | (0.22 | ) | (4.41 | ) | |||||||||||||||
2019 | $ | 22.00 | 0.28 | (d) | (0.55 | ) | (0.27 | ) | (0.24 | ) | (2.16 | ) | |||||||||||||||
2018 | $ | 21.54 | 0.23 | 1.84 | 2.07 | (0.23 | ) | (1.38 | ) | ||||||||||||||||||
2017 | $ | 19.40 | 0.30 | 2.73 | 3.03 | (0.31 | ) | (0.58 | ) | ||||||||||||||||||
Class A | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 18.59 | 0.27 | (d) | 0.68 | 0.95 | — | (0.88 | ) | ||||||||||||||||||
| Year Ended July 31: 2021 | $ | 13.48 | 0.16 | (d) | 5.17 | 5.33 | (0.16 | ) | (0.06 | ) | |||||||||||||||||
2020 | $ | 19.24 | 0.23 | (d) | (1.39 | ) | (1.16 | ) | (0.19 | ) | (4.41 | ) | |||||||||||||||
2019 | $ | 21.91 | 0.20 | (0.55 | ) | (0.35 | ) | (0.16 | ) | (2.16 | ) | ||||||||||||||||
2018 | $ | 21.46 | 0.15 | 1.83 | 1.98 | (0.15 | ) | (1.38 | ) | ||||||||||||||||||
2017 | $ | 19.32 | 0.23 | 2.72 | 2.95 | (0.23 | ) | (0.58 | ) | ||||||||||||||||||
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019, and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(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.
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 (Excludes Sales Charge)*(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, 2022 (Unaudited): | (1.11 | ) | $ | 18.34 | 4.36 | % | 0.91 | % | 1.43 | % | 0.91 | % | $ | 824,279 | 31 | % | |||||||||||||||||||
| Year Ended July 31: 2021 | (0.25 | ) | $ | 18.65 | 39.66 | % | 0.92 | % | 1.29 | % | 0.92 | % | $ | 833,149 | 55 | % | |||||||||||||||||||
2020 | (4.62 | ) | $ | 13.57 | (9.43 | )% | 0.96 | % | 1.69 | % | 0.97 | % | $ | 711,182 | 74 | % | |||||||||||||||||||
2019 | (2.40 | ) | $ | 19.32 | (0.11 | )% | 0.96 | % | 1.35 | % | 0.96 | % | $ | 940,515 | 108 | %(e) | |||||||||||||||||||
2018 | (1.59 | ) | $ | 22.01 | 9.69 | % | 0.99 | % | 1.10 | % | 0.99 | % | $ | 1,007,712 | 29 | % | |||||||||||||||||||
2017 | (0.87 | ) | $ | 21.55 | 15.72 | % | 1.08 | %(f) | 1.37 | % | 1.08 | %(f) | $ | 936,630 | 27 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (1.13 | ) | $ | 18.35 | 4.41 | % | 0.85 | % | 1.50 | % | 0.85 | % | $ | 393,800 | 31 | % | |||||||||||||||||||
| Year Ended July 31: 2021 | (0.26 | ) | $ | 18.67 | 39.83 | % | 0.84 | % | 1.36 | % | 0.85 | % | $ | 273,446 | 55 | % | |||||||||||||||||||
2020 | (4.63 | ) | $ | 13.58 | (9.40 | )% | 0.88 | % | 1.75 | % | 0.89 | % | $ | 215,830 | 74 | % | |||||||||||||||||||
2019 | (2.40 | ) | $ | 19.33 | (0.02 | )% | 0.88 | % | 1.42 | % | 0.88 | % | $ | 222,701 | 108 | %(e) | |||||||||||||||||||
2018 | (1.61 | ) | $ | 22.00 | 9.79 | % | 0.91 | % | 1.18 | % | 0.91 | % | $ | 640,281 | 29 | % | |||||||||||||||||||
2017 | (0.89 | ) | $ | 21.54 | 15.86 | % | 0.98 | %(f) | 1.48 | % | 0.98 | %(f) | $ | 591,384 | 27 | % | |||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (0.88 | ) | $ | 18.66 | 5.13 | % | (0.48 | )%(g) | 2.85 | % | 13.41 | %(h) | $ | 95 | 31 | % | |||||||||||||||||||
| Year Ended July 31: 2021 | (0.22 | ) | $ | 18.59 | 39.88 | % | 1.21 | % | 1.02 | % | 1.65 | % | $ | 135 | 55 | % | |||||||||||||||||||
2020 | (4.60 | ) | $ | 13.48 | (9.66 | )% | 1.21 | % | 1.45 | % | 1.21 | % | $ | 6,027 | 74 | % | |||||||||||||||||||
2019 | (2.32 | ) | $ | 19.24 | (0.44 | )% | 1.27 | %(i) | 1.03 | % | 1.31 | % | $ | 8,613 | 108 | %(e) | |||||||||||||||||||
2018 | (1.53 | ) | $ | 21.91 | 9.41 | % | 1.30 | % | 0.79 | % | 1.30 | % | $ | 9,807 | 29 | % | |||||||||||||||||||
2017 | (0.81 | ) | $ | 21.46 | 15.46 | % | 1.33 | %(f)(j) | 1.13 | % | 1.38 | %(f) | $ | 9,626 | 27 | % | |||||||||||||||||||
(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 expenses paid indirectly decreased the expense ratio by less than 0.01%.
(g) For the period ended January 31, 2022, the Class A net expense ratio includes the impact of the performance fee adjustment. If the performance fee adjustment of (1.75)% was not applied to the Class A net expense ratio, the Class A net expense ratio would have been 1.27%.
(h) The class specific expenses have significantly impacted the gross expense ratio due to fluctuations in Class A net assets.
(i) Prior to December 1, 2018, USAA Asset Management Company ("AMCO") (previous Investment Adviser) voluntarily agreed to limit the annual expenses of Class A to 1.30% of the Class A average daily net assets.
(j) Effective December 1, 2016, AMCO voluntarily agreed to limit the annual expenses of Class A to 1.30% of the Class A average daily net assets.
See notes to financial statements.
13
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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 Class A. 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 sales charges, 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 U.S. Generally Accepted Accounting Principles ("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 risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
14
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Portfolio securities listed or traded on securities exchanges are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq 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 are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically 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 NAV to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 1,200,028 | $ | — | $ | — | $ | 1,200,028 | |||||||||||
Collateral for Securities Loaned | 7,877 | — | — | 7,877 | |||||||||||||||
Total | $ | 1,207,905 | $ | — | $ | — | $ | 1,207,905 | |||||||||||
For the six months ended January 31, 2022, there were no transfers in or out of Level 3 in the 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:
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 or 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 discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
15
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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 and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially 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 generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund effectively does not have control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. 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. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk 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 repledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2022.
| Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
| $ | 7,808 | $ | — | $ | 7,877 | ||||||
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.
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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 years, which includes the current fiscal tax year end). 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 an affiliated trust based upon net assets or another appropriate basis.
16
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, printing fees, and 12b-1 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:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended January 31, 2022, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 417,652 | $ | 353,470 | ||||
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The 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 www.vcm.com. As of January 31, 2022, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 0.2 | ||||||
USAA Cornerstone Equity Fund | 0.9 | ||||||
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and 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 the largest funds within the Lipper Multi-Cap Value Funds category.
17
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
| Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
| +/- 100 to 400 | +/- 4 | ||||||
| +/- 401 to 700 | +/- 5 | ||||||
| +/- 701 and greater | +/- 6 | ||||||
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective 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.
For the period August 1, 2021, to January 31, 2022, performance adjustments were $(164), $(50), and $(1) for Fund Shares, Institutional Shares, and Class A, in thousands, respectively. Performance adjustments were (0.04)%, (0.03)%, and (1.75)% for Fund Shares, Institutional Shares, and Class A, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
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, 2022, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, 0.10%, and 0.15%, which is based on the Fund's average daily net assets of the Fund Shares, of the Institutional Shares, and of the Class A, respectively. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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, 2022 | ||||||
(Unaudited)
the Adviser, which pays the compensation of the CCO and support staff. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA 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 fees for Institutional Shares and Class A are paid monthly based on a fee accrued daily at an annualized rate of 0.10% and 0.10%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred and paid to VCTA for the six months ended January 31, 2022, 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 Services, 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.
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 Class A. The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A. Amounts incurred and paid to the Distributor for the six months ended January 31, 2022, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions in connection with sales of Class A. For the six months ended January 31, 2022, the Distributor did not receive any commissions.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 limits for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, 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. As of January 31, 2022, the expense limits (excluding voluntary waivers) were 0.96%, 0.88%, and 1.27% for Fund Shares, Institutional Shares, and Class A, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser
19
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of January 31, 2022, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at January 31, 2022.
| Expires 2023 | Expires 2024 | Expires 2025 | Total | ||||||||||||
| $ | 30 | $ | 32 | $ | 11 | $ | 73 | ||||||||
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, 2022.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Investment Style Risk — 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.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
Equity Risk — The values of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general market, economic and political conditions and other factors. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or may last for extended periods.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount.
20
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended January 31, 2022, Citibank received 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 London Interbank Offered Rate ("LIBOR") plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected 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, 2022.
Interfund Lending:
The Trust and the 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 Funds Complex that is permitted to participate in the Facility, 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, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. 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, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees.
The average borrowing or lending for the days outstanding and average interest rate for the Fund during the six months ended January 31, 2022, were as follows (amounts in thousands):
| Borrower or Lender | Amount Outstanding at January 31, 2022 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
| Borrower | $ | — | $ | 3,136 | 2 | 0.58 | % | $ | 4,607 | ||||||||||||||
* For the six months ended January 31, 2022, 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, 2022.
As of July 31, 2021, the Fund had no capital loss carryforwards for federal income tax purposes.
21
USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
(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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
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. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; 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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21- 1/31/22* | Hypothetical Expenses Paid During Period 8/1/21- 1/31/22* | Annualized Expense Ratio During Period 8/1/21- 1/31/22 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,043.60 | $ | 1,020.62 | $ | 4.69 | $ | 4.63 | 0.91 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,044.10 | 1,020.92 | 4.38 | 4.33 | 0.85 | % | ||||||||||||||||||||
Class A** | 1,000.00 | 1,051.30 | 1,018.80 | 6.57 | 6.46 | 1.27 | % | ||||||||||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
** The expense ratio for the six-month period could potentially change due to performance fee adjustments.
22
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Considerations of the Board in Continuing the Investment Advisory Agreement
USAA Value Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement was approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and the Adviser, and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser. At the meeting at which the renewal of the Advisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder
23
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services and the effects of any performance adjustment1, as well as any fee waivers and reimbursements — was below the median of its expense group and above the median of its expense universe. The data indicated that the Fund's total expenses, including after any reimbursements, were below the medians of its expense group and expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund.
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total returns relative to its Lipper index and other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was below the average of its performance universe and its Lipper index for the one-, three-, five- and ten-year periods ended September 30, 2021. The Board took into account management's discussion of the Fund's performance, including the reasons for the Fund's underperformance for the three-year period ended September 30, 2021.
1 The Adviser previously agreed that no performance adjustment (positive or negative) would be made to the amount payable to the Adviser from July 1, 2019, through June 30, 2020.
24
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser reimbursed or waived a portion of its management fees to the Fund. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board considered whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in any economies of scale. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board also considered the effect of the change in size, if any, of each of the Fund's classes on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than some expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices and the Adviser is appropriately monitoring the Fund's performance; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800) 235-8396 | ||||||
40847-0322
January 31, 2022
Semi Annual Report
USAA Income Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 34 | ||||||
Statement of Operations | 35 | ||||||
Statements of Changes in Net Assets | 36 | ||||||
Financial Highlights | 38 | ||||||
Notes to Financial Statements | 42 | ||||||
Supplemental Information | 54 | ||||||
Proxy Voting and Portfolio Holdings Information | 54 | ||||||
Expense Examples | 54 | ||||||
Advisory Contract Approval | 55 |
| |||||
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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA Income Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks maximum current income without undue risk to principal.
Asset Allocation*:
January 31, 2022
(% of Net Assets)
* Does not include futures contracts, 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%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Asset-Backed Securities (6.2%) | |||||||||||
| Aligned Data Centers Issuer LLC, Series 2021-1A, Class A2, 1.94%, 8/15/46, Callable 8/15/24 @ 100 (a) | $ | 8,500 | $ | 8,197 | |||||||
| American Credit Acceptance Receivables Trust, Series 2022-1, Class C, 2.12%, 3/13/28, Callable 9/13/25 @ 100 (a) | 3,500 | 3,496 | |||||||||
| American Credit Acceptance Receivables Trust, Series 2022-1, Class B, 1.68%, 9/14/26, Callable 9/13/25 @ 100 (a) | 2,500 | 2,494 | |||||||||
| AmeriCredit Automobile Receivables Trust, Series 2017-4, Class C, 2.60%, 9/18/23, Callable 6/18/22 @ 100 | 966 | 967 | |||||||||
| AmeriCredit Automobile Receivables Trust, Series 2017-4, Class D, 3.08%, 12/18/23, Callable 6/18/22 @ 100 | 1,921 | 1,936 | |||||||||
| AmeriCredit Automobile Receivables Trust, Series 2018-2, Class C, 3.59%, 6/18/24, Callable 1/18/23 @ 100 | 4,000 | 4,049 | |||||||||
| Avis Budget Rental Car Funding AESOP LLC, Series 2018-2A, Class B, 4.27%, 3/20/25, Callable 4/20/24 @ 100 (a) | 5,250 | 5,469 | |||||||||
| Avis Budget Rental Car Funding AESOP LLC, Series 2019-2A, Class B, 3.55%, 9/22/25, Callable 10/20/24 @ 100 (a) | 7,500 | 7,742 | |||||||||
| California Republic Auto Receivables Trust, Series 2018-1, Class D, 4.33%, 4/15/25, Callable 9/15/22 @ 100 | 2,300 | 2,344 | |||||||||
| Canadian Pacer Auto Receivables Trust, Series 2018-2A, Class B, 3.63%, 1/19/24, Callable 4/19/22 @ 100 (a) | 1,250 | 1,258 | |||||||||
| Canadian Pacer Auto Receivables Trust, Series 2018-2A, Class C, 4.07%, 3/19/25, Callable 4/19/22 @ 100 (a) | 1,590 | 1,599 | |||||||||
| CarMax Auto Owner Trust, Series 2020-2, Class B, 2.90%, 8/15/25, Callable 11/15/23 @ 100 | 3,611 | 3,694 | |||||||||
| CarMax Auto Owner Trust, Series 2018-4, Class D, 4.15%, 4/15/25, Callable 11/15/22 @ 100 | 1,470 | 1,503 | |||||||||
| CarMax Auto Owner Trust, Series 2019-1, Class B, 3.45%, 11/15/24, Callable 2/15/23 @ 100 | 1,924 | 1,969 | |||||||||
| CarNow Auto Receivables Trust, Series 2021-1A, Class A, 0.97%, 10/15/24, Callable 9/15/23 @ 100 (a) | 1,602 | 1,602 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N4, Class A2, 1.80%, 9/11/28, Callable 5/10/27 @ 100 | 2,750 | 2,716 | |||||||||
| CCG Receivables Trust, Series 2020-1, Class C, 1.84%, 12/14/27, Callable 11/14/23 @ 100 (a) | 2,000 | 1,998 | |||||||||
| CF Hippolyta LLC, Series 2021-1A, Class A1, 1.53%, 3/15/61, Callable 3/15/24 @ 100 (a) | 2,894 | 2,806 | |||||||||
| Chesapeake Funding LLC, Series 2018-3A, Class C, 3.81%, 1/15/31, Callable 10/15/22 @ 100 (a) | 6,000 | 6,110 | |||||||||
| CIT Education Loan Trust, Series 2007-1, Class B, 0.43% (LIBOR03M+30bps), 6/25/42, Callable 9/25/31 @ 100 (a) (b) | 3,753 | 3,455 | |||||||||
| CNH Equipment Trust, Series 2020-A, Class B, 2.30%, 10/15/27, Callable 7/15/23 @ 100 | 1,100 | 1,114 | |||||||||
| CPS Auto Receivables Trust, Series 2019-C, Class C, 2.84%, 6/16/25, Callable 9/15/23 @ 100 (a) | 720 | 722 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2021-3A, Class A, 1.00%, 5/15/30, Callable 11/15/24 @ 100 (a) | 2,327 | 2,295 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2021-2A, Class B, 1.26%, 4/15/30, Callable 12/15/24 @ 100 (a) | 5,885 | 5,758 | |||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2020-1A, Class B, 2.39%, 4/16/29, Callable 1/15/24 @ 100 (a) | $ | 4,118 | $ | 4,147 | |||||||
| Crossroads Asset Trust, Series 2021-A, Class A2, 0.82%, 3/20/24, Callable 5/20/24 @ 100 (a) | 1,174 | 1,172 | |||||||||
| Diamond Infrastructure Funding LLC, Series 2021-1A, Class A, 1.76%, 4/15/49, Callable 9/20/25 @ 100 (a) | 5,667 | 5,370 | |||||||||
| Diamond Issuer, Series 2021-1A, Class A, 2.31%, 11/20/51, Callable 11/20/25 @ 100 (a) | 4,875 | 4,725 | |||||||||
| Encina Equipment Finance LLC, Series 2021-1A, Class A2, 0.74%, 12/15/26, Callable 1/15/24 @ 100 (a) | 2,046 | 2,037 | |||||||||
| Exeter Automobile Receivables Trust, Series 2017-3A, Class D, 5.28%, 10/15/24, Callable 6/15/22 @ 100 (a) | 8,000 | 8,121 | |||||||||
| Exeter Automobile Receivables Trust, Series 2020-2A, Class B, 2.08%, 7/15/24, Callable 11/15/23 @ 100 (a) | 1,404 | 1,407 | |||||||||
| Exeter Automobile Receivables Trust, Series 2019-2A, Class D, 3.71%, 3/17/25, Callable 8/15/23 @ 100 (a) | 14,770 | 15,037 | |||||||||
| ExteNet LLC, Series 2019-1A, Class A2, 3.20%, 7/26/49, Callable 1/25/23 @ 100 (a) | 5,625 | 5,683 | |||||||||
| First Investors Auto Owner Trust, Series 2019-2A, Class C, 2.71%, 12/15/25, Callable 7/15/23 @ 100 (a) | 4,463 | 4,508 | |||||||||
| First Investors Auto Owner Trust, Series 2020-1A, Class B, 1.85%, 2/17/26, Callable 6/15/23 @ 100 (a) | 3,880 | 3,888 | |||||||||
| First Investors Auto Owner Trust, Series 2018-2A, Class F, 7.31%, 9/15/25, Callable 1/15/23 @ 100 (a) | 3,150 | 3,229 | |||||||||
FirstKey Homes Trust, Series 2021-SFR2, Class B, 1.61%, 9/17/26 (a) | 6,538 | 6,211 | |||||||||
| Flagship Credit Auto Trust, Series 2018-3, Class D, 4.15%, 12/16/24, Callable 8/15/23 @ 100 (a) | 1,176 | 1,206 | |||||||||
| Flagship Credit Auto Trust, Series 2020-2, Class D, 5.75%, 4/15/26, Callable 10/15/23 @ 100 (a) | 3,898 | 4,122 | |||||||||
| Ford Credit Auto Owner Trust, Series 2020-1, Class A, 2.04%, 8/15/31, Callable 2/15/25 @ 100 (a) | 5,333 | 5,378 | |||||||||
| Ford Credit Auto Owner Trust, Series 2020-1, Class C, 2.54%, 8/15/31, Callable 2/15/25 @ 100 (a) | 4,000 | 4,033 | |||||||||
| Foursight Capital Automobile Receivables Trust, Series 2021-1, Class B, 0.87%, 1/15/26, Callable 11/15/24 @ 100 (a) | 3,281 | 3,230 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 2020-1A, Class B, 2.43%, 11/15/24, Callable 12/15/23 @ 100 (a) | 2,775 | 2,795 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 2021-3A, Class B, 0.78%, 11/17/25, Callable 12/15/25 @ 100 (a) | 5,500 | 5,419 | |||||||||
| GM Financial Consumer Automobile Receivables Trust, Series 2020-2, Class B, 2.54%, 8/18/25, Callable 10/16/23 @ 100 | 1,500 | 1,525 | |||||||||
Golden Credit Card Trust, Series 2021-1A, Class C, 1.74%, 8/15/28 (a) | 4,467 | 4,345 | |||||||||
Golden Credit Card Trust, Series 2021-1A, Class B, 1.44%, 8/15/28 (a) | 9,000 | 8,703 | |||||||||
Hertz Vehicle Financing III LP, Series 2021-2A, Class C, 2.52%, 12/27/27 (a) | 3,667 | 3,600 | |||||||||
| Hertz Vehicle Financing LLC, Series 2022-2A, Class C, 2.95%, 6/26/28, Callable 6/25/27 @ 100 (a) | 3,500 | 3,493 | |||||||||
Hertz Vehicle Financing LLC, Series 2021-1A, Class C, 2.05%, 12/26/25 (a) | 2,000 | 1,968 | |||||||||
| HPEFS Equipment Trust, Series 2020-1A, Class B, 1.89%, 2/20/30, Callable 2/20/23 @ 100 (a) | 3,846 | 3,865 | |||||||||
| HPEFS Equipment Trust, Series 2019-1A, Class C, 2.49%, 9/20/29, Callable 8/20/22 @ 100 (a) | 2,700 | 2,713 | |||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| HPEFS Equipment Trust, Series 2022-1A, Class C, 1.96%, 5/21/29, Callable 6/20/25 @ 100 (a) | $ | 1,000 | $ | 998 | |||||||
| HPEFS Equipment Trust, Series 2021-2A, Class C, 0.88%, 9/20/28, Callable 7/20/24 @ 100 (a) | 7,686 | 7,516 | |||||||||
| JPMorgan Chase Bank NA, Series 2021-3, Class C, 0.86%, 2/26/29, Callable 9/25/24 @ 100 (a) | 4,286 | 4,246 | |||||||||
| JPMorgan Chase Bank NA, Series 2021-1, Class B, 0.88%, 9/25/28, Callable 9/25/24 @ 100 (a) | 6,274 | 6,231 | |||||||||
Master Credit Card Trust, Series 2021-1A, Class C, 1.06%, 11/21/25 (a) | 4,500 | 4,397 | |||||||||
Master Credit Card Trust, Series 2021-1A, Class B, 0.79%, 11/21/25 (a) | 1,615 | 1,578 | |||||||||
Master Credit Card Trust, Series 2020-1A, Class B, 2.27%, 9/23/24 (a) | 834 | 843 | |||||||||
Master Credit Card Trust, Series 2022-1A, Class C, 2.27%, 7/21/26 (a) | 3,000 | 3,000 | |||||||||
Master Credit Card Trust, Series 2022-2A, Class C, 2.73%, 7/21/28 (a) | 2,344 | 2,344 | |||||||||
| MMAF Equipment Finance LLC, Series 2017-A, Class A5, 2.68%, 7/16/27, Callable 12/16/26 @ 100 (a) | 1,901 | 1,913 | |||||||||
| MMAF Equipment Finance LLC, Series 2015-A, Class A5, 2.49%, 2/19/36, Callable 3/16/23 @ 100 (a) | 280 | 280 | |||||||||
MVW LLC, Series 2021-1WA, Class A, 1.14%, 1/22/41, Callable 2/20/27 @ 100 (a) | 1,581 | 1,532 | |||||||||
| Navient Student Loan Trust, Series 2018-2A, Class B, 1.25% (LIBOR01M+115bps), 3/25/67, Callable 12/25/33 @ 100 (a) (b) | 3,500 | 3,400 | |||||||||
| Navient Student Loan Trust, Series 2015-2, Class B, 1.59% (LIBOR01M+150bps), 8/25/50, Callable 4/25/30 @ 100 (b) | 3,000 | 2,999 | |||||||||
| Nelnet Student Loan Trust, Series 2005-4, Class B, 0.41% (LIBOR03M+28bps), 9/22/35, Callable 3/22/28 @ 100 (b) | 918 | 821 | |||||||||
| NP SPE II LLC, Series 2017-1A, Class A2, 4.22%, 10/21/47, Callable 4/20/23 @ 100 (a) | 15,625 | 16,062 | |||||||||
NP SPE II LLC, Series 2019-2A, Class C1, 6.44%, 11/19/49 (a) | 8,286 | 7,787 | |||||||||
| OSCAR U.S. Funding Trust LLC, Series 2018-1A, Class A4, 3.50%, 5/12/25, Callable 3/10/22 @ 100 (a) | 2,396 | 2,403 | |||||||||
| Progress Residential Trust, Series 2021-SFR6, Class B, 1.75%, 7/17/38, Callable 7/17/26 @ 100 (a) | 3,938 | 3,774 | |||||||||
| Progress Residential Trust, Series 2021-SFR6, Class A, 1.52%, 7/17/38, Callable 7/17/26 @ 100 (a) | 4,395 | 4,266 | |||||||||
PSNH Funding LLC, Series 2018-1, Class A3, 3.81%, 2/1/35 | 15,545 | 17,273 | |||||||||
| Santander Consumer Auto Receivables Trust, Series 2020-AA, Class D, 5.49%, 4/15/26, Callable 9/15/23 @ 100 (a) | 1,500 | 1,582 | |||||||||
| Santander Retail Auto Lease Trust, Series 2021-C, Class B, 0.83%, 3/20/26, Callable 7/20/24 @ 100 (a) | 3,500 | 3,432 | |||||||||
| SCF Equipment Leasing LLC, Series 2020-1A, Class A3, 1.19%, 10/20/27, Callable 3/20/23 @ 100 (a) | 10,000 | 9,996 | |||||||||
| SCF Equipment Leasing LLC, Series 2020-1A, Class B, 2.02%, 3/20/28, Callable 3/20/23 @ 100 (a) | 3,824 | 3,833 | |||||||||
| SLM Student Loan Trust, Series 2007-1, Class B, 0.34% (LIBOR03M+22bps), 1/27/42, Callable 7/25/29 @ 100 (b) | 5,768 | 5,434 | |||||||||
| SLM Student Loan Trust, Series 2007-7, Class B, 0.87% (LIBOR03M+75bps), 10/27/70, Callable 4/25/24 @ 100 (b) | 5,740 | 5,390 | |||||||||
| SLM Student Loan Trust, Series 2003-14, Class B, 0.81% (LIBOR03M+55bps), 10/25/65, Callable 10/25/29 @ 100 (b) | 1,357 | 1,293 | |||||||||
| SLM Student Loan Trust, Series 2006-9, Class B, 0.35% (LIBOR03M+23bps), 1/25/41, Callable 4/25/33 @ 100 (b) | 4,122 | 3,895 | |||||||||
See notes to financial statements.
5
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| SLM Student Loan Trust, Series 2012-6, Class B, 1.11% (LIBOR01M+100bps), 4/27/43, Callable 2/25/29 @ 100 (b) | $ | 20,862 | $ | 20,284 | |||||||
| SLM Student Loan Trust, Series 2005-9, Class B, 0.42% (LIBOR03M+30bps), 1/25/41, Callable 4/25/31 @ 100 (b) | 1,245 | 1,172 | |||||||||
| SLM Student Loan Trust, Series 2006-10, Class B, 0.34% (LIBOR03M+22bps), 3/25/44, Callable 7/25/32 @ 100 (b) | 1,656 | 1,554 | |||||||||
| Synchrony Credit Card Master Note Trust, Series 2018-2, Class C, 3.87%, 5/15/26 | 10,417 | 10,716 | |||||||||
| Toyota Auto Loan Extended Note Trust, Series 2021-1A, Class A, 1.07%, 2/27/34, Callable 2/25/26 @ 100 (a) (c) | 5,500 | 5,340 | |||||||||
| United Auto Credit Securitization Trust, Series 2019-1, Class E, 4.29%, 8/12/24 (a) | 3,000 | 3,002 | |||||||||
| VB-S1 Issuer LLC, Series 2018-1A, Class C, 3.41%, 2/15/48, Callable 2/15/22 @ 100 (a) | 7,850 | 7,844 | |||||||||
| VB-S1 Issuer LLC, Series 2020-1A, Class C2, 3.03%, 6/15/50, Callable 6/15/24 @ 100 (a) | 1,400 | 1,417 | |||||||||
| Wepco Environmental Trust Finance I LLC, Series 2021-1, Class A, 1.58%, 12/15/35 | 8,687 | 8,574 | |||||||||
| Westlake Automobile Receivables Trust, Series 2021-2A, Class B, 0.62%, 7/15/26, Callable 8/15/24 @ 100 (a) | 6,500 | 6,407 | |||||||||
| World Omni Auto Receivables Trust, Series 2018-D, Class C, 3.87%, 8/15/25, Callable 11/15/22 @ 100 | 4,000 | 4,089 | |||||||||
Total Asset-Backed Securities (Cost $396,042) | 396,140 | ||||||||||
Collateralized Mortgage Obligations (4.7%) | |||||||||||
Aventura Mall Trust, Series 2018-AVM, Class D, 4.11%, 7/5/40 (a) (c) | 4,000 | 3,958 | |||||||||
| BAMLL Commercial Mortgage Securities Trust, Series 2015-200P, Class B, 3.49%, 4/14/33, Callable 4/14/25 @ 100 (a) | 9,027 | 9,255 | |||||||||
BANK, Series 2017-BNK4, Class B, 4.00%, 5/15/50, Callable 3/15/27 @ 100 | 5,600 | 5,885 | |||||||||
BANK, Series 2019-BN24, Class ASB, 2.93%, 11/15/62, Callable 3/15/29 @ 100 | 7,123 | 7,330 | |||||||||
BPR Trust, Series 2021-TY, Class C, 1.81% (LIBOR01M+170bps), 9/23/23 (a) (b) | 1,538 | 1,536 | |||||||||
BPR Trust, Series 2021-TY, Class A, 1.16% (LIBOR01M+105bps), 9/23/23 (a) (b) | 4,904 | 4,898 | |||||||||
| BX Commercial Mortgage Trust, Series 2019-XL, Class B, 1.19% (LIBOR01M+108bps), 10/15/36 (a) (b) | 5,246 | 5,238 | |||||||||
BX Commercial Mortgage Trust, Series 2020-VIV4, Class A, 2.84%, 12/30/30 (a) | 1,875 | 1,872 | |||||||||
| BX Commercial Mortgage Trust, Series 2019-XL, Class D, 1.56% (LIBOR01M+145bps), 10/15/36 (a) (b) | 1,275 | 1,274 | |||||||||
BX Trust, Series 2019-OC11, Class A, 3.20%, 12/9/41 (a) | 9,231 | 9,500 | |||||||||
BXP Trust, Series 2021-601L, Class C, 2.78%, 1/15/44 (a) (c) | 6,500 | 6,091 | |||||||||
| Cantor Commercial Real Estate Lending, Series 2019-CF3, Class ASB, 2.94%, 1/15/53, Callable 3/15/29 @ 100 | 6,000 | 6,176 | |||||||||
| Citigroup Commercial Mortgage Trust, Series 2014-GC23, Class A3, 3.36%, 7/10/47, Callable 6/10/24 @ 100 | 5,531 | 5,650 | |||||||||
| Citigroup Commercial Mortgage Trust, Series 2019-SMRT, Class C, 4.68%, 1/10/36 (a) | 8,100 | 8,364 | |||||||||
| Citigroup Commercial Mortgage Trust, Series 2020-555, Class A, 2.65%, 12/10/41 (a) | 10,000 | 9,982 | |||||||||
| Citigroup Commercial Mortgage Trust, Series 2014-GC23, Class AS, 3.86%, 7/10/47, Callable 7/10/24 @ 100 | 4,000 | 4,151 | |||||||||
See notes to financial statements.
6
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| COMM Mortgage Trust, Series 2015-PC1, Class B, 4.32%, 7/10/50, Callable 6/10/25 @ 100 (c) | $ | 2,500 | $ | 2,606 | |||||||
| COMM Mortgage Trust, Series 2012-CCRE1, Class XA, 1.87%, 5/15/45, Callable 5/15/22 @ 100 (c) (d) | 16,907 | 1 | |||||||||
| COMM Mortgage Trust, Series 2012-CCRE3, Class AM, 3.42%, 10/15/45, Callable 10/15/22 @ 100 (a) | 5,925 | 5,906 | |||||||||
| COMM Mortgage Trust, Series 2015-PC1, Class AM, 4.29%, 7/10/50, Callable 5/10/25 @ 100 (c) | 2,000 | 2,105 | |||||||||
| COMM Mortgage Trust, Series 2014-277P, Class A, 3.61%, 8/10/49, Callable 8/10/24 @ 100 (a) (c) | 10,500 | 10,838 | |||||||||
| COMM Mortgage Trust, Series 2012-CCRE4, Class AM, 3.25%, 10/15/45, Callable 10/15/22 @ 100 | 8,600 | 8,605 | |||||||||
| COMM Mortgage Trust, Series 2012-CR4, Class XA, 1.69%, 10/15/45, Callable 8/15/22 @ 100 (c) (d) | 53,021 | 338 | |||||||||
| COMM Mortgage Trust, Series 2015-LC23, Class AM, 4.16%, 10/10/48, Callable 10/10/25 @ 100 (c) | 6,300 | 6,630 | |||||||||
| COMM Mortgage Trust, Series 2020-CX, Class A, 2.17%, 11/10/46, Callable 11/10/30 @ 100 (a) | 3,500 | 3,361 | |||||||||
| CSMC Trust, Series 2020-West, Class A, 3.04%, 2/15/35, Callable 2/15/30 @ 100 (a) | 2,500 | 2,542 | |||||||||
| DBJPM Mortgage Trust, Series 2016-SFC, Class B, 3.24%, 8/10/36, Callable 8/10/26 @ 100 (a) | 2,500 | 2,523 | |||||||||
| DBJPM Mortgage Trust, Series 2016-SFC, Class A, 2.83%, 8/10/36, Callable 8/10/26 @ 100 (a) | 4,750 | 4,741 | |||||||||
| Extended Stay America Trust, Series 2021-ESH, Class B, 1.49% (LIBOR01M+138bps), 7/15/38 (a) (b) | 5,025 | 5,025 | |||||||||
| Federal Home Loan Mortgage Corp., Series K020, Class X1, 1.34%, 5/25/22, Callable 2/25/22 @ 100 (c) (d) | 64,718 | 102 | |||||||||
| Federal Home Loan Mortgage Corp., Series K021, Class X1, 1.38%, 6/25/22, Callable 3/25/22 @ 100 (d) | 58,063 | 167 | |||||||||
| FREMF Mortgage Trust, Series 2019-K99, Class B, 3.65%, 9/25/29, Callable 9/25/29 @ 100 (a) (c) | 10,000 | 10,490 | |||||||||
| GS Mortgage Securities Corp., Series 2013-GC10, Class AS, 3.28%, 2/10/46, Callable 1/10/23 @ 100 | 5,000 | 5,055 | |||||||||
| GS Mortgage Securities Corp., Series 2013-GC10, Class B, 3.68%, 2/10/46, Callable 1/10/23 @ 100 (a) | 10,000 | 10,122 | |||||||||
| GS Mortgage Securities Corp., Series 2005-ROCK, Class X1, 0.21%, 5/3/32 (a) (c) (d) | 190,667 | 1,599 | |||||||||
| GS Mortgage Securities Corp. Trust, Series 2012-ALOH, Class A, 3.55%, 4/10/34 (a) | 4,667 | 4,675 | |||||||||
| GS Mortgage Securities Corp. Trust, Series 2017-GPTX, Class A, 2.86%, 5/10/34 (a) | 2,000 | 1,996 | |||||||||
| GS Mortgage Securities Trust, Series 2012-GCJ7, Class XA, 1.76%, 5/10/45, Callable 5/10/22 @ 100 (c) (d) | 6,426 | — | (e) | ||||||||
| GS Mortgage Securities Trust, Series 2012-GCJ7, Class A4, 3.38%, 5/10/45, Callable 5/10/22 @ 100 (f) | 246 | 246 | |||||||||
| GS Mortgage Securities Trust, Series 2020-GC45, Class A5, 2.91%, 2/13/53, Callable 12/13/29 @ 100 | 4,231 | 4,352 | |||||||||
| J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2021-2NU, Class B, 2.08%, 1/5/40 (a) | 2,500 | 2,371 | |||||||||
See notes to financial statements.
7
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
| J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2010-C2, Class C, 5.69%, 11/15/43, Callable 2/15/22 @ 100 (a) (c) | $ | 7,998 | $ | 7,967 | |||||||
| JPMBB Commercial Mortgage Securities Trust, Series 2014-C18, Class AS, 4.44%, 2/15/47, Callable 2/15/24 @ 100 (c) | 9,000 | 9,253 | |||||||||
| JPMorgan Chase Commercial Mortgage Securities Trust, Series 2012-CIBX, Class AS, 4.27%, 6/15/45, Callable 6/15/22 @ 100 | 11,745 | 11,793 | |||||||||
| JPMorgan Chase Commercial Mortgage Securities Trust, Series 2012-C6, Class B, 4.82%, 5/15/45, Callable 4/15/22 @ 100 (c) | 10,697 | 10,728 | |||||||||
Manhattan West, Series 2020-1MW, Class A, 2.13%, 9/10/40 (a) | 8,000 | 7,896 | |||||||||
| Morgan Stanley Bank of America Merrill Lynch Trust, Series C9, Class AS, 3.46%, 5/15/46, Callable 4/15/23 @ 100 | 3,200 | 3,251 | |||||||||
| Morgan Stanley Capital Trust, Series 2012-C4, Class AS, 3.77%, 3/15/45, Callable 2/15/22 @ 100 | 661 | 661 | |||||||||
| Morgan Stanley Capital Trust, Series 2015-MS1, Class AS, 4.03%, 5/15/48, Callable 6/15/25 @ 100 (c) | 7,000 | 7,285 | |||||||||
SLG Office Trust, Series 2021-OVA, Class A, 2.59%, 7/15/41 (a) | 5,200 | 5,195 | |||||||||
SMRT, Series 2022-MINI, Class B, 1/15/24 (a) (g) | 6,500 | 6,500 | |||||||||
| UBS Commercial Mortgage Trust, Series 2012-C1, Class B, 4.82%, 5/10/45, Callable 4/10/22 @ 100 | 15,000 | 15,101 | |||||||||
| UBS Commercial Mortgage Trust, Series 2012-C1, Class AS, 4.17%, 5/10/45, Callable 3/10/22 @ 100 | 3,435 | 3,445 | |||||||||
| UBS Commercial Mortgage Trust, Series 2012-C1, Class XA, 1.99%, 5/10/45, Callable 3/10/22 @ 100 (a) (c) (d) | 2,579 | �� | — | (e) | |||||||
| UBS-Barclays Commercial Mortgage Trust, Series 2012-C2, Class ASEC, 4.18%, 5/10/63, Callable 7/10/22 @ 100 (a) | 2,313 | 2,335 | |||||||||
VLS Commercial Mortgage Trust, Series 2020-LAB, Class A, 2.13%, 10/10/42 (a) | 4,000 | 3,825 | |||||||||
| Wells Fargo Commercial Mortgage Trust, Series 2012-LC5, Class XA, 1.72%, 10/15/45, Callable 9/15/22 @ 100 (a) (c) (d) | 21,497 | 84 | |||||||||
| WFRBS Commercial Mortgage Trust, Series 2013-C13, Class AS, 3.35%, 5/15/45, Callable 4/15/23 @ 100 | 5,000 | 5,084 | |||||||||
| WFRBS Commercial Mortgage Trust, Series 2012-C7, Class AS, 4.09%, 6/15/45, Callable 6/15/22 @ 100 (c) | 10,000 | 10,014 | |||||||||
| WFRBS Commercial Mortgage Trust, Series 2012-C10, Class A5, 3.24%, 12/15/45, Callable 12/15/22 @ 100 | 5,000 | 5,005 | |||||||||
Total Collateralized Mortgage Obligations (Cost $303,112) | 302,978 | ||||||||||
Preferred Stocks (0.7%) | |||||||||||
Consumer Staples (0.1%): | |||||||||||
CHS, Inc., cumulative redeemable, Series 1, 7.88% (h) | 200,000 | 5,500 | |||||||||
Financials (0.0%): (i) | |||||||||||
Citigroup Capital, 6.67% (LIBOR03M+637bps), 10/30/40 (b) | 40,000 | 1,077 | |||||||||
Real Estate (0.6%): | |||||||||||
Equity Residential, cumulative redeemable, Series K, 8.29% (h) | 111,611 | 6,695 | |||||||||
| Mid-America Apartment Communities, Inc., cumulative redeemable, Series I, 8.50% (h) | 219,731 | 13,516 | |||||||||
Prologis, Inc., cumulative redeemable, Series Q, 8.54% (h) (j) | 284,623 | 18,233 | |||||||||
38,444 | |||||||||||
Total Preferred Stocks (Cost $35,008) | 45,021 | ||||||||||
See notes to financial statements.
8
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Senior Secured Loans (0.1%) | |||||||||||
| CSC Holdings LLC, 2017 Term Loan, First Lien, 2.36% (LIBOR01M+225bps), 7/17/25 (b) | $ | 2,344 | $ | 2,306 | |||||||
| Terex International Financial Services Co., Incremental U.S. Term Loan, First Lien, 2.75% (LIBOR01M+200bps), 1/31/24 (b) | 958 | 956 | |||||||||
Total Senior Secured Loans (Cost $3,290) | 3,262 | ||||||||||
Corporate Bonds (45.3%) | |||||||||||
Communication Services (2.3%): | |||||||||||
AT&T, Inc. | |||||||||||
4.50%, 5/15/35, Callable 11/15/34 @ 100 | 5,000 | 5,552 | |||||||||
3.10%, 2/1/43, Callable 8/1/42 @ 100 | 10,000 | 9,157 | |||||||||
CBS Corp., 4.20%, 6/1/29, Callable 3/1/29 @ 100 | 3,000 | 3,238 | |||||||||
CenturyLink, Inc. | |||||||||||
5.80%, 3/15/22 | 10,000 | 10,026 | |||||||||
6.75%, 12/1/23 | 2,000 | 2,123 | |||||||||
| Charter Communications Operating LLC, 6.38%, 10/23/35, Callable 4/23/35 @ 100 | 5,000 | 6,124 | |||||||||
| Charter Communications Operating LLC/Charter Communications Operating Capital 2.30%, 2/1/32, Callable 11/1/31 @ 100 (f) | 2,500 | 2,251 | |||||||||
3.50%, 6/1/41, Callable 12/1/40 @ 100 | 10,000 | 8,997 | |||||||||
Comcast Corp., 3.90%, 3/1/38, Callable 9/1/37 @ 100 | 15,000 | 16,118 | |||||||||
CSC Holdings LLC, 5.50%, 4/15/27, Callable 4/15/22 @ 102.75 (a) | 3,000 | 3,066 | |||||||||
Discovery Communications LLC, 3.95%, 3/20/28, Callable 12/20/27 @ 100 | 10,000 | 10,546 | |||||||||
Fox Corp., 4.71%, 1/25/29, Callable 10/25/28 @ 100 | 7,600 | 8,395 | |||||||||
| T-Mobile USA, Inc. 4.75%, 2/1/28, Callable 2/1/23 @ 102.38 | 2,857 | 2,954 | |||||||||
3.88%, 4/15/30, Callable 1/15/30 @ 100 | 15,000 | 15,755 | |||||||||
2.55%, 2/15/31, Callable 11/15/30 @ 100 | 10,000 | 9,523 | |||||||||
| Verizon Communications, Inc. 2.10%, 3/22/28, Callable 1/22/28 @ 100 | 3,500 | 3,416 | |||||||||
1.75%, 1/20/31, Callable 10/20/30 @ 100 | 8,000 | 7,298 | |||||||||
4.40%, 11/1/34, Callable 5/1/34 @ 100 | 5,000 | 5,606 | |||||||||
4.13%, 8/15/46 | 5,000 | 5,457 | |||||||||
2.88%, 11/20/50, Callable 5/20/50 @ 100 | 3,000 | 2,675 | |||||||||
ViacomCBS, Inc., 3.38%, 2/15/28, Callable 11/15/27 @ 100 | 7,000 | 7,273 | |||||||||
145,550 | |||||||||||
Consumer Discretionary (2.6%): | |||||||||||
Amazon.com, Inc., 3.88%, 8/22/37, Callable 2/22/37 @ 100 | 9,000 | 10,054 | |||||||||
| AutoNation, Inc. 4.75%, 6/1/30, Callable 3/1/30 @ 100 | 7,000 | 7,769 | |||||||||
2.40%, 8/1/31, Callable 5/1/31 @ 100 | 3,750 | 3,497 | |||||||||
Brunswick Corp., 2.40%, 8/18/31, Callable 5/18/31 @ 100 | 6,500 | 6,039 | |||||||||
Daimler Trucks Finance North America LLC, 2.38%, 12/14/28 (a) | 5,600 | 5,454 | |||||||||
| Genting New York LLC/GENNY Capital, Inc., 3.30%, 2/15/26, Callable 1/15/26 @ 100 (a) | 5,245 | 5,079 | |||||||||
Genuine Parts Co., 2.75%, 2/1/32, Callable 11/1/31 @ 100 | 3,833 | 3,732 | |||||||||
See notes to financial statements.
9
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Hasbro, Inc., 3.55%, 11/19/26, Callable 9/19/26 @ 100 | $ | 10,000 | $ | 10,470 | |||||||
Kohl's Corp., 3.38%, 5/1/31, Callable 2/1/31 @ 100 (k) | 8,000 | 7,881 | |||||||||
| Marriott International, Inc. 5.75%, 5/1/25, Callable 4/1/25 @ 100 (f) | 194 | 215 | |||||||||
4.63%, 6/15/30, Callable 3/15/30 @ 100 | 2,333 | 2,555 | |||||||||
2.85%, 4/15/31, Callable 1/15/31 @ 100 (f) | 8,000 | 7,726 | |||||||||
Mattel, Inc., 3.38%, 4/1/26, Callable 4/1/23 @ 101.69 (a) | 500 | 500 | |||||||||
| Murphy Oil USA, Inc. 4.75%, 9/15/29, Callable 9/15/24 @ 102.38 | 2,000 | 2,038 | |||||||||
3.75%, 2/15/31, Callable 2/15/26 @ 101.88 (a) | 1,332 | 1,254 | |||||||||
| Nordstrom, Inc. 4.38%, 4/1/30, Callable 1/1/30 @ 100 (k) | 2,000 | 1,876 | |||||||||
4.25%, 8/1/31, Callable 5/1/31 @ 100 (k) | 4,250 | 3,931 | |||||||||
Novant Health, Inc., 2.64%, 11/1/36, Callable 8/1/36 @ 100 | 13,000 | 12,544 | |||||||||
O'Reilly Automotive, Inc., 4.20%, 4/1/30, Callable 1/1/30 @ 100 | 5,000 | 5,486 | |||||||||
| Resorts World Las Vegas LLC/RWLV Capital, Inc., 4.63%, 4/6/31, Callable 1/6/31 @ 100 (a) | 5,367 | 5,137 | |||||||||
| Smithsonian Institution 1.51%, 9/1/26 | 1,250 | 1,219 | |||||||||
1.61%, 9/1/27 | 1,150 | 1,113 | |||||||||
2.65%, 9/1/39 | 2,000 | 1,954 | |||||||||
Sodexo, Inc., 2.72%, 4/16/31, Callable 1/16/31 @ 100 (a) | 8,000 | 7,918 | |||||||||
Stellantis Finance U.S., Inc., 2.69%, 9/15/31, Callable 6/15/31 @ 100 (a) | 13,800 | 13,078 | |||||||||
The Art Institute of Chicago, 3.23%, 3/1/22 | 2,750 | 2,754 | |||||||||
Tufts University, 3.10%, 8/15/51, Callable 2/15/51 @ 100 | 9,500 | 9,701 | |||||||||
University of Notre Dame du Lac, 3.44%, 2/15/45 | 5,000 | 5,565 | |||||||||
Vanderbilt University Medical Center, 4.17%, 7/1/37, Callable 1/1/37 @ 100 | 1,000 | 1,045 | |||||||||
VF Corp., 2.95%, 4/23/30, Callable 1/23/30 @ 100 | 8,000 | 8,077 | |||||||||
Volkswagen Group of America Finance LLC, 3.20%, 9/26/26 (a) | 6,000 | 6,210 | |||||||||
YMCA of Greater New York, 2.30%, 8/1/26, Callable 5/1/26 @ 100 | 1,300 | 1,290 | |||||||||
163,161 | |||||||||||
Consumer Staples (2.3%): | |||||||||||
Altria Group, Inc., 2.45%, 2/4/32, Callable 11/4/31 @ 100 (f) | 6,500 | 5,908 | |||||||||
| Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc., 4.70%, 2/1/36, Callable 8/1/35 @ 100 | 20,000 | 22,983 | |||||||||
Anheuser-Busch InBev Worldwide, Inc., 4.38%, 4/15/38, Callable 10/15/37 @ 100 | 6,500 | 7,210 | |||||||||
BAT Capital Corp., 4.39%, 8/15/37, Callable 2/15/37 @ 100 | 15,000 | 15,165 | |||||||||
Bunge Ltd. Finance Corp., 2.75%, 5/14/31, Callable 2/14/31 @ 100 | 12,000 | 11,678 | |||||||||
Cargill, Inc., 2.13%, 11/10/31, Callable 8/10/31 @ 100 (a) | 6,000 | 5,731 | |||||||||
Church & Dwight Co., Inc., 2.30%, 12/15/31, Callable 9/15/31 @ 100 | 3,750 | 3,650 | |||||||||
Constellation Brands, Inc., 2.25%, 8/1/31, Callable 5/1/31 @ 100 | 13,645 | 12,898 | |||||||||
General Mills, Inc., 4.55%, 4/17/38, Callable 10/17/37 @ 100 | 4,667 | 5,327 | |||||||||
JBS Finance Luxembourg Sarl, 2.50%, 1/15/27, Callable 12/15/26 @ 100 (a) (k) | 6,500 | 6,319 | |||||||||
| JBS USA LUX SA / JBS USA Food Co / JBS USA Finance, Inc., 3.00%, 2/2/29, Callable 12/2/28 @ 100 (a) | 3,250 | 3,184 | |||||||||
| Keurig Dr Pepper, Inc. 4.60%, 5/25/28, Callable 2/25/28 @ 100 | 4,143 | 4,587 | |||||||||
4.99%, 5/25/38, Callable 11/25/37 @ 100 | 4,667 | 5,527 | |||||||||
Kraft Heinz Foods Co., 3.75%, 4/1/30, Callable 1/1/30 @ 100 | 6,000 | 6,198 | |||||||||
See notes to financial statements.
10
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| McCormick & Co., Inc. 2.50%, 4/15/30, Callable 1/15/30 @ 100 | $ | 5,000 | $ | 4,905 | |||||||
1.85%, 2/15/31, Callable 11/15/30 @ 100 | 2,000 | 1,852 | |||||||||
SC Johnson & Son, Inc., 4.35%, 9/30/44, Callable 3/30/44 @ 100 (a) | 7,000 | 8,109 | |||||||||
Smithfield Foods, Inc., 4.25%, 2/1/27, Callable 11/1/26 @ 100 (a) | 5,000 | 5,280 | |||||||||
Sysco Corp., 2.45%, 12/14/31, Callable 9/14/31 @ 100 | 8,000 | 7,744 | |||||||||
144,255 | |||||||||||
Energy (4.4%): | |||||||||||
| Baker Hughes Holdings LLC/Baker Hughes Co-Obligor, Inc., 2.06%, 12/15/26, Callable 11/15/26 @ 100 | 5,688 | 5,623 | |||||||||
| Boardwalk Pipelines LP 4.95%, 12/15/24, Callable 9/15/24 @ 100 | 5,000 | 5,337 | |||||||||
4.45%, 7/15/27, Callable 4/15/27 @ 100 | 10,000 | 10,728 | |||||||||
Buckeye Partners LP, 5.60%, 10/15/44, Callable 4/15/44 @ 100 | 10,000 | 8,989 | |||||||||
Cameron LNG LLC, 3.30%, 1/15/35, Callable 9/15/34 @ 100 (a) | 17,364 | 17,442 | |||||||||
Cheniere Corpus Christi Holdings LLC, 2.74%, 12/31/39, Callable 7/4/39 @ 100 (a) | 8,667 | 8,088 | |||||||||
Columbia Pipeline Group, Inc., 4.50%, 6/1/25, Callable 3/1/25 @ 100 | 7,500 | 8,059 | |||||||||
ConocoPhillips Co., 4.15%, 11/15/34, Callable 5/15/34 @ 100 | 7,500 | 8,205 | |||||||||
| DCP Midstream Operating LP, 5.85% (LIBOR03M+385bps), 5/21/43, Callable 5/21/23 @ 100 (a) (b) | 10,000 | 9,530 | |||||||||
Enable Midstream Partners LP, 4.15%, 9/15/29, Callable 6/15/29 @ 100 | 6,000 | 6,283 | |||||||||
| Energy Transfer Operating LP 4.75%, 1/15/26, Callable 10/15/25 @ 100 | 5,000 | 5,373 | |||||||||
3.15% (LIBOR03M+302bps), 11/1/66, Callable 3/14/22 @ 100 (b) | 8,510 | 6,823 | |||||||||
| Enterprise TE Partners LP, 2.90% (LIBOR03M+278bps), 6/1/67, Callable 3/14/22 @ 100 (b) | 3,000 | 2,430 | |||||||||
EOG Resources, Inc., 3.90%, 4/1/35, Callable 10/1/34 @ 100 | 5,000 | 5,511 | |||||||||
EQM Midstream Partners LP, 4.00%, 8/1/24, Callable 5/1/24 @ 100 | 3,437 | 3,429 | |||||||||
EQT Corp., 7.50%, 2/1/30, Callable 11/1/29 @ 100 | 6,594 | 7,848 | |||||||||
EQT Midstream Partners LP, 4.13%, 12/1/26, Callable 9/1/26 @ 100 | 8,000 | 7,916 | |||||||||
Exxon Mobil Corp., 2.61%, 10/15/30, Callable 7/15/30 @ 100 | 8,500 | 8,558 | |||||||||
Florida Gas Transmission Co. LLC, 2.55%, 7/1/30, Callable 4/1/30 @ 100 (a) | 6,500 | 6,289 | |||||||||
Gray Oak Pipeline LLC, 3.45%, 10/15/27, Callable 8/15/27 @ 100 (a) | 5,333 | 5,463 | |||||||||
| Hilcorp Energy I LP/Hilcorp Finance Co. 6.25%, 11/1/28, Callable 11/1/23 @ 103.13 (a) | 4,000 | 4,150 | |||||||||
6.00%, 2/1/31, Callable 2/1/26 @ 103 (a) | 3,569 | 3,643 | |||||||||
HollyFrontier Corp., 4.50%, 10/1/30, Callable 7/1/30 @ 100 | 12,000 | 12,596 | |||||||||
Marathon Petroleum Corp., 4.75%, 9/15/44, Callable 3/15/44 @ 100 | 5,000 | 5,519 | |||||||||
Midwest Connector Capital Co. LLC, 4.63%, 4/1/29, Callable 1/1/29 @ 100 (a) (f) | 16,500 | 17,500 | |||||||||
| Murphy Oil Corp. 5.75%, 8/15/25, Callable 3/14/22 @ 102.88 | 5,000 | 5,089 | |||||||||
6.38%, 7/15/28, Callable 7/15/24 @ 103.19 | 100 | 103 | |||||||||
Northwest Pipeline LLC, 4.00%, 4/1/27, Callable 1/1/27 @ 100 | 5,067 | 5,392 | |||||||||
| Occidental Petroleum Corp. 3.40%, 4/15/26, Callable 1/15/26 @ 100 | 5,000 | 4,939 | |||||||||
4.40%, 8/15/49, Callable 2/15/49 @ 100 | 5,000 | 4,725 | |||||||||
Phillips 66, 4.65%, 11/15/34, Callable 5/15/34 @ 100 | 5,000 | 5,691 | |||||||||
Pioneer Natural Resources Co., 1.90%, 8/15/30, Callable 5/15/30 @ 100 | 5,000 | 4,608 | |||||||||
| Plains All American Pipeline LP/PAA Finance Corp., 3.55%, 12/15/29, Callable 9/15/29 @ 100 | 13,750 | 13,889 | |||||||||
See notes to financial statements.
11
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Rockies Express Pipeline LLC 4.95%, 7/15/29, Callable 4/15/29 @ 100 (a) | $ | 6,500 | $ | 6,575 | |||||||
4.80%, 5/15/30, Callable 2/15/30 @ 100 (a) | 3,000 | 2,989 | |||||||||
Sabal Trail Transmission LLC, 4.68%, 5/1/38, Callable 11/1/37 @ 100 (a) | 5,000 | 5,721 | |||||||||
| Schlumberger Holdings Corp. 4.00%, 12/21/25, Callable 9/21/25 @ 100 (a) | 961 | 1,020 | |||||||||
3.90%, 5/17/28, Callable 2/17/28 @ 100 (a) | 14,669 | 15,505 | |||||||||
Southwestern Energy Co., 6.20%, 1/23/25, Callable 10/23/24 @ 100 | 2,000 | 2,115 | |||||||||
| Targa Resources Partners LP/Targa Resources Partners Finance Corp., 5.50%, 3/1/30, Callable 3/1/25 @ 102.75 | 5,000 | 5,304 | |||||||||
| TransCanada PipeLines Ltd., 2.33% (LIBOR03M+221bps), 5/15/67, Callable 3/14/22 @ 100 (b) (k) | 10,124 | 8,648 | |||||||||
283,645 | |||||||||||
Financials (13.1%): | |||||||||||
Alexander Funding Trust, 1.84%, 11/15/23 (a) | 6,000 | 5,974 | |||||||||
American Honda Finance Corp., 1.30%, 9/9/26 | 5,000 | 4,841 | |||||||||
American International Group, Inc., 3.88%, 1/15/35, Callable 7/15/34 @ 100 | 10,000 | 10,704 | |||||||||
AmSouth Bancorp, 6.75%, 11/1/25 | 5,000 | 5,741 | |||||||||
AmTrust Financial Services, Inc., 6.13%, 8/15/23 | 10,000 | 10,068 | |||||||||
Assurant, Inc., 4.90%, 3/27/28, Callable 12/27/27 @ 100 (k) | 5,000 | 5,576 | |||||||||
Athene Global Funding, 2.45%, 8/20/27 (a) | 5,000 | 4,969 | |||||||||
Athene Holding Ltd., 3.50%, 1/15/31, Callable 10/15/30 @ 100 | 9,000 | 9,121 | |||||||||
AXA Equitable Holdings, Inc., 4.35%, 4/20/28, Callable 1/20/28 @ 100 | 5,000 | 5,439 | |||||||||
Banc of California, Inc., 5.25%, 4/15/25, Callable 1/15/25 @ 100 | 15,000 | 15,579 | |||||||||
| Bank of America Corp. 4.20%, 8/26/24, MTN (f) | 10,000 | 10,554 | |||||||||
3.95%, 4/21/25, MTN | 5,000 | 5,257 | |||||||||
1.53% (SOFR+65bps), 12/6/25, Callable 12/6/24 @ 100, MTN (b) | 4,500 | 4,427 | |||||||||
3.42% (LIBOR03M+104bps), 12/20/28, Callable 12/20/27 @ 100 (b) | 4,383 | 4,556 | |||||||||
BankUnited, Inc., 4.88%, 11/17/25, Callable 8/17/25 @ 100 | 10,000 | 10,832 | |||||||||
Blackstone Private Credit Fund, 2.63%, 12/15/26, Callable 11/15/26 @ 100 (a) | 10,248 | 9,732 | |||||||||
BMW U.S. Capital LLC, 4.15%, 4/9/30, Callable 1/9/30 @ 100 (a) | 7,000 | 7,749 | |||||||||
| BOKF Merger Corp., 5.63% (LIBOR03M+317bps), 6/25/30, Callable 6/25/25 @ 100 (b) | 8,000 | 8,908 | |||||||||
| Cadence Bancorp, 4.75% (LIBOR03M+303bps), 6/30/29, Callable 6/30/24 @ 100 (b) | 8,583 | 8,962 | |||||||||
| Cadence Bank, 4.13% (LIBOR03M+247bps), 11/20/29, Callable 11/20/24 @ 100 (b) | 6,000 | 6,138 | |||||||||
Capital One Financial Corp., 3.75%, 3/9/27, Callable 2/9/27 @ 100 | 7,500 | 7,943 | |||||||||
| CIT Group, Inc. 5.25%, 3/7/25 | 5,000 | 5,461 | |||||||||
4.13% (H15T5Y+237bps), 11/13/29, Callable 11/13/24 @ 100 (b) | 14,000 | 14,650 | |||||||||
| Citigroup, Inc. 4.40%, 6/10/25 | 10,000 | 10,654 | |||||||||
3.67% (LIBOR03M+139bps), 7/24/28, Callable 7/24/27 @ 100 (b) | 10,000 | 10,516 | |||||||||
Citizens Financial Group, Inc., 2.64%, 9/30/32, Callable 7/2/32 @ 100 | 5,500 | 5,242 | |||||||||
| Compeer Financial FLCA/Compeer Financial PCA, 3.38% (SOFR+197bps), 6/1/36, Callable 6/1/31 @ 100 (a) (b) | 5,544 | 5,315 | |||||||||
Credit Acceptance Corp., 6.63%, 3/15/26, Callable 3/15/22 @ 103.31 (k) | 4,875 | 5,025 | |||||||||
Cullen/Frost Bankers, Inc., 4.50%, 3/17/27, Callable 2/17/27 @ 100 (f) | 3,500 | 3,801 | |||||||||
See notes to financial statements.
12
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Cullen/Frost Capital Trust II, 1.67% (LIBOR03M+155bps), 3/1/34, Callable 3/14/22 @ 100 (b) | $ | 10,000 | $ | 9,649 | |||||||
| Dime Community Bancshares, Inc., 4.50% (LIBOR03M+266bps), 6/15/27, Callable 6/15/22 @ 100 (b) (k) | 3,750 | 3,779 | |||||||||
F&G Global Funding, 2.00%, 9/20/28 (a) | 10,250 | 9,756 | |||||||||
Fifth Third Bank, 3.85%, 3/15/26, Callable 2/15/26 @ 100 | 5,000 | 5,297 | |||||||||
First American Financial Corp., 2.40%, 8/15/31, Callable 5/15/31 @ 100 | 7,225 | 6,845 | |||||||||
| First Citizens BancShares, Inc., 3.37% (SOFR+247bps), 3/15/30, Callable 3/15/25 @ 100 (b) | 12,097 | 12,154 | |||||||||
First Horizon Bank, 5.75%, 5/1/30, Callable 2/1/30 @ 100 | 8,000 | 9,383 | |||||||||
| First Maryland Capital I, 1.12% (LIBOR03M+100bps), 1/15/27, Callable 3/14/22 @ 100 (b) | 3,500 | 3,378 | |||||||||
| Ford Motor Credit Co. LLC 4.06%, 11/1/24, Callable 10/1/24 @ 100 (f) | 5,000 | 5,099 | |||||||||
4.54%, 8/1/26, Callable 6/1/26 @ 100 | 3,400 | 3,535 | |||||||||
| Fulton Financial Corp. 3.60%, 3/16/22 | 469 | 469 | |||||||||
3.25% (SOFR+230bps), 3/15/30, Callable 3/15/25 @ 100 (b) | 10,000 | 10,014 | |||||||||
GA Global Funding Trust, 1.63%, 1/15/26 (a) | 2,250 | 2,184 | |||||||||
GlaxoSmithKline Capital, Inc., 4.20%, 3/18/43 | 7,000 | 8,056 | |||||||||
Glencore Funding LLC, 2.50%, 9/1/30, Callable 6/1/30 @ 100 (a) | 6,500 | 6,085 | |||||||||
Global Atlantic Financial Co., 4.40%, 10/15/29, Callable 7/15/29 @ 100 (a) | 10,000 | 10,510 | |||||||||
| Home Bancshares, Inc., 5.63% (LIBOR03M+358bps), 4/15/27, Callable 4/15/22 @ 100 (b) | 5,000 | 5,015 | |||||||||
Huntington Bancshares, Inc., 2.49%, 8/15/36, Callable 8/15/31 @ 100 (a) | 15,676 | 14,644 | |||||||||
| Huntington Capital Trust I, 0.83% (US0003M+70bps), 2/1/27, Callable 3/14/22 @ 100 (b) | 2,300 | 2,196 | |||||||||
Hyundai Capital America, 3.25%, 9/20/22 (a) | 10,000 | 10,111 | |||||||||
ILFC E-Capital Trust I, 3.37%, 12/21/65, Callable 3/14/22 @ 100 (a) | 10,000 | 8,328 | |||||||||
Intercontinental Exchange, Inc., 3.10%, 9/15/27, Callable 6/15/27 @ 100 | 7,500 | 7,795 | |||||||||
| JPMorgan Chase & Co. 2.95%, 10/1/26, Callable 7/1/26 @ 100 (f) | 10,000 | 10,321 | |||||||||
0.63% (LIBOR03M+50bps), 2/1/27, Callable 3/14/22 @ 100 (b) | 4,000 | 3,870 | |||||||||
4.25%, 10/1/27 | 5,000 | 5,453 | |||||||||
1.95% (SOFR+1bps), 2/4/32, Callable 2/4/31 @ 100 (b) | 8,667 | 8,033 | |||||||||
| KeyBank NA 3.40%, 5/20/26, MTN | 2,500 | 2,612 | |||||||||
3.90%, 4/13/29 | 3,000 | 3,215 | |||||||||
KeyCorp, 2.25%, 4/6/27, MTN | 2,000 | 1,993 | |||||||||
| Level 3 Financing, Inc. 3.75%, 7/15/29, Callable 1/15/24 @ 101.88 (a) | 9,500 | 8,697 | |||||||||
3.88%, 11/15/29, Callable 8/15/29 @ 100 (a) | 19,000 | 18,686 | |||||||||
| Lincoln National Corp., 2.52% (US0003M+236bps), 5/17/66, Callable 8/11/26 @ 100 (b) | 7,500 | 6,569 | |||||||||
Loews Corp., 3.20%, 5/15/30, Callable 2/15/30 @ 100 | 8,000 | 8,312 | |||||||||
| Main Street Capital Corp. 5.20%, 5/1/24 | 3,000 | 3,153 | |||||||||
3.00%, 7/14/26, Callable 6/14/26 @ 100 | 4,000 | 3,921 | |||||||||
Manufacturers & Traders Trust Co., 3.40%, 8/17/27 | 5,000 | 5,236 | |||||||||
| MB Financial Bank NA, 4.00% (LIBOR03M+187bps), 12/1/27, Callable 12/1/22 @ 100 (b) | 10,417 | 10,580 | |||||||||
See notes to financial statements.
13
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Mercury General Corp., 4.40%, 3/15/27, Callable 12/15/26 @ 100 | $ | 10,000 | $ | 10,722 | |||||||
MetLife, Inc., 4.13%, 8/13/42 | 10,000 | 11,189 | |||||||||
| Morgan Stanley, 2.51% (SOFR+120bps), 10/20/32, MTN, Callable 10/20/31 @ 100 (b) | 13,000 | 12,573 | |||||||||
| National Rural Utilities Cooperative Finance Corp., 4.75% (LIBOR03M+291bps), 4/30/43, Callable 4/30/23 @ 100 (b) | 9,500 | 9,563 | |||||||||
| Nationwide Mutual Insurance Co., 2.49% (LIBOR03M+229bps), 12/15/24, Callable 3/14/22 @ 100 (a) (b) | 20,000 | 19,900 | |||||||||
| New York Community Bancorp, Inc., 5.90% (LIBOR03M+278bps), 11/6/28, Callable 11/6/23 @ 100 (b) (k) | 12,000 | 12,907 | |||||||||
Old Republic International Corp., 3.88%, 8/26/26, Callable 7/26/26 @ 100 | 5,000 | 5,307 | |||||||||
Pine Street Trust I, 4.57%, 2/15/29, Callable 11/15/28 @ 100 (a) | 15,000 | 16,427 | |||||||||
| Pinnacle Financial Partners, Inc., 4.13% (LIBOR03M+278bps), 9/15/29, Callable 9/15/24 @ 100 (b) | 5,000 | 5,127 | |||||||||
| PNC Bank NA 3.88%, 4/10/25, Callable 3/10/25 @ 100 | 15,000 | 15,830 | |||||||||
2.70%, 10/22/29 | 10,000 | 10,044 | |||||||||
| PPL Capital Funding, Inc., 2.80% (LIBOR03M+267bps), 3/30/67, Callable 3/14/22 @ 100 (b) | 6,130 | 5,671 | |||||||||
Primerica, Inc., 2.80%, 11/19/31, Callable 8/19/31 @ 100 | 6,500 | 6,398 | |||||||||
| Prudential Financial, Inc. 5.62% (LIBOR03M+392bps), 6/15/43, Callable 6/15/23 @ 100 (b) | 19,000 | 19,624 | |||||||||
3.94%, 12/7/49, Callable 6/7/49 @ 100 | 4,500 | 4,945 | |||||||||
Regions Bank, 6.45%, 6/26/37 | 10,409 | 13,950 | |||||||||
Santander Holdings USA, Inc., 4.40%, 7/13/27, Callable 4/14/27 @ 100 | 5,818 | 6,200 | |||||||||
Signature Bank, 4.13% (LIBOR03M+256bps), 11/1/29, Callable 11/1/24 @ 100 (b) | 10,000 | 10,388 | |||||||||
Sterling Bancorp, 4.00% (SOFR+253bps), 12/30/29, Callable 12/30/24 @ 100 (b) | 8,750 | 8,939 | |||||||||
Stewart Information Services Corp., 3.60%, 11/15/31, Callable 8/15/31 @ 100 | 8,500 | 8,406 | |||||||||
| Synovus Bank/Columbus GA, 4.00% (H15T5Y+363bps), 10/29/30, Callable 10/29/25 @ 100 (b) | 4,500 | 4,738 | |||||||||
| Synovus Financial Corp., 5.90% (USSW5+338bps), 2/7/29, Callable 2/7/24 @ 100 (b) | 10,000 | 10,607 | |||||||||
| TCF National Bank 6.25%, 6/8/22 | 10,000 | 10,176 | |||||||||
4.13% (LIBOR03M+238bps), 7/2/29, Callable 7/2/24 @ 100 (b) | 4,000 | 4,211 | |||||||||
| Texas Capital Bancshares, Inc., 4.00% (H15T5Y+315bps), 5/6/31, Callable 5/6/26 @ 100 (b) | 4,000 | 4,120 | |||||||||
Texas Capital Bank NA, 5.25%, 1/31/26 | 9,335 | 9,914 | |||||||||
| The Allstate Corp., 5.75% (LIBOR03M+294bps), 8/15/53, Callable 8/15/23 @ 100 (b) | 5,000 | 5,179 | |||||||||
| The Bank of New York Mellon Corp., 3.75% (H15T5Y+263bps), Callable 12/20/26 @ 100 (b) (h) | 7,000 | 6,790 | |||||||||
| The Hartford Financial Services Group, Inc., 2.28% (LIBOR03M+213bps), 2/12/67, Callable 3/14/22 @ 100 (a) (b) | 14,000 | 13,171 | |||||||||
TIAA FSB Holdings, Inc., 5.75%, 7/2/25, Callable 6/2/25 @ 100 | 10,000 | 10,717 | |||||||||
Torchmark Corp., 4.55%, 9/15/28, Callable 6/15/28 @ 100 | 7,670 | 8,555 | |||||||||
Towne Bank, 4.50% (LIBOR03M+255bps), 7/30/27, Callable 7/30/22 @ 100 (b) | 11,062 | 11,171 | |||||||||
Truist Bank, 2.25%, 3/11/30, Callable 12/11/29 @ 100 | 2,450 | 2,371 | |||||||||
| Truist Financial Corp., 1.89% (SOFR+63bps), 6/7/29, MTN, Callable 6/7/28 @ 100 (b) | 5,000 | 4,796 | |||||||||
See notes to financial statements.
14
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| UMB Financial Corp., 3.70% (H15T5Y+344bps), 9/17/30, Callable 9/17/25 @ 100 (b) | $ | 7,125 | $ | 7,179 | |||||||
W R Berkley Corp., 3.55%, 3/30/52, Callable 9/30/51 @ 100 | 2,088 | 2,087 | |||||||||
Webster Financial Corp., 4.38%, 2/15/24, Callable 1/16/24 @ 100 | 6,285 | 6,554 | |||||||||
Wells Fargo & Co., 3.00%, 10/23/26 | 10,000 | 10,282 | |||||||||
Zions Bancorp NA, 3.25%, 10/29/29, Callable 7/29/29 @ 100 | 15,000 | 15,143 | |||||||||
840,538 | |||||||||||
Health Care (3.8%): | |||||||||||
AbbVie, Inc., 3.20%, 11/21/29, Callable 8/21/29 @ 100 | 10,000 | 10,315 | |||||||||
Anthem, Inc., 2.55%, 3/15/31, Callable 12/15/30 @ 100 | 8,000 | 7,818 | |||||||||
Baxter International, Inc., 3.13%, 12/1/51, Callable 6/1/51 @ 100 (a) | 10,000 | 9,505 | |||||||||
| Baylor Scott & White Holdings 3.10%, 11/15/25, Callable 8/15/25 @ 100 | 5,000 | 5,135 | |||||||||
2.65%, 11/15/26, Callable 8/15/26 @ 100 | 10,000 | 10,079 | |||||||||
Bon Secours Charity Health System, Inc., 5.25%, 11/1/25 | 3,000 | 3,192 | |||||||||
Cigna Corp., 3.40%, 3/1/27, Callable 12/1/26 @ 100 | 5,000 | 5,224 | |||||||||
Community Health Network, Inc., 4.24%, 5/1/25 | 5,000 | 5,332 | |||||||||
| CVS Health Corp. 4.30%, 3/25/28, Callable 12/25/27 @ 100 | 3,000 | 3,273 | |||||||||
3.25%, 8/15/29, Callable 5/15/29 @ 100 (f) | 8,966 | 9,246 | |||||||||
| CVS Pass-Through Trust 6.04%, 12/10/28 | 4,588 | 5,097 | |||||||||
5.93%, 1/10/34 (a) | 3,490 | 4,059 | |||||||||
DENTSPLY SIRONA, Inc., 3.25%, 6/1/30, Callable 3/1/30 @ 100 | 12,000 | 12,348 | |||||||||
Eastern Maine Healthcare Systems, 5.02%, 7/1/36 | 17,000 | 17,730 | |||||||||
| Fresenius Medical Care U.S. Finance III, Inc., 2.38%, 2/16/31, Callable 11/16/30 @ 100 (a) | 13,000 | 11,993 | |||||||||
| HCA, Inc. 5.25%, 4/15/25 | 5,000 | 5,438 | |||||||||
4.50%, 2/15/27, Callable 8/15/26 @ 100 | 2,500 | 2,690 | |||||||||
Illumina, Inc., 2.55%, 3/23/31, Callable 12/23/30 @ 100 | 15,000 | 14,540 | |||||||||
| Mercy Health 3.38%, 11/1/25 | 15,000 | 15,541 | |||||||||
4.30%, 7/1/28, Callable 1/1/28 @ 100 (k) | 3,720 | 4,098 | |||||||||
Northwell Healthcare, Inc., 3.39%, 11/1/27, Callable 8/1/27 @ 100 | 3,900 | 4,083 | |||||||||
NYU Langone Hospitals, 4.17%, 7/1/37 | 6,500 | 7,114 | |||||||||
Orlando Health Obligated Group, 2.89%, 10/1/35 | 1,660 | 1,625 | |||||||||
| PerkinElmer, Inc. 2.55%, 3/15/31, Callable 12/15/30 @ 100 (k) | 8,500 | 8,268 | |||||||||
2.25%, 9/15/31, Callable 6/15/31 @ 100 | 4,500 | 4,197 | |||||||||
Piedmont Healthcare, Inc., 2.72%, 1/1/42, Callable 7/1/41 @ 100 | 5,000 | 4,620 | |||||||||
Roche Holdings, Inc., 1.93%, 12/13/28, Callable 10/13/28 @ 100 (a) | 8,000 | 7,798 | |||||||||
| Royalty Pharma PLC 2.20%, 9/2/30, Callable 6/2/30 @ 100 | 10,167 | 9,449 | |||||||||
2.15%, 9/2/31, Callable 6/2/31 @ 100 | 8,500 | 7,784 | |||||||||
| Southern Illinois Healthcare Enterprises, Inc., 3.97%, 5/15/50, Callable 11/15/49 @ 100 | 9,000 | 10,005 | |||||||||
SSM Health Care Corp., 3.82%, 6/1/27, Callable 3/1/27 @ 100 | 6,500 | 7,015 | |||||||||
See notes to financial statements.
15
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Trinity Health Corp., 2.63%, 12/1/40, Callable 6/1/40 @ 100 | $ | 3,000 | $ | 2,813 | |||||||
Viatris, Inc., 2.30%, 6/22/27, Callable 4/22/27 @ 100 | 4,000 | 3,932 | |||||||||
241,356 | |||||||||||
Industrials (6.4%): | |||||||||||
Acuity Brands Lighting, Inc., 2.15%, 12/15/30, Callable 9/15/30 @ 100 | 8,000 | 7,496 | |||||||||
Air Lease Corp., 2.88%, 1/15/32, Callable 10/15/31 @ 100 | 4,750 | 4,521 | |||||||||
| American Airlines Pass Through Trust 3.70%, 4/1/28 | 6,254 | 6,220 | |||||||||
4.00%, 3/22/29 | 7,395 | 7,129 | |||||||||
4.00%, 8/15/30 | 3,906 | 3,828 | |||||||||
3.60%, 4/15/31 | 8,106 | 7,809 | |||||||||
American Airlines, Inc./AAdvantage Loyalty IP Ltd., 5.50%, 4/20/26 (a) | 1,923 | 1,968 | |||||||||
| Ashtead Capital, Inc. 4.00%, 5/1/28, Callable 5/1/23 @ 102 (a) | 2,500 | 2,591 | |||||||||
4.25%, 11/1/29, Callable 11/1/24 @ 102.13 (a) | 3,937 | 4,135 | |||||||||
2.45%, 8/12/31, Callable 5/12/31 @ 100 (a) | 6,000 | 5,641 | |||||||||
| BNSF Funding Trust I, 6.61% (LIBOR03M+235bps), 12/15/55, Callable 1/15/26 @ 100 (b) | 8,325 | 9,235 | |||||||||
| British Airways Pass Through Trust 3.35%, 12/15/30 (a) | 5,878 | 5,819 | |||||||||
3.80%, 3/20/33 (a) | 3,266 | 3,380 | |||||||||
| Burlington Northern Santa Fe LLC 3.65%, 9/1/25, Callable 6/1/25 @ 100 | 7,000 | 7,414 | |||||||||
3.90%, 8/1/46, Callable 2/1/46 @ 100 | 5,000 | 5,520 | |||||||||
Carlisle Cos., Inc., 2.75%, 3/1/30, Callable 12/1/29 @ 100 | 7,127 | 7,048 | |||||||||
Carrier Global Corp., 3.38%, 4/5/40, Callable 10/5/39 @ 100 | 7,000 | 6,924 | |||||||||
Continental Airlines Pass Through Trust, 4.00%, 4/29/26 | 3,006 | 3,091 | |||||||||
CoStar Group, Inc., 2.80%, 7/15/30, Callable 4/15/30 @ 100 (a) | 10,354 | 10,040 | |||||||||
Delta Air Lines Pass Through Trust, 3.88%, 1/30/29 | 6,652 | 6,766 | |||||||||
FedEx Corp., 3.90%, 2/1/35 | 10,000 | 10,712 | |||||||||
Fluor Corp., 4.25%, 9/15/28, Callable 6/15/28 @ 100 (k) | 8,000 | 7,973 | |||||||||
General Electric Co., 3.45% (LIBOR03M+333bps), Callable 3/15/22 @ 100 (b) (h) | 11,842 | 11,570 | |||||||||
GXO Logistics, Inc., 2.65%, 7/15/31, Callable 4/15/31 @ 100 (a) | 13,000 | 12,368 | |||||||||
Hawaiian Airlines Pass Through Certificates, 3.90%, 7/15/27 | 10,412 | 10,114 | |||||||||
| Hillenbrand, Inc. 5.00%, 9/15/26, Callable 7/15/26 @ 100 (f) | 15,000 | 16,271 | |||||||||
3.75%, 3/1/31, Callable 3/1/26 @ 101.88 | 3,150 | 3,054 | |||||||||
Howmet Aerospace, Inc., 3.00%, 1/15/29, Callable 11/15/28 @ 100 | 8,500 | 8,059 | |||||||||
| Hubbell, Inc. 3.50%, 2/15/28, Callable 11/15/27 @ 100 | 5,000 | 5,296 | |||||||||
2.30%, 3/15/31, Callable 12/15/30 @ 100 | 8,500 | 8,208 | |||||||||
IDEX Corp., 3.00%, 5/1/30, Callable 2/1/30 @ 100 | 3,500 | 3,549 | |||||||||
JetBlue Pass Through Trust, 2.95%, 11/15/29 | 8,923 | 8,780 | |||||||||
Kennametal, Inc., 4.63%, 6/15/28, Callable 3/15/28 @ 100 | 8,295 | 9,086 | |||||||||
Leidos, Inc., 2.30%, 2/15/31, Callable 11/15/30 @ 100 | 15,000 | 13,802 | |||||||||
| Lincoln Center for the Performing Arts, Inc., 3.71%, 12/1/35, Callable 9/1/35 @ 100 | 3,935 | 4,216 | |||||||||
Molex Electronic Technologies LLC, 3.90%, 4/15/25, Callable 1/15/25 @ 100 (a) | 10,000 | 10,463 | |||||||||
Otis Worldwide Corp., 3.11%, 2/15/40, Callable 8/15/39 @ 100 | 7,000 | 6,809 | |||||||||
| Penske Truck Leasing Co. LP/PTL Finance Corp., 4.00%, 7/15/25, Callable 6/15/25 @ 100 (a) | 8,000 | 8,457 | |||||||||
See notes to financial statements.
16
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Raytheon Technologies Corp., 4.20%, 12/15/44, Callable 6/15/44 @ 100 | $ | 10,000 | $ | 10,721 | |||||||
Ryder System, Inc., 3.35%, 9/1/25, MTN, Callable 8/1/25 @ 100 | 8,000 | 8,313 | |||||||||
| Spirit Airlines Pass Through Trust 4.45%, 10/1/25 | 2,082 | 2,122 | |||||||||
4.10%, 10/1/29 | 9,897 | 10,045 | |||||||||
3.38%, 8/15/31 | 8,107 | 8,068 | |||||||||
| The Boeing Co. 2.20%, 2/4/26, Callable 2/4/23 @ 100 (f) | 10,000 | 9,835 | |||||||||
3.25%, 2/1/28, Callable 12/1/27 @ 100 | 4,000 | 4,083 | |||||||||
3.63%, 2/1/31, Callable 11/1/30 @ 100 (f) | 4,000 | 4,109 | |||||||||
5.71%, 5/1/40, Callable 11/1/39 @ 100 | 15,000 | 18,135 | |||||||||
| The Conservation Fund A Nonprofit Corp., 3.47%, 12/15/29, Callable 9/15/29 @ 100 | 2,900 | 2,984 | |||||||||
| Totem Ocean Trailer Express, Inc. (NBGA — United States Government), 6.37%, 4/15/28 | 5,947 | 6,673 | |||||||||
TTX Co., 3.60%, 1/15/25 (a) | 10,000 | 10,511 | |||||||||
| U.S. Airways Pass Through Trust 6.25%, 10/22/24 | 1,611 | 1,643 | |||||||||
3.95%, 5/15/27 | 5,096 | 5,047 | |||||||||
| Union Pacific Corp. 3.38%, 2/1/35, Callable 8/1/34 @ 100 | 8,000 | 8,396 | |||||||||
4.25%, 4/15/43, Callable 10/15/42 @ 100 | 8,000 | 8,553 | |||||||||
| United Airlines Pass Through Trust 3.70%, 6/1/24 (k) | 7,000 | 7,092 | |||||||||
4.30%, 2/15/27 | 3,265 | 3,397 | |||||||||
2.90%, 11/1/29 | 4,650 | 4,519 | |||||||||
409,608 | |||||||||||
Information Technology (2.1%): | |||||||||||
Amphenol Corp., 2.20%, 9/15/31, Callable 6/15/31 @ 100 | 8,875 | 8,409 | |||||||||
| Broadcom, Inc. 2.45%, 2/15/31, Callable 11/15/30 @ 100 (a) | 8,500 | 7,945 | |||||||||
2.60%, 2/15/33, Callable 11/15/32 @ 100 (a) (f) | 10,000 | 9,245 | |||||||||
Dell International LLC / EMC Corp., 3.38%, 12/15/41, Callable 6/15/41 @ 100 (a) | 9,500 | 8,654 | |||||||||
Global Payments, Inc., 2.90%, 11/15/31, Callable 8/15/31 @ 100 | 6,500 | 6,369 | |||||||||
HP, Inc., 3.40%, 6/17/30, Callable 3/17/30 @ 100 | 12,000 | 12,278 | |||||||||
Jabil, Inc., 3.00%, 1/15/31, Callable 10/15/30 @ 100 | 4,776 | 4,729 | |||||||||
Marvell Technology, Inc., 2.45%, 4/15/28, Callable 2/15/28 @ 100 | 5,950 | 5,847 | |||||||||
| Microsoft Corp. 4.20%, 11/3/35, Callable 5/3/35 @ 100 | 5,000 | 5,873 | |||||||||
3.45%, 8/8/36, Callable 2/8/36 @ 100 | 5,000 | 5,447 | |||||||||
Motorola Solutions, Inc., 2.75%, 5/24/31, Callable 2/24/31 @ 100 | 10,000 | 9,675 | |||||||||
| Oracle Corp. 2.95%, 4/1/30, Callable 1/1/30 @ 100 | 7,000 | 6,855 | |||||||||
2.88%, 3/25/31, Callable 12/25/30 @ 100 (k) | 9,250 | 8,927 | |||||||||
Qorvo, Inc., 3.38%, 4/1/31, Callable 4/1/26 @ 101.69 (a) | 12,485 | 12,192 | |||||||||
Skyworks Solutions, Inc., 3.00%, 6/1/31, Callable 3/1/31 @ 100 | 8,800 | 8,485 | |||||||||
TSMC Arizona Corp., 2.50%, 10/25/31, Callable 7/25/31 @ 100 (k) | 9,000 | 8,866 | |||||||||
Western Digital Corp., 3.10%, 2/1/32, Callable 11/1/31 @ 100 | 6,400 | 6,122 | |||||||||
135,918 | |||||||||||
See notes to financial statements.
17
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Materials (2.0%): | |||||||||||
Avery Dennison Corp., 2.25%, 2/15/32, Callable 11/15/31 @ 100 (k) | $ | 11,500 | $ | 10,764 | |||||||
Ball Corp., 3.13%, 9/15/31, Callable 6/15/31 @ 100 | 8,500 | 7,934 | |||||||||
Colonial Enterprises, Inc., 3.25%, 5/15/30, Callable 2/15/30 @ 100 (a) | 4,000 | 4,117 | |||||||||
| Commercial Metals Co. 3.88%, 2/15/31, Callable 2/15/26 @ 101.94 | 4,500 | 4,303 | |||||||||
4.38%, 3/15/32, Callable 3/15/27 @ 102.19 | 2,500 | 2,488 | |||||||||
Eagle Materials, Inc., 2.50%, 7/1/31, Callable 4/1/31 @ 100 (f) | 6,500 | 6,194 | |||||||||
Ecolab, Inc., 1.65%, 2/1/27, Callable 1/1/27 @ 100 (k) | 6,400 | 6,282 | |||||||||
| Freeport-McMoRan, Inc. 4.38%, 8/1/28, Callable 8/1/23 @ 102.19 | 5,000 | 5,154 | |||||||||
4.63%, 8/1/30, Callable 8/1/25 @ 102.31 | 5,000 | 5,200 | |||||||||
LYB International Finance III LLC, 2.25%, 10/1/30, Callable 7/1/30 @ 100 | 4,500 | 4,304 | |||||||||
Martin Marietta Materials, Inc., 2.40%, 7/15/31, Callable 4/15/31 @ 100 | 5,000 | 4,840 | |||||||||
| Monsanto Co. 3.38%, 7/15/24, Callable 4/15/24 @ 100 | 5,000 | 5,101 | |||||||||
3.95%, 4/15/45, Callable 10/15/44 @ 100 | 5,000 | 5,069 | |||||||||
NewMarket Corp., 2.70%, 3/18/31, Callable 12/18/30 @ 100 | 7,500 | 7,265 | |||||||||
Packaging Corp. of America, 3.05%, 10/1/51, Callable 4/1/51 @ 100 | 10,875 | 10,077 | |||||||||
Reliance Steel & Aluminum Co., 2.15%, 8/15/30, Callable 5/15/30 @ 100 | 9,937 | 9,399 | |||||||||
The Dow Chemical Co., 4.25%, 10/1/34, Callable 4/1/34 @ 100 | 7,500 | 8,283 | |||||||||
Vulcan Materials Co., 3.50%, 6/1/30, Callable 3/1/30 @ 100 | 5,000 | 5,245 | |||||||||
Worthington Industries, Inc., 4.30%, 8/1/32, Callable 5/1/32 @ 100 | 8,890 | 9,765 | |||||||||
WRKCo, Inc., 3.00%, 6/15/33, Callable 3/15/33 @ 100 (f) | 6,000 | 5,938 | |||||||||
127,722 | |||||||||||
Real Estate (1.4%): | |||||||||||
Alexandria Real Estate Equities, Inc., 1.88%, 2/1/33, Callable 11/1/32 @ 100 | 8,000 | 7,224 | |||||||||
| AvalonBay Communities, Inc. 3.20%, 1/15/28, Callable 10/15/27 @ 100, MTN | 2,679 | 2,799 | |||||||||
2.45%, 1/15/31, Callable 10/17/30 @ 100, MTN | 2,000 | 1,981 | |||||||||
Boston Properties LP, 2.55%, 4/1/32, Callable 1/1/32 @ 100 (f) | 9,000 | 8,660 | |||||||||
Crown Castle International Corp., 2.25%, 1/15/31, Callable 10/15/30 @ 100 | 8,500 | 7,971 | |||||||||
ERP Operating LP, 2.85%, 11/1/26, Callable 8/1/26 @ 100 | 9,000 | 9,284 | |||||||||
| Essex Portfolio LP 1.70%, 3/1/28, Callable 1/1/28 @ 100 | 3,500 | 3,341 | |||||||||
2.65%, 3/15/32, Callable 12/15/31 @ 100 | 5,000 | 4,869 | |||||||||
| GLP Capital LP/GLP Financing II, Inc. 4.00%, 1/15/31, Callable 10/15/30 @ 100 | 4,000 | 4,125 | |||||||||
3.25%, 1/15/32, Callable 10/15/31 @ 100 | 3,617 | 3,493 | |||||||||
| Host Hotels & Resorts LP 3.38%, 12/15/29, Callable 9/15/29 @ 100 (k) | 3,500 | 3,486 | |||||||||
3.50%, 9/15/30, Callable 6/15/30 @ 100 | 4,150 | 4,126 | |||||||||
| Hudson Pacific Properties LP 3.95%, 11/1/27, Callable 8/1/27 @ 100 | 5,000 | 5,271 | |||||||||
4.65%, 4/1/29, Callable 1/1/29 @ 100 | 1,979 | 2,182 | |||||||||
3.25%, 1/15/30, Callable 10/15/29 @ 100 | 9,629 | 9,764 | |||||||||
Kilroy Realty LP, 2.65%, 11/15/33, Callable 8/15/33 @ 100 | 6,250 | 5,796 | |||||||||
Physicians Realty LP, 4.30%, 3/15/27, Callable 12/15/26 @ 100 | 7,500 | 8,179 | |||||||||
92,551 | |||||||||||
See notes to financial statements.
18
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Utilities (4.9%): | |||||||||||
| Ameren Corp. 1.75%, 3/15/28, Callable 1/15/28 @ 100 | $ | 5,600 | $ | 5,286 | |||||||
3.50%, 1/15/31, Callable 10/15/30 @ 100 | 4,250 | 4,450 | |||||||||
American Water Capital Corp., 2.95%, 9/1/27, Callable 6/1/27 @ 100 | 5,000 | 5,147 | |||||||||
Atmos Energy Corp., 4.13%, 10/15/44, Callable 4/15/44 @ 100 | 10,000 | 10,957 | |||||||||
Berkshire Hathaway Energy Co., 4.50%, 2/1/45, Callable 8/1/44 @ 100 | 12,000 | 13,650 | |||||||||
Black Hills Corp., 3.88%, 10/15/49, Callable 4/15/49 @ 100 | 10,000 | 10,323 | |||||||||
CenterPoint Energy, Inc., 2.65%, 6/1/31, Callable 3/1/31 @ 100 | 8,500 | 8,314 | |||||||||
Cleco Corporate Holdings LLC, 3.38%, 9/15/29, Callable 6/15/29 @ 100 | 11,000 | 11,032 | |||||||||
Delmarva Power & Light Co., 4.15%, 5/15/45, Callable 11/15/44 @ 100 | 5,000 | 5,519 | |||||||||
Dominion Energy South Carolina, Inc., 4.10%, 6/15/46, Callable 12/15/45 @ 100 | 5,000 | 5,422 | |||||||||
Duke Energy Carolinas LLC, 3.88%, 3/15/46, Callable 9/15/45 @ 100 | 7,000 | 7,531 | |||||||||
Duke Energy Indiana LLC, 3.75%, 5/15/46, Callable 11/15/45 @ 100 | 10,000 | 10,765 | |||||||||
Duke Energy Progress LLC, 4.15%, 12/1/44, Callable 6/1/44 @ 100 | 7,000 | 7,666 | |||||||||
Duquesne Light Holdings, Inc., 2.78%, 1/7/32, Callable 10/7/31 @ 100 (a) | 3,967 | 3,816 | |||||||||
Entergy Louisiana LLC, 4.95%, 1/15/45, Callable 1/15/25 @ 100 | 7,000 | 7,457 | |||||||||
Entergy Mississippi LLC, 3.25%, 12/1/27, Callable 9/1/27 @ 100 | 5,000 | 5,192 | |||||||||
| Entergy Texas, Inc. 3.45%, 12/1/27, Callable 9/1/27 @ 100 | 15,000 | 15,546 | |||||||||
3.55%, 9/30/49, Callable 3/30/49 @ 100 | 5,000 | 5,008 | |||||||||
Florida Power & Light Co., 3.15%, 10/1/49, Callable 4/1/49 @ 100 | 8,750 | 8,719 | |||||||||
Gulf Power Co., 3.30%, 5/30/27, Callable 2/28/27 @ 100 | 10,000 | 10,481 | |||||||||
IPALCO Enterprises, Inc., 4.25%, 5/1/30, Callable 2/1/30 @ 100 | 5,475 | 5,835 | |||||||||
ITC Holdings Corp., 3.35%, 11/15/27, Callable 8/15/27 @ 100 | 7,500 | 7,752 | |||||||||
| MidAmerican Energy Co. 3.15%, 4/15/50, Callable 10/15/49 @ 100 | 7,000 | 6,923 | |||||||||
2.70%, 8/1/52, Callable 2/1/52 @ 100 | 2,500 | 2,278 | |||||||||
Mississippi Power Co., 4.25%, 3/15/42 | 3,168 | 3,460 | |||||||||
National Fuel Gas Co., 3.95%, 9/15/27, Callable 6/15/27 @ 100 | 5,000 | 5,171 | |||||||||
Northern States Power Co., 3.60%, 5/15/46, Callable 11/15/45 @ 100 | 15,000 | 15,975 | |||||||||
NRG Energy, Inc., 4.45%, 6/15/29, Callable 3/15/29 @ 100 (a) (f) | 2,907 | 3,089 | |||||||||
Oncor Electric Delivery Co. LLC, 3.75%, 4/1/45, Callable 10/1/44 @ 100 | 5,000 | 5,360 | |||||||||
PECO Energy Co., 3.00%, 9/15/49, Callable 3/15/49 @ 100 | 7,000 | 6,606 | |||||||||
Pedernales Electric Cooperative, Inc., 5.95%, 11/15/22 (a) | 1,034 | 1,063 | |||||||||
Potomac Electric Power Co., 4.15%, 3/15/43, Callable 9/15/42 @ 100 | 5,000 | 5,578 | |||||||||
Public Service Co. of Colorado, 2.70%, 1/15/51, Callable 7/15/50 @ 100 | 7,000 | 6,360 | |||||||||
Public Service Electric & Gas Co., 3.80%, 3/1/46, MTN, Callable 9/1/45 @ 100 | 8,000 | 8,704 | |||||||||
South Jersey Industries, Inc., 5.02%, 4/15/31 (k) | 9,000 | 9,608 | |||||||||
Southwestern Public Service Co., 3.15%, 5/1/50, Callable 11/1/49 @ 100 | 10,000 | 9,851 | |||||||||
Spire, Inc., 3.54%, 2/27/24, Callable 12/27/23 @ 100 | 11,880 | 11,951 | |||||||||
The AES Corp., 2.45%, 1/15/31, Callable 10/15/30 @ 100 | 9,000 | 8,484 | |||||||||
| Tri-State Generation & Transmission Association, Inc. 4.70%, 11/1/44, Callable 5/1/44 @ 100 | 5,000 | 5,849 | |||||||||
4.25%, 6/1/46, Callable 12/1/45 @ 100 | 10,000 | 10,910 | |||||||||
| WEC Energy Group, Inc., 2.24% (LIBOR03M+211bps), 5/15/67, Callable 3/14/22 @ 100 (b) | 13,000 | 11,765 | |||||||||
314,853 | |||||||||||
Total Corporate Bonds (Cost $2,843,231) | 2,899,157 | ||||||||||
See notes to financial statements.
19
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Yankee Dollars (11.5%) | |||||||||||
Communication Services (0.4%): | |||||||||||
British Telecommunications PLC, 3.25%, 11/8/29, Callable 8/8/29 @ 100 (a) | $ | 7,000 | $ | 6,963 | |||||||
Pearson Funding Four PLC, 3.75%, 5/8/22 (a) | 5,000 | 5,029 | |||||||||
Vodafone Group PLC, 4.25%, 9/17/50 | 10,000 | 10,717 | |||||||||
22,709 | |||||||||||
Consumer Discretionary (0.4%): | |||||||||||
Ascot Group Ltd., 4.25%, 12/15/30, Callable 12/15/25 @ 100 (a) | 7,802 | 7,915 | |||||||||
GENM Capital Labuan Ltd., 3.88%, 4/19/31, Callable 1/19/31 @ 100 (a) | 8,500 | 7,921 | |||||||||
| International Game Technology PLC 4.13%, 4/15/26, Callable 4/15/23 @ 102.06 (a) | 500 | 501 | |||||||||
5.25%, 1/15/29, Callable 1/15/24 @ 102.63 (a) | 5,000 | 5,118 | |||||||||
Nemak SAB de CV, 3.63%, 6/28/31, Callable 3/28/31 @ 100 (a) | 7,192 | 6,649 | |||||||||
28,104 | |||||||||||
Consumer Staples (0.7%): | |||||||||||
Alimentation Couche-Tard, Inc., 2.95%, 1/25/30, Callable 10/25/29 @ 100 (a) (k) | 9,333 | 9,410 | |||||||||
Bacardi Ltd., 4.70%, 5/15/28, Callable 2/15/28 @ 100 (a) (f) | 25,000 | 27,517 | |||||||||
| Imperial Brands Finance PLC 4.25%, 7/21/25, Callable 4/21/25 @ 100 (a) | 5,000 | 5,280 | |||||||||
3.88%, 7/26/29, Callable 4/26/29 @ 100 (a) | 5,000 | 5,167 | |||||||||
47,374 | |||||||||||
Energy (0.5%): | |||||||||||
Aker BP ASA, 4.00%, 1/15/31, Callable 10/15/30 @ 100 (a) | 9,250 | 9,700 | |||||||||
Korea National Oil Corp., 2.63%, 4/18/32 (a) | 6,000 | 5,909 | |||||||||
| Petroleos Mexicanos 6.84%, 1/23/30, Callable 10/23/29 @ 100 | 6,000 | 6,122 | |||||||||
5.95%, 1/28/31, Callable 10/28/30 @ 100 | 6,667 | 6,341 | |||||||||
6.70%, 2/16/32, Callable 11/16/31 @ 100 (a) | 1,500 | 1,484 | |||||||||
29,556 | |||||||||||
Financials (6.5%): | |||||||||||
| ABN AMRO Bank NV 4.75%, 7/28/25 (a) | 12,000 | 12,857 | |||||||||
4.80%, 4/18/26 (a) | 8,000 | 8,652 | |||||||||
| Banco Santander Mexico SA Institucion de Banca Multiple Groupo Financiero Santand, 5.95% (H15T5Y+300bps), 10/1/28, Callable 10/1/23 @ 100 (a) (b) | 1,000 | 1,042 | |||||||||
| Banco Santander Mexico SA Institucion de Banca Multiple Grupo Financiero Santand, 5.38%, 4/17/25 (a) (f) | 1,786 | 1,928 | |||||||||
Bank of Montreal, 3.09%, 1/10/37, Callable 1/10/32 @ 100 | 6,500 | 6,394 | |||||||||
Bank of New Zealand, 1.00%, 3/3/26 (a) | 10,400 | 9,943 | |||||||||
BAT International Finance PLC, 3.95%, 6/15/25 (a) | 5,000 | 5,244 | |||||||||
| BNP Paribas SA 4.71% (LIBOR03M+224bps), 1/10/25, Callable 1/10/24 @ 100 (a) (b) | 10,000 | 10,504 | |||||||||
4.38%, 5/12/26 (a) | 10,000 | 10,647 | |||||||||
| BP Capital Markets PLC, 4.38% (H15T5Y+404bps), Callable 6/22/25 @ 100 (b) (f) (h) | 6,500 | 6,711 | |||||||||
See notes to financial statements.
20
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| BPCE SA 3.50%, 10/23/27 (a) | $ | 5,000 | $ | 5,163 | |||||||
3.25%, 1/11/28 (a) | 10,000 | 10,411 | |||||||||
Brookfield Finance, Inc., 4.85%, 3/29/29, Callable 12/29/28 @ 100 | 10,000 | 11,219 | |||||||||
Canadian Imperial Bank of Commerce, 7.26%, 4/10/32 (a) (k) | 2,526 | 3,203 | |||||||||
Commonwealth Bank of Australia, 2.69%, 3/11/31 (a) | 9,000 | 8,593 | |||||||||
| Cooperatieve Rabobank UA, 4.00% (USSW5+189bps), 4/10/29, MTN, Callable 4/10/24 @ 100 (b) | 5,000 | 5,171 | |||||||||
Credit Agricole SA, 4.13%, 1/10/27 (a) | 15,000 | 16,136 | |||||||||
Credit Suisse Group AG, 3.87%, 1/12/29, Callable 1/12/28 @ 100 (a) (f) | 4,445 | 4,618 | |||||||||
Credit Suisse Group Funding Guernsey Ltd., 4.55%, 4/17/26 | 10,000 | 10,782 | |||||||||
| Deutsche Bank AG 4.88% (USISDA05+255bps), 12/1/32, Callable 12/1/27 @ 100 (b) | 10,000 | 10,450 | |||||||||
3.74%, 1/7/33, Callable 10/7/31 @ 100 | 5,000 | 4,831 | |||||||||
Enel Finance International NV, 2.25%, 7/12/31, Callable 4/12/31 @ 100 (a) | 5,000 | 4,654 | |||||||||
| HSBC Holdings PLC 3.90%, 5/25/26 | 10,000 | 10,580 | |||||||||
2.21% (SOFR+129bps), 8/17/29, Callable 8/17/28 @ 100 (b) | 8,500 | 8,097 | |||||||||
ING Groep NV, 3.95%, 3/29/27 | 14,100 | 15,077 | |||||||||
| Lloyds Banking Group PLC 3.75%, 1/11/27 | 15,000 | 15,849 | |||||||||
3.57% (LIBOR03M+121bps), 11/7/28, Callable 11/7/27 @ 100 (b) | 5,000 | 5,224 | |||||||||
| Macquarie Bank Ltd., 3.05% (H15T5Y+170bps), 3/3/36, Callable 3/3/31 @ 100 (a) (b) | 8,750 | 8,337 | |||||||||
| Mizuho Financial Group, Inc. 3.17%, 9/11/27 | 5,000 | 5,164 | |||||||||
2.56%, 9/13/31 | 5,000 | 4,723 | |||||||||
2.17% (H15T1Y+87bps), 5/22/32, Callable 5/22/31 @ 100 (b) | 8,500 | 8,006 | |||||||||
| Nationwide Building Society 4.00%, 9/14/26 (a) | 10,000 | 10,539 | |||||||||
4.13% (USISDA05+185bps), 10/18/32, Callable 10/18/27 @ 100 (a) (b) | 10,000 | 10,421 | |||||||||
| NXP BV/NXP Funding LLC/NXP USA, Inc., 2.65%, 2/15/32, Callable 11/15/31 @ 100 (a) (k) | 7,000 | 6,737 | |||||||||
| Royal Bank of Scotland Group PLC 4.27% (LIBOR03M+176bps), 3/22/25, Callable 3/22/24 @ 100 (b) | 4,000 | 4,181 | |||||||||
4.80%, 4/5/26 | 5,000 | 5,447 | |||||||||
5.08% (LIBOR03M+191bps), 1/27/30, Callable 1/27/29 @ 100 (b) | 10,000 | 11,242 | |||||||||
| Santander UK Group Holdings PLC, 2.90% (SOFR+148bps), 3/15/32, Callable 3/15/31 @ 100 (b) | 3,000 | 2,929 | |||||||||
Santander UK PLC, 5.00%, 11/7/23 (a) | 7,034 | 7,396 | |||||||||
Shell International Finance BV, 3.63%, 8/21/42 | 10,000 | 10,418 | |||||||||
Siemens Financieringsmaatschappij NV, 3.40%, 3/16/27 (a) | 6,000 | 6,339 | |||||||||
| Societe Generale SA, 1.49% (H15T1Y+1bps), 12/14/26, Callable 12/14/25 @ 100 (a) (b) | 14,500 | 13,822 | |||||||||
| Standard Chartered PLC, 4.87% (LIBOR03M+197bps), 3/15/33, Callable 3/15/28 @ 100 (a) (b) | 7,500 | 7,934 | |||||||||
Sumitomo Mitsui Financial Group, Inc., 2.22%, 9/17/31 (k) | 8,500 | 8,058 | |||||||||
| The Bank of Nova Scotia 4.50%, 12/16/25 | 10,000 | 10,779 | |||||||||
1.30%, 9/15/26, Callable 6/15/26 @ 100 | 8,500 | 8,168 | |||||||||
See notes to financial statements.
21
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| The Toronto-Dominion Bank 2.00%, 9/10/31 | $ | 8,500 | $ | 8,052 | |||||||
3.62% (USSW5+221bps), 9/15/31, Callable 9/15/26 @ 100 (b) | 10,000 | 10,502 | |||||||||
| Washington Aircraft 1 Co. DAC, Title XI (NBGA — United States Government), 2.64%, 9/15/26 | 2,905 | 2,982 | |||||||||
| Westpac Banking Corp. 4.32% (USISDA05+224bps), 11/23/31, Callable 11/23/26 @ 100 (b) | 10,000 | 10,600 | |||||||||
2.67% (H15T5Y+2bps), 11/15/35, Callable 11/15/30 @ 100 (b) | 4,000 | 3,768 | |||||||||
3.02% (H15T5Y+153bps), 11/18/36, Callable 11/18/31 @ 100 (b) | 2,000 | 1,911 | |||||||||
412,435 | |||||||||||
Health Care (0.6%): | |||||||||||
Mylan NV, 3.95%, 6/15/26, Callable 3/15/26 @ 100 | 5,000 | 5,278 | |||||||||
Olympus Corp., 2.14%, 12/8/26, Callable 11/8/26 @ 100 (a) | 3,939 | 3,902 | |||||||||
Smith & Nephew PLC, 2.03%, 10/14/30, Callable 7/14/30 @ 100 | 14,890 | 13,775 | |||||||||
| STERIS Irish FinCo Unlimited Co. 2.70%, 3/15/31, Callable 12/15/30 @ 100 | 3,000 | 2,924 | |||||||||
3.75%, 3/15/51, Callable 9/15/50 @ 100 | 8,000 | 8,082 | |||||||||
Teva Pharmaceutical Finance Netherlands BV, 3.15%, 10/1/26 | 5,000 | 4,586 | |||||||||
38,547 | |||||||||||
Industrials (1.5%): | |||||||||||
| Air Canada Pass Through Trust 4.13%, 11/15/26 (a) | 15,780 | 15,816 | |||||||||
3.60%, 9/15/28 (a) | 7,190 | 7,101 | |||||||||
3.75%, 6/15/29 (a) | 4,409 | 4,487 | |||||||||
BAE Systems PLC, 3.40%, 4/15/30, Callable 1/15/30 @ 100 (a) | 12,000 | 12,393 | |||||||||
Canadian National Railway Co., 2.75%, 3/1/26, Callable 12/1/25 @ 100 | 7,000 | 7,210 | |||||||||
Canadian Pacific Railway Co., 2.45%, 12/2/31, Callable 9/2/31 @ 100 | 4,167 | 4,090 | |||||||||
CK Hutchison International Ltd., 3.25%, 9/29/27 (a) | 10,000 | 10,449 | |||||||||
CNH Industrial NV, 3.85%, 11/15/27, MTN, Callable 8/15/27 @ 100 | 5,000 | 5,314 | |||||||||
Ferguson Finance PLC, 3.25%, 6/2/30, Callable 3/2/30 @ 100 (a) | 5,000 | 5,133 | |||||||||
| Port of Newcastle Investments Financing Pty Ltd., 5.90%, 11/24/31, Callable 8/24/31 @ 100 (a) | 6,000 | 6,010 | |||||||||
Rolls-Royce PLC, 3.63%, 10/14/25, Callable 7/14/25 @ 100 (a) | 5,000 | 4,912 | |||||||||
Sydney Airport Finance Co. Pty Ltd., 3.63%, 4/28/26, Callable 1/28/26 @ 100 (a) | 10,000 | 10,483 | |||||||||
Turkish Airlines Pass Through Trust, 4.20%, 9/15/28 (a) | 6,089 | 5,128 | |||||||||
98,526 | |||||||||||
Information Technology (0.1%): | |||||||||||
CGI, Inc., 1.45%, 9/14/26, Callable 8/14/26 @ 100 (a) | 3,467 | 3,329 | |||||||||
Materials (0.6%): | |||||||||||
Anglo American Capital PLC, 4.00%, 9/11/27 (a) | 6,667 | 7,036 | |||||||||
ArcelorMittal, 7.00%, 10/15/39 | 4,000 | 5,206 | |||||||||
Braskem Netherlands Finance BV, 4.50%, 1/31/30 (a) | 13,000 | 13,224 | |||||||||
CCL Industries, Inc., 3.05%, 6/1/30, Callable 3/1/30 @ 100 (a) | 7,750 | 7,831 | |||||||||
Teck Resources Ltd., 6.13%, 10/1/35 | 5,000 | 6,233 | |||||||||
39,530 | |||||||||||
See notes to financial statements.
22
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Real Estate (0.0%): (i) | |||||||||||
| Ontario Teachers' Cadillac Fairview Properties Trust, 2.50%, 10/15/31, Callable 7/15/31 @ 100 (a) | $ | 3,000 | $ | 2,931 | |||||||
Utilities (0.2%): | |||||||||||
ENEL Chile SA, 4.88%, 6/12/28, Callable 3/12/28 @ 100 | 10,000 | 10,924 | |||||||||
Total Yankee Dollars (Cost $717,237) | 733,965 | ||||||||||
Government National Mortgage Association (0.0%) (i) | |||||||||||
Pass-throughs (0.0%): | |||||||||||
| Government National Mortgage Association 7.50%, 12/15/28-8/15/29 | 70 | 78 | |||||||||
6.00%, 9/20/32 | 164 | 185 | |||||||||
263 | |||||||||||
263 | |||||||||||
Total Government National Mortgage Association (Cost $235) | 263 | ||||||||||
Municipal Bonds (9.9%) | |||||||||||
Alabama (0.1%): | |||||||||||
| The Water Works Board of the City of Birmingham Revenue 2.70%, 1/1/29 | 3,000 | 3,100 | |||||||||
2.80%, 1/1/30, Continuously Callable @ 100 | 3,000 | 3,104 | |||||||||
6,204 | |||||||||||
Arizona (0.1%): | |||||||||||
| City of Phoenix Civic Improvement Corp. Revenue 1.16%, 7/1/26 | 910 | 880 | |||||||||
1.59%, 7/1/29 | 1,000 | 951 | |||||||||
1.84%, 7/1/31, Continuously Callable @ 100 | 2,000 | 1,893 | |||||||||
The University of Arizona Revenue, Series A, 1.82%, 6/1/30 | 1,000 | 970 | |||||||||
4,694 | |||||||||||
California (0.7%): | |||||||||||
| City of El Cajon CA Revenue 2.09%, 4/1/29 | 425 | 414 | |||||||||
2.19%, 4/1/30 | 425 | 413 | |||||||||
2.29%, 4/1/31, Continuously Callable @ 100 | 550 | 532 | |||||||||
| City of Riverside CA Revenue Series A, 2.49%, 6/1/26 | 1,800 | 1,830 | |||||||||
Series A, 2.64%, 6/1/27 | 1,400 | 1,426 | |||||||||
| Port of Oakland Revenue 4.50%, 5/1/32, Pre-refunded 5/1/22 @ 100 | 75 | 76 | |||||||||
4.50%, 5/1/32, Pre-refunded 5/1/22 @ 100 | 11,625 | 11,738 | |||||||||
San Jose Financing Authority Revenue, 1.71%, 6/1/28 | 2,000 | 1,913 | |||||||||
| San Jose Redevelopment Agency Successor Agency Tax Allocation, Series A-T, 3.13%, 8/1/28, Continuously Callable @ 100 | 10,000 | 10,501 | |||||||||
| San Marcos Redevelopment Agency Successor Agency Tax Allocation Series B, 4.02%, 10/1/25 | 5,250 | 5,641 | |||||||||
Series B, 4.47%, 10/1/29 | 6,500 | 7,351 | |||||||||
See notes to financial statements.
23
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Vista Redevelopment Agency Successor Agency Tax Allocation (INS — Assured Guaranty Municipal Corp.), Series A, 4.13%, 9/1/30, Continuously Callable @ 100 | $ | 2,590 | $ | 2,714 | |||||||
44,549 | |||||||||||
Colorado (0.2%): | |||||||||||
| City & County of Denver Co. Airport System Revenue Series C, 2.14%, 11/15/29 | 4,500 | 4,430 | |||||||||
Series C, 2.24%, 11/15/30 | 5,000 | 4,922 | |||||||||
County of El Paso Co. Revenue, 4.47%, 10/1/35 | 5,000 | 5,710 | |||||||||
15,062 | |||||||||||
Connecticut (0.7%): | |||||||||||
| City of Bridgeport, GO Series A, 4.03%, 8/15/28 | 10,000 | 10,815 | |||||||||
Series A, 4.08%, 8/15/29, Continuously Callable @ 100 | 7,380 | 8,000 | |||||||||
City of New Haven, GO, Series B, 4.68%, 8/1/31, Continuously Callable @ 100 | 10,000 | 11,141 | |||||||||
| State of Connecticut, GO Series A, 3.23%, 1/15/25 | 5,000 | 5,231 | |||||||||
Series A, 2.35%, 7/1/26 | 2,415 | 2,464 | |||||||||
Series A, 3.43%, 4/15/28 | 1,500 | 1,612 | |||||||||
Series A, 3.90%, 9/15/28 | 2,500 | 2,767 | |||||||||
Town of Hamden, GO, 4.93%, 8/15/30, Continuously Callable @ 100 | 3,845 | 4,045 | |||||||||
46,075 | |||||||||||
Florida (0.9%): | |||||||||||
| County of Broward Florida Airport System Revenue, Series C, 2.91%, 10/1/32, Continuously Callable @ 100 | 9,500 | 9,513 | |||||||||
| County of Miami-Dade Aviation Revenue Series B, 2.70%, 10/1/26 | 8,250 | 8,420 | |||||||||
Series B, 3.38%, 10/1/30, Continuously Callable @ 100 | 2,500 | 2,635 | |||||||||
| County of Miami-Dade Seaport Department Revenue, Series B-3, 2.34%, 10/1/33, Continuously Callable @ 100 | 3,300 | 3,159 | |||||||||
Hillsborough County IDA Revenue, 3.58%, 8/1/35, Continuously Callable @ 100 | 13,500 | 14,268 | |||||||||
| Hillsborough County School Board Certificate of Participation, Series B, 1.92%, 7/1/25 | 4,250 | 4,237 | |||||||||
| Florida Development Finance Corp., Series A, 3.22%, 2/1/32, Continuously Callable @ 100 | 4,080 | 4,158 | |||||||||
Palm Beach County School District Certificate participation, 5.40%, 8/1/25 | 6,000 | 6,725 | |||||||||
| St. Johns County IDA Revenue (INS — Assured Guaranty Municipal Corp.), Series B, 2.54%, 10/1/30, Continuously Callable @ 100 | 2,500 | 2,552 | |||||||||
55,667 | |||||||||||
Georgia (0.4%): | |||||||||||
| Athens Housing Authority Revenue 2.54%, 12/1/27 | 3,405 | 3,478 | |||||||||
2.59%, 12/1/28 | 4,585 | 4,675 | |||||||||
2.69%, 12/1/29 | 4,740 | 4,851 | |||||||||
| Atlanta & Fulton County Recreation Authority Revenue 3.80%, 12/15/37 | 2,000 | 2,250 | |||||||||
4.00%, 12/15/46 | 1,500 | 1,728 | |||||||||
See notes to financial statements.
24
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| City of Atlanta GA Water & Wastewater Revenue, 2.26%, 11/1/35, Continuously Callable @ 100 | $ | 2,500 | $ | 2,408 | |||||||
Savannah Hospital Authority Revenue, 3.99%, 7/1/38 | 5,000 | 5,343 | |||||||||
24,733 | |||||||||||
Hawaii (0.3%): | |||||||||||
| City & County of Honolulu, GO 2.81%, 11/1/23, Pre-refunded 11/1/22 @ 100 | 900 | 914 | |||||||||
3.06%, 11/1/25, Pre-refunded 11/1/22 @ 100 | 680 | 692 | |||||||||
3.16%, 11/1/26, Pre-refunded 11/1/22 @ 100 | 775 | 789 | |||||||||
3.26%, 11/1/27, Pre-refunded 11/1/22 @ 100 | 625 | 636 | |||||||||
3.36%, 11/1/28, Pre-refunded 11/1/22 @ 100 | 690 | 703 | |||||||||
State of Hawaii Airports System Revenue, Series E, 1.81%, 7/1/27 | 1,370 | 1,341 | |||||||||
| State of Hawaii Department of Business Economic Development & Tourism Revenue, Series A-2, 3.24%, 1/1/31 | 12,320 | 12,905 | |||||||||
17,980 | |||||||||||
Idaho (0.1%): | |||||||||||
| Idaho State Building Authority Revenue 3.78%, 9/1/30, Continuously Callable @ 100 | 2,500 | 2,732 | |||||||||
3.93%, 9/1/31, Continuously Callable @ 100 | 2,120 | 2,328 | |||||||||
3.98%, 9/1/32, Continuously Callable @ 100 | 2,000 | 2,198 | |||||||||
7,258 | |||||||||||
Illinois (0.4%): | |||||||||||
Chicago O'hare International Airport Revenue, Series D, 2.17%, 1/1/28 | 3,000 | 2,964 | |||||||||
City of Chicago Wastewater Transmission Revenue, 5.84%, 1/1/35 | 6,500 | 8,018 | |||||||||
| Illinois Finance Authority Revenue 3.55%, 8/15/29 | 2,025 | 2,139 | |||||||||
3.60%, 8/15/30 | 3,000 | 3,182 | |||||||||
| State of Illinois Sales Tax Revenue 2.51%, 6/15/32, Continuously Callable @ 100 | 2,000 | 1,892 | |||||||||
2.66%, 6/15/33, Continuously Callable @ 100 | 1,500 | 1,420 | |||||||||
| Winnebago & Boone Counties School District No 205 Rockford, GO, 3.80%, 12/1/26, Continuously Callable @ 100 | 4,500 | 4,763 | |||||||||
24,378 | |||||||||||
Indiana (0.2%): | |||||||||||
| Indiana Finance Authority Revenue Series A, 3.62%, 7/1/36 | 1,500 | 1,628 | |||||||||
Series C, 4.36%, 7/15/29 | 4,955 | 5,618 | |||||||||
Series C, 4.53%, 7/15/31 | 4,260 | 4,958 | |||||||||
12,204 | |||||||||||
Kansas (0.2%): | |||||||||||
Kansas Development Finance Authority Revenue, Series H, 4.73%, 4/15/37 | 10,000 | 11,834 | |||||||||
| Wyandotte County-Kansas City Unified Government Utility System Revenue, Series B, 1.66%, 9/1/27 | 2,000 | 1,928 | |||||||||
13,762 | |||||||||||
See notes to financial statements.
25
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Louisiana (0.4%): | |||||||||||
| Louisiana Local Government Environmental Facilities & Community Development Authority Revenue 1.55%, 2/1/27 | $ | 2,005 | $ | 1,938 | |||||||
1.74%, 2/1/28 | 4,500 | 4,322 | |||||||||
3.24%, 8/1/28 | 14,990 | 15,579 | |||||||||
Louisiana Public Facilities Authority Revenue, 2.28%, 6/1/30 | 3,500 | 3,432 | |||||||||
25,271 | |||||||||||
Maryland (0.3%): | |||||||||||
| Maryland Economic Development Corp. Revenue Series B, 4.05%, 6/1/27 | 2,290 | 2,322 | |||||||||
Series B, 4.15%, 6/1/28 | 2,390 | 2,430 | |||||||||
Series B, 4.25%, 6/1/29 | 2,495 | 2,555 | |||||||||
Series B, 4.35%, 6/1/30 | 1,325 | 1,368 | |||||||||
Series B, 4.40%, 6/1/31 | 1,385 | 1,436 | |||||||||
| Maryland Stadium Authority Revenue Series C, 2.33%, 5/1/34 | 3,010 | 2,768 | |||||||||
Series C, 2.36%, 5/1/35 | 3,050 | 2,799 | |||||||||
Series C, 2.81%, 5/1/40 | 7,000 | 6,737 | |||||||||
22,415 | |||||||||||
Massachusetts (0.1%): | |||||||||||
| Massachusetts School Building Authority Revenue, Series B, 2.97%, 10/15/32, Continuously Callable @ 100 | 6,500 | 6,567 | |||||||||
Michigan (0.2%): | |||||||||||
Michigan Finance Authority Revenue, 3.08%, 12/1/34 | 13,000 | 13,476 | |||||||||
Mississippi (0.1%): | |||||||||||
| State of Mississippi, GO Series E, 2.83%, 12/1/24 | 1,800 | 1,865 | |||||||||
Series E, 3.03%, 12/1/25 | 2,000 | 2,097 | |||||||||
3,962 | |||||||||||
Missouri (0.0%): (i) | |||||||||||
University of Missouri Revenue, 2.01%, 11/1/27, Continuously Callable @ 100 | 3,000 | 2,996 | |||||||||
New Jersey (0.5%): | |||||||||||
| City of Atlantic, GO Series A, 4.23%, 9/1/25 | 2,525 | 2,601 | |||||||||
Series A, 4.29%, 9/1/26 | 2,415 | 2,502 | |||||||||
| New Jersey Economic Development Authority Revenue Series C, 5.71%, 6/15/30 | 2,500 | 2,987 | |||||||||
Series NNN, 3.77%, 6/15/31 | 10,000 | 10,656 | |||||||||
New Jersey Educational Facilities Authority Revenue, Series E, 4.02%, 7/1/39 | 3,000 | 3,100 | |||||||||
New Jersey Transportation Trust Fund Authority Revenue, 4.08%, 6/15/39 | 3,845 | 4,191 | |||||||||
| New Jersey Transportation Trust Fund Authority Revenue, Build America Bond, Series C, 5.75%, 12/15/28 | 1,810 | 2,084 | |||||||||
Rutgers The State University of New Jersey Revenue, Series S, 1.91%, 5/1/31 | 2,750 | 2,587 | |||||||||
South Jersey Transportation Authority Revenue, Series B, 2.38%, 11/1/27 | 1,030 | 996 | |||||||||
31,704 | |||||||||||
See notes to financial statements.
26
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
New York (0.7%): | |||||||||||
| Long Island Power Authority Revenue Series B, 3.98%, 9/1/25 | $ | 2,500 | $ | 2,676 | |||||||
Series B, 4.13%, 9/1/26 | 2,500 | 2,711 | |||||||||
Long Island Power Authority Revenue, Build America Bond, 5.25%, 5/1/22 | 10,000 | 10,118 | |||||||||
| New York State Dormitory Authority Revenue Series A, 2.46%, 7/1/32 | 9,250 | 9,083 | |||||||||
Series A, 2.51%, 7/1/33 | 5,000 | 4,906 | |||||||||
Series B, 2.83%, 7/1/31 | 5,000 | 5,094 | |||||||||
New York State Thruway Authority Revenue, Series M, 2.55%, 1/1/28 | 5,000 | 5,059 | |||||||||
| New York State Urban Development Corp. Revenue 1.88%, 3/15/30 | 2,600 | 2,481 | |||||||||
2.03%, 3/15/31, Continuously Callable @ 100 | 3,500 | 3,336 | |||||||||
45,464 | |||||||||||
Ohio (0.4%): | |||||||||||
| Cleveland Department of Public Utilities Division of Public Power Revenue, 5.50%, 11/15/38, Pre-refunded 11/15/24 @ 100 | 10,000 | 11,098 | |||||||||
| State of Ohio, GO Series A, 1.73%, 8/1/31 | 5,000 | 4,820 | |||||||||
Series A, 1.78%, 8/1/32 | 7,000 | 6,710 | |||||||||
22,628 | |||||||||||
Oklahoma (0.2%): | |||||||||||
Oklahoma Development Finance Authority Revenue, Series C, 5.45%, 8/15/28 | 10,250 | 11,245 | |||||||||
| The University of Oklahoma Revenue Series C, 2.15%, 7/1/30 | 750 | 728 | |||||||||
Series C, 2.30%, 7/1/31, Continuously Callable @ 100 | 1,000 | 975 | |||||||||
12,948 | |||||||||||
Pennsylvania (0.9%): | |||||||||||
City of Pittsburgh PA, GO, Series B, 1.19%, 9/1/26 | 4,000 | 3,890 | |||||||||
Commonwealth Financing Authority Revenue, Series A, 3.86%, 6/1/38 | 5,045 | 5,542 | |||||||||
| Pennsylvania Economic Development Financing Authority Revenue, Series B, 3.20%, 11/15/27 | 1,375 | 1,446 | |||||||||
Pennsylvania Higher Educational Facilities Authority Revenue, 3.73%, 7/15/43 | 3,000 | 2,949 | |||||||||
Pennsylvania IDA Revenue, 3.56%, 7/1/24 (a) | 10,000 | 10,274 | |||||||||
| Public Parking Authority of Pittsburgh Revenue, 2.58%, 12/1/31, Continuously Callable @ 100 | 825 | 816 | |||||||||
Public Parking Authority Of Pittsburgh Revenue, 2.33%, 12/1/29 | 895 | 876 | |||||||||
| Scranton School District, GO Series A, 3.15%, 6/15/34, (Put Date 6/15/24) (a) (l) | 2,800 | 2,796 | |||||||||
Series B, 3.15%, 6/15/34, (Put Date 6/15/24) (a) (l) | 1,415 | 1,467 | |||||||||
| Scranton School District, GO (INS — Build America Mutual Assurance Co.) 3.05%, 4/1/29 | 800 | 838 | |||||||||
3.10%, 4/1/30 | 950 | 1,003 | |||||||||
3.15%, 4/1/31 | 250 | 265 | |||||||||
| State Public School Building Authority Revenue 3.05%, 4/1/28 | 2,000 | 2,074 | |||||||||
3.15%, 4/1/30 | 6,460 | 6,805 | |||||||||
See notes to financial statements.
27
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| State Public School Building Authority Revenue (INS — Build America Mutual Assurance Co.), Series B-1, 4.08%, 12/1/23 | $ | 1,300 | $ | 1,356 | |||||||
The School District of Philadelphia, GO, 5.06%, 9/1/42 | 10,000 | 11,768 | |||||||||
| University of Pittsburgh-of the Commonwealth System of Higher Education Revenue Series C, 2.53%, 9/15/31 | 2,000 | 2,044 | |||||||||
Series C, 2.58%, 9/15/32 | 1,000 | 1,023 | |||||||||
Series C, 2.63%, 9/15/33 | 2,000 | 2,051 | |||||||||
59,283 | |||||||||||
Tennessee (0.3%): | |||||||||||
| Jackson Energy Authority Revenue 2.90%, 4/1/22 | 2,000 | 2,008 | |||||||||
3.05%, 4/1/23 | 2,745 | 2,808 | |||||||||
Series E, 3.20%, 4/1/24, Continuously Callable @ 100 | 3,915 | 3,995 | |||||||||
| Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board Revenue, Series B, 4.05%, 7/1/26, Continuously Callable @ 100 | 8,000 | 8,567 | |||||||||
17,378 | |||||||||||
Texas (1.2%): | |||||||||||
| Central Texas Regional Mobility Authority Revenue Series C, 1.74%, 1/1/26 | 1,000 | 987 | |||||||||
Series C, 1.84%, 1/1/27 | 1,000 | 982 | |||||||||
Series C, 2.09%, 1/1/28 | 1,000 | 983 | |||||||||
| City of Corpus Christi TX Utility System Revenue Series B, 1.49%, 7/15/27 | 2,000 | 1,923 | |||||||||
Series B, 1.71%, 7/15/28 | 2,220 | 2,127 | |||||||||
| City of Dallas TX Waterworks & Sewer System Revenue, Series D, 1.68%, 10/1/28 | 1,500 | 1,460 | |||||||||
City of Houston Airport System Revenue, Series C, 2.09%, 7/1/28 | 4,250 | 4,207 | |||||||||
| City of Houston Texas Combined Utility System Revenue, Series E, 3.72%, 11/15/28 | 2,500 | 2,745 | |||||||||
| City of Houston TX Combined Utility System Revenue, Series D, 1.62%, 11/15/30 | 2,250 | 2,123 | |||||||||
City of San Antoni, GO, 1.76%, 2/1/31, Continuously Callable @ 100 | 8,270 | 7,915 | |||||||||
| Colony Local Development Corp. Revenue (INS — Berkshire Hathaway Assurance Corp.), Series A, 4.38%, 10/1/33 | 9,000 | 10,140 | |||||||||
County of Bexar Revenue, 2.53%, 8/15/34, Continuously Callable @ 100 | 2,800 | 2,653 | |||||||||
| Dallas/Fort Worth International Airport Revenue Series C, 1.65%, 11/1/26 | 1,500 | 1,474 | |||||||||
Series C, 1.95%, 11/1/28 | 1,000 | 976 | |||||||||
Series C, 2.05%, 11/1/29 | 1,250 | 1,216 | |||||||||
Series C, 2.10%, 11/1/30 | 1,000 | 967 | |||||||||
| Granbury Independent School District, GO, Series A, 1.87%, 8/1/31, Continuously Callable @ 100 | 1,000 | 965 | |||||||||
| Harris County Cultural Education Facilities Finance Corp. Revenue 3.34%, 11/15/37 | 2,000 | 2,071 | |||||||||
Series B, 2.10%, 5/15/22 | 875 | 879 | |||||||||
Series B, 2.17%, 5/15/23 | 1,000 | 1,010 | |||||||||
See notes to financial statements.
28
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Series B, 2.57%, 5/15/26 | $ | 1,000 | $ | 1,018 | |||||||
Series D, 2.28%, 7/1/34 | 6,785 | 6,438 | |||||||||
| McLennan County Public Facility Corp. Revenue, 3.90%, 6/1/29, Continuously Callable @ 100 | 2,000 | 2,068 | |||||||||
Port of Corpus Christi Authority of Nueces County Revenue, 3.49%, 12/1/25 | 1,000 | 1,070 | |||||||||
| San Antonio Education Facilities Corp. Revenue 2.38%, 4/1/28 | 1,500 | 1,434 | |||||||||
2.65%, 4/1/30 | 1,150 | 1,103 | |||||||||
2.73%, 4/1/31 | 750 | 718 | |||||||||
| Tarrant County Cultural Education Facilities Finance Corp. Revenue 2.08%, 9/1/28 | 600 | 589 | |||||||||
2.57%, 9/1/32, Continuously Callable @ 100 | 1,000 | 988 | |||||||||
2.69%, 9/1/33, Continuously Callable @ 100 | 1,000 | 995 | |||||||||
| Texas Public Finance Authority Revenue 1.62%, 2/1/31 | 2,000 | 1,846 | |||||||||
1.78%, 2/1/32, Continuously Callable @ 100 | 1,500 | 1,382 | |||||||||
| Texas Tech University System Revenue 1.55%, 2/15/28 | 2,000 | 1,923 | |||||||||
1.65%, 2/15/29 | 1,250 | 1,194 | |||||||||
1.75%, 2/15/30, Continuously Callable @ 100 | 2,500 | 2,380 | |||||||||
| Waco Educational Finance Corp. Revenue 1.53%, 3/1/27 | 1,340 | 1,294 | |||||||||
1.69%, 3/1/28 | 1,500 | 1,438 | |||||||||
2.06%, 3/1/31, Continuously Callable @ 100 | 1,500 | 1,432 | |||||||||
77,113 | |||||||||||
Washington (0.1%): | |||||||||||
| Washington State University Revenue Series A, 2.24%, 10/1/28 | 1,800 | 1,775 | |||||||||
Series A, 2.31%, 10/1/29 | 5,915 | 5,802 | |||||||||
7,577 | |||||||||||
Wisconsin (0.2%): | |||||||||||
Public Finance Authority Revenue, Series WI, 3.63%, 6/1/51 | 6,575 | 6,456 | |||||||||
State of Wisconsin Revenue, Series A, 2.40%, 5/1/30 | 4,000 | 4,056 | |||||||||
10,512 | |||||||||||
Total Municipal Bonds (Cost $610,769) | 631,860 | ||||||||||
U.S. Government Agency Mortgages (3.3%) | |||||||||||
| Federal Home Loan Mortgage Corp. Series A1A, 1.60%, 6/15/22 (c) | 1,826 | 1,832 | |||||||||
Series K025, Class X1, 0.78%, 10/25/22 (c) (d) | 60,489 | 271 | |||||||||
Series K026, Class X1, 0.94%, 11/25/22 (c) (d) | 84,345 | 495 | |||||||||
Series K028, Class A2, 3.11%, 2/25/23 | 3,962 | 4,028 | |||||||||
Series K045, Class A2, 3.02%, 1/25/25 | 10,000 | 10,343 | |||||||||
Series KPLB, Class A, 2.77%, 5/25/25 | 17,000 | 17,442 | |||||||||
Series K049, Class A2, 3.01%, 7/25/25 | 8,000 | 8,300 | |||||||||
See notes to financial statements.
29
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Series KIR1, Class A2, 2.85%, 3/25/26 (f) | $ | 12,000 | $ | 12,453 | |||||||
Series S8FX, Class A1, 3.02%, 3/25/27 | 11,911 | 12,294 | |||||||||
Series KIR2, Class A2, 3.17%, 3/25/27 | 9,500 | 10,117 | |||||||||
Series K068, Class A2, 3.24%, 8/25/27 | 4,533 | 4,849 | |||||||||
Series K075, Class A2, 3.65%, 2/25/28 (c) | 3,000 | 3,278 | |||||||||
Series K095, Class A2, 2.79%, 6/25/29 | 8,750 | 9,181 | |||||||||
Series K097, Class A2, 2.51%, 7/25/29 | 8,000 | 8,248 | |||||||||
Series K096, Class A2, 2.52%, 7/25/29 | 9,000 | 9,284 | |||||||||
Series KG02, Class A2, 2.41%, 8/25/29 | 9,091 | 9,256 | |||||||||
Series K100, Class A2, 2.67%, 9/25/29 | 5,455 | 5,688 | |||||||||
5.50%, 12/1/35-4/1/36 | 538 | 599 | |||||||||
3.50%, 5/1/42-5/1/47 | 9,715 | 10,254 | |||||||||
138,212 | |||||||||||
| Federal National Mortgage Association 7.00%, 10/1/22-3/1/23 | 1 | 1 | |||||||||
Series 2016-M2, Class AV2, 2.15%, 1/25/23 | 3,201 | 3,212 | |||||||||
Series 2017-M15, Class AV2, 2.62%, 11/25/24 (c) | 3,518 | 3,591 | |||||||||
Series 2017-M2, Class A2, 2.78%, 2/25/27 (c) | 3,158 | 3,296 | |||||||||
Series M7, Class A2, 2.96%, 2/25/27 (c) | 2,475 | 2,582 | |||||||||
2.50%, 2/1/28 | 3,033 | 3,106 | |||||||||
Series M4, Class A2, 3.06%, 3/25/28 (c) | 6,586 | 7,009 | |||||||||
6.50%, 4/1/31-3/1/32 | 289 | 330 | |||||||||
5.00%, 6/1/33 | 667 | 737 | |||||||||
2.50%, 11/1/34 (f) | 3,300 | 3,376 | |||||||||
5.50%, 9/1/35-5/1/38 | 3,642 | 4,089 | |||||||||
6.00%, 5/1/36-8/1/37 | 1,252 | 1,418 | |||||||||
3.50%, 4/1/48-2/1/50 | 11,959 | 12,485 | |||||||||
4.00%, 4/1/48-2/1/50 | 15,740 | 16,638 | |||||||||
3.50%, 9/1/49 (f) | 2,060 | 2,151 | |||||||||
3.00%, 2/1/50 | 5,909 | 6,048 | |||||||||
70,069 | |||||||||||
| Government National Mortgage Association Series 20067, 7.00%, 5/15/23-7/15/32 | 386 | 419 | |||||||||
6.50%, 6/15/23-10/15/31 | 511 | 560 | |||||||||
7.50%, 7/15/23-2/15/28 | 191 | 204 | |||||||||
6.00%, 9/15/28-1/15/33 | 1,109 | 1,210 | |||||||||
5.50%, 4/20/33 | 223 | 249 | |||||||||
5.00%, 8/15/33 | 1,426 | 1,564 | |||||||||
4,206 | |||||||||||
212,487 | |||||||||||
Total U.S. Government Agency Mortgages (Cost $208,550) | 212,487 | ||||||||||
U.S. Treasury Obligations (17.1%) | |||||||||||
| U.S. Treasury Bonds 1.13%, 5/15/40 (f) | 10,000 | 8,434 | |||||||||
3.88%, 8/15/40 | 15,000 | 19,055 | |||||||||
See notes to financial statements.
30
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
1.38%, 11/15/40 | $ | 30,000 | $ | 26,302 | |||||||
1.88%, 2/15/41 (f) | 9,000 | 8,581 | |||||||||
2.25%, 5/15/41 | 40,000 | 40,469 | |||||||||
2.75%, 8/15/42 (f) | 15,000 | 16,425 | |||||||||
2.75%, 11/15/42 | 10,000 | 10,950 | |||||||||
3.38%, 5/15/44 | 5,000 | 6,049 | |||||||||
3.00%, 11/15/44 | 25,000 | 28,605 | |||||||||
2.50%, 2/15/45 (f) | 55,000 | 57,974 | |||||||||
2.50%, 2/15/46 | 15,000 | 15,881 | |||||||||
2.25%, 8/15/46 (f) | 42,950 | 43,480 | |||||||||
2.88%, 11/15/46 (f) | 10,000 | 11,342 | |||||||||
2.75%, 11/15/47 (f) | 12,000 | 13,399 | |||||||||
3.00%, 2/15/49 | 10,000 | 11,797 | |||||||||
1.25%, 5/15/50 (f) | 30,000 | 24,389 | |||||||||
1.63%, 11/15/50 | 35,000 | 31,227 | |||||||||
1.88%, 2/15/51 | 49,000 | 46,404 | |||||||||
2.38%, 5/15/51 | 10,000 | 10,584 | |||||||||
| U.S. Treasury Inflation Indexed Bonds 2.38%, 1/15/25 | 58,973 | 66,354 | |||||||||
0.88%, 1/15/29 | 11,006 | 12,448 | |||||||||
| U.S. Treasury Notes 2.00%, 2/15/22 | 15,000 | 15,010 | |||||||||
2.00%, 7/31/22 | 10,000 | 10,075 | |||||||||
2.38%, 1/31/23 (f) | 5,000 | 5,077 | |||||||||
2.00%, 2/15/23 | 10,000 | 10,120 | |||||||||
1.50%, 2/28/23 | 20,000 | 20,139 | |||||||||
0.13%, 4/30/23 | 80,000 | 79,234 | |||||||||
0.13%, 7/15/23 | 20,000 | 19,745 | |||||||||
0.13%, 9/15/23 | 60,000 | 59,098 | |||||||||
0.25%, 9/30/23 | 100,000 | 98,656 | |||||||||
0.13%, 10/15/23 | 40,000 | 39,342 | |||||||||
0.13%, 12/15/23 | 50,000 | 49,057 | |||||||||
2.50%, 5/15/24 | 5,000 | 5,140 | |||||||||
2.50%, 1/31/25 (f) | 5,000 | 5,164 | |||||||||
2.00%, 2/15/25 | 70,000 | 71,242 | |||||||||
0.38%, 1/31/26 (f) | 30,000 | 28,643 | |||||||||
1.63%, 2/15/26 | 40,000 | 40,128 | |||||||||
2.38%, 5/15/27 (f) | 10,000 | 10,373 | |||||||||
1.00%, 7/31/28 | 20,000 | 19,092 | |||||||||
Total U.S. Treasury Obligations (Cost $1,073,649) | 1,095,484 | ||||||||||
Commercial Paper (0.7%) (m) | |||||||||||
Arizona Public Service, 0.13%, 2/1/22 | 25,000 | 25,000 | |||||||||
Cabot Corp., 0.15%, 2/1/22 (a) | 18,500 | 18,500 | |||||||||
Total Commercial Paper (Cost $43,500) | 43,500 | ||||||||||
See notes to financial statements.
31
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Collateral for Securities Loaned (0.6%)^ | |||||||||||
| Fidelity Investments Money Market Government Portfolio, Institutional Shares, 0.01% (n) | 18,502,042 | $ | 18,502 | ||||||||
HSBC U.S. Government Money Market Fund, I Shares, 0.03% (n) | 17,988,628 | 17,989 | |||||||||
Total Collateral for Securities Loaned (Cost $36,491) | 36,491 | ||||||||||
Total Investments (Cost $6,271,114) — 100.1% | 6,400,608 | ||||||||||
Liabilities in excess of other assets — (0.1)% | (6,886 | ) | |||||||||
NET ASSETS — 100.00% | $ | 6,393,722 | |||||||||
At January 31, 2022, the Fund's investments in foreign securities were 11.7% of net assets.
^ 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 (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of January 31, 2022, the fair value of these securities was $1,406,994 (thousands) and amounted to 22.0% of net assets.
(b) Variable or Floating-Rate Security. Rate disclosed is as of January 31, 2022.
(c) 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, 2022.
(d) Security is interest only.
(e) Rounds to less than $1 thousand.
(f) All or a portion of this security has been segregated as collateral for securities purchased on a delayed-delivery and/or when-issued basis.
(g) Security or portion of security purchased on a delayed-delivery and/or when-issued basis.
(h) Security is perpetual and has no final maturity date but may be subject to calls at various dates in the future.
(i) Amount represents less than 0.05% of net assets.
(j) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. At January 31, 2022, illiquid securities were 0.3% of the Fund's net assets.
(k) All or a portion of this security is on loan.
(l) Put Bond.
(m) Rate represents the effective yield at January 31, 2022.
(n) Rate disclosed is the daily yield on January 31, 2022.
bps — Basis points
Continuously callable — Investment is continuously callable or will be continuously callable on any date after the first call date until its maturity.
See notes to financial statements.
32
| USAA Mutual Funds Trust USAA Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Unaudited)
GO — General Obligation
H15T1Y — 1 Year Treasury Constant Maturity Rate
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, 2022, based on the last reset date of the security
LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of January 31, 2022, 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
Title XI — The Title XI Guarantee Program provides a guarantee of payment of principal and interest of debt obligations issued by U.S. merchant marine and U.S. shipyards by enabling owners of eligible vessels and shipyards to obtain financing at attractive terms. The guarantee carries the full faith and credit of the U.S. government.
US0003M — 3 Month US Dollar LIBOR, rate disclosed as of January 31, 2022, based on the last reset date of the security
USISDA05 — 5 Year ICE Swap Rate, rate disclosed as of January 31, 2022.
USSW5 — USD 5 Year Swap Rate, rate disclosed as of January 31, 2022.
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.
33
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA Income Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $6,271,114) | $ | 6,400,608 | (a) | ||||
Cash | 8,371 | ||||||
Deposit with broker for futures contracts | 2,085 | ||||||
Receivables: | |||||||
Interest and dividends | 46,667 | ||||||
Capital shares issued | 1,171 | ||||||
Investments sold | 4,883 | ||||||
From Adviser | 4 | ||||||
Prepaid expenses | 44 | ||||||
Total Assets | 6,463,833 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 36,491 | ||||||
Investments purchased | 17,254 | ||||||
Capital shares redeemed | 13,685 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 980 | ||||||
Administration fees | 677 | ||||||
Custodian fees | 64 | ||||||
Transfer agent fees | 771 | ||||||
Compliance fees | 4 | ||||||
| 12b-1 fees | 8 | ||||||
Other accrued expenses | 177 | ||||||
Total Liabilities | 70,111 | ||||||
Net Assets: | |||||||
Capital | 6,199,893 | ||||||
Total accumulated earnings/(loss) | 193,829 | ||||||
Net Assets | $ | 6,393,722 | |||||
Net Assets | |||||||
Fund Shares | $ | 2,848,945 | |||||
Institutional Shares | 3,467,389 | ||||||
Class A | 69,426 | ||||||
Class C | 19 | ||||||
R6 Shares | 7,943 | ||||||
Total | $ | 6,393,722 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 219,790 | ||||||
Institutional Shares | 267,681 | ||||||
Class A | 5,374 | ||||||
Class C | 1 | ||||||
R6 Shares | 613 | ||||||
Total | 493,459 | ||||||
Net asset value, offering and redemption price per share: (b) | |||||||
Fund Shares | $ | 12.96 | |||||
Institutional Shares | 12.95 | ||||||
Class A | 12.92 | ||||||
Class C (c) | 12.92 | ||||||
R6 Shares | 12.96 | ||||||
Maximum Sales Charge — Class A | 2.25 | % | |||||
| Maximum offering price (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 13.22 | |||||
(a) Includes $35,371 of securities on loan.
(b) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
(c) Redemption price per share varies by the length of time shares are held.
See notes to financial statements.
34
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended January 31, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA Income Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 2,691 | |||||
Interest | 110,096 | ||||||
Interfund lending | — | (a) | |||||
Securities lending (net of fees) | 125 | ||||||
Total Income | 112,912 | ||||||
Expenses: | |||||||
Investment advisory fees | 6,551 | ||||||
Administration fees — Fund Shares | 2,270 | ||||||
Administration fees — Institutional Shares | 2,166 | ||||||
Administration fees — Class A | 56 | ||||||
Administration fees — Class C | — | (a) | |||||
Administration fees — R6 Shares | 2 | ||||||
Sub-Administration fees | 14 | ||||||
| 12b-1 fees — Class A | 93 | ||||||
| 12b-1 fees — Class C | — | (a) | |||||
Custodian fees | 172 | ||||||
Transfer agent fees — Fund Shares | 1,456 | ||||||
Transfer agent fees — Institutional Shares | 2,166 | ||||||
Transfer agent fees — Class A | 37 | ||||||
Transfer agent fees — Class C | — | (a) | |||||
Transfer agent fees — R6 Shares | — | (a) | |||||
Trustees' fees | 25 | ||||||
Compliance fees | 26 | ||||||
Legal and audit fees | 37 | ||||||
State registration and filing fees | 63 | ||||||
Other expenses | 355 | ||||||
Total Expenses | 15,489 | ||||||
Expenses waived/reimbursed by Adviser | (14 | ) | |||||
Net Expenses | 15,475 | ||||||
Net Investment Income (Loss) | 97,437 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 118,517 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | (436,760 | ) | |||||
Net realized/unrealized gains (losses) on investments | (318,243 | ) | |||||
Change in net assets resulting from operations | $ | (220,806 | ) | ||||
(a) Rounds to less than $1 thousand.
See notes to financial statements.
35
USAA Mutual Funds Trust | �� | Statements of Changes in Net Assets | |||||
(Amounts in Thousands)
USAA Income Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 97,437 | $ | 236,914 | |||||||
Net realized gains (losses) from investments | 118,517 | 115,776 | |||||||||
| Net change in unrealized appreciation/depreciation on investments | (436,760 | ) | (54,721 | ) | |||||||
Change in net assets resulting from operations | (220,806 | ) | 297,969 | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (100,305 | ) | (144,726 | ) | |||||||
Institutional Shares | (130,587 | ) | (221,182 | ) | |||||||
Class A | (2,373 | ) | (3,502 | ) | |||||||
Class C | (1 | ) | (1 | ) | |||||||
R6 Shares | (277 | ) | (566 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (233,543 | ) | (369,977 | ) | |||||||
Change in net assets resulting from capital transactions | (1,225,734 | ) | (234,278 | ) | |||||||
Change in net assets | (1,680,083 | ) | (306,286 | ) | |||||||
Net Assets: | |||||||||||
Beginning of period | 8,073,805 | 8,380,091 | |||||||||
End of period | $ | 6,393,722 | $ | 8,073,805 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 113,206 | $ | 288,952 | |||||||
Distributions reinvested | 97,001 | 139,349 | |||||||||
Cost of shares redeemed | (258,621 | ) | (601,218 | ) | |||||||
Total Fund Shares | $ | (48,414 | ) | $ | (172,917 | ) | |||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 632,283 | $ | 658,696 | |||||||
Distributions reinvested | 130,417 | 220,877 | |||||||||
Cost of shares redeemed | (1,937,329 | ) | (918,266 | ) | |||||||
Total Institutional Shares | $ | (1,174,629 | ) | $ | (38,693 | ) | |||||
Class A | |||||||||||
Proceeds from shares issued | $ | 864 | $ | 2,020 | |||||||
Distributions reinvested | 2,323 | 3,419 | |||||||||
Cost of shares redeemed | (6,244 | ) | (14,648 | ) | |||||||
Total Class A | $ | (3,057 | ) | $ | (9,209 | ) | |||||
Class C | |||||||||||
Distributions reinvested | 1 | 1 | |||||||||
Total Class C | $ | 1 | $ | 1 | |||||||
R6 Shares | |||||||||||
Proceeds from shares issued | $ | 1,227 | $ | 6,544 | |||||||
Distributions reinvested | 274 | 350 | |||||||||
Cost of shares redeemed | (1,136 | ) | (20,354 | ) | |||||||
Total R6 Shares | $ | 365 | $ | (13,460 | ) | ||||||
Change in net assets resulting from capital transactions | $ | (1,225,734 | ) | $ | (234,278 | ) | |||||
(continues on next page)
See notes to financial statements.
36
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands) (continued)
USAA Income Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 8,358 | 20,967 | |||||||||
Reinvested | 7,252 | 10,105 | |||||||||
Redeemed | (19,181 | ) | (43,669 | ) | |||||||
Total Fund Shares | (3,571 | ) | (12,597 | ) | |||||||
Institutional Shares | |||||||||||
Issued | 46,196 | 47,903 | |||||||||
Reinvested | 9,743 | 16,032 | |||||||||
Redeemed | (142,651 | ) | (66,600 | ) | |||||||
Total Institutional Shares | (86,712 | ) | (2,665 | ) | |||||||
Class A | |||||||||||
Issued | 65 | 147 | |||||||||
Reinvested | 174 | 249 | |||||||||
Redeemed | (464 | ) | (1,066 | ) | |||||||
Total Class A | (225 | ) | (670 | ) | |||||||
Class C | |||||||||||
Reinvested | — | (a) | — | (a) | |||||||
Total Class C | — | (a) | — | (a) | |||||||
R6 Shares | |||||||||||
Issued | 92 | 474 | |||||||||
Reinvested | 20 | 25 | |||||||||
Redeemed | (84 | ) | (1,477 | ) | |||||||
Total R6 Shares | 28 | (978 | ) | ||||||||
Change in Shares | (90,480 | ) | (16,910 | ) | |||||||
(a) Rounds to less than 1 thousand shares.
See notes to financial statements.
37
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, 2022 (Unaudited): | $ | 13.83 | 0.18 | (d) | (0.59 | ) | (0.41 | ) | (0.19 | ) | (0.27 | ) | |||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 13.95 | 0.40 | (d) | 0.11 | 0.51 | (0.40 | ) | (0.23 | ) | |||||||||||||||||
2020 | $ | 13.28 | 0.43 | (d) | 0.69 | 1.12 | (0.41 | ) | (0.04 | ) | |||||||||||||||||
2019 | $ | 12.68 | 0.45 | 0.60 | 1.05 | (0.45 | ) | — | (e) | ||||||||||||||||||
2018 | $ | 13.20 | 0.45 | (0.51 | ) | (0.06 | ) | (0.44 | ) | (0.02 | ) | ||||||||||||||||
2017 | $ | 13.40 | 0.44 | (0.20 | ) | 0.24 | (0.44 | ) | — | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 13.82 | 0.18 | (d) | (0.59 | ) | (0.41 | ) | (0.19 | ) | (0.27 | ) | |||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 13.94 | 0.41 | (d) | 0.11 | 0.52 | (0.41 | ) | (0.23 | ) | |||||||||||||||||
2020 | $ | 13.27 | 0.44 | (d) | 0.69 | 1.13 | (0.42 | ) | (0.04 | ) | |||||||||||||||||
2019 | $ | 12.67 | 0.45 | 0.61 | 1.06 | (0.46 | ) | — | (e) | ||||||||||||||||||
2018 | $ | 13.19 | 0.44 | (0.50 | ) | (0.06 | ) | (0.44 | ) | (0.02 | ) | ||||||||||||||||
2017 | $ | 13.39 | 0.45 | (0.20 | ) | 0.25 | (0.45 | ) | — | ||||||||||||||||||
Class A | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 13.79 | 0.16 | (d) | (0.59 | ) | (0.43 | ) | (0.17 | ) | (0.27 | ) | |||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 13.91 | 0.36 | (d) | 0.11 | 0.47 | (0.36 | ) | (0.23 | ) | |||||||||||||||||
2020 | $ | 13.24 | 0.40 | (d) | 0.69 | 1.09 | (0.38 | ) | (0.04 | ) | |||||||||||||||||
2019 | $ | 12.65 | 0.42 | 0.59 | 1.01 | (0.42 | ) | — | (e) | ||||||||||||||||||
2018 | $ | 13.16 | 0.41 | (0.49 | ) | (0.08 | ) | (0.41 | ) | (0.02 | ) | ||||||||||||||||
2017 | $ | 13.36 | 0.42 | (0.21 | ) | 0.21 | (0.41 | ) | — | ||||||||||||||||||
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019 and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(a) Not annualized for periods less than one year.
See notes to financial statements.
38
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 (Excludes Sales Charge)*(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, 2022 (Unaudited): | (0.46) | $ | 12.96 | (3.06 | )% | 0.44 | % | 2.60 | % | 0.44 | % | $ | 2,848,945 | 17 | % | ||||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.63) | $ | 13.83 | 3.75 | % | 0.44 | % | 2.90 | % | 0.44 | % | $ | 3,089,682 | 20 | % | ||||||||||||||||||||
2020 | (0.45) | $ | 13.95 | 8.64 | % | 0.50 | % | 3.22 | % | 0.50 | % | $ | 3,292,322 | 25 | % | ||||||||||||||||||||
2019 | (0.45) | $ | 13.28 | 8.50 | % | 0.55 | % | 3.49 | % | 0.55 | % | $ | 3,214,507 | 13 | % | ||||||||||||||||||||
2018 | (0.46) | $ | 12.68 | (0.47 | )% | 0.52 | % | 3.40 | % | 0.52 | % | $ | 3,055,739 | 8 | % | ||||||||||||||||||||
2017 | (0.44) | $ | 13.20 | 1.91 | % | 0.49 | % | 3.40 | % | 0.49 | % | $ | 3,617,550 | 9 | % | ||||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (0.46) | $ | 12.95 | (3.05 | )% | 0.39 | % | 2.65 | % | 0.39 | % | $ | 3,467,389 | 17 | % | ||||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.64) | $ | 13.82 | 3.80 | % | 0.40 | % | 2.95 | % | 0.40 | % | $ | 4,898,801 | 20 | % | ||||||||||||||||||||
2020 | (0.46) | $ | 13.94 | 8.78 | % | 0.45 | % | 3.28 | % | 0.45 | % | $ | 4,978,740 | 25 | % | ||||||||||||||||||||
2019 | (0.46) | $ | 13.27 | 8.58 | % | 0.48 | % | 3.56 | % | 0.48 | % | $ | 5,048,203 | 13 | % | ||||||||||||||||||||
2018 | (0.46) | $ | 12.67 | (0.41 | )% | 0.47 | % | 3.46 | % | 0.47 | % | $ | 4,629,713 | 8 | % | ||||||||||||||||||||
2017 | (0.45) | $ | 13.19 | 1.97 | % | 0.43 | % | 3.45 | % | 0.43 | % | $ | 3,644,795 | 9 | % | ||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (0.44) | $ | 12.92 | (3.19 | )% | 0.70 | % | 2.34 | % | 0.71 | % | $ | 69,426 | 17 | % | ||||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.59) | $ | 13.79 | 3.50 | % | 0.70 | % | 2.64 | % | 0.71 | % | $ | 77,209 | 20 | % | ||||||||||||||||||||
2020 | (0.42) | $ | 13.91 | 8.40 | % | 0.77 | % | 2.96 | % | 0.77 | % | $ | 87,216 | 25 | % | ||||||||||||||||||||
2019 | (0.42) | $ | 13.24 | 8.20 | % | 0.77 | % | 3.28 | % | 0.77 | % | $ | 95,026 | 13 | % | ||||||||||||||||||||
2018 | (0.43) | $ | 12.65 | (0.61 | )% | 0.74 | % | 3.18 | % | 0.74 | % | $ | 105,072 | 8 | % | ||||||||||||||||||||
2017 | (0.41) | $ | 13.16 | 1.67 | % | 0.72 | % | 3.17 | % | 0.72 | % | $ | 130,912 | 9 | % | ||||||||||||||||||||
(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.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Amount is less than $0.005 per share.
(continues on next page)
See notes to financial statements.
39
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 | |||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 13.79 | 0.11 | (d) | (0.58 | ) | (0.47 | ) | (0.13 | ) | (0.27 | ) | |||||||||||||||
Year Ended: | |||||||||||||||||||||||||||
2021 | $ | 13.92 | 0.26 | (d) | 0.11 | 0.37 | (0.27 | ) | (0.23 | ) | |||||||||||||||||
| June 29, 2020 (f) through July 31, 2020 | $ | 13.64 | 0.02 | (d) | 0.27 | 0.29 | (0.01 | ) | — | ||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 13.83 | 0.19 | (d) | (0.59 | ) | (0.40 | ) | (0.20 | ) | (0.27 | ) | |||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 13.95 | 0.42 | (d) | 0.11 | 0.53 | (0.42 | ) | (0.23 | ) | |||||||||||||||||
2020 | $ | 13.27 | 0.45 | (d) | 0.70 | 1.15 | (0.43 | ) | (0.04 | ) | |||||||||||||||||
2019 | $ | 12.67 | 0.47 | 0.60 | 1.07 | (0.47 | ) | — | (e) | ||||||||||||||||||
2018 | $ | 13.19 | 0.45 | (0.49 | ) | (0.04 | ) | (0.46 | ) | (0.02 | ) | ||||||||||||||||
| December 1, 2016 (f) 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.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning June 29, 2020, and July 1, 2019, for Class C and R6 Shares, respectively, and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(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.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Amount is less than $0.005 per share.
(f) Commencement of operations.
See notes to financial statements.
40
USAA Mutual Funds Trust | Financial Highlights — continued | ||||||
For a Share Outstanding Throughout Each Period (continued)
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total | Net |
| Net | Net | Gross | Net | Portfolio | ||||||||||||||||||||||||||||
USAA Income Fund | |||||||||||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||
Six Months Ended | (0.40) | $ | 12.92 | (3.49 | )% | 1.40 | % | 1.63 | % | 44.79 | % | $ | 19 | 17 | % | ||||||||||||||||||||
Year Ended: | |||||||||||||||||||||||||||||||||||
2021 | (0.50) | $ | 13.79 | 2.73 | % | 1.42 | % | 1.92 | % | 68.87 | % | $ | 19 | 20 | % | ||||||||||||||||||||
June 29, 2020 (f) | (0.01) | $ | 13.92 | 2.15 | % | 1.43 | % | 1.93 | % | 175.42 | % | $ | 19 | 25 | % | ||||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||||||||||
Six Months Ended | (0.47) | $ | 12.96 | (2.99 | )% | 0.28 | % | 2.76 | % | 0.41 | % | $ | 7,943 | 17 | % | ||||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.65) | $ | 13.83 | 3.90 | % | 0.30 | % | 3.07 | % | 0.35 | % | $ | 8,094 | 20 | % | ||||||||||||||||||||
2020 | (0.47) | $ | 13.95 | 8.86 | % | 0.37 | % | 3.35 | % | 0.37 | % | $ | 21,794 | 25 | % | ||||||||||||||||||||
2019 | (0.47) | $ | 13.27 | 8.68 | % | 0.39 | % | 3.65 | % | 0.43 | % | $ | 20,840 | 13 | % | ||||||||||||||||||||
2018 | (0.48) | $ | 12.67 | (0.32 | )% | 0.39 | % | 3.56 | % | 0.58 | % | $ | 18,874 | 8 | % | ||||||||||||||||||||
December 1, 2016 (f) | (0.30) | $ | 13.19 | 5.22 | % | 0.39 | % | 3.50 | % | 0.99 | % | $ | 5,142 | 9 | % | ||||||||||||||||||||
See notes to financial statements.
41
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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 five classes of shares: Fund Shares, Institutional Shares, Class A, Class C, and R6 Shares. The Fund is classified as diversified under the 1940 Act.
The Board of Trustees (the "Board") of USAA Mutual Funds Trust approved the addition of Class Z for the Fund. This new share class became effective February 5, 2021, but has not yet been funded. Class Z is only available to participants in certain eligible separately managed accounts (also referred to as wrap fee programs) and other advisory clients of Victory Capital Management Inc. ("VCM" or the "Adviser") or its affiliates that are subject to a separate contractual fee for investment management services. The Adviser has contractually agreed to waive its management fee and/or reimburse expenses so that the total annual operating expenses (excluding acquired fund fees and expenses, interest, taxes, brokerage commissions, capitalized expenses, and other extraordinary expenses) do not exceed 0.00% of the Fund's Class Z for an indefinite term.
Each class of shares of the Fund has substantially identical rights and privileges, except with respect to sales charges, 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 U.S. Generally Accepted Accounting Principles ("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.)
42
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
• 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 risks associated with entering into those investments.
The Adviser has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Board's 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 are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq 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 are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
Debt securities are valued each business day by a pricing service approved by the Board. The approved pricing service uses the evaluated bid or the last sale price to value securities. Debt obligations maturing within 60 days may be valued at amortized cost, provided that the amortized cost represents the fair value of such securities. 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, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically 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 NAV to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Asset-Backed Securities | $ | — | $ | 396,140 | $ | — | $ | 396,140 | |||||||||||
Collateralized Mortgage Obligations | — | 302,978 | — | 302,978 | |||||||||||||||
Preferred Stocks | 45,021 | — | — | 45,021 | |||||||||||||||
Senior Secured Loans | — | 3,262 | — | 3,262 | |||||||||||||||
Corporate Bonds | — | 2,899,157 | — | 2,899,157 | |||||||||||||||
Yankee Dollars | — | 733,965 | — | 733,965 | |||||||||||||||
Government National Mortgage Association | — | 263 | — | 263 | |||||||||||||||
Municipal Bonds | — | 631,860 | — | 631,860 | |||||||||||||||
U.S. Government Agency Mortgages | — | 212,487 | — | 212,487 | |||||||||||||||
U.S. Treasury Obligations | — | 1,095,484 | — | 1,095,484 | |||||||||||||||
Commercial Paper | — | 43,500 | — | 43,500 | |||||||||||||||
Collateral for Securities Loaned | 36,491 | — | — | 36,491 | |||||||||||||||
Total | $ | 81,512 | $ | 6,319,096 | $ | — | $ | 6,400,608 | |||||||||||
For the six months ended January 31, 2022, there were no transfers in or out of Level 3 in the fair value hierarchy.
43
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(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:
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 or 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 NAV. 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 Payables for Investments purchased on the accompanying Statement of Assets and Liabilities and the segregated assets are identified on 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. Payments 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 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," respectively), 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.
44
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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 the London InterBank Offered Rate ("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.
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 enter into futures contracts in an effort to hedge against market risks. 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. The collateral held by the Fund is reflected on the Statement of Assets and Liabilities under Deposit with broker for futures contracts.
Management has determined that no offsetting requirements exist as a result of their conclusion that the Fund is not subject to master netting agreements for futures contracts. The Fund did not hold futures contracts as of January 31, 2022.
45
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(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 or 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 discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis. Paydown gains or losses on applicable securities, if any, are recorded as components of Interest income on the Statement of Operations.
The Fund may receive other income from investments in loan assignments and/or unfunded commitments, including amendment fees, consent fees, and commitment fees. These fees are recorded as income when received. These amounts, if received, are included in Interest income on the Statement of Operations.
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 and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially 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 generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund effectively does not have control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. 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. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk 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 repledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2022.
| Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
| $ | 35,371 | $ | — | $ | 36,491 | ||||||
46
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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.
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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 years, which includes the current fiscal tax year end). 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 an 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, printing fees, and 12b-1 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, 2022, 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) | |||||||||
| $ | 22,727 | $ | — | $ | — | ||||||
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended January 31, 2022, were as follows for the Fund (amounts in thousands):
| Excluding U.S. Government Securities | U.S. Government Securities | ||||||||||||||
Purchases | Sales | Purchases | Sales | ||||||||||||
$ | 721,107 | $ | 1,924,507 | $ | 515,929 | $ | 339,128 | ||||||||
47
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The 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 www.vcm.com. As of January 31, 2022, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 0.5 | ||||||
USAA Target Retirement Income Fund | 0.3 | ||||||
USAA Target Retirement 2030 Fund | 0.3 | ||||||
USAA Target Retirement 2040 Fund | 0.1 | ||||||
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 Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund, announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and 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 the largest funds within the Lipper A Rated Bond Funds category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
| Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
| +/- 20 to 50 | +/- 4 | ||||||
| +/- 51 to 100 | +/- 5 | ||||||
| +/- 101 and greater | +/- 6 | ||||||
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
48
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective 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 A Rated Bond Funds Index over that period, even if the class has overall negative returns during the performance period.
For the period August 1, 2021, to January 31, 2022, performance adjustments were $(942), $(1,406), $(26), less than $(1), and $(5) for Fund Shares, Institutional Shares, Class A, Class C, and R6 Shares, in thousands, respectively. Performance adjustments were (0.06)%, (0.07)%, (0.07)%, (0.03)%, and (0.11)% for Fund Shares, Institutional Shares, Class A, Class C, and R6 Shares, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
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, 2022, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, 0.10%, 0.15%, 0.15% and 0.05%, which is based on the Fund's average daily net assets of the Fund Shares, Institutional Shares, Class A, Class C, and R6 Shares, respectively. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund 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 fees for Institutional Shares, Class A, Class C, and R6 Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10%, 0.10%, 0.10%, and 0.01%,
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred and paid to VCTA for the six months ended January 31, 2022, 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 Services, 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.
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 Class A and 1.00% of the average daily net assets of Class C. The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A and Class C. Amounts incurred and paid to the Distributor for the six months ended January 31, 2022, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions in connection with sales of Class A and Class C. For the six months ended January 31, 2022, the Distributor received less than $1 thousand from commissions earned in connection with sales of Class A and did not receive any commissions in connection with sales of Class C.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 limits for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, 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. As of January 31, 2022, the expense limits (excluding voluntary waivers) were 0.52%, 0.46%, 0.77%, 1.43%, and 0.39% for Fund Shares, Institutional Shares, Class A, Class C, and R6 Shares, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of January 31, 2022, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at January 31, 2022.
| Expires 2022 | Expires 2023 | Expires 2024 | Expires 2025 | Total | |||||||||||||||
| $ | 2 | $ | 3 | $ | 28 | $ | 14 | $ | 47 | ||||||||||
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(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, 2022.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
Debt Securities Risk — 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.
Other factors that may affect the value of debt securities include, among others, public health crises and responses by governments and companies to such crises. These and other events may affect the creditworthiness of the issuer of a debt security and may impair an issuer's ability to timely meet its debt obligations as they come due.
Interest Rate Risk — The Fund is subject to the risk that the market value of the bonds in its portfolio will fluctuate because of changes in interest rates, changes in the supply of and demand for tax-exempt securities, and other market factors. 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 ability of an issuer of a debt security to repay principal prior to a security's maturity can increase the security's sensitivity to interest rate changes.
Decisions by the U.S. Federal Reserve (also known as the "Fed") regarding interest rate and monetary policy, which can be difficult to predict and sometimes change direction suddenly in response to economic and market events, can have a significant effect on the value of fixed-income securities as well as the overall strength of the U.S. economy. Precise interest rate predictions are difficult to make, and interest rates may change unexpectedly and dramatically in response to extreme changes in market or economic conditions. As a result, the value of fixed-income securities may vary widely under certain market conditions.
LIBOR Discontinuation Risk — The LIBOR discontinuation may adversely affect the financial markets generally and the Fund's operations, finances and investments specifically. LIBOR has been the principal floating-rate benchmark in the financial markets, and a large portion of the Fund's assets are tied to LIBOR. However, LIBOR has been or will be discontinued as a floating rate benchmark. The date of discontinuation depends on the LIBOR currency and tenor. With limited exceptions, no new LIBOR obligations will be entered into after December 31, 2021. Existing LIBOR obligations have transitioned or will transition to another benchmark, depending on the LIBOR currency and tenor. For some existing LIBOR-based obligations, the contractual consequences of the discontinuation of LIBOR may not be clear.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Non-LIBOR floating-rate obligations, including Secured Overnight Financing Rate ("SOFR")-based obligations, may have returns and values that fluctuate more than those of floating-rate debt obligations that are based on LIBOR or other rates. Also, because SOFR and some alternative floating rates are relatively new market indexes, markets for certain non-LIBOR obligations may never develop or may not be liquid. Market terms for non-LIBOR floating rate obligations, such as the spread over the index reflected in interest-rate provisions, may evolve over time, and prices of non-LIBOR floating rate obligations may be different depending on when they are issued and changing views about correct spread levels.
Various SOFR-based rates, including SOFR-based term rates, and various non-SOFR-based rates are expected to develop in response to the discontinuation of U.S. dollar LIBOR, which may create various risks for the Fund and the financial markets more generally. There are non-LIBOR forward-looking floating rates that are not based on SOFR and that may be considered by participants in the financial markets as LIBOR alternatives. Such rates include Ameribor (American Interbank Offered Rate), BSBY (Bloomberg Short-Term Bank Yield Index) and BYI (Bank Yield Index). Unlike forward-looking SOFR-based term rates, such rates are intended to reflect a bank credit spread component.
It is not clear how replacement rates for LIBOR — including SOFR-based rates and non-SOFR-based rates — will develop and to what extent they will be used. There is no assurance that these replacement rates will be suitable substitutes for LIBOR, and thus the substitution of such rates for LIBOR could have an adverse effect on the Fund and the financial markets more generally. Concerns about market depth and stability could affect the development of non-SOFR-based term rates, and such rates may create various risks, which may or may not be similar to the risks relating to SOFR.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended January 31, 2022, Citibank received 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, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected 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, 2022.
Interfund Lending:
The Trust and the 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 Funds Complex that is permitted to participate in the Facility, 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, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending.
The average borrowing or lending for the days outstanding and average interest rate for the Fund during the six months ended January 31, 2022, were as follows (amounts in thousands):
| Borrower or Lender | Amount Outstanding at January 31, 2022 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
| Borrower | $ | — | $ | 15,106 | 5 | 0.58 | % | $ | 25,531 | ||||||||||||||
* For the six months ended January 31, 2022, 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, 2022.
As of July 31, 2021, the Fund had no capital loss carryforwards for federal income tax purposes.
9. Subsequent Events:
On December 10, 2021, the Board approved a Plan of Liquidation for the USAA Income Fund Class C, which will be liquidated on or about February 28, 2022. Effective January 3, 2022, the USAA Income Fund Class C were closed to new investors.
On March 11, 2022, the Board approved a Plan of Liquidation for the USAA Income Fund Class Z shares which will be liquidated on or about March 30, 2022.
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USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
(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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
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. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; 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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21- 1/31/22* | Hypothetical Expenses Paid During Period 8/1/21- 1/31/22* | Annualized Expense Ratio During Period 8/1/21- 1/31/22 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 969.40 | $ | 1,022.99 | $ | 2.18 | $ | 2.24 | 0.44 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 969.50 | 1,023.24 | 1.94 | 1.99 | 0.39 | % | ||||||||||||||||||||
Class A | 1,000.00 | 968.10 | 1,021.68 | 3.47 | 3.57 | 0.70 | % | ||||||||||||||||||||
Class C | 1,000.00 | 965.10 | 1,018.15 | 6.93 | 7.12 | 1.40 | % | ||||||||||||||||||||
R6 Shares | 1,000.00 | 970.10 | 1,023.79 | 1.39 | 1.43 | 0.28 | % | ||||||||||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
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USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Considerations of the Board in Continuing the Investment Advisory Agreement
USAA Income Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement was approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and the Adviser, and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser. At the meeting at which the renewal of the Advisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder
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USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services and the effects of any performance adjustment1, as well as any fee waivers and reimbursements — was below the median of its expense group and its expense universe. The data indicated that the Fund's total expenses, including after any reimbursements, were below the median of its expense group and its expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund.
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total returns relative to its Lipper index and other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was above the average of its performance universe for the one-, three-, five- and ten-year periods ended September 30, 2021, and was above its Lipper index for the one-year period and below its Lipper index for the three-, five- and ten-year periods ended September 30, 2021.
1 The Adviser previously agreed that no performance adjustment (positive or negative) would be made to the amount payable to the Adviser from July 1, 2019, through June 30, 2020.
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USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser reimbursed or waived a portion of its management fees to the Fund. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board considered whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in any economies of scale. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board also considered the effect of the change in size, if any, of each of the Fund's classes on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
57
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800) 235-8396 | ||||||
23424-0322
January 31, 2022
Semi Annual Report
USAA Short-Term Bond Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
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USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 35 | ||||||
Statement of Operations | 36 | ||||||
Statements of Changes in Net Assets | 37 | ||||||
Financial Highlights | 40 | ||||||
Notes to Financial Statements | 44 | ||||||
Supplemental Information | 56 | ||||||
Proxy Voting and Portfolio Holdings Information | 56 | ||||||
Expense Examples | 56 | ||||||
Advisory Contract Approval | 57 | ||||||
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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks high current income consistent with preservation of principal.
Asset Allocation*:
January 31, 2022
(% of Net Assets)
* Does not include futures contracts, 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%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Asset-Backed Securities (30.0%) | |||||||||||
| Aligned Data Centers Issuer LLC, Series 2021-1A, Class A2, 1.94%, 8/15/46, Callable 8/15/24 @ 100 (a) | $ | 5,500 | $ | 5,304 | |||||||
| American Credit Acceptance Receivables Trust, Series 2019-2, Class E, 4.29%, 6/12/25, Callable 2/12/23 @ 100 (a) | 5,375 | 5,514 | |||||||||
| American Credit Acceptance Receivables Trust, Series 2019-2, Class D, 3.41%, 6/12/25, Callable 2/12/23 @ 100 (a) | 3,000 | 3,036 | |||||||||
| American Credit Acceptance Receivables Trust, Series 2019-3, Class D, 2.89%, 9/12/25, Callable 5/12/23 @ 100 (a) | 700 | 709 | |||||||||
| American Credit Acceptance Receivables Trust, Series 2018-3, Class D, 4.14%, 10/15/24, Callable 7/12/22 @ 100 (a) | 342 | 343 | |||||||||
| American Credit Acceptance Receivables Trust, Series 2020-3, Class C, 1.85%, 6/15/26, Callable 7/13/23 @ 100 (a) | 3,000 | 3,015 | |||||||||
| AmeriCredit Automobile Receivables Trust, Series 2017-4, Class C, 2.60%, 9/18/23, Callable 6/18/22 @ 100 | 966 | 967 | |||||||||
| AmeriCredit Automobile Receivables Trust, Series 2017-4, Class D, 3.08%, 12/18/23, Callable 6/18/22 @ 100 | 1,921 | 1,936 | |||||||||
AMSR Trust, Series 2021-SFR1, Class C, 2.35%, 6/17/38 (a) | 1,200 | 1,147 | |||||||||
AMSR Trust, Series 2021-SFR1, Class B, 2.15%, 6/17/38 (a) | 2,000 | 1,916 | |||||||||
AMSR Trust, Series 2021-SFR1, Class A, 1.95%, 6/17/38 (a) | 2,000 | 1,940 | |||||||||
| Amur Equipment Finance Receivables X LLC, Series 2022-1A, Class B, 2.20%, 1/20/28, Callable 10/20/25 @ 100 (a) | 2,162 | 2,159 | |||||||||
| Amur Equipment Finance Receivables X LLC, Series 2022-1A, Class A2, 1.64%, 10/20/27, Callable 10/20/25 @ 100 (a) | 2,375 | 2,371 | |||||||||
| ARI Fleet Lease Trust, Series 2020-A, Class B, 2.06%, 11/15/28, Callable 2/15/23 @ 100 (a) | 1,470 | 1,479 | |||||||||
| ARI Fleet Lease Trust, Series 2021-A, Class B, 1.13%, 3/15/30, Callable 5/15/24 @ 100 (a) | 2,650 | 2,564 | |||||||||
| ARI Fleet Lease Trust, Series 2021-A, Class A3, 0.68%, 3/15/30, Callable 5/15/24 @ 100 (a) | 2,550 | 2,492 | |||||||||
| ARI Fleet Lease Trust, Series 2020-A, Class A3, 1.80%, 8/15/28, Callable 2/15/23 @ 100 (a) | 2,250 | 2,264 | |||||||||
| ARI Fleet Lease Trust, Series 2019-A, Class A3, 2.53%, 11/15/27, Callable 12/15/22 @ 100 (a) | 5,000 | 5,058 | |||||||||
| Atalaya Equipment Leasing Trust, Series 2022-1A, Class B, 2.08%, 2/15/27, Callable 10/15/24 @ 100 (a) | 2,467 | 2,448 | |||||||||
| Avis Budget Rental Car Funding AESOP LLC, Series 2019-2A, Class A, 3.35%, 9/22/25, Callable 10/20/24 @ 100 (a) | 3,300 | 3,422 | |||||||||
| Avis Budget Rental Car Funding AESOP LLC, Series 2020-1A, Class B, 2.68%, 8/20/26, Callable 9/20/25 @ 100 (a) | 4,000 | 4,045 | |||||||||
| Avis Budget Rental Car Funding AESOP LLC, Series 2019-1A, Class A, 3.45%, 3/20/23, Callable 4/20/22 @ 100 (a) | 1,656 | 1,660 | |||||||||
| Avis Budget Rental Car Funding AESOP LLC, Series 2019-3A, Class A, 2.36%, 3/20/26, Callable 4/20/25 @ 100 (a) | 5,000 | 5,063 | |||||||||
| Avis Budget Rental Car Funding AESOP LLC, Series 2019-1A, Class B, 3.70%, 3/20/23, Callable 4/20/22 @ 100 (a) | 733 | 735 | |||||||||
| Avis Budget Rental Car Funding AESOP LLC, Series 2018-1A, Class C, 4.73%, 9/20/24, Callable 10/20/23 @ 100 (a) | 2,500 | 2,592 | |||||||||
| Bank of The West Auto Trust, Series 2017-1, Class A4, 2.33%, 9/15/23, Callable 2/15/22 @ 100 (a) | 2,276 | 2,278 | |||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Bank of The West Auto Trust, Series 2019-1, Class B, 2.76%, 1/15/25, Callable 5/15/23 @ 100 (a) | $ | 3,300 | $ | 3,360 | |||||||
| Bank of The West Auto Trust, Series 2018-1, Class A4, 3.59%, 12/15/23, Callable 5/15/22 @ 100 (a) | 2,424 | 2,439 | |||||||||
| Bank of The West Auto Trust, Series 2019-1, Class A4, 2.51%, 10/15/24, Callable 5/15/23 @ 100 (a) | 7,500 | 7,604 | |||||||||
| Bank of The West Auto Trust, Series 2019-1, Class C, 2.90%, 4/15/25, Callable 5/15/23 @ 100 (a) | 1,400 | 1,426 | |||||||||
| Bank of The West Auto Trust, Series 2017-1, Class C, 2.96%, 2/15/24, Callable 2/15/22 @ 100 (a) | 5,000 | 5,004 | |||||||||
| California Republic Auto Receivables Trust, Series 2018-1, Class D, 4.33%, 4/15/25, Callable 9/15/22 @ 100 | 3,531 | 3,599 | |||||||||
| Canadian Pacer Auto Receivables Trust, Series 2018-2A, Class B, 3.63%, 1/19/24, Callable 4/19/22 @ 100 (a) | 2,715 | 2,733 | |||||||||
| Canadian Pacer Auto Receivables Trust, Series 2020-1A, Class C, 2.49%, 5/19/26, Callable 7/19/23 @ 100 (a) | 2,405 | 2,433 | |||||||||
| Canadian Pacer Auto Receivables Trust, Series 2021-1A, Class C, 1.46%, 12/20/27, Callable 12/19/24 @ 100 (a) | 3,594 | 3,475 | |||||||||
| Canadian Pacer Auto Receivables Trust, Series 2018-2A, Class A4, 3.44%, 8/21/23, Callable 4/19/22 @ 100 (a) | 4,089 | 4,110 | |||||||||
| Canadian Pacer Auto Receivables Trust, Series 2018-2A, Class C, 4.07%, 3/19/25, Callable 4/19/22 @ 100 (a) | 5,375 | 5,406 | |||||||||
| Canadian Pacer Auto Receivables Trust, Series 2020-1A, Class B, 2.00%, 7/21/25, Callable 7/19/23 @ 100 (a) | 2,000 | 2,016 | |||||||||
CARDS II Trust, Series 2021-1A, Class A, 0.60%, 4/15/27 (a) | 9,200 | 9,024 | |||||||||
| CarMax Auto Owner Trust, Series 2020-1, Class B, 2.21%, 9/15/25, Callable 10/15/23 @ 100 | 3,188 | 3,223 | |||||||||
| CarMax Auto Owner Trust, Series 2020-2, Class B, 2.90%, 8/15/25, Callable 11/15/23 @ 100 | 1,806 | 1,848 | |||||||||
| CarMax Auto Owner Trust, Series 2020-1, Class C, 2.34%, 11/17/25, Callable 10/15/23 @ 100 | 3,270 | 3,313 | |||||||||
| CarMax Auto Owner Trust, Series 2018-2, Class D, 3.99%, 4/15/25, Callable 5/15/22 @ 100 | 800 | 807 | |||||||||
| CarMax Auto Owner Trust, Series 2019-4, Class C, 2.60%, 9/15/25, Callable 9/15/23 @ 100 | 5,163 | 5,244 | |||||||||
| CarMax Auto Owner Trust, Series 2019-1, Class B, 3.45%, 11/15/24, Callable 2/15/23 @ 100 | 1,923 | 1,968 | |||||||||
| CarMax Auto Owner Trust, Series 2021-4, Class D, 1.48%, 3/15/28, Callable 11/15/24 @ 100 | 4,719 | 4,564 | |||||||||
| CarMax Auto Owner Trust, Series 2020-2, Class D, 5.75%, 5/17/27, Callable 11/15/23 @ 100 | 2,348 | 2,501 | |||||||||
| CarMax Auto Owner Trust, Series 2018-1, Class D, 3.37%, 7/15/24, Callable 3/15/22 @ 100 | 500 | 502 | |||||||||
| CarNow Auto Receivables Trust, Series 2021-1A, Class B, 1.38%, 2/17/26, Callable 9/15/23 @ 100 (a) | 1,094 | 1,094 | |||||||||
| CarNow Auto Receivables Trust, Series 2021-1A, Class A, 0.97%, 10/15/24, Callable 9/15/23 @ 100 (a) | 1,001 | 1,001 | |||||||||
CARS LP, Series 2020-1A, Class A1, 2.69%, 2/15/50, Callable 2/15/23 @ 100 (a) | 3,902 | 3,915 | |||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| CARS-DB5 LP, Series 2021-1A, Class A1, 1.44%, 8/15/51, Callable 8/15/24 @ 100 (a) | $ | 1,940 | $ | 1,843 | |||||||
| Carvana Auto Receivables Trust, Series 2021-N2, Class A2, 0.97%, 3/10/28, Callable 1/10/25 @ 100 | 1,250 | 1,227 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N1, Class C, 1.30%, 1/10/28, Callable 6/10/24 @ 100 | 2,000 | 1,996 | |||||||||
| Carvana Auto Receivables Trust, Series 2020-P1, Class D, 1.82%, 9/8/27, Callable 2/8/25 @ 100 | 1,318 | 1,286 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N1, Class A, 0.70%, 1/10/28, Callable 6/10/24 @ 100 | 1,257 | 1,241 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N2, Class D, 1.27%, 3/10/28, Callable 1/10/25 @ 100 | 3,760 | 3,706 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N2, Class B, 0.75%, 3/10/28, Callable 1/10/25 @ 100 | 1,750 | 1,731 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N2, Class C, 1.07%, 3/10/28, Callable 1/10/25 @ 100 | 1,500 | 1,482 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N1, Class B, 1.09%, 1/10/28, Callable 6/10/24 @ 100 | 2,389 | 2,378 | |||||||||
| Carvana Auto Receivables Trust, Series 2019-3A, Class D, 3.04%, 4/15/25, Callable 6/15/24 @ 100 (a) | 3,000 | 3,052 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N3, Class A2, 1.11%, 6/12/28, Callable 7/10/25 @ 100 | 3,500 | 3,386 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N3, Class B, 0.66%, 6/12/28, Callable 7/10/25 @ 100 | 5,000 | 4,944 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N3, Class C, 1.02%, 6/12/28, Callable 7/10/25 @ 100 | 1,750 | 1,722 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N1, Class D, 1.50%, 1/10/28, Callable 6/10/24 @ 100 | 2,750 | 2,743 | |||||||||
| CCG Receivables Trust, Series 2019-2, Class B, 2.55%, 3/15/27, Callable 12/14/22 @ 100 (a) | 3,500 | 3,545 | |||||||||
| CCG Receivables Trust, Series 2019-1, Class B, 3.22%, 9/14/26, Callable 9/14/22 @ 100 (a) | 3,776 | 3,824 | |||||||||
| CCG Receivables Trust, Series 2019-1, Class C, 3.57%, 9/14/26, Callable 9/14/22 @ 100 (a) | 875 | 889 | |||||||||
| CF Hippolyta LLC, Series 2021-1A, Class A1, 1.53%, 3/15/61, Callable 3/15/24 @ 100 (a) | 2,894 | 2,806 | |||||||||
| Chase Auto Credit Linked Notes, Series 2020-1, Class D, 1.89%, 1/25/28, Callable 12/25/23 @ 100 (a) | 481 | 482 | |||||||||
| Chase Auto Credit Linked Notes, Series 2020-1, Class C, 1.39%, 1/25/28, Callable 12/25/23 @ 100 (a) | 1,177 | 1,177 | |||||||||
| Chase Auto Credit Linked Notes, Series 2020-1, Class B, 0.99%, 1/25/28, Callable 12/25/23 @ 100 (a) | 3,021 | 3,016 | |||||||||
| Chesapeake Funding II LLC, Series 2019-1A, Class A1, 2.94%, 4/15/31, Callable 6/15/22 @ 100 (a) | 5,211 | 5,245 | |||||||||
Chesapeake Funding II LLC, Series 1A, Class A1, 0.47%, 4/15/33 (a) | 2,305 | 2,275 | |||||||||
| Chesapeake Funding LLC, Series 2019-1A, Class B, 3.11%, 4/15/31, Callable 6/15/22 @ 100 (a) | 6,000 | 6,050 | |||||||||
| College Loan Corp. Trust, Series 2005-2, Class B, 0.61% (LIBOR03M+49bps), 1/15/37, Callable 7/15/28 @ 100 (c) | 1,065 | 1,011 | |||||||||
See notes to financial statements.
5
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Conn's Receivables Funding LLC, Series 2020-A, Class A, 1.71%, 6/16/25, Callable 7/15/22 @ 100 (a) | $ | 302 | $ | 302 | |||||||
| Conn's Receivables Funding LLC, Series 2021-A, Class B, 2.87%, 5/15/26, Callable 7/15/23 @ 100.25 (a) | 1,350 | 1,350 | |||||||||
| Conn's Receivables Funding LLC, Series 2021-A, Class A, 1.05%, 5/15/26, Callable 7/15/23 @ 100 (a) | 3,946 | 3,941 | |||||||||
| CPS Auto Receivables Trust, Series 2018-D, Class E, 5.82%, 6/16/25, Callable 3/15/23 @ 100 (a) | 5,000 | 5,197 | |||||||||
| CPS Auto Receivables Trust, Series 2020-C, Class B, 1.01%, 1/15/25, Callable 12/15/23 @ 100 (a) | 2,459 | 2,460 | |||||||||
| CPS Auto Receivables Trust, Series 2021-C, Class B, 0.84%, 7/15/25, Callable 1/15/25 @ 100 (a) | 5,000 | 4,962 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2021-4, Class A, 1.26%, 10/15/30, Callable 4/15/25 @ 100 (a) | 667 | 657 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2021-3A, Class B, 1.38%, 7/15/30, Callable 11/15/24 @ 100 (a) | 1,000 | 982 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2021-4, Class B, 1.74%, 12/16/30, Callable 4/15/25 @ 100 (a) | 640 | 630 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2021-3A, Class A, 1.00%, 5/15/30, Callable 11/15/24 @ 100 (a) | 1,455 | 1,435 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2021-4, Class C, 1.94%, 2/18/31, Callable 4/15/25 @ 100 (a) | 1,000 | 982 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2019-3A, Class C, 3.06%, 3/15/29, Callable 9/15/23 @ 100 (a) | 2,625 | 2,678 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2021-3A, Class C, 1.63%, 9/16/30, Callable 11/15/24 @ 100 (a) | 3,000 | 2,939 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2021-2A, Class A, 0.96%, 2/15/30, Callable 12/15/24 @ 100 (a) | 2,000 | 1,972 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2020-1A, Class B, 2.39%, 4/16/29, Callable 1/15/24 @ 100 (a) | 2,059 | 2,074 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2019-3A, Class A, 2.38%, 11/15/28, Callable 9/15/23 @ 100 (a) | 1,742 | 1,753 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2019-3A, Class B, 2.86%, 1/16/29, Callable 9/15/23 @ 100 (a) | 7,330 | 7,458 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2020-1A, Class C, 2.59%, 6/15/29, Callable 1/15/24 @ 100 (a) | 4,000 | 4,045 | |||||||||
| Crossroads Asset Trust, Series 2021-A, Class B, 1.12%, 6/20/25, Callable 5/20/24 @ 100 (a) | 1,350 | 1,339 | |||||||||
| Crossroads Asset Trust, Series 2021-A, Class A2, 0.82%, 3/20/24, Callable 5/20/24 @ 100 (a) | 839 | 837 | |||||||||
| Dell Equipment Finance Trust, Series 2020-1, Class B, 2.98%, 4/24/23, Callable 10/22/22 @ 100 (a) | 775 | 785 | |||||||||
| Dell Equipment Finance Trust, Series 2020-1, Class A3, 2.24%, 2/22/23, Callable 10/22/22 @ 100 (a) | 2,813 | 2,829 | |||||||||
| Dell Equipment Finance Trust, Series 2020-2, Class D, 1.92%, 3/23/26, Callable 6/22/23 @ 100 (a) | 2,125 | 2,130 | |||||||||
| Dell Equipment Finance Trust, Series 2020-2, Class C, 1.37%, 1/22/24, Callable 6/22/23 @ 100 (a) | 4,000 | 3,994 | |||||||||
| Dell Equipment Finance Trust, Series 2020-2, Class B, 0.92%, 11/22/23, Callable 6/22/23 @ 100 (a) | 3,000 | 2,982 | |||||||||
See notes to financial statements.
6
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Dell Equipment Finance Trust, Series 2020-2, Class A3, 0.57%, 10/23/23, Callable 6/22/23 @ 100 (a) | $ | 1,000 | $ | 996 | |||||||
| Dell Equipment Finance Trust, Series 2019-2, Class C, 2.18%, 10/22/24, Callable 5/22/22 @ 100 (a) | 2,700 | 2,715 | |||||||||
| Dell Equipment Finance Trust, Series 2019-1, Class D, 3.45%, 3/24/25, Callable 2/22/22 @ 100 (a) | 3,000 | 3,005 | |||||||||
| Dell Equipment Finance Trust, Series 2021-2, Class D, 1.21%, 6/22/27, Callable 4/22/24 @ 100 (a) | 2,188 | 2,125 | |||||||||
| Dell Equipment Finance Trust, Series 2020-1, Class A2, 2.26%, 6/22/22, Callable 10/22/22 @ 100 (a) | 177 | 177 | |||||||||
| Diamond Infrastructure Funding LLC, Series 2021-1A, Class A, 1.76%, 4/15/49, Callable 9/20/25 @ 100 (a) | 3,333 | 3,158 | |||||||||
| Diamond Infrastructure Funding LLC, Series 2021-1A, Class B, 2.35%, 4/15/49, Callable 9/20/25 @ 100 (a) | 3,000 | 2,894 | |||||||||
| Diamond Issuer, Series 2021-1A, Class B, 2.70%, 11/20/51, Callable 11/20/25 @ 100 (a) | 3,273 | 3,215 | |||||||||
| Diamond Resorts Owner Trust, Series 2021-1A, Class B, 2.05%, 11/21/33, Callable 1/20/25 @ 100 (a) | 1,256 | 1,247 | |||||||||
| Diamond Resorts Owner Trust, Series 2021-1A, Class A, 1.51%, 11/21/33, Callable 1/20/25 @ 100 (a) | 2,177 | 2,137 | |||||||||
Donlen Fleet Lease Funding 2 LLC, Series 2021-2, Class B, 0.98%, 12/11/34 (a) | 4,423 | 4,346 | |||||||||
Donlen Fleet Lease Funding LLC, Series 2, Class C, 1.20%, 12/11/34 (a) | 5,000 | 4,896 | |||||||||
| Drive Auto Receivables Trust, Series 2021-1, Class C, 1.02%, 6/15/27, Callable 9/15/23 @ 100 | 3,542 | 3,527 | |||||||||
| Drive Auto Receivables Trust, Series 2018-4, Class D, 4.09%, 1/15/26, Callable 10/15/22 @ 100 | 1,262 | 1,278 | |||||||||
| Drive Auto Receivables Trust, Series 2021-1, Class B, 0.65%, 7/15/25, Callable 9/15/23 @ 100 | 3,750 | 3,743 | |||||||||
| Drive Auto Receivables Trust, Series 2018-1, Class D, 3.81%, 5/15/24, Callable 5/15/22 @ 100 | 562 | 564 | |||||||||
| Drive Auto Receivables Trust, Series 2018-3, Class D, 4.30%, 9/16/24, Callable 9/15/22 @ 100 | 1,142 | 1,153 | |||||||||
| Drive Auto Receivables Trust, Series 2018-2, Class D, 4.14%, 8/15/24, Callable 8/15/22 @ 100 | 1,522 | 1,535 | |||||||||
| DT Auto Owner Trust, Series 2018-2A, Class D, 4.15%, 3/15/24, Callable 8/15/22 @ 100 (a) | 990 | 997 | |||||||||
| DT Auto Owner Trust, Series 2019-4A, Class C, 2.73%, 7/15/25, Callable 11/15/23 @ 100 (a) | 4,747 | 4,780 | |||||||||
| DT Auto Owner Trust, Series 2021-3A, Class B, 0.58%, 11/17/25, Callable 4/15/25 @ 100 (a) | 5,350 | 5,268 | |||||||||
| DT Auto Owner Trust, Series 2021-3A, Class C, 0.87%, 5/17/27, Callable 4/15/25 @ 100 (a) | 3,125 | 3,053 | |||||||||
| Encina Equipment Finance LLC, Series 2021-1A, Class C, 1.39%, 6/15/27, Callable 1/15/24 @ 100 (a) | 846 | 832 | |||||||||
| Encina Equipment Finance LLC, Series 2021-1A, Class D, 1.69%, 11/15/27, Callable 1/15/24 @ 100 (a) | 1,538 | 1,500 | |||||||||
| Encina Equipment Finance LLC, Series 2021-1A, Class A2, 0.74%, 12/15/26, Callable 1/15/24 @ 100 (a) | 877 | 873 | |||||||||
| Encina Equipment Finance LLC, Series 2021-1A, Class B, 1.21%, 2/15/27, Callable 1/15/24 @ 100 (a) | 713 | 707 | |||||||||
See notes to financial statements.
7
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Enterprise Fleet Financing LLC, Series 2021-1, Class A2, 0.44%, 12/21/26, Callable 7/20/24 @ 100 (a) | $ | 2,702 | $ | 2,680 | |||||||
| Enterprise Fleet Financing LLC, Series 2020-1, Class A3, 1.86%, 12/22/25, Callable 8/20/23 @ 100 (a) | 2,050 | 2,065 | |||||||||
| Enterprise Fleet Financing LLC, Series 2019-1, Class A3, 3.07%, 10/20/24, Callable 5/20/22 @ 100 (a) | 1,000 | 1,005 | |||||||||
| Evergreen Credit Card Trust, Series 2021-1A, Class A, 0.90%, 10/15/26, Callable 11/15/24 @ 100 (a) | 3,500 | 3,439 | |||||||||
Evergreen Credit Card Trust, Series 2019-2, Class B, 2.27%, 9/15/24 (a) | 3,562 | 3,590 | |||||||||
| Exeter Automobile Receivables Trust, Series 2018-3, Class D, 4.35%, 6/17/24, Callable 3/15/23 @ 100 (a) | 1,637 | 1,663 | |||||||||
| Exeter Automobile Receivables Trust, Series 2019-3, Class C, 2.79%, 5/15/24, Callable 9/15/23 @ 100 (a) | 1,582 | 1,589 | |||||||||
| Exeter Automobile Receivables Trust, Series 2019-4, Class C, 2.44%, 9/16/24, Callable 10/15/23 @ 100 (a) | 2,599 | 2,610 | |||||||||
| Exeter Automobile Receivables Trust, Series 2019-2A, Class C, 3.30%, 3/15/24, Callable 8/15/23 @ 100 (a) | 1,511 | 1,516 | |||||||||
| Exeter Automobile Receivables Trust, Series 2019-3A, Class D, 3.11%, 8/15/25, Callable 9/15/23 @ 100 (a) | 5,000 | 5,075 | |||||||||
| Exeter Automobile Receivables Trust, Series 2021-2A, Class C, 0.98%, 6/15/26, Callable 4/15/24 @ 100 | 3,000 | 2,976 | |||||||||
| Exeter Automobile Receivables Trust, Series 2020-1A, Class C, 2.49%, 1/15/25, Callable 10/15/23 @ 100 (a) | 4,515 | 4,541 | |||||||||
| Exeter Automobile Receivables Trust, Series 2020-3A, Class C, 1.32%, 7/15/25, Callable 4/15/24 @ 100 | 2,361 | 2,364 | |||||||||
| First Investors Auto Owner Trust, Series 2019-1A, Class D, 3.55%, 4/15/25, Callable 1/15/23 @ 100 (a) | 1,450 | 1,479 | |||||||||
| First Investors Auto Owner Trust, Series 2018-2A, Class F, 7.31%, 9/15/25, Callable 1/15/23 @ 100 (a) | 3,900 | 3,998 | |||||||||
| First Investors Auto Owner Trust, Series 2020-1A, Class C, 2.55%, 2/17/26, Callable 6/15/23 @ 100 (a) | 5,000 | 5,044 | |||||||||
| First Investors Auto Owner Trust, Series 2019-2A, Class C, 2.71%, 12/15/25, Callable 7/15/23 @ 100 (a) | 7,403 | 7,478 | |||||||||
| First Investors Auto Owner Trust, Series 2019-2, Class B, 2.47%, 1/15/25, Callable 7/15/23 @ 100 (a) | 3,640 | 3,656 | |||||||||
| First Investors Auto Owner Trust, Series 2020-1A, Class B, 1.85%, 2/17/26, Callable 6/15/23 @ 100 (a) | 3,880 | 3,888 | |||||||||
| First Investors Auto Owner Trust, Series 2017-2, Class D, 3.56%, 9/15/23, Callable 2/15/22 @ 100 (a) | 3,544 | 3,547 | |||||||||
FirstKey Homes Trust, Series 2021-SFR3, Class A, 2.14%, 12/17/38 (a) | 1,000 | 988 | |||||||||
FirstKey Homes Trust, Series 2021-SFR3, Class C, 2.54%, 12/17/38 (a) | 1,750 | 1,715 | |||||||||
FirstKey Homes Trust, Series 2021-SFR1, Class B, 1.79%, 8/17/28 (a) | 3,000 | 2,876 | |||||||||
FirstKey Homes Trust, Series 2021-SFR2, Class B, 1.61%, 9/17/26 (a) | 2,308 | 2,192 | |||||||||
FirstKey Homes Trust, Series 2021-SFR1, Class C, 1.89%, 8/17/28 (a) | 3,000 | 2,876 | |||||||||
FirstKey Homes Trust, Series 2021-SFR3, Class B, 2.44%, 12/17/38 (a) | 1,000 | 981 | |||||||||
| Flagship Credit Auto Trust, Series 2021-1, Class C, 0.91%, 3/15/27, Callable 12/15/23 @ 100 (a) | 2,700 | 2,658 | |||||||||
| Flagship Credit Auto Trust, Series 2021-3, Class B, 0.95%, 7/15/27, Callable 5/15/25 @ 100 (a) | 3,300 | 3,219 | |||||||||
See notes to financial statements.
8
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Flagship Credit Auto Trust, Series 2019-4, Class E, 4.11%, 3/15/27, Callable 1/15/24 @ 100 (a) | $ | 2,765 | $ | 2,822 | |||||||
| Flagship Credit Auto Trust, Series 2020-2, Class D, 5.75%, 4/15/26, Callable 10/15/23 @ 100 (a) | 5,000 | 5,288 | |||||||||
| Flagship Credit Auto Trust, Series 2021-1, Class B, 0.68%, 2/16/27, Callable 12/15/23 @ 100 (a) | 3,100 | 3,072 | |||||||||
| Flagship Credit Auto Trust, Series 2020-4, Class B, 1.00%, 10/15/25, Callable 11/15/23 @ 100 (a) | 3,750 | 3,742 | |||||||||
| Flagship Credit Auto Trust, Series 2017-3, Class E, 5.26%, 10/15/24, Callable 6/15/22 @ 100 (a) | 5,150 | 5,232 | |||||||||
| Flagship Credit Auto Trust, Series 2019-2, Class D, 3.53%, 5/15/25, Callable 12/15/23 @ 100 (a) | 3,000 | 3,064 | |||||||||
| Flexential Issuer, Series 2021-1A, Class A2, 3.25%, 11/27/51, Callable 11/25/25 @ 100 (a) | 5,000 | 5,003 | |||||||||
| Ford Credit Auto Lease Trust, Series 2021-A, Class C, 0.78%, 9/15/25, Callable 6/15/23 @ 100 | 1,250 | 1,237 | |||||||||
| Ford Credit Auto Lease Trust, Series 2020-A, Class B, 2.05%, 6/15/23, Callable 8/15/22 @ 100 | 5,000 | 5,026 | |||||||||
| Ford Credit Auto Owner Trust, Series 2020-1, Class C, 2.54%, 8/15/31, Callable 2/15/25 @ 100 (a) | 5,000 | 5,042 | |||||||||
| Ford Credit Auto Owner Trust, Series 2020-1, Class A, 2.04%, 8/15/31, Callable 2/15/25 @ 100 (a) | 2,667 | 2,690 | |||||||||
| Ford Credit Auto Owner Trust, Series 2020-1, Class B, 2.29%, 8/15/31, Callable 2/15/25 @ 100 (a) | 5,000 | 5,039 | |||||||||
| Foursight Capital Automobile Receivables Trust, Series 2021-1, Class B, 0.87%, 1/15/26, Callable 11/15/24 @ 100 (a) | 2,344 | 2,307 | |||||||||
| Foursight Capital Automobile Receivables Trust, Series 2022-1, Class B, 2.15%, 5/17/27, Callable 11/15/25 @ 100 (a) | 2,000 | 1,997 | |||||||||
| Foursight Capital Automobile Receivables Trust, Series 2021-1, Class A3, 0.64%, 7/15/25, Callable 11/15/24 @ 100 (a) | 2,571 | 2,550 | |||||||||
| Foursight Capital Automobile Receivables Trust, Series 2021-2, Class A3, 0.81%, 5/15/26, Callable 1/15/24 @ 100 (a) | 4,300 | 4,240 | |||||||||
| Foursight Capital Automobile Receivables Trust, Series 2021-2, Class B, 1.31%, 7/15/27, Callable 1/15/24 @ 100 (a) | 5,749 | 5,661 | |||||||||
| Foursight Capital Automobile Receivables Trust, Series 2021-1, Class C, 1.02%, 9/15/26, Callable 11/15/24 @ 100 (a) | 1,325 | 1,297 | |||||||||
| Foursight Capital Automobile Receivables Trust, Series 2022-1, Class A3, 1.83%, 12/15/26, Callable 11/15/25 @ 100 (a) | 1,200 | 1,197 | |||||||||
FRTKL, Series 2021-SFR1, Class B, 1.72%, 9/17/38 (a) | 1,500 | 1,438 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 2021-1A, Class B, 0.82%, 4/15/25, Callable 1/15/24 @ 100 (a) | 2,500 | 2,496 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 2020-4A, Class C, 1.14%, 11/17/25, Callable 1/15/24 @ 100 (a) | 1,781 | 1,775 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 2020-3A, Class B, 1.38%, 8/15/24, Callable 2/15/24 @ 100 (a) | 2,735 | 2,739 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 2021-3A, Class B, 0.78%, 11/17/25, Callable 12/15/25 @ 100 (a) | 2,750 | 2,710 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 4A, Class B, 1.53%, 4/15/26, Callable 4/15/27 @ 100 (a) | 1,000 | 995 | |||||||||
See notes to financial statements.
9
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| GLS Auto Receivables Issuer Trust, Series 4A, Class A, 0.84%, 7/15/25, Callable 4/15/27 @ 100 (a) | $ | 1,903 | $ | 1,898 | |||||||
| GLS Auto Receivables Issuer Trust, Series 2021-3A, Class C, 1.11%, 9/15/26, Callable 12/15/25 @ 100 (a) | 3,611 | 3,537 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 2A, Class C, 4.57%, 4/15/26, Callable 4/15/24 @ 100 (a) | 1,250 | 1,303 | |||||||||
| GLS Auto Receivables Trust, Series 2021-2A, Class C, 1.08%, 6/15/26, Callable 12/15/24 @ 100 (a) | 3,043 | 2,994 | |||||||||
| GLS Auto Receivables Trust, Series 2021-2A, Class B, 0.77%, 9/15/25, Callable 12/15/24 @ 100 (a) | 5,000 | 4,958 | |||||||||
| GM Financial Automobile Leasing Trust, Series 2020-2, Class C, 2.56%, 7/22/24, Callable 12/20/22 @ 100 | 1,625 | 1,645 | |||||||||
| GM Financial Automobile Leasing Trust, Series 2020-3, Class B, 0.76%, 10/21/24, Callable 4/20/23 @ 100 | 2,000 | 1,989 | |||||||||
| GM Financial Automobile Leasing Trust, Series 2020-1, Class B, 1.84%, 12/20/23, Callable 7/20/22 @ 100 | 3,261 | 3,276 | |||||||||
| GM Financial Automobile Leasing Trust, Series 2020-3, Class C, 1.11%, 10/21/24, Callable 4/20/23 @ 100 | 1,786 | 1,778 | |||||||||
| GM Financial Consumer Automobile Receivables Trust, Series 2019-2, Class C, 3.07%, 11/18/24, Callable 12/16/22 @ 100 | 2,000 | 2,035 | |||||||||
| GM Financial Consumer Automobile Receivables Trust, Series 2020-2, Class B, 2.54%, 8/18/25, Callable 10/16/23 @ 100 | 1,500 | 1,525 | |||||||||
| GMF Floorplan Owner Revolving Trust, Series 2020-2, Class B, 0.96%, 10/15/25 (a) | 1,750 | 1,732 | |||||||||
| GMF Floorplan Owner Revolving Trust, Series 2020-2, Class C, 1.31%, 10/15/25 (a) | 2,250 | 2,233 | |||||||||
Golden Credit Card Trust, Series 2021-1A, Class A, 1.14%, 8/15/28 (a) | 5,000 | 4,847 | |||||||||
| Great American Auto Leasing, Inc., Series 2019-1, Class A4, 3.21%, 2/18/25, Callable 12/15/22 @ 100 (a) | 1,000 | 1,013 | |||||||||
| GreatAmerica Leasing Receivables Funding LLC, Series 2020-1, Class B, 2.00%, 2/16/26, Callable 12/15/23 @ 100 (a) | 1,090 | 1,097 | |||||||||
| Hertz Vehicle Financing III LLC, Series 2022-1A, Class A, 1.99%, 6/25/26, Callable 6/25/25 @ 100 (a) | 1,000 | 997 | |||||||||
| Hertz Vehicle Financing III LLC, Series 2022-1A, Class B, 2.19%, 6/25/26, Callable 6/25/25 @ 100 (a) | 2,250 | 2,243 | |||||||||
| Hertz Vehicle Financing III LLC, Series 2022-1A, Class C, 2.63%, 6/25/26, Callable 6/25/25 @ 100 (a) | 2,700 | 2,691 | |||||||||
| HPEFS Equipment Trust, Series 2019-1A, Class C, 2.49%, 9/20/29, Callable 8/20/22 @ 100 (a) | 1,350 | 1,356 | |||||||||
| HPEFS Equipment Trust, Series 2020-1A, Class C, 2.03%, 2/20/30, Callable 2/20/23 @ 100 (a) | 2,851 | 2,866 | |||||||||
| HPEFS Equipment Trust, Series 2021-2A, Class C, 0.88%, 9/20/28, Callable 7/20/24 @ 100 (a) | 3,843 | 3,758 | |||||||||
| HPEFS Equipment Trust, Series 2019-1A, Class B, 2.32%, 9/20/29, Callable 8/20/22 @ 100 (a) | 536 | 537 | |||||||||
| HPEFS Equipment Trust, Series 2019-1A, Class D, 2.72%, 9/20/29, Callable 8/20/22 @ 100 (a) | 3,000 | 3,024 | |||||||||
| HPEFS Equipment Trust, Series 2020-2A, Class B, 1.20%, 7/22/30, Callable 5/20/23 @ 100 (a) | 4,167 | 4,171 | |||||||||
See notes to financial statements.
10
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| HPEFS Equipment Trust, Series 2020-2A, Class C, 2.00%, 7/22/30, Callable 5/20/23 @ 100 (a) | $ | 3,400 | $ | 3,416 | |||||||
| HPEFS Equipment Trust, Series 2021-1A, Class C, 0.75%, 3/20/31, Callable 3/20/24 @ 100 (a) | 2,500 | 2,457 | |||||||||
| HPEFS Equipment Trust, Series 2021-2A, Class D, 1.29%, 3/20/29, Callable 7/20/24 @ 100 (a) | 2,719 | 2,656 | |||||||||
| HPEFS Equipment Trust, Series 2021-1A, Class D, 1.03%, 3/20/31, Callable 3/20/24 @ 100 (a) | 3,700 | 3,629 | |||||||||
| JPMorgan Chase Bank NA, Series 2021-2, Class B, 0.89%, 12/26/28, Callable 8/25/24 @ 100 (a) | 1,871 | 1,854 | |||||||||
| JPMorgan Chase Bank NA, Series 2021-3, Class D, 1.01%, 2/26/29, Callable 9/25/24 @ 100 (a) | 2,665 | 2,637 | |||||||||
| JPMorgan Chase Bank NA, Series 2021-1, Class C, 1.02%, 9/25/28, Callable 9/25/24 @ 100 (a) | 2,091 | 2,076 | |||||||||
| JPMorgan Chase Bank NA, Series 2020-2, Class D, 1.49%, 2/25/28, Callable 4/25/24 @ 100 (a) | 3,439 | 3,428 | |||||||||
| JPMorgan Chase Bank NA, Series 2021-2, Class D, 1.14%, 12/26/28, Callable 8/25/24 @ 100 (a) | 956 | 950 | |||||||||
| JPMorgan Chase Bank NA, Series 2021-1, Class B, 0.88%, 9/25/28, Callable 9/25/24 @ 100 (a) | 5,577 | 5,539 | |||||||||
| JPMorgan Chase Bank NA, Series 2020-2, Class B, 0.84%, 2/25/28, Callable 4/25/24 @ 100 (a) | 1,954 | 1,945 | |||||||||
| JPMorgan Chase Bank NA, Series 2020-2, Class C, 1.14%, 2/25/28, Callable 4/25/24 @ 100 (a) | 977 | 974 | |||||||||
| JPMorgan Chase Bank NA, Series 1, Class D, 1.17%, 9/25/28, Callable 9/25/24 @ 100 (a) | 2,774 | 2,754 | |||||||||
| Kubota Credit Owner Trust, Series 2020-1A, Class A3, 1.96%, 3/15/24, Callable 9/15/23 @ 100 (a) | 3,483 | 3,506 | |||||||||
| LAD Auto Receivables Trust, Series 2021-1A, Class B, 1.94%, 11/16/26, Callable 11/15/24 @ 100 (a) | 3,000 | 2,957 | |||||||||
| LAD Auto Receivables Trust, Series 2021-1A, Class C, 2.35%, 4/15/27, Callable 11/15/24 @ 100 (a) | 3,000 | 2,949 | |||||||||
| LAD Auto Receivables Trust, Series 2021-1A, Class A, 1.30%, 8/17/26, Callable 11/15/24 @ 100 (a) | 2,585 | 2,568 | |||||||||
Master Credit Card Trust, Series 2020-1A, Class C, 2.59%, 9/23/24 (a) | 2,125 | 2,152 | |||||||||
Master Credit Card Trust, Series 2021-1A, Class C, 1.06%, 11/21/25 (a) | 4,151 | 4,056 | |||||||||
Master Credit Card Trust, Series 2021-1A, Class B, 0.79%, 11/21/25 (a) | 1,346 | 1,315 | |||||||||
Master Credit Card Trust, Series 2020-1A, Class B, 2.27%, 9/23/24 (a) | 833 | 842 | |||||||||
Master Credit Card Trust, Series 2018-1A, Class C, 3.74%, 7/21/24 (a) | 1,750 | 1,783 | |||||||||
| MMAF Equipment Finance LLC, Series 2020-BA, Class A5, 0.85%, 4/14/42, Callable 4/14/25 @ 100 (a) | 5,000 | 4,861 | |||||||||
| MVW LLC, Series 2021-1WA, Class A, 1.14%, 1/22/41, Callable 2/20/27 @ 100 (a) | 1,703 | 1,649 | |||||||||
| MVW LLC, Series 2021-1WA, Class B, 1.44%, 1/22/41, Callable 2/20/27 @ 100 (a) | 1,782 | 1,717 | |||||||||
| MVW Owner Trust, Series 2018-1A, Class A, 3.45%, 1/21/36, Callable 2/20/24 @ 100 (a) | 4,922 | 5,030 | |||||||||
| MVW Owner Trust, Series 2017-1A, Class A, 2.42%, 12/20/34, Callable 5/20/23 @ 100 (a) | 468 | 472 | |||||||||
| Nelnet Student Loan Trust, Series 2005-3, Class B, 0.41% (LIBOR03M+28bps), 9/22/37, Callable 3/22/22 @ 100 (c) | 1,048 | 1,044 | |||||||||
See notes to financial statements.
11
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| New Economy Assets Phase 1 Sponsor LLC, Series 2021-1, Class B1, 2.41%, 10/20/61, Callable 10/20/24 @ 100 (a) | $ | 1,466 | $ | 1,449 | |||||||
| New Economy Assets Phase 1 Sponsor LLC, Series 2021-1, Class A1, 1.91%, 10/20/61, Callable 10/20/24 @ 100 (a) | 4,516 | 4,400 | |||||||||
| NMEF Funding LLC, Series 2021-A, Class A2, 0.81%, 12/15/27, Callable 9/15/24 @ 100 (a) | 4,758 | 4,743 | |||||||||
| NMEF Funding LLC, Series 2021-A, Class B, 1.85%, 12/15/27, Callable 9/15/24 @ 100 (a) | 4,000 | 3,960 | |||||||||
NP SPE II LLC, Series 2019-2A, Class C1, 6.44%, 11/19/49 (a) | 4,371 | 4,108 | |||||||||
| NP SPE II LLC, Series 2017-1A, Class A1, 3.37%, 10/21/47, Callable 2/20/22 @ 100 (a) | 1,761 | 1,773 | |||||||||
| Oscar U.S. Funding XII LLC, Series 1A, Class A4, 1.00%, 4/10/28, Callable 2/10/25 @ 100 (a) | 7,500 | 7,302 | |||||||||
| Oscar U.S. Funding XII LLC, Series 1A, Class A3, 0.70%, 4/10/25, Callable 2/10/25 @ 100 (a) | 3,245 | 3,203 | |||||||||
| Oscar U.S. Funding XIII LLC, Series 2021-2A, Class A4, 1.27%, 9/11/28, Callable 6/10/25 @ 100 (a) | 8,100 | 7,908 | |||||||||
| Oscar U.S. Funding XIII LLC, Series 2021-2A, Class A3, 0.86%, 9/10/25, Callable 6/10/25 @ 100 (a) | 5,000 | 4,920 | |||||||||
| Pawnee Equipment Receivables LLC, Series 2021-1, Class A2, 1.10%, 7/15/27, Callable 11/15/25 @ 100 (a) | 2,182 | 2,164 | |||||||||
| Pawnee Equipment Receivables LLC, Series 2020-1, Class A, 1.37%, 11/17/25, Callable 2/15/24 @ 100 (a) | 3,444 | 3,451 | |||||||||
| Pawnee Equipment Receivables LLC, Series 2021-1, Class B, 1.82%, 7/15/27, Callable 11/15/25 @ 100 (a) | 1,637 | 1,614 | |||||||||
| Pawnee Equipment Receivables LLC, Series 2020-1, Class B, 1.84%, 1/15/26, Callable 2/15/24 @ 100 (a) | 930 | 931 | |||||||||
| Pawnee Equipment Receivables LLC, Series 2019-1, Class A2, 2.29%, 10/15/24, Callable 4/15/23 @ 100 (a) | 1,229 | 1,236 | |||||||||
| Prestige Auto Receivables Trust, Series 2018-1A, Class C, 3.75%, 10/15/24, Callable 8/15/22 @ 100 (a) | 4,767 | 4,786 | |||||||||
| Prestige Auto Receivables Trust, Series 2019-1A, Class D, 3.01%, 8/15/25, Callable 11/15/22 @ 100 (a) | 5,000 | 5,056 | |||||||||
| Prestige Auto Receivables Trust, Series 2019-1A, Class B, 2.53%, 1/16/24, Callable 11/15/22 @ 100 (a) | 2,087 | 2,089 | |||||||||
| Prestige Auto Receivables Trust, Series 2020-1A, Class C, 1.31%, 11/16/26, Callable 7/15/23 @ 100 (a) | 4,001 | 4,006 | |||||||||
Progress Residential, Series 2021-SFR4, Class B, 1.81%, 5/17/38 (a) | 4,500 | 4,331 | |||||||||
| Progress Residential Trust, Series 2021-SFR6, Class B, 1.75%, 7/17/38, Callable 7/17/26 @ 100 (a) | 2,813 | 2,695 | |||||||||
Progress Residential Trust, Series 2021-SFR5, Class C, 1.81%, 7/16/26 (a) | 1,500 | 1,446 | |||||||||
Progress Residential Trust, Series 2021-SFR5, Class B, 1.66%, 7/16/26 (a) | 2,400 | 2,320 | |||||||||
Progress Residential Trust, Series 2021-SFR2, Class B, 1.80%, 4/19/38 (a) | 6,850 | 6,611 | |||||||||
| Santander Bank NA, Series 2021-1A, Class B, 1.83%, 12/15/31, Callable 9/15/24 @ 100 (a) | 2,823 | 2,810 | |||||||||
| Santander Bank NA, Series 2021-1A, Class C, 3.27%, 12/15/31, Callable 9/15/24 @ 100 (a) | 713 | 709 | |||||||||
| Santander Consumer Auto Receivables Trust, Series 2020-BA, Class C, 1.29%, 4/15/26, Callable 6/15/24 @ 100 (a) | 7,400 | 7,367 | |||||||||
See notes to financial statements.
12
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Santander Retail Auto Lease Trust, Series 2021-C, Class C, 1.11%, 3/20/26, Callable 7/20/24 @ 100 (a) | $ | 2,188 | $ | 2,142 | |||||||
| Santander Retail Auto Lease Trust, Series 2021-B, Class B, 0.84%, 6/20/25, Callable 4/20/24 @ 100 (a) | 5,000 | 4,910 | |||||||||
| Santander Retail Auto Lease Trust, Series 2021-C, Class B, 0.83%, 3/20/26, Callable 7/20/24 @ 100 (a) | 1,750 | 1,716 | |||||||||
| Santander Retail Auto Lease Trust, Series 2020-A, Class B, 1.88%, 3/20/24, Callable 2/20/23 @ 100 (a) | 5,500 | 5,537 | |||||||||
| Santander Retail Auto Lease Trust, Series 2019-C, Class C, 2.39%, 11/20/23, Callable 9/20/22 @ 100 (a) | 1,783 | 1,796 | |||||||||
| SCF Equipment Leasing LLC, Series 2020-1A, Class B, 2.02%, 3/20/28, Callable 3/20/23 @ 100 (a) | 3,824 | 3,833 | |||||||||
| SCF Equipment Leasing LLC, Series 2019-2, Class B, 2.76%, 8/20/26, Callable 11/20/24 @ 100 (a) | 2,000 | 2,028 | |||||||||
| SCF Equipment Leasing LLC, Series 2020-1A, Class C, 2.60%, 8/21/28, Callable 3/20/23 @ 100 (a) | 1,900 | 1,906 | |||||||||
| SCF Equipment Leasing LLC, Series 2020-1A, Class A3, 1.19%, 10/20/27, Callable 3/20/23 @ 100 (a) | 8,767 | 8,763 | |||||||||
| Securitized Term Auto Receivables Trust, Series 2019-CRTA, Class C, 2.85%, 3/25/26, Callable 2/25/23 @ 100 (a) | 694 | 701 | |||||||||
| Securitized Term Auto Receivables Trust, Series 2019-CRTA, Class B, 2.45%, 3/25/26, Callable 2/25/23 @ 100 (a) | 486 | 490 | |||||||||
| Sierra Timeshare Receivables Funding LLC, Series 1A, Class A, 3.20%, 1/20/36, Callable 1/20/24 @ 100 (a) | 1,930 | 1,962 | |||||||||
| Sierra Timeshare Receivables Funding LLC, Series 3A, Class A, 2.34%, 8/20/36, Callable 5/20/24 @ 100 (a) | 4,024 | 4,045 | |||||||||
| Synchrony Credit Card Master Note Trust, Series 2018-2, Class B, 3.67%, 5/15/26 | 510 | 524 | |||||||||
| Synchrony Credit Card Master Note Trust, Series 2017-2, Class C, 3.01%, 10/15/25 | 6,170 | 6,258 | |||||||||
| Synchrony Credit Card Master Note Trust, Series 2018-2, Class C, 3.87%, 5/15/26 | 5,000 | 5,144 | |||||||||
| Tesla Auto Lease Trust, Series 2020-A, Class B, 1.18%, 1/22/24, Callable 4/20/23 @ 100 (a) | 2,750 | 2,745 | |||||||||
| Transportation Finance Equipment Trust, Series 2019-1, Class A4, 1.88%, 3/25/24, Callable 1/23/23 @ 100 (a) | 3,000 | 3,022 | |||||||||
| Tricolor Auto Securitization Trust, Series 2021-1A, Class B, 1.00%, 6/17/24, Callable 9/15/23 @ 100 (a) | 4,250 | 4,226 | |||||||||
| Tricolor Auto Securitization Trust, Series 2021-1A, Class A, 0.74%, 4/15/24, Callable 9/15/23 @ 100 (a) | 6,155 | 6,156 | |||||||||
| Trinity Rail Leasing LLC, Series 2019-2A, Class A1, 2.39%, 10/18/49, Callable 2/17/22 @ 100 (a) | 1,717 | 1,717 | |||||||||
| Unify Auto Receivables Trust, Series 2021-1A, Class A4, 0.98%, 7/15/26, Callable 1/15/24 @ 100 (a) | 3,000 | 2,992 | |||||||||
| Unify Auto Receivables Trust, Series 2021-1A, Class B, 1.29%, 11/16/26, Callable 1/15/24 @ 100 (a) | 3,000 | 2,988 | |||||||||
| United Auto Credit Securitization Trust, Series 2020-1, Class C, 2.15%, 2/10/25, Callable 9/10/22 @ 100 (a) | 2,086 | 2,091 | |||||||||
| United Auto Credit Securitization Trust, Series 2020-1, Class D, 2.88%, 2/10/25, Callable 9/10/22 @ 100 (a) | 750 | 757 | |||||||||
See notes to financial statements.
13
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| United Auto Credit Securitization Trust, Series 2019-1, Class E, 4.29%, 8/12/24 (a) | $ | 3,320 | $ | 3,322 | |||||||
| Vantage Data Centers LLC, Series 2020-1A, Class A2, 1.65%, 9/15/45, Callable 9/15/23 @ 100 (a) | 6,500 | 6,279 | |||||||||
| VB-S1 Issuer LLC, Series 2020-1A, Class C2, 3.03%, 6/15/50, Callable 6/15/24 @ 100 (a) | 2,250 | 2,278 | |||||||||
| Volvo Financial Equipment LLC, Series 2020-1A, Class A4, 0.60%, 3/15/28, Callable 5/15/24 @ 100 (a) | 1,750 | 1,711 | |||||||||
| VSE VOI Mortgage LLC, Series 2017-A, Class B, 2.63%, 3/20/35, Callable 10/20/23 @ 100 (a) | 3,124 | 3,136 | |||||||||
| Westlake Automobile Receivables Trust, Series 2020-1A, Class C, 2.52%, 4/15/25, Callable 9/15/23 @ 100 (a) | 5,000 | 5,051 | |||||||||
| Westlake Automobile Receivables Trust, Series 2021-3A, Class D, 2.12%, 1/15/27, Callable 6/15/25 @ 100 (a) | 1,000 | 994 | |||||||||
| Westlake Automobile Receivables Trust, Series 2019-2A, Class E, 4.02%, 4/15/25, Callable 3/15/23 @ 100 (a) | 4,000 | 4,115 | |||||||||
| Westlake Automobile Receivables Trust, Series 2018-3A, Class D, 4.00%, 10/16/23, Callable 7/15/22 @ 100 (a) | 1,734 | 1,743 | |||||||||
| Wheels SPV 2 LLC, Series 2020-1A, Class A3, 0.62%, 8/20/29, Callable 3/20/24 @ 100 (a) | 3,250 | 3,197 | |||||||||
| World Omni Auto Receivables Trust, Series 2018-D, Class B, 3.67%, 12/16/24, Callable 11/15/22 @ 100 | 2,000 | 2,043 | |||||||||
| World Omni Auto Receivables Trust, Series 2018-D, Class C, 3.87%, 8/15/25, Callable 11/15/22 @ 100 | 4,000 | 4,089 | |||||||||
| World Omni Select Auto Trust, Series 2020-A, Class B, 0.84%, 6/15/26, Callable 8/15/23 @ 100 | 5,750 | 5,724 | |||||||||
| World Omni Select Auto Trust, Series 2018-1A, Class D, 4.13%, 1/15/25, Callable 11/15/22 @ 100 (a) | 1,955 | 1,967 | |||||||||
| World Omni Select Auto Trust, Series 2021-A, Class D, 1.44%, 11/15/27, Callable 2/15/24 @ 100 | 2,750 | 2,644 | |||||||||
Total Asset-Backed Securities (Cost $855,271) | 848,773 | ||||||||||
Collateralized Mortgage Obligations (7.0%) | |||||||||||
| American Money Management Corp., Series 2016-19A, Class AR, 1.26% (LIBOR03M+114bps), 10/16/28, Callable 4/15/22 @ 100 (a) (c) | 648 | 648 | |||||||||
| Annisa CLO Ltd., Series 2016-2, Class AR, 1.23% (LIBOR03M+110bps), 7/20/31, Callable 4/20/22 @ 100 (a) (c) | 3,000 | 3,000 | |||||||||
| BBCMS Mortgage Trust, Series 2020-BID, Class A, 2.25% (LIBOR01M+214bps), 10/15/37 (a) (c) | 3,000 | 3,006 | |||||||||
| BBCMS Mortgage Trust, Series 2020-BID, Class B, 2.65% (LIBOR01M+254bps), 10/15/37 (a) (c) | 5,000 | 5,021 | |||||||||
| BPR Trust, Series 2021-TY, Class C, 1.81% (LIBOR01M+170bps), 9/23/23 (a) (c) | 2,712 | 2,706 | |||||||||
| BPR Trust, Series 2021-TY, Class A, 1.16% (LIBOR01M+105bps), 9/23/23 (a) (c) | 3,731 | 3,726 | |||||||||
| BPR Trust, Series 2021-TY, Class B, 1.26% (LIBOR01M+115bps), 9/23/23 (a) (c) | 750 | 748 | |||||||||
| BPR Trust, Series 2021-TY, Class D, 2.46% (LIBOR01M+235bps), 9/23/23 (a) (c) | 1,313 | 1,309 | |||||||||
See notes to financial statements.
14
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| BX Commercial Mortgage Trust, Series 2019-XL, Class D, 1.56% (LIBOR01M+145bps), 10/15/36 (a) (c) | $ | 2,550 | $ | 2,548 | |||||||
| BX Commercial Mortgage Trust, Series 2021-VOLT, Class B, 1.06% (LIBOR01M+85bps), 9/15/23 (a) (c) | 2,500 | 2,475 | |||||||||
| CHT Mortgage Trust, Series 2017-CSMO, Class E, 3.11% (LIBOR01M+300bps), 11/15/36 (a) (c) | 10,000 | 9,997 | |||||||||
| CHT Mortgage Trust, Series 2017-CSMO, Class C, 1.61% (LIBOR01M+150bps), 11/15/36 (a) (c) | 9,500 | 9,493 | |||||||||
| Citigroup Commercial Mortgage Trust, Series 2019-SMRT, Class B, 4.38%, 1/10/36 (a) | 7,600 | 7,867 | |||||||||
| Citigroup Commercial Mortgage Trust, Series 2019-PRM, Class A, 3.34%, 5/10/36 (a) | 7,338 | 7,513 | |||||||||
COMM Mortgage Trust, Series 2020-CBM, Class B, 3.10%, 11/13/39 (a) | 5,000 | 4,969 | |||||||||
| COMM Mortgage Trust, Series 2012-CR4, Class XA, 1.69%, 10/15/45, Callable 8/15/22 @ 100 (d) (e) | 53,021 | 338 | |||||||||
COMM Mortgage Trust, Series 2020-CBM, Class A2, 2.90%, 11/13/39 (a) | 5,620 | 5,641 | |||||||||
| COMM Mortgage Trust, Series 2015-PC1, Class B, 4.32%, 7/10/50, Callable 6/10/25 @ 100 (d) | 3,366 | 3,509 | |||||||||
| COMM Mortgage Trust, Series 2012-CR2, Class XA, 1.61%, 8/15/45, Callable 7/15/22 @ 100 (d) (e) | 55,866 | 72 | |||||||||
| COMM Mortgage Trust, Series 2014-277P, Class A, 3.61%, 8/10/49, Callable 8/10/24 @ 100 (a) (d) | 10,670 | 11,014 | |||||||||
| COMM Mortgage Trust, Series 2015-PC1, Class AM, 4.29%, 7/10/50, Callable 5/10/25 @ 100 (d) | 3,500 | 3,683 | |||||||||
COMM Mortgage Trust, Series 2020-CBM, Class C, 3.40%, 11/13/39 (a) | 6,875 | 6,777 | |||||||||
| Credit Suisse Mortgage Capital Certificates, Series 2021-980M, Class A, 2.39%, 7/15/26 (a) | 2,500 | 2,431 | |||||||||
| Extended Stay America Trust, Series 2021-ESH, Class C, 1.79% (LIBOR01M+170bps), 7/15/38 (a) (c) | 2,485 | 2,485 | |||||||||
| Extended Stay America Trust, Series 2021-ESH, Class A, 1.17% (LIBOR01M+108bps), 7/15/38 (a) (c) | 1,988 | 1,985 | |||||||||
| Extended Stay America Trust, Series 2021-ESH, Class B, 1.49% (LIBOR01M+138bps), 7/15/38 (a) (c) | 773 | 773 | |||||||||
| Freddie Mac Multifamily Structured Pass Through Certificates, 1.19%, 8/25/22, Callable 5/25/22 @ 100 (e) | 62,093 | 303 | |||||||||
| FREMF Mortgage Trust, Series 2017-K724, Class B, 3.53%, 11/25/23, Callable 11/25/23 @ 100 (a) (d) | 4,935 | 5,069 | |||||||||
| GS Mortgage Securities Corp. Trust, Series 2017-GPTX, Class A, 2.86%, 5/10/34 (a) | 13,530 | 13,506 | |||||||||
| GS Mortgage Securities Corp. Trust, Series 2017-SLP, Class A, 3.42%, 10/10/32 (a) | 4,730 | 4,766 | |||||||||
| GS Mortgage Securities Corp. Trust, Series 2012-ALOH, Class A, 3.55%, 4/10/34 (a) | 10,500 | 10,517 | |||||||||
| GS Mortgage Securities Corp. Trust, Series 2020-UPTN, Class A, 2.75%, 12/10/39 (a) | 2,000 | 2,019 | |||||||||
| GS Mortgage Securities Trust, Series 2012-GCJ7, Class XA, 1.76%, 5/10/45, Callable 5/10/22 @ 100 (d) (e) | 6,524 | — | (b) | ||||||||
| GS Mortgage Securities Trust, Series 2012-GCJ9, Class XA, 1.92%, 11/10/45, Callable 11/10/22 @ 100 (d) (e) | 21,256 | 129 | |||||||||
Houston Galleria Mall Trust, Series 2015-HGLR, Class A1A2, 3.09%, 3/5/37 (a) | 8,824 | 8,875 | |||||||||
See notes to financial statements.
15
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| JP Morgan Chase Commercial Mortgage Securities Trust, Series 2013-C10, Class B, 3.67%, 12/15/47, Callable 2/15/23 @ 100 (d) | $ | 2,250 | $ | 2,291 | |||||||
| JP Morgan Chase Commercial Mortgage Securities Trust, Series 2013-C13, Class C, 4.08%, 1/15/46, Callable 7/15/23 @ 100 (d) | 1,132 | 1,157 | |||||||||
| JP Morgan Chase Commercial Mortgage Securities Trust, Series 2013-C13, Class B, 4.08%, 1/15/46, Callable 6/15/23 @ 100 (d) (f) | 4,212 | 4,332 | |||||||||
| JPMorgan Chase Commercial Mortgage Securities Trust, Series 2012-C8, Class XA, 1.71%, 10/15/45, Callable 9/15/22 @ 100 (d) (e) | 17,160 | 58 | |||||||||
| Life Mortgage Trust, Series 2021-BMR, Class B, 0.99% (LIBOR01M+88bps), 3/15/38 (a) (c) | 3,000 | 2,976 | |||||||||
| Morgan Stanley Bank of America Merrill Lynch Trust, Series 2012-C6, Class XA, 1.59%, 11/15/45, Callable 6/15/22 @ 100 (a) (d) (e) | 16,827 | 55 | |||||||||
| Morgan Stanley Capital I Trust, Series 2017-CLS, Class B, 0.94% (LIBOR01M+85bps), 11/15/34 (a) (c) | 1,100 | 1,099 | |||||||||
| Morgan Stanley Capital I Trust, Series 2017-CLS, Class F, 2.71% (LIBOR01M+260bps), 11/15/34 (a) (c) | 1,000 | 995 | |||||||||
| Morgan Stanley Capital I Trust, Series 2019-NUGS, Class B, 2.80% (LIBOR01M+130bps), 12/15/36 (a) (c) | 3,846 | 3,842 | |||||||||
| Palmer Square Loan Funding Ltd., Series 2019-2, Class A1, 1.10% (LIBOR03M+97bps), 4/20/27, Callable 4/20/22 @ 100 (a) (c) | 589 | 589 | |||||||||
| Palmer Square Loan Funding Ltd., Series 2020-1A, Class A1, 0.96% (LIBOR03M+80bps), 2/20/28, Callable 2/20/22 @ 100 (a) (c) | 2,417 | 2,419 | |||||||||
| Palmer Square Loan Funding Ltd., Series 2020-1A, Class A2, 1.48% (LIBOR03M+135bps), 2/20/28, Callable 2/20/22 @ 100 (a) (c) | 4,600 | 4,601 | |||||||||
| Palmer Square Loan Funding Ltd., Series 2019-3, Class A1, 0.98% (LIBOR03M+85bps), 8/20/27, Callable 2/20/22 @ 100 (a) (c) | 1,670 | 1,670 | |||||||||
| Palmer Square Loan Funding Ltd., Series 2021-1A, Class A1, 1.03% (LIBOR03M+90bps), 4/20/29, Callable 4/20/22 @ 100 (a) (c) | 1,041 | 1,041 | |||||||||
| Palmer Square Loan Funding Ltd., Series 2018-5A, Class A1, 0.98% (LIBOR03M+85bps), 1/20/27, Callable 4/20/22 @ 100 (a) (c) | 763 | 761 | |||||||||
| Race Point CLO Ltd., Series 2016-10A, Class A1R, 1.22% (LIBOR03M+110bps), 7/25/31, Callable 4/25/22 @ 100 (a) (c) | 4,437 | 4,432 | |||||||||
| Sequoia Mortgage Trust, Series 2013-5, Class A2, 3.00%, 5/25/43, Callable 6/25/23 @ 100 (a) (d) | 716 | 719 | |||||||||
SREIT Trust, Series 2021-MFP2, Class C, 1.48%, 11/15/36 (a) | 2,000 | 1,989 | |||||||||
| SREIT Trust, Series 2021-MFP2, Class B, 1.27% (LIBOR01M+117bps), 11/15/36 (a) (c) | 2,000 | 1,989 | |||||||||
Stratus CLO Ltd., Series 2021-3A, Class A, 12/29/29 (a) | 2,000 | 2,001 | |||||||||
Stratus CLO Ltd., Series 2021-3A, Class B, 12/29/29 (a) | 1,643 | 1,644 | |||||||||
TTAN, Series 2021-MHC, Class C, 1.46% (LIBOR01M+140bps), 3/15/38 (a) (c) | 2,996 | 2,979 | |||||||||
TTAN, Series 2021-MHC, Class B, 1.21% (LIBOR01M+115bps), 3/15/38 (a) (c) | 2,225 | 2,217 | |||||||||
TTAN, Series 2021-MHC, Class D, 1.86% (LIBOR01M+180bps), 3/15/38 (a) (c) | 1,198 | 1,189 | |||||||||
| UBS Commercial Mortgage Trust, Series 2012-C1, Class XA, 1.56%, 5/10/45, Callable 3/10/22 @ 100 (a) (d) (e) | 37,169 | 1 | |||||||||
| UBS Commercial Mortgage Trust, Series 2012-C1, Class XA, 1.99%, 5/10/45, Callable 3/10/22 @ 100 (d) (e) | 1,993 | — | (b) | ||||||||
| UBS-Barclays Commercial Mortgage Trust, Series 2012-C3, Class XA, 1.81%, 8/10/49, Callable 9/10/22 @ 100 (d) (e) | 19,466 | 83 | |||||||||
| Wells Fargo Commercial Mortgage Trust, Series 2012-LC5, Class XA, 1.72%, 10/15/45, Callable 9/15/22 @ 100 (d) (e) | 21,497 | 84 | |||||||||
See notes to financial statements.
16
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
| WFRBS Commercial Mortgage Trust, Series 2013-C12, Class B, 3.86%, 3/15/48, Callable 3/15/23 @ 100 | $ | 2,000 | $ | 2,037 | |||||||
Total Collateralized Mortgage Obligations (Cost $198,362) | 198,168 | ||||||||||
Preferred Stocks (0.2%) | |||||||||||
Financials (0.2%): | |||||||||||
Citigroup Capital, 6.67% (LIBOR03M+637bps), 10/30/40 (c) | 200,000 | 5,384 | |||||||||
Total Preferred Stocks (Cost $5,470) | 5,384 | ||||||||||
Senior Secured Loans (1.3%) | |||||||||||
| Clean Harbors, Inc., Initial Term Loan, First Lien, 1.85% (LIBOR01M+175bps), 6/30/24 (c) | 2,481 | 2,477 | |||||||||
| Delos Finance S.A.R.L., Loans, First Lien, 1.97% (LIBOR01M+175bps), 10/6/23 (c) | 10,000 | 9,982 | |||||||||
Genpact International LLC, 1.48% (LIBOR01M+138bps), 8/9/23 (c) (g) | 9,000 | 8,932 | |||||||||
Magallanes, Inc., Term Loan A, First Lien, 12/4/22 (g) (h) | 13,500 | 13,298 | |||||||||
| Ortho-Clinical Diagnostics, Inc., Term Loan B New, First Lien, 1.48% (LIBOR01M+300bps), 6/30/25 (c) (g) | 3,000 | 2,998 | |||||||||
Total Senior Secured Loans (Cost $37,995) | 37,687 | ||||||||||
Corporate Bonds (40.2%) | |||||||||||
Communication Services (0.5%): | |||||||||||
DISH DBS Corp., 5.88%, 7/15/22 | 4,000 | 4,053 | |||||||||
TEGNA, Inc., 4.75%, 3/15/26, Callable 3/15/23 @ 102.38 (a) (f) | 3,000 | 3,048 | |||||||||
| T-Mobile USA, Inc. 2.63%, 4/15/26, Callable 4/15/23 @ 101.31 (f) | 5,000 | 4,900 | |||||||||
4.75%, 2/1/28, Callable 2/1/23 @ 102.38 | 2,641 | 2,731 | |||||||||
14,732 | |||||||||||
Consumer Discretionary (3.0%): | |||||||||||
| Association of American Medical Colleges 2.27%, 10/1/25 | 4,145 | 4,036 | |||||||||
2.39%, 10/1/26 | 4,275 | 4,169 | |||||||||
Duke University Health System, Inc., 2.26%, 6/1/26 | 700 | 688 | |||||||||
Expedia Group, Inc., 6.25%, 5/1/25, Callable 2/1/25 @ 100 (a) | 5,000 | 5,574 | |||||||||
| Genting New York LLC/GENNY Capital, Inc., 3.30%, 2/15/26, Callable 1/15/26 @ 100 (a) | 2,000 | 1,937 | |||||||||
Horace Mann School, 2.48%, 7/1/22 | 2,500 | 2,511 | |||||||||
| Howard University 2.80%, 10/1/23 | 1,000 | 1,006 | |||||||||
2.42%, 10/1/24 | 1,350 | 1,353 | |||||||||
2.52%, 10/1/25 | 1,000 | 999 | |||||||||
Lithia Motors, Inc., 4.63%, 12/15/27, Callable 12/15/22 @ 103.47 (a) | 5,718 | 5,886 | |||||||||
Macy's Retail Holdings LLC, 2.88%, 2/15/23, Callable 11/15/22 @ 100 | 1,250 | 1,252 | |||||||||
Murphy Oil USA, Inc., 5.63%, 5/1/27, Callable 5/1/22 @ 102.81 | 7,470 | 7,713 | |||||||||
Nordstrom, Inc., 2.30%, 4/8/24, Callable 4/8/22 @ 100 | 10,000 | 9,829 | |||||||||
| QVC, Inc. 4.38%, 3/15/23 | 3,515 | 3,558 | |||||||||
4.45%, 2/15/25, Callable 11/15/24 @ 100 | 10,000 | 10,087 | |||||||||
See notes to financial statements.
17
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Smithsonian Institution, 0.97%, 9/1/23 | $ | 1,400 | $ | 1,391 | |||||||
Sodexo, Inc., 1.63%, 4/16/26, Callable 3/16/26 @ 100 (a) (f) | 10,000 | 9,746 | |||||||||
Toll Brothers Finance Corp., 4.38%, 4/15/23, Callable 1/15/23 @ 100 | 5,169 | 5,292 | |||||||||
Volkswagen Group of America Finance LLC, 3.13%, 5/12/23 (a) | 5,000 | 5,107 | |||||||||
YMCA of Greater New York, 2.30%, 8/1/26, Callable 5/1/26 @ 100 | 1,700 | 1,687 | |||||||||
83,821 | |||||||||||
Consumer Staples (1.4%): | |||||||||||
7-Eleven, Inc., 0.80%, 2/10/24, Callable 3/14/22 @ 100 (a) (f) | 5,000 | 4,904 | |||||||||
Central Garden & Pet Co., 5.13%, 2/1/28, Callable 1/1/23 @ 102.56 | 5,000 | 5,180 | |||||||||
Darling Ingredients, Inc., 5.25%, 4/15/27, Callable 4/15/22 @ 102.63 (a) | 5,885 | 6,030 | |||||||||
JBS USA Food Co., 5.75%, 1/15/28 (a) | 7,000 | 7,297 | |||||||||
| JBS USA LUX SA/JBS USA Food Co./JBS USA Finance, Inc., 6.50%, 4/15/29, Callable 4/15/24 @ 103.25 (a) | 5,318 | 5,779 | |||||||||
| Walmart, Inc. 2.85%, 7/8/24, Callable 6/8/24 @ 100 | 5,000 | 5,157 | |||||||||
3.55%, 6/26/25, Callable 4/26/25 @ 100 | 5,000 | 5,295 | |||||||||
39,642 | |||||||||||
Energy (10.6%): | |||||||||||
Buckeye Partners LP, 4.15%, 7/1/23, Callable 4/1/23 @ 100 (f) | 5,000 | 5,007 | |||||||||
| Continental Resources, Inc. 4.50%, 4/15/23, Callable 1/15/23 @ 100 (f) | 10,252 | 10,518 | |||||||||
3.80%, 6/1/24, Callable 3/1/24 @ 100 | 13,790 | 14,201 | |||||||||
2.27%, 11/15/26, Callable 11/15/23 @ 100 (a) | 5,000 | 4,844 | |||||||||
Coterra Energy, Inc., 4.38%, 6/1/24, Callable 3/1/24 @ 100 (a) | 3,150 | 3,303 | |||||||||
DCP Midstream Operating LP, 3.88%, 3/15/23, Callable 12/15/22 @ 100 | 4,814 | 4,878 | |||||||||
Devon Energy Corp., 5.25%, 10/15/27, Callable 10/15/22 @ 102.63 | 13,330 | 13,962 | |||||||||
Enable Midstream Partners LP, 3.90%, 5/15/24, Callable 2/15/24 @ 100 | 10,000 | 10,333 | |||||||||
Energy Transfer LP, 4.90%, 2/1/24, Callable 11/1/23 @ 100 | 6,611 | 6,938 | |||||||||
Energy Transfer Operating LP, 4.20%, 9/15/23, Callable 8/15/23 @ 100 | 5,000 | 5,183 | |||||||||
EnLink Midstream Partners LP, 4.40%, 4/1/24, Callable 1/1/24 @ 100 | 5,295 | 5,331 | |||||||||
| EQM Midstream Partners LP 4.75%, 7/15/23, Callable 6/15/23 @ 100 (f) | 1,684 | 1,703 | |||||||||
4.00%, 8/1/24, Callable 5/1/24 @ 100 | 10,030 | 10,006 | |||||||||
EQT Corp., 6.63%, 2/1/25, Callable 1/1/25 @ 100 | 7,000 | 7,547 | |||||||||
Exxon Mobil Corp., 2.99%, 3/19/25, Callable 2/19/25 @ 100 (f) | 5,000 | 5,168 | |||||||||
Gray Oak Pipeline LLC, 2.00%, 9/15/23 (a) | 8,334 | 8,363 | |||||||||
Hess Corp., 3.50%, 7/15/24, Callable 4/15/24 @ 100 | 2,552 | 2,643 | |||||||||
Hess Midstream Operations LP, 5.63%, 2/15/26, Callable 3/14/22 @ 102.81 (a) | 3,357 | 3,424 | |||||||||
| HollyFrontier Corp. 2.63%, 10/1/23 | 5,000 | 5,058 | |||||||||
5.88%, 4/1/26, Callable 1/1/26 @ 100 (f) | 6,990 | 7,683 | |||||||||
| Midwest Connector Capital Co. LLC 3.63%, 4/1/22, Callable 3/1/22 @ 100 (a) (f) | 19,500 | 19,532 | |||||||||
3.90%, 4/1/24, Callable 3/1/24 @ 100 (a) | 8,000 | 8,256 | |||||||||
Murphy Oil Corp., 5.88%, 12/1/27, Callable 12/1/22 @ 102.94 | 11,000 | 11,238 | |||||||||
| Occidental Petroleum Corp. 3.45%, 7/15/24, Callable 4/15/24 @ 100 | 5,000 | 4,989 | |||||||||
2.90%, 8/15/24, Callable 7/15/24 @ 100 | 6,000 | 6,018 | |||||||||
5.88%, 9/1/25, Callable 6/1/25 @ 100 | 2,000 | 2,137 | |||||||||
See notes to financial statements.
18
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Ovintiv Exploration, Inc. 5.63%, 7/1/24 | $ | 15,178 | $ | 16,363 | |||||||
5.38%, 1/1/26, Callable 10/1/25 @ 100 (f) | 9,272 | 10,129 | |||||||||
| Parsley Energy LLC/Parsley Finance Corp. 5.63%, 10/15/27, Callable 10/15/22 @ 102.81 (a) (f) | 22,028 | 22,969 | |||||||||
4.13%, 2/15/28, Callable 2/15/23 @ 102.06 (a) | 7,289 | 7,415 | |||||||||
| PDC Energy, Inc. 6.13%, 9/15/24, Callable 3/14/22 @ 101.53 | 2,498 | 2,532 | |||||||||
5.75%, 5/15/26, Callable 3/14/22 @ 104.31 | 2,002 | 2,037 | |||||||||
| Range Resources Corp. 5.88%, 7/1/22, Callable 4/1/22 @ 100 | 2,000 | 2,003 | |||||||||
5.00%, 8/15/22, Callable 5/15/22 @ 100 | 4,500 | 4,525 | |||||||||
SM Energy Co., 5.63%, 6/1/25, Callable 3/14/22 @ 101.88 | 5,000 | 4,975 | |||||||||
Southwestern Energy Co., 6.20%, 1/23/25, Callable 10/23/24 @ 100 | 6,329 | 6,692 | |||||||||
| Targa Resources Partners LP / Targa Resources Partners Finance Corp., 5.88%, 4/15/26, Callable 3/14/22 @ 104.41 (i) | 681 | 703 | |||||||||
| Targa Resources Partners LP/Targa Resources Partners Finance Corp., 6.50%, 7/15/27, Callable 7/15/22 @ 104.88 | 2,835 | 3,008 | |||||||||
Viper Energy Partners LP, 5.38%, 11/1/27, Callable 11/1/22 @ 102.69 (a) | 5,000 | 5,151 | |||||||||
| Western Midstream Operating LP 4.00%, 7/1/22, Callable 4/1/22 @ 100 | 5,000 | 5,004 | |||||||||
4.35%, 2/1/25, Callable 1/1/25 @ 100 | 11,453 | 11,596 | |||||||||
WPX Energy, Inc., 8.25%, 8/1/23, Callable 6/1/23 @ 100 | 5,263 | 5,700 | |||||||||
299,065 | |||||||||||
Financials (12.7%): | |||||||||||
Alleghany Corp., 4.95%, 6/27/22 | 1,250 | 1,270 | |||||||||
Ares Capital Corp., 3.25%, 7/15/25, Callable 6/15/25 @ 100 | 5,000 | 5,099 | |||||||||
Assurant, Inc., 4.20%, 9/27/23, Callable 8/27/23 @ 100 | 5,000 | 5,195 | |||||||||
Athene Global Funding, 1.20%, 10/13/23 (a) | 5,000 | 4,963 | |||||||||
BB&T Corp., 4.25%, 9/30/24 | 1,955 | 2,060 | |||||||||
| Blackstone Private Credit Fund 1.75%, 9/15/24 (a) | 3,500 | 3,407 | |||||||||
2.35%, 11/22/24 (a) | 5,000 | 4,928 | |||||||||
2.63%, 12/15/26, Callable 11/15/26 @ 100 (a) | 2,308 | 2,192 | |||||||||
| Cadence Bancorp, 4.75% (LIBOR03M+303bps), 6/30/29, Callable 6/30/24 @ 100 (c) | 9,667 | 10,094 | |||||||||
| Cadence Bank, 4.13% (LIBOR03M+247bps), 11/20/29, Callable 11/20/24 @ 100 (c) | 9,196 | 9,408 | |||||||||
| CIT Group, Inc. 5.00%, 8/15/22 | 18,150 | 18,501 | |||||||||
4.75%, 2/16/24 | 3,000 | 3,172 | |||||||||
5.25%, 3/7/25 | 4,904 | 5,356 | |||||||||
4.13% (H15T5Y+237bps), 11/13/29, Callable 11/13/24 @ 100 (c) | 1,000 | 1,046 | |||||||||
Citizens Financial Group, Inc., 4.15%, 9/28/22 (a) | 1,283 | 1,311 | |||||||||
Colfax Corp., 6.38%, 2/15/26, Callable 3/14/22 @ 103.19 (a) | 3,648 | 3,762 | |||||||||
DAE Funding LLC, 1.55%, 8/1/24, Callable 7/1/24 @ 100 (a) | 1,250 | 1,217 | |||||||||
| Dime Community Bancshares, Inc., 4.50% (LIBOR03M+266bps), 6/15/27, Callable 6/15/22 @ 100 (c) | 3,750 | 3,779 | |||||||||
| First Citizens BancShares, Inc., 3.37% (SOFR+247bps), 3/15/30, Callable 3/15/25 @ 100 (c) | 10,871 | 10,923 | |||||||||
See notes to financial statements.
19
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
First Financial Bancorp, 5.13%, 8/25/25 | $ | 9,000 | $ | 9,469 | |||||||
First Horizon National Corp., 3.55%, 5/26/23, Callable 4/26/23 @ 100 | 5,000 | 5,111 | |||||||||
FNB Corp., 2.20%, 2/24/23, Callable 1/24/23 @ 100 | 7,349 | 7,385 | |||||||||
| Ford Motor Credit Co LLC 3.09%, 1/9/23 | 2,750 | 2,764 | |||||||||
2.30%, 2/10/25, Callable 1/10/25 @ 100 | 5,000 | 4,904 | |||||||||
Ford Motor Credit Co. LLC, 3.38%, 11/13/25, Callable 10/13/25 @ 100 | 3,000 | 3,003 | |||||||||
| FS KKR Capital Corp. 4.63%, 7/15/24, Callable 6/15/24 @ 100 | 2,000 | 2,084 | |||||||||
1.65%, 10/12/24 | 5,119 | 4,970 | |||||||||
4.25%, 2/14/25, Callable 1/14/25 @ 100 (a) (i) | 5,600 | 5,762 | |||||||||
| Fulton Financial Corp. 3.60%, 3/16/22 | 1,446 | 1,447 | |||||||||
3.25% (SOFR+230bps), 3/15/30, Callable 3/15/25 @ 100 (c) | 10,000 | 10,013 | |||||||||
GA Global Funding Trust, 1.63%, 1/15/26 (a) | 2,500 | 2,427 | |||||||||
Glencore Funding LLC, 1.63%, 4/27/26, Callable 3/27/26 @ 100 (a) | 5,000 | 4,845 | |||||||||
| Hilltop Holdings, Inc. 5.00%, 4/15/25, Callable 1/15/25 @ 100 | 5,000 | 5,277 | |||||||||
5.75% (SOFR+568bps), 5/15/30, Callable 5/15/25 @ 100 (c) | 5,000 | 5,553 | |||||||||
| Home Bancshares, Inc., 5.63% (LIBOR03M+358bps), 4/15/27, Callable 4/15/22 @ 100 (c) | 572 | 574 | |||||||||
Infinity Property & Casualty Corp., 5.00%, 9/19/22 (f) | 21,955 | 22,358 | |||||||||
| Main Street Capital Corp. 5.20%, 5/1/24 | 11,700 | 12,295 | |||||||||
3.00%, 7/14/26, Callable 6/14/26 @ 100 | 3,500 | 3,431 | |||||||||
| MB Financial Bank NA, 4.00% (LIBOR03M+187bps), 12/1/27, Callable 12/1/22 @ 100 (c) | 3,000 | 3,047 | |||||||||
Mobr-04 LLC (LOC — Compass Bank), 1.12%, 9/1/24 (f) (j) | 3,050 | 3,050 | |||||||||
| New York Community Bancorp, Inc., 5.90% (LIBOR03M+278bps), 11/6/28, Callable 11/6/23 @ 100 (c) | 8,242 | 8,865 | |||||||||
ProAssurance Corp., 5.30%, 11/15/23 (i) | 14,000 | 14,587 | |||||||||
| Prudential Financial, Inc., 5.62% (LIBOR03M+392bps), 6/15/43, Callable 6/15/23 @ 100 (c) | 3,373 | 3,484 | |||||||||
| Radian Group, Inc. 4.50%, 10/1/24, Callable 7/1/24 @ 100 | 6,349 | 6,534 | |||||||||
6.63%, 3/15/25, Callable 9/15/24 @ 100 | 2,744 | 2,958 | |||||||||
| Reliance Standard Life Global Funding II 3.85%, 9/19/23 (a) | 5,000 | 5,170 | |||||||||
2.75%, 5/7/25 (a) (i) | 5,000 | 5,093 | |||||||||
SCE Recovery Funding LLC, 0.86%, 11/15/31 | 9,622 | 9,178 | |||||||||
| Signature Bank, 4.13% (LIBOR03M+256bps), 11/1/29, Callable 11/1/24 @ 100 (c) | 11,650 | 12,102 | |||||||||
| Sixth Street Specialty Lending, Inc., 4.50%, 1/22/23, Callable 12/22/22 @ 100 | 4,500 | 4,595 | |||||||||
StanCorp Financial Group, Inc., 5.00%, 8/15/22 | 5,366 | 5,461 | |||||||||
| Sterling Bancorp, 4.00% (SOFR+253bps), 12/30/29, Callable 12/30/24 @ 100 (c) | 8,750 | 8,939 | |||||||||
Synovus Bank, 2.29% (SOFR+95bps), 2/10/23 (c) | 7,176 | 7,178 | |||||||||
| TCF National Bank, 4.13% (LIBOR03M+238bps), 7/2/29, Callable 7/2/24 @ 100 (c) | 5,000 | 5,264 | |||||||||
See notes to financial statements.
20
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Texas Capital Bancshares, Inc., 4.00% (H15T5Y+315bps), 5/6/31, Callable 5/6/26 @ 100 (c) | $ | 5,000 | $ | 5,150 | |||||||
| The Huntington National Bank, 5.50% (LIBOR03M+509bps), 5/6/30, Callable 5/6/25 @ 100 (c) | 13,000 | 14,059 | |||||||||
| TIAA FSB Holdings, Inc., 4.91% (LIBOR03M+470bps), 3/15/26, Callable 3/14/22 @ 100 (c) | 5,718 | 5,816 | |||||||||
| UMB Financial Corp., 3.70% (H15T5Y+344bps), 9/17/30, Callable 9/17/25 @ 100 (c) | 3,750 | 3,778 | |||||||||
United Financial Bancorp, Inc., 5.75%, 10/1/24 | 8,120 | 8,842 | |||||||||
Webster Financial Corp., 4.38%, 2/15/24, Callable 1/16/24 @ 100 | 5,000 | 5,214 | |||||||||
359,719 | |||||||||||
Health Care (0.8%): | |||||||||||
| Fresenius Medical Care U.S. Finance III, Inc., 1.88%, 12/1/26, Callable 11/1/26 @ 100 (a) | 5,000 | 4,852 | |||||||||
Fresenius U.S. Finance II, Inc., 4.50%, 1/15/23, Callable 10/17/22 @ 100 (a) | 4,000 | 4,091 | |||||||||
HCA, Inc., 7.50%, 12/15/23 | 2,131 | 2,322 | |||||||||
Hikma Finance USA LLC, 3.25%, 7/9/25 | 7,000 | 7,112 | |||||||||
Laboratory Corp. of America Holdings, 1.55%, 6/1/26, Callable 5/1/26 @ 100 | 5,000 | 4,851 | |||||||||
23,228 | |||||||||||
Industrials (5.3%): | |||||||||||
Air Lease Corp., 2.25%, 1/15/23 | 5,000 | 5,051 | |||||||||
Aircastle Ltd., 4.25%, 6/15/26, Callable 4/15/26 @ 100 (f) | 5,000 | 5,251 | |||||||||
| American Airlines Pass Through Trust 4.38%, 4/1/24 | 2,711 | 2,714 | |||||||||
4.40%, 3/22/25 | 6,187 | 6,090 | |||||||||
4.38%, 12/15/25 (a) | 4,675 | 4,579 | |||||||||
American Airlines, Inc./AAdvantage Loyalty IP Ltd., 5.50%, 4/20/26 (a) | 5,000 | 5,118 | |||||||||
Ashtead Capital, Inc., 4.38%, 8/15/27, Callable 8/15/22 @ 102.19 (a) (f) | 11,245 | 11,604 | |||||||||
Aviation Capital Group LLC, 5.50%, 12/15/24, Callable 11/15/24 @ 100 (a) | 7,495 | 8,076 | |||||||||
Builders FirstSource, Inc., 6.75%, 6/1/27, Callable 6/1/22 @ 103.38 (a) | 23,033 | 23,991 | |||||||||
| Continental Airlines Pass Through Trust 5.98%, 10/19/23 | 901 | 908 | |||||||||
4.00%, 4/29/26 | 9,549 | 9,818 | |||||||||
Delta Air Lines Pass Through Trust, 2.00%, 12/10/29 | 4,552 | 4,449 | |||||||||
Delta Air Lines, Inc., 3.63%, 3/15/22, Callable 2/15/22 @ 100 | 2,750 | 2,750 | |||||||||
Delta Air Lines, Inc./SkyMiles IP Ltd., 4.50%, 10/20/25 (a) | 5,852 | 6,065 | |||||||||
Fluor Corp., 3.50%, 12/15/24, Callable 9/15/24 @ 100 (i) | 6,000 | 6,154 | |||||||||
Hillenbrand, Inc., 5.75%, 6/15/25, Callable 6/15/22 @ 102.88 | 1,000 | 1,034 | |||||||||
Huntington Ingalls Industries, Inc., 0.67%, 8/16/23, Callable 8/16/22 @ 100 (a) | 2,500 | 2,460 | |||||||||
| Mileage Plus Holdings LLC/Mileage Plus Intellectual Property Assets Ltd., 6.50%, 6/20/27, Callable 6/30/23 @ 103.25 (a) | 10,000 | 10,631 | |||||||||
| Penske Truck Leasing Co. LP/PTL Finance Corp., 1.70%, 6/15/26, Callable 5/15/26 @ 100 (a) | 5,000 | 4,857 | |||||||||
Spirit AeroSystems, Inc., 3.95%, 6/15/23, Callable 5/15/23 @ 100 | 1,181 | 1,193 | |||||||||
Spirit Airlines Pass Through Trust, 4.45%, 10/1/25 | 11,689 | 11,913 | |||||||||
The Nature Conservancy, 0.47%, 7/1/23 | 850 | 842 | |||||||||
TransDigm, Inc., 8.00%, 12/15/25, Callable 4/8/22 @ 104 (a) (f) | 3,000 | 3,140 | |||||||||
U.S. Airways Pass Through Trust, 3.95%, 5/15/27 | 3,608 | 3,573 | |||||||||
See notes to financial statements.
21
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| United Airlines Pass Through Trust 4.63%, 3/3/24 | $ | 2,922 | $ | 2,944 | |||||||
4.15%, 10/11/25 | 4,942 | 5,093 | |||||||||
4.88%, 7/15/27 | 889 | 913 | |||||||||
151,211 | |||||||||||
Information Technology (0.5%): | |||||||||||
Global Payments, Inc., 1.50%, 11/15/24, Callable 10/15/24 @ 100 | 3,000 | 2,958 | |||||||||
| Skyworks Solutions, Inc. 0.90%, 6/1/23, Callable 6/1/22 @ 100 | 5,000 | 4,952 | |||||||||
1.80%, 6/1/26, Callable 5/1/26 @ 100 (i) | 5,000 | 4,886 | |||||||||
12,796 | |||||||||||
Materials (1.9%): | |||||||||||
Berry Global, Inc., 4.88%, 7/15/26, Callable 7/15/22 @ 102.44 (a) (f) | 12,082 | 12,393 | |||||||||
Cleveland-Cliffs, Inc., 9.88%, 10/17/25, Callable 10/17/22 @ 107.41 (a) (f) | 4,026 | 4,500 | |||||||||
Commercial Metals Co., 4.88%, 5/15/23, Callable 2/15/23 @ 100 | 2,000 | 2,053 | |||||||||
| Freeport-McMoRan, Inc. 5.00%, 9/1/27, Callable 9/1/22 @ 102.5 (f) | 10,808 | 11,185 | |||||||||
4.38%, 8/1/28, Callable 8/1/23 @ 102.19 | 14,000 | 14,430 | |||||||||
Ingevity Corp., 4.50%, 2/1/26, Callable 3/14/22 @ 101.13 (a) | 3,550 | 3,551 | |||||||||
Sealed Air Corp., 1.57%, 10/15/26, Callable 9/15/26 @ 100 (a) | 5,000 | 4,774 | |||||||||
West Fraser Timber Co. Ltd., 4.35%, 10/15/24, Callable 7/15/24 @ 100 (a) | 2,000 | 2,118 | |||||||||
55,004 | |||||||||||
Real Estate (2.2%): | |||||||||||
American Tower Trust #1, 3.07%, 3/15/48, Callable 3/14/22 @ 100 (a) | 3,760 | 3,754 | |||||||||
| MPT Operating Partnership LP/MPT Finance Corp., 5.00%, 10/15/27, Callable 10/15/22 @ 102.5 | 21,401 | 21,990 | |||||||||
| Nationwide Health Properties, Inc., 6.90%, 10/1/37, (Put Date 10/1/27), MTN (k) | 2,950 | 3,675 | |||||||||
Newmark Group, Inc., 6.13%, 11/15/23, Callable 10/15/23 @ 100 | 12,000 | 12,635 | |||||||||
| SBA Tower Trust 2.84%, 1/15/25, Callable 1/15/24 @ 100 (a) | 6,923 | 7,052 | |||||||||
1.88%, 7/15/50, Callable 1/15/25 @ 100 (a) | 3,500 | 3,449 | |||||||||
SL Green Realty Corp., 4.50%, 12/1/22, Callable 9/1/22 @ 100 (i) | 5,000 | 5,097 | |||||||||
| VICI Properties LP/VICI Note Co., Inc., 3.50%, 2/15/25, Callable 3/14/22 @ 101.75 (a) | 4,136 | 4,136 | |||||||||
61,788 | |||||||||||
Utilities (1.3%): | |||||||||||
Calpine Corp., 5.25%, 6/1/26, Callable 3/14/22 @ 102.63 (a) | 984 | 1,003 | |||||||||
Entergy Texas, Inc., 1.50%, 9/1/26, Callable 8/1/26 @ 100 | 3,000 | 2,875 | |||||||||
National Fuel Gas Co., 5.50%, 1/15/26, Callable 12/15/25 @ 100 | 5,000 | 5,482 | |||||||||
Puget Energy, Inc., 5.63%, 7/15/22, Callable 4/15/22 @ 100 | 1,438 | 1,452 | |||||||||
Sierra Pacific Power Co., 3.38%, 8/15/23, Callable 5/15/23 @ 100 | 4,299 | 4,403 | |||||||||
Southern Power Co., 2.75%, 9/20/23, Callable 7/20/23 @ 100 | 9,500 | 9,665 | |||||||||
System Energy Resources, Inc., 4.10%, 4/1/23, Callable 1/1/23 @ 100 (i) | 3,630 | 3,714 | |||||||||
Vistra Operations Co. LLC, 3.55%, 7/15/24, Callable 6/15/24 @ 100 (a) | 8,000 | 8,166 | |||||||||
36,760 | |||||||||||
Total Corporate Bonds (Cost $1,135,263) | 1,137,766 | ||||||||||
See notes to financial statements.
22
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Yankee Dollars (10.4%) | |||||||||||
Communication Services (0.8%): | |||||||||||
Bharti Airtel International Netherlands BV, 5.35%, 5/20/24 (a) | $ | 8,000 | $ | 8,511 | |||||||
Pearson Funding Four PLC, 3.75%, 5/8/22 (a) | 7,250 | 7,293 | |||||||||
Telefonica Chile SA, 3.88%, 10/12/22 (a) (i) | 5,908 | 6,008 | |||||||||
21,812 | |||||||||||
Consumer Discretionary (0.4%): | |||||||||||
Nissan Motor Co. Ltd., 3.04%, 9/15/23 (a) | 4,000 | 4,067 | |||||||||
Stellantis Finance US, Inc., 1.71%, 1/29/27, Callable 12/29/26 @ 100 (a) | 1,667 | 1,606 | |||||||||
Stellantis NV, 5.25%, 4/15/23 | 4,352 | 4,536 | |||||||||
10,209 | |||||||||||
Consumer Staples (0.2%): | |||||||||||
Imperial Brands Finance PLC, 4.25%, 7/21/25, Callable 4/21/25 @ 100 (a) | 1,075 | 1,135 | |||||||||
| JBS USA LUX SA/JBS USA Finance, Inc., 6.75%, 2/15/28, Callable 2/15/23 @ 103.38 (a) | 5,000 | 5,349 | |||||||||
6,484 | |||||||||||
Energy (1.2%): | |||||||||||
Cenovus Energy, Inc., 3.80%, 9/15/23 | 3,310 | 3,429 | |||||||||
| Galaxy Pipeline Assets Bidco Ltd. 1.75%, 9/30/27 (a) | 2,447 | 2,415 | |||||||||
2.16%, 3/31/34 (a) | 750 | 721 | |||||||||
Harbour Energy PLC, 5.50%, 10/15/26, Callable 10/15/23 @ 102.75 (a) | 2,896 | 2,877 | |||||||||
Harvest Operations Corp., 1.00%, 4/26/24, Callable 4/26/22 @ 100 (a) | 4,572 | 4,508 | |||||||||
Lundin Energy Finance BV, 2.00%, 7/15/26, Callable 6/15/26 @ 100 (a) | 5,000 | 4,893 | |||||||||
Petroleos Mexicanos, 3.85% (LIBOR03M+365bps), 3/11/22 (c) (i) | 14,217 | 14,230 | |||||||||
Woodside Finance Ltd., 3.65%, 3/5/25, Callable 12/5/24 @ 100 (a) | 1,240 | 1,288 | |||||||||
34,361 | |||||||||||
Financials (3.8%): | |||||||||||
| Banco Santander Mexico SA Institucion de Banca Multiple Grupo Financiero Santand 4.13%, 11/9/22 (a) | 10,704 | 10,936 | |||||||||
5.38%, 4/17/25 (a) (f) | 15,085 | 16,285 | |||||||||
5.95%, 10/1/28, Callable 10/1/23 @ 100 | 4,199 | 4,374 | |||||||||
BAT International Finance PLC, 1.67%, 3/25/26, Callable 2/25/26 @ 100 | 5,000 | 4,823 | |||||||||
BBVA Bancomer SA, 6.75%, 9/30/22 (a) | 28,670 | 29,654 | |||||||||
BBVA Bancomer SA Texas, 6.75%, 9/30/22 | 2,000 | 2,065 | |||||||||
Park Aerospace Holdings Ltd., 5.25%, 8/15/22, Callable 7/15/22 @ 100 (a) | 8,000 | 8,135 | |||||||||
Phoenix Group Holdings PLC, 5.38%, 7/6/27, MTN | �� | 5,087 | 5,526 | ||||||||
SA Global Sukuk Ltd., 0.95%, 6/17/24, Callable 5/17/24 @ 100 (a) | 4,167 | 4,069 | |||||||||
| Santander UK Group Holdings PLC, 3.37% (LIBOR03M+108bps), 1/5/24, Callable 1/5/23 @ 100 (c) | 5,000 | 5,086 | |||||||||
Standard Chartered PLC, 7.50% (USSW5+630bps), Callable 4/2/22 @ 100 (c) (l) | 6,000 | 6,045 | |||||||||
| VEON Holdings BV 7.50%, 3/1/22 (a) | 2,000 | 2,004 | |||||||||
5.95%, 2/13/23 | 10,000 | 10,205 | |||||||||
109,207 | |||||||||||
See notes to financial statements.
23
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Health Care (0.1%): | |||||||||||
Olympus Corp., 2.14%, 12/8/26, Callable 11/8/26 @ 100 (a) | $ | 1,818 | $ | 1,801 | |||||||
Industrials (2.2%): | |||||||||||
| AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 3.15%, 2/15/24, Callable 1/15/24 @ 100 | 5,000 | 5,096 | |||||||||
| Air Canada Pass Through Trust 5.00%, 6/15/25 (a) | 973 | 985 | |||||||||
4.13%, 11/15/26 (a) | 13,973 | 14,005 | |||||||||
Aircastle Ltd., 4.40%, 9/25/23, Callable 8/25/23 @ 100 | 5,000 | 5,180 | |||||||||
| Avolon Holdings Funding Ltd. 3.95%, 7/1/24, Callable 6/1/24 @ 100 (a) | 5,000 | 5,166 | |||||||||
2.88%, 2/15/25, Callable 1/15/25 @ 100 (a) | 10,000 | 10,094 | |||||||||
2.13%, 2/21/26, Callable 1/21/26 @ 100 (a) | 4,250 | 4,088 | |||||||||
CK Hutchison International 17 II Ltd., 2.75%, 9/29/23 | 4,907 | 4,983 | |||||||||
IHS Markit Ltd., 5.00%, 11/1/22, Callable 8/1/22 @ 100 (a) | 3,500 | 3,569 | |||||||||
The Weir Group PLC, 2.20%, 5/13/26, Callable 4/13/26 @ 100 (a) | 10,000 | 9,758 | |||||||||
62,924 | |||||||||||
Information Technology (0.3%): | |||||||||||
Telefonaktiebolaget LM Ericsson, 4.13%, 5/15/22 | 7,290 | 7,346 | |||||||||
Materials (1.4%): | |||||||||||
Braskem Netherlands Finance BV, 3.50%, 1/10/23, Callable 12/10/22 @ 100 (a) | 5,000 | 5,076 | |||||||||
| Nufarm Australia Ltd. / Nufarm Americas, Inc., 5.75%, 4/30/26, Callable 2/19/22 @ 102.88 (a) | 7,000 | 7,212 | |||||||||
OCI NV, 4.63%, 10/15/25, Callable 10/15/22 @ 102.31 (a) | 5,119 | 5,251 | |||||||||
| POSCO 2.38%, 1/17/23 | 5,800 | 5,848 | |||||||||
2.38%, 1/17/23 (a) | 11,174 | 11,264 | |||||||||
Syngenta Finance NV, 3.13%, 3/28/22 | 6,256 | 6,272 | |||||||||
40,923 | |||||||||||
Utilities (0.0%): (m) | |||||||||||
TransAlta Corp., 4.50%, 11/15/22, Callable 8/15/22 @ 100 (i) | 1,252 | 1,264 | |||||||||
Total Yankee Dollars (Cost $297,064) | 296,331 | ||||||||||
Municipal Bonds (9.7%) | |||||||||||
Alabama (0.3%): | |||||||||||
Auburn University Revenue, Series C, 0.82%, 6/1/24 | 2,760 | 2,728 | |||||||||
City of Birmingham, GO, 0.86%, 3/1/24 | 1,585 | 1,569 | |||||||||
| The Water Works Board of The City of Birmingham Revenue 2.20%, 1/1/24 | 1,000 | 1,016 | |||||||||
2.36%, 1/1/25 | 2,000 | 2,046 | |||||||||
7,359 | |||||||||||
Alaska (0.1%): | |||||||||||
| University of Alaska Revenue Series W, 1.70%, 10/1/22 | 900 | 904 | |||||||||
Series W, 1.83%, 10/1/23 | 1,000 | 1,005 | |||||||||
1,909 | |||||||||||
See notes to financial statements.
24
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Arizona (0.3%): | |||||||||||
Arizona Board of Regents Certificate participation, 0.77%, 6/1/24 | $ | 1,500 | $ | 1,473 | |||||||
City of Flagstaff AZ Certificate participation, Series A, 0.97%, 5/1/23 | 1,000 | 996 | |||||||||
| City of Phoenix Civic Improvement Corp. Revenue 0.68%, 7/1/23 | 1,000 | 992 | |||||||||
2.37%, 7/1/25 | 1,500 | 1,517 | |||||||||
City of Tempe AZ Certificate participation, 0.62%, 7/1/24 | 2,500 | 2,446 | |||||||||
7,424 | |||||||||||
California (0.7%): | |||||||||||
| California Statewide Communities Development Authority Revenue 0.52%, 4/1/22 | 875 | 875 | |||||||||
1.03%, 4/1/24 | 1,250 | 1,224 | |||||||||
1.31%, 4/1/25 | 915 | 890 | |||||||||
2.15%, 11/15/30, Continuously callable @100 | 4,670 | 4,425 | |||||||||
| California Statewide Communities Development Authority Revenue (NBGA — California Health Insurance Construction Loan Insurance Program), 2.05%, 8/1/30 | 2,790 | 2,684 | |||||||||
City of Riverside CA Revenue, Series A, 1.75%, 6/1/22 | 670 | 672 | |||||||||
| Golden State Tobacco Securitization Corp. Revenue 1.85%, 6/1/31 | 1,500 | 1,458 | |||||||||
Series A1, 1.71%, 6/1/24 | 1,000 | 997 | |||||||||
Series B, 0.50%, 6/1/22 | 1,000 | 1,000 | |||||||||
Series B, 0.67%, 6/1/23 | 1,000 | 992 | |||||||||
Series B, 0.99%, 6/1/24 | 1,000 | 985 | |||||||||
Series B, 1.40%, 6/1/25 | 3,000 | 2,956 | |||||||||
Sequoia Union High School District, GO, 1.74%, 7/1/25 | 1,250 | 1,248 | |||||||||
20,406 | |||||||||||
Colorado (0.6%): | |||||||||||
| City & County of Denver Co. Airport System Revenue Series C, 0.88%, 11/15/23 | 1,850 | 1,835 | |||||||||
Series C, 1.12%, 11/15/24 | 1,330 | 1,312 | |||||||||
City of Loveland Electric & Communications Enterprise Revenue, 2.97%, 12/1/24 | 2,280 | 2,342 | |||||||||
| Colorado Health Facilities Authority Revenue Series B, 2.24%, 11/1/22 | 530 | 534 | |||||||||
Series B, 2.40%, 11/1/23 | 1,250 | 1,262 | |||||||||
Series B, 2.50%, 11/1/24 | 1,250 | 1,264 | |||||||||
Series B, 2.80%, 12/1/26 | 700 | 704 | |||||||||
| Denver City & County Housing Authority Revenue 2.15%, 12/1/24 | 3,850 | 3,881 | |||||||||
2.30%, 12/1/25 | 2,000 | 2,018 | |||||||||
Park Creek Metropolitan District Revenue, Series B, 2.53%, 12/1/24 | 500 | 516 | |||||||||
University of Colorado Revenue, Series A, 2.35%, 6/1/25 | 2,500 | 2,557 | |||||||||
18,225 | |||||||||||
See notes to financial statements.
25
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
District of Columbia (0.0%): (m) | |||||||||||
| District of Columbia Revenue 1.44%, 4/1/22 | $ | 350 | $ | 351 | |||||||
1.56%, 4/1/23 | 520 | 522 | |||||||||
1.67%, 4/1/24 | 550 | 550 | |||||||||
1,423 | |||||||||||
Florida (0.5%): | |||||||||||
| City of Gainesville Florida Revenue 0.64%, 10/1/22 | 800 | 798 | |||||||||
0.82%, 10/1/23 | 750 | 741 | |||||||||
County of Lee Florida Water & Sewer Revenue, 2.01%, 10/1/24 | 1,360 | 1,376 | |||||||||
| Florida Development Finance Corp. Revenue 1.80%, 4/1/22 | 1,180 | 1,180 | |||||||||
1.98%, 4/1/23 | 1,750 | 1,744 | |||||||||
| Hillsborough County IDA Revenue 2.01%, 8/1/24 | 5,000 | 4,973 | |||||||||
2.16%, 8/1/25 | 2,910 | 2,887 | |||||||||
13,699 | |||||||||||
Georgia (0.3%): | |||||||||||
| Athens Housing Authority Revenue 2.13%, 12/1/24 | 1,850 | 1,878 | |||||||||
2.32%, 12/1/25 | 3,215 | 3,278 | |||||||||
| Municipal Electric Authority of Georgia Revenue Series B, 1.58%, 1/1/26 | 1,000 | 983 | |||||||||
Series B, 1.89%, 1/1/27 | 2,650 | 2,585 | |||||||||
8,724 | |||||||||||
Guam (0.1%): | |||||||||||
| Antonio B Won Pat International Airport Authority Revenue Series A, 2.50%, 10/1/25 | 440 | 430 | |||||||||
Series A, 2.70%, 10/1/26 | 610 | 593 | |||||||||
Territory of Guam Revenue, Series E, 3.25%, 11/15/26 | 1,500 | 1,510 | |||||||||
2,533 | |||||||||||
Illinois (0.4%): | |||||||||||
| Chicago O'Hare International Airport Revenue Series D, 0.96%, 1/1/23 | 835 | 835 | |||||||||
Series D, 1.17%, 1/1/24 | 1,000 | 996 | |||||||||
| Chicago Transit Authority Sales Tax Receipts Fund Revenue Series B, 1.71%, 12/1/22 | 1,000 | 1,003 | |||||||||
Series B, 1.84%, 12/1/23 | 1,500 | 1,500 | |||||||||
Illinois Finance Authority Revenue, 2.11%, 5/15/26 | 1,000 | 979 | |||||||||
| State of Illinois Sales Tax Revenue Series B, 0.91%, 6/15/24 | 3,500 | 3,384 | |||||||||
Series B, 1.25%, 6/15/25 | 2,500 | 2,397 | |||||||||
11,094 | |||||||||||
See notes to financial statements.
26
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Indiana (0.3%): | |||||||||||
| Indiana Finance Authority Revenue 2.66%, 3/1/25 | $ | 1,675 | $ | 1,707 | |||||||
2.76%, 3/1/26 | 1,850 | 1,890 | |||||||||
Series B, 1.67%, 11/15/22 | 300 | 298 | |||||||||
Series B, 1.99%, 11/15/24 | 350 | 338 | |||||||||
Series B, 2.45%, 11/15/25 | 360 | 348 | |||||||||
| Lake Central Multi-District School Building Corp. Revenue 0.67%, 1/15/23 | 500 | 498 | |||||||||
0.72%, 7/15/23 | 1,500 | 1,488 | |||||||||
0.85%, 1/15/24 | 1,275 | 1,259 | |||||||||
7,826 | |||||||||||
Kansas (0.0%): (m) | |||||||||||
| Wyandotte County-Kansas City Unified Government Utility System Revenue, Series B, 1.13%, 9/1/24 | 1,000 | 988 | |||||||||
Kentucky (0.1%): | |||||||||||
County of Warren Revenue, 1.07%, 4/1/26 | 1,385 | 1,328 | |||||||||
| Kentucky State Property & Building Commission Revenue, Series C, 2.76%, 5/1/22 | 250 | 251 | |||||||||
1,579 | |||||||||||
Louisiana (0.1%): | |||||||||||
| Terrebonne Levee & Conservation District Revenue Series A, 0.97%, 6/1/22 | 800 | 800 | |||||||||
Series A, 1.13%, 6/1/23 | 1,200 | 1,195 | |||||||||
1,995 | |||||||||||
Maryland (0.8%): | |||||||||||
| County of Howard, GO Series C, 1.22%, 8/15/22 | 960 | 963 | |||||||||
Series C, 1.34%, 8/15/23 | 1,000 | 1,002 | |||||||||
Maryland Economic Development Corp. Revenue, Series B, 3.30%, 6/1/22 | 3,795 | 3,805 | |||||||||
| Maryland Health & Higher Educational Facilities Authority Revenue 0.89%, 1/1/23 | 1,700 | 1,680 | |||||||||
1.23%, 1/1/24 | 5,185 | 5,055 | |||||||||
1.81%, 1/1/25 | 2,780 | 2,707 | |||||||||
1.89%, 1/1/26 | 4,135 | 3,979 | |||||||||
| Maryland Stadium Authority Revenue Series C, 1.13%, 5/1/23 | 1,535 | 1,530 | |||||||||
Series C, 1.32%, 5/1/24 | 1,000 | 991 | |||||||||
21,712 | |||||||||||
Massachusetts (0.0%): (m) | |||||||||||
| Massachusetts Development Finance Agency Revenue, Series B, 4.00%, 6/1/24 | 470 | 476 | |||||||||
Michigan (0.7%): | |||||||||||
| Ecorse Public School District, GO 2.00%, 5/1/24 | 1,250 | 1,263 | |||||||||
2.09%, 5/1/25 | 2,200 | 2,228 | |||||||||
See notes to financial statements.
27
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Great Lakes Water Authority Sewage Disposal System Revenue, Series B, 1.49%, 7/1/22 | $ | 670 | $ | 671 | |||||||
| Michigan Finance Authority Revenue 2.21%, 12/1/23 | 1,565 | 1,585 | |||||||||
2.31%, 12/1/24 | 895 | 909 | |||||||||
2.37%, 9/1/49, (Put Date 9/1/23) (k) | 5,944 | 6,015 | |||||||||
Series A-1, 2.33%, 6/1/30 | 3,820 | 3,786 | |||||||||
| Michigan State Building Authority Revenue Series II, 0.60%, 4/15/23 | 725 | 718 | |||||||||
Series II, 0.65%, 10/15/23 | 1,500 | 1,476 | |||||||||
Ypsilanti School District, GO, 2.02%, 5/1/25 | 575 | 569 | |||||||||
19,220 | |||||||||||
Minnesota (0.1%): | |||||||||||
| Western Minnesota Municipal Power Agency Revenue Series A, 2.28%, 1/1/25 | 1,000 | 1,019 | |||||||||
Series A, 2.38%, 1/1/26 | 1,000 | 1,021 | |||||||||
2,040 | |||||||||||
Mississippi (0.1%): | |||||||||||
| Mississippi Development Bank Revenue 2.31%, 1/1/25 | 2,235 | 2,288 | |||||||||
2.36%, 1/1/26 | 2,000 | 2,052 | |||||||||
4,340 | |||||||||||
Missouri (0.4%): | |||||||||||
| Bi-State Development Agency of the Missouri-Illinois Metropolitan District Revenue Series B, 1.02%, 10/1/23 | 2,000 | 1,986 | |||||||||
Series B, 1.22%, 10/1/24 | 1,250 | 1,234 | |||||||||
Kansas City IDA Revenue, 1.30%, 3/1/24 | 3,000 | 2,979 | |||||||||
| Missouri State Environmental Improvement & Energy Resources Authority Revenue, Series B, 0.70%, 1/1/24 | 2,640 | 2,604 | |||||||||
University of Missouri Revenue, 1.47%, 11/1/23 | 2,000 | 2,007 | |||||||||
10,810 | |||||||||||
Nebraska (0.1%): | |||||||||||
| Nebraska Cooperative Republican Platte Enhancement Project Revenue, Series B, 0.83%, 12/15/22 | 1,000 | 996 | |||||||||
| Papio-Missouri River Natural Resource District Special Tax, 2.09%, 12/15/24, Continuously callable @100 | 900 | 907 | |||||||||
1,903 | |||||||||||
New Jersey (0.4%): | |||||||||||
| Franklin Township Board of Education/Somerset County, GO, 0.65%, 2/1/24 | 655 | 645 | |||||||||
| New Jersey Economic Development Authority Revenue, Series NNN, 2.78%, 6/15/23 | 2,042 | 2,070 | |||||||||
| North Hudson Sewerage Authority Revenue 2.43%, 6/1/24 | 1,200 | 1,218 | |||||||||
2.59%, 6/1/25 | 1,000 | 1,020 | |||||||||
See notes to financial statements.
28
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| South Jersey Transportation Authority Revenue Series B, 2.10%, 11/1/24 | $ | 1,750 | $ | 1,744 | |||||||
Series B, 2.20%, 11/1/25 | 3,515 | 3,493 | |||||||||
10,190 | |||||||||||
New York (0.5%): | |||||||||||
| Buffalo & Erie County Industrial Land Development Corp. Revenue, Series B, 3.35%, 11/1/25 | 1,235 | 1,228 | |||||||||
County of Suffolk, GO, Series C, 0.90%, 6/15/22 | 1,000 | 1,000 | |||||||||
| Long Island Power Authority Revenue, Series C, 0.76%, 3/1/23, Continuously callable @100 | 500 | 499 | |||||||||
| Madison County Capital Resource Corp. Revenue 2.23%, 7/1/24 | 1,200 | 1,216 | |||||||||
2.39%, 7/1/25 | 2,670 | 2,715 | |||||||||
2.52%, 7/1/26 | 3,050 | 3,108 | |||||||||
| New York State Dormitory Authority Revenue Series B, 3.18%, 3/15/22 | 2,000 | 2,006 | |||||||||
Series C, 0.89%, 3/15/25 | 2,000 | 1,947 | |||||||||
New York State Thruway Authority Revenue, Series M, 2.26%, 1/1/25 | 1,000 | 1,014 | |||||||||
14,733 | |||||||||||
North Carolina (0.0%): (m) | |||||||||||
City of Winston-Salem NC Revenue, Series B, 2.33%, 6/1/26 | 500 | 511 | |||||||||
| North Carolina Capital Facilities Finance Agency Revenue, Series B, 0.88%, 10/1/22 | 700 | 697 | |||||||||
1,208 | |||||||||||
Ohio (0.1%): | |||||||||||
| City of Cleveland Airport System Revenue 2.49%, 1/1/25 | 2,000 | 2,035 | |||||||||
2.59%, 1/1/26 | 2,000 | 2,032 | |||||||||
4,067 | |||||||||||
Oklahoma (0.0%): (m) | |||||||||||
Oklahoma Turnpike Authority Revenue, Series B, 0.63%, 1/1/23 | 560 | 559 | |||||||||
Oregon (0.1%): | |||||||||||
| Medford Hospital Facilities Authority Revenue Series B, 1.65%, 8/15/22 | 500 | 501 | |||||||||
Series B, 1.73%, 8/15/23 | 1,400 | 1,399 | |||||||||
Series B, 1.83%, 8/15/24 | 1,700 | 1,691 | |||||||||
3,591 | |||||||||||
Pennsylvania (0.8%): | |||||||||||
City of Pittsburgh PA, GO, Series B, 0.84%, 9/1/24 | 1,715 | 1,682 | |||||||||
County of Allegheny PA, GO, Series C, 0.69%, 11/1/23 | 2,200 | 2,178 | |||||||||
County of Bucks PA, GO, 0.98%, 6/1/24 | 2,025 | 2,002 | |||||||||
| Montgomery County IDA Revenue Series D, 2.45%, 11/15/23 | 1,250 | 1,229 | |||||||||
Series D, 2.60%, 11/15/24 | 4,050 | 3,939 | |||||||||
| Scranton School District, GO Series A, 3.15%, 6/15/34, (Put Date 6/15/24) (a) (k) | 2,805 | 2,800 | |||||||||
Series B, 3.15%, 6/15/34, (Put Date 6/15/24) (a) (k) | 1,415 | 1,467 | |||||||||
See notes to financial statements.
29
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Scranton School District, GO (INS — Build America Mutual Assurance Co.) 2.50%, 4/1/23 | $ | 1,815 | $ | 1,842 | |||||||
2.60%, 4/1/24 | 1,730 | 1,769 | |||||||||
2.72%, 4/1/25 | 900 | 927 | |||||||||
2.82%, 4/1/26 | 1,000 | 1,034 | |||||||||
State Public School Building Authority Revenue, 2.75%, 4/1/25 | 1,500 | 1,541 | |||||||||
22,410 | |||||||||||
Rhode Island (0.1%): | |||||||||||
Rhode Island Commerce Corp. Revenue, 2.86%, 5/1/24 | 2,065 | 2,126 | |||||||||
South Dakota (0.1%): | |||||||||||
Educational Enhancement Funding Corp. Revenue, 0.59%, 6/1/22 | 1,300 | 1,298 | |||||||||
| South Dakota Health & Educational Facilities Authority Revenue Series B, 2.31%, 7/1/23 | 1,500 | 1,514 | |||||||||
Series B, 2.38%, 7/1/24 | 1,350 | 1,363 | |||||||||
4,175 | |||||||||||
Texas (0.7%): | |||||||||||
| Central Texas Regional Mobility Authority Revenue Series C, 1.45%, 1/1/25 | 400 | 395 | |||||||||
Series D, 1.65%, 1/1/24 | 500 | 490 | |||||||||
Series D, 1.80%, 1/1/25 | 750 | 724 | |||||||||
City of Houston Airport System Revenue, Series C, 1.05%, 7/1/23 | 1,650 | 1,643 | |||||||||
City of Lubbock Water & Wastewater System Revenue, 2.06%, 2/15/25 | 5,000 | 5,091 | |||||||||
| Clear Creek Independent School District, GO Series B, 5.00%, 2/15/24 | 2,250 | 2,409 | |||||||||
Series B, 5.00%, 2/15/25 | 1,650 | 1,811 | |||||||||
| Dallas/Fort Worth International Airport Revenue Series C, 1.04%, 11/1/23 | 500 | 497 | |||||||||
Series C, 1.23%, 11/1/24 | 750 | 742 | |||||||||
Denton Independent School District, GO, Series A, 0.99%, 8/15/24 | 1,000 | 963 | |||||||||
| Harris County Cultural Education Facilities Finance Corp. Revenue, Series B, 2.47%, 5/15/25 | 1,000 | 1,018 | |||||||||
| San Antonio Education Facilities Corp. Revenue 1.74%, 4/1/25 | 505 | 489 | |||||||||
1.99%, 4/1/26 | 860 | 828 | |||||||||
2.19%, 4/1/27 | 525 | 503 | |||||||||
| Tarrant County Cultural Education Facilities Finance Corp. Revenue, 0.92%, 9/1/22 | 655 | 655 | |||||||||
| White Settlement Independent School District, GO (NBGA — Texas Permanent School Fund) 0.65%, 8/15/23 | 640 | 627 | |||||||||
0.93%, 8/15/24 | 550 | 529 | |||||||||
19,414 | |||||||||||
Virginia (0.5%): | |||||||||||
County of Arlington, GO, Series B, 0.64%, 8/1/24 (f) | 3,000 | 2,940 | |||||||||
| Virginia Small Business Financing Authority Revenue, 2.25%, 7/1/50, (Put Date 12/29/22) (a) (k) | 11,000 | 10,997 | |||||||||
13,937 | |||||||||||
See notes to financial statements.
30
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
West Virginia (0.2%): | |||||||||||
| Tobacco Settlement Finance Authority Revenue 0.95%, 6/1/22 | $ | 3,500 | $ | 3,502 | |||||||
Series A, 1.19%, 6/1/23 | 3,500 | 3,486 | |||||||||
6,988 | |||||||||||
Wisconsin (0.2%): | |||||||||||
| Public Finance Authority Revenue Series S, 0.81%, 2/1/23 | 750 | 742 | |||||||||
Series S, 1.14%, 2/1/24 | 1,445 | 1,413 | |||||||||
Series S, 1.48%, 2/1/25 | 820 | 797 | |||||||||
| State of Wisconsin Revenue Series A, 1.90%, 5/1/25 | 2,000 | 2,018 | |||||||||
Series A, 2.10%, 5/1/26 | 1,000 | 1,014 | |||||||||
5,984 | |||||||||||
Total Municipal Bonds (Cost $275,991) | 275,067 | ||||||||||
U.S. Government Agency Mortgages (0.3%) | |||||||||||
| Federal Home Loan Mortgage Corp. 2.00% (LIBOR12M+163bps), 4/1/35 (c) | 129 | 132 | |||||||||
| Federal National Mortgage Association Series 2012-M8, Class X2, 0.71%, 5/25/22 (d) (e) | 12,070 | — | (b) | ||||||||
Series 2013-M1, Class X2, 0.55%, 8/25/22 (d) (e) | 16,780 | 1 | |||||||||
6.00%, 10/1/22 – 7/1/23 | 75 | 76 | |||||||||
5.50%, 2/1/23 – 6/1/24 | 109 | 112 | |||||||||
4.50%, 5/1/23 – 2/1/24 | 23 | 23 | |||||||||
5.00%, 6/1/23 – 2/1/24 | 62 | 63 | |||||||||
2.50%, 4/1/27 – 8/1/27 | 7,749 | 7,936 | |||||||||
Series 2012-104, Class HC, 1.25%, 9/25/27 | 1,067 | 1,064 | |||||||||
9,275 | |||||||||||
9,407 | |||||||||||
Total U.S. Government Agency Mortgages (Cost $9,225) | 9,407 | ||||||||||
U.S. Treasury Obligations (1.0%) | |||||||||||
| U.S. Treasury Notes 0.13%, 8/31/23 | 10,000 | 9,856 | |||||||||
0.38%, 7/15/24 | 5,000 | 4,891 | |||||||||
0.38%, 8/15/24 | 13,000 | 12,700 | |||||||||
Total U.S. Treasury Obligations (Cost $27,967) | 27,447 | ||||||||||
Commercial Paper (0.3%) (n) | |||||||||||
Energy Transfer Partners LP, 0.31%, 2/1/22 | 4,200 | 4,200 | |||||||||
Jabil, Inc., 0.38%, 2/1/22 (a) | 4,000 | 4,000 | |||||||||
Total Commercial Paper (Cost $8,200) | 8,200 | ||||||||||
See notes to financial statements.
31
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Collateral for Securities Loaned (0.5%)^ | |||||||||||
| Fidelity Investments Money Market Government Portfolio, Institutional Shares, 0.01% (o) | 6,454,242 | $ | 6,454 | ||||||||
HSBC U.S. Government Money Market Fund, I Shares, 0.03% (o) | 8,218,696 | 8,219 | |||||||||
Total Collateral for Securities Loaned (Cost $14,673) | 14,673 | ||||||||||
Total Investments (Cost $2,865,481) — 100.9% | 2,858,903 | ||||||||||
Liabilities in excess of other assets — (0.9)% | (26,379 | ) | |||||||||
NET ASSETS — 100.00% | $ | 2,832,524 | |||||||||
At January 31, 2022, the Fund's investments in foreign securities were 12.1% of net assets.
^ 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 (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of January 31, 2022, the fair value of these securities was $1,453,708 (thousands) and amounted to 51.3% of net assets.
(b) Rounds to less than $1 thousand.
(c) Variable or Floating-Rate Security. Rate disclosed is as of January 31, 2022.
(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, 2022.
(e) Security is interest only.
(f) All or a portion of this security has been segregated as collateral for derivative instruments, delayed delivered and/or when-issued securities.
(g) Security or portion of security purchased on a delayed-delivery and/or when-issued basis.
(h) 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.
(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) Security is perpetual and has no final maturity date but may be subject to calls at various dates in the future.
(m) Amount represents less than 0.05% of net assets.
(n) Rate represents the effective yield at January 31, 2022.
(o) Rate disclosed is the daily yield on January 31, 2022.
See notes to financial statements.
32
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Unaudited)
bps — Basis points
Continuously callable — Investment is continuously callable or will be continuously callable on any date after the first call date until its maturity.
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, 2022, based on the last reset date of the security
LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of January 31, 2022, based on the last reset date of the security
LIBOR12M — 12 Month US Dollar LIBOR, rate disclosed as of January 31, 2022, based on the last reset date of the security
LLC — Limited Liability Company
LOC — Letter of Credit
LP — Limited Partnership
MTN — Medium Term Note
PLC — Public Limited Company
SOFR — Secured Overnight Financing Rate
USSW5 — USD 5 Year Swap Rate, rate disclosed as of January 31, 2022.
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.
LOC Principal and interest payments are guaranteed by a bank letter of credit or other bank credit agreement.
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.
33
| USAA Mutual Funds Trust USAA Short-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Unaudited)
Futures Contracts Purchased
(Amounts not in thousands)
| Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||
5-Year U.S. Treasury Note Futures | 50 | 3/31/22 | $ | 6,063,011 | $ | 5,960,156 | $ | (102,855 | ) | ||||||||||||||
Total unrealized appreciation | $ | — | |||||||||||||||||||||
Total unrealized depreciation | (102,855 | ) | |||||||||||||||||||||
Total net unrealized appreciation (depreciation) | $ | (102,855 | ) | ||||||||||||||||||||
See notes to financial statements.
34
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA Short-Term Bond Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $2,865,481) | $ | 2,858,903 | (a) | ||||
Cash | 5,596 | ||||||
Deposit with broker for futures contracts | 1,791 | ||||||
Receivables: | |||||||
Interest and dividends | 19,177 | ||||||
Capital shares issued | 4,318 | ||||||
Investments sold | 1 | ||||||
Variation margin on open futures contracts | 2 | ||||||
From Adviser | 3 | ||||||
Prepaid expenses | 53 | ||||||
Total Assets | 2,889,844 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 14,673 | ||||||
Distributions | 78 | ||||||
Investments purchased | 37,726 | ||||||
Capital shares redeemed | 3,443 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 610 | ||||||
Administration fees | 284 | ||||||
Custodian fees | 27 | ||||||
Transfer agent fees | 360 | ||||||
Compliance fees | 1 | ||||||
| 12b-1 fees | 2 | ||||||
Other accrued expenses | 116 | ||||||
Total Liabilities | 57,320 | ||||||
Net Assets: | |||||||
Capital | 2,837,284 | ||||||
Total accumulated earnings/(loss) | (4,760 | ) | |||||
Net Assets | $ | 2,832,524 | |||||
Net Assets | |||||||
Fund Shares | $ | 997,653 | |||||
Institutional Shares | 1,780,140 | ||||||
Class A | 14,149 | ||||||
R6 Shares | 40,582 | ||||||
Total | $ | 2,832,524 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 109,323 | ||||||
Institutional Shares | 195,180 | ||||||
Class A | 1,550 | ||||||
R6 Shares | 4,444 | ||||||
Total | 310,497 | ||||||
Net asset value, offering and redemption price per share: (b) | |||||||
Fund Shares | $ | 9.13 | |||||
Institutional Shares | 9.12 | ||||||
Class A | 9.13 | ||||||
R6 Shares | 9.13 | ||||||
Maximum Sales Charge — Class A | 2.25 | % | |||||
| Maximum offering price (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 9.34 | |||||
(a) Includes $14,217 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.
35
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended January 31, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA Short-Term Bond Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 184 | |||||
Interest | 35,928 | ||||||
Securities lending (net of fees) | 54 | ||||||
Total Income | 36,166 | ||||||
Expenses: | |||||||
Investment advisory fees | 3,819 | ||||||
Administration fees — Fund Shares | 768 | ||||||
Administration fees — Institutional Shares | 1,009 | ||||||
Administration fees — Class A | 11 | ||||||
Administration fees — R6 Shares | 7 | ||||||
Sub-Administration fees | 14 | ||||||
| 12b-1 fees — Class A | 18 | ||||||
Custodian fees | 89 | ||||||
Transfer agent fees — Fund Shares | 646 | ||||||
Transfer agent fees — Institutional Shares | 1,009 | ||||||
Transfer agent fees — Class A | 7 | ||||||
Transfer agent fees — R6 Shares | 1 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 10 | ||||||
Legal and audit fees | 32 | ||||||
State registration and filing fees | 64 | ||||||
Other expenses | 181 | ||||||
Recoupment of prior expenses waived/reimbursed by Adviser | — | (a) | |||||
Total Expenses | 7,709 | ||||||
Expenses waived/reimbursed by Adviser | (12 | ) | |||||
Net Expenses | 7,697 | ||||||
Net Investment Income (Loss) | 28,469 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 10,493 | ||||||
Net realized gains (losses) from futures contracts | (165 | ) | |||||
Net change in unrealized appreciation/depreciation on investment securities | (63,759 | ) | |||||
Net change in unrealized appreciation/depreciation on futures contracts | (160 | ) | |||||
Net realized/unrealized gains (losses) on investments | (53,591 | ) | |||||
Change in net assets resulting from operations | $ | (25,122 | ) | ||||
(a) Rounds to less than $1 thousand.
See notes to financial statements.
36
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands)
USAA Short-Term Bond Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 28,469 | $ | 72,387 | |||||||
Net realized gains (losses) from investments | 10,328 | 13,010 | |||||||||
| Net change in unrealized appreciation/depreciation on investments | (63,919 | ) | 18,274 | ||||||||
Change in net assets resulting from operations | (25,122 | ) | 103,671 | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (16,051 | ) | (29,772 | ) | |||||||
Institutional Shares | (31,246 | ) | (54,924 | ) | |||||||
Class A | (212 | ) | (289 | ) | |||||||
R6 Shares | (498 | ) | (261 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (48,007 | ) | (85,246 | ) | |||||||
Change in net assets resulting from capital transactions | (157,811 | ) | 207,249 | ||||||||
Change in net assets | (230,940 | ) | 225,674 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 3,063,464 | 2,837,790 | |||||||||
End of period | $ | 2,832,524 | $ | 3,063,464 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 105,294 | $ | 170,607 | |||||||
Distributions reinvested | 15,724 | 29,052 | |||||||||
Cost of shares redeemed | (113,519 | ) | (231,904 | ) | |||||||
Total Fund Shares | $ | 7,499 | $ | (32,245 | ) | ||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 436,522 | $ | 451,265 | |||||||
Distributions reinvested | 30,744 | 54,444 | |||||||||
Cost of shares redeemed | (660,289 | ) | (275,046 | ) | |||||||
Total Institutional Shares | $ | (193,023 | ) | $ | 230,663 | ||||||
Class A | |||||||||||
Proceeds from shares issued | $ | 4,262 | $ | 9,052 | |||||||
Distributions reinvested | 195 | 162 | |||||||||
Cost of shares redeemed | (1,989 | ) | (8,489 | ) | |||||||
Total Class A | $ | 2,468 | $ | 725 | |||||||
R6 Shares | |||||||||||
Proceeds from shares issued | $ | 30,852 | $ | 14,200 | |||||||
Distributions reinvested | 497 | 145 | |||||||||
Cost of shares redeemed | (6,104 | ) | (6,239 | ) | |||||||
Total R6 Shares | $ | 25,245 | $ | 8,106 | |||||||
Change in net assets resulting from capital transactions | $ | (157,811 | ) | $ | 207,249 | ||||||
(continues on next page)
See notes to financial statements.
37
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands) (continued)
USAA Short-Term Bond Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 11,354 | 18,265 | |||||||||
Reinvested | 1,702 | 3,111 | |||||||||
Redeemed | (12,259 | ) | (24,827 | ) | |||||||
Total Fund Shares | 797 | (3,451 | ) | ||||||||
Institutional Shares | |||||||||||
Issued | 46,848 | 48,331 | |||||||||
Reinvested | 3,329 | 5,833 | |||||||||
Redeemed | (71,095 | ) | (29,468 | ) | |||||||
Total Institutional Shares | (20,918 | ) | 24,696 | ||||||||
Class A | |||||||||||
Issued | 459 | 969 | |||||||||
Reinvested | 21 | 17 | |||||||||
Redeemed | (216 | ) | (909 | ) | |||||||
Total Class A | 264 | 77 | |||||||||
R6 Shares | |||||||||||
Issued | 3,329 | 1,519 | |||||||||
Reinvested | 54 | 15 | |||||||||
Redeemed | (660 | ) | (668 | ) | |||||||
Total R6 Shares | 2,723 | 866 | |||||||||
Change in Shares | (17,134 | ) | 22,188 | ||||||||
See notes to financial statements.
38
This page is intentionally left blank.
39
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, 2022 (Unaudited): | $ | 9.35 | 0.08 | (d) | (0.15 | ) | (0.07 | ) | (0.10 | ) | (0.05 | ) | |||||||||||||||
Year ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 9.29 | 0.23 | (d) | 0.10 | 0.33 | (0.23 | ) | (0.04 | ) | |||||||||||||||||
2020 | $ | 9.21 | 0.26 | (d) | 0.08 | 0.34 | (0.26 | ) | — | (e) | |||||||||||||||||
2019 | $ | 9.06 | 0.24 | 0.15 | 0.39 | (0.24 | ) | — | (e) | ||||||||||||||||||
2018 | $ | 9.21 | 0.20 | (0.15 | ) | 0.05 | (0.20 | ) | — | (e) | |||||||||||||||||
2017 | $ | 9.20 | 0.17 | 0.01 | 0.18 | (0.17 | ) | — | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 9.35 | 0.09 | (d) | (0.17 | ) | (0.08 | ) | (0.10 | ) | (0.05 | ) | |||||||||||||||
Year ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 9.29 | 0.23 | (d) | 0.11 | 0.34 | (0.24 | ) | (0.04 | ) | |||||||||||||||||
2020 | $ | 9.20 | 0.27 | (d) | 0.09 | 0.36 | (0.27 | ) | — | (e) | |||||||||||||||||
2019 | $ | 9.06 | 0.25 | 0.14 | 0.39 | (0.25 | ) | — | (e) | ||||||||||||||||||
2018 | $ | 9.21 | 0.21 | (0.15 | ) | 0.06 | (0.21 | ) | — | (e) | |||||||||||||||||
2017 | $ | 9.20 | 0.18 | 0.01 | 0.19 | (0.18 | ) | — | |||||||||||||||||||
Class A | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 9.35 | 0.07 | (d) | (0.15 | ) | (0.08 | ) | (0.09 | ) | (0.05 | ) | |||||||||||||||
Year ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 9.29 | 0.21 | (d) | 0.10 | 0.31 | (0.21 | ) | (0.04 | ) | |||||||||||||||||
2020 | $ | 9.21 | 0.24 | (d) | 0.08 | 0.32 | (0.24 | ) | — | (e) | |||||||||||||||||
2019 | $ | 9.06 | 0.22 | 0.15 | 0.37 | (0.22 | ) | — | (e) | ||||||||||||||||||
2018 | $ | 9.21 | 0.18 | (0.15 | ) | 0.03 | (0.18 | ) | — | (e) | |||||||||||||||||
2017 | $ | 9.20 | 0.16 | 0.01 | 0.17 | (0.16 | ) | — | |||||||||||||||||||
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019 and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
See notes to financial statements.
40
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 (Excludes Sales Charge)*(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, 2022 (Unaudited): | (0.15 | ) | $ | 9.13 | (0.79 | )% | 0.55 | % | 1.79 | % | 0.55 | % | $ | 997,653 | 32 | % | |||||||||||||||||||
Year ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.27 | ) | $ | 9.35 | 3.60 | % | 0.54 | % | 2.44 | % | 0.54 | % | $ | 1,015,085 | 62 | % | |||||||||||||||||||
2020 | (0.26 | ) | $ | 9.29 | 3.79 | % | 0.52 | % | 2.82 | % | 0.52 | % | $ | 1,040,688 | 66 | % | |||||||||||||||||||
2019 | (0.24 | ) | $ | 9.21 | 4.43 | % | 0.57 | % | 2.68 | % | 0.57 | % | $ | 1,167,973 | 48 | % | |||||||||||||||||||
2018 | (0.20 | ) | $ | 9.06 | 0.54 | % | 0.59 | % | 2.18 | % | 0.59 | % | $ | 1,188,259 | 39 | % | |||||||||||||||||||
2017 | (0.17 | ) | $ | 9.21 | 2.02 | % | 0.63 | % | 1.90 | % | 0.63 | % | $ | 1,301,428 | 31 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (0.15 | ) | $ | 9.12 | (0.86 | )% | 0.47 | % | 1.87 | % | 0.47 | % | $ | 1,780,140 | 32 | % | |||||||||||||||||||
Year ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.28 | ) | $ | 9.35 | 3.68 | % | 0.46 | % | 2.51 | % | 0.46 | % | $ | 2,020,237 | 62 | % | |||||||||||||||||||
2020 | (0.27 | ) | $ | 9.29 | 4.01 | % | 0.42 | % | 2.92 | % | 0.42 | % | $ | 1,777,916 | 66 | % | |||||||||||||||||||
2019 | (0.25 | ) | $ | 9.20 | 4.42 | % | 0.47 | % | 2.78 | % | 0.47 | % | $ | 1,822,756 | 48 | % | |||||||||||||||||||
2018 | (0.21 | ) | $ | 9.06 | 0.65 | % | 0.48 | % | 2.29 | % | 0.48 | % | $ | 2,025,651 | 39 | % | |||||||||||||||||||
2017 | (0.18 | ) | $ | 9.21 | 2.13 | % | 0.53 | % | 2.00 | % | 0.53 | % | $ | 1,954,307 | 31 | % | |||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (0.14 | ) | $ | 9.13 | (0.90 | )% | 0.76 | % | 1.58 | % | 0.94 | % | $ | 14,149 | 32 | % | |||||||||||||||||||
Year ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.25 | ) | $ | 9.35 | 3.38 | % | 0.74 | % | 2.24 | % | 1.03 | % | $ | 12,031 | 62 | % | |||||||||||||||||||
2020 | (0.24 | ) | $ | 9.29 | 3.58 | % | 0.73 | % | 2.61 | % | 0.74 | % | $ | 11,236 | 66 | % | |||||||||||||||||||
2019 | (0.22 | ) | $ | 9.21 | 4.17 | % | 0.82 | % | 2.43 | % | 0.82 | % | $ | 15,222 | 48 | % | |||||||||||||||||||
2018 | (0.18 | ) | $ | 9.06 | 0.38 | % | 0.74 | % | 2.02 | % | 0.74 | % | $ | 23,030 | 39 | % | |||||||||||||||||||
2017 | (0.16 | ) | $ | 9.21 | 1.82 | % | 0.82 | % | 1.70 | % | 0.82 | % | $ | 21,532 | 31 | % | |||||||||||||||||||
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Amount is less than $0.005 per share.
(continues on next page)
See notes to financial statements.
41
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 | |||||||||||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 9.36 | 0.09 | (d) | (0.16 | ) | (0.07 | ) | (0.11 | ) | (0.05 | ) | |||||||||||||||
Year ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 9.30 | 0.23 | (d) | 0.11 | 0.34 | (0.24 | ) | (0.04 | ) | |||||||||||||||||
2020 | $ | 9.21 | 0.27 | (d) | 0.09 | 0.36 | (0.27 | ) | — | (e) | |||||||||||||||||
2019 | $ | 9.07 | 0.26 | 0.14 | 0.40 | (0.26 | ) | — | (e) | ||||||||||||||||||
2018 | $ | 9.21 | 0.22 | (0.14 | ) | 0.08 | (0.22 | ) | — | (e) | |||||||||||||||||
| December 1, 2016 (f) 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.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019 and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(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.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Amount is less than $0.005 per share.
(f) Commencement of operations.
See notes to financial statements.
42
USAA Mutual Funds Trust | Financial Highlights — continued | ||||||
For a Share Outstanding Throughout Each Period (continued)
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 | |||||||||||||||||||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (0.16 | ) | $ | 9.13 | (0.81 | )% | 0.37 | % | 1.96 | % | 0.37 | % | $ | 40,582 | 32 | % | |||||||||||||||||||
Year ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.28 | ) | $ | 9.36 | 3.71 | % | 0.42 | % | 2.50 | % | 0.49 | % | $ | 16,111 | 62 | % | |||||||||||||||||||
2020 | (0.27 | ) | $ | 9.30 | 4.04 | % | 0.39 | % | 2.96 | % | 0.45 | % | $ | 7,950 | 66 | % | |||||||||||||||||||
2019 | (0.26 | ) | $ | 9.21 | 4.50 | % | 0.39 | % | 2.86 | % | 0.71 | % | $ | 5,456 | 48 | % | |||||||||||||||||||
2018 | (0.22 | ) | $ | 9.07 | 0.85 | % | 0.39 | % | 2.38 | % | 0.67 | % | $ | 5,142 | 39 | % | |||||||||||||||||||
| December 1, 2016 (f) through July 31, 2017 | (0.13 | ) | $ | 9.21 | 2.43 | % | 0.39 | % | 2.14 | % | 1.02 | % | $ | 5,129 | 31 | % | |||||||||||||||||||
See notes to financial statements.
43
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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, Class A, 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 sales charges, 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 U.S. Generally Accepted Accounting Principles ("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 risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
44
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Portfolio securities listed or traded on securities exchanges are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq 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 are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
Debt securities are valued each business day by a pricing service approved by the Board. The approved pricing service uses the evaluated bid or the last sale price to value securities. Debt obligations maturing within 60 days may be valued at their amortized cost, provided that the amortized cost represents the fair value of such securities. These valuations are typically categorized as Level 2 in the fair value hierarchy.
Futures contracts are valued at the settlement price established each day by the board of trade or an exchange on which they are traded. These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically 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 NAV to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Asset-Backed Securities | $ | — | $ | 848,773 | $ | — | $ | 848,773 | |||||||||||
Collateralized Mortgage Obligations | — | 198,168 | — | 198,168 | |||||||||||||||
Preferred Stocks | 5,384 | — | — | 5,384 | |||||||||||||||
Senior Secured Loans | — | 37,687 | — | 37,687 | |||||||||||||||
Corporate Bonds | — | 1,137,766 | — | 1,137,766 | |||||||||||||||
Yankee Dollars | — | 296,331 | — | 296,331 | |||||||||||||||
Municipal Bonds | — | 275,067 | — | 275,067 | |||||||||||||||
U.S. Government Agency Mortgages | — | 9,407 | — | 9,407 | |||||||||||||||
U.S. Treasury Obligations | — | 27,447 | — | 27,447 | |||||||||||||||
Commercial Paper | — | 8,200 | — | 8,200 | |||||||||||||||
Collateral for Securities Loaned | 14,673 | — | — | 14,673 | |||||||||||||||
Total | $ | 20,057 | $ | 2,838,846 | $ | — | $ | 2,858,903 | |||||||||||
Other Financial Investments^ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||
Futures Contracts | $ | (103 | ) | $ | — | $ | — | $ | (103 | ) | |||||||||
Total | $ | (103 | ) | $ | — | $ | — | $ | (103 | ) | |||||||||
^ Futures contracts are valued at the unrealized appreciation (depreciation) on the investment.
For the six months ended January 31, 2022, there were no transfers in or out of Level 3 in the fair value hierarchy.
45
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(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:
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 or 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 NAV. 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 Payables for Investments purchased on the accompanying Statement of Assets and Liabilities and the segregated assets are identified on 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. Payments 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 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," respectively), 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.
46
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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 the London Interbank Offered Rate ("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.
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 enter into futures contracts in an effort to hedge against market risks. 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. The collateral held by the Fund is presented on the Statement of Assets and Liabilities under Deposit with broker for futures contracts. As of January 31, 2022, the Fund entered into futures contracts primarily for the strategy of hedging or other purposes, including but not limited to, providing liquidity and equitizing cash.
47
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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, 2022 (amounts in thousands):
Assets | Liabilities | ||||||||||
| Variation Margin Receivable on Open Futures Contracts* | Variation Margin Payable on Open Futures Contracts* | ||||||||||
Interest Rate Risk Exposure | $ | — | $ | 103 | |||||||
* Includes cumulative unrealized appreciation (depreciation) of futures contracts as reported on the Schedule of Portfolio Investments. Only current day's variation margin for futures contracts is 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, 2022 (amounts in thousands):
| Net Realized Gains (Losses) on Derivatives Recognized as a Result of 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 | $ | (165 | ) | $ | (160 | ) | |||||
All open derivative positions at period end are reflected on 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.
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 or 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 discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis. Paydown gains or losses on applicable securities, if any, are recorded as components of Interest income on the Statement of Operations.
The Fund may receive other income from investments in loan assignments and/or unfunded commitments, including amendment fees, consent fees, and commitment fees. These fees are recorded as income when received. These amounts, if received, are included in Interest income on the Statement of Operations.
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 and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially 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 generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash
48
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund effectively does not have control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. 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. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk 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 repledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2022.
| Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
| $ | 14,217 | $ | — | $ | 14,673 | ||||||
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.
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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 years, which includes the current fiscal tax year end). 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 an 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, printing fees, and 12b-1 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
49
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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, 2022, 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) | |||||||||
| $ | 5,076 | $ | — | $ | — | ||||||
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended January 31, 2022, were as follows for the Fund (amounts in thousands):
| Excluding U.S. Government Securities | U.S. Government Securities | ||||||||||||||
| Purchases | Sales | Purchases | Sales | ||||||||||||
$ | 874,795 | $ | 932,660 | $ | 47,931 | $ | 22,260 | ||||||||
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The 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 www.vcm.com. As of January 31, 2022, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 0.2 | ||||||
USAA Target Retirement Income Fund | 4.1 | ||||||
USAA Target Retirement 2030 Fund | 2.1 | ||||||
USAA Target Retirement 2040 Fund | 0.8 | ||||||
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 Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019,
50
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and 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 the largest funds within the Lipper Short Investment Grade Debt Funds category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
| Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
| +/- 20 to 50 | +/- 4 | ||||||
| +/- 51 to 100 | +/- 5 | ||||||
| +/- 101 and greater | +/- 6 | ||||||
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective 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.
For the period August 1, 2021, to January 31, 2022, performance adjustments were $261, $471, $2, and $3 for Fund Shares, Institutional Shares, Class A, and R6 Shares, in thousands, respectively. Performance adjustments were 0.05%, 0.05%, 0.03%, and 0.02% for Fund Shares, Institutional Shares, Class A, and R6 Shares, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
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, 2022, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, 0.10%, 0.15%, and 0.05%, which is based on the Fund's average daily net assets of the Fund Shares, Institutional Shares, Class A, and R6 Shares, respectively. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and
51
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund 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 fees for Institutional Shares, Class A, and R6 Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10%, 0.10% and 0.01%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred and paid to VCTA for the six months ended January 31, 2022, 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 Services, 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.
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 Class A. The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A. Amounts incurred and paid to the Distributor for the six months ended January 31, 2022, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions in connection with sales of Class A. For the six months ended January 31, 2022, the Distributor received less than $1 thousand from commissions earned in connection with sales of Class A.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 limits for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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. As of January 31, 2022, the expense limits (excluding voluntary waivers) were 0.53%, 0.43%, 0.73%, and 0.39% for Fund Shares, Institutional Shares, Class A and R6 Shares, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of January 31, 2022, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at January 31, 2022.
Expires | Expires | Expires | Expires | Total | |||||||||||||||
$ | 5 | $ | 6 | $ | 37 | $ | 12 |
| $ | 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, 2022.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Debt Securities Risk — 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.
Other factors that may affect the value of debt securities include, among others, public health crises and responses by governments and companies to such crises. These and other events may affect the creditworthiness of the issuer of a debt security and may impair an issuer's ability to timely meet its debt obligations as they come due.
Interest Rate Risk — The Fund is subject to the risk that the market value of the bonds in its portfolio will fluctuate because of changes in interest rates, changes in the supply of and demand for tax-exempt securities, and other market factors. 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 ability of an issuer of a debt security to repay principal prior to a security's maturity can increase the security's sensitivity to interest rate changes.
Decisions by the U.S. Federal Reserve (also known as the "Fed") regarding interest rate and monetary policy, which can be difficult to predict and sometimes change direction suddenly in response to economic and market events, can have a significant effect on the value of fixed-income securities as well as the overall strength of the U.S. economy. Precise interest rate predictions are difficult to make, and interest rates may change unexpectedly and dramatically in response to extreme changes in market
53
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
or economic conditions. As a result, the value of fixed-income securities may vary widely under certain market conditions.
Credit Risk — 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.
LIBOR Discontinuation Risk — The LIBOR discontinuation may adversely affect the financial markets generally and the Fund's operations, finances and investments specifically. LIBOR has been the principal floating-rate benchmark in the financial markets, and a large portion of the Fund's assets are tied to LIBOR. However, LIBOR has been or will be discontinued as a floating rate benchmark. The date of discontinuation depends on the LIBOR currency and tenor. With limited exceptions, no new LIBOR obligations will be entered into after December 31, 2021. Existing LIBOR obligations have transitioned or will transition to another benchmark, depending on the LIBOR currency and tenor. For some existing LIBOR-based obligations, the contractual consequences of the discontinuation of LIBOR may not be clear.
Non-LIBOR floating-rate obligations, including Secured Overnight Financing Rate ("SOFR")-based obligations, may have returns and values that fluctuate more than those of floating-rate debt obligations that are based on LIBOR or other rates. Also, because SOFR and some alternative floating rates are relatively new market indexes, markets for certain non-LIBOR obligations may never develop or may not be liquid. Market terms for non-LIBOR floating rate obligations, such as the spread over the index reflected in interest-rate provisions, may evolve over time, and prices of non-LIBOR floating rate obligations may be different depending on when they are issued and changing views about correct spread levels.
Various SOFR-based rates, including SOFR-based term rates, and various non-SOFR-based rates are expected to develop in response to the discontinuation of U.S. dollar LIBOR, which may create various risks for the Fund and the financial markets more generally. There are non-LIBOR forward-looking floating rates that are not based on SOFR and that may be considered by participants in the financial markets as LIBOR alternatives. Such rates include Ameribor (American Interbank Offered Rate), BSBY (Bloomberg Short-Term Bank Yield Index) and BYI (Bank Yield Index). Unlike forward-looking SOFR-based term rates, such rates are intended to reflect a bank credit spread component.
It is not clear how replacement rates for LIBOR — including SOFR-based rates and non-SOFR-based rates — will develop and to what extent they will be used. There is no assurance that these replacement rates will be suitable substitutes for LIBOR, and thus the substitution of such rates for LIBOR could have an adverse effect on the Fund and the financial markets more generally. Concerns about market depth and stability could affect the development of non-SOFR-based term rates, and such rates may create various risks, which may or may not be similar to the risks relating to SOFR.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination
54
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended January 31, 2022, Citibank received 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, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected 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, 2022.
Interfund Lending:
The Trust and the 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 Funds Complex that is permitted to participate in the Facility, 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, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. 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, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending.
The Fund did not utilize or participate in the Facility during the six months ended January 31, 2022.
8. Federal Income Tax Information:
Distributions from the Fund's net investment income are accrued daily and distributed on the last business day of each month. 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, 2022.
As of July 31, 2021, the Fund had no capital loss carryforwards for federal income tax purposes.
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USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
(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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
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. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; 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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21- 1/31/22* | Hypothetical Expenses Paid During Period 8/1/21- 1/31/22* | Annualized Expense Ratio During Period 8/1/21- 1/31/22 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 992.10 | $ | 1,022.43 | $ | 2.76 | $ | 2.80 | 0.55 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 991.40 | 1,022.84 | 2.36 | 2.40 | 0.47 | % | ||||||||||||||||||||
Class A | 1,000.00 | 991.00 | 1,021.37 | 3.81 | 3.87 | 0.76 | % | ||||||||||||||||||||
R6 Shares | 1,000.00 | 991.90 | 1,023.34 | 1.86 | 1.89 | 0.37 | % | ||||||||||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
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USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Considerations of the Board in Continuing the Investment Advisory Agreement
USAA Short-Term Bond Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement was approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and the Adviser, and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser. At the meeting at which the renewal of the Advisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder
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USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services and the effects of any performance adjustment1, as well as any fee waivers and reimbursements — was below the median of its expense group and its expense universe. The data indicated that the Fund's total expenses, including after any reimbursements, were below the median of its expense group and its expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund.
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total returns relative to its Lipper index and other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was above the average of its performance universe and its Lipper index for the one-, three-, five- and ten-year periods ended September 30, 2021.
1 The Adviser previously agreed that no performance adjustment (positive or negative) would be made to the amount payable to the Adviser from July 1, 2019, through June 30, 2020.
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USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser reimbursed or waived a portion of its management fees to the Fund. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board considered whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in any economies of scale. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board also considered the effect of the change in size, if any, of each of the Fund's classes on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than some expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
59
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800) 235-8396 | ||||||
23426-0322
January 31, 2022
Semi Annual Report
USAA Intermediate-Term Bond Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
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Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 34 | ||||||
Statement of Operations | 36 | ||||||
Statements of Changes in Net Assets | 37 | ||||||
Financial Highlights | 40 | ||||||
Notes to Financial Statements | 44 | ||||||
Supplemental Information | 56 | ||||||
Proxy Voting and Portfolio Holdings Information | 56 | ||||||
Expense Examples | 56 | ||||||
Advisory Contract Approval | 57 | ||||||
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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks high current income without undue risk to principal.
Asset Allocation*:
January 31, 2022
(% of Net Assets)
* Does not include futures contracts, 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%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Asset-Backed Securities (12.4%) | |||||||||||
| AccessLex Institute, Series 2004-2, Class A3, 0.45% (LIBOR03M+19bps), 10/25/24, Callable 4/25/31 @ 100 (a) | $ | 1,164 | $ | 1,148 | |||||||
| Aligned Data Centers Issuer LLC, Series 2021-1A, Class B, 2.48%, 8/15/46, Callable 8/15/24 @ 100 (b) | 1,500 | 1,440 | |||||||||
| Aligned Data Centers Issuer LLC, Series 2021-1A, Class A2, 1.94%, 8/15/46, Callable 8/15/24 @ 100 (b) | 3,000 | 2,893 | |||||||||
| American Credit Acceptance Receivables Trust, Series 2019-3, Class D, 2.89%, 9/12/25, Callable 5/12/23 @ 100 (b) | 745 | 754 | |||||||||
| Americredit Automobile Receivables Trust, Series 2018-1, Class D, 3.82%, 3/18/24, Callable 10/18/22 @ 100 | 6,360 | 6,478 | |||||||||
AMSR Trust, Series 2021-SFR1, Class D, 2.60%, 6/17/38 (b) | 1,500 | 1,433 | |||||||||
AMSR Trust, Series 2021-SFR1, Class C, 2.35%, 6/17/38 (b) | 1,800 | 1,720 | |||||||||
| Amur Equipment Finance Receivables X LLC, Series 2022-1A, Class B, 2.20%, 1/20/28, Callable 10/20/25 @ 100 (b) | 1,216 | 1,214 | |||||||||
| ARI Fleet Lease Trust, Series 2020-A, Class B, 2.06%, 11/15/28, Callable 2/15/23 @ 100 (b) | 1,470 | 1,479 | |||||||||
| Avis Budget Rental Car Funding AESOP LLC, Series 2020-1A, Class B, 2.68%, 8/20/26, Callable 9/20/25 @ 100 (b) | 4,000 | 4,045 | |||||||||
| Ballyrock CLO Ltd., Series 2020-14A, Class B, 2.55% (LIBOR03M+230bps), 1/20/34, Callable 1/20/23 @ 100 (a) (b) | 1,000 | 1,002 | |||||||||
| Bank of The West Auto Trust, Series 2019-1, Class C, 2.90%, 4/15/25, Callable 5/15/23 @ 100 (b) | 3,790 | 3,860 | |||||||||
| California Republic Auto Receivables Trust, Series 2018-1, Class D, 4.33%, 4/15/25, Callable 9/15/22 @ 100 | 3,533 | 3,601 | |||||||||
| Canadian Pacer Auto Receivables Trust, Series 2020-1A, Class C, 2.49%, 5/19/26, Callable 7/19/23 @ 100 (b) | 2,000 | 2,023 | |||||||||
| Canadian Pacer Auto Receivables Trust, Series 2019-1, Class C, 3.75%, 7/21/25, Callable 1/19/23 @ 100 (b) | 3,000 | 3,056 | |||||||||
| Canadian Pacer Auto Receivables Trust, Series 2021-1A, Class C, 1.46%, 12/20/27, Callable 12/19/24 @ 100 (b) | 2,156 | 2,085 | |||||||||
CARDS II Trust, Series 2021-1A, Class C, 1.20%, 4/15/27 (b) | 7,750 | 7,604 | |||||||||
| CarMax Auto Owner Trust, Series 2019-1, Class B, 3.45%, 11/15/24, Callable 2/15/23 @ 100 | 1,923 | 1,968 | |||||||||
| CarMax Auto Owner Trust, Series 2018-1, Class D, 3.37%, 7/15/24, Callable 3/15/22 @ 100 | 500 | 502 | |||||||||
| CarMax Auto Owner Trust, Series 2021-4, Class D, 1.48%, 3/15/28, Callable 11/15/24 @ 100 | 2,831 | 2,738 | |||||||||
| CarMax Auto Owner Trust, Series 2019-4, Class C, 2.60%, 9/15/25, Callable 9/15/23 @ 100 | 5,162 | 5,243 | |||||||||
| CarMax Auto Owner Trust, Series 2020-3, Class C, 1.69%, 4/15/26, Callable 2/15/24 @ 100 | 2,500 | 2,503 | |||||||||
| CarMax Auto Owner Trust, Series 2018-4, Class C, 3.85%, 7/15/24, Callable 11/15/22 @ 100 | 420 | 429 | |||||||||
| CarMax Auto Owner Trust, Series 2018-2, Class D, 3.99%, 4/15/25, Callable 5/15/22 @ 100 | 800 | 807 | |||||||||
| CarMax Auto Owner Trust, Series 2020-2, Class B, 2.90%, 8/15/25, Callable 11/15/23 @ 100 | 1,083 | 1,108 | |||||||||
| CarMax Auto Owner Trust, Series 2021-3, Class D, 1.50%, 1/18/28, Callable 9/15/24 @ 100 | 2,760 | 2,695 | |||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| CarMax Auto Owner Trust, Series 2020-4, Class C, 1.30%, 8/17/26, Callable 6/15/24 @ 100 | $ | 3,450 | $ | 3,410 | |||||||
| CarMax Auto Owner Trust, Series 2020-1, Class C, 2.34%, 11/17/25, Callable 10/15/23 @ 100 | 4,230 | 4,285 | |||||||||
| CarNow Auto Receivables Trust, Series 2021-1A, Class B, 1.38%, 2/17/26, Callable 9/15/23 @ 100 (b) | 656 | 656 | |||||||||
| CARS-DB5 LP, Series 2021-1A, Class A2, 2.28%, 8/15/51, Callable 8/15/28 @ 100 (b) | 2,182 | 2,149 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-P2, Class C, 1.60%, 6/10/27, Callable 9/10/25 @ 100 | 10,000 | 9,799 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N2, Class D, 1.27%, 3/10/28, Callable 1/10/25 @ 100 | 4,000 | 3,943 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N1, Class D, 1.50%, 1/10/28, Callable 6/10/24 @ 100 | 2,750 | 2,743 | |||||||||
| Carvana Auto Receivables Trust, Series 2020-P1, Class C, 1.32%, 11/9/26, Callable 2/8/25 @ 100 | 551 | 537 | |||||||||
| Carvana Auto Receivables Trust, Series 2021-N4, Class D, 2.30%, 9/11/28, Callable 5/10/27 @ 100 | 876 | 867 | |||||||||
| CCG Receivables Trust, Series 2019-1, Class B, 3.22%, 9/14/26, Callable 9/14/22 @ 100 (b) | 2,540 | 2,572 | |||||||||
| CCG Receivables Trust, Series 2020-1, Class C, 1.84%, 12/14/27, Callable 11/14/23 @ 100 (b) | 5,786 | 5,781 | |||||||||
| CCG Receivables Trust, Series 2021-2, Class C, 1.50%, 3/14/29, Callable 1/14/25 @ 100 (b) | 3,000 | 2,933 | |||||||||
| CF Hippolyta LLC, Series 2021-1A, Class B1, 1.98%, 3/15/61, Callable 3/15/24 @ 100 (b) | 1,929 | 1,863 | |||||||||
| Chase Auto Credit Linked Notes, Series 2020-1, Class D, 1.89%, 1/25/28, Callable 12/25/23 @ 100 (b) | 481 | 482 | |||||||||
| Chesapeake Funding II LLC, Series 2019-1A, Class A1, 2.94%, 4/15/31, Callable 6/15/22 @ 100 (b) | 482 | 485 | |||||||||
| CNH Equipment Trust, Series 2020-A, Class B, 2.30%, 10/15/27, Callable 7/15/23 @ 100 | 1,100 | 1,114 | |||||||||
| CPS Auto Receivables Trust, Series 2018-D, Class E, 5.82%, 6/16/25, Callable 3/15/23 @ 100 (b) | 2,000 | 2,079 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2021-2A, Class B, 1.26%, 4/15/30, Callable 12/15/24 @ 100 (b) | 2,077 | 2,032 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2020-1A, Class C, 2.59%, 6/15/29, Callable 1/15/24 @ 100 (b) | 5,000 | 5,056 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2019-3A, Class A, 2.38%, 11/15/28, Callable 9/15/23 @ 100 (b) | 3,871 | 3,895 | |||||||||
| Credit Acceptance Auto Loan Trust, Series 2021-4, Class B, 1.74%, 12/16/30, Callable 4/15/25 @ 100 (b) | 720 | 709 | |||||||||
| DB Master Finance LLC, Series 2021-1A, Class A2II, 2.49%, 11/20/51, Callable 11/20/25 @ 100 (b) | 4,532 | 4,442 | |||||||||
| Dell Equipment Finance Trust, Series 2020-2, Class D, 1.92%, 3/23/26, Callable 6/22/23 @ 100 (b) | 2,125 | 2,130 | |||||||||
| Dell Equipment Finance Trust, Series 2020-1, Class B, 2.98%, 4/24/23, Callable 10/22/22 @ 100 (b) | 775 | 785 | |||||||||
| Dell Equipment Finance Trust, Series 2020-1, Class C, 4.26%, 6/22/23, Callable 10/22/22 @ 100 (b) | 1,750 | 1,786 | |||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Dell Equipment Finance Trust, Series 2021-2, Class D, 1.21%, 6/22/27, Callable 4/22/24 @ 100 (b) | $ | 1,312 | $ | 1,274 | |||||||
| Diamond Infrastructure Funding LLC, Series 2021-1A, Class C, 3.48%, 4/15/49, Callable 9/20/25 @ 100 (b) | 3,000 | 2,913 | |||||||||
| Diamond Infrastructure Funding LLC, Series 2021-1A, Class B, 2.35%, 4/15/49, Callable 9/20/25 @ 100 (b) | 6,000 | 5,787 | |||||||||
| Diamond Issuer, Series 2021-1A, Class B, 2.70%, 11/20/51, Callable 11/20/25 @ 100 (b) | 4,418 | 4,340 | |||||||||
| Diamond Resorts Owner Trust, Series 2021-1A, Class B, 2.05%, 11/21/33, Callable 1/20/25 @ 100 (b) | 1,256 | 1,247 | |||||||||
| Drive Auto Receivables Trust, Series 2018-1, Class D, 3.81%, 5/15/24, Callable 5/15/22 @ 100 | 469 | 470 | |||||||||
| Drive Auto Receivables Trust, Series 2020-2, Class C, 2.28%, 8/17/26, Callable 6/15/23 @ 100 | 1,680 | 1,696 | |||||||||
| DT Auto Owner Trust, Series 2021-3A, Class C, 0.87%, 5/17/27, Callable 4/15/25 @ 100 (b) | 1,875 | 1,832 | |||||||||
| DT Auto Owner Trust, Series 2020-2A, Class D, 4.73%, 3/16/26, Callable 1/15/24 @ 100 (b) | 500 | 525 | |||||||||
| Encina Equipment Finance LLC, Series 2021-1A, Class C, 1.39%, 6/15/27, Callable 1/15/24 @ 100 (b) | 1,409 | 1,386 | |||||||||
| Encina Equipment Finance LLC, Series 2021-1A, Class D, 1.69%, 11/15/27, Callable 1/15/24 @ 100 (b) | 2,562 | 2,498 | |||||||||
| Enterprise Fleet Financing LLC, Series 2019-3, Class A2, 2.06%, 5/20/25, Callable 2/20/23 @ 100 (b) | 938 | 943 | |||||||||
Evergreen Credit Card Trust, Series 2019-2, Class C, 2.62%, 9/15/24 (b) | 2,096 | 2,114 | |||||||||
| Evergreen Credit Card Trust, Series 2021-1, Class B, 1.15%, 10/15/26, Callable 11/15/24 @ 100 (b) | 7,500 | 7,367 | |||||||||
| Evergreen Credit Card Trust, Series 2021-1, Class C, 1.42%, 10/15/26, Callable 11/15/24 @ 100 (b) | 6,300 | 6,192 | |||||||||
| Exeter Automobile Receivables Trust, Series 2020-2A, Class B, 2.08%, 7/15/24, Callable 11/15/23 @ 100 (b) | 842 | 844 | |||||||||
| Exeter Automobile Receivables Trust, Series 2020-1A, Class C, 2.49%, 1/15/25, Callable 10/15/23 @ 100 (b) | 2,258 | 2,271 | |||||||||
| Exeter Automobile Receivables Trust, Series 2019-2A, Class C, 3.30%, 3/15/24, Callable 8/15/23 @ 100 (b) | 868 | 870 | |||||||||
| Exeter Automobile Receivables Trust, Series 2017-3A, Class D, 5.28%, 10/15/24, Callable 6/15/22 @ 100 (b) | 3,000 | 3,046 | |||||||||
| Exeter Automobile Receivables Trust, Series 2020-3A, Class C, 1.32%, 7/15/25, Callable 4/15/24 @ 100 | 1,417 | 1,419 | |||||||||
| ExteNet LLC, Series 2019-1A, Class A2, 3.20%, 7/26/49, Callable 1/25/23 @ 100 (b) | 1,875 | 1,894 | |||||||||
| First Investors Auto Owner Trust, Series 2018-2A, Class F, 7.31%, 9/15/25, Callable 1/15/23 @ 100 (b) | 1,000 | 1,025 | |||||||||
FirstKey Homes Trust, Series 2021-SFR2, Class D, 2.06%, 9/17/26 (b) | 4,500 | 4,275 | |||||||||
FirstKey Homes Trust, Series 2021-SFR2, Class C, 1.71%, 9/17/26 (b) | 6,512 | 6,183 | |||||||||
FirstKey Homes Trust, Series 2021-SFR3, Class A, 2.14%, 12/17/38 (b) | 2,500 | 2,469 | |||||||||
| Flagship Credit Auto Trust, Series 2019-4, Class E, 4.11%, 3/15/27, Callable 1/15/24 @ 100 (b) | 2,500 | 2,551 | |||||||||
| Flagship Credit Auto Trust, Series 2018-4, Class C, 4.11%, 10/15/24, Callable 11/15/23 @ 100 (b) | 1,082 | 1,093 | |||||||||
See notes to financial statements.
5
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Flagship Credit Auto Trust, Series 2019-2, Class D, 3.53%, 5/15/25, Callable 12/15/23 @ 100 (b) | $ | 2,943 | $ | 3,006 | |||||||
| Ford Credit Auto Owner Trust, Series 2021-1, Class D, 2.31%, 10/17/33, Callable 4/15/26 @ 100 (b) | 1,650 | �� | 1,608 | ||||||||
| Ford Credit Auto Owner Trust, Series 2021-2, Class C, 2.11%, 5/15/34, Callable 11/15/26 @ 100 (b) | 2,250 | 2,203 | |||||||||
| Ford Credit Auto Owner Trust, Series 2021-1, Class C, 1.91%, 10/17/33, Callable 4/15/26 @ 100 (b) | 1,708 | 1,673 | |||||||||
| Foursight Capital Automobile Receivables Trust, Series 2021-1, Class C, 1.02%, 9/15/26, Callable 11/15/24 @ 100 (b) | 1,325 | 1,297 | |||||||||
FRTKL, Series 2021-SFR1, Class D, 2.17%, 9/17/38 (b) | 1,500 | 1,435 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 2020-4A, Class C, 1.14%, 11/17/25, Callable 1/15/24 @ 100 (b) | 2,969 | 2,960 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 2020-1A, Class B, 2.43%, 11/15/24, Callable 12/15/23 @ 100 (b) | 3,775 | 3,802 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 2020-3A, Class C, 1.92%, 5/15/25, Callable 2/15/24 @ 100 (b) | 2,000 | 2,011 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 2A, Class C, 4.57%, 4/15/26, Callable 4/15/24 @ 100 (b) | 1,250 | 1,303 | |||||||||
| GLS Auto Receivables Issuer Trust, Series 2021-3A, Class C, 1.11%, 9/15/26, Callable 12/15/25 @ 100 (b) | 2,167 | 2,123 | |||||||||
| GM Financial Automobile Leasing Trust, Series 2020-2, Class C, 2.56%, 7/22/24, Callable 12/20/22 @ 100 | 1,625 | 1,645 | |||||||||
| GM Financial Automobile Leasing Trust, Series 2020-3, Class C, 1.11%, 10/21/24, Callable 4/20/23 @ 100 | 4,464 | 4,444 | |||||||||
| GM Financial Revolving Receivables Trust, Series 2021-1, Class C, 1.67%, 6/12/34, Callable 9/11/26 @ 100 (b) | 1,000 | 969 | |||||||||
Golden Credit Card Trust, Series 2021-1A, Class B, 1.44%, 8/15/28 (b) | 4,500 | 4,351 | |||||||||
Golden Credit Card Trust, Series 2021-1A, Class A, 1.14%, 8/15/28 (b) | 5,000 | 4,847 | |||||||||
Golden Credit Card Trust, Series 2021-1A, Class C, 1.74%, 8/15/28 (b) | 2,233 | 2,172 | |||||||||
| Golub Capital Partners CLO Ltd., Series 2020-52A, Class A2, 2.05% (LIBOR03M+180bps), 1/20/34, Callable 1/20/23 @ 100 (a) (b) | 5,000 | 5,009 | |||||||||
Hertz Vehicle Financing III LP, Series 2021-2A, Class C, 2.52%, 12/27/27 (b) | 1,833 | 1,800 | |||||||||
| Hertz Vehicle Financing LLC, Series 2022-2A, Class C, 2.95%, 6/26/28, Callable 6/25/27 @ 100 (b) | 3,500 | 3,493 | |||||||||
| Hertz Vehicle Financing LLC, Series 2022-2A, Class A, 2.33%, 6/26/28, Callable 6/25/27 @ 100 (b) | 3,750 | 3,729 | |||||||||
Hertz Vehicle Financing LLC, Series 2021-1A, Class C, 2.05%, 12/26/25 (b) | 1,667 | 1,641 | |||||||||
| Hertz Vehicle Financing LLC, Series 2022-2A, Class B, 2.65%, 6/26/28, Callable 6/25/27 @ 100 (b) | 1,500 | 1,497 | |||||||||
| HPEFS Equipment Trust, Series 2020-1A, Class C, 2.03%, 2/20/30, Callable 2/20/23 @ 100 (b) | 2,851 | 2,866 | |||||||||
| HPEFS Equipment Trust, Series 2020-2A, Class C, 2.00%, 7/22/30, Callable 5/20/23 @ 100 (b) | 3,400 | 3,416 | |||||||||
| HPEFS Equipment Trust, Series 2021-2A, Class D, 1.29%, 3/20/29, Callable 7/20/24 @ 100 (b) | 4,531 | 4,426 | |||||||||
| HPEFS Equipment Trust, Series 2021-1A, Class D, 1.03%, 3/20/31, Callable 3/20/24 @ 100 (b) | 5,180 | 5,080 | |||||||||
| HPEFS Equipment Trust, Series 2019-1A, Class B, 2.32%, 9/20/29, Callable 8/20/22 @ 100 (b) | 536 | 537 | |||||||||
See notes to financial statements.
6
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| HPEFS Equipment Trust, Series 2019-1A, Class C, 2.49%, 9/20/29, Callable 8/20/22 @ 100 (b) | $ | 1,350 | $ | 1,356 | |||||||
| JPMorgan Chase Bank NA, Series 2021-2, Class D, 1.14%, 12/26/28, Callable 8/25/24 @ 100 (b) | 956 | 950 | |||||||||
| JPMorgan Chase Bank NA, Series 2021-3, Class D, 1.01%, 2/26/29, Callable 9/25/24 @ 100 (b) | 1,672 | 1,655 | |||||||||
| JPMorgan Chase Bank NA, Series 2021-2, Class C, 0.97%, 12/26/28, Callable 8/25/24 @ 100 (b) | 1,710 | 1,699 | |||||||||
| JPMorgan Chase Bank NA, Series 2020-2, Class C, 1.14%, 2/25/28, Callable 4/25/24 @ 100 (b) | 622 | 621 | |||||||||
| JPMorgan Chase Bank NA, Series 2021-1, Class B, 0.88%, 9/25/28, Callable 9/25/24 @ 100 (b) | 1,743 | 1,731 | |||||||||
| JPMorgan Chase Bank NA, Series 1, Class D, 1.17%, 9/25/28, Callable 9/25/24 @ 100 (b) | 3,486 | 3,461 | |||||||||
| JPMorgan Chase Commercial Mortgage Securities Trust, Series 2021-2NU, Class D, 2.08%, 1/5/40 (b) | 2,700 | 2,474 | |||||||||
Master Credit Card Trust, Series 2020-1A, Class B, 2.27%, 9/23/24 (b) | 833 | 842 | |||||||||
Master Credit Card Trust, Series 2018-1A, Class C, 3.74%, 7/21/24 (b) | 1,750 | 1,783 | |||||||||
Master Credit Card Trust, Series 2020-1A, Class C, 2.59%, 9/23/24 (b) | 2,125 | 2,152 | |||||||||
Master Credit Card Trust, Series 2021-1A, Class C, 1.06%, 11/21/25 (b) | 5,775 | 5,643 | |||||||||
Master Credit Card Trust, Series 2022-2A, Class C, 2.73%, 7/21/28 (b) | 1,719 | 1,719 | |||||||||
| MVW LLC, Series 2021-1WA, Class B, 1.44%, 1/22/41, Callable 2/20/27 @ 100 (b) | 1,113 | 1,073 | |||||||||
| MVW Owner Trust, Series 2018-1A, Class A, 3.45%, 1/21/36, Callable 2/20/24 @ 100 (b) | 2,316 | 2,367 | |||||||||
| New Economy Assets Phase 1 Sponsor LLC, Series 2021-1, Class A1, 1.91%, 10/20/61, Callable 10/20/24 @ 100 (b) | 6,097 | 5,941 | |||||||||
| New Economy Assets Phase 1 Sponsor LLC, Series 2021-1, Class B1, 2.41%, 10/20/61, Callable 10/20/24 @ 100 (b) | 1,832 | 1,811 | |||||||||
| NP SPE II LLC, Series 2017-1A, Class A2, 4.22%, 10/21/47, Callable 4/20/23 @ 100 (b) | 5,875 | 6,039 | |||||||||
NP SPE II LLC, Series 2019-2A, Class A2, 3.10%, 11/19/49 (b) | 4,207 | 4,254 | |||||||||
NP SPE II LLC, Series 2019-2A, Class C1, 6.44%, 11/19/49 (b) | 4,371 | 4,108 | |||||||||
| Oscar U.S. Funding XII LLC, Series 1A, Class A4, 1.00%, 4/10/28, Callable 2/10/25 @ 100 (b) | 930 | 905 | |||||||||
| Pawnee Equipment Receivables LLC, Series 2021-1, Class B, 1.82%, 7/15/27, Callable 11/15/25 @ 100 (b) | 1,637 | 1,614 | |||||||||
| Prestige Auto Receivables Trust, Series 2019-1A, Class D, 3.01%, 8/15/25, Callable 11/15/22 @ 100 (b) | 5,750 | 5,815 | |||||||||
Progress Residential, Series 2021-SFR4, Class C, 2.04%, 5/17/38 (b) | 2,351 | 2,269 | |||||||||
Progress Residential, Series 2021-SFR4, Class D, 2.31%, 5/17/38 (b) | 2,500 | 2,414 | |||||||||
Progress Residential Trust, Series 2021-SFR7, Class B, 1.94%, 8/17/40 (b) | 3,250 | 3,069 | |||||||||
Progress Residential Trust, Series 2021-SFR5, Class D, 2.11%, 7/16/26 (b) | 2,000 | 1,927 | |||||||||
| Progress Residential Trust, Series 2021-SFR6, Class D, 2.23%, 7/17/38, Callable 7/17/26 @ 100 (b) | 3,000 | 2,880 | |||||||||
Progress Residential Trust, Series 2021-SFR3, Class D, 2.29%, 5/17/26 (b) | 2,000 | 1,930 | |||||||||
| Santander Bank NA, Series 2021-1A, Class B, 1.83%, 12/15/31, Callable 9/15/24 @ 100 (b) | 1,629 | 1,621 | |||||||||
| Santander Consumer Auto Receivables Trust, Series 2020-BA, Class D, 2.14%, 12/15/26, Callable 6/15/24 @ 100 (b) | 5,000 | 5,016 | |||||||||
See notes to financial statements.
7
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Santander Consumer Auto Receivables Trust, Series 2020-BA, Class C, 1.29%, 4/15/26, Callable 6/15/24 @ 100 (b) | $ | 2,500 | $ | 2,489 | |||||||
| Santander Consumer Auto Receivables Trust, Series 2020-AA, Class D, 5.49%, 4/15/26, Callable 9/15/23 @ 100 (b) | 2,000 | 2,109 | |||||||||
| Santander Drive Auto Receivables Trust, Series 2020-3, Class C, 1.12%, 1/15/26, Callable 9/15/23 @ 100 | 2,000 | 2,002 | |||||||||
| Santander Drive Auto Receivables Trust, Series 2018-5, Class D, 4.19%, 12/16/24, Callable 10/15/22 @ 100 | 2,342 | 2,365 | |||||||||
| Santander Drive Auto Receivables Trust, Series 2018-2, Class D, 3.88%, 2/15/24, Callable 5/15/22 @ 100 | 816 | 821 | |||||||||
| Santander Retail Auto Lease Trust, Series 2019-C, Class C, 2.39%, 11/20/23, Callable 9/20/22 @ 100 (b) | 1,782 | 1,795 | |||||||||
| Santander Retail Auto Lease Trust, Series 2019-B, Class C, 2.77%, 8/21/23, Callable 7/20/22 @ 100 (b) | 1,460 | 1,470 | |||||||||
| Santander Retail Auto Lease Trust, Series 2021-C, Class C, 1.11%, 3/20/26, Callable 7/20/24 @ 100 (b) | 1,312 | 1,285 | |||||||||
| SCF Equipment Leasing LLC, Series 2020-1A, Class C, 2.60%, 8/21/28, Callable 3/20/23 @ 100 (b) | 3,800 | 3,812 | |||||||||
| SCF Equipment Leasing LLC, Series 1A, Class B, 1.37%, 8/20/29, Callable 4/20/24 @ 100 (b) | 500 | 491 | |||||||||
| SCF Equipment Leasing LLC, Series 2020-1A, Class B, 2.02%, 3/20/28, Callable 3/20/23 @ 100 (b) | 3,823 | 3,832 | |||||||||
| SCF Equipment Leasing LLC, Series 2019-2, Class C, 3.11%, 6/21/27, Callable 11/20/24 @ 100 (b) | 6,500 | 6,608 | |||||||||
| SLM Student Loan Trust, Series 2003-14, Class B, 0.81% (LIBOR03M+55bps), 10/25/65, Callable 10/25/29 @ 100 (a) | 543 | 517 | |||||||||
| SLM Student Loan Trust, Series 2012-6, Class B, 1.11% (LIBOR01M+100bps), 4/27/43, Callable 2/25/29 @ 100 (a) | 2,500 | 2,431 | |||||||||
| 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 | 7,801 | |||||||||
| Synchrony Credit Card Master Note Trust, Series 2017-2, Class C, 3.01%, 10/15/25 | 1,000 | 1,014 | |||||||||
| Tesla Auto Lease Trust, Series 2020-A, Class C, 1.68%, 2/20/24, Callable 4/20/23 @ 100 (b) | 2,000 | 2,005 | |||||||||
| Tesla Auto Lease Trust, Series 2019-A, Class B, 2.41%, 12/20/22, Callable 11/20/22 @ 100 (b) | 5,000 | 5,044 | |||||||||
| Transportation Finance Equipment Trust, Series 2019-1, Class C, 2.19%, 8/23/24, Callable 1/23/23 @ 100 (b) | 1,250 | 1,261 | |||||||||
Trillium Credit Card Trust II, Series 2021-1A, Class C, 2.42%, 10/26/29 (b) | 9,300 | 9,199 | |||||||||
| Trinity Rail Leasing LLC, Series 2021-1A, Class A, 2.26%, 7/19/51, Callable 1/19/24 @ 100 (b) | 985 | 964 | |||||||||
| Trinity Rail Leasing LLC, Series 2019-1, Class A, 3.82%, 4/17/49, Callable 4/17/23 @ 100 (b) | 3,472 | 3,551 | |||||||||
| Vantage Data Centers LLC, Series 2020-2A, Class A2, 1.99%, 9/15/45, Callable 9/15/25 @ 100 (b) | 9,000 | 8,661 | |||||||||
| VB-S1 Issuer LLC, Series 2020-1A, Class D, 4.09%, 6/15/50, Callable 6/15/24 @ 100 (b) | 1,100 | 1,121 | |||||||||
See notes to financial statements.
8
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| VB-S1 Issuer LLC, Series 2020-1A, Class C2, 3.03%, 6/15/50, Callable 6/15/24 @ 100 (b) | $ | 1,850 | $ | 1,873 | |||||||
| Verizon Owner Trust, Series 2020-A, Class C, 2.06%, 7/22/24, Callable 4/20/23 @ 100 | 5,000 | 5,040 | |||||||||
| Volvo Financial Equipment LLC, Series 2019-2A, Class A4, 2.14%, 9/16/24, Callable 7/15/23 @ 100 (b) | 2,500 | 2,526 | |||||||||
| Wells Fargo Commercial Mortgage Trust, Series 2021-SAVE, Class D, 2.61% (LIBOR01M+250bps), 2/15/40 (a) (b) | 1,364 | 1,359 | |||||||||
| Westlake Automobile Receivables Trust, Series 2019-2A, Class D, 3.20%, 11/15/24, Callable 3/15/23 @ 100 (b) | 2,550 | 2,586 | |||||||||
| Westlake Automobile Receivables Trust, Series 2018-3A, Class D, 4.00%, 10/16/23, Callable 7/15/22 @ 100 (b) | 2,223 | 2,235 | |||||||||
| World Omni Auto Receivables Trust, Series 2021-C, Class C, 1.06%, 4/17/28, Callable 9/15/24 @ 100 | 5,000 | 4,888 | |||||||||
| World Omni Select Auto Trust, Series 2021-A, Class C, 1.09%, 11/15/27, Callable 2/15/24 @ 100 | 1,250 | 1,206 | |||||||||
| World Omni Select Auto Trust, Series 2020-A, Class C, 1.25%, 10/15/26, Callable 8/15/23 @ 100 | 3,750 | 3,728 | |||||||||
| World Omni Select Auto Trust, Series 2018-1A, Class D, 4.13%, 1/15/25, Callable 11/15/22 @ 100 (b) | 1,955 | 1,967 | |||||||||
Total Asset-Backed Securities (Cost $461,666) | 457,449 | ||||||||||
Collateralized Mortgage Obligations (18.2%) | |||||||||||
| 37 Capital CLO I, Series 2021-1A, Class C, 2.45% (LIBOR03M+225bps), 10/15/34, Callable 10/15/23 @ 100 (a) (b) | 2,750 | 2,744 | |||||||||
| AB BSL CLO 1 Ltd., Series 2020-1A, Class A2AR, 1.82%, 1/15/35, Callable 1/15/24 @ 100 (b) | 3,500 | 3,500 | |||||||||
| AB BSL CLO 1 Ltd., Series 2020-1A, Class BR, 2.17%, 1/15/35, Callable 1/15/24 @ 100 (b) | 3,000 | 3,000 | |||||||||
| AB BSL CLO 1 Ltd., Series 2020-1A, Class CR, 2.67%, 1/15/35, Callable 1/15/24 @ 100 (b) | 3,000 | 3,000 | |||||||||
| Aimco CLO 11 Ltd., Series 2020-11A, Class BR, 1.84% (LIBOR03M+160bps), 10/17/34, Callable 1/17/24 @ 100 (a) (b) | 3,250 | 3,250 | |||||||||
| Annisa CLO Ltd., Series 2016-2, Class BR, 1.90% (LIBOR03M+165bps), 7/20/31, Callable 4/20/22 @ 100 (a) (b) | 10,000 | 9,975 | |||||||||
| AOA Mortgage Trust, Series 2021-1177, Class D, 1.93% (LIBOR01M+182bps), 10/15/36 (a) (b) | 10,600 | 10,538 | |||||||||
| AOA Mortgage Trust, Series 2021-1177, Class B, 1.28% (LIBOR01M+117bps), 10/15/36 (a) (b) | 3,000 | 2,980 | |||||||||
| Arbor Multifamily Mortgage Securities Trust, Series 2021-MF2, Class B, 2.56%, 6/15/54, Callable 6/15/31 @ 100 (b) (c) | 3,200 | 3,110 | |||||||||
| Arbor Multifamily Mortgage Securities Trust, Series 2020-MF1, Class C, 3.60%, 5/15/53, Callable 4/15/30 @ 100 (b) (c) | 1,500 | 1,535 | |||||||||
| Austin Fairmont Hotel Trust, Series 2019-FAIR, Class D, 1.91% (LIBOR01M+180bps), 9/15/32 (a) (b) | 3,585 | 3,557 | |||||||||
Aventura Mall Trust, Series 2018-AVM, Class D, 4.11%, 7/5/40 (b) (c) | 12,420 | 12,291 | |||||||||
| Ballyrock CLO, Series 2020-2A, Class A2R, 1.80% (US0003M+155bps), 10/20/31, Callable 10/20/22 @ 100 (a) (b) | 4,000 | 3,996 | |||||||||
| Ballyrock CLO 15 Ltd., Series 2021-1A, Class B, 2.29% (LIBOR03M+205bps), 4/15/34, Callable 7/15/23 @ 100 (a) (b) | 5,000 | 5,001 | |||||||||
See notes to financial statements.
9
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Ballyrock CLO 18 Ltd., Series 2021-18A, Class A2, 1.88% (LIBOR03M+165bps), 1/15/35, Callable 1/15/24 @ 100 (a) (b) | $ | 2,750 | $ | 2,751 | |||||||
| Ballyrock CLO Ltd., Series 2019-2A, Class A1BR, 1.36% (LIBOR03M+120bps), 11/20/30, Callable 2/20/22 @ 100 (a) (b) | 2,000 | 2,000 | |||||||||
| BAMLL Commercial Mortgage Securities Trust, Series 2015-200P, Class D, 3.60% (LIBOR01M+105bps), 4/14/33, Callable 4/14/25 @ 100 (a) (b) | 12,485 | 12,608 | |||||||||
| BAMLL Commercial Mortgage Securities Trust, Series 2020-BOC, Class C, 3.03%, 1/15/32 (b) | 5,000 | 4,952 | |||||||||
| BANK, Series 2017-BNK4, Class AS, 3.78%, 5/15/50, Callable 3/15/27 @ 100 | 5,000 | 5,260 | |||||||||
| BBCMS Mortgage Trust, Series 2020-BID, Class B, 2.65% (LIBOR01M+254bps), 10/15/37 (a) (b) | 5,000 | 5,021 | |||||||||
| BBCMS Mortgage Trust, Series 2020-BID, Class C, 3.75% (LIBOR01M+364bps), 10/15/37 (a) (b) | 5,000 | 5,030 | |||||||||
| BBCMS Mortgage Trust, Series 2020-BID, Class D, 4.74% (LIBOR01M+463bps), 10/15/37 (a) (b) | 14,600 | 14,692 | |||||||||
| BBCRE Trust, Series 2015-GTP, Class A, 3.97%, 8/10/33, Callable 5/10/25 @ 100 (b) | 5,935 | 6,221 | |||||||||
| Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR7, Class B, 5.21%, 2/11/41, Callable 2/11/22 @ 100 (c) | 304 | 298 | |||||||||
| Benchmark Mortgage Trust, Series 2019-B14, Class AS, 3.35%, 12/15/61, Callable 11/15/29 @ 100 | 5,000 | 5,176 | |||||||||
| Benchmark Mortgage Trust, Series 2021-B25, Class 300D, 2.99%, 4/15/54, Callable 4/15/30 @ 100 (b) (c) | 2,417 | 2,172 | |||||||||
BPR Trust, Series 2021-TY, Class D, 2.46% (LIBOR01M+235bps), 9/23/23 (a) (b) | 5,688 | 5,672 | |||||||||
BPR Trust, Series 2021-TY, Class B, 1.26% (LIBOR01M+115bps), 9/23/23 (a) (b) | 750 | 748 | |||||||||
| BX Commercial Mortgage Trust, Series 2021-SOAR, Class D, 1.51% (LIBOR01M+140bps), 6/15/38 (a) (b) | 2,305 | 2,287 | |||||||||
| BX Commercial Mortgage Trust, Series 2020-VIV3, Class B, 3.54%, 3/9/44 (b) (c) | 5,000 | 5,151 | |||||||||
| BX Commercial Mortgage Trust, Series 2020-VIV4, Class X, 0.70%, 11/10/42 (b) (c) (d) | 144,200 | 7,200 | |||||||||
| BX Commercial Mortgage Trust, Series 2021-VOLT, Class B, 1.06% (LIBOR01M+85bps), 9/15/23 (a) (b) | 1,500 | 1,485 | |||||||||
| BX Commercial Mortgage Trust, Series 2019-XL, Class D, 1.56% (LIBOR01M+145bps), 10/15/36 (a) (b) | 3,400 | 3,398 | |||||||||
| BX Commercial Mortgage Trust, Series 2021-VIVA, Class D, 3.55%, 3/11/44 (b) (c) | 5,000 | 4,874 | |||||||||
| BX Commercial Mortgage Trust, Series 2020-FOX, Class D, 2.21% (LIBOR01M+210bps), 11/15/32 (a) (b) | 3,371 | 3,370 | |||||||||
| BX Commercial Mortgage Trust, Series 2019-XL, Class C, 1.36% (LIBOR01M+125bps), 10/15/36 (a) (b) | 6,800 | 6,788 | |||||||||
| BX Commercial Mortgage Trust, Series 2020-FOX, Class C, 1.66% (LIBOR01M+155bps), 11/15/32 (a) (b) | 3,371 | 3,371 | |||||||||
| BX Commercial Mortgage Trust, Series 2019-XL, Class B, 1.19% (LIBOR01M+108bps), 10/15/36 (a) (b) | 7,766 | 7,753 | |||||||||
| BX Mortgage Trust, Series 2021-PAC, Class B, 1.01% (LIBOR01M+90bps), 10/15/36 (a) (b) | 3,250 | 3,217 | |||||||||
| BX Trust, Series 2021-ARIA, Class D, 2.00% (LIBOR01M+190bps), 10/15/36 (a) (b) | 3,000 | 2,987 | |||||||||
See notes to financial statements.
10
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
BXP Trust, Series 2021-601L, Class B, 2.78%, 1/15/44 (b) (c) | $ | 4,995 | $ | 4,900 | |||||||
BXP Trust, Series 2021-601L, Class D, 2.78%, 1/15/44 (b) (c) | 4,000 | 3,581 | |||||||||
BXP Trust, Series 2021-601L, Class C, 2.78%, 1/15/44 (b) (c) | 3,750 | 3,514 | |||||||||
| CAMB Commercial Mortgage Trust, Series 2021-CX2, Class A, 2.70%, 11/10/46, Callable 11/10/31 @ 100 (b) | 2,500 | 2,484 | |||||||||
| CHT Cosmo Mortgage Trust, Series 2017-CSMO, Class D, 2.36% (LIBOR01M+225bps), 11/15/36 (a) (b) | 20,250 | 20,238 | |||||||||
| CHT Mortgage Trust, Series 2017-CSMO, Class E, 3.11% (LIBOR01M+300bps), 11/15/36 (a) (b) | 22,867 | 22,860 | |||||||||
| CHT Mortgage Trust, Series 2017-CSMO, Class C, 1.61% (LIBOR01M+150bps), 11/15/36 (a) (b) | 7,000 | 6,995 | |||||||||
| Citigroup Commercial Mortgage Trust, Series 2020-555, Class D, 3.23%, 12/10/41 (b) | 5,000 | 4,733 | |||||||||
| Citigroup Commercial Mortgage Trust, Series 2020-555, Class B, 2.83%, 12/10/41 (b) | 4,000 | 3,961 | |||||||||
| Citigroup Commercial Mortgage Trust, Series 2019-PRM, Class D, 4.35%, 5/10/36 (b) | 1,850 | 1,889 | |||||||||
| Citigroup Commercial Mortgage Trust, Series 2019-PRM, Class A, 3.34%, 5/10/36 (b) | 3,750 | 3,840 | |||||||||
| Columbia Cent CLO 29 Ltd., Series 2020-29A, Class BR, 1.95% (LIBOR03M+170bps), 10/20/34, Callable 10/20/23 @ 100 (a) (b) | 3,000 | 3,001 | |||||||||
| COMM Mortgage Trust, Series 2020-CX, Class A, 2.17%, 11/10/46, Callable 11/10/30 @ 100 (b) | 13,000 | 12,484 | |||||||||
COMM Mortgage Trust, Series 2020-CBM, Class A2, 2.90%, 11/13/39 (b) | 2,660 | 2,670 | |||||||||
COMM Mortgage Trust, Series 2020-CBM, Class C, 3.40%, 11/13/39 (b) | 9,700 | 9,561 | |||||||||
| COMM Mortgage Trust, Series 2013-CCRE11, Class AM, 4.72%, 8/10/50, Callable 9/10/23 @ 100 (c) | 5,000 | 5,208 | |||||||||
| COMM Mortgage Trust, Series 2014-277P, Class A, 3.61%, 8/10/49, Callable 8/10/24 @ 100 (b) (c) | 9,500 | 9,806 | |||||||||
| COMM Mortgage Trust, Series 2015-PC1, Class B, 4.32%, 7/10/50, Callable 6/10/25 @ 100 (c) | 3,399 | 3,543 | |||||||||
| COMM Mortgage Trust, Series 2015-PC1, Class AM, 4.29%, 7/10/50, Callable 5/10/25 @ 100 (c) | 3,000 | 3,157 | |||||||||
CSMC Trust, Series 2019-UVIL, Class C, 3.28%, 12/15/41 (b) (c) | 5,000 | 4,789 | |||||||||
| CSMC Trust, Series 2020-West, Class A, 3.04%, 2/15/35, Callable 2/15/30 @ 100 (b) | 2,500 | 2,542 | |||||||||
| DBJPM Mortgage Trust, Series 2016-SFC, Class B, 3.24%, 8/10/36, Callable 8/10/26 @ 100 (b) | 2,500 | 2,523 | |||||||||
| DBJPM Mortgage Trust, Series 2016-SFC, Class A, 2.83%, 8/10/36, Callable 8/10/26 @ 100 (b) | 5,000 | 4,990 | |||||||||
| Dryden Senior Loan Fund, Series 2016-42A, Class BR, 1.79% (LIBOR03M+155bps), 7/15/30, Callable 4/15/22 @ 100 (a) (b) | 5,000 | 4,984 | |||||||||
| Extended Stay America Trust, Series 2021-ESH, Class D, 2.36% (LIBOR01M+225bps), 7/15/38 (a) (b) | 4,472 | 4,483 | |||||||||
| Flatiron CLO 18 Ltd., Series 2018-1A, Class A, 1.19% (LIBOR03M+95bps), 4/17/31, Callable 4/17/22 @ 100 (a) (b) | 3,500 | 3,493 | |||||||||
| Flatiron CLO 20 Ltd., Series 2020-1A, Class B, 1.91% (LIBOR03M+175bps), 11/20/33, Callable 11/20/22 @ 100 (a) (b) | 750 | 751 | |||||||||
| Flatiron CLO 20 Ltd., Series 2020-1A, Class C, 2.61% (LIBOR03M+245bps), 11/20/33, Callable 11/20/22 @ 100 (a) (b) | 4,000 | 4,022 | |||||||||
See notes to financial statements.
11
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Flatiron RR CLO 22 LLC, Series 2021-2A, Class B (US0003M+160bps), 10/15/34, Callable 10/15/23 @ 100 (a) (b) | $ | 3,000 | $ | 2,998 | |||||||
| FREMF Mortgage Trust, Series 2017-K724, Class B, 3.53%, 11/25/23, Callable 11/25/23 @ 100 (b) (c) | 7,000 | 7,189 | |||||||||
| Goldentree Loan Management US Clo 8 Ltd., Series 2020-8A, Class BR, 1.85% (US0003M+160bps), 10/20/34, Callable 10/20/23 @ 100 (a) (b) | 2,500 | 2,501 | |||||||||
| Golub Capital Partners 48 LP, Series 2020-48A, Class B1, 2.04% (LIBOR03M+180bps), 4/17/33, Callable 4/17/22 @ 100 (a) (b) | 4,350 | 4,350 | |||||||||
| Golub Capital Partners CLO Ltd., Series 2020-52A, Class C, 3.05% (LIBOR03M+280bps), 1/20/34, Callable 1/20/23 @ 100 (a) (b) | 3,500 | 3,510 | |||||||||
| GS Mortgage Securities Corp. Trust, Series 2012-ALOH, Class A, 3.55%, 4/10/34 (b) | 10,166 | 10,183 | |||||||||
| GS Mortgage Securities Corp. Trust, Series 2020-UPTN, Class B, 2.95%, 12/10/39 (b) | 1,735 | 1,749 | |||||||||
| GS Mortgage Securities Trust, Series 2019-GSA1, Class AS, 3.34%, 11/10/52, Callable 10/10/29 @ 100 | 5,000 | 5,185 | |||||||||
| GS Mortgage Securities Trust, Series 2019-GSA1, Class A4, 3.05%, 11/10/52, Callable 10/10/29 @ 100 | 4,000 | 4,137 | |||||||||
Hilton USA Trust, Series 2016-HHV, Class B, 4.19%, 11/5/38 (b) (c) | 4,650 | 4,873 | |||||||||
Hilton USA Trust, Series 2016-HHV, Class C, 4.19%, 11/5/38 (b) (c) | 824 | 854 | |||||||||
| Houston Galleria Mall Trust, Series 2015-HGLR, Class A1A2, 3.09%, 3/5/37 (b) | 6,924 | 6,964 | |||||||||
| Hudson Yards Mortgage Trust, Series 2019-55HY, Class D, 2.94%, 12/10/41 (b) (c) | 10,672 | 10,406 | |||||||||
| Hudson Yards Mortgage Trust, Series 2016-10HY, Class A, 2.84%, 8/10/38, Callable 8/10/26 @ 100 (b) | 3,020 | 3,080 | |||||||||
| Hudson Yards Mortgage Trust, Series 2019-55HY, Class A, 2.94%, 12/10/41 (b) (c) | 4,500 | 4,625 | |||||||||
| Hudson Yards Mortgage Trust, Series 2019-30HY, Class D, 3.44%, 7/10/39 (b) (c) | 9,457 | 9,505 | |||||||||
| J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2010-C2, Class C, 5.69%, 11/15/43, Callable 2/15/22 @ 100 (b) (c) | 2,133 | 2,125 | |||||||||
Jackson Park Trust, Series 2019-LIC, Class A, 2.77%, 10/14/39 (b) | 5,000 | 5,004 | |||||||||
Jackson Park Trust, Series 2019-LIC, Class C, 3.13%, 10/14/39 (b) (c) | 5,000 | 4,785 | |||||||||
| JP Morgan Chase Commercial Mortgage Securities Trust, Series 2013-C10, Class B, 3.67%, 12/15/47, Callable 2/15/23 @ 100 (c) | 2,250 | 2,291 | |||||||||
| JP Morgan Chase Commercial Mortgage Securities Trust, Series 2013-C13, Class C, 4.08%, 1/15/46, Callable 7/15/23 @ 100 (c) | 468 | 478 | |||||||||
| JPMorgan Chase Commercial Mortgage Securities Trust, Series 2012-C8, Class XA, 1.71%, 10/15/45, Callable 9/15/22 @ 100 (c) (d) | 17,463 | 59 | |||||||||
| JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C10, Class C, 4.10%, 12/15/47, Callable 2/15/23 @ 100 (c) | 3,045 | 3,045 | |||||||||
| JPMorgan Chase Commercial Mortgage Securities Trust, Series 2021-2NU, Class XA, 0.09%, 1/5/40 (b) (c) (d) | 226,300 | 1,291 | |||||||||
| JPMorgan Chase Commercial Mortgage Securities Trust, Series 2019-OSB, Class C, 3.75%, 6/5/39, Callable 6/5/29 @ 100 (b) (c) | 1,614 | 1,677 | |||||||||
| JPMorgan Chase Commercial Mortgage Securities Trust, Series 2019-OSB, Class D, 3.78%, 6/5/39, Callable 6/5/29 @ 100 (b) (c) | 2,000 | 2,044 | |||||||||
| KNDL Mortgage Trust, Series 2019-KNSQ, Class E, 1.91% (LIBOR01M+180bps), 5/15/36 (a) (b) | 2,500 | 2,492 | |||||||||
See notes to financial statements.
12
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| LCM LP, Series 18A, Class A1R, 1.27% (LIBOR03M+102bps), 4/20/31, Callable 4/20/22 @ 100 (a) (b) | $ | 1,000 | $ | 999 | |||||||
| LCM Ltd., Series 36A, Class A2, 1.65% (LIBOR03M+140bps), 1/15/34, Callable 1/15/24 @ 100 (a) (b) | 3,000 | 3,002 | |||||||||
| LCM Ltd., Series 2032A, Class B, 1.95% (LIBOR03M+170bps), 7/20/34, Callable 7/20/23 @ 100 (a) (b) | 2,500 | 2,503 | |||||||||
| Life BMR Mortgage Trust, Series 2021-BMR, Class D, 1.51% (LIBOR01M+140bps), 3/15/38 (a) (b) | 4,500 | 4,463 | |||||||||
| Magnetite Ltd., Series 2015-12A, Class BRRA, 1.84% (LIBOR03M+160bps), 10/15/31, Callable 4/15/22 @ 100 (a) (b) | 3,240 | 3,233 | |||||||||
Manhattan West, Series 2020-1MW, Class C, 2.33%, 9/10/40 (b) (c) | 5,000 | 4,850 | |||||||||
Manhattan West, Series 2020-1MW, Class D, 2.33%, 9/10/40 (b) (c) | 4,250 | 4,030 | |||||||||
Manhattan West, Series 2020-1MW, Class A, 2.13%, 9/10/40 (b) | 5,000 | 4,935 | |||||||||
| MHC Commercial Mortgage Trust, Series MHC, Class D, 1.71% (LIBOR01M+160bps), 4/15/26 (a) (b) | 2,000 | 1,993 | |||||||||
| MHC Trust, Series 2021-MHC2, Class D, 1.61% (LIBOR01M+150bps), 5/15/23 (a) (b) | 1,900 | 1,877 | |||||||||
MHP, Series 2022-MHIL, Class D, 1.66%, 1/15/27 (b) | 2,500 | 2,486 | |||||||||
| Morgan Stanley Bank of America Merrill Lynch Trust, Series 2012-C6, Class XA, 1.59%, 11/15/45, Callable 6/15/22 @ 100 (b) (c) (d) | 16,877 | 55 | |||||||||
| Morgan Stanley Capital I Trust, Series 2017-CLS, Class F, 2.71% (LIBOR01M+260bps), 11/15/34 (a) (b) | 4,000 | 3,978 | |||||||||
| Morgan Stanley Capital I Trust, Series 2021-PLZA, Class C, 2.81%, 11/9/31, Callable 5/9/31 @ 100 (b) | 2,750 | 2,594 | |||||||||
| Morgan Stanley Capital I Trust, Series 2017-CLS, Class E, 2.06% (LIBOR01M+195bps), 11/15/34 (a) (b) | 8,215 | 8,187 | |||||||||
| Morgan Stanley Capital I Trust, Series 2017-CLS, Class C, 1.11% (LIBOR01M+100bps), 11/15/34 (a) (b) | 3,245 | 3,238 | |||||||||
| Morgan Stanley Eaton Vance CLO, Series 2021-1A, Class B, 1.78% (US0003M+165bps), 10/20/34, Callable 10/23/23 @ 100 (a) (b) | 2,500 | 2,500 | |||||||||
| Mountain View CLO Ltd., Series 2013-1A, Class CRR, 2.32% (LIBOR03M+220bps), 10/12/30 (a) (b) | 4,000 | 4,000 | |||||||||
| Neuberger Berman CLO XIV Ltd., Series 2013-14A, Class BR2, 1.78% (LIBOR03M+150bps), 1/28/30, Callable 4/28/22 @ 100 (a) (b) | 5,000 | 5,001 | |||||||||
| Neuberger Berman Loan Advisers CLO 44 Ltd., Series 2021-44A, Class B, 1.84% (US0003M+160bps), 10/16/34, Callable 10/16/23 @ 100 (a) (b) | 2,500 | 2,503 | |||||||||
| Neuberger Berman Loan Advisers CLO Ltd., Series 2018-29A, Class B2, 4.60%, 10/19/31, Callable 4/19/22 @ 100 (b) | 5,000 | 5,017 | |||||||||
| Octagon 57 Ltd., Series 2021-1A, Class B1, 1.77% (LIBOR03M+165bps), 10/15/34, Callable 10/15/23 @ 100 (a) (b) | 3,000 | 3,000 | |||||||||
| Octagon Investment Partners 48 Ltd., Series 2020-3A, Class BR, 1.85% (LIBOR03M+160bps), 10/20/34, Callable 10/20/23 @ 100 (a) (b) | 4,200 | 4,185 | |||||||||
One Bryant Park Trust, Series 2019-OBP, Class A, 2.52%, 9/13/49 (b) | 11,040 | 10,966 | |||||||||
| One New York Plaza Trust, Series 2020-1NYP, Class A, 1.06% (LIBOR01M+95bps), 1/15/26 (a) (b) | 2,625 | 2,619 | |||||||||
| ONE PARK Mortgage Trust, Series 2021-PARK, Class D, 1.61% (LIBOR01M+150bps), 3/15/36 (a) (b) | 5,000 | 4,951 | |||||||||
| Palmer Square Loan Funding Ltd., Series 2019-2, Class B, 2.50% (LIBOR03M+225bps), 4/20/27, Callable 4/20/22 @ 100 (a) (b) | 5,000 | 4,995 | |||||||||
See notes to financial statements.
13
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Palmer Square Loan Funding Ltd., Series 2020-1A, Class B, 2.06% (LIBOR03M+190bps), 2/20/28, Callable 2/20/22 @ 100 (a) (b) | $ | 2,000 | $ | 2,000 | |||||||
| Palmer Square Loan Funding Ltd., Series 2019-3, Class B, 2.26% (LIBOR03M+210bps), 8/20/27, Callable 2/20/22 @ 100 (a) (b) | 5,000 | 5,002 | |||||||||
| Palmer Square Loan Funding Ltd., Series 2019-4, Class B, 2.36% (LIBOR03M+210bps), 10/24/27, Callable 4/24/22 @ 100 (a) (b) | 5,000 | 5,001 | |||||||||
| Palmer Square Loan Funding Ltd., Series 2019-4, Class A2, 1.86% (LIBOR03M+160bps), 10/24/27, Callable 4/24/22 @ 100 (a) (b) | 4,500 | 4,504 | |||||||||
| Palmer Square Loan Funding Ltd., Series 2020-4A, Class B, 2.48% (LIBOR03M+230bps), 11/25/28, Callable 2/25/22 @ 100 (a) (b) | 5,000 | 5,002 | |||||||||
| Race Point CLO Ltd., Series 2016-10A, Class B1R, 1.91% (LIBOR03M+165bps), 7/25/31, Callable 4/25/22 @ 100 (a) (b) | 5,000 | 4,986 | |||||||||
SLG Office Trust, Series 2021-OVA, Class B, 2.71%, 7/15/41 (b) | 4,000 | 3,993 | |||||||||
SLG Office Trust, Series 2021-OVA, Class C, 2.85%, 7/15/41 (b) | 4,000 | 3,930 | |||||||||
SMRT, Series 2022-MINI, Class E, 2.75%, 1/15/24 (b) (e) | 2,000 | 2,000 | |||||||||
| Sound Point CLO XVIII Ltd., Series 2017-4A, Class B, 2.05% (LIBOR03M+180bps), 1/21/31, Callable 4/20/22 @ 100 (a) (b) | 1,000 | 989 | |||||||||
| SREIT Trust, Series 2021-MFP2, Class D, 1.68% (LIBOR01M+157bps), 11/15/36 (a) (b) | 1,000 | 994 | |||||||||
| Stewart Park CLO Ltd., Series 2015-1A, Class A2R, 1.49% (LIBOR03M+125bps), 1/15/30, Callable 4/15/22 @ 100 (a) (b) | 2,000 | 1,998 | |||||||||
| Stratus CLO Ltd., Series 2021-3A, Class B (LIBOR03M+155bps), 12/29/29 (a) (b) | 2,259 | 2,260 | |||||||||
| Structured Asset Mortgage Investments II Trust, Series 2005-AR5, Class B1, 0.85% (LIBOR01M+50bps), 7/19/35, Callable 2/19/22 @ 100 (a) | 799 | 795 | |||||||||
| SUMIT Mortgage Trust, Series 2022-BVUE, Class C, 2.89%, 2/12/41, Callable 2/12/29 @ 100 (b) | 1,636 | 1,579 | |||||||||
| Symphony CLO XXVIII Ltd., Series 2021-28A, Class C, 2.19% (US0003M+210bps), 10/23/34, Callable 10/23/23 @ 100 (a) (b) | 3,000 | 3,004 | |||||||||
| TIAA CLO IV Ltd., Series 2018-1A, Class A2, 1.95% (LIBOR03M+170bps), 1/20/32, Callable 4/20/22 @ 100 (a) (b) | 5,000 | 4,987 | |||||||||
| TRESTLES CLO Ltd., Series 2021-4A, Class B2, 2.72%, 7/21/34, Callable 7/21/23 @ 100 (b) | 1,000 | 954 | |||||||||
| Trimaran Cavu Ltd., Series 2019-1A, Class A2, 2.15% (LIBOR03M+190bps), 7/20/32, Callable 7/20/22 @ 100 (a) (b) | 7,000 | 7,011 | |||||||||
| Trimaran Cavu Ltd., Series 2021-2A, Class B1, 1.88% (LIBOR03M+175bps), 10/25/34, Callable 10/25/23 @ 100 (a) (b) | 2,500 | 2,498 | |||||||||
| Trimaran Cavu Ltd., Series 2021-3A, Class C1, 2.57% (LIBOR03M+247bps), 1/18/35, Callable 1/18/24 @ 100 (a) (b) | 5,000 | 5,001 | |||||||||
| Tryon Park CLO Ltd., Series 2013-1A, Class A1SR, 1.13% (LIBOR03M+89bps), 4/15/29, Callable 4/15/22 @ 100 (a) (b) | 3,580 | 3,582 | |||||||||
TTAN, Series 2021-MHC, Class D, 1.86% (LIBOR01M+180bps), 3/15/38 (a) (b) | 1,797 | 1,784 | |||||||||
| UBS Commercial Mortgage Trust, Series 2012-C1, Class XA, 1.56%, 5/10/45, Callable 3/10/22 @ 100 (b) (c) (d) | 1,312 | — | (f) | ||||||||
| Venture 37 CLO Ltd., Series 2019-37A, Class A2R, 1.69% (LIBOR03M+145bps), 7/15/32, Callable 7/15/22 @ 100 (a) (b) | 3,000 | 3,001 | |||||||||
| VLS Commercial Mortgage Trust, Series 2020-LAB, Class A, 2.13%, 10/10/42 (b) | 3,000 | 2,869 | |||||||||
| Voya CLO, Series 2020-2A, Class A2R, 1.65% (US0003M+140bps), 7/19/34, Callable 7/19/23 @ 100 (a) (b) | 4,000 | 4,002 | |||||||||
See notes to financial statements.
14
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
| Voya CLO, Series 2017-4A, Class A2, 1.49% (US0003M+125bps), 10/15/30, Callable 4/15/22 @ 100 (a) (b) | $ | 2,000 | $ | 1,996 | |||||||
| Voya CLO Ltd., Series 2018-3, Class B, 1.89% (LIBOR03M+165bps), 10/15/31, Callable 4/15/22 @ 100 (a) (b) | 2,500 | 2,493 | |||||||||
| Voya CLO Ltd., Series 2015-3A, Class BR, 2.45% (LIBOR03M+220bps), 10/20/31, Callable 4/20/22 @ 100 (a) (b) | 1,250 | 1,240 | |||||||||
| Wells Fargo Commercial Mortgage Trust, Series 2015-NXS4, Class B, 4.22%, 12/15/48 (c) | 5,000 | 5,232 | |||||||||
| Wells Fargo Commercial Mortgage Trust, Series 2015-NXS4, Class AS, 3.97%, 12/15/48 | 3,500 | 3,678 | |||||||||
| Wells Fargo Commercial Mortgage Trust, Series 2015-NXS3, Class B, 4.50%, 9/15/57, Callable 9/15/25 @ 100 (c) | 2,000 | 2,103 | |||||||||
| Wells Fargo Commercial Mortgage Trust, Series 2020-C56, Class AS, 3.11%, 6/15/53, Callable 3/15/30 @ 100 | 2,000 | 2,046 | |||||||||
| Wells Fargo Commercial Mortgage Trust, Series 2018-AUS, Class A, 4.06%, 7/17/36 (b) (c) | 4,200 | 4,547 | |||||||||
| WFRBS Commercial Mortgage Trust, Series 2012-C10, Class XA, 1.48%, 12/15/45, Callable 12/15/22 @ 100 (c) (d) | 54,378 | 361 | |||||||||
Total Collateralized Mortgage Obligations (Cost $674,683) | 670,943 | ||||||||||
Preferred Stocks (0.7%) | |||||||||||
Consumer Staples (0.3%): | |||||||||||
CHS, Inc., cumulative redeemable, Series 2, 7.10% (LIBOR03M+429bps) (a) (g) | 400,000 | 10,940 | |||||||||
Financials (0.4%): | |||||||||||
Citigroup Capital, 6.67% (LIBOR03M+637bps), 10/30/40 (a) | 87,500 | 2,356 | |||||||||
Delphi Financial Group, Inc., 3.35% (LIBOR03M+319bps), 5/15/37 (a) (h) (i) | 369,987 | 8,047 | |||||||||
U.S. Bancorp, non-cumulative, Series A, 3.50% (LIBOR03M+102bps) (a) (g) | 5,000 | 4,530 | |||||||||
14,933 | |||||||||||
Total Preferred Stocks (Cost $24,873) | 25,873 | ||||||||||
Senior Secured Loans (2.9%) | |||||||||||
| AAdvantage Loyalty IP Ltd., Initial Term Loan, First Lien, 5.50% (LIBOR03M+475bps), 4/20/28 (a) | 4,000 | 4,146 | |||||||||
| Academy Ltd., Refinancing Term Loans, First Lien, 4.50% (LIBOR01M+375bps), 11/6/27 (a) | 372 | 372 | |||||||||
Air Canada, Term Loan, First Lien, 4.25% (LIBOR06M+350bps), 7/27/28 (a) | 1,000 | 1,002 | |||||||||
| Alterra Mountain Co., Facility 2028 Term Loan B, First Lien, 4.00% (LIBOR01M+350bps), 8/17/28 (a) | 960 | 958 | |||||||||
| AOT Packaging Products Acquisitionco LLC, Closing Date Initial Term Loans, First Lien, 3.75% (LIBOR01M+325bps), 3/3/28 (a) | 1,493 | 1,482 | |||||||||
| AssuredPartners, Inc., 2021 Term Loan, First Lien, 4.00% (LIBOR01M+350bps), 2/13/27 (a) | 2,955 | 2,951 | |||||||||
| Asurion LLC, New B-9 Term Loans, First Lien, 3.35% (LIBOR01M+325bps), 7/29/27 (a) | 993 | 986 | |||||||||
| Berlin Packaging LLC, Tranche B-4 Term Loans, First Lien, 3.75% (LIBOR03M+325bps), 3/5/28 (a) | 496 | 493 | |||||||||
| Blackstone CQP Holdco LP, Initial Term Loans, First Lien, 4.25% (LIBOR03M+375bps), 5/26/28 (a) | 995 | 993 | |||||||||
See notes to financial statements.
15
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Buckeye Partners LP, 2021 Tranche B-1 Refinancing Term Loan, First Lien, 2.35% (LIBOR01M+225bps), 11/1/26 (a) | $ | 1,465 | $ | 1,458 | |||||||
| BWAY Holding Co., Initial Term Loan, First Lien, 3.25% (LIBOR01M+325bps), 4/3/24 (a) | 1,719 | 1,701 | |||||||||
| Cincinnati Bell, Inc., Term B2, First Lien, 3.75% (SOFR01M+325bps), 11/17/28 (a) | 500 | 500 | |||||||||
| CITGO Petroleum Corp., 2019 Incremental Term B Loans, First Lien, 7.25% (LIBOR03M+625bps), 3/22/24 (a) | 1,418 | 1,417 | |||||||||
| ClubCorp Holdings, Inc., Term B Loans, First Lien, 2.97% (LIBOR03M+275bps), 9/18/24 (a) | 2 | 2 | |||||||||
| DELTA AIR LINES, Inc. and SKYMILES IP Ltd., Initial Term Loan, First Lien, 4.75% (LIBOR03M+375bps), 9/16/27 (a) | 16,000 | 16,882 | |||||||||
| Directv Financing LLC, Closing Date Term Loans, First Lien, 5.75% (LIBOR03M+500bps), 7/22/27 (a) | 5,376 | 5,380 | |||||||||
| Fertitta Entertainment LLC, Initial B Term Loan, First Lien, 4.50% (SOFR01M+400bps), 1/12/29 (a) (e) | 1,500 | 1,504 | |||||||||
| Foundation Building Materials, Initial Term Loans, First Lien, 3.75% (LIBOR03M+325bps), 1/29/28 (a) | 498 | 495 | |||||||||
| Freeport LNG Investments, LLLP, Initial Term B Loan, First Lien, 4.00% (LIBOR01M+350bps), 12/21/28 (a) | 1,000 | 995 | |||||||||
| Graham Packaging Co., Inc., New Term Loans, First Lien, 3.75% (LIBOR01M+300bps), 8/4/27 (a) | 466 | 464 | |||||||||
| Great Outdoors Group LLC, Term B1, First Lien, 4.50% (LIBOR03M+375bps), 3/5/28 (a) | 990 | 989 | |||||||||
| H-Food Holdings LLC, 2020 Incremental Term B-3 Loan, First Lien, 6.00% (LIBOR01M+500bps), 5/31/25 (a) | 493 | 493 | |||||||||
| H-Food Holdings LLC, Initial Term Loan, First Lien, 3.79% (LIBOR01M+369bps), 5/31/25 (a) | 1,417 | 1,406 | |||||||||
| Hilton Grand Vacations Borrower LLC, Initial Term Loan, First Lien, 3.50% (LIBOR01M+300bps), 8/2/28 (a) | 1,085 | 1,083 | |||||||||
| Hub International Ltd., B-3 Incremental Term Loans, First Lien, 4.00% (LIBOR03M+325bps), 4/25/25 (a) | 4,886 | 4,874 | |||||||||
| Hub International Ltd., B-3 Incremental Term Loans, First Lien, 4.00% (LIBOR02M+325bps), 4/25/25 (a) | 12 | 12 | |||||||||
| IRB Holding Corp., Fourth Amendment Incremental Term Loans, First Lien, 4.25% (LIBOR03M+325bps), 11/19/27 (a) | 1,976 | 1,976 | |||||||||
IRB Holding Corp., TLB, First Lien, 3.75% (SOFR03M+300bps), 12/15/27 (a) (e) | 1,000 | 990 | |||||||||
| Kronos Acquisition Holdings, Inc., Tranche B-1 Term Loans, First Lien, 4.25% (LIBOR03M+375bps), 12/22/26 (a) | 4 | 4 | |||||||||
| Lumen Technologies, Inc., Term B Loans, First Lien, 2.35% (LIBOR01M+225bps), 3/15/27 (a) | 428 | 420 | |||||||||
| Magnite, Inc., Initial Term Loans, First Lien, 5.75% (LIBOR06M+500bps), 4/30/28 (a) | 995 | 991 | |||||||||
| Medline Industries, Inc., Initial Dollar Term Loans, First Lien, 3.75% (LIBOR01M+325bps), 10/21/28 (a) | 1,000 | 995 | |||||||||
| Mileage Plus Holdings LLC, Initial Term Loan, First Lien, 6.25% (LIBOR03M+525bps), 6/20/27 (a) | 18,000 | 18,981 | |||||||||
| Mitchell International, Inc., Term Loans, First Lien, 4.25% (LIBOR01M+375bps), 10/16/28 (a) | 1,500 | 1,487 | |||||||||
See notes to financial statements.
16
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Oculus Acquisition Corp., Initial Term Loan, First Lien, 4.25% (LIBOR06M+350bps), 11/8/27 (a) | $ | 993 | $ | 992 | |||||||
Osmosis Debt Merger Sub, Inc., Delayed TL, First Lien, 6/17/28 (e) (j) | 111 | 111 | |||||||||
| Osmosis Debt Merger Sub, Inc., Initial Term B Loans, First Lien, 4.50% (LIBOR01M+400bps), 7/31/28 (a) | 889 | 890 | |||||||||
| Pactiv Evergreen Group Holdings, Inc., Tranche B-3 US Term Loans, First Lien, 4.00% (LIBOR01M+350bps), 9/17/28 (a) | 998 | 995 | |||||||||
| Petco Health and Wellness Co., Inc., Initial Term Loans, First Lien, 4.00% (LIBOR03M+325bps), 2/25/28 (a) | 1,985 | 1,982 | |||||||||
| Polaris Newco LLC, Dollar Term Loan, First Lien, 4.50% (LIBOR03M+400bps), 6/4/28 (a) | 1,247 | 1,246 | |||||||||
| Proofpoint, Inc., Initial Term Loans, First Lien, 3.75% (LIBOR03M+325bps), 8/31/28 (a) | 1,500 | 1,492 | |||||||||
Sophia LP, Term Loan B, First Lien, 4.00% (LIBOR03M+350bps), 10/7/27 (a) | 990 | 989 | |||||||||
| Sotheby's, 2021 2nd Refin Term Loan, First Lien, 5.00% (LIBOR03M+450bps), 1/15/27 (a) | 5,470 | 5,479 | |||||||||
| Sunshine Luxembourg VII Sarl, Facility B3 Commitments, First Lien, 4.50% (LIBOR03M+375bps), 10/2/26 (a) | 1,435 | 1,434 | |||||||||
| The E.W. Scripps Co., Term Loan B3, First Lien, 3.75% (LIBOR01M+300bps), 12/15/27 (a) | 834 | 833 | |||||||||
| UKG, Inc., Incremental Term loans, First Lien, 3.75% (LIBOR03M+325bps), 5/4/26 (a) | 986 | 983 | |||||||||
| Virtus Investment Partners, Inc., Initial Term Loans, First Lien, 2.35% (LIBOR01M+225bps), 9/18/28 (a) | 499 | 495 | |||||||||
| Walker & Dunlop, Inc., TLB, First Lien, 2.75% (SOFR06M+225bps), 12/16/28 (a) | 2,000 | 1,995 | |||||||||
| Weber-Stephen Products LLC, Initial Term B Loans, First Lien, 4.00% (LIBOR06M+325bps), 10/30/27 (a) | 24 | 24 | |||||||||
| Weber-Stephen Products LLC, Initial Term B Loans, First Lien, 4.00% (LIBOR01M+325bps), 10/30/27 (a) | 790 | 790 | |||||||||
| Whatabrands LLC, Initial Term B Loans, First Lien, 3.75% (LIBOR01M+325bps), 7/21/28 (a) (e) | 6,500 | 6,480 | |||||||||
Total Senior Secured Loans (Cost $103,246) | 106,092 | ||||||||||
Corporate Bonds (30.8%) | |||||||||||
Communication Services (2.0%): | |||||||||||
AT&T, Inc., 4.50%, 5/15/35, Callable 11/15/34 @ 100 | 7,000 | 7,773 | |||||||||
| CCO Holdings LLC/CCO Holdings Capital Corp. 4.25%, 2/1/31, Callable 7/1/25 @ 102.13 (b) | 1,000 | 955 | |||||||||
4.25%, 1/15/34, Callable 1/15/28 @ 102.13 (b) | 6,000 | 5,562 | |||||||||
| Charter Communications Operating LLC/Charter Communications Operating Capital, 2.25%, 1/15/29, Callable 11/15/28 @ 100 | 1,000 | 942 | |||||||||
Comcast Corp., 4.20%, 8/15/34, Callable 2/15/34 @ 100 | 4,000 | 4,496 | |||||||||
CSC Holdings LLC, 3.38%, 2/15/31, Callable 2/15/26 @ 101.69 (b) | 500 | 437 | |||||||||
Discovery Communications LLC, 4.65%, 5/15/50, Callable 11/15/49 @ 100 | 8,000 | 8,672 | |||||||||
Gray Television, Inc., 4.75%, 10/15/30, Callable 10/15/25 @ 102.38 (b) | 2,500 | 2,400 | |||||||||
Lamar Media Corp., 3.63%, 1/15/31, Callable 1/15/26 @ 101.81 | 10,109 | 9,419 | |||||||||
Netflix, Inc., 4.88%, 6/15/30, Callable 3/15/30 @ 100 (b) (k) | 2,000 | 2,234 | |||||||||
Sirius XM Radio, Inc., 3.88%, 9/1/31, Callable 9/1/26 @ 101.94 (b) | 3,000 | 2,775 | |||||||||
See notes to financial statements.
17
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Sprint Spectrum Co. LLC, 5.15%, 9/20/29, Callable 3/20/27 @ 100 (b) | $ | 2,000 | $ | 2,186 | |||||||
T-Mobile USA, Inc., 3.50%, 4/15/31, Callable 4/15/26 @ 101.75 (b) | 9,500 | 9,292 | |||||||||
| Verizon Communications, Inc. 2.55%, 3/21/31, Callable 12/21/30 @ 100 | 1,000 | 976 | |||||||||
4.50%, 8/10/33 (l) | 11,000 | 12,465 | |||||||||
Zayo Group Holdings, Inc., 4.00%, 3/1/27, Callable 3/14/22 @ 100 (b) | 1,500 | 1,419 | |||||||||
72,003 | |||||||||||
Consumer Discretionary (2.6%): | |||||||||||
Asbury Automotive Group, Inc., 4.75%, 3/1/30, Callable 3/1/25 @ 102.38 | 4,000 | 3,949 | |||||||||
AutoNation, Inc., 2.40%, 8/1/31, Callable 5/1/31 @ 100 | 5,000 | 4,663 | |||||||||
| Caesars Entertainment, Inc., 4.63%, 10/15/29, Callable 10/15/24 @ 102.31 (b) (k) | 1,010 | 968 | |||||||||
| Choice Hotels International, Inc., 3.70%, 1/15/31, Callable 10/15/30 @ 100 | 4,000 | 4,111 | |||||||||
Churchill Downs, Inc., 4.75%, 1/15/28, Callable 1/15/23 @ 102.38 (b) | 1,000 | 1,008 | |||||||||
Dollar Tree, Inc., 2.65%, 12/1/31, Callable 9/1/31 @ 100 | 1,750 | 1,693 | |||||||||
| Hilton Domestic Operating Co., Inc., 3.63%, 2/15/32, Callable 8/15/26 @ 101.81 (b) | 9,430 | 8,957 | |||||||||
Kohl's Corp., 3.38%, 5/1/31, Callable 2/1/31 @ 100 (k) | 10,500 | 10,343 | |||||||||
Lithia Motors, Inc., 3.88%, 6/1/29, Callable 6/1/24 @ 101.94 (b) | 6,050 | 5,945 | |||||||||
Marriott International, Inc., 3.50%, 10/15/32, Callable 7/15/32 @ 100 (l) | 9,000 | 9,084 | |||||||||
| Marriott Ownership Resorts, Inc., 4.50%, 6/15/29, Callable 6/15/24 @ 102.25 (b) | 950 | 932 | |||||||||
Murphy Oil USA, Inc., 3.75%, 2/15/31, Callable 2/15/26 @ 101.88 (b) | 1,362 | 1,282 | |||||||||
Nordstrom, Inc., 4.25%, 8/1/31, Callable 5/1/31 @ 100 (k) | 8,370 | 7,742 | |||||||||
PulteGroup, Inc., 6.00%, 2/15/35 | 1,000 | 1,237 | |||||||||
| Resorts World Las Vegas LLC/RWLV Capital, Inc., 4.63%, 4/6/31, Callable 1/6/31 @ 100 (b) | 13,000 | 12,444 | |||||||||
Sodexo, Inc., 2.72%, 4/16/31, Callable 1/16/31 @ 100 (b) | 2,100 | 2,079 | |||||||||
Sonic Automotive, Inc., 4.88%, 11/15/31, Callable 11/15/26 @ 102.44 (b) | 6,000 | 5,809 | |||||||||
Sotheby's, 7.38%, 10/15/27, Callable 10/15/22 @ 103.69 (b) | 4,625 | 4,811 | |||||||||
Starbucks Corp., 3.50%, 11/15/50, Callable 5/15/50 @ 100 | 2,500 | 2,485 | |||||||||
Tractor Supply Co., 1.75%, 11/1/30, Callable 8/1/30 @ 100 | 2,750 | 2,496 | |||||||||
Vanderbilt University Medical Center, 4.17%, 7/1/37, Callable 1/1/37 @ 100 | 1,445 | 1,510 | |||||||||
Volkswagen Group of America Finance LLC, 3.75%, 5/13/30 (b) | 3,000 | 3,193 | |||||||||
96,741 | |||||||||||
Consumer Staples (0.5%): | |||||||||||
| BAT Capital Corp. 2.73%, 3/25/31, Callable 12/25/30 @ 100 (k) (l) | 4,319 | 4,055 | |||||||||
3.73%, 9/25/40, Callable 3/25/40 @ 100 | 3,000 | 2,717 | |||||||||
| JBS Finance Luxembourg Sarl, 2.50%, 1/15/27, Callable 12/15/26 @ 100 (b) (k) | 3,500 | 3,402 | |||||||||
| JBS USA LUX SA/JBS USA Food Co./JBS USA Finance, Inc., 3.00%, 5/15/32, Callable 2/15/32 @ 100 (b) | 3,000 | 2,812 | |||||||||
Pilgrim's Pride Corp., 3.50%, 3/1/32, Callable 9/1/26 @ 101.75 (b) | 250 | 238 | |||||||||
Post Holdings, Inc., 4.50%, 9/15/31, Callable 9/15/26 @ 102.25 (b) | 500 | 476 | |||||||||
Smithfield Foods, Inc., 2.63%, 9/13/31, Callable 6/13/31 @ 100 (b) | 1,000 | 942 | |||||||||
See notes to financial statements.
18
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Sysco Corp., 2.45%, 12/14/31, Callable 9/14/31 @ 100 | $ | 2,167 | $ | 2,098 | |||||||
Unilever Capital Corp., 2.63%, 8/12/51, Callable 2/12/51 @ 100 | 3,000 | 2,707 | |||||||||
19,447 | |||||||||||
Energy (2.1%): | |||||||||||
Boardwalk Pipelines LP, 4.45%, 7/15/27, Callable 4/15/27 @ 100 | 4,000 | 4,291 | |||||||||
Cameron LNG LLC, 3.30%, 1/15/35, Callable 9/15/34 @ 100 (b) | 4,727 | 4,748 | |||||||||
Diamondback Energy, Inc., 3.13%, 3/24/31, Callable 12/24/30 @ 100 | 2,000 | 1,992 | |||||||||
| Energy Transfer Operating LP, 3.15% (LIBOR03M+302bps), 11/1/66, Callable 3/14/22 @ 100 (a) | 2,000 | 1,604 | |||||||||
| Enterprise Products Operating LLC, 3.30%, 2/15/53, Callable 8/15/52 @ 100 | 4,000 | 3,674 | |||||||||
Gray Oak Pipeline LLC, 3.45%, 10/15/27, Callable 8/15/27 @ 100 (b) | 3,333 | 3,414 | |||||||||
Helmerich & Payne, Inc., 2.90%, 9/29/31, Callable 6/29/31 @ 100 (b) | 4,500 | 4,342 | |||||||||
| Hilcorp Energy I LP/Hilcorp Finance Co., 6.25%, 11/1/28, Callable 11/1/23 @ 103.13 (b) | 10,142 | 10,521 | |||||||||
Magellan Midstream Partners LP, 5.15%, 10/15/43, Callable 4/15/43 @ 100 (l) | 8,405 | 9,670 | |||||||||
Marathon Petroleum Corp., 4.75%, 9/15/44, Callable 3/15/44 @ 100 | 1,000 | 1,104 | |||||||||
| Midwest Connector Capital Co. LLC, 4.63%, 4/1/29, Callable 1/1/29 @ 100 (b) (l) | 15,000 | 15,909 | |||||||||
Northwest Pipeline LLC, 4.00%, 4/1/27, Callable 1/1/27 @ 100 | 4,455 | 4,741 | |||||||||
| Parsley Energy LLC/Parsley Finance Corp., 5.63%, 10/15/27, Callable 10/15/22 @ 102.81 (b) (l) | 3,000 | 3,128 | |||||||||
Sabal Trail Transmission LLC, 4.68%, 5/1/38, Callable 11/1/37 @ 100 (b) | 3,000 | 3,433 | |||||||||
Transocean Pontus Ltd., 6.13%, 8/1/25, Callable 3/14/22 @ 104.59 (b) | 447 | 439 | |||||||||
Viper Energy Partners LP, 5.38%, 11/1/27, Callable 11/1/22 @ 102.69 (b) | 3,500 | 3,606 | |||||||||
76,616 | |||||||||||
Financials (10.0%): | |||||||||||
| American International Group, Inc., 8.17% (LIBOR03M+420bps), 5/15/68, Callable 5/15/38 @ 100 (a) | 2,000 | 2,902 | |||||||||
AmFam Holdings, Inc., 2.81%, 3/11/31, Callable 12/11/30 @ 100 (b) | 2,000 | 1,972 | |||||||||
Ares Finance Co. IV LLC, 3.65%, 2/1/52, Callable 8/1/51 @ 100 (b) | 3,500 | 3,339 | |||||||||
Associated Bancorp, 4.25%, 1/15/25, Callable 10/15/24 @ 100 | 10,000 | 10,515 | |||||||||
Assurant, Inc., 2.65%, 1/15/32, Callable 10/15/31 @ 100 | 3,000 | 2,842 | |||||||||
Athene Global Funding, 2.67%, 6/7/31 (b) | 6,000 | 5,728 | |||||||||
Athene Holding Ltd., 6.15%, 4/3/30, Callable 1/3/30 @ 100 | 3,000 | 3,580 | |||||||||
Banc of California, Inc., 5.25%, 4/15/25, Callable 1/15/25 @ 100 | 10,000 | 10,386 | |||||||||
| Bank of America Corp. 2.30% (SOFR+122bps), 7/21/32, Callable 7/21/31 @ 100 (a) | 6,000 | 5,681 | |||||||||
2.57% (SOFR+121bps), 10/20/32, Callable 10/20/31 @ 100 (a) | 6,000 | 5,817 | |||||||||
| BankUnited, Inc. 4.88%, 11/17/25, Callable 8/17/25 @ 100 | 3,000 | 3,250 | |||||||||
5.13%, 6/11/30, Callable 3/11/30 @ 100 | 2,000 | 2,240 | |||||||||
BlackRock, Inc., 2.10%, 2/25/32, Callable 11/25/31 @ 100 | 3,000 | 2,857 | |||||||||
| Blackstone Holdings Finance Co. LLC, 2.55%, 3/30/32, Callable 12/30/31 @ 100 (b) | 3,000 | 2,922 | |||||||||
Blackstone Private Credit Fund, 2.63%, 12/15/26, Callable 11/15/26 @ 100 (b) | 2,308 | 2,192 | |||||||||
Blue Owl Finance LLC, 3.13%, 6/10/31, Callable 3/10/31 @ 100 (b) (l) | 5,000 | 4,691 | |||||||||
| BOKF Merger Corp., 5.63% (LIBOR03M+317bps), 6/25/30, Callable 6/25/25 @ 100 (a) | 4,750 | 5,289 | |||||||||
See notes to financial statements.
19
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Cadence Bank, 4.13% (LIBOR03M+247bps), 11/20/29, Callable 11/20/24 @ 100 (a) | $ | 4,286 | $ | 4,385 | |||||||
| Capital One Financial Corp., 2.36% (SOFR+134bps), 7/29/32, Callable 7/29/31 @ 100 (a) (l) | 5,000 | 4,586 | |||||||||
Citizens Financial Group, Inc., 2.64%, 9/30/32, Callable 7/2/32 @ 100 | 5,500 | 5,242 | |||||||||
| Compeer Financial FLCA/Compeer Financial PCA, 3.38% (SOFR+197bps), 6/1/36, Callable 6/1/31 @ 100 (a) (b) | 978 | 938 | |||||||||
Cullen/Frost Bankers, Inc., 4.50%, 3/17/27, Callable 2/17/27 @ 100 (l) | 2,000 | 2,172 | |||||||||
F&G Global Funding, 2.00%, 9/20/28 (b) | 1,000 | 952 | |||||||||
| First Citizens BancShares, Inc., 3.37% (SOFR+247bps), 3/15/30, Callable 3/15/25 @ 100 (a) | 3,000 | 3,014 | |||||||||
First Financial Bancorp, 5.13%, 8/25/25 | 5,000 | 5,261 | |||||||||
First Horizon Bank, 5.75%, 5/1/30, Callable 2/1/30 @ 100 | 3,000 | 3,519 | |||||||||
First Midwest Bancorp, Inc., 5.88%, 9/29/26, Callable 8/29/26 @ 100 | 5,000 | 5,646 | |||||||||
FNB Corp., 2.20%, 2/24/23, Callable 1/24/23 @ 100 | 1,175 | 1,181 | |||||||||
Franklin Resources, Inc., 2.95%, 8/12/51, Callable 2/12/51 @ 100 | 1,000 | 920 | |||||||||
Fulton Financial Corp., 4.50%, 11/15/24 (k) | 4,759 | 5,059 | |||||||||
Glencore Funding LLC, 2.50%, 9/1/30, Callable 6/1/30 @ 100 (b) | 2,000 | 1,872 | |||||||||
Global Atlantic Financial Co., 4.40%, 10/15/29, Callable 7/15/29 @ 100 (b) | 6,472 | 6,802 | |||||||||
Hilltop Holdings, Inc., 5.00%, 4/15/25, Callable 1/15/25 @ 100 | 5,000 | 5,277 | |||||||||
HUB International Ltd., 5.63%, 12/1/29, Callable 12/1/24 @ 102.81 (b) | 400 | 397 | |||||||||
Huntington Bancshares, Inc., 2.49%, 8/15/36, Callable 8/15/31 @ 100 (b) | 9,176 | 8,572 | |||||||||
ILFC E-Capital Trust I, 3.37%, 12/21/65, Callable 3/14/22 @ 100 (b) | 6,225 | 5,184 | |||||||||
| JPMorgan Chase & Co., 2.96% (SOFR+252bps), 5/13/31, Callable 5/13/30 @ 100 (a) (l) | 25,601 | 25,457 | |||||||||
Kemper Corp., 4.35%, 2/15/25, Callable 11/15/24 @ 100 | 1,000 | 1,058 | |||||||||
KeyBank NA, 3.90%, 4/13/29 (k) | 3,000 | 3,215 | |||||||||
KeyCorp Capital II, 6.88%, 3/17/29 | 750 | 888 | |||||||||
KKR Group Finance Co. X LLC, 3.25%, 12/15/51, Callable 6/15/51 @ 100 (b) | 2,000 | 1,876 | |||||||||
Level 3 Financing, Inc., 3.88%, 11/15/29, Callable 8/15/29 @ 100 (b) | 3,000 | 2,950 | |||||||||
| Lincoln National Corp., 2.52% (US0003M+236bps), 5/17/66, Callable 8/11/26 @ 100 (a) | 5,018 | 4,395 | |||||||||
Main Street Capital Corp., 3.00%, 7/14/26, Callable 6/14/26 @ 100 | 3,000 | 2,941 | |||||||||
| MB Financial Bank NA, 4.00% (LIBOR03M+187bps), 12/1/27, Callable 12/1/22 @ 100 (a) | 7,717 | 7,838 | |||||||||
Mercury General Corp., 4.40%, 3/15/27, Callable 12/15/26 @ 100 | 5,350 | 5,737 | |||||||||
MetLife, Inc., 9.25%, 4/8/68, Callable 4/8/33 @ 100 (b) (k) | 5,000 | 7,251 | |||||||||
| Morgan Stanley 1.93% (SOFR+102bps), 4/28/32, Callable 4/28/31 @ 100, MTN (a) | 23,000 | 21,171 | |||||||||
2.51% (SOFR+120bps), 10/20/32, Callable 10/20/31 @ 100, MTN (a) | 3,000 | 2,902 | |||||||||
2.48% (SOFR+136bps), 9/16/36, Callable 9/16/31 @ 100 (a) | 5,000 | 4,639 | |||||||||
Mozart Debt Merger Sub, Inc., 3.88%, 4/1/29, Callable 10/1/24 @ 101.94 (b) | 1,500 | 1,445 | |||||||||
| Nationwide Mutual Insurance Co., 2.49% (LIBOR03M+229bps), 12/15/24, Callable 3/14/22 @ 100 (a) (b) | 10,235 | 10,184 | |||||||||
| New York Community Bancorp, Inc., 5.90% (LIBOR03M+278bps), 11/6/28, Callable 11/6/23 @ 100 (a) | 4,000 | 4,302 | |||||||||
New York Life Global Funding, 1.85%, 8/1/31 (b) | 7,750 | 7,274 | |||||||||
| Park Intermediate Holdings LLC/PK Domestic Property LLC/PK Finance Co-Issuer, 5.88%, 10/1/28, Callable 10/1/23 @ 102.94 (b) | 500 | 511 | |||||||||
People's United Bank NA, 4.00%, 7/15/24, Callable 4/16/24 @ 100 | 9,000 | 9,371 | |||||||||
See notes to financial statements.
20
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Pine Street Trust I, 4.57%, 2/15/29, Callable 11/15/28 @ 100 (b) | $ | 1,750 | $ | 1,917 | |||||||
| Prudential Financial, Inc., 5.87% (LIBOR03M+418bps), 9/15/42, Callable 9/15/22 @ 100 (a) | 3,000 | 3,042 | |||||||||
| Regions Financial Corp., 5.75% (H15T5Y+543bps), Callable 6/15/25 @ 100 (a) (g) (k) | 1,000 | 1,074 | |||||||||
Santander Holdings USA, Inc., 4.40%, 7/13/27, Callable 4/14/27 @ 100 | 4,318 | 4,601 | |||||||||
| TCF National Bank 4.60%, 2/27/25 | 5,000 | 5,289 | |||||||||
4.13% (LIBOR03M+238bps), 7/2/29, Callable 7/2/24 @ 100 (a) | 5,000 | 5,264 | |||||||||
| Texas Capital Bancshares, Inc., 4.00% (H15T5Y+315bps), 5/6/31, Callable 5/6/26 @ 100 (a) | 3,000 | 3,090 | |||||||||
Texas Capital Bank NA, 5.25%, 1/31/26 (k) | 10,225 | 10,859 | |||||||||
| The Allstate Corp., 5.75% (LIBOR03M+294bps), 8/15/53, Callable 8/15/23 @ 100 (a) | 7,000 | 7,251 | |||||||||
| The Bank of New York Mellon Corp., 3.75% (H15T5Y+263bps), Callable 12/20/26 @ 100 (a) (g) | 5,000 | 4,850 | |||||||||
The Goldman Sachs Group, Inc., 3.10%, 2/24/33, Callable 2/24/32 @ 100 | 5,000 | 5,028 | |||||||||
| The Hartford Financial Services Group, Inc., 2.28% (LIBOR03M+213bps), 2/12/67, Callable 3/14/22 @ 100 (a) (b) | 7,500 | 7,056 | |||||||||
| The Huntington National Bank, 5.50% (LIBOR03M+509bps), 5/6/30, Callable 5/6/25 @ 100 (a) | 1,250 | 1,352 | |||||||||
TIAA FSB Holdings, Inc., 5.75%, 7/2/25, Callable 6/2/25 @ 100 | 10,000 | 10,717 | |||||||||
Towne Bank, 4.50% (LIBOR03M+255bps), 7/30/27, Callable 7/30/22 @ 100 (a) | 4,643 | 4,689 | |||||||||
Truist Bank, 0.82% (LIBOR03M+67bps), 5/15/27, Callable 3/14/22 @ 100 (a) | 5,000 | 4,837 | |||||||||
| Truist Financial Corp., 5.10% (H15T10Y+435bps), Callable 3/1/30 @ 100 (a) (g) (l) | 4,000 | 4,339 | |||||||||
United Financial Bancorp, Inc., 5.75%, 10/1/24 | 2,700 | 2,940 | |||||||||
W R Berkley Corp., 3.55%, 3/30/52, Callable 9/30/51 @ 100 | 3,000 | 2,999 | |||||||||
Wells Fargo & Co., 3.90% (H15T5Y+3bps), Callable 3/15/26 @ 100 (a) (g) | 2,000 | 1,981 | |||||||||
Wintrust Financial Corp., 5.00%, 6/13/24 | 3,500 | 3,684 | |||||||||
369,446 | |||||||||||
Health Care (2.6%): | |||||||||||
AbbVie, Inc., 4.25%, 11/21/49, Callable 5/21/49 @ 100 (l) | 4,000 | 2,962 | |||||||||
Baxter International, Inc., 2.54%, 2/1/32, Callable 11/1/31 @ 100 (b) | 2,500 | 2,429 | |||||||||
| Bayer U.S. Finance II LLC 2.85%, 4/15/25, Callable 1/15/25 @ 100 (b) | 4,405 | 4,458 | |||||||||
4.63%, 6/25/38, Callable 12/25/37 @ 100 (b) | 5,000 | 5,577 | |||||||||
Baylor Scott & White Holdings, 2.65%, 11/15/26, Callable 8/15/26 @ 100 | 5,000 | 5,040 | |||||||||
Bon Secours Charity Health System, Inc., 5.25%, 11/1/25 | 5,000 | 5,321 | |||||||||
Boston Medical Center Corp., 3.91%, 7/1/28 | 3,000 | 3,185 | |||||||||
Centene Corp., 2.50%, 3/1/31, Callable 12/1/30 @ 100 | 14,429 | 13,387 | |||||||||
CVS Health Corp., 4.88%, 7/20/35, Callable 1/20/35 @ 100 | 5,000 | 5,863 | |||||||||
CVS Pass-Through Trust, 5.93%, 1/10/34 (b) | 6,980 | 8,117 | |||||||||
DENTSPLY SIRONA, Inc., 3.25%, 6/1/30, Callable 3/1/30 @ 100 | 2,500 | 2,573 | |||||||||
Eastern Maine Healthcare Systems, 3.71%, 7/1/26 | 12,555 | 12,668 | |||||||||
| Fresenius Medical Care U.S. Finance III, Inc., 3.75%, 6/15/29, Callable 3/15/29 @ 100 (b) | 3,000 | 3,114 | |||||||||
HealthEquity, Inc., 4.50%, 10/1/29, Callable 10/1/24 @ 102.25 (b) | 1,000 | 981 | |||||||||
Hologic, Inc., 3.25%, 2/15/29, Callable 9/28/23 @ 101.63 (b) | 532 | 504 | |||||||||
Illumina, Inc., 2.55%, 3/23/31, Callable 12/23/30 @ 100 | 2,000 | 1,939 | |||||||||
See notes to financial statements.
21
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
MEDNAX, Inc., 6.25%, 1/15/27 (b) | $ | 1,000 | $ | 1,045 | |||||||
Prestige Brands, Inc., 3.75%, 4/1/31, Callable 4/1/26 @ 101.88 (b) | 5,500 | 5,001 | |||||||||
| Royalty Pharma PLC 2.20%, 9/2/30, Callable 6/2/30 @ 100 | 1,333 | 1,239 | |||||||||
2.15%, 9/2/31, Callable 6/2/31 @ 100 | 4,750 | 4,350 | |||||||||
Tenet Healthcare Corp., 4.38%, 1/15/30, Callable 12/1/24 @ 102.19 (b) | 1,050 | 1,013 | |||||||||
Universal Health Services, Inc., 2.65%, 1/15/32, Callable 10/15/31 @ 100 (b) | 4,000 | 3,773 | |||||||||
94,539 | |||||||||||
Industrials (4.5%): | |||||||||||
Acuity Brands Lighting, Inc., 2.15%, 12/15/30, Callable 9/15/30 @ 100 | 1,000 | 937 | |||||||||
| Air Lease Corp. 3.13%, 12/1/30, Callable 9/1/30 @ 100 | 2,500 | 2,445 | |||||||||
2.88%, 1/15/32, Callable 10/15/31 @ 100 | 3,000 | 2,856 | |||||||||
Aircastle Ltd., 4.25%, 6/15/26, Callable 4/15/26 @ 100 (l) | 3,000 | 3,151 | |||||||||
| Alaska Airlines Pass Through Trust 8.00%, 2/15/27 (b) | 4,041 | 4,483 | |||||||||
4.80%, 2/15/29 (b) | 5,530 | 6,023 | |||||||||
| American Airlines Pass Through Trust 4.00%, 1/15/27 | 4,747 | 4,567 | |||||||||
3.60%, 4/15/31 | 1,621 | 1,562 | |||||||||
American Airlines, Inc./AAdvantage Loyalty IP Ltd., 5.75%, 4/20/29 (b) | 12,000 | 12,298 | |||||||||
Ashtead Capital, Inc., 2.45%, 8/12/31, Callable 5/12/31 @ 100 (b) | 1,333 | 1,253 | |||||||||
Aviation Capital Group LLC, 5.50%, 12/15/24, Callable 11/15/24 @ 100 (b) | 3,000 | 3,233 | |||||||||
| British Airways Pass Through Trust 4.63%, 12/20/25 (b) | 7,516 | 7,743 | |||||||||
3.35%, 12/15/30 (b) | 2,099 | 2,078 | |||||||||
CoStar Group, Inc., 2.80%, 7/15/30, Callable 4/15/30 @ 100 (b) | 6,750 | 6,545 | |||||||||
Delta Air Lines Pass Through Trust, 2.50%, 12/10/29 | 4,322 | 4,267 | |||||||||
Delta Air Lines, Inc./Skymiles IP Ltd., 4.75%, 10/20/28 (b) | 2,532 | 2,704 | |||||||||
FedEx Corp., 3.90%, 2/1/35 | 5,000 | 5,356 | |||||||||
GXO Logistics, Inc., 2.65%, 7/15/31, Callable 4/15/31 @ 100 (b) | 4,500 | 4,281 | |||||||||
Hawaiian Airlines Pass Through Certificates, 3.90%, 7/15/27 | 5,981 | 5,810 | |||||||||
| Hawaiian Brand Intellectual Property Ltd./HawaiianMiles Loyalty Ltd., 5.75%, 1/20/26, Callable 1/20/24 @ 102.88 (b) | 4,730 | 4,836 | |||||||||
JetBlue Pass Through Trust, 7.75%, 5/15/30 | 4,478 | 5,140 | |||||||||
| Lincoln Center for the Performing Arts, Inc., 3.71%, 12/1/35, Callable 9/1/35 @ 100 | 1,475 | 1,580 | |||||||||
Molex Electronic Technologies LLC, 3.90%, 4/15/25, Callable 1/15/25 @ 100 (b) | 5,000 | 5,232 | |||||||||
Southwest Airlines Co., 5.13%, 6/15/27, Callable 4/15/27 @ 100 | 3,000 | 3,351 | |||||||||
| Spirit Loyalty Cayman Ltd./Spirit IP Cayman Ltd., 8.00%, 9/20/25, Callable 9/20/23 @ 104 (b) | 4,424 | 4,793 | |||||||||
Teledyne Technologies, Inc., 2.75%, 4/1/31, Callable 1/1/31 @ 100 | 1,500 | 1,470 | |||||||||
| The Boeing Co. 5.15%, 5/1/30, Callable 2/1/30 @ 100 (l) | 10,000 | 11,271 | |||||||||
3.63%, 2/1/31, Callable 11/1/30 @ 100 (k) (l) | 8,000 | 8,218 | |||||||||
5.81%, 5/1/50, Callable 11/1/49 @ 100 | 3,000 | 3,772 | |||||||||
The Hertz Corp., 5.00%, 12/1/29, Callable 12/1/24 @ 102.5 (b) | 500 | 483 | |||||||||
The Timken Co., 4.50%, 12/15/28, Callable 9/15/28 @ 100 | 3,658 | 3,989 | |||||||||
See notes to financial statements.
22
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| U.S. Airways Pass Through Trust 6.25%, 10/22/24 | $ | 1,611 | $ | 1,643 | |||||||
7.13%, 4/22/25 | 1,123 | 1,164 | |||||||||
3.95%, 5/15/27 | 5,096 | 5,047 | |||||||||
| United Airlines Pass Through Trust 4.63%, 3/3/24 | 3,113 | 3,137 | |||||||||
4.15%, 10/11/25 | 6,398 | 6,594 | |||||||||
4.30%, 2/15/27 | 3,265 | 3,397 | |||||||||
3.50%, 11/1/29 | 4,178 | 4,052 | |||||||||
| United Rentals North America, Inc., 3.88%, 2/15/31, Callable 8/15/25 @ 101.94 | 5,940 | 5,783 | |||||||||
166,544 | |||||||||||
Information Technology (2.0%): | |||||||||||
Apple, Inc., 2.40%, 8/20/50, Callable 2/20/50 @ 100 | 4,000 | 3,462 | |||||||||
Broadcom, Inc., 2.60%, 2/15/33, Callable 11/15/32 @ 100 (b) (l) | 8,000 | 7,396 | |||||||||
Dell International LLC/EMC Corp., 5.30%, 10/1/29, Callable 7/1/29 @ 100 | 3,000 | 3,437 | |||||||||
Dell, Inc., 5.40%, 9/10/40 (l) | 4,965 | 5,301 | |||||||||
Fiserv, Inc., 4.40%, 7/1/49, Callable 1/1/49 @ 100 | 6,000 | 6,633 | |||||||||
Global Payments, Inc., 4.15%, 8/15/49, Callable 2/15/49 @ 100 (k) | 5,000 | 5,278 | |||||||||
Micron Technology, Inc., 2.70%, 4/15/32, Callable 1/15/32 @ 100 | 1,000 | 957 | |||||||||
| Oracle Corp. 2.88%, 3/25/31, Callable 12/25/30 @ 100 | 7,000 | 6,755 | |||||||||
3.60%, 4/1/50, Callable 10/1/49 @ 100 | 6,000 | 5,328 | |||||||||
Qorvo, Inc., 3.38%, 4/1/31, Callable 4/1/26 @ 101.69 (b) | 15,000 | 14,648 | |||||||||
ServiceNow, Inc., 1.40%, 9/1/30, Callable 6/1/30 @ 100 | 1,000 | 893 | |||||||||
Skyworks Solutions, Inc., 3.00%, 6/1/31, Callable 3/1/31 @ 100 | 1,000 | 964 | |||||||||
Square, Inc., 3.50%, 6/1/31, Callable 3/1/31 @ 100 (b) | 1,333 | 1,270 | |||||||||
TSMC Arizona Corp., 2.50%, 10/25/31, Callable 7/25/31 @ 100 | 5,000 | 4,926 | |||||||||
Twilio, Inc., 3.63%, 3/15/29, Callable 3/15/24 @ 101.81 | 4,300 | 4,129 | |||||||||
VMware, Inc., 3.90%, 8/21/27, Callable 5/21/27 @ 100 | 2,000 | 2,125 | |||||||||
Western Digital Corp., 3.10%, 2/1/32, Callable 11/1/31 @ 100 | 1,800 | 1,722 | |||||||||
75,224 | |||||||||||
Materials (0.6%): | |||||||||||
Amcor Flexibles North America, Inc., 2.69%, 5/25/31, Callable 2/25/31 @ 100 | 2,000 | 1,967 | |||||||||
Avery Dennison Corp., 2.25%, 2/15/32, Callable 11/15/31 @ 100 | 5,281 | 4,943 | |||||||||
Cabot Corp., 4.00%, 7/1/29, Callable 4/1/29 @ 100 | 3,000 | 3,189 | |||||||||
Eagle Materials, Inc., 2.50%, 7/1/31, Callable 4/1/31 @ 100 (l) | 6,617 | 6,306 | |||||||||
Reliance Steel & Aluminum Co., 2.15%, 8/15/30, Callable 5/15/30 @ 100 | 500 | 473 | |||||||||
WRKCo, Inc., 3.00%, 6/15/33, Callable 3/15/33 @ 100 (l) | 3,500 | 3,464 | |||||||||
20,342 | |||||||||||
Real Estate (2.6%): | |||||||||||
Alexandria Real Estate Equities, Inc., 1.88%, 2/1/33, Callable 11/1/32 @ 100 | 4,500 | 4,063 | |||||||||
| Boston Properties LP 2.55%, 4/1/32, Callable 1/1/32 @ 100 (l) | 10,500 | 10,104 | |||||||||
2.45%, 10/1/33, Callable 7/1/33 @ 100 | 7,000 | 6,521 | |||||||||
CBRE Services, Inc., 2.50%, 4/1/31, Callable 1/1/31 @ 100 | 3,000 | 2,903 | |||||||||
See notes to financial statements.
23
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Crown Castle International Corp. 3.30%, 7/1/30, Callable 4/1/30 @ 100 | $ | 1,000 | $ | 1,018 | |||||||
2.90%, 4/1/41, Callable 10/1/40 @ 100 | 4,000 | 3,635 | |||||||||
Federal Realty Investment Trust, 3.50%, 6/1/30, Callable 3/1/30 @ 100 | 3,000 | 3,123 | |||||||||
| GLP Capital LP/GLP Financing II, Inc. 4.00%, 1/15/30, Callable 10/15/29 @ 100 | 2,976 | 3,071 | |||||||||
3.25%, 1/15/32, Callable 10/15/31 @ 100 | 2,100 | 2,028 | |||||||||
Healthpeak Properties, Inc., 2.88%, 1/15/31, Callable 10/15/30 @ 100 | 2,500 | 2,511 | |||||||||
Host Hotels & Resorts LP, 3.50%, 9/15/30, Callable 6/15/30 @ 100 | 8,643 | 8,592 | |||||||||
| Invitation Homes Operating Partnership LP, 2.70%, 1/15/34, Callable 10/15/33 @ 100 | 5,750 | 5,398 | |||||||||
| Keenan Development Associates of Tennessee LLC (INS — XL Capital Assurance), 5.02%, 7/15/28 (b) | 313 | 324 | |||||||||
Kilroy Realty LP, 2.50%, 11/15/32, Callable 8/15/32 @ 100 | 4,500 | 4,214 | |||||||||
Nationwide Health Properties, Inc., 6.90%, 10/1/37, MTN | 2,000 | 2,492 | |||||||||
Physicians Realty LP, 2.63%, 11/1/31, Callable 8/1/31 @ 100 | 2,750 | 2,657 | |||||||||
| RHP Hotel Properties LP/RHP Finance Corp., 4.50%, 2/15/29, Callable 2/15/24 @ 102.25 (b) | 500 | 484 | |||||||||
RLJ Lodging Trust LP, 3.75%, 7/1/26, Callable 7/1/23 @ 101.88 (b) | 6,600 | 6,419 | |||||||||
SBA Communications Corp., 3.13%, 2/1/29, Callable 2/1/24 @ 101.56 (b) | 1,500 | 1,400 | |||||||||
| SBA Tower Trust 2.33%, 7/15/52, Callable 7/15/26 @ 100 (b) | 3,000 | 3,009 | |||||||||
2.59%, 10/15/56 (b) | 5,000 | 4,978 | |||||||||
Simon Property Group LP, 2.25%, 1/15/32, Callable 10/15/31 @ 100 (l) | 6,000 | 5,675 | |||||||||
| VICI Properties LP/VICI Note Co., Inc., 4.13%, 8/15/30, Callable 2/15/25 @ 102.06 (b) | 12,000 | 12,065 | |||||||||
96,684 | |||||||||||
Utilities (1.3%): | |||||||||||
Ameren Corp., 3.50%, 1/15/31, Callable 10/15/30 @ 100 | 1,500 | 1,571 | |||||||||
Duke Energy Corp., 2.55%, 6/15/31, Callable 3/15/31 @ 100 | 6,000 | 5,804 | |||||||||
Duquesne Light Holdings, Inc., 2.78%, 1/7/32, Callable 10/7/31 @ 100 (b) | 2,333 | 2,244 | |||||||||
Entergy Corp., 2.40%, 6/15/31, Callable 3/5/31 @ 100 | 3,000 | 2,866 | |||||||||
Jersey Central Power & Light Co., 2.75%, 3/1/32, Callable 12/1/31 @ 100 (b) | 3,000 | 2,949 | |||||||||
National Fuel Gas Co., 3.95%, 9/15/27, Callable 6/15/27 @ 100 | 4,000 | 4,137 | |||||||||
| NRG Energy, Inc. 2.45%, 12/2/27, Callable 10/2/27 @ 100 (b) | 6,300 | 6,106 | |||||||||
4.45%, 6/15/29, Callable 3/15/29 @ 100 (b) (l) | 3,907 | 4,151 | |||||||||
South Jersey Industries, Inc., 5.02%, 4/15/31 (k) | 3,000 | 3,203 | |||||||||
Spire, Inc., 3.54%, 2/27/24, Callable 12/27/23 @ 100 | 2,270 | 2,283 | |||||||||
| Vistra Operations Co. LLC 3.70%, 1/30/27, Callable 11/30/26 @ 100 (b) | 6,895 | 7,006 | |||||||||
4.30%, 7/15/29, Callable 4/15/29 @ 100 (b) | 6,397 | 6,628 | |||||||||
48,948 | |||||||||||
Total Corporate Bonds (Cost $1,126,404) | 1,136,534 | ||||||||||
Yankee Dollars (4.7%) | |||||||||||
Consumer Discretionary (0.3%): | |||||||||||
Ascot Group Ltd., 4.25%, 12/15/30, Callable 12/15/25 @ 100 (b) | 2,454 | 2,490 | |||||||||
GENM Capital Labuan Ltd., 3.88%, 4/19/31, Callable 1/19/31 @ 100 (b) | 5,000 | 4,659 | |||||||||
See notes to financial statements.
24
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
IHO Verwaltungs GmbH, 6.38%, 5/15/29, Callable 5/15/24 @ 103.19 (b) (p) | $ | 3,285 | $ | 3,465 | |||||||
Nemak SAB de CV, 3.63%, 6/28/31, Callable 3/28/31 @ 100 (b) | 2,539 | 2,347 | |||||||||
12,961 | |||||||||||
Consumer Staples (0.3%): | |||||||||||
Anheuser-Busch InBev Worldwide, Inc., 3.75%, 7/15/42 (l) | 4,000 | 4,121 | |||||||||
Bacardi Ltd., 2.75%, 7/15/26, Callable 4/15/26 @ 100 (b) | 3,000 | 3,011 | |||||||||
Becle SAB de CV, 2.50%, 10/14/31, Callable 7/14/31 @ 100 (b) | 4,000 | 3,767 | |||||||||
10,899 | |||||||||||
Energy (0.2%): | |||||||||||
Equinor ASA, 3.13%, 4/6/30, Callable 1/6/30 @ 100 | 1,000 | 1,043 | |||||||||
Harbour Energy PLC, 5.50%, 10/15/26, Callable 10/15/23 @ 102.75 (b) | 1,000 | 993 | |||||||||
Korea National Oil Corp., 2.63%, 4/18/32 (b) (k) | 5,000 | 4,924 | |||||||||
Transocean Sentry Ltd., 5.38%, 5/15/23, Callable 3/14/22 @ 102.67 (b) | 1,250 | 1,212 | |||||||||
8,172 | |||||||||||
Financials (2.2%): | |||||||||||
| Banco Santander Mexico SA Institucion de Banca Multiple Grupo Financiero Santand, 5.38%, 4/17/25 (b) (l) | 2,143 | 2,314 | |||||||||
Banco Santander SA, 2.96%, 3/25/31 | 3,000 | 2,935 | |||||||||
Bank of Montreal, 3.09%, 1/10/37, Callable 1/10/32 @ 100 | 3,000 | 2,951 | |||||||||
Barclays PLC, 2.28% (H15T1Y+105bps), 11/24/27, Callable 11/24/26 @ 100 (a) | 5,000 | 4,900 | |||||||||
BNP Paribas, 2.87% (SOFR+1bps), 4/19/32, Callable 4/19/31 @ 100 (a) (b) | 3,000 | 2,919 | |||||||||
BNP Paribas SA, 4.63%, 3/13/27 (b) | 3,000 | 3,240 | |||||||||
| BP Capital Markets PLC, 4.38% (H15T5Y+404bps), Callable 6/22/25 @ 100 (a) (g) (l) | 5,000 | 5,162 | |||||||||
Brookfield Finance I UK PLC, 2.34%, 1/30/32, Callable 10/30/31 @ 100 | 4,000 | 3,790 | |||||||||
| Credit Suisse Group AG, 3.09% (SOFR+173bps), 5/14/32, Callable 5/14/31 @ 100 (a) (b) | 3,000 | 2,914 | |||||||||
Deutsche Bank AG, 3.74%, 1/7/33, Callable 10/7/31 @ 100 | 8,000 | 7,729 | |||||||||
| Deutsche Bank AG/New York, 3.04% (SOFR+172bps), 5/28/32, Callable 5/28/31 @ 100 (a) | 3,000 | 2,894 | |||||||||
HSBC Holdings PLC, 3.90%, 5/25/26 | 3,000 | 3,174 | |||||||||
JAB Holdings BV, 3.75%, 5/28/51, Callable 11/28/50 @ 100 (b) | 2,500 | 2,540 | |||||||||
| Lloyds Banking Group PLC, 3.57% (LIBOR03M+121bps), 11/7/28, Callable 11/7/27 @ 100 (a) | 3,500 | 3,657 | |||||||||
| Macquarie Bank Ltd., 3.05% (H15T5Y+170bps), 3/3/36, Callable 3/3/31 @ 100 (a) (b) | 3,000 | 2,859 | |||||||||
Mizuho Financial Group, Inc., 2.56%, 9/13/31 | 3,000 | 2,834 | |||||||||
Nationwide Building Society, 4.00%, 9/14/26 (b) | 3,000 | 3,162 | |||||||||
| Natwest Group PLC, 3.07% (H15T1Y+255bps), 5/22/28, Callable 5/22/27 @ 100 (a) | 3,000 | 3,048 | |||||||||
Nomura Holdings, Inc., 2.61%, 7/14/31 | 3,000 | 2,860 | |||||||||
| NXP BV/NXP Funding LLC/NXP USA, Inc., 2.65%, 2/15/32, Callable 11/15/31 @ 100 (b) (k) | 3,750 | 3,609 | |||||||||
| Santander UK Group Holdings PLC, 2.90% (SOFR+148bps), 3/15/32, Callable 3/15/31 @ 100 (a) (k) | 2,000 | 1,953 | |||||||||
Societe Generale SA, 4.03%, 1/21/43, Callable 1/21/42 @ 100 (b) | 3,000 | 2,888 | |||||||||
See notes to financial statements.
25
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | �� | |||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Standard Chartered PLC, 4.87% (LIBOR03M+197bps), 3/15/33, Callable 3/15/28 @ 100 (a) (b) | $ | 4,000 | $ | 4,231 | |||||||
| Westpac Banking Corp., 4.11% (H15T5Y+200bps), 7/24/34, Callable 7/24/29 @ 100 (a) | 3,000 | 3,146 | |||||||||
81,709 | |||||||||||
Health Care (0.3%): | |||||||||||
Bausch Health Cos, Inc., 6.13%, 2/1/27, Callable 2/1/24 @ 103.06 (b) (e) | 500 | 502 | |||||||||
Bausch Health Cos., Inc., 4.88%, 6/1/28, Callable 6/1/24 @ 102.44 (b) | 500 | 475 | |||||||||
Olympus Corp., 2.14%, 12/8/26, Callable 11/8/26 @ 100 (b) | 1,818 | 1,801 | |||||||||
Royalty Pharma PLC, 3.35%, 9/2/51, Callable 3/2/51 @ 100 | 1,500 | 1,321 | |||||||||
Smith & Nephew PLC, 2.03%, 10/14/30, Callable 7/14/30 @ 100 | 3,000 | 2,775 | |||||||||
STERIS Irish FinCo Unlimited Co., 2.70%, 3/15/31, Callable 12/15/30 @ 100 | 4,000 | 3,898 | |||||||||
| Teva Pharmaceutical Finance Netherlands III BV, 5.13%, 5/9/29, Callable 2/9/29 @ 100 | 1,000 | 974 | |||||||||
11,746 | |||||||||||
Industrials (0.8%): | |||||||||||
| Air Canada Pass Through Trust 3.88%, 9/15/24 (b) | 5,473 | 5,486 | |||||||||
4.13%, 11/15/26 (b) | 10,827 | 10,852 | |||||||||
3.75%, 6/15/29 (b) | 4,409 | 4,487 | |||||||||
Avolon Holdings Funding Ltd., 3.25%, 2/15/27, Callable 12/15/26 @ 100 (b) | 2,550 | 2,530 | |||||||||
BAE Systems PLC, 3.40%, 4/15/30, Callable 1/15/30 @ 100 (b) | 3,000 | 3,098 | |||||||||
| Sydney Airport Finance Co. Pty Ltd., 3.63%, 4/28/26, Callable 1/28/26 @ 100 (b) | 2,000 | 2,097 | |||||||||
28,550 | |||||||||||
Materials (0.1%): | |||||||||||
Teck Resources Ltd., 6.13%, 10/1/35 | 3,000 | 3,740 | |||||||||
Real Estate (0.3%): | |||||||||||
| Ontario Teachers' Cadillac Fairview Properties Trust, 2.50%, 10/15/31, Callable 7/15/31 @ 100 (b) | 10,750 | 10,501 | |||||||||
Sovereign Bond (0.1%): | |||||||||||
| Bermuda Government International Bond, 2.38%, 8/20/30, Callable 5/20/30 @ 100 (b) | 3,000 | 2,927 | |||||||||
Korea International Bond, 1.00%, 9/16/30 | 1,000 | 922 | |||||||||
3,849 | |||||||||||
Utilities (0.1%): | |||||||||||
Empresa Electrica Cochrane SpA, 5.50%, 5/14/27 (b) | 1,981 | 1,970 | |||||||||
Total Yankee Dollars (Cost $174,206) | 174,097 | ||||||||||
Municipal Bonds (4.5%) | |||||||||||
Alabama (0.1%): | |||||||||||
Auburn University Revenue, Series C, 1.85%, 6/1/31, Continuously Callable @100 | 750 | 717 | |||||||||
City of Homewood AL, GO, Series B, 1.89%, 9/1/32, Continuously Callable @100 | 1,850 | 1,772 | |||||||||
City of Trussville AL, GO, Series B, 1.78%, 10/1/31, Continuously Callable @100 | 1,000 | 956 | |||||||||
3,445 | |||||||||||
See notes to financial statements.
26
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Arizona (0.2%): | |||||||||||
| City of Phoenix Civic Improvement Corp. Revenue 2.37%, 7/1/25 | $ | 1,500 | $ | 1,517 | |||||||
1.59%, 7/1/29 | 2,000 | 1,902 | |||||||||
1.84%, 7/1/31, Continuously Callable @100 | 1,000 | 946 | |||||||||
The University of Arizona Revenue, Series A, 1.82%, 6/1/30 | 3,070 | 2,977 | |||||||||
7,342 | |||||||||||
California (0.0%): (m) | |||||||||||
| City of Los Angeles Department of Airports Revenue, Series C, 1.96%, 5/15/33, Continuously Callable @100 | 675 | 624 | |||||||||
Colorado (0.2%): | |||||||||||
| City & County of Denver Co. Airport System Revenue, Series C, 2.52%, 11/15/32, Continuously Callable @100 | 5,000 | 4,995 | |||||||||
| Park Creek Metropolitan District Revenue Series B, 2.89%, 12/1/27 | 660 | 694 | |||||||||
Series B, 2.99%, 12/1/28 | 1,000 | 1,062 | |||||||||
6,751 | |||||||||||
Connecticut (0.0%): (m) | |||||||||||
State of Connecticut, GO, Series A, 2.42%, 7/1/27 | 1,000 | 1,021 | |||||||||
District of Columbia (0.1%): | |||||||||||
| District of Columbia Revenue 2.25%, 4/1/27 | 800 | 795 | |||||||||
2.68%, 4/1/31 | 1,500 | 1,479 | |||||||||
2,274 | |||||||||||
Florida (0.2%): | |||||||||||
City of Gainesville Florida Revenue, 2.04%, 10/1/30 | 2,500 | 2,367 | |||||||||
| County of Miami-Dade Florida Aviation Revenue, Series B, 2.61%, 10/1/32, Continuously Callable @100 | 1,000 | 988 | |||||||||
| County of Miami-Dade Seaport Department Revenue, Series B-3, 2.34%, 10/1/33, Continuously Callable @100 | 5,000 | 4,786 | |||||||||
8,141 | |||||||||||
Hawaii (0.3%): | |||||||||||
| State of Hawaii Department of Business Economic Development & Tourism Revenue, Series A-2, 3.24%, 1/1/31 | 12,320 | 12,905 | |||||||||
Illinois (0.1%): | |||||||||||
Chicago O'Hare International Airport Revenue, Series D, 2.45%, 1/1/31 | 2,000 | 1,972 | |||||||||
| Chicago Transit Authority Sales Tax Receipts Fund Revenue, Series B, 3.10%, 12/1/30 | 750 | 756 | |||||||||
Illinois Finance Authority Revenue, 5.45%, 8/1/38 | 1,500 | 1,647 | |||||||||
4,375 | |||||||||||
Indiana (0.1%): | |||||||||||
| Indiana Finance Authority Revenue Series B, 3.08%, 9/15/27 | 1,130 | 1,114 | |||||||||
Series B, 3.18%, 9/15/28 | 1,000 | 985 | |||||||||
2,099 | |||||||||||
See notes to financial statements.
27
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Louisiana (0.0%): (m) | |||||||||||
Louisiana Public Facilities Authority Revenue, 2.28%, 6/1/30 | $ | 1,750 | $ | 1,716 | |||||||
Maryland (0.4%): | |||||||||||
| Maryland Economic Development Corp. Revenue Series B, 4.05%, 6/1/27 | 2,295 | 2,327 | |||||||||
Series B, 4.15%, 6/1/28 | 2,390 | 2,430 | |||||||||
Series B, 4.25%, 6/1/29 | 2,490 | 2,549 | |||||||||
Series B, 4.35%, 6/1/30 | 1,330 | 1,374 | |||||||||
Series B, 4.40%, 6/1/31 | 1,385 | 1,436 | |||||||||
| Maryland Stadium Authority Revenue Series C, 1.76%, 5/1/27 | 1,715 | 1,663 | |||||||||
Series C, 1.91%, 5/1/28 | 4,770 | 4,584 | |||||||||
16,363 | |||||||||||
Massachusetts (0.1%): | |||||||||||
| Massachusetts Development Finance Agency Revenue, Series B, 4.00%, 6/1/24 | 465 | 471 | |||||||||
| Massachusetts State College Building Authority Revenue Series A, 1.80%, 5/1/29 | 2,995 | 2,905 | |||||||||
Series A, 1.80%, 5/1/29 | 5 | 5 | |||||||||
3,381 | |||||||||||
Michigan (0.1%): | |||||||||||
Michigan Finance Authority Revenue, 2.95%, 12/1/30 | 2,500 | 2,584 | |||||||||
New Jersey (0.6%): | |||||||||||
| City of Atlantic, GO Series A, 4.23%, 9/1/25 | 2,525 | 2,601 | |||||||||
Series A, 4.29%, 9/1/26 | 2,410 | 2,497 | |||||||||
| New Jersey Economic Development Authority Revenue Series C, 5.71%, 6/15/30 | 2,500 | 2,988 | |||||||||
Series NNN, 3.47%, 6/15/27 | 5,000 | 5,179 | |||||||||
| New Jersey Transportation Trust Fund Authority Revenue, Build America Bond, Series C, 5.75%, 12/15/28 | 3,000 | 3,454 | |||||||||
| Rutgers The State University of New Jersey Revenue, Series S, 1.76%, 5/1/29 | 2,000 | 1,907 | |||||||||
| South Jersey Transportation Authority Revenue Series B, 3.12%, 11/1/26 | 450 | 463 | |||||||||
Series B, 3.36%, 11/1/28 | 1,375 | 1,435 | |||||||||
20,524 | |||||||||||
New York (0.3%): | |||||||||||
| Metropolitan Transportation Authority Revenue, Build America Bond, Series E, 6.73%, 11/15/30 | 5,000 | 6,163 | |||||||||
| New York City Industrial Development Agency Revenue 2.68%, 3/1/33 | 1,000 | 977 | |||||||||
2.34%, 1/1/35 | 1,000 | 936 | |||||||||
2.44%, 1/1/36 | 1,250 | 1,172 | |||||||||
New York State Dormitory Authority Revenue, 2.01%, 7/1/28 | 750 | 736 | |||||||||
New York State Thruway Authority Revenue, Series M, 2.50%, 1/1/27 | 1,200 | 1,219 | |||||||||
11,203 | |||||||||||
See notes to financial statements.
28
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
North Carolina (0.0%): (m) | |||||||||||
City of Winston-Salem NC Revenue, Series B, 2.64%, 6/1/29 | $ | 1,140 | $ | 1,177 | |||||||
Oklahoma (0.3%): | |||||||||||
Oklahoma Development Finance Authority Revenue, Series C, 5.45%, 8/15/28 | 7,951 | 8,723 | |||||||||
| The University of Oklahoma Revenue, Series C, 2.45%, 7/1/32, Continuously Callable @100 | 1,200 | 1,180 | |||||||||
9,903 | |||||||||||
Oregon (0.0%): (m) | |||||||||||
Medford Hospital Facilities Authority Revenue, Series B, 1.88%, 8/15/25 | 500 | 493 | |||||||||
Pennsylvania (0.4%): | |||||||||||
| City of Bethlehem, GO (NBGA — Federal Agricultural Mortgage Corporation) Series A, 2.46%, 10/1/26 | 2,570 | 2,597 | |||||||||
Series A, 2.55%, 10/1/27 | 2,655 | 2,677 | |||||||||
| City of Philadelphia PA Water & Wastewater Revenue Series B, 1.73%, 11/1/28 | 1,000 | 973 | |||||||||
Series B, 1.88%, 11/1/29 | 1,000 | 975 | |||||||||
City of Philadelphia, GO, Series A, 2.71%, 7/15/29 | 1,000 | 1,013 | |||||||||
| City of Pittsburgh PA, GO Series B, 1.62%, 9/1/29 | 1,570 | 1,510 | |||||||||
Series B, 1.80%, 9/1/31, Continuously Callable @100 | 1,200 | 1,147 | |||||||||
| Pennsylvania Economic Development Financing Authority Revenue 2.62%, 3/1/29 | 1,855 | 1,858 | |||||||||
Series B, 3.20%, 11/15/27 | 1,000 | 1,051 | |||||||||
Public Parking Authority of Pittsburgh Revenue, 2.23%, 12/1/28 | 730 | 713 | |||||||||
14,514 | |||||||||||
South Dakota (0.1%): | |||||||||||
| South Dakota Health & Educational Facilities Authority Revenue Series B, 2.59%, 7/1/25 | 1,000 | 1,013 | |||||||||
Series B, 2.80%, 7/1/26 | 2,735 | 2,784 | |||||||||
3,797 | |||||||||||
Tennessee (0.1%): | |||||||||||
| Metropolitan Government Nashville & Davidson County Sports Authority Revenue, Series C, 2.45%, 8/1/32, Continuously Callable @100 | 1,500 | 1,438 | |||||||||
State of Tennessee, GO, Series B, 1.83%, 11/1/33, Continuously Callable @100 | 3,000 | 2,858 | |||||||||
4,296 | |||||||||||
Texas (0.6%): | |||||||||||
Central Texas Regional Mobility Authority Revenue, Series C, 2.19%, 1/1/29 | 855 | 838 | |||||||||
City of Dallas TX Waterworks & Sewer System Revenue, 1.50%, 10/1/27 | 850 | 827 | |||||||||
| City of Houston TX Airport System Revenue, Series C, 2.39%, 7/1/31, Continuously Callable @100 | 2,000 | 1,960 | |||||||||
County of Bexar TX Revenue, 2.43%, 8/15/33, Continuously Callable @100 | 1,500 | 1,415 | |||||||||
| Dallas/Fort Worth International Airport Revenue, Series C, 2.25%, 11/1/31, Continuously Callable @100 | 2,585 | 2,510 | |||||||||
See notes to financial statements.
29
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Harris County Cultural Education Facilities Finance Corp. Revenue 2.36%, 11/15/26 | $ | 1,250 | $ | 1,252 | |||||||
2.79%, 11/15/29 | 1,385 | 1,390 | |||||||||
Series B, 2.71%, 5/15/27 | 1,600 | 1,635 | |||||||||
Series B, 2.76%, 5/15/28 | 2,000 | 2,039 | |||||||||
Series D, 1.27%, 7/1/25 | 850 | 831 | |||||||||
Series D, 2.30%, 7/1/35 | 500 | 469 | |||||||||
| Tarrant County Cultural Education Facilities Finance Corp. Revenue, 2.41%, 9/1/31, Continuously Callable @100 | 1,000 | 981 | |||||||||
Texas State University System Revenue, Series B, 2.54%, 3/15/28 | 2,775 | 2,849 | |||||||||
| Uptown Development Authority Tax Allocation, Series B, 2.68%, 9/1/32, Continuously Callable @100 | 400 | 393 | |||||||||
Waco Educational Finance Corp. Revenue, 1.79%, 3/1/29 | 1,500 | 1,429 | |||||||||
20,818 | |||||||||||
Washington (0.0%): (m) | |||||||||||
Port of Seattle WA Revenue, Series D, 2.04%, 8/1/30 | 1,130 | 1,077 | |||||||||
Wisconsin (0.2%): | |||||||||||
State of Wisconsin Revenue, Series A, 2.35%, 5/1/29 | 6,000 | 6,091 | |||||||||
Total Municipal Bonds (Cost $164,517) | 166,914 | ||||||||||
U.S. Government Agency Mortgages (1.6%) | |||||||||||
| Federal Home Loan Mortgage Corp. Series K019, Class X1, 1.58%, 3/25/22 (c) (d) | 14,842 | 1 | |||||||||
Series K023, Class X1, 1.20%, 8/25/22 (c) (d) | 61,928 | 303 | |||||||||
Series K025, Class X1, 0.78%, 10/25/22 (c) (d) | 60,489 | 270 | |||||||||
5.50%, 4/1/36 | 42 | 46 | |||||||||
620 | |||||||||||
| Federal National Mortgage Association Series M7, Class A2, 2.96%, 2/25/27 (c) | 2,475 | 2,582 | |||||||||
2.50%, 7/1/27 – 11/1/34 (l) | 8,680 | 8,881 | |||||||||
3.50%, 9/1/47 – 2/1/50 | 19,010 | 19,856 | |||||||||
3.50%, 3/1/48 – 9/1/49 (l) | 9,993 | 10,433 | |||||||||
4.00%, 1/1/49 – 2/1/50 | 13,868 | 14,668 | |||||||||
4.00%, 8/1/49 (l) | 2,103 | 2,223 | |||||||||
58,643 | |||||||||||
59,263 | |||||||||||
Total U.S. Government Agency Mortgages (Cost $60,814) | 59,263 | ||||||||||
U.S. Treasury Obligations (23.3%) | |||||||||||
| U.S. Treasury Bonds 1.13%, 5/15/40 (l) | 65,000 | 54,824 | |||||||||
1.38%, 11/15/40 | 5,000 | 4,384 | |||||||||
2.50%, 2/15/45 (l) | 33,000 | 34,784 | |||||||||
3.38%, 11/15/48 (l) | 35,000 | 43,936 | |||||||||
1.25%, 5/15/50 (l) | 30,000 | 24,389 | |||||||||
See notes to financial statements.
30
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
| U.S. Treasury Inflation Indexed Bonds 0.13%, 7/15/30 | $ | 5,420 | $ | 5,897 | |||||||
0.13%, 1/15/31 | 3,203 | 3,482 | |||||||||
0.25%, 2/15/50 | 2,162 | 2,403 | |||||||||
| U.S. Treasury Notes 0.38%, 11/30/25 (l) | 55,000 | 52,658 | |||||||||
2.38%, 5/15/27 (l) | 17,000 | 17,635 | |||||||||
0.38%, 7/31/27 (l) | 60,000 | 55,997 | |||||||||
0.63%, 11/30/27 | 39,000 | 36,681 | |||||||||
0.75%, 1/31/28 | 82,500 | 77,988 | |||||||||
1.13%, 2/29/28 | 55,000 | 53,157 | |||||||||
1.25%, 3/31/28 | 53,000 | 51,538 | |||||||||
1.63%, 8/15/29 (l) | 105,000 | 104,196 | |||||||||
0.63%, 8/15/30 (l) | 53,000 | 48,238 | |||||||||
0.88%, 11/15/30 | 55,000 | 51,038 | |||||||||
1.13%, 2/15/31 | 105,000 | 99,406 | |||||||||
1.63%, 5/15/31 (l) | 27,500 | 27,165 | |||||||||
1.38%, 11/15/31 | 7,500 | 7,227 | |||||||||
Total U.S. Treasury Obligations (Cost $877,032) | 857,023 | ||||||||||
Commercial Paper (0.5%) | |||||||||||
Jabil, Inc., 0.38%, 2/1/22 (b) (n) | 18,500 | 18,500 | |||||||||
Total Commercial Paper (Cost $18,500) | 18,500 | ||||||||||
Collateral for Securities Loaned (0.8%)^ | |||||||||||
| Fidelity Investments Money Market Government Portfolio, Institutional Shares, 0.01% (o) | 23,320,382 | 23,320 | |||||||||
HSBC U.S. Government Money Market Fund, I Shares, 0.03% (o) | 4,905,521 | 4,906 | |||||||||
Total Collateral for Securities Loaned (Cost $28,226) | 28,226 | ||||||||||
Total Investments (Cost $3,714,167) — 100.4% | 3,700,914 | ||||||||||
Liabilities in excess of other assets — (0.4)% | (13,943 | ) | |||||||||
NET ASSETS — 100.00% | $ | 3,686,971 | |||||||||
At January 31, 2022, the Fund's investments in foreign securities were 9.1% of net assets.
^ Purchased with cash collateral from securities on loan.
(a) Variable or Floating-Rate Security. Rate disclosed is as of January 31, 2022.
(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 otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of January 31, 2022, the fair value of these securities was $1,502,903 (thousands) and amounted to 40.8% of net assets.
(c) 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, 2022.
(d) Security is interest only.
(e) Security or portion of security purchased on a delayed-delivery and/or when-issued basis.
See notes to financial statements.
31
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Unaudited)
(f) Rounds to less than $1 thousand.
(g) Security is perpetual and has no final maturity date but may be subject to calls at various dates in the future.
(h) Affiliated security (See Note 9 in the Notes to Financial Statements).
(i) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. At January 31, 2022, illiquid securities were 0.2% of the Fund's net assets.
(j) 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.
(k) All or a portion of this security is on loan.
(l) All or a portion of this security has been segregated as collateral for derivative instruments, delayed delivered and/or when-issued securities.
(m) Amount represents less than 0.05% of net assets.
(n) Rate represents the effective yield at January 31, 2022.
(o) Rate disclosed is the daily yield on January 31, 2022.
(p) Coupon may be 7.13% PIK.
bps — Basis points
Continuously callable — Investment is continuously callable or will be continuously callable on any date after the first call date until its maturity.
GO — General Obligation
H15T1Y — 1 Year Treasury Constant Maturity Rate
H15T5Y — 5 Year Treasury Constant Maturity Rate
H15T10Y — 10 Year Treasury Constant Maturity Rate
LIBOR — London InterBank Offered Rate
LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of January 31, 2022, based on the last reset date of the security
LIBOR02M — 2 Month US Dollar LIBOR, rate disclosed as of January 31, 2022, based on the last reset date of the security
LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of January 31, 2022, based on the last reset date of the security
LIBOR06M — 6 Month US Dollar LIBOR, rate disclosed as of January 31, 2022, 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
See notes to financial statements.
32
| USAA Mutual Funds Trust USAA Intermediate-Term Bond Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Unaudited)
US0003M — 3 Month US Dollar LIBOR, rate disclosed as of January 31, 2022, based on the last reset date of the security
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.
Futures Contracts Purchased | |||||||||||||||||||||||
(Amounts not in thousands) | |||||||||||||||||||||||
| Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||
10-Year U.S. Treasury Note Futures | 675 | 3/22/22 | $ | 87,978,654 | $ | 86,378,906 | $ | (1,599,748 | ) | ||||||||||||||
2-Year U.S. Treasury Note Futures | 5 | 3/31/22 | 1,093,918 | 1,083,281 | (10,637 | ) | |||||||||||||||||
30-Year U.S. Treasury Bond Futures | 410 | 3/22/22 | 66,085,741 | 63,806,250 | (2,279,491 | ) | |||||||||||||||||
5-Year U.S. Treasury Note Futures | 15 | 3/31/22 | 1,818,904 | 1,788,047 | (30,857 | ) | |||||||||||||||||
$ | (3,920,733 | ) | |||||||||||||||||||||
Total unrealized appreciation | $ | — | |||||||||||||||||||||
Total unrealized depreciation | (3,920,733 | ) | |||||||||||||||||||||
Total net unrealized appreciation (depreciation) | $ | (3,920,733 | ) | ||||||||||||||||||||
See notes to financial statements.
33
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA Intermediate- Term Bond Fund | |||||||
Assets: | |||||||
Affiliated investments, at value (Cost $8,941) | $ | 8,047 | |||||
Unaffiliated investments, at value (Cost $3,705,226) | 3,692,867 | (a) | |||||
Cash | 12,973 | ||||||
Deposit with broker for futures contracts | 6,077 | ||||||
Receivables: | |||||||
Interest and dividends | 19,016 | ||||||
Capital shares issued | 6,183 | ||||||
Investments sold | 12,502 | ||||||
Variation margin on open futures contracts | 11 | ||||||
From Adviser | 43 | ||||||
Prepaid expenses | 44 | ||||||
Total Assets | 3,757,763 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 28,226 | ||||||
Distributions | 155 | ||||||
Investments purchased | 34,959 | ||||||
Capital shares redeemed | 5,268 | ||||||
Variation margin on open futures contracts | 51 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 1,151 | ||||||
Administration fees | 388 | ||||||
Custodian fees | 56 | ||||||
Transfer agent fees | 432 | ||||||
Compliance fees | 2 | ||||||
| 12b-1 fees | 6 | ||||||
Other accrued expenses | 98 | ||||||
Total Liabilities | 70,792 | ||||||
(continues on next page)
See notes to financial statements.
34
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited) (continued)
| USAA Intermediate- Term Bond Fund | |||||||
Net Assets: | |||||||
Capital | $ | 3,694,236 | |||||
Total accumulated earnings/(loss) | (7,265 | ) | |||||
Net Assets | $ | 3,686,971 | |||||
Net Assets | |||||||
Fund Shares | $ | 1,795,713 | |||||
Institutional Shares | 1,690,574 | ||||||
Class A | 49,618 | ||||||
Class C | 2,112 | ||||||
R6 Shares | 148,954 | ||||||
Total | $ | 3,686,971 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 173,073 | ||||||
Institutional Shares | 162,906 | ||||||
Class A | 4,788 | ||||||
Class C | 204 | ||||||
R6 Shares | 14,352 | ||||||
Total | 355,323 | ||||||
Net asset value, offering and redemption price per share: (b) | |||||||
Fund Shares | $ | 10.38 | |||||
Institutional Shares | 10.38 | ||||||
Class A | 10.36 | ||||||
Class C (c) | 10.37 | ||||||
R6 Shares | 10.38 | ||||||
Maximum Sales Charge — Class A | 2.25 | % | |||||
| Maximum offering price (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 10.60 | |||||
(a) Includes $27,250 of securities on loan.
(b) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
(c) Redemption price per share varies by the length of time shares are held.
See notes to financial statements.
35
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended January 31, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA Intermediate- Term Bond Fund | |||||||
Investment Income: | |||||||
Dividends from unaffiliated investments | $ | 981 | |||||
Dividends from affiliated investments | 156 | ||||||
Interest from unaffiliated investments | 51,225 | ||||||
Securities lending (net of fees) | 74 | ||||||
Total Income | 52,436 | ||||||
Expenses: | |||||||
Investment advisory fees | 6,907 | ||||||
Administration fees — Fund Shares | 1,411 | ||||||
Administration fees — Institutional Shares | 868 | ||||||
Administration fees — Class A | 36 | ||||||
Administration fees — Class C | 2 | ||||||
Administration fees — R6 Shares | 30 | ||||||
Sub-Administration fees | 14 | ||||||
| 12b-1 fees — Class A | 60 | ||||||
| 12b-1 fees — Class C | 12 | ||||||
Custodian fees | 161 | ||||||
Transfer agent fees — Fund Shares | 891 | ||||||
Transfer agent fees — Institutional Shares | 868 | ||||||
Transfer agent fees — Class A | 24 | ||||||
Transfer agent fees — Class C | 1 | ||||||
Transfer agent fees — R6 Shares | 6 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 13 | ||||||
Legal and audit fees | 52 | ||||||
State registration and filing fees | 63 | ||||||
Interfund lending fees | 1 | ||||||
Other expenses | 215 | ||||||
Total Expenses | 11,659 | ||||||
Expenses waived/reimbursed by Adviser | (120 | ) | |||||
Net Expenses | 11,539 | ||||||
Net Investment Income (Loss) | 40,897 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from unaffiliated investment securities | 20,566 | ||||||
Net realized gains (losses) from futures contracts | 1,879 | ||||||
| Net change in unrealized appreciation/depreciation on affiliated investment securities | (185 | ) | |||||
| Net change in unrealized appreciation/depreciation on unaffiliated investment securities | (156,586 | ) | |||||
Net change in unrealized appreciation/depreciation on futures contracts | (7,166 | ) | |||||
Net realized/unrealized gains (losses) on investments | (141,492 | ) | |||||
Change in net assets resulting from operations | $ | (100,595 | ) | ||||
See notes to financial statements.
36
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands)
| USAA Intermediate- Term Bond Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 40,897 | $ | 95,661 | |||||||
Net realized gains (losses) from investments | 22,445 | 111,896 | |||||||||
| Net change in unrealized appreciation/depreciation on investments | (163,937 | ) | (26,735 | ) | |||||||
Change in net assets resulting from operations | (100,595 | ) | 180,822 | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (67,942 | ) | (117,150 | ) | |||||||
Institutional Shares | (63,419 | ) | (107,060 | ) | |||||||
Class A | (1,673 | ) | (2,629 | ) | |||||||
Class C | (70 | ) | (50 | ) | |||||||
R6 Shares | (4,987 | ) | (2,025 | ) | |||||||
| Change in net assets resulting from distributions to shareholders | (138,091 | ) | (228,914 | ) | |||||||
Change in net assets resulting from capital transactions | (22,163 | ) | 171,322 | ||||||||
Change in net assets | (260,849 | ) | 123,230 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 3,947,820 | 3,824,590 | |||||||||
End of period | $ | 3,686,971 | $ | 3,947,820 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 111,817 | $ | 271,402 | |||||||
Distributions reinvested | 66,233 | 113,766 | |||||||||
Cost of shares redeemed | (173,718 | ) | (409,467 | ) | |||||||
Total Fund Shares | $ | 4,332 | $ | (24,299 | ) | ||||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 378,754 | $ | 381,200 | |||||||
Distributions reinvested | 61,974 | 104,489 | |||||||||
Cost of shares redeemed | (542,292 | ) | (354,935 | ) | |||||||
Total Institutional Shares | $ | (101,564 | ) | $ | 130,754 | ||||||
Class A | |||||||||||
Proceeds from shares issued | $ | 9,238 | $ | 7,156 | |||||||
Distributions reinvested | 1,620 | 2,563 | |||||||||
Cost of shares redeemed | (5,108 | ) | (8,191 | ) | |||||||
Total Class A | $ | 5,750 | $ | 1,528 | |||||||
Class C | |||||||||||
Proceeds from shares issued | $ | 593 | $ | 2,484 | |||||||
Distributions reinvested | 70 | 50 | |||||||||
Cost of shares redeemed | (947 | ) | (19 | ) | |||||||
Total Class C | $ | (284 | ) | $ | 2,515 | ||||||
R6 Shares | |||||||||||
Proceeds from shares issued | $ | 75,087 | $ | 66,952 | |||||||
Distributions reinvested | 4,956 | 1,669 | |||||||||
Cost of shares redeemed | (10,440 | ) | (7,797 | ) | |||||||
Total R6 Shares | $ | 69,603 | $ | 60,824 | |||||||
Change in net assets resulting from capital transactions | $ | (22,163 | ) | $ | 171,322 | ||||||
(continues on next page)
See notes to financial statements.
37
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands) (continued)
| USAA Intermediate- Term Bond Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 10,345 | 24,607 | |||||||||
Reinvested | 6,209 | 10,340 | |||||||||
Redeemed | (16,095 | ) | (37,150 | ) | |||||||
Total Fund Shares | 459 | (2,203 | ) | ||||||||
Institutional Shares | |||||||||||
Issued | 34,874 | 34,747 | |||||||||
Reinvested | 5,809 | 9,495 | |||||||||
Redeemed | (49,654 | ) | (32,129 | ) | |||||||
Total Institutional Shares | (8,971 | ) | 12,113 | ||||||||
Class A | |||||||||||
Issued | 863 | 652 | |||||||||
Reinvested | 152 | 233 | |||||||||
Redeemed | (473 | ) | (745 | ) | |||||||
Total Class A | 542 | 140 | |||||||||
Class C | |||||||||||
Issued | 54 | 225 | |||||||||
Reinvested | 7 | 5 | |||||||||
Redeemed | (87 | ) | (2 | ) | |||||||
Total Class C | (26 | ) | 228 | ||||||||
R6 Shares | |||||||||||
Issued | 6,935 | 6,143 | |||||||||
Reinvested | 465 | 151 | |||||||||
Redeemed | (975 | ) | (717 | ) | |||||||
Total R6 Shares | 6,425 | 5,577 | |||||||||
Change in Shares | (1,571 | ) | 15,855 | ||||||||
See notes to financial statements.
38
This page is intentionally left blank.
39
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, 2022 (Unaudited): | $ | 11.06 | 0.12 | (d) | (0.40 | ) | (0.28 | ) | (0.12 | ) | (0.28 | ) | |||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 11.21 | 0.28 | (d) | 0.25 | 0.53 | (0.28 | ) | (0.40 | ) | |||||||||||||||||
2020 | $ | 10.78 | 0.36 | (d) | 0.58 | 0.94 | (0.36 | ) | (0.15 | ) | |||||||||||||||||
2019 | $ | 10.33 | 0.38 | 0.46 | 0.84 | (0.39 | ) | — | |||||||||||||||||||
2018 | $ | 10.70 | 0.37 | (0.37 | ) | — | (0.37 | ) | — | ||||||||||||||||||
2017 | $ | 10.71 | 0.38 | (0.01 | ) | 0.37 | (0.38 | ) | — | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 11.06 | 0.12 | (d) | (0.40 | ) | (0.28 | ) | (0.12 | ) | (0.28 | ) | |||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 11.22 | 0.28 | (d) | 0.24 | 0.52 | (0.28 | ) | (0.40 | ) | |||||||||||||||||
2020 | $ | 10.78 | 0.37 | (d) | 0.59 | 0.96 | (0.37 | ) | (0.15 | ) | |||||||||||||||||
2019 | $ | 10.33 | 0.39 | 0.45 | 0.84 | (0.39 | ) | — | |||||||||||||||||||
2018 | $ | 10.70 | 0.38 | (0.37 | ) | 0.01 | (0.38 | ) | — | ||||||||||||||||||
2017 | $ | 10.72 | 0.39 | (0.02 | ) | 0.37 | (0.39 | ) | — | ||||||||||||||||||
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019, and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(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.
(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.
See notes to financial statements.
40
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, 2022 (Unaudited): | (0.40 | ) | $ | 10.38 | (2.53 | )% | 0.64 | % | 2.13 | % | 0.64 | % | $ | 1,795,713 | 26 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.68 | ) | $ | 11.06 | 4.83 | % | 0.63 | % | 2.50 | % | 0.63 | % | $ | 1,909,199 | 69 | % | |||||||||||||||||||
2020 | (0.51 | ) | $ | 11.21 | 8.94 | % | 0.58 | % | 3.32 | % | 0.58 | % | $ | 1,960,334 | 73 | %(e) | |||||||||||||||||||
2019 | (0.39 | ) | $ | 10.78 | 8.28 | % | 0.64 | % | 3.71 | % | 0.64 | % | $ | 1,949,989 | 35 | % | |||||||||||||||||||
2018 | (0.37 | ) | $ | 10.33 | (0.03 | )% | 0.63 | % | 3.50 | % | 0.63 | % | $ | 1,907,941 | 15 | % | |||||||||||||||||||
2017 | (0.38 | ) | $ | 10.70 | 3.52 | % | 0.63 | % | 3.57 | % | 0.63 | % | $ | 1,949,102 | 13 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (0.40 | ) | $ | 10.38 | (2.59 | )% | 0.58 | % | 2.19 | % | 0.59 | % | $ | 1,690,574 | 26 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.68 | ) | $ | 11.06 | 4.80 | % | 0.57 | % | 2.56 | % | 0.59 | % | $ | 1,901,458 | 69 | % | |||||||||||||||||||
2020 | (0.52 | ) | $ | 11.22 | 9.11 | % | 0.51 | % | 3.39 | % | 0.52 | % | $ | 1,791,887 | 73 | %(e) | |||||||||||||||||||
2019 | (0.39 | ) | $ | 10.78 | 8.35 | % | 0.58 | % | 3.77 | % | 0.58 | % | $ | 1,798,154 | 35 | % | |||||||||||||||||||
2018 | (0.38 | ) | $ | 10.33 | 0.04 | % | 0.56 | % | 3.57 | % | 0.56 | % | $ | 1,964,377 | 15 | % | |||||||||||||||||||
2017 | (0.39 | ) | $ | 10.70 | 3.51 | % | 0.56 | % | 3.64 | % | 0.56 | % | $ | 2,049,723 | 13 | % | |||||||||||||||||||
(continues on next page)
See notes to financial statements.
41
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 | |||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 11.05 | 0.10 | (d) | (0.41 | ) | (0.31 | ) | (0.10 | ) | (0.28 | ) | |||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 11.20 | 0.25 | (d) | 0.25 | 0.50 | (0.25 | ) | (0.40 | ) | |||||||||||||||||
2020 | $ | 10.77 | 0.33 | (d) | 0.58 | 0.91 | (0.33 | ) | (0.15 | ) | |||||||||||||||||
2019 | $ | 10.32 | 0.35 | 0.45 | 0.80 | (0.35 | ) | — | |||||||||||||||||||
2018 | $ | 10.69 | 0.34 | (0.37 | ) | (0.03 | ) | (0.34 | ) | — | |||||||||||||||||
2017 | $ | 10.70 | 0.35 | (0.01 | ) | 0.34 | (0.35 | ) | — | ||||||||||||||||||
Class C | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 11.05 | 0.07 | (d) | (0.40 | ) | (0.33 | ) | (0.07 | ) | (0.28 | ) | |||||||||||||||
Year Ended July 31, 2021 | $ | 11.20 | 0.16 | (d) | 0.27 | 0.43 | (0.18 | ) | (0.40 | ) | |||||||||||||||||
| June 29, 2020 (f) through July 31, 2020 | $ | 10.99 | 0.02 | (d) | 0.21 | 0.23 | (0.02 | ) | — | ||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 11.06 | 0.13 | (d) | (0.40 | ) | (0.27 | ) | (0.13 | ) | (0.28 | ) | |||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 11.22 | 0.29 | (d) | 0.25 | 0.54 | (0.30 | ) | (0.40 | ) | |||||||||||||||||
2020 | $ | 10.79 | 0.37 | (d) | 0.59 | 0.96 | (0.38 | ) | (0.15 | ) | |||||||||||||||||
2019 | $ | 10.33 | 0.41 | 0.46 | 0.87 | (0.41 | ) | — | |||||||||||||||||||
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.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment is calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019, June 29, 2020, and July 1, 2019, for Class A, Class C and R6 Shares, respectively, and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
See notes to financial statements.
42
USAA Mutual Funds Trust | Financial Highlights — continued | ||||||
For a Share Outstanding Throughout Each Period (continued)
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
| Total Distributions | Net Asset Value, End of Period | Total Return (Excludes Sales Charge)*(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 | |||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (0.38 | ) | $ | 10.36 | (2.85 | )% | 0.92 | % | 1.86 | % | 0.92 | % | $ | 49,618 | 26 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.65 | ) | $ | 11.05 | 4.55 | % | 0.91 | % | 2.22 | % | 0.92 | % | $ | 46,911 | 69 | % | |||||||||||||||||||
2020 | (0.48 | ) | $ | 11.20 | 8.66 | % | 0.86 | % | 3.06 | % | 0.86 | % | $ | 45,991 | 73 | %(e) | |||||||||||||||||||
2019 | (0.35 | ) | $ | 10.77 | 7.97 | % | 0.93 | % | 3.42 | % | 0.93 | % | $ | 50,892 | 35 | % | |||||||||||||||||||
2018 | (0.34 | ) | $ | 10.32 | (0.31 | )% | 0.90 | % | 3.22 | % | 0.90 | % | $ | 53,308 | 15 | % | |||||||||||||||||||
2017 | (0.35 | ) | $ | 10.69 | 3.28 | % | 0.87 | % | 3.44 | % | 0.87 | % | $ | 74,377 | 13 | % | |||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (0.35 | ) | $ | 10.37 | (3.07 | )% | 1.54 | % | 1.23 | % | 1.89 | % | $ | 2,112 | 26 | % | |||||||||||||||||||
Year Ended July 31, 2021 | (0.58 | ) | $ | 11.05 | 3.90 | % | 1.53 | % | 1.50 | % | 2.60 | % | $ | 2,544 | 69 | % | |||||||||||||||||||
| June 29, 2020 (f) through July 31, 2020 | (0.02 | ) | $ | 11.20 | 2.09 | % | 1.53 | % | 2.06 | % | 175.78 | % | $ | 19 | 73 | %(e) | |||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | (0.41 | ) | $ | 10.38 | (2.51 | )% | 0.41 | % | 2.36 | % | 0.42 | % | $ | 148,954 | 26 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.70 | ) | $ | 11.06 | 4.97 | % | 0.42 | % | 2.65 | % | 0.46 | % | $ | 87,708 | 69 | % | |||||||||||||||||||
2020 | (0.53 | ) | $ | 11.22 | 9.14 | % | 0.39 | % | 3.45 | % | 0.46 | % | $ | 26,359 | 73 | %(e) | |||||||||||||||||||
2019 | (0.41 | ) | $ | 10.79 | 8.66 | % | 0.39 | % | 3.96 | % | 0.74 | % | $ | 5,513 | 35 | % | |||||||||||||||||||
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 | % | |||||||||||||||||||
(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.
(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) Commencement of operations.
See notes to financial statements.
43
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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 five classes of shares: Fund Shares, Institutional Shares, Class A, Class C, 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 sales charges, 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 U.S. Generally Accepted Accounting Principles ("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 risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
44
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq 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 are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
Debt securities are valued each business day by a pricing service approved by the Board. The approved pricing service uses the evaluated bid or the last sale price to value securities. Debt obligations maturing within 60 days may be valued at amortized cost, provided that the amortized cost represents the fair value of such securities. These valuations are typically categorized as Level 2 in the fair value hierarchy.
Futures contracts are valued at the settlement price established each day by the board of trade or an exchange on which they are traded. These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically 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 NAV to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Asset-Backed Securities | $ | — | $ | 457,449 | $ | — | $ | 457,449 | |||||||||||
Collateralized Mortgage Obligations | — | 670,943 | — | 670,943 | |||||||||||||||
Preferred Stocks | 17,826 | 8,047 | — | 25,873 | |||||||||||||||
Senior Secured Loans | — | 106,092 | — | 106,092 | |||||||||||||||
Corporate Bonds | — | 1,136,534 | — | 1,136,534 | |||||||||||||||
Yankee Dollars | — | 174,097 | — | 174,097 | |||||||||||||||
Municipal Bonds | — | 166,914 | — | 166,914 | |||||||||||||||
U.S. Government Agency Mortgages | — | 59,263 | — | 59,263 | |||||||||||||||
U.S. Treasury Obligations | — | 857,023 | — | 857,023 | |||||||||||||||
Commercial Paper | — | 18,500 | — | 18,500 | |||||||||||||||
Collateral for Securities Loaned | 28,226 | — | — | 28,226 | |||||||||||||||
Total | $ | 46,052 | $ | 3,654,862 | $ | — | $ | 3,700,914 | |||||||||||
Other Financial Investments^ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||
Futures Contracts | $ | (3,921 | ) | $ | — | $ | — | $ | (3,921 | ) | |||||||||
Total | $ | (3,921 | ) | $ | — | $ | — | $ | (3,921 | ) | |||||||||
^ Futures contracts are valued at the unrealized appreciation (depreciation) on the investment.
For the six months ended January 31, 2022, there were no transfers in or out of Level 3 in the fair value hierarchy.
45
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(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:
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 or 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 NAV. 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 Payables for Investments purchased on the accompanying Statement of Assets and Liabilities and the segregated assets are identified on 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. Payments 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 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," respectively), 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.
46
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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 the London InterBank Offered Rate ("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.
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 enter into futures contracts in an effort to hedge against market risks. 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. The collateral held by the Fund is presented on the Statement of Assets and Liabilities under Deposit with broker for futures contracts. As of January 31, 2022, the Fund entered into futures contracts primarily for the strategy of hedging or other purposes, including but not limited to, providing liquidity and equitizing cash.
47
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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, 2022 (amounts in thousands):
Assets | Liabilities | ||||||||||
| Variation Margin Receivable on Open Futures Contracts* | Variation Margin Payable on Open Futures Contracts* | ||||||||||
Interest Rate Risk Exposure | $ | — | $ | 3,921 | |||||||
* Includes cumulative unrealized appreciation (depreciation) of futures contracts as reported on the Schedule of Portfolio Investments. Only current day's variation margin for futures contracts is 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, 2022 (amounts in thousands):
| Net Realized Gains (Losses) on Derivatives Recognized as a Result of 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 | $ | 1,879 | $ | (7,166 | ) | ||||||
All open derivative positions at period end are reflected on 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.
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 or 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 discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis. Paydown gains or losses on applicable securities, if any, are recorded as components of Interest income on the Statement of Operations.
The Fund may receive other income from investments in loan assignments and/or unfunded commitments, including amendment fees, consent fees, and commitment fees. These fees are recorded as income when received. These amounts, if received, are included in Interest income on the Statement of Operations.
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 and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially 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 generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund effectively does not have control of the non-cash collateral and therefore it is
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
not disclosed on the Fund's Schedule of Portfolio Investments. 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. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk 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 repledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2022.
| Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
| $ | 27,250 | $ | — | $ | 28,226 | ||||||
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.
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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 years, which includes the current fiscal tax year end). 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 an 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, printing fees, and 12b-1 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:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended January 31, 2022, were as follows for the Fund (amounts in thousands):
| Excluding U.S. Government Securities | U.S. Government Securities | ||||||||||||||
Purchases | Sales | Purchases | Sales | ||||||||||||
$ | 923,264 | $ | 799,793 | $ | 176,891 | $ | 154,321 | ||||||||
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The 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 www.vcm.com. As of January 31, 2022, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 1.2 | ||||||
USAA Target Retirement Income Fund | 0.4 | ||||||
USAA Target Retirement 2030 Fund | 1.3 | ||||||
USAA Target Retirement 2040 Fund | 1.0 | ||||||
USAA Target Retirement 2050 Fund | 0.4 | ||||||
USAA Target Retirement 2060 Fund | 0.1 | ||||||
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned 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 first $50 million of the Fund's average daily net assets, 0.40% of that portion of the Fund's average daily net assets over $50 million but not over $100 million, and 0.30% of that portion of the Fund's average daily net assets over $100 million. Amounts incurred and paid to VCM for the six months ended January 31, 2022, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and 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 the largest funds within the Lipper Core Plus Bond Funds category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
| Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
| +/- 20 to 50 | +/- 4 | ||||||
| +/- 51 to 100 | +/- 5 | ||||||
| +/- 101 and greater | +/- 6 | ||||||
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective 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.
For the period August 1, 2021, to January 31, 2022, performance adjustments were $586, $539, $12, less than $1, and $11 for Fund Shares, Institutional Shares, Class A, Class C, and R6 Shares, in thousands, respectively. Performance adjustments were 0.06%, 0.06%, 0.05%, 0.01%, and 0.02% for Fund Shares, Institutional Shares, Class A, Class C, and R6 Shares, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
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, 2022, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, 0.10%, 0.15%, 0.15%, and 0.05%, which is based on the Fund's average daily net assets of the Fund Shares, Institutional Shares, Class A, Class C, and R6 Shares, respectively. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund 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 fees for Institutional Shares, Class A, Class C, and R6 Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10%, 0.10%, 0.10%, and 0.01%,
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred and paid to VCTA for the six months ended January 31, 2022, 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 Services, 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.
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 Class A and 1.00% of the average daily net assets of Class C. The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A and Class C. Amounts incurred and paid to the Distributor for the six months ended January 31, 2022, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions in connection with sales of Class A and Class C. For the six months ended January 31, 2022, the Distributor received approximately $1 thousand from commissions earned in connection with sales of Class A and did not receive any commissions in connection with sales of Class C.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 limits for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, 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. As of January 31, 2022, the expense limits (excluding voluntary waivers) were 0.59%, 0.52%, 0.87%, 1.53%, and 0.39% for Fund Shares, Institutional Shares, Class A, Class C, and R6 Shares, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of January 31, 2022, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at January 31, 2022.
| Expires 2022 | Expires 2023 | Expires 2024 | Expires 2025 | Total | |||||||||||||||
| $ | 4 | $ | 200 | $ | 280 | $ | 120 | $ | 604 | ||||||||||
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(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, 2022.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Debt Securities Risk — 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.
Other factors that may affect the value of debt securities include, among others, public health crises and responses by governments and companies to such crises. These and other events may affect the creditworthiness of the issuer of a debt security and may impair an issuer's ability to timely meet its debt obligations as they come due.
Interest Rate Risk — The Fund is subject to the risk that the market value of the bonds in its portfolio will fluctuate because of changes in interest rates, changes in the supply of and demand for tax-exempt securities, and other market factors. 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 ability of an issuer of a debt security to repay principal prior to a security's maturity can increase the security's sensitivity to interest rate changes.
Decisions by the U.S. Federal Reserve (also known as the "Fed") regarding interest rate and monetary policy, which can be difficult to predict and sometimes change direction suddenly in response to economic and market events, can have a significant effect on the value of fixed-income securities as well as the overall strength of the U.S. economy. Precise interest rate predictions are difficult to make, and interest rates may change unexpectedly and dramatically in response to extreme changes in market or economic conditions. As a result, the value of fixed-income securities may vary widely under certain market conditions.
Credit Risk — 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.
LIBOR Discontinuation Risk — The LIBOR discontinuation may adversely affect the financial markets generally and the Fund's operations, finances and investments specifically. LIBOR has been the principal floating-rate benchmark in the financial markets, and a large portion of the Fund's assets are tied to LIBOR. However, LIBOR has been or will be discontinued as a floating rate benchmark. The date of discontinuation depends on the LIBOR currency and tenor. With limited exceptions, no new LIBOR obligations will be entered into after December 31, 2021. Existing LIBOR obligations have transitioned or will transition to another benchmark, depending on the LIBOR currency and tenor. For some existing LIBOR-based obligations, the contractual consequences of the discontinuation of LIBOR may not be clear.
Non-LIBOR floating-rate obligations, including Secured Overnight Financing Rate ("SOFR")-based obligations, may have returns and values that fluctuate more than those of floating-rate debt obligations that are based on LIBOR or other rates. Also, because SOFR and some alternative floating rates are relatively new market indexes, markets for certain non-LIBOR obligations may never develop or may
53
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
not be liquid. Market terms for non-LIBOR floating rate obligations, such as the spread over the index reflected in interest-rate provisions, may evolve over time, and prices of non-LIBOR floating rate obligations may be different depending on when they are issued and changing views about correct spread levels.
Various SOFR-based rates, including SOFR-based term rates, and various non-SOFR-based rates are expected to develop in response to the discontinuation of U.S. dollar LIBOR, which may create various risks for the Fund and the financial markets more generally. There are non-LIBOR forward-looking floating rates that are not based on SOFR and that may be considered by participants in the financial markets as LIBOR alternatives. Such rates include Ameribor (American Interbank Offered Rate), BSBY (Bloomberg Short-Term Bank Yield Index) and BYI (Bank Yield Index). Unlike forward-looking SOFR-based term rates, such rates are intended to reflect a bank credit spread component.
It is not clear how replacement rates for LIBOR — including SOFR-based rates and non-SOFR-based rates — will develop and to what extent they will be used. There is no assurance that these replacement rates will be suitable substitutes for LIBOR, and thus the substitution of such rates for LIBOR could have an adverse effect on the Fund and the financial markets more generally. Concerns about market depth and stability could affect the development of non-SOFR-based term rates, and such rates may create various risks, which may or may not be similar to the risks relating to SOFR.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended January 31, 2022, Citibank received 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, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected 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, 2022.
Interfund Lending:
The Trust and the 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 Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. 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, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees.
The average borrowing or lending for the days outstanding and average interest rate for the Fund during the six months ended January 31, 2022, were as follows (amounts in thousands):
| Borrower or Lender | Amount Outstanding at January 31, 2022 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
| Borrower | $ | — | $ | 6,435 | 6 | 0.58 | % | $ | 8,180 | ||||||||||||||
* For the six months ended January 31, 2022, based on the number of days borrowings were outstanding.
8. Federal Income Tax Information:
Distributions from the Fund's net investment income are accrued daily and distributed on the last business day of each month. 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, 2022.
As of July 31, 2021, the Fund had no capital loss carryforwards, for the federal income tax purposes.
9. Affiliated Securities
An affiliated security is a security in which the Fund has ownership of at least 5% of the security issuers outstanding voting shares, an investment company managed by VCM, or an issuer under common control with a Fund or VCM. The Fund does not invest in affiliated securities for the purpose of exercising management or control. These securities are noted as affiliated on the Fund's Schedule of Portfolio Investments. Transactions in affiliated securities during the six months ended January 31, 2022, were as follows (amounts in thousands):
| Fair Value 7/31/21 | Purchases at Cost | Proceeds from Sales | Realized Gains (Losses) | Net Change in Unrealized Appreciation/ Depreciation | Fair Value 1/31/22 | Dividend Income | ||||||||||||||||||||||||
| Delphi Financial Group, Inc., 3.35% (LIBOR03M+ 319bps), 5/15/37 | $ | 8,232 | $ | — | $ | — | $ | — | $ | (185 | ) | $ | 8,047 | $ | 156 | ||||||||||||||||
55
USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
(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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
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. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; 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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21- 1/31/22* | Hypothetical Expenses Paid During Period 8/1/21- 1/31/22* | Annualized Expense Ratio During Period 8/1/21- 1/31/22 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 974.70 | $ | 1,021.98 | $ | 3.19 | $ | 3.26 | 0.64 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 974.10 | 1,022.28 | 2.89 | 2.96 | 0.58 | % | ||||||||||||||||||||
Class A | 1,000.00 | 971.50 | 1,020.57 | 4.57 | 4.69 | 0.92 | % | ||||||||||||||||||||
Class C | 1,000.00 | 969.30 | 1,017.44 | 7.64 | 7.83 | 1.54 | % | ||||||||||||||||||||
R6 Shares | 1,000.00 | 974.90 | 1,023.14 | 2.04 | 2.09 | 0.41 | % | ||||||||||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
56
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Considerations of the Board in Continuing the Investment Advisory Agreement
USAA Intermediate-Term Bond Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement was approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and the Adviser, and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser. At the meeting at which the renewal of the Advisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder
57
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services and the effects of any performance adjustment1, as well as any fee waivers and reimbursements — was above the median of its expense group and its expense universe. The data indicated that the Fund's total expenses, including after any reimbursements, were equal to the median of its expense group and its expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund.
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total returns relative to its Lipper index and other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was above the average of its performance universe and its Lipper index for the one-, three-, five- and ten-year periods ended September 30, 2021.
1 The Adviser previously agreed that no performance adjustment (positive or negative) would be made to the amount payable to the Adviser from July 1, 2019, through June 30, 2020.
58
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser reimbursed or waived a portion of its management fees to the Fund. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board noted that the Fund has advisory fee breakpoints that allow the Fund to participate in economies of scale and that such economies of scale were currently reflected in the advisory fee. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board also considered the effect of the change in size, if any, of each of the Fund's classes on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
59
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800) 235-8396 | ||||||
40049-0322
January 31, 2022
Semi Annual Report
USAA High Income Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 19 | ||||||
Statement of Operations | 20 | ||||||
Statements of Changes in Net Assets | 21 | ||||||
Financial Highlights | 24 | ||||||
Notes to Financial Statements | 28 | ||||||
Supplemental Information | 40 | ||||||
Proxy Voting and Portfolio Holdings Information | 40 | ||||||
Expense Examples | 40 | ||||||
Advisory Contract Approval | 41 | ||||||
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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA High Income Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks an attractive total return primarily through high current income and secondarily through capital appreciation.
Sector Allocation*:
January 31, 2022
(% of Net Assets)
* Does not include futures contracts, 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%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Asset-Backed Securities (0.2%) | |||||||||||
NP SPE II LLC, Series 2019-2A, Class C1, 6.44%, 11/19/49 (a) | $ | 2,935 | $ | 2,758 | |||||||
Total Asset-Backed Securities (Cost $2,889) | 2,758 | ||||||||||
Collateralized Mortgage Obligations (0.0%) (b) | |||||||||||
| Banc of America Commercial Mortgage Trust, Series 2008-1, Class AJ, 6.79%, 2/10/51, Callable 3/10/22 @ 100 (c) | 163 | 167 | |||||||||
| CHL Mortgage Pass-Through Trust, Series 2004-25, Class 1A6, 1.07% (LIBOR01M+96bps), 2/25/35, Callable 2/25/22 @ 100 (d) | 806 | 62 | |||||||||
| Credit Suisse Commercial Mortgage Trust, Series 2007-C1, Class AMFL, 0.28% (LIBOR01M+19bps), 2/15/40 (d) | 50 | 50 | |||||||||
| Credit Suisse First Boston Mortgage Securities Corp., Series 1998-C1, Class AX, 2.33%, 5/17/40, Callable 2/17/22 @ 100 (c) (e) | 32 | 1 | |||||||||
Total Collateralized Mortgage Obligations (Cost $564) | 280 | ||||||||||
Common Stocks (0.9%) | |||||||||||
Communication Services (0.0%): (b) | |||||||||||
AT&T, Inc. | 19,101 | 487 | |||||||||
Clear Channel Outdoor Holdings, Inc. (f) | 58,641 | 180 | |||||||||
Frontier Communications Parent, Inc. (f) | 450 | 12 | |||||||||
679 | |||||||||||
Energy (0.4%): | |||||||||||
| BP PLC, ADR | 19,808 | 612 | |||||||||
Chesapeake Energy Corp. | 7,750 | 528 | |||||||||
Civitas Resources, Inc. | 11,262 | 614 | |||||||||
Exxon Mobil Corp. | 13,433 | 1,020 | |||||||||
GenOn Energy, Inc. (f) (g) (h) | 16,168 | 1,779 | |||||||||
Nine Point Energy (f) (g) (h) | 2,678,202 | — | (i) | ||||||||
Sabine Oil & Gas Holdings, Inc. (f) (g) (h) | 2,824 | 1 | |||||||||
Shell PLC, ADR (f) (h) | 10,265 | 528 | |||||||||
Thunderbird Resources (f) (g) (h) | 22,883 | 10 | |||||||||
5,092 | |||||||||||
Financials (0.3%): | |||||||||||
CME Group, Inc. | 2,853 | 655 | |||||||||
Crown Castle International Corp. | 6,253 | 1,141 | |||||||||
JPMorgan Chase & Co. | 3,105 | 461 | |||||||||
KeyCorp | 20,033 | 502 | |||||||||
Regions Financial Corp. | 17,992 | 413 | |||||||||
3,172 | |||||||||||
Health Care (0.2%): | |||||||||||
AbbVie, Inc. | 3,578 | 490 | |||||||||
CVS Health Corp. | 9,166 | 976 | |||||||||
Merck & Co., Inc. | 6,970 | 568 | |||||||||
2,034 | |||||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Materials (0.0%): (b) | |||||||||||
LyondellBasell Industries NV Class A | 5,946 | $ | 575 | ||||||||
Total Common Stocks (Cost $12,573) | 11,552 | ||||||||||
Preferred Stocks (2.3%) | |||||||||||
Communication Services (0.4%): | |||||||||||
Qwest Corp., 6.50%, 9/1/56 | 186,401 | 4,699 | |||||||||
Consumer Staples (0.5%): | |||||||||||
CHS, Inc., cumulative redeemable, Series 1, 7.88% (j) | 109,326 | 3,006 | |||||||||
CHS, Inc., cumulative redeemable, Series 2, 7.10% (LIBOR03M+429bps) (d) (j) | 114,391 | 3,129 | |||||||||
6,135 | |||||||||||
Energy (0.9%): | |||||||||||
NuStar Logistics LP, 6.98% (LIBOR03M+673bps), 1/15/43 (d) (k) | 443,698 | 11,186 | |||||||||
Financials (0.5%): | |||||||||||
Equity Residential, cumulative redeemable, Series K, 8.29% (j) | 45,314 | 2,718 | |||||||||
Prologis, Inc., cumulative redeemable, Series Q, 8.54% (j) | 5,310 | 340 | |||||||||
U.S. Bancorp, non-cumulative, Series A, 3.50% (LIBOR03M+102bps) (d) (j) (l) | 3,000 | 2,718 | |||||||||
5,776 | |||||||||||
Total Preferred Stocks (Cost $26,722) | 27,796 | ||||||||||
Warrants (0.0%) (b) | |||||||||||
Energy (0.0%): | |||||||||||
SandRidge Energy, Inc. (h) | 14,270 | — | (i) | ||||||||
SandRidge Energy, Inc. | 6,008 | — | (i) | ||||||||
— | (i) | ||||||||||
Total Warrants (Cost $—) | — | (i) | |||||||||
Senior Secured Loans (2.3%) | |||||||||||
| AAdvantage Loyalty IP Ltd., Initial Term Loan, First Lien, 5.50% (LIBOR03M+475bps), 4/20/28 (d) (m) | $ | 2,000 | 2,073 | ||||||||
Bausch Health Companies, Inc., Term B, First Lien, 1/27/27 (m) (n) | 1,000 | 992 | |||||||||
| CITGO Petroleum Corp., 2019 Incremental Term B Loans, First Lien, 7.25% (LIBOR03M+625bps), 3/22/24 (d) | 2,128 | 2,125 | |||||||||
| Daseke Cos., Inc., Initial Term Loan, First Lien, 4.75% (LIBOR01M+400bps), 3/9/28 (d) | 993 | 990 | |||||||||
| Envision Healthcare Corp., Initial Term Loans, First Lien, 3.85% (LIBOR01M+375bps), 10/11/25 (d) | 5 | 4 | |||||||||
| Fertitta Entertainment LLC, Initial B Term Loan, First Lien, 4.50% (SOFR01M+400bps), 1/12/29 (d) (m) | 2,500 | 2,507 | |||||||||
| Getty Images, Inc., Initial Dollar Term Loans, First Lien, 4.63% (LIBOR01M+450bps), 2/19/26 (d) | 1,987 | 1,986 | |||||||||
| Graham Packaging Co., Inc., New Term Loans, First Lien, 3.75% (LIBOR01M+300bps), 8/4/27 (d) | 1,458 | 1,453 | |||||||||
| Lealand Finance Co. BV, Make Whole Term Loan, First Lien, 3.10% (LIBOR01M+300bps), 6/30/24 (d) (h) | 39 | 23 | |||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Lealand Finance Co. BV, Take-Back Term Loan, First Lien, 1.10% (3.00% PIK) (LIBOR01M+100bps), 6/30/25 (d) (h) | $ | 337 | $ | 158 | |||||||
Paya, Inc., TLB, First Lien, 4.00% (LIBOR03M+325bps), 6/25/28 (d) | 998 | 993 | |||||||||
| Polaris Newco LLC, Dollar Term Loan, First Lien, 4.50% (LIBOR03M+400bps), 6/4/28 (d) | 1,247 | 1,246 | |||||||||
| Pregis Topco LLC, Initial Term Loan, First Lien, 4.10% (LIBOR01M+400bps), 7/25/26 (d) | 1,470 | 1,466 | |||||||||
Quicksilver Resources, Inc., Loans, Second Lien, 7/23/26 (g) (h) (n) | 3,914 | 6 | |||||||||
| Sunshine Luxembourg VII Sarl, Facility B3 Commitments, First Lien, 4.50% (LIBOR03M+375bps), 10/2/26 (d) (m) | 3,967 | 3,962 | |||||||||
| Team Health Holdings, Inc., Initial Term Loans, First Lien, 3.75% (LIBOR01M+275bps), 2/6/24 (d) | 3,974 | 3,829 | |||||||||
| WaterBridge Midstream Operating LLC, Term Loan B, First Lien, 6.75% (LIBOR03M+575bps), 6/21/26 (d) | — | (i) | — | (i) | |||||||
| Whatabrands LLC, Initial Term B Loans, First Lien, 3.75% (LIBOR01M+325bps), 7/21/28 (d) (m) | 2,000 | 1,994 | |||||||||
| Wok Holdings, Inc., Initial Term Loans, First Lien, 6.35% (LIBOR01M+625bps), 3/1/26 (d) | 2,918 | 2,896 | |||||||||
Total Senior Secured Loans (Cost $32,540) | 28,703 | ||||||||||
Corporate Bonds (73.5%) | |||||||||||
Communication Services (10.8%): | |||||||||||
AMC Networks, Inc., 4.25%, 2/15/29, Callable 2/15/24 @ 102.13 (k) | 5,000 | 4,819 | |||||||||
Cars.com, Inc., 6.38%, 11/1/28, Callable 11/1/23 @ 103.19 (a) | 2,000 | 2,081 | |||||||||
| CCO Holdings LLC/CCO Holdings Capital Corp. 4.75%, 3/1/30, Callable 9/1/24 @ 102.38 (a) | 10,000 | 9,928 | |||||||||
4.50%, 8/15/30, Callable 2/15/25 @ 102.25 (a) | 5,000 | 4,875 | |||||||||
4.50%, 5/1/32, Callable 5/1/26 @ 102.25 | 1,000 | 964 | |||||||||
4.50%, 6/1/33, Callable 6/1/27 @ 102.25 (a) | 5,000 | 4,756 | |||||||||
| CenturyLink, Inc. 7.50%, 4/1/24, Callable 1/1/24 @ 100 | 3,000 | 3,206 | |||||||||
7.65%, 3/15/42 | 5,121 | 5,136 | |||||||||
| Charter Communications Operating LLC/Charter Communications Operating Capital, 3.50%, 6/1/41, Callable 12/1/40 @ 100 | 2,000 | 1,799 | |||||||||
| Clear Channel Worldwide Holdings, Inc., 5.13%, 8/15/27, Callable 8/15/22 @ 102.56 (a) | 1,500 | 1,508 | |||||||||
| CSC Holdings LLC 5.38%, 2/1/28, Callable 2/1/23 @ 102.69 (a) | 1,000 | 1,003 | |||||||||
7.50%, 4/1/28, Callable 4/1/23 @ 103.75 (a) (k) | 3,000 | 3,105 | |||||||||
6.50%, 2/1/29, Callable 2/1/24 @ 103.25 (a) | 4,500 | 4,687 | |||||||||
5.75%, 1/15/30, Callable 1/15/25 @ 102.88 (a) | 10,000 | 9,421 | |||||||||
5.00%, 11/15/31, Callable 11/15/26 @ 102.5 (a) | 1,000 | 902 | |||||||||
| DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., 5.88%, 8/15/27, Callable 8/15/23 @ 104.41 (a) | 2,000 | 2,007 | |||||||||
| Dish DBS Corp. 5.88%, 11/15/24 | 4,000 | 4,027 | |||||||||
7.75%, 7/1/26 | 7,000 | 7,212 | |||||||||
7.38%, 7/1/28, Callable 7/1/23 @ 103.69 (l) | 2,000 | 1,935 | |||||||||
DISH DBS Corp., 5.25%, 12/1/26, Callable 6/1/26 @ 100 (a) | 1,500 | 1,456 | |||||||||
Embarq Corp., 8.00%, 6/1/36 | 3,000 | 3,089 | |||||||||
See notes to financial statements.
5
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Frontier Communications Corp., 6.75%, 5/1/29, Callable 5/1/24 @ 103.38 (a) | $ | 2,000 | $ | 2,005 | |||||||
| Frontier Communications Holdings LLC, 5.00%, 5/1/28, Callable 5/1/24 @ 102.5 (a) | 2,000 | 1,983 | |||||||||
Gray Television, Inc., 4.75%, 10/15/30, Callable 10/15/25 @ 102.38 (a) | 1,000 | 960 | |||||||||
iHeartCommunications, Inc., 8.38%, 5/1/27, Callable 5/1/22 @ 104.19 | 2,000 | 2,094 | |||||||||
Lumen Technologies, Inc., 5.38%, 6/15/29, Callable 6/15/24 @ 102.69 (a) | 2,000 | 1,900 | |||||||||
Match Group Holdings II LLC, 4.63%, 6/1/28, Callable 6/1/23 @ 102.31 (a) | 2,000 | 1,978 | |||||||||
Netflix, Inc., 4.38%, 11/15/26 | 2,000 | 2,147 | |||||||||
| Nexstar Broadcasting, Inc. 5.63%, 7/15/27, Callable 7/15/22 @ 104.22 (a) | 4,000 | 4,116 | |||||||||
4.75%, 11/1/28, Callable 11/1/23 @ 102.38 (a) | 2,000 | 1,980 | |||||||||
Rackspace Technology Global, Inc., 3.50%, 2/15/28, Callable 2/15/24 @ 101.75 (a) | 1,000 | 934 | |||||||||
Salem Media Group, Inc., 6.75%, 6/1/24, Callable 3/14/22 @ 101.69 (a) (l) | 1,000 | 1,002 | |||||||||
| Scripps Escrow II, Inc. 3.88%, 1/15/29, Callable 1/15/24 @ 101.94 (a) | 500 | 477 | |||||||||
5.38%, 1/15/31, Callable 1/15/26 @ 102.69 (a) | 500 | 495 | |||||||||
Sinclair Television Group, Inc., 5.50%, 3/1/30, Callable 12/1/24 @ 102.75 (a) (k) | 6,000 | 5,560 | |||||||||
| Sirius XM Radio, Inc. 4.13%, 7/1/30, Callable 7/1/25 @ 102.06 (a) | 5,000 | 4,771 | |||||||||
3.88%, 9/1/31, Callable 9/1/26 @ 101.94 (a) | 2,000 | 1,850 | |||||||||
TEGNA, Inc., 5.00%, 9/15/29, Callable 9/15/24 @ 102.5 (k) | 7,500 | 7,394 | |||||||||
T-Mobile USA, Inc., 2.63%, 4/15/26, Callable 4/15/23 @ 101.31 (k) | 5,000 | 4,901 | |||||||||
Univision Communications, Inc., 4.50%, 5/1/29, Callable 5/1/24 @ 102.25 (a) | 1,000 | 991 | |||||||||
| Zayo Group Holdings, Inc. 4.00%, 3/1/27, Callable 3/14/22 @ 100 (a) | 1,500 | 1,419 | |||||||||
6.13%, 3/1/28, Callable 3/1/23 @ 103.06 (a) | 5,000 | 4,737 | |||||||||
131,610 | |||||||||||
Consumer Discretionary (10.6%): | |||||||||||
| Asbury Automotive Group, Inc. 4.75%, 3/1/30, Callable 3/1/25 @ 102.38 | 1,500 | 1,481 | |||||||||
5.00%, 2/15/32, Callable 11/15/26 @ 102.5 (a) | 1,000 | 993 | |||||||||
| Ashton Woods USA LLC/Ashton Woods Finance Co., 4.63%, 4/1/30, Callable 4/1/25 @ 102.31 (a) | 3,000 | 2,959 | |||||||||
Beazer Homes USA, Inc., 7.25%, 10/15/29, Callable 10/15/24 @ 103.63 | 6,000 | 6,425 | |||||||||
Boyd Gaming Corp., 4.75%, 6/15/31, Callable 6/15/26 @ 102.38 (a) | 1,500 | 1,477 | |||||||||
Caesars Entertainment, Inc., 4.63%, 10/15/29, Callable 10/15/24 @ 102.31 (a) (l) | 9,000 | 8,626 | |||||||||
| Carnival Corp. 9.88%, 8/1/27, Callable 2/1/24 @ 104.94 (a) | 6,000 | 6,740 | |||||||||
6.00%, 5/1/29, Callable 11/1/24 @ 103 (a) | 3,000 | 2,886 | |||||||||
| Clarios Global LP/Clarios US Finance Co., 8.50%, 5/15/27, Callable 5/15/22 @ 104.25 (a) | 3,500 | 3,661 | |||||||||
Everi Holdings, Inc., 5.00%, 7/15/29, Callable 7/15/24 @ 102.5 (a) | 1,000 | 995 | |||||||||
| Fertitta Entertainment LLC/Fertitta Entertainment Finance Co., Inc., 4.63%, 1/15/29, Callable 1/15/25 @ 102.31 (a) | 4,000 | 3,896 | |||||||||
| Ford Motor Co. 6.63%, 10/1/28 | 8,000 | 9,290 | |||||||||
3.25%, 2/12/32, Callable 11/12/31 @ 100 | 3,000 | 2,860 | |||||||||
GPC Merger Sub, Inc., 7.13%, 8/15/28, Callable 8/15/23 @ 103.56 (a) | 2,000 | 2,030 | |||||||||
Group 1 Automotive, Inc., 4.00%, 8/15/28, Callable 8/15/23 @ 102 (a) | 1,500 | 1,437 | |||||||||
Hilton Domestic Operating Co., Inc., 4.00%, 5/1/31, Callable 5/1/26 @ 102 (a) | 2,500 | 2,460 | |||||||||
See notes to financial statements.
6
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
KB Home, 4.80%, 11/15/29, Callable 5/15/29 @ 100 | $ | 2,000 | $ | 2,087 | |||||||
L Brands, Inc., 6.95%, 3/1/33 | 3,000 | 3,272 | |||||||||
Lindblad Expeditions LLC, 6.75%, 2/15/27, Callable 2/15/24 @ 103.38 (a) (m) | 1,000 | 1,012 | |||||||||
M/I Homes, Inc., 4.95%, 2/1/28, Callable 2/1/23 @ 103.71 | 4,500 | 4,549 | |||||||||
Magic Mergerco, Inc., 5.25%, 5/1/28, Callable 11/1/23 @ 102.63 (a) | 3,000 | 2,896 | |||||||||
| Marriott Ownership Resorts, Inc. 4.75%, 1/15/28, Callable 9/15/22 @ 102.38 | 2,000 | 1,983 | |||||||||
4.50%, 6/15/29, Callable 6/15/24 @ 102.25 (a) | 2,000 | 1,962 | |||||||||
Mattel, Inc., 3.75%, 4/1/29, Callable 4/1/24 @ 101.88 (a) | 3,000 | 3,000 | |||||||||
MGM Resorts International, 4.75%, 10/15/28, Callable 7/15/28 @ 100 | 5,000 | 4,953 | |||||||||
Murphy Oil USA, Inc., 3.75%, 2/15/31, Callable 2/15/26 @ 101.88 (a) | 2,721 | 2,562 | |||||||||
Newell Brands, Inc., 5.88%, 4/1/36, Callable 10/1/35 @ 100 | 3,000 | 3,529 | |||||||||
| Nordstrom, Inc. 4.38%, 4/1/30, Callable 1/1/30 @ 100 (l) | 2,000 | 1,876 | |||||||||
4.25%, 8/1/31, Callable 5/1/31 @ 100 (l) | 3,000 | 2,775 | |||||||||
| Northwest Fiber LLC/Northwest Fiber Finance Sub, Inc. 6.00%, 2/15/28, Callable 2/15/24 @ 103 (a) (l) | 2,000 | 1,883 | |||||||||
10.75%, 6/1/28, Callable 6/1/23 @ 105.38 (a) | 1,000 | 1,087 | |||||||||
| Scientific Games International, Inc., 8.25%, 3/15/26, Callable 3/15/22 @ 104.13 (a) | 6,000 | 6,270 | |||||||||
| Seaworld Parks & Entertainment, Inc., 5.25%, 8/15/29, Callable 8/15/24 @ 102.63 (a) | 2,750 | 2,673 | |||||||||
Taylor Morrison Communities, Inc., 5.75%, 1/15/28, Callable 10/15/27 @ 100 (a) | 5,000 | 5,344 | |||||||||
| The Gap, Inc. 3.63%, 10/1/29, Callable 10/1/24 @ 101.81 (a) | 500 | 465 | |||||||||
3.88%, 10/1/31, Callable 10/1/26 @ 101.94 (a) | 500 | 465 | |||||||||
Travel + Leisure Co., 4.50%, 12/1/29, Callable 9/1/29 @ 100 (a) | 2,000 | 1,931 | |||||||||
Trident TPI Holdings, Inc., 6.63%, 11/1/25, Callable 2/22/22 @ 101.66 (a) | 3,000 | 2,990 | |||||||||
| USA Compression Partners LP / USA Compression Finance, 6.88%, 4/1/26, Callable 3/14/22 @ 105.16 | 3,000 | 3,044 | |||||||||
| Weekley Homes LLC/Weekley Finance Corp., 4.88%, 9/15/28, Callable 9/15/23 @ 102.44 (a) | 2,000 | 1,966 | |||||||||
Wyndham Hotels & Resorts, Inc., 4.38%, 8/15/28, Callable 8/15/23 @ 102.19 (a) | 2,000 | 1,987 | |||||||||
| Wynn Resorts Finance LLC/Wynn Resorts Capital Corp., 5.13%, 10/1/29, Callable 7/1/29 @ 100 (a) | 1,000 | 972 | |||||||||
Yum! Brands, Inc., 4.75%, 1/15/30, Callable 10/15/29 @ 100 (a) | 4,000 | 4,113 | |||||||||
129,862 | |||||||||||
Consumer Staples (3.9%): | |||||||||||
Coty, Inc., 6.50%, 4/15/26, Callable 3/14/22 @ 104.88 (a) | 4,500 | 4,573 | |||||||||
| Edgewell Personal Care Co. 5.50%, 6/1/28, Callable 6/1/23 @ 102.75 (a) | 1,000 | 1,041 | |||||||||
4.13%, 4/1/29, Callable 4/1/24 @ 102.06 (a) | 2,500 | 2,453 | |||||||||
| H-Food Holdings LLC/Hearthside Finance Co., Inc., 8.50%, 6/1/26, Callable 2/22/22 @ 104.25 (a) | 4,000 | 3,962 | |||||||||
JBS USA Food Co., 5.75%, 1/15/28 (a) | 1,500 | 1,564 | |||||||||
Kraft Heinz Foods Co., 4.38%, 6/1/46, Callable 12/1/45 @ 100 | 7,000 | 7,340 | |||||||||
Lamb Weston Holdings, Inc., 4.38%, 1/31/32, Callable 1/31/27 @ 102.19 (a) | 2,000 | 1,975 | |||||||||
NBM US Holdings, Inc., 6.63%, 8/6/29, Callable 8/6/24 @ 103.31 (a) | 3,000 | 3,215 | |||||||||
Performance Food Group, Inc., 4.25%, 8/1/29, Callable 8/1/24 @ 102.13 (a) | 5,000 | 4,697 | |||||||||
Pilgrim's Pride Corp., 3.50%, 3/1/32, Callable 9/1/26 @ 101.75 (a) | 1,000 | 953 | |||||||||
See notes to financial statements.
7
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Post Holdings, Inc. 5.50%, 12/15/29, Callable 12/15/24 @ 102.75 (a) | $ | 2,500 | $ | 2,568 | |||||||
4.63%, 4/15/30, Callable 4/15/25 @ 102.31 (a) | 3,000 | 2,891 | |||||||||
Spectrum Brands, Inc., 3.88%, 3/15/31, Callable 3/15/26 @ 101.94 (a) | 3,500 | 3,302 | |||||||||
Triton Water Holdings, Inc., 6.25%, 4/1/29, Callable 4/1/24 @ 103.13 (a) | 1,500 | 1,407 | |||||||||
U.S. Foods, Inc., 4.75%, 2/15/29, Callable 2/15/24 @ 102.38 (a) | 6,000 | 5,902 | |||||||||
47,843 | |||||||||||
Energy (10.7%): | |||||||||||
Antero Resources Corp., 8.38%, 7/15/26, Callable 1/15/24 @ 104.19 (a) | 1,500 | 1,674 | |||||||||
Apache Corp., 4.38%, 10/15/28, Callable 7/15/28 @ 100 | 5,000 | 5,172 | |||||||||
| Blue Racer Midstream LLC/Blue Racer Finance Corp., 7.63%, 12/15/25, Callable 12/15/22 @ 103.81 (a) | 1,500 | 1,569 | |||||||||
Bonanza Creek Energy, Inc., 7.50%, 4/30/26, Callable 2/22/22 @ 107.5 | 482 | 480 | |||||||||
Buckeye Partners LP, 5.60%, 10/15/44, Callable 4/15/44 @ 100 | 2,000 | 1,798 | |||||||||
California Resources Corp., 7.13%, 2/1/26, Callable 2/1/23 @ 103.57 (a) | 3,000 | 3,120 | |||||||||
Carrizo Oil & Gas, Inc., 8.25%, 7/15/25, Callable 3/14/22 @ 104.13 | 3,000 | 2,962 | |||||||||
Citgo Holding, Inc., 9.25%, 8/1/24, Callable 3/14/22 @ 104.63 (a) (l) | 1,000 | 1,001 | |||||||||
Colgate Energy Partners III LLC, 5.88%, 7/1/29, Callable 7/1/24 @ 102.94 (a) | 1,500 | 1,524 | |||||||||
CONSOL Energy, Inc., 11.00%, 11/15/25, Callable 3/14/22 @ 105.5 (a) | 2,000 | 2,081 | |||||||||
| CSI Compressco LP/CSI Compressco Finance, Inc. 7.50%, 4/1/25, Callable 3/14/22 @ 105.63 (a) | 1,163 | 1,170 | |||||||||
10.00% (3.50% PIK), 4/1/26, Callable 4/1/23 @ 107.5 (a) (l) | 3,781 | 3,661 | |||||||||
| DCP Midstream Operating LP 5.13%, 5/15/29, Callable 2/15/29 @ 100 | 2,000 | 2,118 | |||||||||
6.75%, 9/15/37 (a) | 2,030 | 2,615 | |||||||||
DT Midstream, Inc., 4.38%, 6/15/31, Callable 6/15/26 @ 102.19 (a) | 2,000 | 1,975 | |||||||||
| Encino Acquisition Partners Holdings LLC, 8.50%, 5/1/28, Callable 5/1/24 @ 104.25 (a) | 2,000 | 2,023 | |||||||||
| Endeavor Energy Resources LP/EER Finance, Inc., 6.63%, 7/15/25, Callable 7/15/22 @ 103.31 (a) | 2,000 | 2,091 | |||||||||
Energy Transfer LP, 7.13% (H15T5Y+531bps), Callable 5/15/30 @ 100 (d) (j) | 1,000 | 1,021 | |||||||||
| Energy Transfer Operating LP, 3.15% (LIBOR03M+302bps), 11/1/66, Callable 3/14/22 @ 100 (d) | 1,500 | 1,203 | |||||||||
| Enlink Midstream Partners LP, 6.00% (LIBOR03M+411bps), Callable 12/15/22 @ 100 (d) (j) | 1,000 | 753 | |||||||||
| Enterprise Products Operating LLC, 2.95% (LIBOR03M+278bps), 6/1/67, Callable 3/14/22 @ 100 (d) | 2,750 | 2,442 | |||||||||
| Enterprise TE Partners LP, 2.90% (LIBOR03M+278bps), 6/1/67, Callable 3/14/22 @ 100 (d) | 3,000 | 2,430 | |||||||||
EQT Corp., 7.50%, 2/1/30, Callable 11/1/29 @ 100 | 1,000 | 1,190 | |||||||||
GenOn Energy, Inc., 9.88%, 10/15/20 (g) (h) | 7,000 | — | |||||||||
Hess Midstream Partners LP, 5.13%, 6/15/28, Callable 6/15/23 @ 102.56 (a) | 3,000 | 3,057 | |||||||||
| Hilcorp Energy I LP/Hilcorp Finance Co., 6.25%, 11/1/28, Callable 11/1/23 @ 103.13 (a) | 8,000 | 8,299 | |||||||||
Laredo Petroleum, Inc., 10.13%, 1/15/28, Callable 1/15/23 @ 107.59 (l) | 3,000 | 3,168 | |||||||||
| Martin Midstream Partners LP/Martin Midstream Finance Corp. 10.00%, 2/29/24, Callable 3/14/22 @ 102 (a) | 480 | 491 | |||||||||
11.50%, 2/28/25, Callable 8/12/22 @ 102 (a) (l) | 1,750 | 1,820 | |||||||||
MPLX LP, 6.88% (LIBOR03M+465bps), Callable 2/15/23 @ 100 (d) (j) (l) | 3,000 | 3,005 | |||||||||
Murphy Oil Corp., 5.75%, 8/15/25, Callable 3/14/22 @ 102.88 | 6,000 | 6,107 | |||||||||
See notes to financial statements.
8
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| Occidental Petroleum Corp. 8.50%, 7/15/27, Callable 1/15/27 @ 100 | $ | 5,000 | $ | 6,010 | |||||||
6.38%, 9/1/28, Callable 3/1/28 @ 100 | 5,000 | 5,678 | |||||||||
8.88%, 7/15/30, Callable 1/15/30 @ 100 | 2,000 | 2,595 | |||||||||
4.30%, 10/10/36 (o) | 3,500 | 1,886 | |||||||||
Ovintiv, Inc., 6.63%, 8/15/37 | 1,000 | 1,261 | |||||||||
PDC Energy, Inc., 5.75%, 5/15/26, Callable 3/14/22 @ 104.31 | 1,500 | 1,526 | |||||||||
Petroleos Mexicanos, 6.63%, 6/15/35 | 7,000 | 6,516 | |||||||||
| Range Resources Corp. 4.88%, 5/15/25, Callable 2/15/25 @ 100 | 2,000 | 2,038 | |||||||||
4.75%, 2/15/30, Callable 2/15/25 @ 102.38 (a) (m) | 1,000 | 1,001 | |||||||||
SM Energy Co., 5.63%, 6/1/25, Callable 3/14/22 @ 101.88 | 3,000 | 2,985 | |||||||||
| Southern Union Co., 3.14% (LIBOR03M+302bps), 11/1/66, Callable 3/14/22 @ 100 (d) | 2,000 | 1,363 | |||||||||
| Southwestern Energy Co. 7.75%, 10/1/27, Callable 10/1/22 @ 103.88 (l) | 1,000 | 1,065 | |||||||||
5.38%, 2/1/29, Callable 2/1/24 @ 102.69 | 1,500 | 1,525 | |||||||||
| Sunoco LP/Sunoco Finance Corp. 4.50%, 5/15/29, Callable 5/15/24 @ 102.25 | 3,000 | 2,940 | |||||||||
4.50%, 4/30/30, Callable 4/30/25 @ 102.25 (a) | 2,000 | 1,973 | |||||||||
| Tallgrass Energy Partners LP/Tallgras Energy Finance Corp., 6.00%, 3/1/27, Callable 3/1/23 @ 103 (a) | 3,000 | 3,054 | |||||||||
Talos Production, Inc., 12.00%, 1/15/26, Callable 1/15/23 @ 106 | 1,000 | 1,065 | |||||||||
| Targa Resources Partners LP/Targa Resources Partners Finance Corp. 5.00%, 1/15/28, Callable 1/15/23 @ 102.5 | 4,000 | 4,093 | |||||||||
4.88%, 2/1/31, Callable 2/1/26 @ 102.44 | 2,000 | 2,091 | |||||||||
Transocean Pontus Ltd., 6.13%, 8/1/25, Callable 3/14/22 @ 104.59 (a) | 335 | 329 | |||||||||
Transocean, Inc., 11.50%, 1/30/27, Callable 7/30/23 @ 105.75 (a) | 2,500 | 2,480 | |||||||||
| Western Midstream Operating LP 4.65%, 7/1/26, Callable 4/1/26 @ 100 | 2,000 | 2,094 | |||||||||
6.50%, 2/1/50, Callable 8/1/49 @ 100 | 3,000 | 3,291 | |||||||||
130,879 | |||||||||||
Financials (10.1%): | |||||||||||
Adient Global Holdings Corp., 4.88%, 8/15/26, Callable 3/14/22 @ 102.44 (a) | 3,000 | 3,018 | |||||||||
AmTrust Financial Services, Inc., 6.13%, 8/15/23 | 5,000 | 5,034 | |||||||||
AmWINS Group, Inc., 4.88%, 6/30/29, Callable 6/30/24 @ 102.44 (a) | 2,000 | 1,962 | |||||||||
AssuredPartners, Inc., 5.63%, 1/15/29, Callable 12/15/23 @ 102.81 (a) | 2,000 | 1,858 | |||||||||
Banc of California, Inc., 5.25%, 4/15/25, Callable 1/15/25 @ 100 | 5,000 | 5,193 | |||||||||
| Blackstone Private Credit Fund 2.63%, 12/15/26, Callable 11/15/26 @ 100 (a) | 3,000 | 2,849 | |||||||||
3.25%, 3/15/27, Callable 2/15/27 @ 100 (a) | 3,000 | 2,933 | |||||||||
Diversified Healthcare Trust, 9.75%, 6/15/25, Callable 6/15/22 @ 104.88 | 3,000 | 3,188 | |||||||||
Flex Acquisition Co., Inc., 7.88%, 7/15/26, Callable 3/14/22 @ 103.94 (a) | 2,000 | 2,063 | |||||||||
| Ford Motor Credit Co. LLC 4.13%, 8/17/27, Callable 6/17/27 @ 100 | 6,250 | 6,398 | |||||||||
5.11%, 5/3/29, Callable 2/3/29 @ 100 | 8,000 | 8,560 | |||||||||
| Genworth Holdings, Inc., 2.16% (LIBOR03M+200bps), 11/15/66, Callable 2/28/22 @ 100 (d) | 2,000 | 1,177 | |||||||||
| Global Atlantic Fin Co., 4.70% (H15T5Y+380bps), 10/15/51, Callable 7/15/26 @ 100 (a) (d) | 4,000 | 3,983 | |||||||||
See notes to financial statements.
9
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
HUB International Ltd., 7.00%, 5/1/26, Callable 2/22/22 @ 103.5 (a) | $ | 3,000 | $ | 3,072 | |||||||
ILFC E-Capital Trust II, 3.71%, 12/21/65, Callable 3/14/22 @ 100 (a) | 2,000 | 1,729 | |||||||||
| Jefferies Finance LLC/JFIN Co-Issuer Corp., 5.00%, 8/15/28, Callable 8/15/24 @ 102.5 (a) | 1,500 | 1,483 | |||||||||
| LABL Escrow Issuer LLC 6.75%, 7/15/26, Callable 7/15/22 @ 103.38 (a) | 1,000 | 1,014 | |||||||||
10.50%, 7/15/27, Callable 7/15/22 @ 105.25 (a) (k) | 3,000 | 3,083 | |||||||||
Lehman Brothers Holdings, 5.75%, 4/25/11, MTN (h) (s) | 1,000 | 5 | |||||||||
Lehman Brothers Treasury Co. BV, MTN (j) (p) | 1,447 | 7 | |||||||||
Level 3 Financing, Inc., 4.25%, 7/1/28, Callable 7/1/23 @ 102.13 (a) (l) | 2,000 | 1,910 | |||||||||
Lions Gate Capital Holdings LLC, 5.50%, 4/15/29, Callable 4/15/24 @ 102.75 (a) | 1,500 | 1,494 | |||||||||
MetLife, Inc., 10.75%, 8/1/69, Callable 8/1/34 @ 100 | 2,000 | 3,300 | |||||||||
| MGM Growth Properties Operating Partnership LP/MGP Finance Co-Issuer, Inc., 3.88%, 2/15/29, Callable 11/15/28 @ 100 (a) | 3,750 | 3,895 | |||||||||
Mozart Debt Merger Sub, Inc., 5.25%, 10/1/29, Callable 10/1/24 @ 102.63 (a) (l) | 3,000 | 2,918 | |||||||||
| Navient Corp. 6.75%, 6/25/25 | 5,000 | 5,293 | |||||||||
6.75%, 6/15/26 | 5,000 | 5,295 | |||||||||
5.63%, 8/1/33, MTN | 6,000 | 5,374 | |||||||||
| Olympus Water US Holding Corp. 4.25%, 10/1/28, Callable 10/1/24 @ 102.13 (a) | 2,000 | 1,911 | |||||||||
6.25%, 10/1/29, Callable 10/1/24 @ 103.13 (a) | 750 | 715 | |||||||||
| OneMain Finance Corp. 7.13%, 3/15/26 | 6,000 | 6,599 | |||||||||
5.38%, 11/15/29, Callable 5/15/29 @ 100 | 2,000 | 2,033 | |||||||||
| Outfront Media Capital LLC/Outfront Media Capital Corp. 6.25%, 6/15/25, Callable 6/15/22 @ 103.13 (a) | 2,000 | 2,080 | |||||||||
4.63%, 3/15/30, Callable 3/15/25 @ 102.31 (a) | 1,000 | 960 | |||||||||
| Park Intermediate Holdings LLC/PK Domestic Property LLC/PK Finance Co-Issuer, 4.88%, 5/15/29, Callable 5/15/24 @ 102.44 (a) | 2,000 | 1,979 | |||||||||
| PPL Capital Funding, Inc., 2.80% (LIBOR03M+267bps), 3/30/67, Callable 3/14/22 @ 100 (d) | 2,750 | 2,544 | |||||||||
| Service Properties Trust 4.95%, 2/15/27, Callable 8/15/26 @ 100 | 2,000 | 1,861 | |||||||||
4.95%, 10/1/29, Callable 7/1/29 @ 100 | 4,000 | 3,610 | |||||||||
Starwood Property Trust, Inc., 4.38%, 1/15/27, Callable 7/15/26 @ 100 (a) | 1,000 | 996 | |||||||||
Summer BC Bidco B LLC, 5.50%, 10/31/26, Callable 7/15/23 @ 102.75 (a) | 2,000 | 1,961 | |||||||||
The Hanover Insurance Group, Inc., 8.21%, 2/3/27 | 3,000 | 3,294 | |||||||||
| The Hartford Financial Services Group, Inc., 2.28% (LIBOR03M+213bps), 2/12/67, Callable 3/14/22 @ 100 (a) (d) | 2,000 | 1,882 | |||||||||
Vertical US Newco, Inc., 5.25%, 7/15/27, Callable 7/15/23 @ 102.63 (a) | 2,000 | 2,025 | |||||||||
| VICI Properties LP/VICI Note Co., Inc., 4.13%, 8/15/30, Callable 2/15/25 @ 102.06 (a) | 750 | 754 | |||||||||
123,292 | |||||||||||
Health Care (6.8%): | |||||||||||
| Bausch Health Cos., Inc. 5.00%, 1/30/28, Callable 1/30/23 @ 102.5 (a) | 2,000 | 1,686 | |||||||||
5.25%, 1/30/30, Callable 1/30/25 @ 102.63 (a) (k) | 7,000 | 5,642 | |||||||||
Centene Corp., 4.63%, 12/15/29, Callable 12/15/24 @ 102.31 | 2,500 | 2,597 | |||||||||
CHS, Inc., 8.00%, 3/15/26, Callable 3/15/22 @ 104 (a) | 12,000 | 12,516 | |||||||||
See notes to financial statements.
10
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| CHS/Community Health Systems, Inc. 6.88%, 4/15/29, Callable 4/15/24 @ 103.44 (a) | $ | 3,000 | $ | 2,975 | |||||||
5.25%, 5/15/30, Callable 5/15/25 @ 102.63 (a) (m) | 2,000 | 1,991 | |||||||||
| DaVita, Inc. 4.63%, 6/1/30, Callable 6/1/25 @ 102.31 (a) | 1,500 | 1,460 | |||||||||
3.75%, 2/15/31, Callable 2/15/26 @ 101.88 (a) | 10,000 | 9,185 | |||||||||
Eastern Maine Healthcare Systems, 5.02%, 7/1/36 | 3,000 | 3,129 | |||||||||
| Encompass Health Corp. 5.75%, 9/15/25, Callable 3/14/22 @ 101.92 | 2,000 | 2,040 | |||||||||
4.63%, 4/1/31, Callable 4/1/26 @ 102.31 | 500 | 490 | |||||||||
Global Medical Response, Inc., 6.50%, 10/1/25, Callable 2/16/22 @ 103.25 (a) | 2,000 | 2,001 | |||||||||
HealthEquity, Inc., 4.50%, 10/1/29, Callable 10/1/24 @ 102.25 (a) | 750 | 735 | |||||||||
MEDNAX, Inc., 6.25%, 1/15/27 (a) | 6,000 | 6,271 | |||||||||
Organon Finance 1 LLC, 4.13%, 4/30/28, Callable 4/30/24 @ 102.06 (a) | 2,000 | 1,977 | |||||||||
| Ortho-Clinical Diagnostics, Inc./Ortho-Clinical Diagnostics SA 7.38%, 6/1/25, Callable 6/1/22 @ 103.69 (a) (k) | 598 | 628 | |||||||||
7.25%, 2/1/28, Callable 2/1/23 @ 103.63 (a) | 1,218 | 1,297 | |||||||||
Prestige Brands, Inc., 3.75%, 4/1/31, Callable 4/1/26 @ 101.88 (a) | 2,000 | 1,818 | |||||||||
Select Medical Corp., 6.25%, 8/15/26, Callable 8/15/22 @ 103.13 (a) | 2,500 | 2,572 | |||||||||
Team Health Holdings, Inc., 6.38%, 2/1/25, Callable 2/28/22 @ 100 (a) (l) | 1,000 | 900 | |||||||||
| Tenet Healthcare Corp. 5.13%, 11/1/27, Callable 11/1/22 @ 102.56 (a) | 6,000 | 6,015 | |||||||||
6.13%, 10/1/28, Callable 10/1/23 @ 103.06 (a) | 4,000 | 4,018 | |||||||||
4.38%, 1/15/30, Callable 12/1/24 @ 102.19 (a) | 3,000 | 2,895 | |||||||||
6.88%, 11/15/31 | 3,000 | 3,264 | |||||||||
US Acute Care Solutions, 6.38%, 3/1/26, Callable 3/1/23 @ 103.19 (a) | 4,000 | 4,018 | |||||||||
US Acute Care Solutions LLC, 6.38%, 3/1/26, Callable 3/1/23 @ 103.19 (a) (m) | 1,000 | 1,014 | |||||||||
83,134 | |||||||||||
Industrials (9.7%): | |||||||||||
ADT Security Corp., 4.88%, 7/15/32 (a) | 3,000 | 2,897 | |||||||||
American Airlines, Inc., 11.75%, 7/15/25 (a) | 2,000 | 2,424 | |||||||||
American Airlines, Inc./AAdvantage Loyalty IP Ltd., 5.75%, 4/20/29 (a) | 3,000 | 3,075 | |||||||||
Atkore, Inc., 4.25%, 6/1/31, Callable 6/1/26 @ 102.13 (a) | 3,000 | 2,957 | |||||||||
| Avis Budget Car Rental LLC/Avis Budget Finance, Inc. 5.75%, 7/15/27, Callable 7/15/22 @ 102.88 (a) (l) | 1,000 | 1,029 | |||||||||
5.38%, 3/1/29, Callable 3/1/24 @ 102.69 (a) (l) | 2,000 | 2,006 | |||||||||
| Brand Energy & Infrastructure Services, Inc., 8.50%, 7/15/25, Callable 3/14/22 @ 104.25 (a) | 1,000 | 949 | |||||||||
| Builders FirstSource, Inc. 4.25%, 2/1/32, Callable 8/1/26 @ 102.13 (a) | 1,000 | 979 | |||||||||
4.25%, 2/1/32 (a) | 100 | 99 | |||||||||
BWX Technologies, Inc., 4.13%, 4/15/29, Callable 4/15/24 @ 102.06 (a) | 2,000 | 1,976 | |||||||||
Covanta Holding Corp., 5.00%, 9/1/30, Callable 9/1/25 @ 102.5 | 1,000 | 990 | |||||||||
Delta Air Lines, Inc., 7.38%, 1/15/26, Callable 12/15/25 @ 100 | 2,000 | 2,277 | |||||||||
Fluor Corp., 4.25%, 9/15/28, Callable 6/15/28 @ 100 (l) | 1,000 | 997 | |||||||||
Gates Global LLC/Gates Corp., 6.25%, 1/15/26, Callable 3/14/22 @ 103.13 (a) | 2,500 | 2,572 | |||||||||
H&E Equipment Services, Inc., 3.88%, 12/15/28, Callable 12/15/23 @ 101.94 (a) | 2,000 | 1,887 | |||||||||
Howmet Aerospace, Inc., 5.95%, 2/1/37 | 4,000 | 4,490 | |||||||||
| Icahn Enterprises LP/Icahn Enterprises Finance Corp., 5.25%, 5/15/27, Callable 11/15/26 @ 100 | 4,000 | 4,030 | |||||||||
See notes to financial statements.
11
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
JB Poindexter & Co., Inc., 7.13%, 4/15/26, Callable 3/14/22 @ 105.34 (a) | $ | 2,500 | $ | 2,598 | |||||||
Matthews International Corp., 5.25%, 12/1/25, Callable 3/14/22 @ 102.63 (a) | 3,500 | 3,573 | |||||||||
Minerva Merger Sub, Inc., 6.50%, 2/15/30, Callable 2/15/25 @ 103.25 (a) (m) | 5,000 | 4,978 | |||||||||
Mueller Water Products, Inc., 4.00%, 6/15/29, Callable 6/15/24 @ 102 (a) | 1,000 | 984 | |||||||||
| Prime Security Services Borrower LLC/Prime Finance, Inc. 3.38%, 8/31/27, Callable 8/31/26 @ 100 (a) | 1,000 | 932 | |||||||||
6.25%, 1/15/28, Callable 1/15/23 @ 103.13 (a) | 10,000 | 9,987 | |||||||||
| Roller Bearing Co. of America, Inc., 4.38%, 10/15/29, Callable 10/15/24 @ 102.19 (a) | 1,000 | 990 | |||||||||
RR Donnelley & Sons Co., 8.25%, 7/1/27, Callable 7/1/23 @ 106.19 | 2,850 | 3,276 | |||||||||
Sensata Technologies, Inc., 3.75%, 2/15/31, Callable 2/15/26 @ 101.88 (a) | 2,000 | 1,880 | |||||||||
Spirit AeroSystems, Inc., 5.50%, 1/15/25, Callable 10/15/22 @ 102.75 (a) | 1,500 | 1,541 | |||||||||
Spirit Airlines Pass Through Trust, 4.10%, 10/1/29 | 1,979 | 2,009 | |||||||||
| Spirit Loyalty Cayman Ltd./Spirit IP Cayman Ltd., 8.00%, 9/20/25, Callable 9/20/23 @ 104 (a) | 75 | 81 | |||||||||
| Standard Industries, Inc. 4.38%, 7/15/30, Callable 7/15/25 @ 102.19 (a) | 2,000 | 1,915 | |||||||||
3.38%, 1/15/31, Callable 7/15/25 @ 101.69 (a) | 6,000 | 5,461 | |||||||||
Terex Corp., 5.00%, 5/15/29, Callable 5/15/24 @ 102.5 (a) | 3,000 | 2,971 | |||||||||
| Textron Financial Corp., 1.86% (LIBOR03M+174bps), 2/15/42, Callable 2/28/22 @ 100 (a) (d) | 4,000 | 3,402 | |||||||||
The ADT Security Corp., 4.13%, 8/1/29, Callable 8/1/28 @ 100 (a) | 2,000 | 1,881 | |||||||||
| The Hertz Corp. 4.63%, 12/1/26, Callable 12/1/23 @ 102.31 (a) | 2,000 | 1,941 | |||||||||
5.00%, 12/1/29, Callable 12/1/24 @ 102.5 (a) | 3,000 | 2,895 | |||||||||
| TransDigm, Inc. 7.50%, 3/15/27, Callable 3/15/22 @ 103.75 | 5,000 | 5,183 | |||||||||
5.50%, 11/15/27, Callable 11/15/22 @ 102.75 | 7,000 | 7,047 | |||||||||
4.88%, 5/1/29, Callable 5/1/24 @ 102.44 | 5,000 | 4,805 | |||||||||
U.S. Airways Pass Through Trust, 3.95%, 5/15/27 | 2,179 | 2,158 | |||||||||
Uber Technologies, Inc., 7.50%, 9/15/27, Callable 9/15/22 @ 105.63 (a) | 3,000 | 3,203 | |||||||||
United Airlines Pass Through Trust, 4.88%, 7/15/27 | 24 | 25 | |||||||||
| United Airlines, Inc. 4.38%, 4/15/26, Callable 10/15/25 @ 100 (a) | 250 | 248 | |||||||||
4.63%, 4/15/29, Callable 10/15/28 @ 100 (a) | 250 | 249 | |||||||||
United Rentals North America, Inc., 4.00%, 7/15/30, Callable 7/15/25 @ 102 | 3,000 | 2,957 | |||||||||
Waste Pro USA, Inc., 5.50%, 2/15/26, Callable 3/14/22 @ 102.75 (a) | 3,000 | 2,917 | |||||||||
WESCO Distribution, Inc., 7.25%, 6/15/28, Callable 6/15/23 @ 103.63 (a) | 1,000 | 1,072 | |||||||||
118,793 | |||||||||||
Information Technology (3.0%): | |||||||||||
| Acuris Finance US, Inc./Acuris Finance SARL, 5.00%, 5/1/28, Callable 5/1/24 @ 102.5 (a) | 2,000 | 1,913 | |||||||||
Avaya, Inc., 6.13%, 9/15/28, Callable 9/15/23 @ 103.06 (a) | 2,500 | 2,557 | |||||||||
Brightstar Escrow Corp., 9.75%, 10/15/25, Callable 10/15/22 @ 104.88 (a) | 2,000 | 2,141 | |||||||||
| Colt Merger Sub, Inc. 6.25%, 7/1/25, Callable 7/1/22 @ 103.13 (a) | 5,000 | 5,182 | |||||||||
5.75%, 7/1/25, Callable 7/1/22 @ 102.88 (a) | 1,000 | 1,030 | |||||||||
| CommScope Technologies LLC 6.00%, 6/15/25, Callable 2/22/22 @ 102 (a) | 2,000 | 1,948 | |||||||||
5.00%, 3/15/27, Callable 3/15/22 @ 102.5 (a) | 4,000 | 3,559 | |||||||||
See notes to financial statements.
12
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Entegris, Inc., 3.63%, 5/1/29, Callable 5/1/24 @ 102.72 (a) | $ | 1,000 | $ | 958 | |||||||
Gartner, Inc., 4.50%, 7/1/28, Callable 7/1/23 @ 102.25 (a) | 1,500 | 1,531 | |||||||||
J2 Global, Inc., 4.63%, 10/15/30, Callable 10/15/25 @ 102.21 (a) | 1,304 | 1,276 | |||||||||
| NCR Corp. 5.13%, 4/15/29, Callable 4/15/24 @ 102.56 (a) (l) | 3,000 | 2,994 | |||||||||
6.13%, 9/1/29, Callable 9/1/24 @ 103.06 (a) | 3,000 | 3,147 | |||||||||
Square, Inc., 3.50%, 6/1/31, Callable 3/1/31 @ 100 (a) | 1,500 | 1,429 | |||||||||
Switch Ltd., 4.13%, 6/15/29, Callable 6/15/24 @ 102.06 (a) | 2,000 | 1,949 | |||||||||
Twilio, Inc., 3.88%, 3/15/31, Callable 3/15/26 @ 101.94 | 3,000 | 2,871 | |||||||||
Unisys Corp., 6.88%, 11/1/27, Callable 11/1/23 @ 103.44 (a) | 2,000 | 2,133 | |||||||||
36,618 | |||||||||||
Materials (5.3%): | |||||||||||
Allegheny Ludlum LLC, 6.95%, 12/15/25 | 1,456 | 1,574 | |||||||||
Arconic Corp., 6.13%, 2/15/28, Callable 2/15/23 @ 103.06 (a) | 1,200 | 1,246 | |||||||||
| Ardagh Metal Packaging Finance USA LLC/Ardagh Metal Packaging Finance PLC, 4.00%, 9/1/29, Callable 5/15/24 @ 102 (a) | 2,500 | 2,381 | |||||||||
| Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc., 5.25%, 8/15/27, Callable 8/15/22 @ 102.63 (a) | 3,000 | 2,928 | |||||||||
Axalta Coating Systems LLC, 3.38%, 2/15/29, Callable 2/15/24 @ 101.69 (a) | 3,000 | 2,783 | |||||||||
Bway Holding Co., 7.25%, 4/15/25, Callable 3/14/22 @ 101.81 (a) | 8,000 | 7,924 | |||||||||
Cleveland-Cliffs, Inc., 4.88%, 3/1/31, Callable 3/1/26 @ 102.44 (a) (l) | 4,000 | 3,919 | |||||||||
Commercial Metals Co., 4.38%, 3/15/32, Callable 3/15/27 @ 102.19 (l) | 2,000 | 1,990 | |||||||||
Freeport-McMoRan, Inc., 4.25%, 3/1/30, Callable 3/1/25 @ 102.13 | 3,500 | 3,566 | |||||||||
Glatfelter Corp., 4.75%, 11/15/29, Callable 11/1/24 @ 102.38 (a) | 2,000 | 2,021 | |||||||||
Kaiser Aluminum Corp., 4.50%, 6/1/31, Callable 6/1/26 @ 102.25 (a) | 3,000 | 2,824 | |||||||||
Kraton Polymers LLC/Kraton Polymers Capital Corp., 4.25%, 12/15/25 (a) | 1,000 | 1,046 | |||||||||
Louisiana-Pacific Corp., 3.63%, 3/15/29, Callable 3/15/24 @ 101.81 (a) | 7,000 | 6,863 | |||||||||
Novelis Corp., 4.75%, 1/30/30, Callable 1/30/25 @ 102.38 (a) | 3,000 | 2,994 | |||||||||
Olin Corp., 5.00%, 2/1/30, Callable 2/1/24 @ 102.5 | 2,000 | 2,039 | |||||||||
| Pactiv Evergreen Group Issuer LLC/Pactiv Evergreen Group Issuer, Inc., 4.38%, 10/15/28, Callable 10/15/24 @ 102.19 (a) | 2,000 | 1,914 | |||||||||
| Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer, 4.00%, 10/15/27, Callable 10/15/23 @ 102 (a) | 1,000 | 947 | |||||||||
SCIH Salt Holdings, Inc., 4.88%, 5/1/28, Callable 5/1/24 @ 102.44 (a) (l) | 2,000 | 1,875 | |||||||||
| The Chemours Co. 5.38%, 5/15/27, Callable 2/15/27 @ 100 (l) | 1,000 | 1,029 | |||||||||
5.75%, 11/15/28, Callable 11/15/23 @ 102.88 (a) | 3,000 | 3,054 | |||||||||
4.63%, 11/15/29, Callable 11/15/24 @ 102.31 (a) | 3,000 | 2,858 | |||||||||
Tronox, Inc., 4.63%, 3/15/29, Callable 3/15/24 @ 102.31 (a) | 4,000 | 3,863 | |||||||||
Valvoline, Inc., 3.63%, 6/15/31, Callable 6/15/26 @ 101.81 (a) | 1,000 | 918 | |||||||||
| Venator Finance SARL/Venator Materials LLC, 5.75%, 7/15/25, Callable 3/14/22 @ 102.88 (a) (l) | 2,000 | 1,895 | |||||||||
64,451 | |||||||||||
Utilities (2.6%): | |||||||||||
| Calpine Corp. 4.50%, 2/15/28, Callable 2/15/23 @ 102.25 (a) | 3,000 | 2,932 | |||||||||
4.63%, 2/1/29, Callable 2/1/24 @ 102.31 (a) | 7,000 | 6,627 | |||||||||
Genesis Energy LP, 6.50%, 10/1/25, Callable 3/14/22 @ 103.25 | 2,000 | 1,961 | |||||||||
See notes to financial statements.
13
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
| NRG Energy, Inc. 5.75%, 1/15/28, Callable 1/15/23 @ 102.88 | $ | 3,000 | $ | 3,109 | |||||||
3.63%, 2/15/31, Callable 2/15/26 @ 101.81 (a) | 1,000 | 928 | |||||||||
Pacific Gas and Electric Co., 4.20%, 6/1/41, Callable 12/1/40 @ 100 | 3,000 | 2,857 | |||||||||
| PG&E Corp. 5.00%, 7/1/28, Callable 7/1/23 @ 102.5 (l) | 1,000 | 1,000 | |||||||||
5.25%, 7/1/30, Callable 7/1/25 @ 102.63 | 3,000 | 2,981 | |||||||||
Talen Energy Supply LLC, 7.25%, 5/15/27, Callable 5/15/22 @ 103.63 (a) | 2,000 | 1,795 | |||||||||
Vistra Corp., 7.00%, Callable 12/15/26 @ 100 (a) (j) | 1,500 | 1,498 | |||||||||
| Vistra Operations Co. LLC 5.00%, 7/31/27, Callable 7/31/22 @ 102.5 (a) | 5,000 | 5,072 | |||||||||
4.38%, 5/1/29, Callable 5/1/24 @ 102.19 (a) | 1,500 | 1,446 | |||||||||
32,206 | |||||||||||
Total Corporate Bonds (Cost $885,217) | 898,688 | ||||||||||
Yankee Dollars (17.6%) | |||||||||||
Communication Services (1.9%): | |||||||||||
Altice France Holding SA, 6.00%, 2/15/28, Callable 2/15/23 @ 103 (a) | 8,000 | 7,301 | |||||||||
| Altice France SA 8.13%, 2/1/27, Callable 2/22/22 @ 106.09 (a) | 3,000 | 3,174 | |||||||||
5.50%, 10/15/29, Callable 10/15/24 @ 102.75 (a) | 3,000 | 2,843 | |||||||||
| Digicel International Finance Ltd./Digicel Holdings Bermuda Ltd. 8.75%, 5/25/24, Callable 2/28/22 @ 104.38 (a) | 1,195 | 1,225 | |||||||||
8.75%, 5/25/24, Callable 2/28/22 @ 104.38 (a) | 2,500 | 2,564 | |||||||||
| LCPR Seniorr Secured Financing DAC, 5.13%, 7/15/29, Callable 7/15/24 @ 102.56 (a) | 1,500 | 1,469 | |||||||||
Telecom Italia Capital SA, 7.20%, 7/18/36 | 5,000 | 5,309 | |||||||||
23,885 | |||||||||||
Consumer Discretionary (1.7%): | |||||||||||
| 1011778 BC ULC/New Red Finance, Inc., 3.88%, 1/15/28, Callable 9/15/22 @ 101.94 (a) | 3,000 | 2,929 | |||||||||
IHO Verwaltungs GmbH, 6.38%, 5/15/29, Callable 5/15/24 @ 103.19 (a) (r) | 3,024 | 3,188 | |||||||||
International Game Technology PLC, 6.25%, 1/15/27, Callable 7/15/26 @ 100 (a) | 3,000 | 3,266 | |||||||||
| Jaguar Land Rover Automotive PLC, 5.88%, 1/15/28, Callable 1/15/24 @ 102.94 (a) | 1,500 | 1,494 | |||||||||
Mattamy Group Corp., 4.63%, 3/1/30, Callable 3/1/25 @ 102.31 (a) | 3,000 | 2,959 | |||||||||
Melco Reosrts Finance Ltd., 5.38%, 12/4/29, Callable 12/4/24 @ 102.69 (a) | 2,000 | 1,887 | |||||||||
Melco Resorts Finance Ltd., 5.75%, 7/21/28, Callable 7/21/23 @ 102.88 (a) | 1,000 | 963 | |||||||||
| Royal Caribbean Cruises Ltd. 5.50%, 8/31/26, Callable 2/28/26 @ 100 (a) | 1,500 | 1,464 | |||||||||
5.50%, 4/1/28, Callable 10/1/27 @ 100 (a) | 1,500 | 1,457 | |||||||||
Wynn Macau Ltd., 5.50%, 1/15/26, Callable 6/15/22 @ 104.13 (a) | 1,000 | 942 | |||||||||
20,549 | |||||||||||
Consumer Staples (0.8%): | |||||||||||
| JBS USA LUX SA/JBS USA Finance, Inc., 6.75%, 2/15/28, Callable 2/15/23 @ 103.38 (a) | 4,000 | 4,279 | |||||||||
Leviathan Bond Ltd., 6.75%, 6/30/30, Callable 12/30/29 @ 100 (a) | 2,000 | 2,144 | |||||||||
See notes to financial statements.
14
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Minerva Luxembourg SA, 5.88%, 1/19/28, Callable 1/19/23 @ 102.94 (a) (l) | $ | 3,000 | $ | 3,198 | |||||||
9,621 | |||||||||||
Energy (2.3%): | |||||||||||
Baytex Energy Corp., 8.75%, 4/1/27, Callable 4/1/23 @ 106.56 (a) | 3,000 | 3,235 | |||||||||
Harbour Energy PLC, 5.50%, 10/15/26, Callable 10/15/23 @ 102.75 (a) | 2,000 | 1,987 | |||||||||
Ithaca Energy North Sea PLC, 9.00%, 7/15/26, Callable 7/15/23 @ 104.5 (a) | 2,000 | 2,062 | |||||||||
| Northriver Midstream Finance LP, 5.63%, 2/15/26, Callable 10/15/22 @ 102.81 (a) | 3,000 | 3,054 | |||||||||
Petrobras Global Finance BV, 5.50%, 6/10/51, Callable 12/10/50 @ 100 (l) | 6,000 | 5,284 | |||||||||
| Petroleos Mexicanos 6.84%, 1/23/30, Callable 10/23/29 @ 100 | 5,000 | 5,102 | |||||||||
5.95%, 1/28/31, Callable 10/28/30 @ 100 | 3,000 | 2,853 | |||||||||
Tecpetrol SA, 4.88%, 12/12/22, Callable 2/22/22 @ 100 (a) (l) | 1,000 | 982 | |||||||||
| Transportadora de Gas del Sur SA, 6.75%, 5/2/25, Callable 5/2/22 @ 103.38 (a) (l) | 2,165 | 1,943 | |||||||||
Tullow Oil PLC, 10.25%, 5/15/26, Callable 5/6/23 @ 105 (a) | 1,500 | 1,515 | |||||||||
28,017 | |||||||||||
Financials (3.4%): | |||||||||||
| Altice Financing SA 5.00%, 1/15/28, Callable 1/15/23 @ 102.5 (a) | 6,000 | 5,557 | |||||||||
5.75%, 8/15/29, Callable 8/15/24 @ 102.88 (a) | 2,500 | 2,336 | |||||||||
| BBVA Bancomer SA, 5.87% (H15T5Y+431bps), 9/13/34, Callable 9/13/29 @ 100 (a) (d) (l) | 4,500 | 4,792 | |||||||||
| Deutsche Bank AG 5.88% (SOFR+544bps), 7/8/31, Callable 4/8/30 @ 100 (d) | 4,000 | 4,477 | |||||||||
4.88% (USISDA05+255bps), 12/1/32, Callable 12/1/27 @ 100 (d) | 7,000 | 7,316 | |||||||||
Intesa Sanpaolo SpA, 5.71%, 1/15/26 (a) | 2,000 | 2,157 | |||||||||
Natwest Group PLC, 2.45% (LIBOR03M+232bps), Callable 3/31/22 @ 100 (d) (j) | 2,000 | 1,988 | |||||||||
UniCredit SpA, 7.30% (USISDA05+491bps), 4/2/34, Callable 4/2/29 @ 100 (a) (d) | 10,000 | 11,454 | |||||||||
Vertical Holdco GmbH, 7.63%, 7/15/28, Callable 7/15/23 @ 103.81 (a) | 1,000 | 1,052 | |||||||||
41,129 | |||||||||||
Health Care (1.0%): | |||||||||||
| Bausch Health Cos., Inc. 4.88%, 6/1/28, Callable 6/1/24 @ 102.44 (a) | 3,000 | 2,852 | |||||||||
7.25%, 5/30/29, Callable 5/30/24 @ 103.63 (a) | 4,500 | 4,038 | |||||||||
| Teva Pharmaceutical Finance Netherlands III BV 6.75%, 3/1/28, Callable 12/1/27 @ 100 (l) | 3,000 | 3,183 | |||||||||
4.10%, 10/1/46 | 3,000 | 2,428 | |||||||||
12,501 | |||||||||||
Industrials (1.9%): | |||||||||||
Air Canada Pass Through Trust, 4.13%, 11/15/26 (a) | 4,917 | 4,928 | |||||||||
| ATS Automation Tooling Systems, Inc., 4.13%, 12/15/28, Callable 12/15/23 @ 102.06 (a) | 1,000 | 995 | |||||||||
| Bombardier, Inc. 7.50%, 3/15/25, Callable 3/14/22 @ 102.5 (a) | 8,000 | 8,098 | |||||||||
7.88%, 4/15/27, Callable 4/15/22 @ 103.94 (a) (l) | 5,000 | 5,065 | |||||||||
Rolls-Royce PLC, 5.75%, 10/15/27, Callable 7/15/27 @ 100 (a) | 2,967 | 3,122 | |||||||||
See notes to financial statements.
15
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Seaspan Corp., 5.50%, 8/1/29, Callable 8/1/24 @ 102.75 (a) | $ | 1,500 | $ | 1,484 | |||||||
23,692 | |||||||||||
Information Technology (0.2%): | |||||||||||
Seagate HDD Cayman, 4.88%, 6/1/27, Callable 3/1/27 @ 100 | 2,000 | 2,092 | |||||||||
Materials (3.4%): | |||||||||||
Alcoa Nederland Holding, 6.13%, 5/15/28, Callable 5/15/23 @ 103.06 (a) | 1,500 | 1,595 | |||||||||
Alcoa Nederland Holding BV, 4.13%, 3/31/29, Callable 3/31/24 @ 102.06 (a) | 3,000 | 3,016 | |||||||||
ArcelorMittal, 7.00%, 10/15/39 | 2,000 | 2,603 | |||||||||
Cemex SAB de CV, 5.45%, 11/19/29, Callable 11/19/24 @ 102.73 (a) | 3,000 | 3,111 | |||||||||
Diamond Bc BV, 4.63%, 10/1/29, Callable 10/1/24 @ 102.31 (a) | 2,000 | 1,880 | |||||||||
Eldorado Gold Corp., 6.25%, 9/1/29, Callable 9/1/24 @ 103.13 (a) | 2,000 | 2,002 | |||||||||
Endeavour Mining PLC, 5.00%, 10/14/26, Callable 10/14/23 @ 102.5 (a) | 2,000 | 1,943 | |||||||||
First Quantum Minerals Ltd., 7.50%, 4/1/25, Callable 2/22/22 @ 103.75 (a) | 10,000 | 10,225 | |||||||||
Infrabuild Australia Pty Ltd., 12.00%, 10/1/24, Callable 3/14/22 @ 109 (a) (l) | 2,000 | 2,053 | |||||||||
Intertape Polymer Group, Inc., 4.38%, 6/15/29, Callable 6/15/24 @ 102.19 (a) | 1,000 | 992 | |||||||||
Methanex Corp., 5.25%, 12/15/29, Callable 9/15/29 @ 100 | 5,000 | 5,055 | |||||||||
Mineral Resources Ltd., 8.13%, 5/1/27, Callable 5/1/22 @ 106.09 (a) | 3,000 | 3,210 | |||||||||
NOVA Chemicals Corp., 4.25%, 5/15/29, Callable 5/15/24 @ 102.13 (a) (l) | 2,000 | 1,903 | |||||||||
The Scotts Miracle-Gro Co., 4.38%, 2/1/32, Callable 8/1/26 @ 102.19 | 2,000 | 1,940 | |||||||||
41,528 | |||||||||||
Sovereign Bond (0.1%): | |||||||||||
| Bahamas Government International Bond, 6.00%, 11/21/28, Callable 8/21/28 @ 100 (a) | 1,500 | 1,215 | |||||||||
Utilities (0.9%): | |||||||||||
AES Gener SA, 7.13% (USSW5+464bps), 3/26/79, Callable 4/7/24 @ 100 (a) (d) | 2,750 | 2,809 | |||||||||
Comision Federal de Electricidad, 3.35%, 2/9/31, Callable 11/9/30 @ 100 (a) (l) | 1,000 | 935 | |||||||||
| Electricite de France SA, 5.25% (USSW10+371bps), Callable 1/29/23 @ 100 (a) (d) (j) | 3,000 | 3,049 | |||||||||
Empresa Electrica Cochrane SpA, 5.50%, 5/14/27 (a) (l) | 2,377 | 2,364 | |||||||||
ENEL SpA, 8.75% (USSW5+588bps), 9/24/73, Callable 9/24/23 @ 100 (a) (d) | 1,975 | 2,177 | |||||||||
11,334 | |||||||||||
Total Yankee Dollars (Cost $209,905) | 215,563 | ||||||||||
Municipal Bonds (0.3%) | |||||||||||
Illinois (0.2%): | |||||||||||
City of Chicago, GO, Series B, 7.05%, 1/1/29 | 1,480 | 1,701 | |||||||||
New Jersey (0.1%): | |||||||||||
South Jersey Transportation Authority Revenue, Series B, 3.36%, 11/1/28 | 1,375 | 1,435 | |||||||||
Total Municipal Bonds (Cost $2,855) | 3,136 | ||||||||||
Commercial Paper (2.9%) | |||||||||||
Albemarle Corp., 0.36%, 2/4/22 (a) (o) | 6,000 | 6,000 | |||||||||
| Aviation Captial Group LLC 0.20%, 2/7/22 (a) | 9,000 | 8,999 | |||||||||
0.20%, 2/14/22 (a) | 500 | 500 | |||||||||
Energy Transfer Partners LP, 0.31%, 2/1/22 (o) | 5,400 | 5,400 | |||||||||
See notes to financial statements.
16
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Jabil, Inc., 0.38%, 2/1/22 (a) (o) | $ | 12,000 | $ | 12,000 | |||||||
Viacom, Inc., 0.41%, 2/15/22 (a) | 2,000 | 2,000 | |||||||||
Total Commercial Paper (Cost $34,899) | 34,899 | ||||||||||
Exchange-Traded Funds (0.2%) | |||||||||||
iShares iBoxx High Yield Corporate Bond ETF (k) (l) | 11,515 | 975 | |||||||||
SPDR Bloomberg High Yield Bond ETF (k) (l) | 9,213 | 973 | |||||||||
Total Exchange-Traded Funds (Cost $2,000) | 1,948 | ||||||||||
Collateral for Securities Loaned (2.1%)^ | |||||||||||
| Fidelity Investments Money Market Government Portfolio, Institutional Shares, 0.01% (q) | 16,452,185 | 16,452 | |||||||||
HSBC U.S. Government Money Market Fund, I Shares, 0.03% (q) | 9,422,016 | 9,422 | |||||||||
Total Collateral for Securities Loaned (Cost $25,874) | 25,874 | ||||||||||
Total Investments (Cost $1,236,038) — 102.3% | 1,251,197 | ||||||||||
Liabilities in excess of other assets — (2.3)% | (28,301 | ) | |||||||||
NET ASSETS — 100.00% | $ | 1,222,896 | |||||||||
At January 31, 2022, the Fund's investments in foreign securities were 17.9% of net assets.
^ 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 (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of January 31, 2022, the fair value of these securities was $763,314 (thousands) and amounted to 62.4% of net assets.
(b) Amount represents less than 0.05% of net assets.
(c) 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, 2022.
(d) Variable or Floating-Rate Security. Rate disclosed is as of January 31, 2022.
(e) Security is interest only.
(f) Non-income producing security.
(g) Security was fair valued based upon procedures approved by the Board of Trustees and represents 0.1% of net assets as of January 31, 2022. This security is classified as Level 3 within the fair value hierarchy. (See Note 2 in the Notes to Financial Statements)
(h) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. At January 31, 2022, illiquid securities were 0.2% of the Fund's net assets.
(i) Rounds to less than $1 thousand.
(j) Security is perpetual and has no final maturity date but may be subject to calls at various dates in the future.
See notes to financial statements.
17
| USAA Mutual Funds Trust USAA High Income Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Unaudited)
(k) All or a portion of this security has been segregated as collateral for securities purchased on a delayed-delivery and/or when-issued basis.
(l) All or a portion of this security is on loan.
(m) Security or portion of security purchased on a delayed-delivery and/or when-issued basis.
(n) 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.
(o) Rate represents the effective yield at January 31, 2022.
(p) Zero-coupon bond.
(q) Rate disclosed is the daily yield on January 31, 2022.
(r) Coupon may be 7.13% PIK.
(s) Currently the issuer is in default with respect to interest and/or principal payments.
ADR — American Depositary Receipt
bps — Basis points
Continuously callable — Investment is continuously callable or will be continuously callable on any date after the first call date until its maturity.
ETF — Exchange-Traded Fund
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, 2022, based on the last reset date of the security
LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of January 31, 2022, 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
SOFR — Secured Overnight Financing Rate
ULC — Unlimited Liability Co.
USISDA05 — 5 Year ICE Swap Rate, rate disclosed as of January 31, 2022.
USSW10 — USD 10 Year Swap Rate, rate disclosed as of January 31, 2022.
USSW5 — USD 5 Year Swap Rate, rate disclosed as of January 31, 2022.
See notes to financial statements.
18
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA High Income Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,236,038) | $ | 1,251,197 | (a) | ||||
Cash | 721 | ||||||
Deposit with broker for futures contracts | 90 | ||||||
Receivables: | |||||||
Interest and dividends | 16,736 | ||||||
Capital shares issued | 302 | ||||||
Investments sold | 2,137 | ||||||
From Adviser | 18 | ||||||
Prepaid expenses | 29 | ||||||
Total Assets | 1,271,230 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 25,874 | ||||||
Investments purchased | 17,604 | ||||||
Capital shares redeemed | 3,921 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 459 | ||||||
Administration fees | 146 | ||||||
Custodian fees | 24 | ||||||
Transfer agent fees | 217 | ||||||
Compliance fees | 1 | ||||||
Trustees' fees | 1 | ||||||
| 12b-1 fees | — | (b) | |||||
Other accrued expenses | 87 | ||||||
Total Liabilities | 48,334 | ||||||
Net Assets: | |||||||
Capital | 1,372,157 | ||||||
Total accumulated earnings/(loss) | (149,261 | ) | |||||
Net Assets | $ | 1,222,896 | |||||
Net Assets | |||||||
Fund Shares | $ | 888,280 | |||||
Institutional Shares | 331,939 | ||||||
Class A | 2,357 | ||||||
R6 Shares | 320 | ||||||
Total | $ | 1,222,896 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 116,942 | ||||||
Institutional Shares | 43,753 | ||||||
Class A | 309 | ||||||
R6 Shares | 42 | ||||||
Total | 161,046 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 7.60 | |||||
Institutional Shares | 7.59 | ||||||
Class A | 7.62 | ||||||
R6 Shares | 7.59 | ||||||
Maximum Sales Charge — Class A | 2.25 | % | |||||
Maximum offering price | |||||||
| (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 7.80 | |||||
(a) Includes $24,969 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.
19
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended January 31, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA High Income Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 1,637 | |||||
Interest | 36,922 | ||||||
Securities lending (net of fees) | 194 | ||||||
Total Income | 38,753 | ||||||
Expenses: | |||||||
Investment advisory fees | 3,141 | ||||||
Administration fees — Fund Shares | 710 | ||||||
Administration fees — Institutional Shares | 246 | ||||||
Administration fees — Class A | 2 | ||||||
Administration fees — R6 Shares | — | (a) | |||||
Sub-Administration fees | 12 | ||||||
| 12b-1 fees — Class A | 3 | ||||||
Custodian fees | 53 | ||||||
Transfer agent fees — Fund Shares | 582 | ||||||
Transfer agent fees — Institutional Shares | 246 | ||||||
Transfer agent fees — Class A | 1 | ||||||
Transfer agent fees — R6 Shares | — | (a) | |||||
Trustees' fees | 24 | ||||||
Compliance fees | 5 | ||||||
Legal and audit fees | 46 | ||||||
State registration and filing fees | 45 | ||||||
Interfund lending fees | 3 | ||||||
Other expenses | 108 | ||||||
Total Expenses | 5,227 | ||||||
Expenses waived/reimbursed by Adviser | (64 | ) | |||||
Net Expenses | 5,163 | ||||||
Net Investment Income (Loss) | 33,590 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 49,560 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | (104,095 | ) | |||||
Net realized/unrealized gains (losses) on investments | (54,535 | ) | |||||
Change in net assets resulting from operations | $ | (20,945 | ) | ||||
(a) Rounds to less than $1 thousand.
See notes to financial statements.
20
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands)
USAA High Income Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 33,590 | $ | 91,178 | |||||||
Net realized gains (losses) from investments | 49,560 | 20,046 | |||||||||
| Net change in unrealized appreciation/depreciation on investments | (104,095 | ) | 92,386 | ||||||||
Change in net assets resulting from operations | (20,945 | ) | 203,610 | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (23,209 | ) | (48,734 | ) | |||||||
Institutional Shares | (11,869 | ) | (40,433 | ) | |||||||
Class A | (61 | ) | (296 | ) | |||||||
R6 Shares | (12 | ) | (208 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (35,151 | ) | (89,671 | ) | |||||||
Change in net assets resulting from capital transactions | (488,254 | ) | (185,398 | ) | |||||||
Change in net assets | (544,350 | ) | (71,459 | ) | |||||||
Net Assets: | |||||||||||
Beginning of period | 1,767,246 | 1,838,705 | |||||||||
End of period | $ | 1,222,896 | $ | 1,767,246 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 36,164 | $ | 90,425 | |||||||
Distributions reinvested | 21,560 | 45,288 | |||||||||
Cost of shares redeemed | (93,981 | ) | (262,821 | ) | |||||||
Total Fund Shares | $ | (36,257 | ) | $ | (127,108 | ) | |||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 6,585 | $ | 130,926 | |||||||
Distributions reinvested | 11,853 | 40,372 | |||||||||
Cost of shares redeemed | (470,183 | ) | (219,424 | ) | |||||||
Total Institutional Shares | $ | (451,745 | ) | $ | (48,126 | ) | |||||
Class A | |||||||||||
Proceeds from shares issued | $ | 42 | $ | 82 | |||||||
Distributions reinvested | 52 | 102 | |||||||||
Cost of shares redeemed | (220 | ) | (5,204 | ) | |||||||
Total Class A | $ | (126 | ) | $ | (5,020 | ) | |||||
R6 Shares | |||||||||||
Proceeds from shares issued | $ | 39 | $ | 162 | |||||||
Distributions reinvested | 12 | 22 | |||||||||
Cost of shares redeemed | (177 | ) | (5,328 | ) | |||||||
Total R6 Shares | $ | (126 | ) | $ | (5,144 | ) | |||||
Change in net assets resulting from capital transactions | $ | (488,254 | ) | $ | (185,398 | ) | |||||
(continues on next page)
See notes to financial statements.
21
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands) (continued)
USAA High Income Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 4,615 | 11,660 | |||||||||
Reinvested | 2,762 | 5,880 | |||||||||
Redeemed | (12,010 | ) | (34,060 | ) | |||||||
Total Fund Shares | (4,633 | ) | (16,520 | ) | |||||||
Institutional Shares | |||||||||||
Issued | 836 | 17,052 | |||||||||
Reinvested | 1,518 | 5,246 | |||||||||
Redeemed | (59,880 | ) | (28,493 | ) | |||||||
Total Institutional Shares | (57,526 | ) | (6,195 | ) | |||||||
Class A | |||||||||||
Issued | 4 | 12 | |||||||||
Reinvested | 7 | 13 | |||||||||
Redeemed | (28 | ) | (662 | ) | |||||||
Total Class A | (17 | ) | (637 | ) | |||||||
R6 Shares | |||||||||||
Issued | 5 | 20 | |||||||||
Reinvested | 2 | 3 | |||||||||
Redeemed | (23 | ) | (681 | ) | |||||||
Total R6 Shares | (16 | ) | (658 | ) | |||||||
Change in Shares | (62,192 | ) | (24,010 | ) | |||||||
See notes to financial statements.
22
This page is intentionally left blank.
23
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 | Total Distributions | ||||||||||||||||||||||
USAA High Income Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 7.92 | 0.18 | (d) | (0.31 | ) | (0.13 | ) | (0.19 | ) | (0.19 | ) | |||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 7.44 | 0.39 | (d) | 0.47 | 0.86 | (0.38 | ) | (0.38 | ) | |||||||||||||||||
2020 | $ | 7.91 | 0.44 | (d) | (0.47 | ) | (0.03 | ) | (0.44 | ) | (0.44 | ) | |||||||||||||||
2019 | $ | 8.01 | 0.47 | (0.10 | ) | 0.37 | (0.47 | ) | (0.47 | ) | |||||||||||||||||
2018 | $ | 8.27 | 0.47 | (0.26 | ) | 0.21 | (0.47 | ) | (0.47 | ) | |||||||||||||||||
2017 | $ | 7.90 | 0.47 | 0.37 | 0.84 | (0.47 | ) | (0.47 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 7.91 | 0.19 | (d) | (0.31 | ) | (0.12 | ) | (0.20 | ) | (0.20 | ) | |||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 7.43 | 0.39 | (d) | 0.48 | 0.87 | (0.39 | ) | (0.39 | ) | |||||||||||||||||
2020 | $ | 7.90 | 0.44 | (d) | (0.47 | ) | (0.03 | ) | (0.44 | ) | (0.44 | ) | |||||||||||||||
2019 | $ | 8.00 | 0.47 | (0.09 | ) | 0.38 | (0.48 | ) | (0.48 | ) | |||||||||||||||||
2018 | $ | 8.26 | 0.48 | (0.26 | ) | 0.22 | (0.48 | ) | (0.48 | ) | |||||||||||||||||
2017 | $ | 7.90 | 0.48 | 0.36 | 0.84 | (0.48 | ) | (0.48 | ) | ||||||||||||||||||
Class A | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 7.94 | 0.18 | (d) | (0.31 | ) | (0.13 | ) | (0.19 | ) | (0.19 | ) | |||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 7.46 | 0.38 | (d) | 0.47 | 0.85 | (0.37 | ) | (0.37 | ) | |||||||||||||||||
2020 | $ | 7.93 | 0.43 | (d) | (0.48 | ) | (0.05 | ) | (0.42 | ) | (0.42 | ) | |||||||||||||||
2019 | $ | 8.03 | 0.46 | (0.10 | ) | 0.36 | (0.46 | ) | (0.46 | ) | |||||||||||||||||
2018 | $ | 8.28 | 0.46 | (0.26 | ) | 0.20 | (0.45 | ) | (0.45 | ) | |||||||||||||||||
2017 | $ | 7.92 | 0.46 | 0.35 | 0.81 | (0.45 | ) | (0.45 | ) | ||||||||||||||||||
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment are calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019 and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
See notes to financial statements.
24
USAA Mutual Funds Trust | Financial Highlights — continued | ||||||
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
| Redemption Fees Added to Beneficial Interests | Net Asset Value, End of Period | Total Return (Excludes Sales Charge)*(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, 2022 (Unaudited): | $ | — | $ | 7.60 | (1.63 | )% | 0.75 | % | 4.64 | % | 0.75 | % | $ | 888,280 | 17 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | — | $ | 7.92 | 11.84 | % | 0.75 | % | 5.01 | % | 0.75 | % | $ | 962,971 | 30 | % | ||||||||||||||||||||
2020 | — | $ | 7.44 | (0.27 | )% | 0.81 | % | 5.82 | % | 0.81 | % | $ | 1,027,510 | 48 | % | ||||||||||||||||||||
2019 | — | (e) | $ | 7.91 | 4.85 | % | 0.85 | % | 5.93 | % | 0.85 | % | $ | 1,212,711 | 31 | % | |||||||||||||||||||
2018 | — | (e) | $ | 8.01 | 2.65 | % | 0.81 | % | 5.79 | % | 0.81 | % | $ | 1,207,790 | 22 | % | |||||||||||||||||||
2017 | — | (e) | $ | 8.27 | 10.92 | % | 0.83 | % | 5.80 | % | 0.83 | % | $ | 1,225,990 | 21 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | — | $ | 7.59 | (1.58 | )% | 0.65 | % | 4.74 | % | 0.67 | % | $ | 331,939 | 17 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | — | $ | 7.91 | 11.93 | % | 0.67 | % | 5.08 | % | 0.68 | % | $ | 801,226 | 30 | % | ||||||||||||||||||||
2020 | — | $ | 7.43 | (0.19 | )% | 0.72 | % | 5.91 | % | 0.73 | % | $ | 798,688 | 48 | % | ||||||||||||||||||||
2019 | — | (e) | $ | 7.90 | 4.94 | % | 0.78 | % | 6.00 | % | 0.78 | % | $ | 913,599 | 31 | % | |||||||||||||||||||
2018 | — | (e) | $ | 8.00 | 2.74 | % | 0.72 | % | 5.88 | % | 0.72 | % | $ | 966,124 | 22 | % | |||||||||||||||||||
2017 | — | (e) | $ | 8.26 | 10.89 | % | 0.75 | % | 5.89 | % | 0.75 | % | $ | 970,767 | 21 | % | |||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | — | $ | 7.62 | (1.66 | )% | 0.83 | % | 4.56 | % | 1.60 | % | $ | 2,357 | 17 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | — | $ | 7.94 | 11.58 | % | 0.92 | % | 4.89 | % | 1.37 | % | $ | 2,586 | 30 | % | ||||||||||||||||||||
2020 | — | $ | 7.46 | (0.44 | )% | 0.98 | % | 5.63 | % | 1.09 | % | $ | 7,184 | 48 | % | ||||||||||||||||||||
2019 | — | (e) | $ | 7.93 | 4.69 | % | 1.00 | % | 5.78 | % | 1.21 | % | $ | 10,021 | 31 | % | |||||||||||||||||||
2018 | — | (e) | $ | 8.03 | 2.55 | % | 1.02 | %(f) | 5.58 | % | 1.13 | % | $ | 10,019 | 22 | % | |||||||||||||||||||
2017 | — | (e) | $ | 8.28 | 10.49 | % | 1.08 | %(g) | 5.55 | % | 1.15 | % | $ | 10,096 | 21 | % | |||||||||||||||||||
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Amount is less than $0.005 per share.
(f) Prior to December 1, 2017, USAA Asset Management Company ("AMCO") (previous Investment Adviser) voluntarily agreed to limit the annual expenses of Class A to 1.05% of the Class A average daily net assets.
(g) Prior to December 1, 2016, AMCO voluntarily agreed to limit the annual expenses of Class A to 1.15% of the Class A average daily net assets.
(continues on next page)
See notes to financial statements.
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 | Total Distributions | ||||||||||||||||||||||
USAA High Income Fund | |||||||||||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 7.92 | 0.21 | (d) | (0.32 | ) | (0.11 | ) | (0.22 | ) | (0.22 | ) | |||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 7.43 | 0.40 | (d) | 0.49 | 0.89 | (0.40 | ) | (0.40 | ) | |||||||||||||||||
2020 | $ | 7.90 | 0.45 | (d) | (0.47 | ) | (0.02 | ) | (0.45 | ) | (0.45 | ) | |||||||||||||||
2019 | $ | 8.01 | 0.48 | (0.10 | ) | 0.38 | (0.49 | ) | (0.49 | ) | |||||||||||||||||
2018 | $ | 8.26 | 0.48 | (0.25 | ) | 0.23 | (0.48 | ) | (0.48 | ) | |||||||||||||||||
| December 1, 2016 (e) through July 31, 2017 | $ | 7.98 | 0.32 | 0.28 | 0.60 | (0.32 | ) | (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.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment are calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ 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 period beginning July 1, 2019 and in effect through June 30, 2023, 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.
† Does not include acquired fund fees, if any.
(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.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Commencement of operations.
See notes to financial statements.
26
USAA Mutual Funds Trust | Financial Highlights — continued | ||||||
For a Share Outstanding Throughout Each Period (continued)
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||||||
R6 Shares | |||||||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | — | $ | 7.59 | (1.46 | )% | 0.17 | % | 5.21 | % | 4.24 | % | $ | 320 | 17 | % | |||||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||||||
2021 | — | $ | 7.92 | 12.25 | % | 0.58 | % | 5.25 | % | 0.92 | % | $ | 463 | 30 | % | ||||||||||||||||||||
2020 | — | $ | 7.43 | (0.12 | )% | 0.64 | % | 5.98 | % | 0.82 | % | $ | 5,323 | 48 | % | ||||||||||||||||||||
2019 | — | $ | 7.90 | 4.95 | % | 0.65 | % | 6.13 | % | 0.96 | % | $ | 5,214 | 31 | % | ||||||||||||||||||||
2018 | — | $ | 8.01 | 2.94 | % | 0.65 | % | 5.95 | % | 0.92 | % | $ | 5,055 | 22 | % | ||||||||||||||||||||
| December 1, 2016 (e) through July 31, 2017 | — | $ | 8.26 | 7.64 | % | 0.65 | % | 5.88 | % | 1.26 | % | $ | 5,177 | 21 | % | ||||||||||||||||||||
See notes to financial statements.
27
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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, Class A, 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 sales charges, 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 U.S. Generally Accepted Accounting Principles ("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 risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
28
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETFs") and American Depositary Receipts ("ADRs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq 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 are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
Debt securities are valued each business day by a pricing service approved by the Board. The approved pricing service uses the evaluated bid or the last sale price to value securities. Debt obligations maturing within 60 days may be valued at amortized cost, provided that the amortized cost represents the fair value of such securities. 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, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically 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 NAV to be more reliable than it otherwise would be.
A summary of the valuations as of January 31, 2022, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Asset-Backed Securities | $ | — | $ | 2,758 | $ | — | $ | 2,758 | |||||||||||
Collateralized Mortgage Obligations | — | 280 | — | 280 | |||||||||||||||
Common Stocks | 9,762 | — | 1,790 | 11,552 | |||||||||||||||
Preferred Stocks | 27,796 | — | — | 27,796 | |||||||||||||||
Warrants | — | (a) | — | — | — | (a) | |||||||||||||
Senior Secured Loans | — | 28,697 | 6 | 28,703 | |||||||||||||||
Corporate Bonds | — | 898,688 | — | 898,688 | |||||||||||||||
Yankee Dollars | �� | — | 215,563 | — | 215,563 | ||||||||||||||
Municipal Bonds | — | 3,136 | — | 3,136 | |||||||||||||||
Commercial Paper | — | 34,899 | — | 34,899 | |||||||||||||||
Exchange-Traded Funds | 1,948 | — | — | 1,948 | |||||||||||||||
Collateral for Securities Loaned | 25,874 | — | — | 25,874 | |||||||||||||||
Total | $ | 65,380 | $ | 1,184,021 | $ | 1,796 | $ | 1,251,197 | |||||||||||
(a) Less than $1 thousand.
As of January 31, 2022, there were no significant Level 3 holdings in the fair value hierarchy. For the six months ended January 31, 2022, there were no transfers in or out of Level 3 in the 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.
29
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs, 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 often 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 the ETF is 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 or 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 NAV. 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 Payables for Investments purchased on the accompanying Statement of Assets and Liabilities and the segregated assets are identified on 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. Payments 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 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," respectively), 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.
30
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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 the London Interbank Offered Rate ("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 invests 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.
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 enter into futures contracts in an effort to hedge against market risks. 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. The collateral held by the Fund is reflected on the Statement of Assets and Liabilities under Deposit with broker for futures contracts. Management has determined that no offsetting requirements exist as a result of their conclusion that the Fund is not subject to master netting agreements for futures contracts. The Fund did not hold futures contracts as of January 31, 2022.
31
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(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 or 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 discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis. Paydown gains or losses on applicable securities, if any, are recorded as components of Interest income on the Statement of Operations.
The Fund may receive other income from investments in loan assignments and/or unfunded commitments, including amendment fees, consent fees, and commitment fees. These fees are recorded as income when received. These amounts, if received, are included in Interest income on the Statement of Operations.
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 and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially 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 generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund effectively does not have control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. 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. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk 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 repledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of January 31, 2022.
| Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
| $ | 24,969 | $ | — | $ | 25,874 | ||||||
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.
32
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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 years, which includes the current fiscal tax year end). 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 an 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, printing fees, and 12b-1 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, 2022, 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) | |||||||||
| $ | — | $ | 5,076 | $ | 674 | ||||||
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended January 31, 2022, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 230,937 | $ | 680,986 | ||||
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The 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 www.vcm.com. As of January 31, 2022, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 0.9 | ||||||
USAA Target Retirement Income Fund | 2.8 | ||||||
USAA Target Retirement 2030 Fund | 4.2 | ||||||
USAA Target Retirement 2040 Fund | 3.8 | ||||||
USAA Target Retirement 2050 Fund | 0.8 | ||||||
USAA Target Retirement 2060 Fund | 0.0 | * | |||||
* Amount is less than 0.05%.
33
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and 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 the largest funds within the Lipper High Yield Bond Funds category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
| Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
| +/- 20 to 50 | +/- 4 | ||||||
| +/- 51 to 100 | +/- 5 | ||||||
| +/- 101 and greater | +/- 6 | ||||||
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective 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.
For the period August 1, 2021, to January 31, 2022, performance adjustments were $(264), $(195), $(2), and $(1) for Fund Shares, Institutional Shares, Class A, and R6 Shares, in thousands, respectively. Performance adjustments were (0.06)%, (0.08)%, (0.17)%, and (0.48)% for Fund Shares, Institutional Shares, Class A, and R6 Shares, respectively. The performance adjustment rate included in the
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USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
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investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
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, 2022, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, 0.10%, 0.15%, and 0.05%, which is based on the Fund's average daily net assets of the Fund Shares, Institutional Shares, Class A, and R6 Shares, respectively. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund 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 fees for Institutional Shares, Class A, and R6 Shares are paid monthly based on a fee accrued daily at an annualized rate of 0.10%, 0.10% and 0.01%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred and paid to VCTA for the six months ended January 31, 2022, 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 Services, 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.
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 Class A. The distribution and service fees paid to the Distributor
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may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A. Amounts incurred and paid to the Distributor for the six months ended January 31, 2022, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions in connection with sales of Class A. For the six months ended January 31, 2022, the Distributor received less than $1 thousand from commissions earned in connection with sales of Class A.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 limits for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, 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. As of January 31, 2022, the expense limits (excluding voluntary waivers) were 0.83%, 0.73%, 1.00%, and 0.65% for Fund Shares, Institutional Shares, Class A, and R6 Shares, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of January 31, 2022, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at January 31, 2022.
| Expires 2022 | Expires 2023 | Expires 2024 | Expires 2025 | Total | |||||||||||||||
| $ | 10 | $ | 69 | $ | 114 | $ | 64 | $ | 257 | ||||||||||
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, 2022.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Debt Securities Risk — 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.
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Other factors that may affect the value of debt securities include, among others, public health crises and responses by governments and companies to such crises. These and other events may affect the creditworthiness of the issuer of a debt security and may impair an issuer's ability to timely meet its debt obligations as they come due.
Credit Risk — 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.
High-Yield/Junk Bond 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 and longer periods of time.
LIBOR Discontinuation Risk — The LIBOR discontinuation may adversely affect the financial markets generally and the Fund's operations, finances and investments specifically. LIBOR has been the principal floating-rate benchmark in the financial markets, and a large portion of the Fund's assets are tied to LIBOR. However, LIBOR has been or will be discontinued as a floating rate benchmark. The date of discontinuation depends on the LIBOR currency and tenor. With limited exceptions, no new LIBOR obligations will be entered into after December 31, 2021. Existing LIBOR obligations have transitioned or will transition to another benchmark, depending on the LIBOR currency and tenor. For some existing LIBOR-based obligations, the contractual consequences of the discontinuation of LIBOR may not be clear.
Non-LIBOR floating-rate obligations, including Secured Overnight Financing Rate ("SOFR")-based obligations, may have returns and values that fluctuate more than those of floating-rate debt obligations that are based on LIBOR or other rates. Also, because SOFR and some alternative floating rates are relatively new market indexes, markets for certain non-LIBOR obligations may never develop or may not be liquid. Market terms for non-LIBOR floating rate obligations, such as the spread over the index reflected in interest-rate provisions, may evolve over time, and prices of non-LIBOR floating rate obligations may be different depending on when they are issued and changing views about correct spread levels.
Various SOFR-based rates, including SOFR-based term rates, and various non-SOFR-based rates are expected to develop in response to the discontinuation of U.S. dollar LIBOR, which may create various risks for the Fund and the financial markets more generally. There are non-LIBOR forward-looking floating rates that are not based on SOFR and that may be considered by participants in the financial markets as LIBOR alternatives. Such rates include Ameribor (American Interbank Offered Rate), BSBY (Bloomberg Short-Term Bank Yield Index) and BYI (Bank Yield Index). Unlike forward-looking SOFR-based term rates, such rates are intended to reflect a bank credit spread component.
It is not clear how replacement rates for LIBOR — including SOFR-based rates and non-SOFR-based rates — will develop and to what extent they will be used. There is no assurance that these replacement rates will be suitable substitutes for LIBOR, and thus the substitution of such rates for LIBOR could have an adverse effect on the Fund and the financial markets more generally. Concerns about market depth and stability could affect the development of non-SOFR-based term rates, and such rates may create various risks, which may or may not be similar to the risks relating to SOFR.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other catastrophes, may add to instability in global economies and markets generally, and may lead to
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increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended January 31, 2022, Citibank received 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, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected 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, 2022.
Interfund Lending:
The Trust and the 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 Funds Complex that is permitted to participate in the Facility, 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, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. 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, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees.
The average borrowing or lending for the days outstanding and average interest rate for the Fund during the six months ended January 31, 2022, were as follows (amounts in thousands):
| Borrower or Lender | Amount Outstanding at January 31, 2022 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
| Borrower | $ | — | $ | 34,024 | 6 | 0.59 | % | $ | 43,998 | ||||||||||||||
* For the six months ended January 31, 2022, based on the number of days borrowings were outstanding.
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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, 2022.
As of July 31, 2021, the Fund had net capital loss carryforwards as summarized in the table below (amounts in thousands). It is unlikely that the Board will authorize a distribution of capital gains realized in the future until the capital loss carryforwards have been used.
| Short-Term Amount | Long-Term Amount | Total | |||||||||
| $ | 30,452 | $ | 186,004 | $ | 216,456 | ||||||
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USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
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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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
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. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; 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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21- 1/31/22* | Hypothetical Expenses Paid During Period 8/1/21- 1/31/22* | Annualized Expense Ratio During Period 8/1/21- 1/31/22 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 983.70 | $ | 1,021.42 | $ | 3.75 | $ | 3.82 | 0.75 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 984.20 | 1,021.93 | 3.25 | 3.31 | 0.65 | % | ||||||||||||||||||||
Class A | 1,000.00 | 983.40 | 1,021.02 | 4.15 | 4.23 | 0.83 | % | ||||||||||||||||||||
R6 Shares | 1,000.00 | 985.40 | 1,024.35 | 0.85 | 0.87 | 0.17 | % | ||||||||||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
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Considerations of the Board in Continuing the Investment Advisory Agreement
USAA High Income Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement was approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and the Adviser, and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser. At the meeting at which the renewal of the Advisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder
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services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services and the effects of any performance adjustment1, as well as any fee waivers and reimbursements — was below the median of its expense group and its expense universe. The data indicated that the Fund's total expenses, including after any reimbursements, were below the median of its expense group and its expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund.
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total returns relative to its Lipper index and other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was above the average of its performance universe for the one- and ten-year periods ended September 30, 2021, and was below the average of its performance universe for the three- and five-year periods ended September 30, 2021,
1 The Adviser previously agreed that no performance adjustment (positive or negative) would be made to the amount payable to the Adviser from July 1, 2019, through June 30, 2020.
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(Unaudited)
and was above its Lipper index for the one-year period ended September 30, 2021, and was below its Lipper index for the three-, five- and ten-year periods ended September 30, 2021. The Board took into account management's discussion of the Fund's performance, including the reasons for the Fund's underperformance over the three-year period ended September 30, 2021.
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser reimbursed or waived a portion of its management fees to the Fund. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board considered whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in any economies of scale. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board also considered the effect of the change in size, if any, of each of the Fund's classes on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
43
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800) 235-8396 | ||||||
40051-0322
January 31, 2022
Semi Annual Report
USAA Money Market Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, 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.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 8 | ||||||
Statement of Operations | 9 | ||||||
Statements of Changes in Net Assets | 10 | ||||||
Financial Highlights | 12 | ||||||
Notes to Financial Statements | 14 | ||||||
Supplemental Information | 21 | ||||||
Proxy Voting and Portfolio Holdings Information | 21 | ||||||
Expense Example | 21 | ||||||
Advisory Contract Approval | 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, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
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.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
| USAA Mutual Funds Trust USAA Money Market Fund | January 31, 2022 | ||||||
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks the highest income consistent with preservation of capital and the maintenance of liquidity.
Portfolio Mix
January 31, 2022
(% of Net Assets)
Percentages are of the net assets of the Fund and may not equal 100%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
| USAA Mutual Funds Trust USAA Money Market Fund | Schedule of Portfolio Investments January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Corporate Bonds (9.9%) | |||||||||||
Consumer Discretionary (0.2%): | |||||||||||
| Harvest Time Tabernacle, Inc. (LOC — Federal Home Loan Bank of Dallas), 0.18%, 8/1/37 (a) | $ | 3,875 | $ | 3,875 | |||||||
Consumer Staples (1.4%): | |||||||||||
| Altoona-Blair County Development Corp. (LOC — PNC Financial Services Group), 0.15%, 4/1/35, Callable 2/22/22 @ 100 (a) (b) | 20,000 | 20,000 | |||||||||
Labcon North America (LOC — BNP Paribas), 0.20%, 6/1/44 (a) | 6,820 | 6,820 | |||||||||
26,820 | |||||||||||
Financials (8.3%): | |||||||||||
| Bass Pro Rossford Development Co. LLC (LOC — Fifth Third Bank), 0.17%, 11/1/27 (a) | 18,255 | 18,255 | |||||||||
| Carol Allen Family Liquidity Trust (LOC — Comerica Bank, N.A.), 0.17%, 3/1/48, Callable 3/14/22 @ 100 (a) | 25,000 | 25,000 | |||||||||
| Chad J Himmel Irrevocable Trust (LOC — Federal Home Loan Bank of Dallas), 0.12%, 7/1/48, Callable 3/14/22 @ 100 (a) | 5,290 | 5,290 | |||||||||
| Columbus Hotel Investment One LLC (LOC — Federal Home Loan Bank of New York), 0.12%, 10/1/48, Callable 3/14/22 @ 100 (a) | 6,535 | 6,535 | |||||||||
Elsinore Properties LP (LOC — Fifth Third Bank), 0.12%, 2/1/37 (a) | 4,905 | 4,905 | |||||||||
Fiore Capital LLC (LOC — Wells Fargo & Co.), 0.15%, 8/1/45 (a) | 24,990 | 24,990 | |||||||||
| Gillean Family Trust (LOC — Federal Home Loan Bank of Dallas), 0.12%, 12/1/39, Callable 3/14/22 @ 100 (a) | 6,140 | 6,140 | |||||||||
| Herman & Kittle Capital LLC (LOC — Federal Home Loan Bank of Cincinnati), 0.12%, 2/1/37 (a) | 50 | 50 | |||||||||
| Lamar Avenue Trust (LOC — Federal Home Loan Bank of Dallas), 0.12%, 12/1/37, Callable 3/14/22 @ 100 (a) | 4,445 | 4,445 | |||||||||
| Lavonia O Frick Family Trust (LOC — Federal Home Loan Bank of Atlanta), 0.12%, 8/1/48, Callable 3/14/22 @ 100 (a) | 6,000 | 6,000 | |||||||||
| Mark E Potteiger Irrevocable Life Insurance Trust (LOC — Federal Home Loan Bank of Dallas), 0.12%, 6/1/48, Callable 3/14/22 @ 100 (a) | 4,025 | 4,025 | |||||||||
| NLS Irrevocable Trust (LOC — Bank of Oklahoma, N.A.), 0.17%, 12/1/39, Callable 3/14/22 @ 100 (a) | 11,260 | 11,260 | |||||||||
| Opler Irrevocable Trust (LOC — Bank of Oklahoma, N.A.), 0.17%, 11/1/39, Callable 3/14/22 @ 100 (a) | 9,280 | 9,280 | |||||||||
Stobro Co. LP (LOC — Federal Home Loan Bank of Pittsburgh), 0.24%, 1/1/32 (a) | 8,955 | 8,955 | |||||||||
| The Debra B Kennedy Irrevocable Trust (LOC — Federal Home Loan Bank of Dallas), 0.12%, 5/1/48, Callable 3/14/22 @ 100 (a) | 4,420 | 4,420 | |||||||||
| The Dennis Wesley Co., Inc. (LOC — Federal Home Loan Bank of Indianapolis), 0.12%, 11/15/39, Callable 3/14/22 @ 100 (a) | 10,125 | 10,125 | |||||||||
| The Linda E Krejsek Life Insurance Trust (LOC — Federal Home Loan Bank of Dallas), 0.15%, 9/1/37 (a) | 5,490 | 5,490 | |||||||||
155,165 | |||||||||||
Total Corporate Bonds (Cost $185,860) | 185,860 | ||||||||||
See notes to financial statements.
3
| USAA Mutual Funds Trust USAA Money Market Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Yankee Dollars (1.1%) | |||||||||||
Materials (1.1%): | |||||||||||
SSAB AB (LOC — Swedbank AB), 0.12%, 4/1/34 (a) | $ | 20,000 | $ | 20,000 | |||||||
Total Yankee Dollars (Cost $20,000) | 20,000 | ||||||||||
Municipal Bonds (12.4%) | |||||||||||
Arizona (1.4%): | |||||||||||
| Yavapai County IDA Revenue (LOC — Bank of Nova Scotia), 0.15%, 9/1/35, Continuously Callable @100 (a) | 26,625 | 26,625 | |||||||||
Connecticut (0.2%): | |||||||||||
| Connecticut State Development Authority Revenue (LOC — Toronto-Dominion Bank), 0.26%, 12/1/28, Continuously Callable @100 (a) | 3,980 | 3,980 | |||||||||
Georgia (1.7%): | |||||||||||
| Appling County Development Authority Revenue, 0.18%, 9/1/41, Continuously Callable @100 (a) | 15,900 | 15,900 | |||||||||
| The Burke County Development Authority Revenue, Series 1, 0.14%, 7/1/49, Continuously Callable @100 (a) | 15,000 | 15,000 | |||||||||
30,900 | |||||||||||
Indiana (0.6%): | |||||||||||
| City of Knox Revenue (LOC — SunTrust Bank), 0.18%, 2/1/46, Continuously Callable @100 (a) | 11,300 | 11,300 | |||||||||
Louisiana (4.6%): | |||||||||||
| Parish of St. James Revenue, Series B-1, 0.12%, 11/1/40, Continuously Callable @100 (a) (c) | 85,970 | 85,970 | |||||||||
Oklahoma (1.7%): | |||||||||||
| Muskogee Industrial Trust Revenue, Series A, 0.12%, 1/1/25, Callable 3/2/22 @ 100 (a) | 32,400 | 32,400 | |||||||||
Pennsylvania (0.3%): | |||||||||||
| Allegheny County IDA Revenue (LOC — PNC Financial Services Group), 0.20%, 11/1/27, Callable 3/1/22 @ 100 (a) | 4,736 | 4,736 | |||||||||
Tennessee (0.8%): | |||||||||||
| Chattanooga Health Educational & Housing Facility Board Revenue, Series C, 0.17%, 5/1/39, Continuously Callable @100 (a) (c) | 15,500 | 15,500 | |||||||||
Texas (1.1%): | |||||||||||
| Port of Port Arthur Navigation District Revenue, 0.23%, 11/1/40, Continuously Callable @100 (a) | 20,000 | 20,000 | |||||||||
Total Municipal Bonds (Cost $231,411) | 231,411 | ||||||||||
Commercial Paper (64.5%) (d) | |||||||||||
American Honda Finance, 0.30%, 3/21/22 | 20,000 | 19,992 | |||||||||
AT&T, Inc., 0.29%, 3/17/22 (b) | 20,000 | 19,993 | |||||||||
Barton Capital Corp. | |||||||||||
0.15%, 3/10/22 (b) | 20,000 | 19,997 | |||||||||
0.18%, 4/13/22 (b) | 20,000 | 19,993 | |||||||||
See notes to financial statements.
4
| USAA Mutual Funds Trust USAA Money Market Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Bayerische Landesbank | |||||||||||
0.18%, 2/15/22 | $ | 20,000 | $ | 19,999 | |||||||
0.17%, 4/1/22 | 20,000 | 19,994 | |||||||||
0.20%, 5/12/22 | 20,000 | 19,989 | |||||||||
Cooperatieve Rabobank U.A., 0.15%, 2/15/22 | 20,000 | 19,999 | |||||||||
Crown Point Capital Co. LLC | |||||||||||
0.17%, 2/1/22 (b) | 20,000 | 20,000 | |||||||||
0.18%, 4/12/22 (b) | 20,000 | 19,993 | |||||||||
0.20%, 5/2/22 (b) | 20,000 | 19,990 | |||||||||
Dairy Farmers of America, 0.18%, 2/1/22 (b) | 80,000 | 80,000 | |||||||||
Duke Energy Corp., 0.17%, 2/9/22 (b) | 20,000 | 19,999 | |||||||||
Enbridge Gas Distribution, 0.23%, 2/14/22 (b) | 20,000 | 19,998 | |||||||||
Energy Transfer Partners LP, 0.31%, 2/1/22 | 90,000 | 90,000 | |||||||||
Fairway Finance Corp., 0.06%, 2/2/22 (b) | 20,000 | 20,000 | |||||||||
Hannover Funding Co. LLC, 0.27%, 2/9/22 (b) | 20,000 | 19,999 | |||||||||
Harley-Davidson Funding | |||||||||||
0.23%, 2/3/22 (b) | 20,000 | 20,000 | |||||||||
0.29%, 2/7/22 (b) | 20,000 | 19,999 | |||||||||
0.42%, 3/17/22 (b) | 15,000 | 14,992 | |||||||||
Jabil, Inc., 0.38%, 2/1/22 (b) | 90,000 | 90,000 | |||||||||
Lma Americas LLC | |||||||||||
0.18%, 3/28/22 (b) | 20,000 | 19,995 | |||||||||
0.25%, 4/26/22 (b) | 20,000 | 19,988 | |||||||||
Manhattan Asset Funding Co., 0.18%, 5/31/22 (b) | 20,000 | 19,988 | |||||||||
National Rural Utilities Cooperative Finance Corp., 0.19%, 2/14/22 | 20,000 | 19,998 | |||||||||
Natixis | |||||||||||
0.09%, 2/3/22 | 20,000 | 20,000 | |||||||||
0.19%, 3/7/22 | 20,000 | 19,996 | |||||||||
Nutrien, Ltd. | |||||||||||
0.25%, 2/1/22 (b) | 40,000 | 40,000 | |||||||||
0.27%, 3/18/22 (b) | 20,000 | 19,993 | |||||||||
Old Line Funding LLC | |||||||||||
0.13%, 2/24/22 (b) | 20,000 | 19,998 | |||||||||
0.20%, 5/5/22 (b) | 20,000 | 19,990 | |||||||||
Ridgefield Funding Co. LLC | |||||||||||
0.21%, 2/18/22 (b) | 20,000 | 19,998 | |||||||||
0.14%, 3/3/22 (b) | 20,000 | 19,998 | |||||||||
0.16%, 4/6/22 (b) | 20,000 | 19,994 | |||||||||
Sheffield Receivables, 0.21%, 4/1/22 (b) | 20,000 | 19,993 | |||||||||
Sheffield Receivables Co. LLC, 0.15%, 2/11/22 (b) | 19,000 | 18,999 | |||||||||
Societe Generale SA | |||||||||||
0.16%, 3/31/22 (b) | 20,000 | 19,995 | |||||||||
0.17%, 4/19/22 (b) | 20,000 | 19,992 | |||||||||
0.19%, 6/9/22 (b) | 15,000 | 14,990 | |||||||||
Sumitomo Mitsui Banking Corp. | |||||||||||
0.18%, 3/3/22 (b) | 20,000 | 19,997 | |||||||||
0.19%, 3/9/22 (b) | 20,000 | 19,996 | |||||||||
0.14%, 3/21/22 (b) | 20,000 | 19,996 | |||||||||
See notes to financial statements.
5
| USAA Mutual Funds Trust USAA Money Market Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Union Pacific Corp. | |||||||||||
0.10%, 2/2/22 (b) | $ | 20,000 | $ | 20,000 | |||||||
0.19%, 2/24/22 (b) | 20,000 | 19,997 | |||||||||
Verizon Communications | |||||||||||
0.24%, 3/15/22 (b) | 20,000 | 19,994 | |||||||||
0.26%, 3/21/22 (b) | 20,000 | 19,993 | |||||||||
Victory Receivables Corp. | |||||||||||
0.13%, 2/9/22 (b) | 20,000 | 19,999 | |||||||||
0.16%, 2/15/22 (b) | 20,000 | 19,999 | |||||||||
0.17%, 2/18/22 (b) | 20,000 | 19,998 | |||||||||
Vw Credit, Inc., 0.24%, 2/23/22 (b) | 20,000 | 19,997 | |||||||||
Total Commercial Paper (Cost $1,208,797) | 1,208,797 | ||||||||||
Certificates of Deposit (12.5%) | |||||||||||
Bank of Montreal Chicago, 0.30%(SOFR+25bps), 2/24/23 (e) | 20,000 | 20,000 | |||||||||
Bank of Nova Scotia, 0.29%(SOFR+25bps), 2/28/23 (e) | 20,000 | 20,000 | |||||||||
Canadian Imp BK Comm NY, 0.30%(SOFR+25bps), 2/10/23 (e) | 20,000 | 20,000 | |||||||||
Goldman Sachs Bank USA | |||||||||||
0.29%, 11/25/22 (SOFR+25bps) (e) | 25,000 | 25,000 | |||||||||
0.32%, 1/20/23 (SOFR+27bps) (e) | 25,000 | 25,000 | |||||||||
0.35%, 2/17/23 (SOFR+30bps) (e) | 25,000 | 25,000 | |||||||||
Lloyds Bank Corp. Mkts/NY, 0.30%(SOFR+25bps), 1/12/23 (e) | 20,000 | 20,000 | |||||||||
Mizuho Bank, Ltd./NY, 0.19%(SOFR+14bps), 7/18/22 (e) | 20,000 | 20,000 | |||||||||
MUFG Bank, Ltd./NY, 0.33%(SOFR+28bps), 1/24/23 (e) | 20,000 | 20,000 | |||||||||
Standard Chartered BK/NY, 0.29%(SOFR+25bps), 1/31/23 (e) | 20,000 | 20,000 | |||||||||
Sumitomo Mitsui Bank NY, 0.33%(SOFR+28bps), 2/1/23 (e) (f) | 20,000 | 20,000 | |||||||||
Total Certificates of Deposit (Cost $235,000) | 235,000 | ||||||||||
Total Investments (Cost $1,881,068) — 100.4% | 1,881,068 | ||||||||||
Liabilities in excess of other assets — (0.4)% | (7,646 | ) | |||||||||
NET ASSETS — 100.00% | $ | 1,873,422 | |||||||||
At January 31, 2022, the Fund's investments in foreign securities were 26.7% of net assets.
(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 (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of January 31, 2022, the fair value of these securities was $978,830 (thousands) and amounted to 52.2% of net assets.
(c) All or a portion of this security has been segregated as collateral for securities purchased on a delayed-delivery and/or when-issued basis.
(d) Rate represents the effective yield at January 31, 2022.
(e) Variable or Floating-Rate Security. Rate disclosed is as of January 31, 2022.
See notes to financial statements.
6
| USAA Mutual Funds Trust USAA Money Market Fund | Schedule of Portfolio Investments — continued January 31, 2022 | ||||||
(Unaudited)
(f) Security or portion of security purchased on a delayed-delivery and/or when-issued basis.
bps — Basis points
Continuously callable — Investment is continuously callable or will be continuously callable on any date after the first call date until its maturity.
IDA — Industrial Development Authority
LLC — Limited Liability Company
LOC — Letter of Credit
LP — Limited Partnership
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.
LOC Principal and interest payments are guaranteed by a bank letter of credit or other bank credit agreement.
See notes to financial statements.
7
USAA Mutual Funds Trust | Statement of Assets and Liabilities January 31, 2022 | ||||||
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
| USAA Money Market Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,881,068) | $ | 1,881,068 | |||||
Cash | 9,220 | ||||||
Receivables: | |||||||
Interest | 68 | ||||||
Capital shares issued | 2,875 | ||||||
Investments sold | 3,405 | ||||||
From Adviser | 1,399 | ||||||
Prepaid expenses | 21 | ||||||
Total Assets | 1,898,056 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Distributions | — | (a) | |||||
Investments purchased | 20,000 | ||||||
Capital shares redeemed | 3,595 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 382 | ||||||
Administration fees | 159 | ||||||
Custodian fees | 28 | ||||||
Transfer agent fees | 400 | ||||||
Compliance fees | 1 | ||||||
Trustees' fees | — | (a) | |||||
Other accrued expenses | 69 | ||||||
Total Liabilities | 24,634 | ||||||
Net Assets: | |||||||
Capital | 1,873,423 | ||||||
Total accumulated earnings/(loss) | (1 | ) | |||||
Net Assets | $ | 1,873,422 | |||||
Shares (unlimited number of shares authorized with no par value): | 1,873,947 | ||||||
Net asset value, offering and redemption price per share: (b) | $ | 1.00 | |||||
(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.
8
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended January 31, 2022 | ||||||
(Amounts in Thousands) (Unaudited)
| USAA Money Market Fund | |||||||
Investment Income: | |||||||
Interest | $ | 1,649 | |||||
Total Income | 1,649 | ||||||
Expenses: | |||||||
Investment advisory fees | 2,303 | ||||||
Administration fees | 960 | ||||||
Sub-Administration fees | 3 | ||||||
Custodian fees | 82 | ||||||
Transfer agent fees | 2,399 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 7 | ||||||
Legal and audit fees | 26 | ||||||
State registration and filing fees | 40 | ||||||
Other expenses | 100 | ||||||
Total Expenses | 5,944 | ||||||
Expenses waived/reimbursed by Adviser | (4,391 | ) | |||||
Net Expenses | 1,553 | ||||||
Net Investment Income | 96 | ||||||
Realized/Unrealized Gains from Investments: | |||||||
Net realized gains from investment securities | — | (a) | |||||
Net realized/unrealized gains on investments | — | (a) | |||||
Change in net assets resulting from operations | $ | 96 | |||||
(a) Rounds to less than $1 thousand.
See notes to financial statements.
9
USAA Mutual Funds Trust | Statements of Changes in Net Assets | ||||||
(Amounts in Thousands)
USAA Money Market Fund | |||||||||||
| Six Months Ended January 31, 2022 (Unaudited) | Year Ended July 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income | $ | 96 | $ | 214 | |||||||
Net realized gains from investments | — | (a) | — | ||||||||
Change in net assets resulting from operations | 96 | 214 | |||||||||
Change in net assets resulting from distributions to shareholders | (96 | ) | (323 | ) | |||||||
Change in net assets resulting from capital transactions | (77,347 | ) | (393,741 | ) | |||||||
Change in net assets | (77,347 | ) | (393,850 | ) | |||||||
Net Assets: | |||||||||||
Beginning of period | 1,950,769 | 2,344,619 | |||||||||
End of period | $ | 1,873,422 | $ | 1,950,769 | |||||||
Capital Transactions: | |||||||||||
Proceeds from shares issued | $ | 261,693 | $ | 638,947 | |||||||
Distributions reinvested | 95 | 320 | |||||||||
Cost of shares redeemed | (339,135 | ) | (1,033,008 | ) | |||||||
Change in net assets resulting from capital transactions | $ | (77,347 | ) | $ | (393,741 | ) | |||||
Share Transactions: | |||||||||||
Issued | 261,695 | 638,949 | |||||||||
Reinvested | 95 | 320 | |||||||||
Redeemed | (339,135 | ) | (1,033,008 | ) | |||||||
Change in Shares | (77,345 | ) | (393,739 | ) | |||||||
(a) Rounds to less than $1 thousand.
See notes to financial statements.
10
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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 | Net Realized and Unrealized Gains on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains From Investments | ||||||||||||||||||||||
USAA Money Market Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | $ | 1.00 | — | (c)(d) | — | (c) | — | (c) | — | (c) | — | ||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||
2021 | $ | 1.00 | — | (c)(d) | — | — | (c) | — | (c) | — | (c) | ||||||||||||||||
2020 | $ | 1.00 | 0.01 | (d) | — | (c) | 0.01 | (0.01 | ) | — | |||||||||||||||||
2019 | $ | 1.00 | 0.02 | — | (c) | 0.02 | (0.02 | ) | — | ||||||||||||||||||
2018 | $ | 1.00 | 0.01 | — | (c) | 0.01 | (0.01 | ) | — | ||||||||||||||||||
2017 | $ | 1.00 | — | (c) | — | (c) | — | (c) | — | (c) | — | (c) | |||||||||||||||
* 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 period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 3 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) Amount is less than $0.005 per share.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(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.
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(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | |||||||||||||||||||||||||
USAA Money Market Fund | |||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||
| Six Months Ended January 31, 2022 (Unaudited): | — | (c) | $ | 1.00 | 0.01 | % | 0.16 | % | 0.01 | % | 0.62 | % | $ | 1,873,422 | |||||||||||||||||
Year Ended July 31: | |||||||||||||||||||||||||||||||
2021 | — | (c) | $ | 1.00 | 0.01 | % | 0.23 | % | 0.01 | % | 0.61 | % | $ | 1,950,769 | |||||||||||||||||
2020 | (0.01 | ) | $ | 1.00 | 1.04 | % | 0.58 | % | 1.15 | % | 0.61 | % | $ | 2,344,619 | |||||||||||||||||
2019 | (0.02 | ) | $ | 1.00 | 1.97 | % | 0.62 | % | 1.95 | % | 0.62 | % | $ | 4,878,643 | |||||||||||||||||
2018 | (0.01 | ) | $ | 1.00 | 1.13 | % | 0.62 | % | 1.12 | % | 0.62 | % | $ | 4,623,610 | |||||||||||||||||
2017 | — | (c) | $ | 1.00 | 0.31 | %(e) | 0.63 | %(e)(f) | 0.29 | % | 0.63 | %(f) | $ | 4,513,270 | |||||||||||||||||
See notes to financial statements.
13
USAA Mutual Funds Trust | Notes to Financial Statements January 31, 2022 | ||||||
(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 46 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.
The Fund has adopted policies and procedures permitting the Trust's Board of Trustees (the "Board") to impose a liquidity fee or to temporarily suspend redemptions from the Fund (impose a "redemption gate") if the Fund's weekly liquid assets fall below specific 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 would temporarily delay your ability to redeem your investments in the Fund.
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 U.S. Generally Accepted Accounting Principles ("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.
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)
14
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Board's 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. Securities for which amortized cost valuations are considered unreliable or for 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.
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 Adviser monitors the creditworthiness of sellers with which the Fund may enter into repurchase agreements.
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. Payments 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 trade date or 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 discounts. Gains or losses realized on sales of securities are recorded on the identified cost basis.
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.
For the six months ended January 31, 2022, the Fund did not incur any income tax, interest, or penalties, and has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions.
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 years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
15
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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 an affiliated trust based upon net assets or another appropriate basis.
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, 2022, 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) | |||||||||
| $ | — | $ | 12,500 | $ | — | ||||||
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.
3. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
The Fund's Investment Adviser 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 for the six months ended January 31, 2022, 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, 2022, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM also serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.10%, which is based on the Fund's average daily net assets. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Administration 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 Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Sub-Administration fees.
16
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
The Fund (as part of the Trust) has entered into an agreement with the Adviser to provide compliance services, 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. The 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 for the six months ended January 31, 2022, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. Transfer agent 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. 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 and paid to VCTA for the six months ended January 31, 2022, 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 Services, 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 and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended January 31, 2022, are reflected on the Statement of Operations as Custodian fees.
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, 2023. 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 in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, 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. As of January 31, 2022, the expense limit (excluding voluntary waivers) was 0.62%.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after 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. Prior to May 1, 2021, the Adviser was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
In addition, the Adviser agreed to further reimburse fees in excess of the Fund's expense limit of 0.62%. 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 of up to three years after the fiscal year in which the waiver or reimbursement took place, to the extent any repayments would not
17
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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.
As of January 31, 2022, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayments are not probable at January 31, 2022.
| Expires 2023 | Expires 2024 | Expires 2025 | Total | ||||||||||||
| $ | 1,305 | $ | 8,192 | $ | 4,391 | $ | 13,888 | ||||||||
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
4. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Stable Net Asset Value Risk — You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1 per share, it cannot guarantee it will do so. The Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation ("FDIC") or any other government agency. The Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.
Liquidity Fees and Gates — 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 would temporarily delay your ability to redeem your investments in the Fund.
Credit Risk — 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.
LIBOR Discontinuation Risk — The London Interbank Offered Rate ("LIBOR") discontinuation may adversely affect the financial markets generally and the Fund's operations, finances and investments specifically. LIBOR has been the principal floating-rate benchmark in the financial markets, and a large portion of the Fund's assets are tied to LIBOR. However, LIBOR has been or will be discontinued as a floating rate benchmark. The date of discontinuation depends on the LIBOR currency and tenor. With limited exceptions, no new LIBOR obligations will be entered into after December 31, 2021. Existing LIBOR obligations have transitioned or will transition to another benchmark, depending on the LIBOR currency and tenor. For some existing LIBOR-based obligations, the contractual consequences of the discontinuation of LIBOR may not be clear.
Non-LIBOR floating-rate obligations, including Secured Overnight Financing Rate ("SOFR")-based obligations, may have returns and values that fluctuate more than those of floating-rate debt obligations that are based on LIBOR or other rates. Also, because SOFR and some alternative floating rates are relatively new market indexes, markets for certain non-LIBOR obligations may never develop or may not be liquid. Market terms for non-LIBOR floating rate obligations, such as the spread over the index reflected in interest-rate provisions, may evolve over time, and prices of non-LIBOR floating rate obligations may be different depending on when they are issued and changing views about correct spread levels.
Various SOFR-based rates, including SOFR-based term rates, and various non-SOFR-based rates are expected to develop in response to the discontinuation of U.S. dollar LIBOR, which may create various
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
risks for the Fund and the financial markets more generally. There are non-LIBOR forward-looking floating rates that are not based on SOFR and that may be considered by participants in the financial markets as LIBOR alternatives. Such rates include Ameribor (American Interbank Offered Rate), BSBY (Bloomberg Short-Term Bank Yield Index) and BYI (Bank Yield Index). Unlike forward-looking SOFR-based term rates, such rates are intended to reflect a bank credit spread component.
It is not clear how replacement rates for LIBOR — including SOFR-based rates and non-SOFR-based rates — will develop and to what extent they will be used. There is no assurance that these replacement rates will be suitable substitutes for LIBOR, and thus the substitution of such rates for LIBOR could have an adverse effect on the Fund and the financial markets more generally. Concerns about market depth and stability could affect the development of non-SOFR-based term rates, and such rates may create various risks, which may or may not be similar to the risks relating to SOFR.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, terrorism, trade disputes, inflation rates, interest rate levels and other fiscal and monetary policy changes, cybersecurity incidents, pandemics and other public health crises, sanctions against a particular foreign country, its nationals, businesses or industries, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods or other catastrophes, may add to instability in global economies and markets generally, and may lead to increased market volatility. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely affect issuers in another country or region. The impact of these and other factors may be short-term or may last for extended periods.
5. Borrowing:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may 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 Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended January 31, 2022, Citibank received 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, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 28, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to the Fund during the period, if applicable, is reflected 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, 2022.
6. Federal Income Tax Information:
Distributions from the Fund's net investment income are accrued daily and distributed on the last business day of each month. 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
19
USAA Mutual Funds Trust | Notes to Financial Statements — continued January 31, 2022 | ||||||
(Unaudited)
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, 2022.
As of July 31, 2021, the Fund had no capital loss carryforwards for federal income tax purposes.
20
USAA Mutual Funds Trust | Supplemental Information January 31, 2022 | ||||||
(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) 235-8396. 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.
Availability of Schedules of Portfolio Investments:
The Fund makes available on VCM.com a complete list of portfolio holdings no sooner than 5 business days after the end of each month. Form N-MFP is available on the SEC's website at www.sec.gov.
Expense Example
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, 2021, through January 31, 2022.
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. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value 8/1/21 | Actual Ending Account Value 1/31/22 | Hypothetical Ending Account Value 1/31/22 | Actual Expenses Paid During Period 8/1/21-1/31/22* | Hypothetical Expenses Paid During Period 8/1/21-1/31/22* | Annualized Expense Ratio During Period 8/1/21-1/31/22 | ||||||||||||||||||
| $ | 1,000.00 | $ | 1,000.10 | $ | 1,024.40 | $ | 0.81 | $ | 0.82 | 0.16 | % | ||||||||||||
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
21
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
Considerations of the Board in Continuing the Investment Advisory Agreement
USAA Money Market Fund (the "Fund")
At a meeting of the Board of Trustees (the "Board") of USAA Mutual Funds Trust (the "Trust") held on December 9-10, 2021, the Board, including the Trustees who are not "interested persons" (as that term is defined in the Investment Company Act of 1940, as amended) of the Trust (the "Independent Trustees"), approved for an annual period the continuance of the Investment Advisory Agreement (the "Advisory Agreement") between the Trust and Victory Capital Management Inc. (the "Adviser") with respect to the Fund. Prior to the December 9-10, 2021 meeting at which the Advisory Agreement was approved, the Independent Trustees also discussed and considered information regarding the proposed continuation of the Advisory Agreement at a meeting held on November 19, 2021.
In advance of the foregoing meetings, the Trustees received and considered a variety of information relating to the Advisory Agreement and the Adviser and were given the opportunity to ask questions and request additional information from management. The information provided to the Board included, among other things: (i) a separate report prepared by an independent third party of mutual fund data, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable investment companies; (ii) information concerning the services rendered to the Fund, as well as information regarding the Adviser's revenues and costs of providing services to the Fund and compensation paid to affiliates of the Adviser; and (iii) information about the Adviser's operations and personnel. Prior to voting, the Independent Trustees reviewed the proposed continuance of the Advisory Agreement with management and with experienced independent counsel retained by the Independent Trustees ("Independent Counsel") and received materials from such Independent Counsel discussing the legal standards for their consideration of the proposed continuation of the Advisory Agreement with respect to the Fund. The Independent Trustees also reviewed the proposed continuation of the Advisory Agreement with respect to the Fund in private sessions with Independent Counsel at which no representatives of management were present.
At each regularly scheduled meeting of the Board and its committees, the Board receives and reviews, among other things, information concerning the Fund's performance and related services provided by the Adviser. At the meeting at which the renewal of the Advisory Agreement is considered, particular focus is given to information concerning Fund performance, fees and total expenses as compared to comparable investment companies, and the Adviser's profitability with respect to the Fund. However, the Board noted that the evaluation process with respect to the Adviser is an ongoing one. In this regard, the Board's and its committees' consideration of the Advisory Agreement included information previously received at such meetings. The Board also recognized that the contractual arrangements for the Fund have been reviewed by the Board and discussed with the Adviser in prior years and that the Board's conclusions may be based, in part, on its consideration of these same arrangements in prior years.
Advisory Agreement
After full consideration of a variety of factors, the Board, including the Independent Trustees, voted to approve the Advisory Agreement. In approving the Advisory Agreement, the Trustees did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Throughout their deliberations, the Independent Trustees were represented and assisted by Independent Counsel.
Nature, Extent, and Quality of Services — In considering the nature, extent, and quality of the services provided by the Adviser under the Advisory Agreement, the Board reviewed information provided by the Adviser relating to its operations and personnel. The Board also took into account its knowledge of the Adviser's management and the quality of the performance of the Adviser's duties through Board meetings, discussions, and reports during the preceding year. The Board considered the fees paid to the Adviser and the services provided to the Fund by the Adviser under the Advisory Agreement, as well as other services provided by the Adviser and its affiliates under other agreements, and the personnel who provide these services. In addition to the investment advisory services provided to the Fund, the Adviser and its affiliates provide administrative services, shareholder services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements, and other services necessary for the operation of the Fund and the Trust.
22
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
The Board considered the scope of services provided by, and the undertakings required of, the Adviser in connection with those services, including, among other things, maintaining (i) its own and the Fund's compliance programs, (ii) risk management programs, (iii) liquidity risk management programs, and (iv) cybersecurity programs, each of which had expanded over time as a result of regulatory, market, and other developments. The Board also considered the significant risks assumed by the Adviser in connection with the services provided to the Fund, including investment, operational, enterprise, litigation, regulatory and compliance risks.
The Board considered the Adviser's management style and the performance of the Adviser's duties under the Advisory Agreement. The Board considered the level and depth of knowledge of the Adviser, including the professional experience and qualifications of its senior and investment personnel, as well as current staffing levels. The allocation of the Fund's brokerage, including the Adviser's process for monitoring "best execution," also was considered. The Adviser's role in coordinating the activities of the Fund's other service providers was also considered. The Board also considered the Adviser's risk management processes. The Board considered the Adviser's financial condition and that it had the financial wherewithal to continue to provide the same scope and high quality of services under the Advisory Agreement. In reviewing the Advisory Agreement, the Board focused on the experience, resources, and strengths of the Adviser and its affiliates in managing the Fund, as well as the other funds in the Trust.
The Board also reviewed the compliance and administrative services provided to the Fund by the Adviser and its affiliates, including the Adviser's oversight of the Fund's day-to-day operations and oversight of Fund accounting. The Trustees, guided also by information obtained from their experiences as Trustees of the Trust, also focused on the quality of the Adviser's compliance and administrative staff.
Expenses and Performance — In connection with its consideration of the Advisory Agreement, the Board evaluated the Fund's advisory fees and total expense ratio as compared to other open-end investment companies deemed to be comparable to the Fund as determined by the independent third party in its report. The Fund's expenses were compared to (i) a group of investment companies chosen by the independent third party to be comparable to the Fund based upon certain factors, including fund type, comparability of investment objective and classification, sales load type, asset size, and expense components (the "expense group") and (ii) a larger group of investment companies with the same investment classification/objective as the Fund regardless of asset size, excluding outliers (the "expense universe"). Among other data, the Board noted that the Fund's net management fee rate — which includes advisory and administrative services, as well as any fee waivers and reimbursements — was below the medians of its expense group and expense universe. The data indicated that the Fund's total expenses, including after any reimbursements, were below the medians of its expense group and its expense universe. The Board also took into account the Adviser's current undertakings to maintain expense limitations for the Fund, which include voluntary waiver support to preserve a minimum daily yield. The Board took into account the various other services provided to the Fund by the Adviser and its affiliates and noted the high quality of services received by the Fund.
In considering the Fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the Fund's performance results. The Trustees also reviewed various comparative data provided to them in connection with their consideration of the renewal of the Advisory Agreement, including, among other information, a comparison of the Fund's average annual total returns relative to its Lipper index and other mutual funds deemed to be in its peer group by the independent third party in its report (the "performance universe"). The Fund's performance universe consisted of the Fund and all retail and institutional open-end investment companies with the same classification/objective as the Fund regardless of asset size or primary channel of distribution. This comparison indicated that, among other data, the Fund's performance was above the average of its performance universe for the three- and five-year periods ended September 30, 2021, and was below the average of its performance universe for the one- and ten-year periods ended September 30, 2021, and was below its Lipper index for the one-, three-, five- and ten-year periods ended September 30, 2021. The Board noted the relatively narrow range of returns of the funds in the Fund's peer group.
Compensation and Profitability — The Board took into consideration the level and method of computing the management fee. The information considered by the Board included operating profit margin information for the Adviser's business as a whole. The Board also received and considered profitability information related to the management revenues from the Fund. This information included a review of the methodology used in the allocation of certain costs to the Fund. In considering the profitability data with respect to the Fund, the Trustees noted that the Adviser reimbursed or waived a portion of its management fees to the Fund. The Trustees reviewed the profitability of the Adviser's relationship with the Fund before tax expenses. The Board was also provided
23
USAA Mutual Funds Trust | Supplemental Information — continued January 31, 2022 | ||||||
(Unaudited)
with a profitability analysis of other publicly traded asset managers prepared by an independent information service. In reviewing the overall profitability of the management fee to the Adviser, the Board also considered the fact that the Adviser and its affiliates provide shareholder servicing and administrative services to the Fund for which they receive compensation. The Board also considered the possible direct and indirect benefits to the Adviser from its relationship with the Trust, including that the Adviser may derive reputational and other benefits from its association with the Fund. The Trustees recognized that the Adviser should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the Fund and the entrepreneurial and other risks that it assumes as Adviser.
Economies of Scale — The Board considered whether there should be changes in the management fee rate or structure in order to enable the Fund to participate in any economies of scale. The Board also considered the fee waiver and expense reimbursement arrangements by the Adviser. The Board also considered the effect of the Fund's change in size, if any, on its performance and fees, noting that the Fund may realize other economies of scale if assets increase proportionally more than expenses. The Board determined that the current investment management fee structure was reasonable.
Conclusions — The Board reached the following conclusions regarding the Fund's Advisory Agreement with the Adviser: (i) the Adviser has demonstrated that it possesses the capability and resources to perform the duties required of it under the Advisory Agreement; (ii) the Adviser maintains an appropriate compliance program; (iii) the overall performance of the Fund is reasonable in relation to the performance of funds with similar investment objectives and to relevant indices; (iv) the Fund's advisory expenses are reasonable in relation to those of similar funds and to the services to be provided by the Adviser; and (v) the Adviser's and its affiliates' level of profitability from their relationship with the Fund is reasonable in light of the nature and high quality of services provided by the Adviser and its affiliates and the type of fund. Based on its conclusions, the Board determined that continuation of the Advisory Agreement would be in the best interests of the Fund and its shareholders.
24
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.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
www.vcm.com | (800) 235-8396 | ||||||
23428-0322
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.
Not applicable.
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) Not applicable.
(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 |
| By (Signature and Title)* | /s/ James K. De Vries | |
| James K. De Vries, Principal Financial Officer | ||
| Date | March 29, 2022 |
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 | |
| Christopher K. Dyer, Principal Executive Officer |
| Date | March 29, 2022 |
| By (Signature and Title)* | /s/ James K. De Vries | |
| James K. De Vries, Principal Financial Officer |
| Date | March 29, 2022 |