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: JULY 31
Date of reporting period: JANUARY 31, 2015
ITEM 1. SEMIANNUAL REPORT TO STOCKHOLDERS.
USAA MUTUAL FUNDS TRUST - SEMIANNUAL REPORT FOR PERIOD ENDED JANUARY 31, 2015
[LOGO OF USAA]
USAA(R)
[GRAPHIC OF USAA VALUE FUND]
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SEMIANNUAL REPORT
USAA VALUE FUND
FUND SHARES o INSTITUTIONAL SHARES o ADVISER SHARES
JANUARY 31, 2015
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PRESIDENT'S MESSAGE
"...WE BELIEVE THAT IT IS IMPORTANT FOR INVESTORS
TO FOCUS LESS ON WHAT'S HAPPENING DAY-TO-DAY IN [PHOTO OF BROOKS ENGLEHARDT]
THE FINANCIAL MARKETS AND MORE ON THEIR OWN
FINANCIAL WELL-BEING."
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MARCH 2015
The United States was the place to be during the six-month reporting period
ended January 31, 2015. Those investors who concentrated their investments in
U.S. stocks and/or longer-term U.S. Treasury securities were fortuitously
positioned, as these asset classes generally outperformed all other market
segments. U.S. equities recorded strong gains, surpassing developed equities
markets and emerging markets equities, both of which declined during the
reporting period. Among U.S. stocks, growth-oriented names outperformed their
value counterparts, while mid-cap stocks outpaced small-cap and large-cap
stocks. Meanwhile, yields on longer-term U.S. Treasuries trended down, driving
up bond prices. (Bond prices move in the opposite direction of interest rates.)
Though yields were near historic lows during the period, they still remained the
highest among developed nations. U.S. Treasuries also benefited from their
perceived status as high-quality, safe-haven investments.
What circumstances produced these results? At USAA Investments, we believe a
series of interconnected factors were at work, all of which were still in place
at the end of the reporting period. These factors include:
o SLOWING INTERNATIONAL GROWTH. U.S. economic conditions improved during the
reporting period, but most other countries struggled with economic weakness.
The economy of continental Europe was stagnant, with some countries falling
into recession, while Japan's government continued to attempt to jumpstart its
sluggish economy. China's economy weakened, growing at its slowest pace in
more than 24 years. At the same time, a sharp drop in commodities and energy
prices weighed on emerging markets economies. Although economic divergence is
likely to continue for a time, we do not believe it is likely to endure over
the long term. We believe that eventually, either the global economy will
rebound or else global economic weakness will dampen U.S. economic growth.
o DIVERGENT MONETARY POLICIES. Reflecting the disparity between international
and U.S. economic growth, the monetary policies of the world's central banks
diverged. In the United States, the Federal Reserve ended its quantitative
easing asset purchases and signaled its willingness--should the data support
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it--to raise short-term interest rates. Elsewhere, central banks continued to
cut rates and increase monetary stimulus to support their faltering economies.
o STRONGER U.S. DOLLAR. The divergence in monetary policies, along with
differing expectations about U.S. and international economic growth, had a
major impact on currencies. During the reporting period, the U.S. dollar
strengthened, appreciating significantly compared to most other global
currencies. In response, some countries devalued their currencies as an
attempt to make their exports cheaper to foreign buyers, and therefore to
boost economic growth.
o DECREASING INFLATION. Slowing international growth, divergent global monetary
policies, and currency movements combined to reduce inflation expectations.
The drop in energy prices was a prime example. Oil prices fell nearly 50%
during 2014. Lower oil prices do have some advantages--automobile owners have
more money to spend on other things--but extended periods of low inflation can
lead to economic stagnation, cause consumers to postpone spending, and put
pressure on corporate profit margins.
In this economic environment we believe that it is important for investors to
focus less on what's happening day-to-day in the financial markets and more on
their own financial well-being. As I write to you, tax season is upon us. You
may be preparing to make contributions to your IRA. You may also consider
setting near term goals, such as reviewing your investment strategy to make sure
it still suits your objectives, time horizon, and tolerance for risk. If you'd
like assistance, please call one of our financial advisors. They would be happy
to help.
Looking ahead, it is too soon to identify a dominant market trend for 2015.
However, we believe investors are likely to focus on higher asset quality as
long as the financial markets continue to grapple with the implications of
slowing global growth, divergent monetary policy, a stronger U.S. dollar, and
lower oil prices. On behalf of everyone here at USAA Investments, thank you for
your continued investment in our family of mutual funds.
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 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
MANAGERS' COMMENTARY 2
INVESTMENT OVERVIEW 6
FINANCIAL INFORMATION
Portfolio of Investments 13
Notes to Portfolio of Investments 20
Financial Statements 21
Notes to Financial Statements 24
EXPENSE EXAMPLE 41
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.
202729-0315
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FUND OBJECTIVE
THE USAA VALUE FUND (THE FUND) SEEKS LONG-TERM GROWTH OF CAPITAL.
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TYPES OF INVESTMENTS
The Fund invests its assets primarily in equity securities of companies that are
considered to be undervalued. Although the Fund will invest primarily in U.S.
securities, it may invest up to 20% of its total assets in foreign securities
including securities issued in emerging markets.
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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MANAGERS' COMMENTARY ON THE FUND
Barrow, Hanley, Mewhinney & Strauss, LLC*
TIMOTHY J. CULLER, CFA JOHN P. HARLOE, CFA
JEFF G. FAHRENBRUCH, CFA CORY L. MARTIN
DAVID W. GANUCHEAU, CFA JAMES S. McCLURE, CFA
MARK GIAMBRONE LEWIS ROPP
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o PLEASE DISCUSS MARKET CONDITIONS DURING THE REPORTING PERIOD.
Stocks rose moderately during for the six-month reporting period ended
January 31, 2015, but with considerable volatility along the way. As the
period began, geopolitical risks were at the forefront, with the Russia-
Ukraine conflict ongoing, the Israeli military launching actions in Gaza,
and unrest in the Middle East. On the economic front, fears of outright
deflation in major regions, most notably Europe and Japan, were added to
concerns over the impact on global growth of China's efforts to reform and
restructure its economy. The United States stood as the principal bright
spot globally, as data confirmed that the prior winter's lull in economic
activity had been largely weather-driven. With inflation subdued and
employment remaining below historical norms, the Federal Reserve (the Fed)
indicated it was in no rush to raise short-term interest rates, further
supporting the domestic growth outlook.
Market jitters over increasing signs of possible deflation globally and
speculation over the impact of an improving U.S. jobs picture on Fed policy
caused stocks to dip in October 2014, before resuming their upward trend.
The biggest story late in the reporting period was a collapse in oil prices,
based on the outlook for weakened global demand
* Effective December 1, 2014, James P. Barrow and Ray Nixon, Jr. are no
longer co-managers of the Value Fund.
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2 | USAA VALUE FUND
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and continued strong supply. Russia, highly dependent on oil revenues and
already laboring under sanctions imposed in response to events in Ukraine,
saw the ruble dive in relation to other key currencies, adding to
geopolitical uncertainty. Against this backdrop, investors favored
dollar-denominated assets, helping to keep U.S. interest rates low.
Energy-related stocks suffered significant declines, while other areas of
the market benefited from the anticipated positive impact of lower energy
prices on U.S. consumers. Utilities, real estate investment trusts (REITs),
and other dividend-oriented stocks continued to benefit from the investor
search for yield.
o HOW DID THE USAA VALUE 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 January 31, 2015,
the Fund Shares, Institutional Shares, and Adviser Shares had total returns
of 1.65%, 1.69%, and 1.50%, respectively. This compares to returns of 2.31%
for the Russell 3000(R) Value Index (the Index) and 1.36% for the Lipper
Multi-Cap Value Funds Index.
USAA Asset Management Company is the Fund's investment adviser. As the
investment adviser, USAA Asset Management Company employs dedicated
resources to support the research, selection, and monitoring of the Fund's
subadviser. Barrow, Hanley, Mewhinney & Strauss, LLC (BHMS) is the
subadviser to the Fund. The subadviser provides day-to-day discretionary
management for the Fund's assets.
o WHAT WERE THE PRINCIPAL FACTORS THAT IMPACTED THE FUND'S PERFORMANCE
RELATIVE TO THE INDEX DURING THE REPORTING PERIOD?
In broad terms, the Fund has continued to be positioned for gradual economic
improvement and an accompanying rise in market interest
Refer to page 7 for benchmark definitions.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
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MANAGERS' COMMENTARY ON THE FUND | 3
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rate levels. For the six-month reporting period, stock selection within the
consumer discretionary and materials sectors added to the Fund's return
relative to the Index, as did an underweight allocation to the energy
sector. Security selection within the financials sector, where the Fund had
a focus on lenders positioned to benefit from a rise in interest rate levels
and an underweight allocation to REITs based on valuation concerns,
detracted from the Fund's return. An underweight allocation to the utilities
sector detracted as well.
The most significant contributor to the Fund's relative performance was a
positon in retailer Target Corp.(Target) within the consumer discretionary
sector. Target's results had suffered from a weak 2014 retail environment
and costs associated with its expansion into Canada, as well as negative
sentiment over a breach of credit card data privacy for customers in its
stores. The Fund added to its holdings while Target's share price was down,
based on our view that Target is an excellent retailer and that the stock
had been impacted by short-term issues. Target saw its shares rebound over
the reporting period on an improved consumer outlook driven by a stronger
economy, continued low interest rates and lower energy costs. Within
consumer staples, the Fund's holding of tobacco company Altria Group Inc.
contributed positively to returns, as investors were attracted to the
company's high dividend payout. Another standout contributor to returns was
medical device manufacturer Medtronic plc (Medtronic). Medtronic has
benefited, along with other health care companies, from higher patient
utilization rates as the economy improves and also has been increasing its
market share based on its strong product lineup.
The biggest individual detractors for the reporting period came from within
the energy sector. Specifically, positions in offshore driller SeaDrill Ltd.
and integrated oil and gas company BP plc ADR experienced especially
significant declines as the drop in oil prices impacted the outlook for the
energy sector. Another significant detractor was Joy Global, Inc., a global
supplier of equipment used in the extraction of commodities. The near-term
outlook for the company has suffered from the decline in commodity prices
globally.
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4 | USAA VALUE FUND
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The Fund continues to be positioned overall for an improving economic
backdrop and rising interest rates, favoring less expensive companies in
more economically sensitive sectors such as industrials and consumer
discretionary. Conversely, the Fund has sought to avoid overpaying for
utilities, REITs, and other dividend-oriented stocks. While this stance has
had mixed results in recent quarters given the global search for yield by
investors, BHMS will continue to focus on broad measures of valuation,
including low payout ratios and solid earnings prospects that together
suggest the potential for long-term growth in dividends.
Thank you for your continued investment in the Fund.
Foreign investing is subject to additional risks, such as currency
fluctuations, market illiquidity, and political instability. Emerging market
countries are most volatile. Emerging market countries are less diverse and
mature than other countries and tend to be politically less stable. o Investing
in REITs has some of the same risks associated with the direct ownership of real
estate.
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MANAGERS' COMMENTARY ON THE FUND | 5
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INVESTMENT OVERVIEW
USAA VALUE FUND SHARES (FUND SHARES) (Ticker Symbol: UVALX)
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1/31/15 7/31/14
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Net Assets $883.8 Million $844.1 Million
Net Asset Value Per Share $19.39 $20.00
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AVERAGE ANNUAL TOTAL RETURNS AS OF 1/31/15
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7/31/14 - 1/31/15* 1 YEAR 5 YEARS 10 YEARS
1.65% 8.54% 13.89% 7.33%
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AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/14
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1 YEAR 5 YEARS 10 YEARS
8.40% 14.28% 7.62%
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EXPENSE RATIO AS OF 7/31/14**
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1.11%
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 December 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.
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6 | USAA VALUE FUND
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o CUMULATIVE PERFORMANCE COMPARISON o
[CHART OF CUMULATIVE PERFORMANCE COMPARISON]
LIPPER MULTI-CAP
USAA VALUE RUSSELL 3000 VALUE FUNDS
FUND SHARES VALUE INDEX INDEX
1/31/2005 $10,000.00 $10,000.00 $10,000.00
2/28/2005 10,355.99 10,320.13 10,263.85
3/31/2005 10,291.26 10,172.59 10,118.51
4/30/2005 10,064.72 9,961.59 9,876.34
5/31/2005 10,323.62 10,231.30 10,197.80
6/30/2005 10,558.25 10,372.13 10,323.36
7/31/2005 10,922.33 10,697.64 10,671.93
8/31/2005 10,800.97 10,633.21 10,592.21
9/30/2005 10,898.06 10,767.67 10,681.09
10/31/2005 10,542.07 10,494.47 10,419.28
11/30/2005 10,800.97 10,846.58 10,769.29
12/31/2005 10,942.14 10,898.34 10,869.93
1/31/2006 11,258.10 11,363.36 11,228.30
2/28/2006 11,291.36 11,426.38 11,245.95
3/31/2006 11,474.28 11,616.96 11,430.60
4/30/2006 11,798.55 11,887.59 11,657.40
5/31/2006 11,474.28 11,569.87 11,357.21
6/30/2006 11,432.71 11,649.98 11,334.28
7/31/2006 11,457.65 11,891.58 11,370.14
8/31/2006 11,648.89 12,104.73 11,589.05
9/30/2006 11,906.65 12,334.83 11,849.87
10/31/2006 12,255.86 12,758.87 12,267.55
11/30/2006 12,530.25 13,056.77 12,523.01
12/31/2006 12,761.65 13,333.37 12,725.46
1/31/2007 12,975.92 13,506.53 12,941.53
2/28/2007 12,881.64 13,300.04 12,720.25
3/31/2007 13,121.62 13,501.56 12,828.51
4/30/2007 13,558.72 13,967.91 13,355.48
5/31/2007 14,107.24 14,472.49 13,866.01
6/30/2007 13,867.26 14,134.54 13,620.43
7/31/2007 13,207.32 13,434.21 12,988.72
8/31/2007 13,275.89 13,594.41 13,014.70
9/30/2007 13,567.29 14,028.37 13,358.50
10/31/2007 13,661.57 14,041.91 13,413.58
11/30/2007 13,164.47 13,326.37 12,733.66
12/31/2007 12,926.43 13,198.64 12,593.25
1/31/2008 12,453.30 12,668.98 11,982.89
2/29/2008 11,935.52 12,140.32 11,558.45
3/31/2008 11,489.17 12,070.34 11,327.91
4/30/2008 12,060.50 12,642.37 11,906.76
5/31/2008 12,346.17 12,657.40 12,120.18
6/30/2008 11,176.72 11,446.38 11,001.25
7/31/2008 11,114.23 11,453.20 10,879.94
8/31/2008 11,283.85 11,676.05 11,002.45
9/30/2008 10,391.14 10,843.96 9,983.72
10/31/2008 8,525.37 8,941.77 8,153.69
11/30/2008 7,891.55 8,268.37 7,611.85
12/31/2008 8,262.71 8,413.92 7,852.03
1/31/2009 7,632.74 7,427.38 7,177.78
2/28/2009 6,683.21 6,431.87 6,388.40
3/31/2009 7,267.54 6,983.50 6,944.41
4/30/2009 8,098.37 7,760.83 7,699.56
5/31/2009 8,472.71 8,214.61 8,159.49
6/30/2009 8,554.88 8,157.31 8,103.98
7/31/2009 9,431.36 8,846.15 8,768.46
8/31/2009 9,842.22 9,305.39 9,146.88
9/30/2009 10,106.99 9,673.38 9,514.77
10/31/2009 9,878.74 9,349.38 9,276.53
11/30/2009 10,499.58 9,858.40 9,688.90
12/31/2009 10,803.66 10,076.64 9,939.63
1/31/2010 10,581.85 9,792.28 9,666.77
2/28/2010 10,970.01 10,113.14 9,980.35
3/31/2010 11,626.18 10,786.58 10,554.12
4/30/2010 11,875.70 11,105.71 10,806.77
5/31/2010 10,914.56 10,190.64 9,906.37
6/30/2010 10,165.97 9,590.33 9,293.38
7/31/2010 10,923.80 10,242.37 9,930.44
8/31/2010 10,258.39 9,777.98 9,452.16
9/30/2010 11,293.47 10,558.82 10,271.99
10/31/2010 11,579.97 10,882.90 10,620.32
11/30/2010 11,644.66 10,851.83 10,573.42
12/31/2010 12,543.43 11,711.78 11,384.90
1/31/2011 12,935.42 11,955.51 11,638.77
2/28/2011 13,346.06 12,409.90 12,057.67
3/31/2011 13,448.73 12,469.26 12,176.71
4/30/2011 13,831.38 12,790.50 12,500.76
5/31/2011 13,691.38 12,647.59 12,321.62
6/30/2011 13,467.39 12,383.91 12,060.58
7/31/2011 12,823.42 11,973.28 11,635.60
8/31/2011 11,946.13 11,200.65 10,729.83
9/30/2011 10,938.17 10,324.15 9,707.92
10/31/2011 12,300.78 11,529.71 10,921.54
11/30/2011 12,319.44 11,472.86 10,849.96
12/31/2011 12,490.60 11,699.96 10,916.25
1/31/2012 13,029.15 12,168.88 11,537.52
2/29/2012 13,605.50 12,629.54 12,077.90
3/31/2012 14,030.67 13,005.30 12,355.91
4/30/2012 13,775.56 12,868.28 12,203.34
5/31/2012 12,849.64 12,111.19 11,325.81
6/30/2012 13,340.94 12,710.94 11,776.04
7/31/2012 13,435.43 12,822.68 11,824.48
8/31/2012 13,756.67 13,109.86 12,180.62
9/30/2012 14,087.36 13,529.86 12,513.01
10/31/2012 14,021.22 13,455.60 12,467.15
11/30/2012 14,077.91 13,453.51 12,518.23
12/31/2012 14,302.07 13,753.05 12,797.54
1/31/2013 15,069.45 14,641.27 13,619.46
2/28/2013 15,261.30 14,848.14 13,791.63
3/31/2013 15,913.57 15,438.67 14,374.55
4/30/2013 16,191.75 15,652.90 14,555.46
5/31/2013 16,796.06 16,059.58 15,039.27
6/30/2013 16,680.95 15,923.85 14,846.51
7/31/2013 17,620.99 16,796.43 15,673.46
8/31/2013 17,083.83 16,150.93 15,196.67
9/30/2013 17,726.51 16,596.96 15,713.35
10/31/2013 18,378.78 17,308.69 16,395.06
11/30/2013 19,040.65 17,806.90 16,853.96
12/31/2013 19,429.22 18,248.55 17,249.09
1/31/2014 18,681.17 17,595.84 16,654.01
2/28/2014 19,528.95 18,360.29 17,379.71
3/31/2014 19,858.09 18,781.71 17,673.87
4/30/2014 19,708.49 18,907.28 17,718.46
5/31/2014 20,007.70 19,172.01 18,044.80
6/30/2014 20,486.45 19,699.74 18,516.26
7/31/2014 19,947.86 19,294.86 18,087.62
8/31/2014 20,646.03 20,014.11 18,754.77
9/30/2014 20,097.47 19,528.17 18,177.62
10/31/2014 20,606.14 20,036.24 18,499.02
11/30/2014 21,005.10 20,407.07 18,871.86
12/31/2014 21,061.77 20,565.36 18,954.84
1/31/2015 20,277.44 19,740.57 18,333.11
[END CHART]
Data from 1/31/05 to 1/31/15.
The graph illustrates the comparison of a $10,000 hypothetical investment in the
USAA Value Fund Shares to the following benchmarks:
o The unmanaged Russell 3000 Value Index measures the performance of those
Russell 3000 Index companies with lower price-to-book ratios and lower
forecasted growth values. The stocks in this index are also members of
either the unmanaged Russell 1000(R) Value or the unmanaged Russell 2000(R)
Value indexes.
o The unmanaged Lipper Multi-Cap Value Funds Index tracks the total return
performance of the 30 largest funds within the Lipper Multi-Cap Value Funds
category.
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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INVESTMENT OVERVIEW | 7
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USAA VALUE FUND INSTITUTIONAL SHARES (INSTITUTIONAL SHARES)
(Ticker Symbol: UIVAX)
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1/31/15 7/31/14
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Net Assets $440.9 Million $330.1 Million
Net Asset Value Per Share $19.37 $20.00
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AVERAGE ANNUAL TOTAL RETURNS AS OF 1/31/15
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7/31/14 - 1/31/15* 1 YEAR 5 YEARS SINCE INCEPTION 8/01/08
1.69% 8.70% 14.08% 9.91%
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AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/14
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1 YEAR 5 YEARS SINCE INCEPTION 8/01/08
8.45% 14.46% 10.70%
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EXPENSE RATIO AS OF 7/31/14**
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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 December 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 VALUE FUND
================================================================================
o CUMULATIVE PERFORMANCE COMPARISON o
[CHART OF CUMULATIVE PERFORMANCE COMPARISON]
USAA VALUE LIPPER MULTI-CAP
FUND INSTITUTIONAL RUSSELL 3000 VALUE FUNDS
SHARES VALUE INDEX INDEX
7/31/2008 $10,000.00 $10,000.00 $10,000.00
8/31/2008 10,177.13 10,194.58 10,112.61
9/30/2008 9,371.98 9,468.06 9,176.26
10/31/2008 7,689.21 7,807.23 7,494.25
11/30/2008 7,117.55 7,219.27 6,996.23
12/31/2008 7,454.67 7,346.36 7,216.98
1/31/2009 6,885.67 6,484.98 6,597.26
2/28/2009 6,036.30 5,615.78 5,871.72
3/31/2009 6,555.82 6,097.43 6,382.76
4/30/2009 7,306.24 6,776.13 7,076.84
5/31/2009 7,644.34 7,172.32 7,499.57
6/30/2009 7,726.80 7,122.29 7,448.56
7/31/2009 8,518.44 7,723.74 8,059.30
8/31/2009 8,897.78 8,124.71 8,407.11
9/30/2009 9,136.92 8,446.01 8,745.24
10/31/2009 8,930.76 8,163.12 8,526.27
11/30/2009 9,499.76 8,607.55 8,905.29
12/31/2009 9,771.02 8,798.10 9,135.74
1/31/2010 9,570.25 8,549.82 8,884.95
2/28/2010 9,921.61 8,829.97 9,173.17
3/31/2010 10,515.56 9,417.97 9,700.54
4/30/2010 10,749.80 9,696.61 9,932.75
5/31/2010 9,871.41 8,897.64 9,105.17
6/30/2010 9,202.16 8,373.50 8,541.76
7/31/2010 9,888.14 8,942.80 9,127.30
8/31/2010 9,285.82 8,537.34 8,687.70
9/30/2010 10,231.13 9,219.10 9,441.23
10/31/2010 10,490.47 9,502.06 9,761.38
11/30/2010 10,557.39 9,474.94 9,718.28
12/31/2010 11,371.72 10,225.77 10,464.12
1/31/2011 11,727.35 10,438.58 10,697.46
2/28/2011 12,108.38 10,835.32 11,082.49
3/31/2011 12,201.52 10,887.14 11,191.90
4/30/2011 12,548.69 11,167.62 11,489.74
5/31/2011 12,421.68 11,042.85 11,325.09
6/30/2011 12,218.46 10,812.63 11,085.16
7/31/2011 11,642.68 10,454.09 10,694.55
8/31/2011 10,846.74 9,779.49 9,862.04
9/30/2011 9,932.26 9,014.21 8,922.77
10/31/2011 11,168.50 10,066.81 10,038.25
11/30/2011 11,185.44 10,017.17 9,972.45
12/31/2011 11,350.72 10,215.45 10,033.37
1/31/2012 11,840.49 10,624.87 10,604.40
2/29/2012 12,364.64 11,027.09 11,101.08
3/31/2012 12,751.30 11,355.17 11,356.60
4/30/2012 12,519.30 11,235.54 11,216.37
5/31/2012 11,685.83 10,574.51 10,409.81
6/30/2012 12,124.05 11,098.16 10,823.63
7/31/2012 12,218.56 11,195.72 10,868.15
8/31/2012 12,510.71 11,446.46 11,195.49
9/30/2012 12,811.44 11,813.17 11,501.00
10/31/2012 12,751.30 11,748.33 11,458.85
11/30/2012 12,802.85 11,746.51 11,505.80
12/31/2012 13,012.21 12,008.05 11,762.52
1/31/2013 13,711.32 12,783.57 12,517.96
2/28/2013 13,886.10 12,964.19 12,676.21
3/31/2013 14,480.34 13,479.79 13,211.98
4/30/2013 14,733.77 13,666.84 13,378.26
5/31/2013 15,293.06 14,021.92 13,822.94
6/30/2013 15,179.45 13,903.41 13,645.77
7/31/2013 16,044.61 14,665.28 14,405.84
8/31/2013 15,546.49 14,101.68 13,967.60
9/30/2013 16,140.74 14,491.12 14,442.51
10/31/2013 16,734.98 15,112.54 15,069.08
11/30/2013 17,337.97 15,547.54 15,490.86
12/31/2013 17,702.51 15,933.16 15,854.03
1/31/2014 17,011.50 15,363.26 15,307.09
2/28/2014 17,784.34 16,030.71 15,974.09
3/31/2014 18,093.48 16,398.67 16,244.46
4/30/2014 17,957.10 16,508.30 16,285.44
5/31/2014 18,229.86 16,739.45 16,585.39
6/30/2014 18,666.29 17,200.22 17,018.72
7/31/2014 18,184.40 16,846.71 16,624.74
8/31/2014 18,811.76 17,474.70 17,237.94
9/30/2014 18,320.78 17,050.41 16,707.46
10/31/2014 18,784.48 17,494.02 17,002.88
11/30/2014 19,148.17 17,817.80 17,345.56
12/31/2014 19,198.70 17,956.00 17,421.83
1/31/2015 18,492.23 17,235.87 16,850.38
[END CHART]
Data from 7/31/08 to 1/31/15.*
The graph illustrates the comparison of a $10,000 hypothetical investment in the
USAA Value Fund Institutional Shares to the Fund's benchmarks listed above (see
page 7 for benchmark definitions).
*The performance of the Russell 3000 Value Index and the Lipper Multi-Cap Value
Funds 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.
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.
================================================================================
INVESTMENT OVERVIEW | 9
================================================================================
USAA VALUE FUND ADVISER SHARES (ADVISER SHARES) (Ticker Symbol: UAVAX)
--------------------------------------------------------------------------------
1/31/15 7/31/14
--------------------------------------------------------------------------------
Net Assets $8.6 Million $8.9 Million
Net Asset Value Per Share $19.34 $19.94
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 1/31/15
--------------------------------------------------------------------------------
7/31/14 - 1/31/15* 1 YEAR SINCE INCEPTION 8/01/10
1.50% 8.34% 13.73%
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/14
--------------------------------------------------------------------------------
1 YEAR SINCE INCEPTION 8/01/10
8.37% 15.00%
--------------------------------------------------------------------------------
EXPENSE RATIO AS OF 7/31/14**
--------------------------------------------------------------------------------
1.35%
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 December 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 VALUE FUND
================================================================================
o CUMULATIVE PERFORMANCE COMPARISON o
[CHART OF CUMULATIVE PERFORMANCE COMPARISON]
LIPPER MULTI-CAP USAA VALUE
RUSSELL 3000 VALUE FUNDS FUND ADVISER
VALUE INDEX INDEX SHARES
7/31/2010 $10,000.00 $10,000.00 $10,000.00
8/31/2010 9,546.60 9,518.37 9,188.07
9/30/2010 10,308.96 10,343.94 10,115.99
10/31/2010 10,625.37 10,694.71 10,364.54
11/30/2010 10,595.04 10,647.48 10,422.54
12/31/2010 11,434.64 11,464.64 11,223.33
1/31/2011 11,672.60 11,720.29 11,565.96
2/28/2011 12,116.24 12,142.13 11,933.67
3/31/2011 12,174.19 12,262.00 12,017.24
4/30/2011 12,487.83 12,588.32 12,351.51
5/31/2011 12,348.30 12,407.93 12,217.80
6/30/2011 12,090.87 12,145.05 12,017.24
7/31/2011 11,689.95 11,717.09 11,432.25
8/31/2011 10,935.60 10,804.98 10,655.06
9/30/2011 10,079.84 9,775.91 9,744.15
10/31/2011 11,256.88 10,998.04 10,955.91
11/30/2011 11,201.37 10,925.95 10,964.26
12/31/2011 11,423.10 10,992.71 11,111.07
1/31/2012 11,880.92 11,618.33 11,590.87
2/29/2012 12,330.68 12,162.50 12,095.92
3/31/2012 12,697.55 12,442.46 12,466.29
4/30/2012 12,563.77 12,288.82 12,239.02
5/31/2012 11,824.60 11,405.14 11,414.10
6/30/2012 12,410.16 11,858.52 11,843.39
7/31/2012 12,519.25 11,907.30 11,919.15
8/31/2012 12,799.63 12,265.94 12,196.93
9/30/2012 13,209.69 12,600.66 12,483.12
10/31/2012 13,137.19 12,554.48 12,424.20
11/30/2012 13,135.15 12,605.92 12,466.29
12/31/2012 13,427.61 12,887.18 12,666.85
1/31/2013 14,294.80 13,714.86 13,339.35
2/28/2013 14,496.78 13,888.23 13,509.61
3/31/2013 15,073.34 14,475.24 14,079.96
4/30/2013 15,282.50 14,657.41 14,318.31
5/31/2013 15,679.55 15,144.61 14,846.10
6/30/2013 15,547.04 14,950.50 14,735.43
7/31/2013 16,398.96 15,783.25 15,569.66
8/31/2013 15,768.74 15,303.11 15,084.44
9/30/2013 16,204.22 15,823.42 15,654.79
10/31/2013 16,899.10 16,509.90 16,216.63
11/30/2013 17,385.53 16,972.01 16,795.49
12/31/2013 17,816.73 17,369.90 17,142.70
1/31/2014 17,179.46 16,770.66 16,472.50
2/28/2014 17,925.82 17,501.45 17,213.24
3/31/2014 18,337.28 17,797.66 17,513.06
4/30/2014 18,459.87 17,842.56 17,371.97
5/31/2014 18,718.34 18,171.19 17,636.52
6/30/2014 19,233.58 18,645.95 18,059.80
7/31/2014 18,838.28 18,214.30 17,583.60
8/31/2014 19,540.51 18,886.13 18,192.06
9/30/2014 19,066.06 18,304.94 17,707.06
10/31/2014 19,562.11 18,628.59 18,147.97
11/30/2014 19,924.17 19,004.04 18,500.70
12/31/2014 20,078.71 19,087.61 18,538.89
1/31/2015 19,273.44 18,461.52 17,846.81
[END CHART]
Data from 7/31/10 to 1/31/15.*
The graph illustrates the comparison of a $10,000 hypothetical investment in the
USAA Value Fund Adviser Shares to the Fund's benchmarks listed above (see page 7
for benchmark definitions).
*The performance of the Russell 3000 Value Index and the Lipper Multi-Cap Value
Funds 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.
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.
================================================================================
INVESTMENT OVERVIEW | 11
================================================================================
o TOP 10 HOLDINGS - 1/31/15 o
(% of Net Assets)
Capital One Financial Corp. 2.2%
Medtronic plc 2.1%
Wells Fargo & Co. 2.1%
Target Corp. 2.1%
CRH plc ADR 2.0%
Oracle Corp. 2.0%
Sanofi ADR 1.9%
Pfizer, Inc. 1.9%
Delphi Automotive plc 1.8%
JPMorgan Chase & Co. 1.8%
o ASSET ALLOCATION - 1/31/15 o
[PIE CHART OF ASSET ALLOCATION]
FINANCIALS 22.1%
HEALTH CARE 16.6%
CONSUMER DISCRETIONARY 13.6%
INDUSTRIALS 13.0%
INFORMATION TECHNOLOGY 12.1%
CONSUMER STAPLES 5.7%
ENERGY 5.5%
MATERIALS 3.2%
TELECOMMUNICATION SERVICES 2.3%
UTILITIES 2.2%
MONEY MARKET INSTRUMENTS 3.5%
[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 13-19.
================================================================================
12 | USAA VALUE FUND
================================================================================
PORTFOLIO OF INVESTMENTS
January 31, 2015 (unaudited)
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
COMMON STOCKS (96.3%)
CONSUMER DISCRETIONARY (13.6%)
------------------------------
APPAREL RETAIL (1.3%)
149,600 L Brands, Inc. $ 12,661
110,843 Men's Wearhouse, Inc. 5,151
----------
17,812
----------
APPAREL, ACCESSORIES & LUXURY GOODS (1.0%)
119,700 Hanesbrands, Inc. 13,332
----------
AUTO PARTS & EQUIPMENT (3.9%)
358,023 American Axle & Manufacturing Holdings, Inc.* 8,718
354,643 Delphi Automotive plc 24,374
406,581 Johnson Controls, Inc. 18,894
----------
51,986
----------
AUTOMOBILE MANUFACTURERS (1.2%)
1,103,721 Ford Motor Co. 16,236
----------
GENERAL MERCHANDISE STORES (2.1%)
369,161 Target Corp. 27,174
----------
HOME FURNISHINGS (0.5%)
117,700 Tempur Sealy International, Inc.* 6,477
----------
HOTELS, RESORTS & CRUISE LINES (1.3%)
201,546 Carnival Corp. 8,860
117,300 Royal Caribbean Cruises Ltd. 8,862
----------
17,722
----------
HOUSEHOLD APPLIANCES (0.6%)
40,647 Whirlpool Corp. 8,092
----------
LEISURE FACILITIES (0.4%)
270,700 SeaWorld Entertainment, Inc. 4,740
----------
LEISURE PRODUCTS (0.5%)
124,900 Brunswick Corp. 6,780
----------
PUBLISHING (0.6%)
56,424 John Wiley & Sons, Inc. "A" 3,496
71,400 Meredith Corp. 3,717
----------
7,213
----------
================================================================================
PORTFOLIO OF INVESTMENTS | 13
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
SPECIALTY STORES (0.2%)
75,000 Vitamin Shoppe, Inc.* $ 3,170
----------
Total Consumer Discretionary 180,734
----------
CONSUMER STAPLES (5.7%)
-----------------------
HYPERMARKETS & SUPER CENTERS (1.2%)
193,358 Wal-Mart Stores, Inc. 16,432
----------
TOBACCO (4.5%)
307,182 Altria Group, Inc. 16,311
166,100 Lorillard, Inc. 10,898
267,980 Philip Morris International, Inc. 21,503
154,900 Reynolds American, Inc. 10,525
----------
59,237
----------
Total Consumer Staples 75,669
----------
ENERGY (5.5%)
-------------
INTEGRATED OIL & GAS (2.7%)
483,030 BP plc ADR 18,756
219,138 Occidental Petroleum Corp. 17,531
----------
36,287
----------
OIL & GAS DRILLING (0.3%)
395,532 SeaDrill Ltd. 4,248
----------
OIL & GAS EXPLORATION & PRODUCTION (1.8%)
294,799 ConocoPhillips 18,566
117,710 Linn Co., LLC 1,216
98,300 Murphy Oil Corp. 4,415
----------
24,197
----------
OIL & GAS REFINING & MARKETING (0.6%)
109,002 Phillips 66 7,665
----------
OIL & GAS STORAGE & TRANSPORTATION (0.1%)
32,700 Golar LNG Ltd. 928
----------
Total Energy 73,325
----------
FINANCIALS (22.1%)
-------------------
ASSET MANAGEMENT & CUSTODY BANKS (2.0%)
63,500 Ameriprise Financial, Inc. 7,934
263,825 State Street Corp. 18,866
----------
26,800
----------
CONSUMER FINANCE (6.2%)
249,713 American Express Co. 20,149
391,690 Capital One Financial Corp. 28,675
================================================================================
14 | USAA VALUE FUND
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
165,900 Discover Financial Services $ 9,022
944,624 Navient Corp. 18,647
651,700 SLM Corp. 5,937
----------
82,430
----------
DIVERSIFIED BANKS (6.4%)
1,094,825 Bank of America Corp. 16,587
378,909 Citigroup, Inc. 17,790
436,553 JPMorgan Chase & Co. 23,740
526,339 Wells Fargo & Co. 27,327
----------
85,444
----------
INSURANCE BROKERS (0.4%)
120,200 Willis Group Holdings Ltd. plc 5,205
----------
MULTI-LINE INSURANCE (0.8%)
146,389 American International Group, Inc. 7,154
436,100 Genworth Financial, Inc. "A"* 3,044
----------
10,198
----------
REGIONAL BANKS (4.2%)
123,400 CIT Group, Inc. 5,407
82,112 City National Corp. 7,118
424,100 Fifth Third Bancorp 7,337
427,100 First Niagara Financial Group, Inc. 3,468
133,100 Hanmi Financial Corp. 2,643
263,458 PNC Financial Services Group, Inc. 22,273
93,200 Prosperity Bancshares, Inc. 4,268
93,400 Texas Capital Bancshares, Inc.* 3,816
----------
56,330
----------
REITs - HOTEL & RESORT (0.8%)
466,100 Host Hotels & Resorts, Inc. 10,669
----------
REITs - OFFICE (0.4%)
173,300 Corporate Office Properties Trust 5,199
----------
THRIFTS & MORTGAGE FINANCE (0.9%)
424,000 New York Community Bancorp, Inc. 6,551
398,200 People's United Financial, Inc. 5,602
----------
12,153
----------
Total Financials 294,428
----------
HEALTH CARE (16.6%)
-------------------
HEALTH CARE DISTRIBUTORS (0.8%)
133,400 Cardinal Health, Inc. 11,098
----------
================================================================================
PORTFOLIO OF INVESTMENTS | 15
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT (2.8%)
396,165 Medtronic plc $ 28,286
145,700 St. Jude Medical, Inc. 9,597
----------
37,883
----------
HEALTH CARE FACILITIES (0.5%)
137,080 HealthSouth Corp. 6,045
----------
HEALTH CARE SERVICES (0.9%)
155,400 Omnicare, Inc. 11,652
----------
HEALTH CARE SUPPLIES (0.5%)
170,960 Haemonetics Corp.* 6,770
----------
MANAGED HEALTH CARE (2.9%)
83,597 Anthem, Inc. 11,282
89,200 Cigna Corp. 9,529
166,829 UnitedHealth Group, Inc. 17,726
----------
38,537
----------
PHARMACEUTICALS (8.2%)
207,387 Johnson & Johnson 20,768
309,000 Merck & Co., Inc. 18,626
818,529 Pfizer, Inc. 25,579
563,079 Sanofi ADR 25,952
336,098 Teva Pharmaceutical Industries Ltd. ADR 19,111
----------
110,036
----------
Total Health Care 222,021
----------
INDUSTRIALS (13.0%)
-------------------
AEROSPACE & DEFENSE (3.9%)
121,434 General Dynamics Corp. 16,176
142,785 Honeywell International, Inc. 13,959
141,951 Raytheon Co. 14,202
163,700 Spirit AeroSystems Holdings, Inc. "A"* 7,373
----------
51,710
----------
AIR FREIGHT & LOGISTICS (0.4%)
107,000 Forward Air Corp. 4,804
----------
BUILDING PRODUCTS (1.6%)
155,525 Gibraltar Industries, Inc.* 2,355
239,700 Owens Corning, Inc. 9,600
98,600 Simpson Manufacturing Co., Inc. 3,218
156,600 Trex Co., Inc.* 6,660
----------
21,833
----------
================================================================================
16 | USAA VALUE FUND
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.5%)
15,100 Aegion Corp.* $ 231
194,421 Comfort Systems USA, Inc. 3,237
218,800 KBR, Inc. 3,617
--------
7,085
--------
CONSTRUCTION MACHINERY & HEAVY TRUCKS (1.3%)
218,100 Joy Global, Inc. 9,147
107,200 Oshkosh Corp. 4,593
183,302 Terex Corp. 4,121
--------
17,861
--------
DIVERSIFIED SUPPORT SERVICES (0.4%)
151,430 Mobile Mini, Inc. 5,497
--------
ELECTRICAL COMPONENTS & EQUIPMENT (1.6%)
111,500 Eaton Corp. plc 7,035
249,646 Emerson Electric Co. 14,215
--------
21,250
--------
INDUSTRIAL MACHINERY (2.8%)
160,800 Barnes Group, Inc. 5,524
90,500 SPX Corp. 7,563
240,788 Stanley Black & Decker, Inc. 22,550
39,100 Xylem, Inc. 1,333
--------
36,970
--------
OFFICE SERVICES & SUPPLIES (0.3%)
120,900 Herman Miller, Inc. 3,512
--------
TRUCKING (0.2%)
105,500 Heartland Express, Inc. 2,710
--------
Total Industrials 173,232
--------
INFORMATION TECHNOLOGY (12.1%)
------------------------------
APPLICATION SOFTWARE (0.3%)
166,000 Mentor Graphics Corp. 3,820
--------
DATA PROCESSING & OUTSOURCED SERVICES (0.6%)
211,000 Total System Services, Inc. 7,463
--------
ELECTRONIC COMPONENTS (1.1%)
332,900 II-VI, Inc.* 5,722
40,700 Littelfuse, Inc. 4,019
369,940 Vishay Intertechnology, Inc. 5,039
--------
14,780
--------
================================================================================
PORTFOLIO OF INVESTMENTS | 17
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.2%)
59,100 FARO Technologies, Inc.* $ 3,271
----------
ELECTRONIC MANUFACTURING SERVICES (0.6%)
188,600 Mercury Systems, Inc.* 2,976
103,300 Park Electrochemical Corp. 2,243
91,900 Plexus Corp.* 3,482
----------
8,701
----------
SEMICONDUCTOR EQUIPMENT (0.8%)
431,200 Brooks Automation, Inc. 5,567
291,586 Photronics, Inc.* 2,449
318,300 Xcerra Corp.* 2,445
----------
10,461
----------
SEMICONDUCTORS (4.1%)
214,830 Diodes, Inc.* 5,678
386,024 Fairchild Semiconductor International, Inc.* 5,925
604,989 Intel Corp. 19,989
138,300 Microchip Technology, Inc. 6,237
305,127 Texas Instruments, Inc. 16,309
----------
54,138
----------
SYSTEMS SOFTWARE (4.4%)
353,000 CA, Inc. 10,696
542,798 Microsoft Corp. 21,929
619,658 Oracle Corp. 25,957
----------
58,582
----------
Total Information Technology 161,216
----------
MATERIALS (3.2%)
----------------
CONSTRUCTION MATERIALS (2.0%)
1,108,203 CRH plc ADR 26,752
----------
DIVERSIFIED CHEMICALS (0.5%)
117,900 FMC Corp. 6,779
----------
FERTILIZERS & AGRICULTURAL CHEMICALS (0.3%)
65,531 Scotts Miracle-Gro Co. "A" 4,157
----------
SPECIALTY CHEMICALS (0.4%)
152,600 PolyOne Corp. 5,431
----------
Total Materials 43,119
----------
TELECOMMUNICATION SERVICES (2.3%)
---------------------------------
INTEGRATED TELECOMMUNICATION SERVICES (2.3%)
275,972 AT&T, Inc. 9,085
472,275 Verizon Communications, Inc. 21,588
----------
================================================================================
18 | USAA VALUE FUND
================================================================================
---------------------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
---------------------------------------------------------------------------------------------------
$ 30,673
----------
Total Telecommunication Services 30,673
----------
UTILITIES (2.2%)
----------------
ELECTRIC UTILITIES (1.7%)
88,967 Entergy Corp. 7,785
121,000 Pinnacle West Capital Corp. 8,492
170,400 Xcel Energy, Inc. 6,395
----------
22,672
----------
MULTI-UTILITIES (0.5%)
146,000 CenterPoint Energy, Inc. 3,371
85,700 Public Service Enterprise Group, Inc. 3,658
----------
7,029
----------
Total Utilities 29,701
----------
Total Common Stocks (cost: $969,640) 1,284,118
----------
MONEY MARKET INSTRUMENTS (3.5%)
MONEY MARKET FUNDS (3.5%)
46,476,071 State Street Institutional Liquid Reserves Fund Premier
Class, 0.09%(a) (cost: $46,476) 46,476
----------
TOTAL INVESTMENTS (COST: $1,016,116) $1,330,594
==========
---------------------------------------------------------------------------------------------------
($ 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 $1,284,118 $- $- $1,284,118
Money Market Instruments:
Money Market Funds 46,476 - - 46,476
---------------------------------------------------------------------------------------------------
Total $1,330,594 $- $- $1,330,594
---------------------------------------------------------------------------------------------------
For the period of August 1, 2014, through January 31, 2015, there were no
transfers of securities between levels. 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.
================================================================================
PORTFOLIO OF INVESTMENTS | 19
================================================================================
NOTES TO PORTFOLIO OF INVESTMENTS
January 31, 2015 (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 9.0% of net assets at January 31,
2015.
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.
REIT Real estate investment trust
o SPECIFIC NOTES
(a) Rate represents the money market fund annualized seven-day yield
at January 31, 2015.
* Non-income-producing security.
See accompanying notes to financial statements.
================================================================================
20 | USAA VALUE FUND
================================================================================
STATEMENT OF ASSETS AND LIABILITIES (IN THOUSANDS)
January 31, 2015 (unaudited)
--------------------------------------------------------------------------------
ASSETS
Investments in securities, at market value (cost of $1,016,116) $1,330,594
Cash 6
Receivables:
Capital shares sold 802
Dividends and interest 1,329
Securities sold 3,081
----------
Total assets 1,335,812
----------
LIABILITIES
Payables:
Securities purchased 954
Capital shares redeemed 494
Accrued management fees 865
Accrued transfer agent's fees 53
Other accrued expenses and payables 65
----------
Total liabilities 2,431
----------
Net assets applicable to capital shares outstanding $1,333,381
==========
NET ASSETS CONSIST OF:
Paid-in capital $1,001,821
Accumulated undistributed net investment income 1,146
Accumulated net realized gain on investments 15,936
Net unrealized appreciation of investments 314,478
----------
Net assets applicable to capital shares outstanding $1,333,381
==========
Net asset value, redemption price, and offering price per share:
Fund Shares (net assets of $883,841/45,573 shares outstanding) $ 19.39
==========
Institutional Shares (net assets of $440,935/22,761
shares outstanding) $ 19.37
==========
Adviser Shares (net assets of $8,605/444 shares outstanding) $ 19.35
==========
See accompanying notes to financial statements.
================================================================================
FINANCIAL STATEMENTS | 21
================================================================================
STATEMENT OF OPERATIONS (IN THOUSANDS)
Six-month period ended January 31, 2015 (unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $32) $ 14,087
Interest 21
--------
Total income 14,108
--------
EXPENSES
Management fees 4,844
Administration and servicing fees:
Fund Shares 664
Institutional Shares 202
Adviser Shares 7
Transfer agent's fees:
Fund Shares 716
Institutional Shares 202
Distribution and service fees (Note 6E):
Adviser Shares 11
Custody and accounting fees:
Fund Shares 57
Institutional Shares 24
Adviser Shares 1
Postage:
Fund Shares 25
Shareholder reporting fees:
Fund Shares 18
Trustees' fees 12
Registration fees:
Fund Shares 15
Institutional Shares 9
Adviser Shares 9
Professional fees 54
Other 11
--------
Total expenses 6,881
--------
NET INVESTMENT INCOME 7,227
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain 30,410
Change in net unrealized appreciation/depreciation (17,665)
--------
Net realized and unrealized gain 12,745
--------
Increase in net assets resulting from operations $ 19,972
========
See accompanying notes to financial statements.
================================================================================
22 | USAA VALUE FUND
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (IN THOUSANDS)
Six-month period ended January 31, 2015 (unaudited), and year ended
July 31, 2014
---------------------------------------------------------------------------------------------------
1/31/2015 7/31/2014
---------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 7,227 $ 15,808
Net realized gain on investments 30,410 45,040
Change in net unrealized appreciation/depreciation
of investments (17,665) 57,645
--------------------------
Increase in net assets resulting from operations 19,972 118,493
--------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Fund Shares (11,218) (7,457)
Institutional Shares (6,208) (2,381)
Adviser Shares (92) (56)
--------------------------
Total distributions of net investment income (17,518) (9,894)
--------------------------
Net realized gains:
Fund Shares (31,238) (19,995)
Institutional Shares (15,427) (6,055)
Adviser Shares (322) (246)
--------------------------
Total distributions of net realized gains (46,987) (26,296)
--------------------------
Distributions to shareholders (64,505) (36,190)
--------------------------
NET INCREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS (NOTE 5)
Fund Shares 68,290 149,297
Institutional Shares 126,519 95,285
Adviser Shares 9 (109)
--------------------------
Total net increase in net assets from capital
share transactions 194,818 244,473
--------------------------
Net increase in net assets 150,285 326,776
NET ASSETS
Beginning of period 1,183,096 856,320
--------------------------
End of period $1,333,381 $1,183,096
==========================
Accumulated undistributed net investment income:
End of period $ 1,146 $ 11,437
==========================
See accompanying notes to financial statements.
================================================================================
FINANCIAL STATEMENTS | 23
================================================================================
NOTES TO FINANCIAL STATEMENTS
January 31, 2015 (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.
Additionally, the Fund qualifies as a registered investment company under
Accounting Standards Codification Topic 946. The information presented in this
semiannual report pertains only to the USAA Value Fund (the Fund), which is
classified as diversified under the 1940 Act. The Fund's investment objective is
to seek long-term growth of capital.
The Fund consists of three classes of shares: Value Fund Shares (Fund Shares),
Value Fund Institutional Shares (Institutional Shares), and Value 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, 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
================================================================================
24 | USAA VALUE FUND
================================================================================
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 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
================================================================================
NOTES TO FINANCIAL STATEMENTS | 25
================================================================================
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 and the Fund's subadviser(s), if
applicable, will monitor for events that would materially affect the
value of the Fund's foreign securities. The Fund's subadviser(s) have
agreed to notify the Manager of significant events they identify that
would materially affect the value of the Fund's foreign securities. If
the Manager determines that a particular event would materially affect
the value of the Fund's foreign securities, then the Manager, under
valuation procedures approved by the 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 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.
================================================================================
26 | USAA VALUE FUND
================================================================================
4. Debt securities purchased with original or remaining maturities of 60
days or less may be valued at amortized cost, which approximates market
value.
5. Repurchase agreements are valued at cost, which approximates market
value.
6. Securities for which market quotations are not readily available or
are considered unreliable, or whose values have been materially affected
by events occurring after the close of their primary markets but before
the pricing of the Fund, are valued in good faith at fair value, using
methods determined by the Manager in consultation with the Fund's
subadviser(s), if applicable, 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.
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.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 27
================================================================================
Level 2 - inputs to the valuation methodology are other significant
observable inputs, including quoted prices for similar securities, inputs
that are observable for the securities, either directly or indirectly, and
market-corroborated inputs such as market indices.
Level 3 - inputs to the valuation methodology are unobservable and
significant to the fair value measurement, including the Manager's own
assumptions in determining the fair value.
The inputs or methodologies used for valuing securities are not necessarily
an indication of the risks associated with investing in those securities.
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.
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.
================================================================================
28 | USAA VALUE FUND
================================================================================
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 - A portion of the brokerage commissions that
the Fund pays may be recaptured as a credit that is tracked and used by the
custodian to directly reduce expenses paid by the Fund. In addition, through
arrangements with the Fund's custodian and other banks utilized by the Fund
for cash management purposes, realized credits, if any, generated from cash
balances in the Fund's bank accounts may be used to directly reduce the
Fund's expenses. For the six-month period ended January 31, 2015, the Fund
did not receive any brokerage commission recapture credits. For the
six-month period ended January 31, 2015 there were no custodian and other
bank credits.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 29
================================================================================
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. 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.
For the six-month period ended January 31, 2015, the Fund paid CAPCO facility
fees of $3,000, which represents 1.9% 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 January 31, 2015.
================================================================================
30 | USAA VALUE FUND
================================================================================
(3) DISTRIBUTIONS
The tax basis of distributions and accumulated undistributed net investment
income will be determined based upon the Fund's tax year-end of July 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 July 31, 2014, the Fund had no capital loss carryforwards, for federal income
tax purposes.
For the six-month period ended January 31, 2015, 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
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 January 31, 2015, were
$246,808,000 and $103,498,000, respectively.
As of January 31, 2015, the cost of securities, including short-term securities,
for federal income tax purposes, was approximately the same as that reported in
the financial statements.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 31
================================================================================
Gross unrealized appreciation and depreciation of investments as of January 31,
2015, were $347,044,000 and $32,566,000, respectively, resulting in net
unrealized appreciation of $314,478,000.
(5) CAPITAL SHARE TRANSACTIONS
At January 31, 2015, 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:
SIX-MONTH PERIOD ENDED YEAR ENDED
JANUARY 31, 2015 JULY 31, 2014
-----------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------------------------------------------
FUND SHARES:
Shares sold 4,578 $ 92,380 12,574 $243,710
Shares issued from reinvested
dividends 2,065 41,969 1,424 27,183
Shares redeemed (3,270) (66,059) (6,261) (121,596)
-----------------------------------------------
Net increase from
capital share transactions 3,373 $ 68,290 7,737 $149,297
===============================================
INSTITUTIONAL SHARES:
Shares sold 5,822 $117,601 5,916 $116,128
Shares issued from reinvested
dividends 1,064 21,629 442 8,436
Shares redeemed (633) (12,711) (1,553) (29,279)
-----------------------------------------------
Net increase from
capital share transactions 6,253 $126,519 4,805 $ 95,285
===============================================
ADVISER SHARES:
Shares sold 1 $ 28 3 $ 51
Shares issued from reinvested
dividends -* 3 -* 3
Shares redeemed (1) (22) (9) (163)
-----------------------------------------------
Net increase (decrease) from
capital share transactions -* $ 9 (6) $ (109)
===============================================
*Represents less than 500 shares.
================================================================================
32 | USAA VALUE FUND
================================================================================
(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. 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 the Fund's assets.
The Manager monitors each subadviser's performance through quantitative
and qualitative analysis, and periodically reports to the Board as to whether
each subadviser's agreement should be renewed, terminated, or modified. The
Manager also is responsible for allocating assets to the subadviser(s). The
allocation for each subadviser could range from 0% to 100% of the Fund's
assets, and the Manager could change the allocations without shareholder
approval.
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 Multi-Cap Value Funds Index over the performance period. The Lipper
Multi-Cap Value Funds Index tracks the total return performance of the 30
largest funds within the Lipper Multi-Cap Value 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
RELATIVE TO INDEX ANNUAL ADJUSTMENT RATE
(IN BASIS POINTS)(1) (IN BASIS POINTS)(1)
-------------------------------------------------------------------------------
+/- 100 to 400 +/- 4
+/- 401 to 700 +/- 5
+/- 701 and greater +/- 6
(1)Based on the difference between average annual performance of the
relevant share class of the Fund and its relevant index, rounded to the
nearest basis point. Average net assets of the share class are calculated
over a rolling 36-month period.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 33
================================================================================
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 Multi-Cap Value Funds Index over that period, even if
the class had overall negative returns during the performance period.
For the six-month period ended January 31, 2015, the Fund incurred total
management fees, paid or payable to the Manager, of $4,844,000, which
included a performance adjustment for the Fund Shares, Institutional Shares,
and Adviser Shares of $(22,000), $(8,000), and $(1,000), respectively. The
performance adjustments were less than (0.01)% for the Fund Shares and
Institutional Shares and (0.02)% for the Adviser Shares.
B. SUBADVISORY ARRANGEMENT(S) - The Manager has entered into an investment
subadvisory agreement with Barrow, Hanley, Mewhinney & Strauss, LLC (BHMS),
under which BHMS directs the investment and reinvestment of the Fund's assets
(as allocated from time to time by the Manager). The Manager (not the Fund)
pays BHMS a subadvisory fee based on the aggregate average net assets that
BHMS manages in the USAA Value Fund and the USAA Growth & Income Fund
combined, in the annual amount of 0.75% on the first $15 million in assets,
0.55% on assets over $15 million and up to $25 million, 0.45% on assets over
$25 million and up to $100 million, 0.35% on assets over $100 million and up
to $200 million, 0.25% on assets over $200 million and up to $1 billion, and
0.15% on assets over $1 billion. For the six-month period ended January 31,
2015, the Manager incurred subadvisory fees, paid or payable to BHMS, of
$1,437,000.
================================================================================
34 | USAA VALUE FUND
================================================================================
C. 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 January 31, 2015, the Fund Shares, Institutional Shares, and
Adviser Shares incurred administration and servicing fees, paid or payable to
the Manager, of $664,000, $202,000, and $7,000, 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 January 31, 2015, the Fund reimbursed
the Manager $21,000 for these compliance and legal services. These expenses
are included in the professional fees on the Fund's statement of operations.
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 January 31,
2015, the Fund Shares, Institutional Shares, and Adviser Shares incurred
transfer agent's fees, paid or payable to SAS, of $716,000, $202,000, and
less than $500, 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
================================================================================
NOTES TO FINANCIAL STATEMENTS | 35
================================================================================
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 January
31, 2015, the Adviser Shares incurred distribution and service (12b-1) fees
of $11,000.
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.
================================================================================
36 | USAA VALUE 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 January 31, 2015, 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 0.6
USAA Target Retirement Income Fund 1.5
USAA Target Retirement 2020 Fund 3.6
USAA Target Retirement 2030 Fund 9.0
USAA Target Retirement 2040 Fund 11.4
USAA Target Retirement 2050 Fund 6.7
USAA Target Retirement 2060 Fund 0.3
The Manager is indirectly wholly owned by United Services Automobile Association
(USAA), a large, diversified financial services institution. At January 31,
2015, USAA and its affiliates owned 441,000 shares which represent 99.1% of the
Adviser Shares and 0.6% 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 | 37
================================================================================
(8) FINANCIAL HIGHLIGHTS - FUND SHARES
Per share operating performance for a share outstanding throughout each period
is as follows:
SIX-MONTH
PERIOD ENDED
JANUARY 31, YEAR ENDED JULY 31,
-----------------------------------------------------------------------------------
2015 2014 2013 2012 2011 2010
-----------------------------------------------------------------------------------
Net asset value at
beginning of period $ 20.00 $ 18.37 $ 14.22 $ 13.74 $ 11.82 $ 10.33
-----------------------------------------------------------------------------------
Income from
investment operations:
Net investment income .11(d) .27 .21 .23 .14 .13
Net realized and
unrealized gain .26(d) 2.11 4.17 .41 1.91 1.50
-----------------------------------------------------------------------------------
Total from
investment operations .37(d) 2.38 4.38 .64 2.05 1.63
-----------------------------------------------------------------------------------
Less distributions from:
Net investment income (.25) (.20) (.23) (.16) (.13) (.14)
Realized capital gains (.73) (.55) - - - -
-----------------------------------------------------------------------------------
Total distributions (.98) (.75) (.23) (.16) (.13) (.14)
-----------------------------------------------------------------------------------
Net asset value at
end of period $ 19.39 $ 20.00 $ 18.37 $ 14.22 $ 13.74 $ 11.82
===================================================================================
Total return (%)* 1.65 13.21 31.15 4.77 17.39 15.82
Net assets at end
of period (000) $883,841 $844,121 $633,228 $425,071 $585,536 $437,995
Ratios to average
net assets:**
Expenses (%)(a) 1.09(c) 1.11(b) 1.15(b) 1.15(b) 1.15(b) 1.15(b)
Expenses, excluding
reimbursements (%)(a) 1.09(c) 1.11 1.25 1.31 1.25 1.32
Net investment
income (%) 1.09(c) 1.55 1.40 1.48 1.10 1.16
Portfolio turnover (%) 8 20 26 20 22 17
* 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 January 31, 2015, average net assets were
$878,952,000.
(a) 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%)(+) (.01%) (.01%) (.01%)
(+) Represents less than 0.01% of average net assets.
(b) Prior to December 1, 2013, the Manager had voluntarily agreed to limit
the annual expenses of the Fund Shares to 1.15% of the Fund Shares' average
net assets.
(c) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
(d) Calculated using average shares. For the six-month period ended January
31, 2015, average shares were 43,405,000.
================================================================================
38 | USAA VALUE 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
JANUARY 31, YEAR ENDED JULY 31,
-----------------------------------------------------------------------------------
2015 2014 2013 2012 2011 2010
-----------------------------------------------------------------------------------
Net asset value at
beginning of period $ 20.00 $ 18.36 $ 14.22 $ 13.75 $ 11.82 $ 10.34
----------------------------------------------------------------------------------
Income from
investment operations:
Net investment income .12(d) .29 .25 .21 .18 .18
Net realized and
unrealized gain .26(d) 2.11 4.15 .45 1.91 1.47
----------------------------------------------------------------------------------
Total from
investment operations .38(d) 2.40 4.40 .66 2.09 1.65
----------------------------------------------------------------------------------
Less distributions from:
Net investment income (.28) (.21) (.26) (.19) (.16) (.17)
Realized capital gains (.73) (.55) - - - -
----------------------------------------------------------------------------------
Total distributions (1.01) (.76) (.26) (.19) (.16) (.17)
----------------------------------------------------------------------------------
Net asset value at
end of period $ 19.37 $ 20.00 $ 18.36 $ 14.22 $ 13.75 $ 11.82
==================================================================================
Total return (%)* 1.69 13.34 31.31 4.95 17.74 15.97
Net assets at
end of period (000) $440,935 $330,114 $214,855 $171,322 $141,668 $87,698
Ratios to average
net assets:**
Expenses (%)(a) .97(c) 1.00 1.01 1.00 .90(b) .90(b)
Net investment
income (%) 1.17(c) 1.59 1.54 1.61 1.35 1.38
Portfolio turnover (%) 8 20 26 20 22 17
* 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 January 31, 2015, average net assets were
$402,345,000.
(a) 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%)(+) (.01%) (.01%) (.01%)
(+) Represents less than 0.01% of average net assets.
(b) Prior to December 1, 2010, the Manager had voluntarily agreed to limit
the annual expenses of the Institutional Shares to 0.91% of the
Institutional Shares' average net assets.
(c) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
(d) Calculated using average shares. For the six-month period ended January
31, 2015, average shares were 19,865,000.
================================================================================
NOTES TO FINANCIAL STATEMENTS | 39
================================================================================
(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
JANUARY 31, YEAR ENDED JULY 31, JULY 31,
-----------------------------------------------------------------------------------
2015 2014 2013 2012 2011***
-----------------------------------------------------------------------------------
Net asset value at
beginning of period $19.94 $18.29 $14.16 $13.68 $12.07
----------------------------------------------------------------------------
Income from
investment operations:
Net investment income .09 .25 .15 .13 .08(a)
Net realized and
unrealized gain .26 2.08 4.15 .44 1.65(a)
----------------------------------------------------------------------------
Total from
investment operations .35 2.33 4.30 .57 1.73(a)
----------------------------------------------------------------------------
Less distributions from:
Net investment income (.21) (.13) (.17) (.09) (.12)
Realized capital gains (.73) (.55) - - -
----------------------------------------------------------------------------
Total distributions (.94) (.68) (.17) (.09) (.12)
----------------------------------------------------------------------------
Net asset value at
end of period $19.35 $19.94 $18.29 $14.16 $13.68
============================================================================
Total return (%)* 1.55 12.94 30.63 4.26 14.32
Net assets at
end of period (000) $8,605 $8,861 $8,237 $6,406 $6,161
Ratios to average
net assets:**
Expenses (%)(b) 1.35(c) 1.35(d) 1.57(d) 1.65(d) 1.65(c),(d)
Expenses, excluding
reimbursements (%)(b) 1.35(c) 1.35 1.57 1.66 2.00(c)
Net investment income (%) .84(c) 1.30 .99 .97 .58(c)
Portfolio turnover (%) 8 20 26 20 22
* 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 January 31, 2015, average net assets were
$8,973,000.
*** Adviser Shares were initiated on August 1, 2010.
(a) Calculated using average shares.
(b) 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:
- (.01%) (.00%)(+) (.01%) (.00%)(+)
(+) Represents less than 0.01% of average net assets.
(c) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
(d) Prior to December 1, 2013, the Manager had voluntarily agreed to limit
the annual expenses of the Adviser Shares to 1.65% of the Adviser Shares'
average net assets.
================================================================================
40 | USAA VALUE FUND
================================================================================
EXPENSE EXAMPLE
January 31, 2015 (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 August 1, 2014, through
January 31, 2015.
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
================================================================================
EXPENSE EXAMPLE | 41
================================================================================
estimate 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 AUGUST 1, 2014 -
AUGUST 1, 2014 JANUARY 31, 2015 JANUARY 31, 2015
---------------------------------------------------------
FUND SHARES
Actual $1,000.00 $1,016.50 $5.54
Hypothetical
(5% return before expenses) 1,000.00 1,019.71 5.55
INSTITUTIONAL SHARES
Actual 1,000.00 1,016.90 4.93
Hypothetical
(5% return before expenses) 1,000.00 1,020.32 4.94
ADVISER SHARES
Actual 1,000.00 1,015.50 6.86
Hypothetical
(5% return before expenses) 1,000.00 1,018.40 6.87
* Expenses are equal to the annualized expense ratio of 1.09% for Fund Shares,
0.97% for Institutional Shares, and 1.35% for Adviser Shares, which are net of
any reimbursements and expenses paid indirectly, multiplied by the average
account value over the period, multiplied by 184 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 1.65% for Fund Shares, 1.69% for Institutional
Shares, and 1.55% for Adviser Shares for the six-month period of August 1,
2014, through January 31, 2015.
================================================================================
42 | USAA VALUE 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 One Lincoln Street
Boston, Massachusetts 02111
--------------------------------------------------------------------------------
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.
================================================================================
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)
=============================================================================
40847-0315 (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 trustees. The Corporate Governance
Committee has adopted procedures to consider Board candidates suggested by
shareholders. The procedures are initiated by the receipt of nominations
submitted by a fund shareholder sent to Board member(s) at the address specified
in fund disclosure documents or as received by AMCO or a fund officer. Any
recommendations for a nomination by a shareholder, to be considered by the
Board, must include at least the following information: name; date of birth;
contact information; education; business profession and other expertise;
affiliations; experience relating to serving on the Board; and references. The
Corporate Governance Committee gives shareholder recommendations the same
consideration as any other candidate.
ITEM 11. CONTROLS AND PROCEDURES
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 January 31, 2015
By:* /S/ DANIEL J. MAVICO
-----------------------------------------------------------
Signature and Title: Daniel J. Mavico, Assistant Secretary
Date: 03/26/2015
------------------------------
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: 03/30/2015
------------------------------
By:* /S/ ROBERTO GALINDO, JR.
-----------------------------------------------------
Signature and Title: Roberto Galindo, Jr., Treasurer
Date: 03/30/2015
------------------------------
*Print the name and title of each signing officer under his or her signature.