UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR/S
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-7852
Exact name of registrant as specified in charter: USAA MUTUAL FUNDS TRUST
Address of principal executive offices and zip code: 9800 FREDERICKSBURG ROAD
SAN ANTONIO, TX 78288
Name and address of agent for service: DANIEL J. MAVICO
USAA MUTUAL FUNDS TRUST
9800 FREDERICKSBURG ROAD
SAN ANTONIO, TX 78288
Registrant's telephone number, including area code: (210) 498-0226
Date of fiscal year end: MAY 31
Date of reporting period: NOVEMBER 30, 2014
ITEM 1. SEMIANNUAL REPORT TO STOCKHOLDERS.
USAA MUTUAL FUNDS TRUST - SEMIANNUAL REPORT FOR PERIOD ENDED NOVEMBER 30, 2014
[LOGO OF USAA]
USAA(R)
[GRAPHIC OF USAA PRECIOUS METALS AND MINERALS FUND]
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SEMIANNUAL REPORT
USAA PRECIOUS METALS AND MINERALS FUND
FUND SHARES o INSTITUTIONAL SHARES o ADVISER SHARES
NOVEMBER 30, 2014
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PRESIDENT'S MESSAGE
"...[A] KEY DETERMINANT OF INVESTMENT
SUCCESS IS THE ABILITY TO DEAL WITH OUR [PHOTO OF BROOKS ENGLEHARDT]
EMOTIONAL REACTIONS."
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JANUARY 2015
The reporting period was perilous for those who believe they can gauge - and
trade - the direction of the financial markets. When the period began in June of
last year, many observers believed that longer-term interest rates could not get
any lower. In fact, they continued to trend down as the Federal Reserve (the
Fed) gradually tapered (or reduced), and eventually, ended its quantitative
easing (QE) bond-buying program. The yield on a 10-year U.S. Treasury, which
began the period at 2.48%, ended it at 2.17%. As yields fell, bond prices rose
(bond prices and yields move in opposite directions), with longer-term and
intermediate-term U.S. Treasuries generating the highest bond-market returns for
the reporting period overall. U.S. large-cap stocks performed even better than
U.S. Treasuries. After dipping sharply in the first two weeks of October,
large-cap stocks rallied and finished the period with a solid gain.
The performance of other asset classes was quite different. During the reporting
period, investors generally sold off European stocks, which ended the period in
negative territory. Japanese equities notched a gain, but they underperformed
versus the broad U.S. stock market. U.S. small-cap stocks declined for most of
the period, rebounding during the final weeks to eke out a small positive
return. Within fixed-income securities, high-yield spreads (or yield
differentials versus risk-free U.S. Treasuries of comparable maturity) widened,
suggesting investors were growing concerned about corporate fundamentals amid
weaker global economic growth.
Indeed, while the U.S. economy continued to strengthen during the reporting
period, other economies did not fare well. Europe's economic growth slowed,
Japan struggled to jumpstart its declining economy, and the former engine of
global growth - China - weakened. The monetary policies of global central banks
reflected the divergence between those economies and our own. As the Fed was
ending its QE program, other central banks were easing monetary policy further,
pushing down interest rates around the world. At the same time, inflation
pressures eased as oil prices fell by nearly a third during the reporting period
and natural gas,
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copper, and agricultural commodity prices also declined. Gold prices, however,
held up relatively well in comparison, falling only modestly.
Few could have foreseen this investment landscape when the reporting period
started. Despite what some experts say, no one can be sure exactly what will
happen in the financial markets. I suspect those who tried to time the markets
were surprised by the performance of certain asset classes. Under the
circumstances, if you decided to adhere to your long-term investment plan, you
have every reason to congratulate yourself. This is all the more true when you
consider the dramatic headlines that dominated the period, including Russia's
involvement in the Ukraine, the Ebola crisis, and the uncertainty in the Middle
East. In my opinion, a key determinant of investment success is the ability to
deal with our emotional reactions. We believe investors should strive to ignore
media noise and focus instead on relevant information, such as the direction of
interest rates and the condition of the U.S. economy, which can provide them
with the perspective they need to manage their investments. In this respect, a
long-term plan can be extremely useful.
That said, as we look ahead to 2015, it may be a good time to review your
investment plan and make sure it still suits your goals, risk tolerance, and
time horizon. You also may want to rebalance your portfolio. Regular rebalancing
can potentially help you protect your gains and prepare for what happens next.
If you would like some help, please call one of our financial advisors. They
would be happy to assist you.
At USAA Investments, we remain committed to providing you with our best advice,
top-notch service and a wide variety of investment choices. Rest assured we will
continue monitoring global economic trends, central bank monetary policy, and
other factors that potentially could affect your investments. From all of us
here, I would like to thank you for the opportunity to serve your investment
needs.
Sincerely,
/S/ BROOKS ENGLEHARDT
Brooks Englehardt
President
USAA Investments
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. o As interest rates rise,
bond prices generally fall; given the historically low interest rate
environment, risks associated with rising interest rates may be heightened. o
Emerging market countries are less diverse and mature than other countries and
tend to be politically less stable. o Precious metals and minerals is a volatile
asset class and is subject to additional risks, such as currency fluctuation,
market illiquidity, political instability, and increased price volatility. It
may be more volatile than other asset classes that diversify across many
industries and companies. o Investments provided by USAA Investment Management
Company and USAA Financial Advisors Inc., both registered broker dealers. o
Financial advice provided by USAA Financial Planning Services Insurance Agency,
Inc. (known as USAA Financial Insurance Agency in California, License #
0E36312), and USAA Financial Advisors, Inc., a registered broker dealer.
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TABLE OF CONTENTS
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FUND OBJECTIVE 1
MANAGER'S COMMENTARY 2
INVESTMENT OVERVIEW 5
FINANCIAL INFORMATION
Portfolio of Investments 13
Notes to Portfolio of Investments 17
Financial Statements 19
Notes to Financial Statements 22
EXPENSE EXAMPLE 39
THIS REPORT IS FOR THE INFORMATION OF THE SHAREHOLDERS AND OTHERS WHO HAVE
RECEIVED A COPY OF THE CURRENTLY EFFECTIVE PROSPECTUS OF THE FUND, MANAGED BY
USAA ASSET MANAGEMENT COMPANY. IT MAY BE USED AS SALES LITERATURE ONLY WHEN
PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS, WHICH PROVIDES FURTHER DETAILS
ABOUT THE FUND.
(C)2015, USAA. All rights reserved.
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FUND OBJECTIVE
THE USAA PRECIOUS METALS AND MINERALS FUND (THE FUND) SEEKS LONG-TERM CAPITAL
APPRECIATION AND TO PROTECT THE PURCHASING POWER OF YOUR CAPITAL AGAINST
INFLATION.
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TYPES OF INVESTMENTS
The Fund normally invests at least 80% of its assets in equity securities of
domestic and foreign companies (including those located in emerging markets)
principally engaged in the exploration, mining, or processing of gold and other
precious metals and minerals, such as platinum, silver, and diamonds. This 80%
policy may be changed upon at least 60 days' written notice to shareholders.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable
portion of your distribution and, if you live in a state that requires state
income tax withholding, at your state's set rate. However, you may elect not to
have withholding apply or to have income tax withheld at a higher rate. If you
wish to make such an election, please call USAA Asset Management Company at
(800) 531-USAA (8722).
If you must pay estimated taxes, you may be subject to estimated tax penalties
if your estimated tax payments are not sufficient and sufficient tax is not
withheld from your distribution.
For more specific information, please consult your tax adviser.
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FUND OBJECTIVE | 1
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MANAGER'S COMMENTARY ON THE FUND
DAN DENBOW, CFA [PHOTO OF DAN DENBOW]
USAA Asset Management Company
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o PLEASE REVIEW THE PERFORMANCE OF GOLD AND GOLD STOCKS DURING THE REPORTING
PERIOD.
The price of gold began the period at $1,250 an ounce and ended at
$1,167 an ounce, for a decline of 6.6% over the reporting period. Early in
the period, gold rose on concerns over instability in the Middle East. Gold
would reach a peak for the six-month period on July 11, 2014, at $1,339 an
ounce, and trade at comparable levels for several weeks. However, these
gains were reversed as the period progressed, as the U.S. dollar
strengthened along with the improving outlook for the U.S. economy.
Investors took long positions in the dollar given uncertain outlooks for
Europe, China, and emerging markets. Furthermore, commodities overall
suffered a sharp decline late in the period as uncertainty over Chinese
growth took hold. Gold reached a low for the period of $1,141 an ounce on
November 5, 2014. During the reporting period silver prices fell 17.8%,
underperforming versus gold in keeping with silver's historical leverage to
gold prices, while the price of platinum fell 17.2%.
The price of shares of gold mining companies has historically been
leveraged to movements in the price of gold by a ratio of between 2:1 and
3:1. For the reporting period, gold stocks overall exhibited their
traditional relationship to moves in the price of gold, underperforming
versus the metal itself by a wide margin. Shares of senior producers with
the financial wherewithal to withstand a dip in gold prices held up better
than shares of junior miners.
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2 | USAA PRECIOUS METALS AND MINERALS FUND
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o HOW DID THE USAA PRECIOUS METALS AND MINERALS FUND (THE FUND) PERFORM
DURING THE REPORTING PERIOD?
The Fund has three share classes: Fund Shares, Institutional Shares, and
Adviser Shares. For the six-month reporting period ended November 30, 2014,
the Fund Shares, Institutional Shares, and Adviser Shares had total returns
of -15.65%, -15.53%, and -15.70%, respectively. This compares to total
returns of 8.58% for the S&P 500(R) Index, -17.35% for the NYSE Arca Gold
Miners (GDM) Index, and -16.25% for the Lipper Precious Metals Equity Funds
Index.
USAA Asset Management Company is the Fund's investment adviser. The
investment adviser provides day-to-day discretionary management for the
Fund's assets.
o PLEASE DISCUSS THE PRINCIPAL FACTORS IN THE FUND'S PERFORMANCE
FOR THE REPORTING PERIOD.
At the end of November 2014, the Fund held 80% of its assets in gold
stocks, and the Fund's absolute performance reflects the overall downdraft
that impacted the sector. In terms of specific company weightings that
helped performance on a relative basis, Centerra Gold, Inc. shares
outperformed as its mining operations continued to show good results and
there were signs of progress in resolving a dispute over ownership of a mine
in Kyrgyzstan. Eldorado Gold Corp. also performed well on a relative basis
on the strength of plans to raise capital against its mining assets in
China. The company's outlook also is supported by mine building and
expansion activities in Turkey and Greece. AuRico Gold, Inc. (AuRico)
shares benefited as its production profile has been supported by steady
development of a large underground mine in Canada. AuRico also has operating
assets in Mexico.
On the downside, exposure to a pair of silver-related companies, Silver
Wheaton Corp. (Silver Wheaton) and Tahoe Resources, Inc. (Tahoe
Refer to page 7 for benchmark definitions.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
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MANAGER'S COMMENTARY ON THE FUND | 3
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Resources) hurt relative performance, as the price of silver fell
sharply. Silver Wheaton is a silver streaming company, which means that it
contracts to purchase silver that is produced as a by-product of gold
mining, while Tahoe Resources is a silver mining and exploration company.
Both companies are well positioned to show growth and the Fund has
maintained the positions. Shares of gold mining company B2Gold Corp.
underperformed on questions around whether the company could absorb
effectively an acquisition of mining assets in Africa. The company also has
seen a softening in its production results from mining operations in
Nicaragua.
The Fund will typically have modest exposure to silver and platinum
stocks. We have been adding to our silver exposure as recent weakness has
improved relative valuations for silver miners, and ended the period with an
approximately 13% weighting. The challenging labor environment in South
Africa has led to concerns about production costs for platinum going
forward, as the region is responsible for the majority of the world's
supply. We previously had reduced our exposure to platinum mining stocks due
to these concerns; and at the end of the period, the Fund held just 2% in
platinum miners.
Thank you for your continued confidence and investment in the Fund.
The USAA Precious Metals and Minerals Fund may be subject to stock
market risk and is non-diversified which means that it may invest a greater
percentage of its assets in a single issuer. Individual stocks will
fluctuate in response to the activities of individual companies, general
market, and economic conditions domestically and abroad. When redeemed or
sold, may be worth more or less than the original cost. o The USAA Precious
Metals and Minerals Fund is subject to additional risks, such as currency
fluctuation, market illiquidity, political instability, and increased price
volatility. It may be more volatile than a fund that diversifies across many
industries and companies.
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4 | USAA PRECIOUS METALS AND MINERALS FUND
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INVESTMENT OVERVIEW
USAA PRECIOUS METALS AND MINERALS FUND SHARES
(FUND SHARES) (Ticker Symbol:USAGX)
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11/30/14 5/31/14
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Net Assets $594.1 Million $710.5 Million
Net Asset Value Per Share $11.91 $14.12
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AVERAGE ANNUAL TOTAL RETURNS AS OF 11/30/14
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5/31/14-11/30/14* 1 YEAR 5 YEARS 10 YEARS
-15.65% -12.34% -15.78% 2.62%
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AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/14
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1 YEAR 5 YEARS 10 YEARS
-8.27% -15.02% 3.29%
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EXPENSE RATIO AS OF 5/31/14**
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1.24%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF
FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE
DATA QUOTED. THE RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE, SO
THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, VISIT
USAA.COM.
*Total returns for periods of less than one year are not annualized. This
six-month return is cumulative.
**The expense ratio represents the total annual operating expenses, before
reductions of any expenses paid indirectly and including any acquired fund fees
and expenses, as reported in the Fund's prospectus dated October 1, 2014, and is
calculated as a percentage of average net assets. This expense ratio may differ
from the expense ratio disclosed in the Financial Highlights, which excludes
acquired fund fees and expenses.
Total return measures the price change in a share assuming the reinvestment of
all net investment income and realized capital gain distributions, if any. The
total returns quoted do not reflect adjustments made to the enclosed financial
statements in accordance with U.S. generally accepted accounting principles or
the deduction of taxes that a shareholder would pay on distributions (including
capital gains distributions), redemption of shares, or reinvested net investment
income.
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INVESTMENT OVERVIEW | 5
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o CUMULATIVE PERFORMANCE COMPARISON o
[CHART OF CUMULATIVE PERFORMANCE COMPARISON]
USAA PRECIOUS LIPPER PRECIOUS
METALS AND MINERALS METALS EQUITY NYSE ARCA GOLD MINERS
S&P 500 INDEX FUND SHARES FUND INDEX (GDM) INDEX
11/30/04 $10,000.00 $10,000.00 $10,000.00 $10,000.00
12/31/04 10,340.29 9,407.45 9,451.05 9,218.59
01/31/05 10,088.24 8,891.97 8,956.11 8,572.27
02/28/05 10,300.54 9,499.50 9,653.27 9,241.33
03/31/05 10,118.14 9,069.93 9,146.40 8,733.05
04/30/05 9,926.24 8,223.08 8,274.06 7,783.59
05/31/05 10,242.08 8,345.81 8,390.70 8,028.37
06/30/05 10,256.62 9,198.80 9,092.76 8,719.95
07/31/05 10,638.05 9,112.89 9,095.78 8,506.89
08/31/05 10,540.98 9,671.32 9,517.11 8,923.75
09/30/05 10,626.36 11,137.97 11,031.80 10,450.44
10/31/05 10,449.21 10,389.31 10,317.08 9,662.35
11/30/05 10,844.42 11,506.17 11,365.71 10,596.59
12/31/05 10,848.14 13,100.12 12,610.27 11,946.72
01/31/06 11,135.43 15,221.62 14,980.97 14,382.74
02/28/06 11,165.65 14,497.96 13,997.73 12,980.18
03/31/06 11,304.63 16,143.21 15,383.04 14,140.15
04/30/06 11,456.43 18,153.38 17,242.07 15,920.78
05/31/06 11,126.70 16,557.61 15,753.29 14,150.87
06/30/06 11,141.78 16,724.61 15,659.40 14,159.09
07/31/06 11,210.51 16,761.72 15,666.72 14,176.01
08/31/06 11,477.24 17,609.09 16,195.45 14,850.50
09/30/06 11,773.01 15,926.73 14,732.03 13,071.41
10/31/06 12,156.64 17,163.76 15,831.38 13,921.32
11/30/06 12,387.81 19,161.56 17,388.35 15,364.57
12/31/06 12,561.59 18,758.63 17,015.24 14,687.25
01/31/07 12,751.56 18,913.94 16,908.21 14,571.15
02/28/07 12,502.15 19,298.83 17,239.59 14,736.98
03/31/07 12,641.99 19,359.61 17,405.97 14,548.89
04/30/07 13,201.97 19,366.36 17,726.58 14,628.83
05/31/07 13,662.66 19,487.90 17,816.75 14,464.12
06/30/07 13,435.67 19,170.53 17,575.63 13,993.62
07/31/07 13,019.10 19,501.41 18,023.00 14,795.84
08/31/07 13,214.26 18,772.13 16,992.32 13,872.73
09/30/07 13,708.46 22,708.88 20,577.38 16,676.30
10/31/07 13,926.52 25,909.59 23,143.52 18,667.01
11/30/07 13,344.30 23,201.82 20,887.63 17,124.11
12/31/07 13,251.72 23,950.56 21,182.62 17,268.26
01/31/08 12,456.86 26,064.28 22,640.08 18,865.18
02/29/08 12,052.19 28,332.66 24,578.33 19,974.36
03/31/08 12,000.15 25,990.63 22,372.82 18,011.58
04/30/08 12,584.59 24,326.17 21,123.91 16,416.90
05/31/08 12,747.59 26,160.02 22,549.54 17,390.34
06/30/08 11,672.93 27,124.82 22,947.25 18,238.82
07/31/08 11,574.80 24,156.78 20,198.90 16,406.00
08/31/08 11,742.23 21,402.31 17,858.28 14,171.99
09/30/08 10,695.91 18,890.89 15,655.24 12,728.58
10/31/08 8,899.55 11,194.60 9,699.27 7,865.12
11/30/08 8,260.97 13,823.86 11,411.92 10,038.48
12/31/08 8,348.87 18,064.55 14,279.25 12,715.33
01/31/09 7,645.17 17,877.70 14,311.38 12,866.00
02/28/09 6,831.13 17,988.11 14,270.40 12,554.64
03/31/09 7,429.51 20,408.61 16,002.90 13,972.76
04/30/09 8,140.58 18,998.78 15,080.69 12,442.47
05/31/09 8,595.91 25,045.77 19,589.78 16,725.35
06/30/09 8,612.96 21,758.99 17,390.85 14,303.52
07/31/09 9,264.42 23,389.64 18,592.46 15,055.43
08/31/09 9,598.90 23,559.50 18,758.36 14,950.40
09/30/09 9,957.09 26,557.52 21,087.70 17,131.81
10/31/09 9,772.11 25,640.28 20,402.43 16,076.75
11/30/09 10,358.28 30,566.20 24,179.98 19,325.88
12/31/09 10,558.36 29,338.45 22,833.02 17,543.12
01/31/10 10,178.53 26,413.24 20,668.59 15,477.77
02/28/10 10,493.83 28,259.83 22,112.18 16,710.51
03/31/10 11,127.08 29,045.07 23,029.32 16,865.32
04/30/10 11,302.75 32,686.49 25,514.16 19,270.48
05/31/10 10,400.22 31,814.96 24,652.52 18,937.45
06/30/10 9,855.79 32,522.54 25,270.88 19,822.32
07/31/10 10,546.31 31,530.21 24,741.57 18,422.65
08/31/10 10,070.21 34,722.92 27,064.76 20,440.79
09/30/10 10,968.92 37,294.35 29,231.60 21,391.13
10/31/10 11,386.28 37,674.02 30,362.61 21,857.65
11/30/10 11,387.74 39,106.43 31,494.24 22,736.41
12/31/10 12,148.80 41,051.81 33,133.88 23,639.39
01/31/11 12,436.74 35,816.24 29,446.11 20,756.33
02/28/11 12,862.82 38,783.38 32,178.49 23,036.06
03/31/11 12,867.93 39,175.81 32,501.93 23,174.80
04/30/11 13,249.02 41,453.81 33,932.14 23,976.54
05/31/11 13,099.05 38,812.10 31,940.40 22,399.50
06/30/11 12,880.70 37,357.24 30,282.12 21,074.84
07/31/11 12,618.77 39,118.38 31,774.07 21,960.01
08/31/11 11,933.30 42,296.09 33,703.36 24,235.92
09/30/11 11,094.40 36,467.10 28,338.53 21,298.04
10/31/11 12,306.94 38,457.95 30,663.92 22,725.18
11/30/11 12,279.74 38,524.95 30,802.20 23,332.92
12/31/11 12,405.35 33,039.89 26,739.27 19,981.61
01/31/12 12,961.30 36,808.25 29,901.04 21,923.82
02/29/12 13,521.78 35,836.80 29,389.18 21,508.11
03/31/12 13,966.77 32,271.27 26,250.03 19,259.86
04/30/12 13,879.10 30,712.69 24,934.40 18,025.94
05/31/12 13,044.96 27,542.14 22,367.56 17,033.36
06/30/12 13,582.44 28,011.85 22,729.02 17,442.23
07/31/12 13,771.08 27,040.40 22,314.12 16,701.65
08/31/12 14,081.25 29,837.32 24,499.18 18,696.18
09/30/12 14,445.13 33,925.94 27,615.35 20,941.87
10/31/12 14,178.41 33,146.64 26,986.61 20,641.06
11/30/12 14,260.66 29,922.72 24,716.93 18,578.21
12/31/12 14,390.64 29,120.98 24,092.71 18,290.07
01/31/13 15,136.01 26,559.46 22,325.95 16,418.63
02/28/13 15,341.48 23,531.23 19,984.99 14,784.53
03/31/13 15,916.83 23,759.16 19,953.52 14,982.09
04/30/13 16,223.50 19,319.92 16,586.50 12,006.50
05/31/13 16,602.99 18,115.14 15,926.05 11,693.05
06/30/13 16,380.03 15,086.90 13,201.76 9,698.80
07/31/13 17,213.52 16,997.19 14,675.45 10,688.35
08/31/13 16,714.99 18,419.05 15,777.88 11,147.21
09/30/13 17,239.16 16,725.84 14,485.15 9,956.69
10/31/13 18,031.61 16,769.26 14,495.17 9,981.82
11/30/13 18,581.10 14,772.14 12,915.02 8,827.92
12/31/13 19,051.50 14,177.15 12,566.17 8,485.71
01/31/14 18,392.81 15,579.65 13,718.18 9,401.63
02/28/14 19,234.17 17,667.08 15,305.69 10,386.33
03/31/14 19,395.85 16,199.35 14,109.33 9,491.29
04/30/14 19,539.22 16,655.98 14,484.06 9,712.37
05/31/14 19,997.89 15,351.33 13,674.87 9,031.71
06/30/14 20,411.00 18,417.25 16,038.40 10,631.40
07/31/14 20,129.51 17,928.01 15,686.09 10,451.93
08/31/14 20,934.79 18,547.72 15,954.15 10,757.15
09/30/14 20,641.21 14,949.07 13,067.47 8,630.89
10/31/14 21,145.37 12,318.03 10,927.17 7,047.38
11/30/14 21,714.07 12,948.61 11,452.41 7,465.69
[END CHART]
Data from 11/30/04 to 11/30/14.
See next page for benchmark definitions.
Past performance is no guarantee of future results, and the cumulative
performance quoted does not reflect the deduction of taxes that a shareholder
would pay on distributions or the redemption of shares. Indexes are unmanaged
and you cannot invest directly in an index. The return information for the
indexes does not reflect the deduction of any fees, expenses, or taxes.
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6 | USAA PRECIOUS METALS AND MINERALS FUND
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The graph on page 6 illustrates the comparison of a $10,000 hypothetical
investment in the USAA Precious Metals and Minerals Fund Shares to the following
benchmarks:
o The unmanaged S&P 500 Index represents the weighted average performance of
a group of 500 widely held, publicly traded stocks.
o The unmanaged Lipper Precious Metals Equity Funds Index tracks the total
return performance of the 10 largest funds within the Lipper Precious Metals
Equity Funds category.
o The NYSE Arca Gold Miners (GDM) Index is a modified market capitalization
weighted index comprised of publicly traded companies involved primarily in
the mining for gold and silver.
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INVESTMENT OVERVIEW | 7
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USAA PRECIOUS METALS AND MINERALS FUND
INSTITUTIONAL SHARES (INSTITUTIONAL SHARES)
(Ticker Symbol: UIPMX)
--------------------------------------------------------------------------------
11/30/14 5/31/14
--------------------------------------------------------------------------------
Net Assets $151.1 Million $183.8 Million
Net Asset Value Per Share $11.97 $14.17
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 11/30/14
--------------------------------------------------------------------------------
5/31/14-11/30/14* 1 YEAR 5 YEARS SINCE INCEPTION 8/01/08
-15.53% -12.16% -15.59% -8.65%
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/14
--------------------------------------------------------------------------------
1 YEAR 5 YEARS SINCE INCEPTION 8/01/08
-8.05% -14.81% -8.47%
--------------------------------------------------------------------------------
EXPENSE RATIO AS OF 5/31/14**
--------------------------------------------------------------------------------
1.00%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF
FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE
DATA QUOTED. THE RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE, SO
THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, VISIT
USAA.COM.
*Total returns for periods of less than one year are not annualized. This
six-month return is cumulative.
**The expense ratio represents the total annual operating expenses, before
reductions of any expenses paid indirectly and including any acquired fund fees
and expenses, as reported in the Fund's prospectus dated October 1, 2014, and is
calculated as a percentage of average net assets. The expense ratio may differ
from the expense ratio disclosed in the Financial Highlights, which excludes
acquired fund fees and expenses.
Total return measures the price change in a share assuming the reinvestment of
all net investment income and realized capital gain distributions, if any. The
total returns quoted do not reflect adjustments made to the enclosed financial
statements in accordance with U.S. generally accepted accounting principles or
the deduction of taxes that a shareholder would pay on distributions (including
capital gains distributions), redemption of shares, or reinvested net investment
income.
The Institutional Shares are available for investment through a USAA
discretionary managed account program, and certain advisory programs sponsored
by financial intermediaries, such as brokerage firms, investment advisors,
financial planners, third-party administrators, and insurance companies.
Institutional Shares also are available to institutional investors, which
include retirement plans, endowments, foundations, and bank trusts, as well as
other persons or legal entities that the Fund may approve from time to time, or
for purchase by a USAA fund participating in a fund-of-funds investment strategy
(USAA fund-of-funds).
================================================================================
8 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
o CUMULATIVE PERFORMANCE COMPARISON o
[CHART OF CUMULATIVE PERFORMANCE COMPARISON]
USAA PRECIOUS METALS
LIPPER PRECIOUS METALS AND MINERALS FUND NYSE ARCA GOLD MINERS
S&P 500 INDEX EQUITY FUNDS INDEX INSTITUTIONAL SHARES (GDM) INDEX
07/31/08 $10,000.00 $10,000.00 $10,000.00 $10,000.00
08/31/08 10,144.65 8,841.22 9,184.58 8,638.30
09/30/08 9,240.68 7,750.54 8,106.83 7,758.49
10/31/08 7,688.73 4,801.88 4,804.05 4,794.05
11/30/08 7,137.03 5,649.77 5,932.36 6,118.79
12/31/08 7,212.97 7,069.32 7,755.85 7,750.42
01/31/09 6,605.01 7,085.23 7,675.67 7,842.25
02/28/09 5,901.73 7,064.94 7,726.70 7,652.47
03/31/09 6,418.69 7,922.66 8,769.07 8,516.86
04/30/09 7,033.02 7,466.10 8,167.70 7,584.09
05/31/09 7,426.40 9,698.44 10,766.35 10,194.65
06/30/09 7,441.13 8,609.80 9,359.51 8,718.47
07/31/09 8,003.95 9,204.69 10,062.93 9,176.78
08/31/09 8,292.93 9,286.83 10,135.82 9,112.76
09/30/09 8,602.38 10,440.02 11,429.68 10,442.41
10/31/09 8,442.58 10,100.77 11,036.06 9,799.31
11/30/09 8,948.99 11,970.94 13,160.90 11,779.76
12/31/09 9,121.85 11,304.09 12,631.28 10,693.11
01/31/10 8,793.70 10,232.54 11,376.32 9,434.21
02/28/10 9,066.10 10,947.22 12,174.60 10,185.61
03/31/10 9,613.20 11,401.28 12,516.19 10,279.97
04/30/10 9,764.97 12,631.46 14,090.45 11,746.00
05/31/10 8,985.23 12,204.89 13,719.16 11,543.00
06/30/10 8,514.87 12,511.02 14,027.34 12,082.36
07/31/10 9,111.44 12,248.97 13,604.06 11,229.21
08/31/10 8,700.12 13,399.13 14,981.55 12,459.34
09/30/10 9,476.55 14,471.88 16,095.42 13,038.60
10/31/10 9,837.13 15,031.81 16,262.50 13,322.96
11/30/10 9,838.39 15,592.06 16,886.27 13,858.59
12/31/10 10,495.91 16,403.81 17,730.34 14,408.99
01/31/11 10,744.67 14,578.08 15,469.18 12,651.67
02/28/11 11,112.78 15,930.81 16,756.56 14,041.24
03/31/11 11,117.20 16,090.94 16,929.86 14,125.81
04/30/11 11,446.44 16,799.01 17,916.02 14,614.49
05/31/11 11,316.87 15,812.95 16,781.31 13,653.24
06/30/11 11,128.23 14,991.97 16,154.13 12,845.81
07/31/11 10,901.94 15,730.60 16,921.60 13,385.35
08/31/11 10,309.72 16,685.74 18,299.76 14,772.59
09/30/11 9,584.96 14,029.74 15,778.64 12,981.86
10/31/11 10,632.53 15,180.99 16,641.02 13,851.75
11/30/11 10,609.03 15,249.45 16,674.03 14,222.19
12/31/11 10,717.55 13,237.99 14,299.71 12,179.45
01/31/12 11,197.87 14,803.31 15,932.64 13,363.30
02/29/12 11,682.08 14,549.90 15,517.49 13,109.90
03/31/12 12,066.53 12,995.78 13,976.81 11,739.52
04/30/12 11,990.79 12,344.44 13,303.34 10,987.41
05/31/12 11,270.14 11,073.66 11,933.34 10,382.40
06/30/12 11,734.49 11,252.61 12,136.30 10,631.62
07/31/12 11,897.47 11,047.20 11,721.15 10,180.21
08/31/12 12,165.44 12,128.97 12,934.32 11,395.94
09/30/12 12,479.81 13,671.71 14,710.25 12,764.76
10/31/12 12,249.38 13,360.44 14,373.51 12,581.41
11/30/12 12,320.44 12,236.78 12,975.83 11,324.04
12/31/12 12,432.74 11,927.74 12,634.00 11,148.40
01/31/13 13,076.69 11,053.06 11,517.86 10,007.70
02/28/13 13,254.21 9,894.10 10,209.44 9,011.66
03/31/13 13,751.28 9,878.52 10,307.92 9,132.08
04/30/13 14,016.22 8,211.59 8,385.15 7,318.36
05/31/13 14,344.09 7,884.62 7,864.60 7,127.30
06/30/13 14,151.46 6,535.88 6,551.49 5,911.74
07/31/13 14,871.55 7,265.47 7,376.87 6,514.90
08/31/13 14,440.85 7,811.26 7,995.91 6,794.59
09/30/13 14,893.70 7,171.26 7,264.32 6,068.93
10/31/13 15,578.33 7,176.22 7,283.08 6,084.25
11/30/13 16,053.07 6,393.92 6,420.17 5,380.91
12/31/13 16,459.47 6,221.22 6,162.72 5,172.32
01/31/14 15,890.40 6,791.55 6,775.22 5,730.60
02/28/14 16,617.28 7,577.49 7,679.84 6,330.81
03/31/14 16,756.96 6,985.20 7,043.78 5,785.26
04/30/14 16,880.83 7,170.72 7,241.67 5,920.01
05/31/14 17,277.09 6,770.11 6,676.28 5,505.13
06/30/14 17,633.99 7,940.24 8,019.08 6,480.19
07/31/14 17,390.80 7,765.82 7,802.34 6,370.80
08/31/14 18,086.53 7,898.53 8,070.90 6,556.84
09/30/14 17,832.89 6,469.40 6,506.66 5,260.81
10/31/14 18,268.46 5,409.78 5,366.47 4,295.61
11/30/14 18,759.78 5,669.82 5,639.74 4,550.58
[END CHART]
Data from 7/31/08 to 11/30/14.*
See page 7 for benchmark definitions.
Past performance is no guarantee of future results, and the cumulative
performance quoted does not reflect the deduction of taxes that a shareholder
would pay on distributions or the redemption of shares. Indexes are unmanaged
and you cannot invest directly in an index. The return information for the
indexes does not reflect the deduction of any fees, expenses, or taxes.
*The performance of the S&P 500 Index, the Lipper Precious Metals Equity Funds
Index, and the NYSE Arca Gold Miners (GDM) Index is calculated from the end of
the month, July 31, 2008, while the inception date of the Institutional Shares
is August 1, 2008. There may be a slight variation of performance numbers
because of this difference.
================================================================================
INVESTMENT OVERVIEW | 9
================================================================================
USAA PRECIOUS METALS AND MINERALS FUND ADVISER SHARES (ADVISER SHARES)
(Ticker Symbol: UPMMX)
--------------------------------------------------------------------------------
11/30/14 5/31/14
--------------------------------------------------------------------------------
Net Assets $15.1 Million $15.7 Million
Net Asset Value Per Share $11.81 $14.01
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 11/30/14
--------------------------------------------------------------------------------
5/31/14-11/30/14* 1 YEAR SINCE INCEPTION 8/01/10
-15.70% -12.52% -18.74%
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/14
--------------------------------------------------------------------------------
1 YEAR SINCE INCEPTION 8/01/10
-8.37% -18.35%
--------------------------------------------------------------------------------
EXPENSE RATIO AS OF 5/31/14**
--------------------------------------------------------------------------------
1.40%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF
FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE
DATA QUOTED. THE RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE, SO
THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, VISIT
USAA.COM.
*Total returns for periods of less than one year are not annualized. This
six-month return is cumulative.
**The expense ratio represents the total annual operating expenses, before
reductions of any expenses paid indirectly and including any acquired fund fees
and expenses, as reported in the Fund's prospectus dated October 1, 2014, and is
calculated as a percentage of average net assets. The expense ratio may differ
from the expense ratio disclosed in the Financial Highlights, which excludes
acquired fund fees and expenses.
Total return measures the price change in a share assuming the reinvestment of
all net investment income and realized capital gain distributions, if any. The
total returns quoted do not reflect adjustments made to the enclosed financial
statements in accordance with U.S. generally accepted accounting principles or
the deduction of taxes that a shareholder would pay on distributions (including
capital gains distributions), redemption of shares, or reinvested net investment
income.
================================================================================
10 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
o CUMULATIVE PERFORMANCE COMPARISON o
[CHART OF CUMULATIVE PERFORMANCE COMPARISON]
USAA PRECIOUS METALS
LIPPER PRECIOUS METALS AND MINERALS FUND NYSE ARCA GOLD MINERS
S&P 500 INDEX EQUITY FUNDS INDEX ADVISER SHARES (GDM) INDEX
07/31/10 $10,000.00 $10,000.00 $10,000.00 $10,000.00
08/31/10 9,548.56 10,938.98 11,030.98 11,095.47
09/30/10 10,400.72 11,814.77 11,845.35 11,611.32
10/31/10 10,796.45 12,271.90 11,963.26 11,864.55
11/30/10 10,797.84 12,729.28 12,415.68 12,341.55
12/31/10 11,519.47 13,391.99 13,028.39 12,831.70
01/31/11 11,792.50 11,901.47 11,366.03 11,266.75
02/28/11 12,196.50 13,005.84 12,302.06 12,504.21
03/31/11 12,201.36 13,136.57 12,423.62 12,579.52
04/30/11 12,562.70 13,714.63 13,143.87 13,014.71
05/31/11 12,420.50 12,909.61 12,302.06 12,158.68
06/30/11 12,213.46 12,239.37 11,837.08 11,439.64
07/31/11 11,965.10 12,842.39 12,393.23 11,920.11
08/31/11 11,315.13 13,622.16 13,396.11 13,155.50
09/30/11 10,519.69 11,453.82 11,548.37 11,560.79
10/31/11 11,669.42 12,393.69 12,177.45 12,335.46
11/30/11 11,643.64 12,449.58 12,192.65 12,665.35
12/31/11 11,762.74 10,807.43 10,451.18 10,846.22
01/31/12 12,289.89 12,085.35 11,640.66 11,900.47
02/29/12 12,821.33 11,878.47 11,332.27 11,674.82
03/31/12 13,243.27 10,609.69 10,200.40 10,454.45
04/30/12 13,160.15 10,077.94 9,705.63 9,784.66
05/31/12 12,369.21 9,040.48 8,702.54 9,245.88
06/30/12 12,878.85 9,186.57 8,848.26 9,467.82
07/31/12 13,057.72 9,018.88 8,539.87 9,065.83
08/31/12 13,351.82 9,902.03 9,420.97 10,148.47
09/30/12 13,696.85 11,161.52 10,708.73 11,367.46
10/31/12 13,443.95 10,907.40 10,461.34 11,204.18
11/30/12 13,521.94 9,990.04 9,441.30 10,084.44
12/31/12 13,645.19 9,737.75 9,190.19 9,928.03
01/31/13 14,351.94 9,023.66 8,376.96 8,912.20
02/28/13 14,546.77 8,077.50 7,422.45 8,025.19
03/31/13 15,092.32 8,064.78 7,487.92 8,132.43
04/30/13 15,383.10 6,703.90 6,092.33 6,517.25
05/31/13 15,742.94 6,436.96 5,709.84 6,347.10
06/30/13 15,531.53 5,335.87 4,755.33 5,264.61
07/31/13 16,321.84 5,931.50 5,354.91 5,801.74
08/31/13 15,849.13 6,377.08 5,799.43 6,050.82
09/30/13 16,346.15 5,854.58 5,265.32 5,404.59
10/31/13 17,097.55 5,858.63 5,279.10 5,418.23
11/30/13 17,618.58 5,219.97 4,651.95 4,791.88
12/31/13 18,064.61 5,078.97 4,462.52 4,606.13
01/31/14 17,440.04 5,544.59 4,903.60 5,103.30
02/28/14 18,237.82 6,186.23 5,561.78 5,637.80
03/31/14 18,391.12 5,702.69 5,100.02 5,151.97
04/30/14 18,527.07 5,854.14 5,241.31 5,271.97
05/31/14 18,961.97 5,527.08 4,827.79 4,902.51
06/30/14 19,353.68 6,482.37 5,796.10 5,770.83
07/31/14 19,086.78 6,339.98 5,641.04 5,673.42
08/31/14 19,850.34 6,448.32 5,834.01 5,839.09
09/30/14 19,571.97 5,281.59 4,700.29 4,684.94
10/31/14 20,050.02 4,416.52 3,873.26 3,825.39
11/30/14 20,589.26 4,628.81 4,069.68 4,052.45
[END CHART]
Data from 7/31/10 to 11/30/14.*
See page 7 for benchmark definitions.
Past performance is no guarantee of future results, and the cumulative
performance quoted does not reflect the deduction of taxes that a shareholder
would pay on distributions or the redemption of shares. Indexes are unmanaged
and you cannot invest directly in an index. The return information for the
indexes does not reflect the deduction of any fees, expenses, or taxes.
*The performance of the S&P 500 Index, the Lipper Precious Metals Equity Funds
Index, and the NYSE Arca Gold Miners (GDM) Index is calculated from the end of
the month, July 31, 2010, while the inception date of the Adviser Shares is
August 1, 2010. There may be a slight variation of performance numbers because
of this difference.
================================================================================
INVESTMENT OVERVIEW | 11
================================================================================
o TOP 10 EQUITY HOLDINGS - 11/30/14 o
(% of Net Assets)
Goldcorp, Inc............................................................ 6.2%
Randgold Resources Ltd. ADR.............................................. 6.0%
Eldorado Gold Corp....................................................... 5.9%
Royal Gold, Inc.......................................................... 4.9%
Silver Wheaton Corp...................................................... 4.3%
Newcrest Mining Ltd...................................................... 4.2%
Newmont Mining Corp...................................................... 3.7%
Alamos Gold, Inc......................................................... 3.6%
Compania de Minas Buenaventura S.A. ADR.................................. 3.6%
Tahoe Resources, Inc..................................................... 3.5%
o ASSET ALLOCATION - 11/30/14 o
[PIE CHART OF ASSET ALLOCATION]
GOLD 80.3%
SILVER 12.5%
MONEY MARKET INSTRUMENTS 6.3%
PLATINUM GROUP METALS 1.5%
[END CHART]
Percentages are of the net assets of the Fund and may not equal 100%.
You will find a complete list of securities that the Fund owns on pages 13-16.
================================================================================
12 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
PORTFOLIO OF INVESTMENTS
November 30, 2014 (unaudited)
--------------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
--------------------------------------------------------------------------------------------------------
EQUITY SECURITIES (94.3%)
COMMON STOCKS (94.3%)
GOLD (80.3%)
AFRICAN GOLD COMPANIES (5.0%)
1,679,800 AngloGold Ashanti Ltd. ADR* $ 14,379
4,080,000 Gold Fields Ltd. ADR 16,728
6,500,000 Great Basin Gold Ltd., acquired 03/30/2012; cost $4,455*(a),(b),(c) -
18,400,000 Great Basin Gold Ltd.*(b) -
4,300,000 Harmony Gold Mining Co. Ltd. ADR* 7,353
--------
38,460
--------
AUSTRALIAN GOLD COMPANIES (7.2%)
7,063,636 Kingsgate Consolidated Ltd.*(b) 4,042
3,800,000 Newcrest Mining Ltd.*(b) 32,120
6,850,000 Oceanagold Corp.* 12,879
21,450,000 Perseus Mining Ltd.* 4,971
15,971,414 St. Barbara Ltd.*(b) 1,149
--------
55,161
--------
EUROPEAN GOLD COMPANIES (7.6%)
16,801,000 Centamin plc 11,901
705,000 Randgold Resources Ltd. ADR 45,600
--------
57,501
--------
NORTH AMERICAN GOLD COMPANIES (56.9%)
1,000,000 Agnico-Eagle Mines Ltd. 23,490
8,161,500 Alacer Gold Corp. 14,988
3,950,000 Alamos Gold, Inc. 27,220
6,800,000 AuRico Gold, Inc. 23,392
240,000 Axmin, Inc., acquired 12/06/2006-06/03/2008; cost $1,806*(a) 4
9,282,289 B2Gold Corp.* 15,098
1,460,000 Barrick Gold Corp. 17,359
4,750,000 Centerra Gold, Inc. 21,933
1,681,300 Continental Gold Ltd.* 3,308
242,800 Detour Gold Corp.* 1,765
5,539,800 Dundee Precious Metals, Inc.* 14,340
7,218,100 Eldorado Gold Corp. 45,258
================================================================================
PORTFOLIO OF INVESTMENTS | 13
================================================================================
--------------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
--------------------------------------------------------------------------------------------------------
2,400,000 Goldcorp, Inc. $ 47,136
197,600 Guyana Goldfields, Inc.* 475
4,000,000 IAMGOLD Corp.* 8,440
26,500 Kerr Mines, Inc.* 3
5,600,000 Kinross Gold Corp.* 15,680
1,985,000 Kirkland Lake Gold, Inc.* 6,006
2,120,000 Mandalay Resources Corp. 1,539
1,872,100 Nautilus Minerals, Inc., acquired 02/02/2007-03/11/2009; cost $3,817*(a),(c) 835
6,000,000 New Gold, Inc.* 24,060
1,550,000 Newmont Mining Corp. 28,520
375,000 Northern Star Mining Corp., acquired 05/05/2006; cost $373*(a),(b) -
2,563,600 Primero Mining Corp.* 10,447
6,399,950 Romarco Minerals, Inc.* 2,854
590,000 Royal Gold, Inc. 37,571
1,363,000 San Gold Corp.* 78
7,193,700 Semafo, Inc.* 21,389
3,900,300 Torex Gold Resources, Inc.* 4,434
3,976,400 Yamana Gold, Inc. 15,031
-------
432,653
-------
SOUTH AMERICAN GOLD COMPANIES (3.6%)
2,925,000 Compania de Minas Buenaventura S.A. ADR 27,056
-------
Total Gold (cost: $1,276,307) 610,831
-------
PLATINUM GROUP METALS (1.5%)
1,550,000 Impala Platinum Holdings Ltd.* (cost $14,940) 11,291
-------
SILVER (12.5%)
1,066,457 Fresnillo plc 11,861
2,508,470 Pan American Silver Corp. 23,479
1,660,000 Silver Wheaton Corp. 33,067
1,668,800 Tahoe Resources, Inc.* 26,648
-------
Total Silver (cost: $132,523) 95,055
-------
Total Common Stocks (cost: $1,423,770) 717,177
-------
WARRANTS (0.0%)
SILVER (0.0%)
91,530 Pan American Silver Corp., acquired 12/23/2009; cost $553*(a),(b),(c) (cost $553) -
-------
Total Equity Securities (cost: $1,424,323) 717,177
-------
================================================================================
14 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
--------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COUPON VALUE
(000) SECURITY RATE MATURITY (000)
--------------------------------------------------------------------------------------------------------
MONEY MARKET INSTRUMENTS (6.3%)
COMMERCIAL PAPER (4.0%)
$ 3,681 Crown Point Capital Co., LLC(d) 0.14% 12/02/2014 $ 3,681
1,071 Crown Point Capital Co., LLC(d) 0.14 12/09/2014 1,071
5,414 Gotham Funding Corp.(d),(e) 0.14 12/03/2014 5,414
7,916 Manhattan Asset Funding Co., LLC(d),(e) 0.13 12/09/2014 7,916
4,583 Nieuw Amsterdam Receivables Corp.(d),(e) 0.11 12/08/2014 4,583
7,487 Working Capital Management Co.(d),(e) 0.13 12/15/2014 7,486
-------
Total Commercial Paper 30,151
-------
--------------------------------------------------------------------------------------------------------
NUMBER
OF SHARES
--------------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS (2.3%)
7,879,266 State Street Institutional Liquid Reserves Fund Premier Class, 0.08%(f) 17,879
-------
Total Money Market Instruments (cost: $48,030) 48,030
-------
TOTAL INVESTMENTS (COST: $1,472,353) $765,207
========
================================================================================
PORTFOLIO OF INVESTMENTS | 15
================================================================================
--------------------------------------------------------------------------------------------------------
($ IN 000s) VALUATION HIERARCHY
--------------------------------------------------------------------------------------------------------
(LEVEL 1) (LEVEL 2) (LEVEL 3)
QUOTED PRICES OTHER SIGNIFICANT SIGNIFICANT
IN ACTIVE MARKETS OBSERVABLE UNOBSERVABLE
ASSETS FOR IDENTICAL ASSETS INPUTS INPUTS TOTAL
--------------------------------------------------------------------------------------------------------
Equity Securities:
Common Stocks $679,866 $37,311 $- $717,177
Warrants - - - -
Money Market Instruments:
Commercial Paper - 30,151 - 30,151
Money Market Funds 17,879 - - 17,879
--------------------------------------------------------------------------------------------------------
Total $697,745 $67,462 $- $765,207
--------------------------------------------------------------------------------------------------------
For the period of June 1, 2014, through November 30, 2014, common stocks with a
fair value of $41,391,000 were transferred from Level 1 to Level 2. Due to an
assessment of events at the end of the current reporting period, these
securities had adjustments to their foreign market closing prices to reflect
changes in value that occurred after the close of foreign markets and prior to
the close of the U.S. securities markets. Such adjustments were not made at the
end of the prior reporting period. The Fund's policy is to recognize any
transfers into and out of the levels as of the beginning of the period in which
the event or circumstance that caused the transfer occurred.
================================================================================
16 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
NOTES TO PORTFOLIO OF INVESTMENTS
November 30, 2014 (unaudited)
--------------------------------------------------------------------------------
o GENERAL NOTES
Market values of securities are determined by procedures and practices
discussed in Note 1 to the financial statements.
The portfolio of investments category percentages shown represent the
percentages of the investments to net assets, and, in total, may not equal
100%. A category percentage of 0.0% represents less than 0.1% of net assets.
Investments in foreign securities were 81.7% of net assets at November 30,
2014.
o CATEGORIES AND DEFINITIONS
WARRANTS - entitle the holder to buy a proportionate amount of common stock
at a specified price for a stated period.
o PORTFOLIO ABBREVIATION(S) AND DESCRIPTION(S)
ADR American depositary receipts are receipts issued by a U.S. bank
evidencing ownership of foreign shares. Dividends are paid in U.S.
dollars.
o SPECIFIC NOTES
(a) Security deemed illiquid by USAA Asset Management Company (the
Manager), under liquidity guidelines approved by the USAA Mutual Funds
Trust's Board of Trustees (the Board). The aggregate market value of
these securities at November 30, 2014, was $839,000, which represented
0.1% of the Fund's net assets.
================================================================================
NOTES TO PORTFOLIO OF INVESTMENTS | 17
================================================================================
(b) Security was fair valued at November 30, 2014, by the Manager
in accordance with valuation procedures approved by the Board. The
total value of all such securities was $37,311,000, which represented
4.9% of the Fund's net assets.
(c) Restricted security that is not registered under the
Securities Act of 1933.
(d) Restricted security that is not registered under the
Securities Act of 1933. A resale of this security in the United States
may occur in an exempt transaction to a qualified institutional buyer
as defined by Rule 144A, and as such has been deemed liquid by the
Manager under liquidity guidelines approved by the Board, unless
otherwise noted as illiquid.
(e) Commercial paper issued in reliance on the "private placement"
exemption from registration afforded by Section 4(2) of the Securities
Act of 1933. Unless this commercial paper is subsequently registered, a
resale of this commercial paper in the United States must be effected
in a transaction exempt from registration under the Securities Act of
1933. Section 4(2) commercial paper is normally resold to other
investors through or with the assistance of the issuer or an investment
dealer who makes a market in this security, and as such has been deemed
liquid by the Manager under liquidity guidelines approved by the Board,
unless otherwise noted as illiquid.
(f) Rate represents the money market fund annualized seven-day yield at
November 30, 2014.
* Non-income-producing security.
See accompanying notes to financial statements.
================================================================================
18 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
STATEMENT OF ASSETS AND LIABILITIES (IN THOUSANDS)
November 30, 2014 (unaudited)
--------------------------------------------------------------------------------
ASSETS
Investments in securities, at market value (cost of $1,472,353) $ 765,207
Cash 236
Cash denominated in foreign currencies (identified cost of $702) 692
Receivables:
Capital shares sold 1,590
Dividends and interest 560
----------
Total assets 768,285
----------
LIABILITIES
Payables:
Securities purchased 5,910
Capital shares redeemed 1,343
Unrealized depreciation on foreign currency contracts held, at value 6
Accrued management fees 430
Accrued administration and servicing fees 3
Accrued transfer agent's fees 97
Other accrued expenses and payables 164
----------
Total liabilities 7,953
----------
Net assets applicable to capital shares outstanding $ 760,332
==========
NET ASSETS CONSIST OF:
Paid-in capital $1,671,668
Accumulated undistributed net investment loss (39,214)
Accumulated net realized loss on investments (164,974)
Net unrealized depreciation of investments (707,146)
Net unrealized depreciation of foreign currency translations (2)
----------
Net assets applicable to capital shares outstanding $ 760,332
==========
Net asset value, redemption price, and offering price per share:
Fund Shares (net assets of $594,105/49,896 shares outstanding) $ 11.91
==========
Institutional Shares (net assets of $151,146/12,627
shares outstanding) $ 11.97
==========
Adviser Shares (net assets of $15,081/1,277 shares outstanding) $ 11.81
==========
See accompanying notes to financial statements.
================================================================================
FINANCIAL STATEMENTS | 19
================================================================================
STATEMENT OF OPERATIONS (IN THOUSANDS)
Six-month period ended November 30, 2014 (unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $461) $ 3,200
Interest 25
---------
Total income 3,225
---------
EXPENSES
Management fees 3,298
Administration and servicing fees:
Fund Shares 565
Institutional Shares 94
Adviser Shares 13
Transfer agent's fees:
Fund Shares 1,233
Institutional Shares 94
Adviser Shares 5
Distribution and service fees (Note 6E):
Adviser Shares 22
Custody and accounting fees:
Fund Shares 61
Institutional Shares 14
Adviser Shares 1
Postage:
Fund Shares 50
Institutional Shares 14
Adviser Shares 3
Shareholder reporting fees:
Fund Shares 23
Institutional Shares 8
Adviser Shares 2
Trustees' fees 12
Registration fees:
Fund Shares 17
Institutional Shares 12
Adviser Shares 10
Professional fees 98
Other 14
---------
Total expenses 5,663
---------
NET INVESTMENT LOSS (2,438)
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain (loss) on:
Investments 6,153
Foreign currency transactions (46)
Change in net unrealized appreciation/depreciation of:
Investments (139,411)
Foreign currency translations (53)
---------
Net realized and unrealized loss (133,357)
---------
Decrease in net assets resulting from operations $(135,795)
=========
See accompanying notes to financial statements.
================================================================================
20 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (IN THOUSANDS)
Six-month period ended November 30, 2014 (unaudited), and year ended May 31,
2014
------------------------------------------------------------------------------------------------------
11/30/2014 5/31/2014
------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment loss $ (2,438) $ (737)
Net realized gain (loss) on investments 6,153 (95,273)
Net realized gain (loss) on foreign currency transactions (46) 9
Change in net unrealized appreciation/depreciation of:
Investments (139,411) (73,680)
Foreign currency translations (53) 52
--------------------------
Decrease in net assets resulting from operations (135,795) (169,629)
--------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Fund Shares - (1,084)
Institutional Shares - (1,016)
--------------------------
Distributions to shareholders - (2,100)
--------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS (NOTE 5)
Fund Shares (7,926) 1,865
Institutional Shares (8,384) (97,759)
Adviser Shares 2,455 6,894
--------------------------
Total net decrease in net assets from capital share transactions (13,855) (89,000)
--------------------------
Net decrease in net assets (149,650) (260,729)
NET ASSETS
Beginning of period 909,982 1,170,711
--------------------------
End of period $ 760,332 $ 909,982
==========================
Accumulated undistributed net investment loss:
End of period $ (39,214) $ (36,776)
==========================
See accompanying notes to financial statements.
================================================================================
FINANCIAL STATEMENTS | 21
================================================================================
NOTES TO FINANCIAL STATEMENTS
November 30, 2014 (unaudited)
--------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USAA MUTUAL FUNDS TRUST (the Trust), registered under the Investment Company Act
of 1940, as amended (the 1940 Act), is an open-end management investment
company organized as a Delaware statutory trust consisting of 52 separate funds.
The information presented in this semiannual report pertains only to the USAA
Precious Metals and Minerals Fund (the Fund), which is classified as
nondiversified under the 1940 Act. The Fund's investment objective is to seek
long-term capital appreciation and to protect the purchasing power of
shareholders' capital against inflation.
The Fund concentrates its investments in equity securities of domestic and
foreign companies engaged in the exploration, mining, or processing of gold and
other precious metals and minerals, such as platinum, silver, and diamonds. As
such, the Fund may be exposed to more risk than portfolios with a broader
industry diversification. As a nondiversified fund, the Fund may invest a
greater percentage of its assets in a single issuer. Because a relatively high
percentage of the Fund's total assets may be invested in the securities of a
single issuer or a limited number of issuers, the securities of the Fund may be
more sensitive to changes in the market value of a single issuer, a limited
number of issuers, or large companies generally. Such a focused investment
strategy may increase the volatility of the Fund's investment results because
this Fund may be more susceptible to risk associated with a single economic,
political, or regulatory event than a diversified fund.
The Fund consists of three classes of shares: Precious Metals and Minerals Fund
Shares (Fund Shares), Precious Metals and Minerals Fund Institutional Shares
(Institutional Shares), and Precious Metals and Minerals Fund Adviser Shares
(Adviser Shares). Each class of shares has equal rights to assets and earnings,
except that each class bears certain class-related expenses specific to the
particular class. These expenses include administration and servicing fees,
================================================================================
22 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
transfer agent fees, postage, shareholder reporting fees, distribution and
service (12b-1) fees, and certain registration and custodian fees. Expenses not
attributable to a specific class, income, and realized gains or losses on
investments are allocated to each class of shares based on each class's relative
net assets. Each class has exclusive voting rights on matters related solely to
that class and separate voting rights on matters that relate to all classes. The
Institutional Shares are available for investment through a USAA discretionary
managed account program, and certain advisory programs sponsored by financial
intermediaries, such as brokerage firms, investment advisors, financial
planners, third-party administrators, and insurance companies. Institutional
Shares also are available to institutional investors, which include retirement
plans, endowments, foundations, and bank trusts, as well as other persons or
legal entities that the Fund may approve from time to time, or for purchase by a
USAA fund participating in a fund-of-funds investment strategy (USAA
fund-of-funds). The Adviser Shares permit investors to purchase shares through
financial intermediaries, including banks, broker-dealers, insurance companies,
investment advisers, plan sponsors, and financial professionals that provide
various administrative and distribution services.
A. SECURITY VALUATION - The Trust's Board of Trustees (the Board) has
established the Valuation Committee (the Committee), and subject to Board
oversight, the Committee administers and oversees the Fund's valuation
policies and procedures which are approved by the Board. Among other
things, these policies and procedures allow the Fund to utilize independent
pricing services, quotations from securities dealers, and a wide variety of
sources and information to establish and adjust the fair value of securities
as events occur and circumstances warrant.
The Committee reports to the Board on a quarterly basis and makes
recommendations to the Board as to pricing methodologies and services used
by the Fund and presents additional information to the Board regarding
application of the pricing and fair valuation policies and procedures during
the preceding quarter.
The Committee meets as often as necessary to make pricing and fair value
determinations. In addition, the Committee holds regular monthly meetings to
review prior actions taken by the Committee and USAA
================================================================================
NOTES TO FINANCIAL STATEMENTS | 23
================================================================================
Asset Management Company (the Manager). Among other things, these
monthly meetings include a review and analysis of back testing reports,
pricing service quotation comparisons, illiquid securities and fair value
determinations, pricing movements, and daily stale price monitoring.
The value of each security is determined (as of the close of trading on
the New York Stock Exchange (NYSE) on each business day the NYSE is open) as
set forth below:
1. Equity securities, including exchange-traded funds (ETFs), except
as otherwise noted, traded primarily on a domestic securities exchange
or the Nasdaq over-the-counter markets, are valued at the last sales
price or official closing price on the exchange or primary market on
which they trade. Equity securities traded primarily on foreign
securities exchanges or markets are valued at the last quoted sales
price, or the most recently determined official closing price calculated
according to local market convention, available at the time the Fund is
valued. If no last sale or official closing price is reported or
available, the average of the bid and asked prices generally is used.
2. Equity securities trading in various foreign markets may take
place on days when the NYSE is closed. Further, when the NYSE is open,
the foreign markets may be closed. Therefore, the calculation of the
Fund's net asset value (NAV) may not take place at the same time the
prices of certain foreign securities held by the Fund are determined.
In most cases, events affecting the values of foreign securities that
occur between the time of their last quoted sales or official closing
prices and the close of normal trading on the NYSE on a day the Fund's
NAV is calculated will not be reflected in the value of the Fund's
foreign securities. However, the Manager will monitor for events that
would materially affect the value of the Fund's foreign securities. If
the Manager determines that a particular event would materially affect
the value of the Fund's foreign securities, then the Manager, under
valuation procedures approved by the Board, will consider such available
information that it deems relevant to determine a fair value for the
affected foreign securities. In addition, the Fund may use information
from an external vendor or other sources to adjust
================================================================================
24 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
the foreign market closing prices of foreign equity securities to
reflect what the Fund believes to be the fair value of the securities as
of the close of the NYSE. Fair valuation of affected foreign equity
securities may occur frequently based on an assessment that events that
occur on a fairly regular basis (such as U.S. market movements) are
significant.
3. Investments in open-end investment companies, hedge, or other
funds, other than ETFs, are valued at their NAV at the end of each
business day.
4. Debt securities purchased with original or remaining maturities of 60
days or less may be valued at amortized cost, which approximates market
value.
5. Repurchase agreements are valued at cost, which approximates market
value.
6. Securities for which market quotations are not readily available or
are considered unreliable, or whose values have been materially affected
by events occurring after the close of their primary markets but before
the pricing of the Fund, are valued in good faith at fair value, using
methods determined by the Manager under valuation procedures approved by
the Board. The effect of fair value pricing is that securities may not
be priced on the basis of quotations from the primary market in which
they are traded and the actual price realized from the sale of a
security may differ materially from the fair value price. Valuing these
securities at fair value is intended to cause the Fund's NAV to be more
reliable than it otherwise would be.
Fair value methods used by the Manager include, but are not limited
to, obtaining market quotations from secondary pricing services,
broker-dealers, or widely used quotation systems. General factors
considered in determining the fair value of securities include
fundamental analytical data, the nature and duration of any restrictions
on disposition of the securities, and an evaluation of the forces that
influenced the market in which the securities are purchased and sold.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 25
================================================================================
B. FAIR VALUE MEASUREMENTS - Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The
three-level valuation hierarchy disclosed in the portfolio of investments is
based upon the transparency of inputs to the valuation of an asset or
liability as of the measurement date. The three levels are defined as
follows:
Level 1 - inputs to the valuation methodology are quoted prices
(unadjusted) in active markets for identical securities.
Level 2 - inputs to the valuation methodology are other significant
observable inputs, including quoted prices for similar securities, inputs
that are observable for the securities, either directly or indirectly, and
market-corroborated inputs such as market indices. Level 2 securities
include common stocks which are valued based on methods discussed in Note
1A2 and commercial paper, which is valued at amortized cost.
Level 3 - inputs to the valuation methodology are unobservable and
significant to the fair value measurement, including the Manager's own
assumptions in determining the fair value.
The inputs or methodologies used for valuing securities are not
necessarily an indication of the risks associated with investing in those
securities.
C. FEDERAL TAXES - The Fund's policy is to comply with the requirements of
the Internal Revenue Code of 1986, as amended, applicable to regulated
investment companies and to distribute substantially all of its income to
its shareholders. Therefore, no federal income tax provision is required.
D. INVESTMENTS IN SECURITIES - Security transactions are accounted for on
the date the securities are purchased or sold (trade date). Gains or losses
from sales of investment securities are computed on the identified cost
basis. Dividend income, less foreign taxes, if any, is recorded on the ex-
dividend date. If the ex-dividend date has passed, certain dividends from
foreign securities are recorded upon notification. Interest income is
recorded daily on the accrual basis. Discounts and premiums on short-term
securities are amortized on a straight-line basis over the life of the
respective securities.
================================================================================
26 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
E. FOREIGN CURRENCY TRANSLATIONS - The Fund's assets may be invested in the
securities of foreign issuers and may be traded in foreign currency. Since
the Fund's accounting records are maintained in U.S. dollars, foreign
currency amounts are translated into U.S. dollars on the following bases:
1. Purchases and sales of securities, income, and expenses at the
exchange rate obtained from an independent pricing service on the
respective dates of such transactions.
2. Market value of securities, other assets, and liabilities at the
exchange rate obtained from an independent pricing service on a daily
basis.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Separately, net realized foreign currency gains/losses may arise from
sales of foreign currency, currency gains/losses realized between the trade
and settlement dates on security transactions, and from the difference
between amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the amounts
received. At the end of the Fund's fiscal year, these net realized foreign
currency gains/losses are reclassified from accumulated net realized
gain/loss to accumulated undistributed net investment income on the
statement of assets and liabilities as such amounts are treated as ordinary
income/loss for tax purposes. Net unrealized foreign currency exchange
gains/losses arise from changes in the value of assets and liabilities,
other than investments in securities, resulting from changes in the exchange
rate.
F. EXPENSES PAID INDIRECTLY - Through arrangements with the Fund's custodian
and other banks utilized by the Fund for cash management purposes, realized
credits, if any, generated from cash balances in the Fund's bank accounts
may be used to directly reduce the Fund's expenses. For the six-month period
ended November 30, 2014, there were no custodian and other bank credits.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 27
================================================================================
G. INDEMNIFICATIONS - Under the Trust's organizational documents, its
officers and trustees are indemnified against certain liabilities arising
out of the performance of their duties to the Trust. In addition, in the
normal course of business, the Trust enters into contracts that contain a
variety of representations and warranties that provide general
indemnifications. The Trust's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the
Trust that have not yet occurred. However, the Trust expects the risk of
loss to be remote.
H. REDEMPTION FEES - Adviser Shares held in the Fund less than 60 days are
subject to a redemption fee equal to 1.00% of the proceeds of the redeemed
or exchanged shares. All redemption fees paid will be accounted for by the
Fund as an addition to paid in capital. For the six-month period ended
November 30, 2014, the Adviser Shares incurred redemption fees of less than
$500.
I. USE OF ESTIMATES - The preparation of financial statements in conformity
with U.S. generally accepted accounting principles requires management to
make estimates and assumptions that may affect the reported amounts in the
financial statements.
(2) LINE OF CREDIT
The Fund participates in a joint, short-term, revolving, committed loan
agreement of $500 million with USAA Capital Corporation (CAPCO), an affiliate of
the Manager. The purpose of the agreement is to meet temporary or emergency cash
needs, including redemption requests that might otherwise require the untimely
disposition of securities. Subject to availability, the Fund may borrow from
CAPCO an amount up to 5% of the Fund's total assets at an interest rate based on
the London Interbank Offered Rate (LIBOR).
The USAA Funds that are party to the loan agreement are assessed facility fees
by CAPCO in the amount of 7.0 basis points of the amount of the committed loan
agreement. The facility fees are allocated among the Funds based on their
respective average net assets for the period.
================================================================================
28 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
For the six-month period ended November 30, 2014, the Fund paid CAPCO facility
fees of $2,000, which represents 1.4% of the total fees paid to CAPCO by the
USAA Funds. The Fund had no borrowings under this agreement during the six-month
period ended November 30, 2014.
(3) DISTRIBUTIONS
The tax basis of distributions and any accumulated undistributed net investment
income will be determined based upon the Fund's tax year-end of May 31, 2015, in
accordance with applicable tax law.
Distributions of net investment income and realized gains from security
transactions not offset by capital losses are made annually in the succeeding
fiscal year or as otherwise required to avoid the payment of federal taxes.
The Fund is permitted to carry forward post-enactment capital losses
indefinitely. Additionally, such capital losses that are carried forward will
retain their character as short-term and/or long-term capital losses. Post-
enactment capital loss carryforwards must be used before pre-enactment capital
loss carryforwards. As a result, pre-enactment capital loss carryforwards may be
more likely to expire unused.
At May 31, 2014, the Fund had no pre-enactment capital loss carryforwards and
post-enactment net capital loss carryforwards of $169,825,000, for federal
income tax purposes. 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.
POST-ENACTMENT CAPITAL LOSS CARRYFORWARDS
------------------------------------------
TAX CHARACTER
------------------------------------------
(NO EXPIRATION) BALANCE
--------------- ------------
Short-Term $ 20,244,000
Long-Term 149,581,000
------------
Total $169,825,000
============
For the six-month period ended November 30, 2014, 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. On an
ongoing basis, the Manager will monitor its tax positions to determine if
================================================================================
NOTES TO FINANCIAL STATEMENTS | 29
================================================================================
adjustments to this conclusion are necessary. The statute of limitations on the
Fund's tax return filings generally remain open for the three preceding fiscal
reporting year ends and remain subject to examination by the Internal Revenue
Service and state taxing authorities.
(4) INVESTMENT TRANSACTIONS
Cost of purchases and proceeds from sales/maturities of securities, excluding
short-term securities, for the six-month period ended November 30, 2014, were
$30,608,000 and $52,062,000, respectively.
As of November 30, 2014, the cost of securities, including short-term
securities, for federal income tax purposes, was approximately the same as that
reported in the financial statements.
Gross unrealized appreciation and depreciation of investments as of November 30,
2014, were $23,683,000 and $730,829,000, respectively, resulting in net
unrealized depreciation of $707,146,000.
(5) CAPITAL SHARE TRANSACTIONS
At November 30, 2014, there were an unlimited number of shares of capital stock
at no par value authorized for the Fund.
Capital share transactions for the Institutional Shares resulted from purchases
and sales by the affiliated USAA fund-of-funds as well as other persons or legal
entities that the Fund may approve from time to time. Capital share transactions
for all classes were as follows, in thousands:
================================================================================
30 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
SIX-MONTH PERIOD ENDED YEAR ENDED
NOVEMBER 30, 2014 MAY 31, 2014
-----------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------
FUND SHARES:
Shares sold 4,672 $ 67,447 12,667 $ 189,371
Shares issued from reinvested
dividends -* -* 83 1,059
Shares redeemed 5,104) (75,373) (12,862) (188,565)
--------------------------------------------------
Net increase (decrease) from
capital share transactions (432) $ (7,926) (112) $ 1,865
==================================================
INSTITUTIONAL SHARES:
Shares sold 2,378 $ 35,575 5,640 $ 83,153
Shares issued from
reinvested dividends - - 77 988
Shares redeemed 2,716) (43,959) (11,707) (181,900)
--------------------------------------------------
Net decrease from
capital share transactions (338) $ (8,384) (5,990) $ (97,759)
==================================================
ADVISER SHARES:
Shares sold 354 $ 5,257 730 $ 10,988
Shares issued from reinvested
dividends - - -* -*
Shares redeemed** (199) (2,802) (275) (4,094)
--------------------------------------------------
Net increase from capital
share transactions 155 $ 2,455 455 $ 6,894
==================================================
* Represents less than 500 shares or $500.
** Net of redemption fees.
(6) TRANSACTIONS WITH MANAGER
A. MANAGEMENT FEES - The Manager provides investment management services to
the Fund pursuant to an Advisory Agreement. Under this agreement, the
Manager is responsible for managing the business and affairs of the Fund,
and for directly managing the day-to-day investment of a portion of the
Fund's assets, subject to the authority of and supervision by the Board.
The Manager is authorized to select (with approval of the Board and without
shareholder approval) one or more subadvisers to manage the actual
day-to-day investment of a portion of
================================================================================
NOTES TO FINANCIAL STATEMENTS | 31
================================================================================
the Fund's assets. For the six-month period ended November 30, 2014,
there were no subadvisers.
The investment management fee for the Fund is comprised of a base fee
and a performance adjustment. The Fund's base fee is accrued daily and paid
monthly at an annualized rate of 0.75% of the Fund's average net assets for
the fiscal year.
The performance adjustment is calculated separately for each share
class on a monthly basis by comparing each class's performance to that of
the Lipper Precious Metals Equity Funds Index over the performance period.
The Lipper Precious Metals Equity Funds Index tracks the total return
performance of the 10 largest funds in the Lipper Precious Metals Equity
Funds category. The performance period for each class consists of the
current month plus the previous 35 months. The following table is utilized
to determine the extent of the performance adjustment:
OVER/UNDER PERFORMANCE ANNUAL ADJUSTMENT RATE
RELATIVE TO INDEX (IN BASIS POINTS AS A %
(IN BASIS POINTS)(1) OF THE FUND'S AVERAGE NET ASSETS)(1)
--------------------------------------------------------------------------------------
+/- 100 to 400 +/- 4
+/- 401 to 700 +/- 5
+/- 701 and greater +/- 6
(1) Based on the difference between average annual performance of the
relevant share class of the Fund and its relevant index, rounded to the
nearest basis point. Average net assets are calculated over a rolling
36-month period.
Each class's annual performance adjustment rate is multiplied by the
average 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 will pay a positive
performance fee adjustment for a performance period whenever the class
outperforms the Lipper Precious Metals Equity Funds Index over that period,
even if the class had overall negative returns during the performance
period.
================================================================================
32 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
For the six-month period ended November 30, 2014, the Fund incurred total
management fees, paid or payable to the Manager, of $3,298,000, which
included a performance adjustment for the Fund Shares, Institutional
Shares, and Adviser Shares of $(251,000), $(44,000), and $(3,000),
respectively. For the Fund Shares, Institutional Shares, and Adviser
Shares, the performance adjustments were (0.07)%, (0.05)%, and (0.03)%,
respectively.
B. ADMINISTRATION AND SERVICING FEES - The Manager provides certain
administration and servicing functions for the Fund. For such services, the
Manager receives a fee accrued daily and paid monthly at an annualized rate
of 0.15% of average net assets of the Fund Shares and Adviser Shares, and
0.10% of average net assets of the Institutional Shares. For the six-month
period ended November 30, 2014, the Fund Shares, Institutional Shares, and
Adviser Shares incurred administration and servicing fees, paid or payable
to the Manager, of $565,000, $94,000, and $13,000, respectively.
In addition to the services provided under its Administration and
Servicing Agreement with the Fund, the Manager also provides certain
compliance and legal services for the benefit of the Fund. The Board has
approved the reimbursement of a portion of these expenses incurred by the
Manager. For the six-month period ended November 30, 2014, the Fund
reimbursed the Manager $14,000 for these compliance and legal services.
These expenses are included in the professional fees on the Fund's
statement of operations.
C. EXPENSE LIMITATION - The Manager agreed, through October 1, 2014, to
limit the total annual operating expenses of the Adviser Shares to 1.45% of
its average net assets, excluding extraordinary expenses and before
reductions of any expenses paid indirectly, and will reimburse the Adviser
Shares for all expenses in excess of that amount. Effective October 1,
2014, the Manager terminated this agreement for the Adviser Shares. For the
six-month period ended November 30, 2014, the Adviser Shares incurred no
reimbursable expenses.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 33
================================================================================
D. TRANSFER AGENT'S FEES - USAA Transfer Agency Company, d/b/a USAA
Shareholder Account Services (SAS), an affiliate of the Manager, provides
transfer agent services to the Fund. Transfer agent's fees for both the
Fund Shares and Adviser Shares are paid monthly based on an annual charge
of $23 per shareholder account plus out-of-pocket expenses. SAS pays a
portion of these fees to certain intermediaries for the administration and
servicing of accounts that are held with such intermediaries. Transfer
agent's fees for Institutional Shares are paid monthly based on a fee
accrued daily at an annualized rate of 0.10% of the Institutional Shares'
average net assets, plus out-of-pocket expenses. For the six-month period
ended November 30, 2014, the Fund Shares, Institutional Shares, and Adviser
Shares incurred transfer agent's fees, paid or payable to SAS, of
$1,233,000, $94,000, and $5,000, respectively.
E. DISTRIBUTION AND SERVICE (12B-1) FEES - The Fund has adopted a plan
pursuant to Rule 12b-1 under the 1940 Act with respect to the Adviser
Shares. Under the plan, the Adviser Shares pay fees to USAA Investment
Management Company, the distributor, for distribution and shareholder
services. USAA Investment Management Company pays all or a portion of such
fees to intermediaries that make the Adviser Shares available for
investment by their customers. The fee is accrued daily and paid monthly at
an annual rate of 0.25% of the Adviser Shares' average net assets. Adviser
Shares are offered and sold without imposition of an initial sales charge
or a contingent deferred sales charge. For the six-month period ended
November 30, 2014, the Adviser Shares incurred distribution and service
(12b-1) fees of $22,000.
F. UNDERWRITING SERVICES - USAA Investment Management Company provides
exclusive underwriting and distribution of the Fund's shares on a
continuing best-efforts basis and receives no commissions or fees for this
service.
================================================================================
34 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
(7) TRANSACTIONS WITH AFFILIATES
The Fund offers its Institutional Shares for investment by other USAA funds and
is one of 17 USAA mutual funds in which the affiliated USAA fund-of-funds may
invest. The USAA fund-of-funds do not invest in the underlying funds for the
purpose of exercising management or control. As of November 30, 2014, the USAA
fund-of-funds owned the following percentages of the total outstanding shares of
the Fund:
AFFILIATED USAA FUND OWNERSHIP %
--------------------------------------------------------------------------------
USAA Cornerstone Conservative Fund 0.1
USAA Cornerstone Equity Fund 0.4
USAA Target Retirement Income Fund 0.2
USAA Target Retirement 2020 Fund 0.6
USAA Target Retirement 2030 Fund 1.6
USAA Target Retirement 2040 Fund 2.4
USAA Target Retirement 2050 Fund 1.3
USAA Target Retirement 2060 Fund 0.0*
*Represents less than 0.1%
The Manager is indirectly wholly owned by United Services Automobile Association
(USAA), a large, diversified financial services institution. At November 30,
2014, USAA and its affiliates owned 130,000 shares which represent 10.2% of the
Adviser Shares and 0.2% of the Fund.
Certain trustees and officers of the Fund are also directors, officers, and/or
employees of the Manager. None of the affiliated trustees or Fund officers
received any compensation from the Fund.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 35
================================================================================
(8) FINANCIAL HIGHLIGHTS - FUND SHARES
Per share operating performance for a share outstanding throughout each period
is as follows:
SIX-MONTH
PERIOD ENDED
NOVEMBER 30, YEAR ENDED MAY 31,
----------------------------------------------------------------------------------
2014 2014 2013 2012 2011 2010
----------------------------------------------------------------------------------
Net asset value at
beginning of period $ 14.12 $ 16.69 $ 25.80 $ 40.55 $ 36.87 $ 29.49
--------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment loss(a) (.04) (.02) (.00)(b) (.07) (.23) (.24)
Net realized and
unrealized gain (loss)(a) (2.17) (2.53) (8.67) (10.76) 8.52(c) 8.15
--------------------------------------------------------------------------------
Total from investment
operations(a) (2.21) (2.55) (8.67) (10.83) 8.29 7.91
--------------------------------------------------------------------------------
Less distributions from:
Net investment income - (.02) - (.08) (.67) (.53)
Realized capital gains - - (.44) (3.84) (3.94) -
--------------------------------------------------------------------------------
Total distributions - (.02) (.44) (3.92) (4.61) (.53)
--------------------------------------------------------------------------------
Net asset value at
end of period $ 11.91 $ 14.12 $ 16.69 $ 25.80 $ 40.55 $ 36.87
================================================================================
Total return (%)* (15.65) (15.26) (34.23) (29.04) 21.99(c) 27.03(d)
Net assets at
end of period (000) $594,105 $710,487 $841,841 $1,577,939 $2,246,060 $1,767,212
Ratios to average
net assets:**
Expenses (%)(e) 1.23(f) 1.24 1.18 1.17 1.15 1.20(d)
Net investment loss (%) (.55)(f) (.13) (.01) (.21) (.56) (.75)
Portfolio turnover (%) 3 10 15 20 24 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. Total returns for periods of less
than one year are not annualized.
** For the six-month period ended November 30, 2014, average net assets were
$749,748,000.
(a) Calculated using average shares. For the six-month period ended November
30, 2014, average shares were 49,927,000.
(b) Represents less than $0.01 per share.
(c) During the year ended May 31, 2011, the Manager reimbursed the Fund
Shares $12,000 for a loss incurred from the disposal of an investment in
error. The effect of this reimbursement of the Fund Shares' net realized
loss and total return was less than $0.01/0.01% per share.
(d) During the year ended May 31, 2010, SAS reimbursed the Fund Shares
$188,000 for corrections in fees paid for the administration and servicing
of certain accounts. The effect of this reimbursement on the Fund Shares'
total return was less than 0.01%. The reimbursement decreased the Fund
Shares' expense ratios by 0.01%. This decrease is excluded from the expense
ratio in the Financial Highlights table.
(e) Reflects total annual operating expenses of the Fund Shares before
reductions of any expenses paid indirectly. The Fund Shares' expenses paid
indirectly decreased the expense ratios as follows:
- (.00%)(+) (.00%)(+) (.00%)(+) (.00%)(+) (.00%)(+)
(+) Represents less than 0.01% of average net assets.
(f) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
================================================================================
36 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
(8) FINANCIAL HIGHLIGHTS (continued) -
INSTITUTIONAL SHARES
Per share operating performance for a share outstanding throughout each
period is as follows:
SIX-MONTH
PERIOD ENDED
NOVEMBER 30, YEAR ENDED MAY 31,
------------------------------------------------------------------------------
2014 2014 2013 2012 2011 2010
------------------------------------------------------------------------------
Net asset value at
beginning of period $ 14.17 $ 16.77 $ 25.87 $ 40.67 $ 36.95 $ 29.54
------------------------------------------------------------------------------
Income (loss)from
investment operations:
Net investment
income (loss)(a) (.02) .02 .06 .02 (.11) (.13)
Net realized and
unrealized gain (loss)(a) (2.18) (2.56) (8.72) (10.81) 8.53(b) 8.16
------------------------------------------------------------------------------
Total from investment
operations(a) (2.20) (2.54) (8.66) (10.79) 8.42 8.03
------------------------------------------------------------------------------
Less distributions from:
Net investment income - (.06) - (.17) (.76) (.62)
Realized capital gains - - (.44) (3.84) (3.94) -
------------------------------------------------------------------------------
Total distributions - (.06) (.44) (4.01) (4.70) (.62)
------------------------------------------------------------------------------
Net asset value at
end of period $ 11.97 $ 14.17 $ 16.77 $ 25.87 $ 40.67 $ 36.95
==============================================================================
Total return (%)* (15.53) (15.11) (34.10) (28.89) 22.32(b) 27.43
Net assets at
end of period (000) $151,146 $183,768 $317,818 $145,782 $64,034 $40,197
Ratios to average
net assets:**
Expenses (%)(c) .98(d) 1.00 .99 .97 .89(e) .90(e)
Expenses, excluding
reimbursements (%)(c) .98(d) 1.00 .99 .97 .89 .90
Net investment
income (loss) (%) (.31)(d) .11 .27 .05 (.28) (.42)
Portfolio turnover (%) 3 10 15 20 24 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. Total returns for periods of less
than one year are not annualized.
** For the six-month period ended November 30, 2014, average net assets were
$186,764,000.
(a) Calculated using average shares. For the six-month period ended November
30, 2014, average shares were 12,448,000.
(b) During the year ended May 31, 2011, the Manager reimbursed the
Institutional Shares less than $500 for a loss incurred from the disposal of
an investment in error. The effect of this reimbursement on the
Institutional Shares' net realized loss and total return was less than
$0.01/0.01% per share.
(c) Reflects total annual operating expenses of the Institutional Shares
before reductions of any expenses paid indirectly. The Institutional Shares'
expenses paid indirectly decreased the expense ratios as follows:
- (.00%)(+) (.00%)(+) (.00%)(+) (.00%)(+) (.00%)(+)
(+) Represents less than 0.01% of average net assets.
(d) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
(e) Prior to October 1, 2010, the Manager voluntarily agreed to limit the
annual expenses of the Institutional Shares to 0.90% of the Institutional
Shares' average net assets.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 37
================================================================================
(8) FINANCIAL HIGHLIGHTS (continued) - ADVISER SHARES
Per share operating performance for a share outstanding throughout each
period is as follows:
SIX-MONTH
PERIOD ENDED PERIOD ENDED
NOVEMBER 30, YEAR ENDED MAY 31, MAY 31,
--------------------------------------------------------------------------
2014 2014 2013 2012 2011***
--------------------------------------------------------------------------
Net asset value at
beginning of period $ 14.01 $ 16.57 $ 25.68 $ 40.48 $36.47
-------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment loss(a) (.05) (.05) (.06) (.13) (.27)
Net realized and
unrealized gain (loss)(a) (2.15) (2.51) (8.61) (10.78) 8.85(b)
-------------------------------------------------------------------------
Total from investment
operations(a) (2.20) (2.56) (8.67) (10.91) 8.58
-------------------------------------------------------------------------
Less distributions from:
Net investment income - (.00)(c) - (.06) (.63)
Realized capital gains - - (.44) (3.84) (3.94)
-------------------------------------------------------------------------
Total distributions - (.00)(c) (.44) (3.90) (4.57
-------------------------------------------------------------------------)
Redemption fees (.00)(c) (.00)(c) (.00)(c) .01 (.00)(c)
-------------------------------------------------------------------------
Net asset value at end
of period $ 11.81 $ 14.01 $ 16.57 $ 25.68 $40.48
=========================================================================
Total return (%)* (15.70) (15.45) (34.39) (29.26) 23.02(b)
Net assets at end of
period (000) $15,081 $15,727 $11,052 $11,904 $6,384
Ratios to average
net assets:**
Expenses (%)(d) 1.39(e) 1.40 1.45 1.45 1.45(e)
Expenses, excluding
reimbursements (%)(d) 1.39(e) 1.40 1.49 1.55 1.90(e)
Net investment loss (%) (.71)(e) (.31) (.23) (.39) (.78)(e)
Portfolio turnover (%) 3 10 15 20 24
* 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. Total returns for periods of less
than one year are not annualized.
** For the six-month period ended November 30, 2014, average net assets were
$17,919,000.
*** Adviser Shares were initiated on August 1, 2010.
(a) Calculated using average shares. For the six-month period ended November
30, 2014, average shares were 1,200,000.
(b) During the period ended May 31, 2011, the Manager reimbursed the Adviser
Shares less than $500 for a loss incurred from the disposal of an investment
in error. The effect of this reimbursement on the Adviser Shares' net
realized loss and total return was less than $0.01/0.01% per share.
(c) Represents less than $0.01 per share.
(d) Reflects total annual operating expenses of the Adviser Shares before
reductions of any expenses paid indirectly. The Adviser Shares' expenses
paid indirectly decreased the expense ratios as follows:.
- (.00%)(+) (.00%)(+) (.00%)(+) (.00%)(+)
(+) Represents less than 0.01% of average net assets.
(e) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
================================================================================
38 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
EXPENSE EXAMPLE
November 30, 2014 (unaudited)
--------------------------------------------------------------------------------
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: direct costs, such
as wire fees, redemption fees, and low balance fees; and indirect costs,
including management fees, transfer agency fees, distribution and service
(12b-1) fees, and other Fund operating expenses. This example is intended to
help you understand your indirect costs, also referred to as "ongoing costs" (in
dollars), of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire six-month period of June 1, 2014, through
November 30, 2014.
ACTUAL EXPENSES
The line labeled "actual" under each share class in the table provides
information about actual account values and actual expenses. You may use the
information in this line, together with the amount you invested at the beginning
of the period, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number for your share
class in the "actual" line under the heading "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The line labeled "hypothetical" under each share class in the table provides
information about hypothetical account values and hypothetical expenses based on
the Fund's actual expense ratios for each class 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
================================================================================
EXPENSE EXAMPLE | 39
================================================================================
the actual ending account balance or expenses you paid for the period. You may
use this information to compare the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any direct costs, such as wire fees,
redemption fees, or low balance fees. Therefore, the line labeled "hypothetical"
is useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these direct
costs were included, your costs would have been higher.
EXPENSES PAID
BEGINNING ENDING DURING PERIOD*
ACCOUNT VALUE ACCOUNT VALUE JUNE 1, 2014 -
JUNE 1, 2014 NOVEMBER 30, 2014 NOVEMBER 30, 2014
-------------------------------------------------------------
FUND SHARES
Actual $1,000.00 $ 843.50 $5.68
Hypothetical
(5% return before expenses) 1,000.00 1,018.90 6.23
INSTITUTIONAL SHARES
Actual 1,000.00 844.70 4.53
Hypothetical
(5% return before expenses) 1,000.00 1,020.16 4.96
ADVISER SHARES
Actual 1,000.00 843.00 6.42
Hypothetical
(5% return before expenses) 1,000.00 1,018.10 7.03
*Expenses are equal to the annualized expense ratio of 1.23% for Fund Shares,
0.98% for Institutional Shares, and 1.39% for Adviser Shares, which are net of
any reimbursements and expenses paid indirectly, multiplied by the average
account value over the period, multiplied by 183 days/365 days (to reflect the
one-half-year period). The Fund's actual ending account values are based on its
actual total returns of (15.65)% for Fund Shares, (15.53)% for Institutional
Shares, and (15.70)% for Adviser Shares for the six-month period of June 1,
2014, through November 30, 2014.
================================================================================
40 | USAA PRECIOUS METALS AND MINERALS FUND
================================================================================
TRUSTEES Daniel S. McNamara
Robert L. Mason, Ph.D.
Jefferson C. Boyce
Dawn M. Hawley
Paul L. McNamara
Barbara B. Ostdiek, Ph.D.
Michael F. Reimherr
--------------------------------------------------------------------------------
ADMINISTRATOR AND USAA Asset Management Company
INVESTMENT ADVISER P.O. Box 659453
San Antonio, Texas 78265-9825
--------------------------------------------------------------------------------
UNDERWRITER AND USAA Investment Management Company
DISTRIBUTOR P.O. Box 659453
San Antonio, Texas 78265-9825
--------------------------------------------------------------------------------
TRANSFER AGENT USAA Shareholder Account Services
9800 Fredericksburg Road
San Antonio, Texas 78288
--------------------------------------------------------------------------------
CUSTODIAN AND State Street Bank and Trust Company
ACCOUNTING AGENT P.O. Box 1713
Boston, Massachusetts 02105
--------------------------------------------------------------------------------
INDEPENDENT Ernst & Young LLP
REGISTERED PUBLIC 100 West Houston St., Suite 1800
ACCOUNTING FIRM San Antonio, Texas 78205
--------------------------------------------------------------------------------
MUTUAL FUND Under "My Accounts" on
SELF-SERVICE 24/7 usaa.com select your mutual fund
AT USAA.COM account and either click the link or
select 'I want to...' and select
OR CALL the desired action.
(800) 531-USAA
(8722)
Copies of the Manager's proxy voting policies and procedures, approved by the
Trust's Board of Trustees for use in voting proxies on behalf of the Fund, are
available without charge (i) by calling (800) 531-USAA (8722); (ii) at USAA.COM;
and (iii) in summary within the Statement of Additional Information on the SEC's
website at HTTP://WWW.SEC.GOV. Information regarding how the Fund voted proxies
relating to portfolio securities during the most recent 12-month period ended
June 30 is available without charge (i) at USAA.COM; and (ii) on the SEC's
website at HTTP://WWW.SEC.GOV.
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. These Forms N-Q are
available at no charge (i) by calling (800) 531-USAA (8722); (ii) at USAA.COM;
and (iii) on the SEC's website at HTTP://WWW.SEC.GOV. These Forms N-Q also may
be reviewed and copied at the SEC's Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be obtained by
calling (800) 732-0330.
200996-0115
================================================================================
USAA
9800 Fredericksburg Road --------------
San Antonio, TX 78288 PRSRT STD
U.S. Postage
PAID
USAA
--------------
>> SAVE PAPER AND FUND COSTS
Under MY PROFILE on USAA.COM select MANAGE PREFERENCES
Set your DOCUMENT PREFERENCES to USAA DOCUMENTS ONLINE.
[LOGO OF USAA]
USAA We know what it means to serve.(R)
=============================================================================
23408-0115 (C)2015, USAA. All rights reserved.
ITEM 2. CODE OF ETHICS.
NOT APPLICABLE. This item must be disclosed only in annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
NOT APPLICABLE. This item must be disclosed only in annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
NOT APPLICABLE. This item must be disclosed only in annual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not Applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Filed as part of the report to shareholders.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not Applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not Applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not Applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Corporate Governance Committee selects and nominates candidates for
membership on the Board as independent directors. Currently, there is no
procedure for shareholders to recommend candidates to serve on the Board.
ITEM 11. CONTROLS AND PROCEDURES
The principal executive officer and principal financial officer of USAA Mutual
Funds Trust (Trust) have concluded that the Trust's disclosure controls and
procedures are sufficient to ensure that information required to be disclosed by
the Trust in this Form N-CSR/S was recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms, based upon such officers' evaluation of these controls and
procedures as of a date within 90 days of the filing date of the report.
There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Trust's internal controls
or in other factors that could significantly affect the Trust's internal
controls subsequent to the date of their evaluation. The only change to the
procedures was to document the annual disclosure controls and procedures
established for the new section of the shareholder reports detailing the factors
considered by the Funds' Board in approving the Funds' advisory agreements.
ITEM 12. EXHIBITS.
(a)(1). NOT APPLICABLE. This item must be disclosed only in annual reports.
(a)(2). Certification pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit
99.CERT.
(a)(3). Not Applicable.
(b). Certification pursuant to Rule 30a-2(b) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(b))is filed and attached hereto as Exhibit
99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: USAA MUTUAL FUNDS TRUST, Period Ended November 30, 2014
By:* /S/ DANIEL J. MAVICO
-----------------------------------------------------------
Signature and Title: Daniel J. Mavico, Assistant Secretary
Date: 01/26/2015
------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By:* /S/ DANIEL S. MCNAMARA
-----------------------------------------------------
Signature and Title: Daniel S. McNamara, President
Date: 01/27/2015
------------------------------
By:* /S/ ROBERTO GALINDO, JR.
-----------------------------------------------------
Signature and Title: Roberto Galindo, Jr., Treasurer
Date: 01/27/2015
------------------------------
*Print the name and title of each signing officer under his or her signature.