UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07852
USAA Mutual Funds Trust
(Exact name of registrant as specified in charter)
15935 La Cantera Pkwy, San Antonio, Texas 78256
(Address of principal executive offices) (Zip code)
Citi Fund Services Ohio, Inc., 4400 Easton Commons, Suite 200, Columbus, OH 43219
(Name and address of agent for service)
Registrant’s telephone number, including area code: 800-235-8396
Date of fiscal year end: May 31
Date of reporting period: November 30, 2021
Item 1. Reports to Stockholders.
NOVEMBER 30, 2021
Semi Annual Report
USAA Cornerstone Moderately
Conservative Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 13 | ||||||
Statement of Operations | 14 | ||||||
Statements of Changes in Net Assets | 15 | ||||||
Financial Highlights | 16 | ||||||
Notes to Financial Statements | 18 | ||||||
Supplemental Information | 29 | ||||||
Proxy Voting and Portfolio Holdings Information | 29 | ||||||
Expense Example | 29 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA Cornerstone Moderately Conservative Fund | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks current income with a secondary focus on capital appreciation.
Asset Allocation*:
November 30, 2021
(% of Net Assets)
* Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
2
USAA Mutual Funds Trust USAA Cornerstone Moderately Conservative Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Asset-Backed Securities (1.0%) | |||||||||||
BCC Funding Corp. XVI LLC, Series 2019-1A, Class A2, 2.46%, 8/20/24, Callable 6/20/23 @ 100 (a) | $ | 472 | $ | 475 | |||||||
Drive Auto Receivables Trust, Series 2018-4, Class D, 4.09%, 1/15/26, Callable 10/15/22 @ 100 | 102 | 104 | |||||||||
Exeter Automobile Receivables Trust, Series 2017-3A, Class D, 5.28%, 10/15/24, Callable 6/15/22 @ 100 (a) | 110 | 113 | |||||||||
Exeter Automobile Receivables Trust, Series 2019-2A, Class C, 3.30%, 3/15/24, Callable 8/15/23 @ 100 (a) | 85 | 86 | |||||||||
Exeter Automobile Receivables Trust, Series 2020-1A, Class B, 2.26%, 4/15/24, Callable 10/15/23 @ 100 (a) | 28 | 28 | |||||||||
HPEFS Equipment Trust, Series 2019-1A, Class C, 2.49%, 9/20/29, Callable 7/20/22 @ 100 (a) | 97 | 98 | |||||||||
HPEFS Equipment Trust, Series 2020-1A, Class B, 1.89%, 2/20/30, Callable 1/20/23 @ 100 (a) | 55 | 56 | |||||||||
Navient Student Loan Trust, Series 2015-2, Class B, 1.59% (LIBOR01M+150bps), 8/25/50, Callable 2/25/30 @ 100 (b) | 200 | 201 | |||||||||
NP SPE II LLC, Series 2017-1A, Class A1, 3.37%, 10/21/47, Callable 12/20/21 @ 100 (a) | 63 | 64 | |||||||||
SCF Equipment Leasing LLC, Series 2020-1A, Class B, 2.02%, 3/20/28, Callable 11/20/23 @ 100 (a) | 107 | 108 | |||||||||
Trinity Rail Leasing LLC, Series 2019-2A, Class A1, 2.39%, 10/18/49, Callable 12/17/21 @ 100 (a) | 355 | 355 | |||||||||
Westlake Automobile Receivables Trust, Series 2020-1A, Class B, 1.94%, 4/15/25, Callable 8/15/23 @ 100 (a) | 358 | 360 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-2A, Class D, 4.00%, 1/16/24, Callable 2/15/22 @ 100 (a) | 52 | 52 | |||||||||
Total Asset-Backed Securities (Cost $2,068) | 2,100 | ||||||||||
Collateralized Mortgage Obligations (0.4%) | |||||||||||
Banc of America Commercial Mortgage Trust, Series 2008-1, Class AJ, 6.79%, 2/10/51 (c) | 26 | 26 | |||||||||
BTH Mortgage-Backed Securities Trust, Series 2018-21, Class A, 2.59% (LIBOR01M+250bps), 4/4/22 (a) (b) | 255 | 256 | |||||||||
Credit Suisse Commercial Mortgage Trust, Series 2007-C1, Class AMFL, 0.28% (LIBOR01M+19bps), 2/15/40 (b) | 3 | 3 | |||||||||
DBJPM Mortgage Trust, Series 2016-SFC, Class A, 2.83%, 8/10/36 (a) | 500 | 507 | |||||||||
UBS Commercial Mortgage Trust, Series 2012-C1, Class XA, 2.17%, 5/10/45, Callable 3/10/22 @ 100 (a) (c) (d) | 1,946 | 3 | |||||||||
Total Collateralized Mortgage Obligations (Cost $793) | 795 | ||||||||||
Common Stocks (15.0%) | |||||||||||
Communication Services (1.1%): | |||||||||||
Alphabet, Inc. Class C (e) | 407 | 1,159 | |||||||||
AT&T, Inc. | 8,274 | 189 | |||||||||
Comcast Corp. Class A | 8,170 | 408 | |||||||||
Match Group, Inc. (e) | 1,027 | 133 |
See notes to financial statements.
3
USAA Mutual Funds Trust USAA Cornerstone Moderately Conservative Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Netflix, Inc. (e) | 347 | $ | 223 | ||||||||
Sirius XM Holdings, Inc. (f) | 23,279 | 142 | |||||||||
Verizon Communications, Inc. | 4,111 | 207 | |||||||||
Zillow Group, Inc. Class C (e) | 178 | 10 | |||||||||
2,471 | |||||||||||
Consumer Discretionary (1.3%): | |||||||||||
AutoZone, Inc. (e) | 85 | 154 | |||||||||
Best Buy Co., Inc. | 1,183 | 126 | |||||||||
eBay, Inc. | 2,323 | 157 | |||||||||
Ford Motor Co. | 17,518 | 336 | |||||||||
Garmin Ltd. | 1,094 | 146 | |||||||||
General Motors Co. (e) | 3,047 | 176 | |||||||||
Lennar Corp. Class A | 1,500 | 158 | |||||||||
Lowe's Cos., Inc. | 1,658 | 406 | |||||||||
McDonald's Corp. | 797 | 195 | |||||||||
O'Reilly Automotive, Inc. (e) | 250 | 160 | |||||||||
Target Corp. (g) | 1,441 | 351 | |||||||||
The Home Depot, Inc. | 1,365 | 547 | |||||||||
2,912 | |||||||||||
Consumer Staples (0.9%): | |||||||||||
Altria Group, Inc. | 4,024 | 172 | |||||||||
Archer-Daniels-Midland Co. | 2,516 | 157 | |||||||||
Colgate-Palmolive Co. | 2,124 | 159 | |||||||||
Costco Wholesale Corp. | 414 | 223 | |||||||||
PepsiCo, Inc. | 1,292 | 206 | |||||||||
Philip Morris International, Inc. | 4,034 | 347 | |||||||||
The Clorox Co. | 903 | 147 | |||||||||
The Estee Lauder Cos., Inc. | 500 | 166 | |||||||||
Tyson Foods, Inc. Class A | 1,997 | 158 | |||||||||
Walgreens Boots Alliance, Inc. | 3,315 | 148 | |||||||||
1,883 | |||||||||||
Energy (0.5%): | |||||||||||
Chevron Corp. | 1,869 | 211 | |||||||||
ConocoPhillips | 4,769 | 334 | |||||||||
Devon Energy Corp. | 3,640 | 153 | |||||||||
EOG Resources, Inc. | 1,691 | 147 | |||||||||
Exxon Mobil Corp. | 3,488 | 209 | |||||||||
Marathon Petroleum Corp. | 2,445 | 149 | |||||||||
1,203 | |||||||||||
Financials (2.1%): | |||||||||||
AGNC Investment Corp. | 418 | 6 | |||||||||
Annaly Capital Management, Inc. | 1,116 | 9 | |||||||||
Aon PLC Class A | 561 | 166 | |||||||||
Bank of America Corp. | 5,255 | 234 | |||||||||
Berkshire Hathaway, Inc. Class B (e) | 897 | 248 | |||||||||
Blackstone, Inc. | 1,221 | 173 | |||||||||
Capital One Financial Corp. | 2,238 | 314 | |||||||||
Citigroup, Inc. | 2,870 | 183 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Cornerstone Moderately Conservative Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
First Republic Bank | 742 | $ | 156 | ||||||||
Marsh & McLennan Cos., Inc. | 1,058 | 174 | |||||||||
MetLife, Inc. | 2,714 | 159 | |||||||||
Morgan Stanley | 3,847 | 365 | |||||||||
MSCI, Inc. | 250 | 157 | |||||||||
Prudential Financial, Inc. | 3,037 | 311 | |||||||||
Regions Financial Corp. | 6,393 | 145 | |||||||||
S&P Global, Inc. | 386 | 176 | |||||||||
SVB Financial Group (e) | 431 | 298 | |||||||||
Synchrony Financial | 3,371 | 151 | |||||||||
T. Rowe Price Group, Inc. | 728 | 146 | |||||||||
The Allstate Corp. | 2,832 | 308 | |||||||||
The Goldman Sachs Group, Inc. | 933 | 355 | |||||||||
The Progressive Corp. | 1,718 | 160 | |||||||||
Wells Fargo & Co. | 4,252 | 203 | |||||||||
4,597 | |||||||||||
Health Care (2.4%): | |||||||||||
AbbVie, Inc. | 1,830 | 211 | |||||||||
Agilent Technologies, Inc. | 1,026 | 155 | |||||||||
Amgen, Inc. | 1,739 | 346 | |||||||||
Anthem, Inc. | 432 | 175 | |||||||||
Biogen, Inc. (e) | 627 | 148 | |||||||||
Bristol-Myers Squibb Co. | 3,248 | 174 | |||||||||
Cigna Corp. | 823 | 158 | |||||||||
CVS Health Corp. | 2,052 | 183 | |||||||||
Danaher Corp. | 676 | 217 | |||||||||
Eli Lilly & Co. | 1,575 | 391 | |||||||||
Gilead Sciences, Inc. (g) | 2,725 | 188 | |||||||||
HCA Healthcare, Inc. | 690 | 156 | |||||||||
IDEXX Laboratories, Inc. (e) | 524 | 319 | |||||||||
Intuitive Surgical, Inc. (e) | 511 | 166 | |||||||||
IQVIA Holdings, Inc. (e) | 648 | 168 | |||||||||
Johnson & Johnson (g) | 3,259 | 508 | |||||||||
Merck & Co., Inc. | 5,038 | 377 | |||||||||
Mettler-Toledo International, Inc. (e) | 102 | 154 | |||||||||
Pfizer, Inc. | 4,805 | 258 | |||||||||
UnitedHealth Group, Inc. | 1,152 | 512 | |||||||||
Waters Corp. (e) | 443 | 145 | |||||||||
West Pharmaceutical Services, Inc. | 388 | 172 | |||||||||
5,281 | |||||||||||
Industrials (1.4%): | |||||||||||
3M Co. | 2,000 | 340 | |||||||||
Carrier Global Corp. | 3,002 | 162 | |||||||||
Cummins, Inc. | 710 | 149 | |||||||||
Eaton Corp. PLC | 978 | 159 | |||||||||
Fastenal Co. | 2,691 | 159 | |||||||||
General Dynamics Corp. | 818 | 155 | |||||||||
Illinois Tool Works, Inc. | 714 | 166 | |||||||||
Johnson Controls International PLC | 2,185 | 163 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Cornerstone Moderately Conservative Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Lockheed Martin Corp. | 1,041 | $ | 347 | ||||||||
Northrop Grumman Corp. | 934 | 326 | |||||||||
Old Dominion Freight Line, Inc. | 459 | 163 | |||||||||
Otis Worldwide Corp. | 1,895 | 152 | |||||||||
PACCAR, Inc. | 1,887 | 157 | |||||||||
Republic Services, Inc. (g) | 1,205 | 159 | |||||||||
Rockwell Automation, Inc. | 475 | 160 | |||||||||
W.W. Grainger, Inc. | 321 | 155 | |||||||||
3,072 | |||||||||||
Information Technology (4.2%): | |||||||||||
Accenture PLC Class A | 1,151 | 411 | |||||||||
Adobe, Inc. (e) | 347 | 232 | |||||||||
Apple, Inc. | 10,677 | 1,765 | |||||||||
Applied Materials, Inc. | 2,468 | 363 | |||||||||
Broadcom, Inc. | 769 | 426 | |||||||||
Cisco Systems, Inc. | 7,549 | 414 | |||||||||
Cognizant Technology Solutions Corp. Class A | 2,109 | 164 | |||||||||
EPAM Systems, Inc. (e) | 227 | 138 | |||||||||
Fortinet, Inc. (e) | 473 | 157 | |||||||||
Gartner, Inc. (e) | 472 | 147 | |||||||||
HP, Inc. | 10,355 | 365 | |||||||||
Intel Corp. | 4,146 | 204 | |||||||||
International Business Machines Corp. | 1,545 | 181 | |||||||||
Intuit, Inc. | 320 | 209 | |||||||||
Mastercard, Inc. Class A | 662 | 209 | |||||||||
Micron Technology, Inc. | 2,391 | 201 | |||||||||
Microsoft Corp. (g) | 4,601 | 1,521 | |||||||||
Motorola Solutions, Inc. | 656 | 166 | |||||||||
NVIDIA Corp. | 1,143 | 374 | |||||||||
Oracle Corp. | 4,264 | 387 | |||||||||
QUALCOMM, Inc. | 2,433 | 439 | |||||||||
Texas Instruments, Inc. | 2,062 | 397 | |||||||||
VeriSign, Inc. (e) | 666 | 160 | |||||||||
VMware, Inc. Class A (e) | 1,285 | 150 | |||||||||
9,180 | |||||||||||
Materials (0.4%): | |||||||||||
Avery Dennison Corp. | 679 | 139 | |||||||||
LyondellBasell Industries NV Class A | 1,780 | 155 | |||||||||
Nucor Corp. | 1,425 | 152 | |||||||||
PPG Industries, Inc. | 987 | 152 | |||||||||
The Sherwin-Williams Co. | 527 | 175 | |||||||||
773 | |||||||||||
Real Estate (0.4%): | |||||||||||
Alexandria Real Estate Equities, Inc. | 111 | 22 | |||||||||
American Tower Corp. | 362 | 95 | |||||||||
AvalonBay Communities, Inc. | 111 | 27 | |||||||||
Boston Properties, Inc. | 118 | 13 | |||||||||
Camden Property Trust | 77 | 13 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Cornerstone Moderately Conservative Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
CBRE Group, Inc. Class A (e) | 267 | $ | 26 | ||||||||
Crown Castle International Corp. | 344 | 63 | |||||||||
Digital Realty Trust, Inc. | 224 | 38 | |||||||||
Duke Realty Corp. | 297 | 17 | |||||||||
Equinix, Inc. | 71 | 58 | |||||||||
Equity LifeStyle Properties, Inc. | 138 | 11 | |||||||||
Equity Residential | 283 | 24 | |||||||||
Essex Property Trust, Inc. | 51 | 17 | |||||||||
Extra Space Storage, Inc. | 106 | 21 | |||||||||
Healthpeak Properties, Inc. | 430 | 14 | |||||||||
Host Hotels & Resorts, Inc. (e) | 563 | 9 | |||||||||
Invitation Homes, Inc. | 453 | 18 | |||||||||
Iron Mountain, Inc. | 230 | 10 | |||||||||
Medical Properties Trust, Inc. | 469 | 10 | |||||||||
Mid-America Apartment Communities, Inc. | 91 | 19 | |||||||||
Omega Healthcare Investors, Inc. | 187 | 5 | |||||||||
Orion Office REIT, Inc. (e) | 41 | 1 | |||||||||
Prologis, Inc. | 590 | 89 | |||||||||
Public Storage | 125 | 41 | |||||||||
Realty Income Corp. | 425 | 29 | |||||||||
Regency Centers Corp. | 122 | 8 | |||||||||
SBA Communications Corp. | 87 | 30 | |||||||||
Simon Property Group, Inc. | 262 | 40 | |||||||||
Sun Communities, Inc. | 89 | 17 | |||||||||
UDR, Inc. | 236 | 13 | |||||||||
Ventas, Inc. | 314 | 15 | |||||||||
VICI Properties, Inc. | 489 | 13 | |||||||||
Vornado Realty Trust | 129 | 5 | |||||||||
Welltower, Inc. | 330 | 26 | |||||||||
Weyerhaeuser Co. | 597 | 22 | |||||||||
WP Carey, Inc. | 142 | 11 | |||||||||
890 | |||||||||||
Utilities (0.3%): | |||||||||||
Exelon Corp. | 3,078 | 162 | |||||||||
FirstEnergy Corp. | 4,131 | 156 | |||||||||
NRG Energy, Inc. | 4,350 | 157 | |||||||||
The AES Corp. | 6,433 | 150 | |||||||||
UGI Corp. | 3,407 | 141 | |||||||||
766 | |||||||||||
Total Common Stocks (Cost $25,062) | 33,028 | ||||||||||
Preferred Stocks (0.5%) | |||||||||||
Communication Services (0.2%): | |||||||||||
Qwest Corp., 6.50%, 9/1/56 | 20,000 | 502 | |||||||||
Financials (0.3%): | |||||||||||
Delphi Financial Group, Inc., 3.35% (LIBOR03M+319bps), 5/15/37 (b) (h) | 27,414 | 657 | |||||||||
Total Preferred Stocks (Cost $1,190) | 1,159 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Cornerstone Moderately Conservative Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Corporate Bonds (3.0%) | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
AutoNation, Inc., 4.75%, 6/1/30, Callable 3/1/30 @ 100 | $ | 85 | $ | 99 | |||||||
VF Corp., 2.95%, 4/23/30, Callable 1/23/30 @ 100 | 106 | 110 | |||||||||
209 | |||||||||||
Consumer Staples (0.1%): | |||||||||||
McCormick & Co., Inc., 2.50%, 4/15/30, Callable 1/15/30 @ 100 | 62 | 63 | |||||||||
Sysco Corp., 5.95%, 4/1/30, Callable 1/1/30 @ 100 | 56 | 70 | |||||||||
133 | |||||||||||
Energy (0.1%): | |||||||||||
Florida Gas Transmission Co. LLC, 2.55%, 7/1/30, Callable 4/1/30 @ 100 (a) | 1 | 1 | |||||||||
ONEOK, Inc., 6.35%, 1/15/31, Callable 10/15/30 @ 100 | 89 | 113 | |||||||||
Targa Resources Partners LP/Targa Resources Partners Finance Corp., 5.50%, 3/1/30, Callable 3/1/25 @ 102.75 | 143 | 155 | |||||||||
269 | |||||||||||
Financials (1.4%): | |||||||||||
Ares Capital Corp., 3.63%, 1/19/22, Callable 12/23/21 @ 100 (f) (g) | 350 | 351 | |||||||||
Belrose Funding Trust, 2.33%, 8/15/30, Callable 5/15/30 @ 100 (a) | 209 | 205 | |||||||||
Citizens Financial Group, Inc., 2.50%, 2/6/30, Callable 11/6/29 @ 100 | 215 | 218 | |||||||||
Cullen/Frost Capital Trust II, 1.67% (LIBOR03M+155bps), 3/1/34, Callable 1/10/22 @ 100 (b) | 1,000 | 960 | |||||||||
First Horizon Bank, 5.75%, 5/1/30, Callable 2/1/30 @ 100 | 106 | 128 | |||||||||
First Maryland Capital I, 1.12% (LIBOR03M+100bps), 1/15/27, Callable 1/10/22 @ 100 (b) | 100 | 97 | |||||||||
HSB Group, Inc., 1.03% (LIBOR03M+91bps), 7/15/27, Callable 1/10/22 @ 100 (b) | 550 | 500 | |||||||||
Loews Corp., 3.20%, 5/15/30, Callable 2/15/30 @ 100 | 140 | 149 | |||||||||
New York Community Bancorp, Inc., 5.90% (LIBOR03M+278bps), 11/6/28, Callable 11/6/23 @ 100 (b) | 52 | 56 | |||||||||
Santander Holdings USA, Inc., 3.45%, 6/2/25, Callable 5/2/25 @ 100 | 88 | 93 | |||||||||
Signature Bank, 4.13% (LIBOR03M+256bps), 11/1/29, Callable 11/1/24 @ 100 (b) | 250 | 262 | |||||||||
The Progressive Corp., 3.20%, 3/26/30, Callable 12/26/29 @ 100 | 43 | 47 | |||||||||
3,066 | |||||||||||
Health Care (0.1%): | |||||||||||
DENTSPLY SIRONA, Inc., 3.25%, 6/1/30, Callable 3/1/30 @ 100 | 158 | 167 | |||||||||
Duke University Health System, Inc., 2.60%, 6/1/30 | 105 | 107 | |||||||||
Viatris, Inc., 2.30%, 6/22/27, Callable 4/22/27 @ 100 | 52 | 52 | |||||||||
326 | |||||||||||
Industrials (0.3%): | |||||||||||
Caterpillar, Inc., 2.60%, 4/9/30, Callable 1/9/30 @ 100 | 106 | 111 | |||||||||
CoStar Group, Inc., 2.80%, 7/15/30, Callable 4/15/30 @ 100 (a) | 47 | 48 | |||||||||
Dover Corp., 2.95%, 11/4/29, Callable 8/4/29 @ 100 | 215 | 228 | |||||||||
The Conservation Fund A Nonprofit Corp., 3.47%, 12/15/29, Callable 9/15/29 @ 100 | 325 | 345 | |||||||||
732 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Cornerstone Moderately Conservative Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Information Technology (0.1%): | |||||||||||
HP, Inc., 3.40%, 6/17/30, Callable 3/17/30 @ 100 | $ | 161 | $ | 169 | |||||||
Jabil, Inc., 3.00%, 1/15/31, Callable 10/15/30 @ 100 | 47 | 48 | |||||||||
217 | |||||||||||
Materials (0.1%): | |||||||||||
Avery Dennison Corp., 2.65%, 4/30/30, Callable 2/1/30 @ 100 | 86 | 88 | |||||||||
Colonial Enterprises, Inc., 3.25%, 5/15/30, Callable 2/15/30 @ 100 (a) | 44 | 46 | |||||||||
WRKCo, Inc., 3.00%, 6/15/33, Callable 3/15/33 @ 100 (g) | 80 | 83 | |||||||||
217 | |||||||||||
Real Estate (0.4%): | |||||||||||
AvalonBay Communities, Inc., 2.45%, 1/15/31, MTN, Callable 10/17/30 @ 100 | 211 | 216 | |||||||||
Essex Portfolio LP, 2.65%, 3/15/32, Callable 12/15/31 @ 100 | 250 | 253 | |||||||||
GLP Capital LP/GLP Financing II, Inc., 4.00%, 1/15/31, Callable 10/15/30 @ 100 | 52 | 55 | |||||||||
Host Hotels & Resorts LP, 3.50%, 9/15/30, Callable 6/15/30 @ 100 | 44 | 45 | |||||||||
SBA Tower Trust, 2.84%, 1/15/25, Callable 1/15/24 @ 100 (a) | 173 | 178 | |||||||||
VICI Properties LP/VICI Note Co., Inc., 4.63%, 12/1/29, Callable 12/1/24 @ 102.31 (a) | 33 | 35 | |||||||||
782 | |||||||||||
Utilities (0.3%): | |||||||||||
Alabama Power Co., 3.85%, 12/1/42 | 215 | 247 | |||||||||
Ameren Corp., 3.50%, 1/15/31, Callable 10/15/30 @ 100 | 71 | 77 | |||||||||
Duke Energy Florida LLC, 3.85%, 11/15/42, Callable 5/15/42 @ 100 | 215 | 245 | |||||||||
569 | |||||||||||
Total Corporate Bonds (Cost $6,248) | 6,520 | ||||||||||
Yankee Dollars (0.2%) | |||||||||||
Energy (0.1%): | |||||||||||
Petroleos Mexicanos, 6.49%, 1/23/27, Callable 11/23/26 @ 100 | 123 | 126 | |||||||||
Financials (0.0%): (i) | |||||||||||
Banco Santander Mexico SA Institucion de Banca Multiple Grupo Financiero Santand, 5.38%, 4/17/25 (a) (g) | 101 | 110 | |||||||||
Industrials (0.0%): (i) | |||||||||||
Ferguson Finance PLC, 3.25%, 6/2/30, Callable 3/2/30 @ 100 (a) | 95 | 101 | |||||||||
Materials (0.1%): | |||||||||||
CCL Industries, Inc., 3.05%, 6/1/30, Callable 3/1/30 @ 100 (a) | 159 | 166 | |||||||||
Total Yankee Dollars (Cost $477) | 503 | ||||||||||
U.S. Government Agency Mortgages (2.1%) | |||||||||||
Federal Home Loan Mortgage Corporation 3.50%, 4/1/46 – 4/1/48 | 1,473 | 1,563 | |||||||||
3.00%, 10/1/46 – 3/1/47 | 2,821 | 2,960 | |||||||||
4,523 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA Cornerstone Moderately Conservative Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Federal National Mortgage Association Series 2016-M2, Class AV2, 2.15%, 1/25/23 | $ | 153 | $ | 154 | |||||||
4,677 | |||||||||||
Total U.S. Government Agency Mortgages (Cost $4,492) | 4,677 | ||||||||||
U.S. Treasury Obligations (7.7%) | |||||||||||
U.S. Treasury Bonds 3.13%, 8/15/44 | 700 | 864 | |||||||||
3.00%, 8/15/48 (g) | 1,000 | 1,253 | |||||||||
2.38%, 11/15/49 | 1,000 | 1,129 | |||||||||
U.S. Treasury Notes 2.00%, 2/15/23 | 618 | 630 | |||||||||
1.63%, 4/30/23 | 3,800 | 3,867 | |||||||||
2.50%, 5/15/24 | 1,500 | 1,565 | |||||||||
2.25%, 11/15/25 | 6,200 | 6,489 | |||||||||
2.25%, 2/15/27 | 1,000 | 1,054 | |||||||||
Total U.S. Treasury Obligations (Cost $15,806) | 16,851 | ||||||||||
Exchange-Traded Funds (40.5%) | |||||||||||
First Trust TCW Securitized Plus ETF | 242,443 | 6,260 | |||||||||
Invesco DB Commodity Index Tracking Fund | 22,900 | 446 | |||||||||
Invesco FTSE RAFI Developed Markets ex-US ETF | 35,176 | 1,604 | |||||||||
Invesco FTSE RAFI Emerging Markets ETF | 86,305 | 1,857 | |||||||||
iShares 7-10 Year Treasury Bond ETF | 33,340 | 3,861 | |||||||||
iShares Core MSCI Emerging Markets ETF | 74,599 | 4,485 | |||||||||
iShares Core S&P 500 ETF | 12,580 | 5,757 | |||||||||
iShares Core S&P Small-Cap ETF | 7,173 | 791 | |||||||||
iShares Core US Aggregate Bond ETF | 96,693 | 11,097 | |||||||||
iShares Core US REIT ETF (g) | 7,907 | 496 | |||||||||
iShares MSCI Canada ETF (f) | 40,001 | 1,495 | |||||||||
iShares MSCI International Momentum Factor ETF | 71,831 | 2,737 | |||||||||
iShares MSCI International Quality Factor ETF (f) | 81,444 | 3,116 | |||||||||
JPMorgan BetaBuilders Canada ETF (f) | 8,551 | 556 | |||||||||
Schwab Fundamental Emerging Markets Large Co. Index ETF | 160,268 | 4,935 | |||||||||
Schwab Fundamental International Large Co. Index ETF | 237,343 | 7,517 | |||||||||
Schwab Fundamental International Small Co. Index ETF (f) | 50,100 | 1,832 | |||||||||
SPDR Bloomberg High Yield Bond ETF (f) (g) | 5,106 | 545 | |||||||||
SPDR Gold Shares (f) | 2,632 | 436 | |||||||||
SPDR S&P Emerging Markets SmallCap ETF | 7,496 | 440 | |||||||||
U.S. Oil Fund LP (f) | 7,844 | 376 | |||||||||
Vanguard FTSE All-World ex-US ETF | 46,506 | 2,788 | |||||||||
Vanguard FTSE Developed Markets ETF | 129,843 | 6,453 | |||||||||
Vanguard Mortgage-Backed Securities ETF | 42,318 | 2,243 | |||||||||
Vanguard Real Estate ETF (f) | 20,893 | 2,230 | |||||||||
Vanguard S&P 500 ETF (g) | 6,969 | 2,920 | |||||||||
Vanguard Short-Term Bond ETF | 3,431 | 279 | |||||||||
Vanguard Small-Cap Value ETF (g) | 11,516 | 1,976 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA Cornerstone Moderately Conservative Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Vanguard Total Bond Market ETF | 62,334 | $ | 5,325 | ||||||||
Vanguard Total Stock Market ETF (g) | 13,464 | 3,143 | |||||||||
Wisdom Tree Trust — WisdomTree Emerging Markets SmallCap Dividend Fund | 5,259 | 270 | |||||||||
Xtrackers USD High Yield Corporate Bond ETF (f) | 28,050 | 1,099 | |||||||||
Total Exchange-Traded Funds (Cost $76,428) | 89,365 | ||||||||||
Affiliated Exchange-Traded Funds (28.6%) | |||||||||||
Victoryshares ESG Core Plus Bond ETF | 490,515 | 12,256 | |||||||||
VictoryShares USAA Core Intermediate-Term Bond ETF | 892,020 | 47,607 | |||||||||
VictoryShares USAA Core Short-Term Bond ETF | 54,683 | 2,819 | |||||||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF (g) | 9,770 | 454 | |||||||||
Total Affiliated Exchange-Traded Funds (Cost $63,613) | 63,136 | ||||||||||
Collateral for Securities Loaned^ (4.5%) | |||||||||||
Fidelity Investments Money Market Government Portfolio Institutional Shares, 0.01% (j) | 3,798,303 | 3,799 | |||||||||
HSBC U.S. Government Money Market Fund I Shares, 0.03% (j) | 6,227,262 | 6,227 | |||||||||
Total Collateral for Securities Loaned (Cost $10,026) | 10,026 | ||||||||||
Total Investments (Cost $206,203) — 103.5% | 228,160 | ||||||||||
Liabilities in excess of other assets — (3.5)% | (7,656 | ) | |||||||||
NET ASSETS — 100.00% | $ | 220,504 |
At November 30, 2021, the Fund's investments in foreign securities were 18.4% of net assets.
^ Purchased with cash collateral from securities on loan.
(a) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of November 30, 2021, the fair value of these securities was $3,452 (thousands) and amounted to 1.6% of net assets.
(b) Variable or Floating-Rate Security. Rate disclosed is as of November 30, 2021.
(c) The rate for certain asset-backed and mortgage-backed securities may vary based on factors relating to the pool of assets underlying the security. The rate disclosed is the rate in effect at November 30, 2021.
(d) Security is interest only.
(e) Non-income producing security.
(f) All or a portion of this security is on loan.
(g) All or a portion of this security has been segregated as collateral for derivative instruments.
(h) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of November 30, 2021, illiquid securities were 0.3% of net assets.
(i) Amount represents less than 0.05% of net assets.
(j) Rate disclosed is the daily yield on November 30, 2021.
bps — Basis points
See notes to financial statements.
11
USAA Mutual Funds Trust USAA Cornerstone Moderately Conservative Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Unaudited)
ETF — Exchange-Traded Fund
LIBOR — London InterBank Offered Rate
LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of November 30, 2021, based on the last reset date of the security
LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of November 30, 2021, based on the last reset date of the security
LLC — Limited Liability Company
LP — Limited Partnership
MTN — Medium Term Note
PLC — Public Limited Company
REIT — Real Estate Investment Trust
Futures Contracts Purchased
(Amounts not in thousands)
Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||
S&P/Toronto Stock Exchange 60 Index Futures | 10 | 12/16/21 | $ | 1,929,488 | $ | 1,950,990 | $ | 44,267 | |||||||||||||||
Swiss Market Index Futures | 15 | 12/17/21 | 1,961,238 | 1,993,518 | 23,729 | ||||||||||||||||||
$ | 67,996 |
Futures Contracts Sold
(Amounts not in thousands)
Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||
ASX SPI 200 Index Futures | 7 | 12/16/21 | $ | 960,097 | $ | 901,872 | $ | 22,755 | |||||||||||||||
Euro Stoxx 50 Futures | 37 | 12/17/21 | 1,813,464 | 1,710,636 | 27,662 | ||||||||||||||||||
FTSE 100 Index Futures | 12 | 12/17/21 | 1,163,565 | 1,129,632 | 21,498 | ||||||||||||||||||
Tokyo Price Index Futures | 11 | 12/9/21 | 2,050,095 | 1,845,337 | 157,388 | ||||||||||||||||||
$ | 229,303 | ||||||||||||||||||||||
Total unrealized appreciation | $ | 297,299 | |||||||||||||||||||||
Total unrealized depreciation | — | ||||||||||||||||||||||
Total net unrealized appreciation (depreciation) | $ | 297,299 |
See notes to financial statements.
12
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Cornerstone Moderately Conservative Fund | |||||||
Assets: | |||||||
Affiliated investments, at value (Cost $63,613) | $ | 63,136 | |||||
Unaffiliated investments, at value (Cost $142,590) | 165,024 | (a) | |||||
Cash | 2,852 | ||||||
Deposit with broker for futures contracts | 267 | ||||||
Receivables: | |||||||
Interest and dividends | 187 | ||||||
Capital shares issued | 37 | ||||||
Variation margin on open futures contracts | 68 | ||||||
From Adviser | 47 | ||||||
Prepaid expenses | 10 | ||||||
Total Assets | 231,628 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 10,026 | ||||||
Collateral received from broker for futures contract | 517 | ||||||
Investments purchased | 269 | ||||||
Capital shares redeemed | 41 | ||||||
Variation margin on open futures contracts | 56 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 92 | ||||||
Administration fees | 28 | ||||||
Custodian fees | 3 | ||||||
Transfer agent fees | 39 | ||||||
Compliance fees | — | (b) | |||||
Other accrued expenses | 53 | ||||||
Total Liabilities | 11,124 | ||||||
Net Assets: | |||||||
Capital | 185,243 | ||||||
Total accumulated earnings/(loss) | 35,261 | ||||||
Net Assets | $ | 220,504 | |||||
Shares (unlimited number of shares authorized with no par value): | 17,271 | ||||||
Net asset value, offering and redemption price per share: (c) | $ | 12.77 |
(a) Includes $9,627 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
13
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Cornerstone Moderately Conservative Fund | |||||||
Investment Income: | |||||||
Income distributions from affiliated funds | $ | 345 | |||||
Dividends | 1,179 | ||||||
Interest | 662 | ||||||
Securities lending (net of fees) | 33 | ||||||
Foreign tax withholding | — | (a) | |||||
Total Income | 2,219 | ||||||
Expenses: | |||||||
Investment advisory fees | 559 | ||||||
Administration fees | 168 | ||||||
Sub-Administration fees | 36 | ||||||
Custodian fees | 10 | ||||||
Transfer agent fees | 238 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 1 | ||||||
Legal and audit fees | 29 | ||||||
State registration and filing fees | 13 | ||||||
Other expenses | 30 | ||||||
Total Expenses | 1,108 | ||||||
Expenses waived/reimbursed by Adviser | (109 | ) | |||||
Net Expenses | 999 | ||||||
Net Investment Income (Loss) | 1,220 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from unaffiliated investment securities and foreign currency translations | 5,837 | ||||||
Net realized gains (losses) from futures contracts | (337 | ) | |||||
Net change in unrealized appreciation/depreciation on affiliated funds | (199 | ) | |||||
Net change in unrealized appreciation/depreciation on unaffiliated investment securities | (5,134 | ) | |||||
Net change in unrealized appreciation/depreciation on futures contracts | 420 | ||||||
Net realized/unrealized gains (losses) on investments | 587 | ||||||
Change in net assets resulting from operations | $ | 1,807 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
14
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Cornerstone Moderately Conservative Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 1,220 | $ | 3,052 | |||||||
Net realized gains (losses) from investments | 5,500 | 8,850 | |||||||||
Net change in unrealized appreciation/depreciation on investments | (4,913 | ) | 22,233 | ||||||||
Change in net assets resulting from operations | 1,807 | 34,135 | |||||||||
Change in net assets resulting from distributions to shareholders | (1,235 | ) | (3,777 | ) | |||||||
Change in net assets resulting from capital transactions | (1,960 | ) | (29,253 | ) | |||||||
Change in net assets | (1,388 | ) | 1,105 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 221,892 | 220,787 | |||||||||
End of period | $ | 220,504 | $ | 221,892 | |||||||
Capital Transactions: | |||||||||||
Proceeds from shares issued | $ | 11,972 | $ | 24,253 | |||||||
Distributions reinvested | 1,229 | 3,582 | |||||||||
Cost of shares redeemed | (15,161 | ) | (57,088 | ) | |||||||
Change in net assets resulting from capital transactions | $ | (1,960 | ) | $ | (29,253 | ) | |||||
Share Transactions: | |||||||||||
Issued | 931 | 2,002 | |||||||||
Reinvested | 96 | 303 | |||||||||
Redeemed | (1,178 | ) | (4,710 | ) | |||||||
Change in Shares | (151 | ) | (2,405 | ) |
See notes to financial statements.
15
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Cornerstone Moderately Conservative Fund | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 12.74 | 0.07 | (d) | 0.03 | 0.10 | (0.07 | ) | — | ||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 11.14 | 0.16 | (d) | 1.64 | 1.80 | (0.17 | ) | (0.03 | ) | |||||||||||||||||
2020 | $ | 10.94 | 0.23 | (d) | 0.22 | 0.45 | (0.23 | ) | (0.02 | ) | |||||||||||||||||
2019 | $ | 11.29 | 0.24 | (0.14 | ) | 0.10 | (0.24 | ) | (0.21 | ) | |||||||||||||||||
2018 | $ | 11.34 | 0.21 | 0.23 | 0.44 | (0.21 | ) | (0.28 | ) | ||||||||||||||||||
2017 | $ | 10.67 | 0.23 | 0.68 | 0.91 | (0.24 | ) | — |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) The expense ratios exclude the impact of expenses paid by each underlying fund.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects increased usage of quantitative investment strategies.
See notes to financial statements.
16
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b)(c) | Net Investment Income (Loss)(b) | Gross Expenses(b)(c) | Net Assets, End of Period (000's) | Portfolio Turnover(a) | ||||||||||||||||||||||||||||
USAA Cornerstone Moderately Conservative Fund | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | (0.07 | ) | $ | 12.77 | 0.80 | % | 0.89 | % | 1.09 | % | 0.99 | % | $ | 220,504 | 27 | % | |||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.20 | ) | $ | 12.74 | 16.30 | % | 0.90 | % | 1.35 | % | 1.02 | % | $ | 221,892 | 52 | % | |||||||||||||||||||
2020 | (0.25 | ) | $ | 11.14 | 4.09 | % | 0.90 | % | 2.05 | % | 1.02 | % | $ | 220,787 | 84 | % | |||||||||||||||||||
2019 | (0.45 | ) | $ | 10.94 | 0.99 | % | 0.90 | % | 2.22 | % | 1.08 | % | $ | 226,484 | 77 | %(e) | |||||||||||||||||||
2018 | (0.49 | ) | $ | 11.29 | 3.89 | % | 0.90 | % | 1.84 | % | 1.07 | % | $ | 221,721 | 45 | % | |||||||||||||||||||
2017 | (0.24 | ) | $ | 11.34 | 8.65 | % | 0.90 | % | 2.12 | % | 1.09 | % | $ | 209,270 | 55 | % |
See notes to financial statements.
17
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Cornerstone Moderately Conservative Fund (the "Fund"). The Fund is classified as diversified under the 1940 Act.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs") and American Depositary Receipts ("ADRs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies, including underlying funds, are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
Debt securities are valued each business day by a pricing service approved by the Board. The approved pricing service uses the evaluated bid or the last sale price to value securities. Debt obligations maturing within 60 days may be valued at their amortized cost, provided that the amortized cost represents the fair value of such securities. These valuations are typically categorized as Level 2 in the fair value hierarchy.
Futures contracts are valued at the settlement price established each day by the board of trade or an exchange on which they are traded. These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Asset-Backed Securities | $ | — | $ | 2,100 | $ | — | $ | 2,100 | |||||||||||
Collateralized Mortgage Obligations | — | 795 | — | 795 | |||||||||||||||
Common Stocks | 33,028 | — | — | 33,028 | |||||||||||||||
Preferred Stocks | 502 | 657 | — | 1,159 | |||||||||||||||
Corporate Bonds | — | 6,520 | — | 6,520 | |||||||||||||||
Yankee Dollars | — | 503 | — | 503 | |||||||||||||||
U.S. Government Agency Mortgages | — | 4,677 | — | 4,677 | |||||||||||||||
U.S. Treasury Obligations | — | 16,851 | — | 16,851 | |||||||||||||||
Exchange-Traded Funds | 89,365 | — | — | 89,365 | |||||||||||||||
Affiliated Exchange-Traded Funds | 63,136 | — | — | 63,136 | |||||||||||||||
Collateral for Securities Loaned | 10,026 | — | — | 10,026 | |||||||||||||||
Total | $ | 196,057 | $ | 32,103 | $ | — | $ | 228,160 | |||||||||||
Other Financial Investments* | |||||||||||||||||||
Assets: | |||||||||||||||||||
Futures Contracts | $ | 297 | $ | — | $ | — | $ | 297 | |||||||||||
Total | $ | 297 | $ | — | $ | — | $ | 297 |
* Futures contracts are valued at the unrealized appreciation (depreciation) on the investment.
For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
19
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a portfolio of securities often designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Mortgage and Asset-Backed Securities:
The values of some mortgage-related or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Fund to a lower rate of return upon reinvestment of principal. The values of mortgage- and asset-backed securities depend in part on the credit quality and adequacy of the underlying assets or collateral and may fluctuate in response to the market's perception of these factors as well as current and future repayment rates. Some mortgage-backed securities are backed by the full faith and credit of the U.S. government (e.g., mortgage-backed securities issued by the Government National Mortgage Association, commonly known as "Ginnie Mae"), while other mortgage-backed securities (e.g., mortgage-backed securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, commonly known as "Fannie Mae" and "Freddie Mac", respectively), are backed only by the credit of the government entity issuing them. In addition, some mortgage-backed securities are issued by private entities and, as such, are not guaranteed by the U.S. government or any agency or instrumentality of the U.S. government.
Derivative Instruments:
Futures Contracts:
The Fund may enter into contracts for the future delivery of securities or foreign currencies and futures contracts based on a specific security, class of securities, foreign currency or an index, and purchase or sell options on any such futures contracts. A futures contract on a securities index is an agreement obligating either party to pay, and entitling the other party to receive, while the contract is outstanding, cash payments based on the level of a specified securities index. No physical delivery of the underlying asset is made. The Fund may enter into futures contracts in an effort to hedge against market risks. The acquisition of put and call options on futures contracts will give the Fund the right (but not the obligation), for a specified price, to sell or to purchase the underlying futures contract, upon exercise of the option, at any time during the option period. Futures transactions involve brokerage costs and require the Fund to segregate assets to cover contracts that would require it to purchase securities or
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currencies. A good faith margin deposit, known as initial margin, of cash or government securities with a broker or custodian is required to initiate and maintain open positions in futures contracts. Subsequent payments, known as variation margin, are made or received by the Fund based on the change in the market value of the position and are recorded as unrealized appreciation or depreciation until the contract is closed out, at which time the gain or loss is realized. The Fund may lose the expected benefit of futures transactions if interest rates, exchange rates or securities prices change in an unanticipated manner. Such unanticipated changes may also result in lower overall performance than if the Fund had not entered into any futures transactions. In addition, the value of the Fund's futures positions may not prove to be perfectly or even highly correlated with the value of its portfolio securities or foreign currencies, limiting the Fund's ability to hedge effectively against interest rate, exchange rate and/or market risk and giving rise to additional risks. There is no assurance of liquidity in the secondary market for purposes of closing out futures positions. The collateral held by the Fund is presented on the Statement of Assets and Liabilities under Deposit with broker for futures contracts and Collateral received from broker for futures contracts . During the six months ended November 30, 2021, the Fund entered into futures contracts primarily for the strategy of gaining exposure to a particular asset class or securities market.
Summary of Derivative Instruments:
The following table summarizes the fair values of derivative instruments on the Statement of Assets and Liabilities, categorized by risk exposure, as of November 30, 2021 (amounts in thousands):
Assets | Liabilities | ||||||||||
Variation Margin Receivable on Open Futures Contracts* | Variation Margin Payable on Open Futures Contracts* | ||||||||||
Equity Risk Exposure | $ | 297 | $ | — |
* Includes cumulative unrealized appreciation (depreciation) of futures contracts as reported on the Schedule of Portfolio Investments. Only current day's variation margin for futures contracts is reported within the Statement of Assets and Liabilities.
The following table presents the effect of derivative instruments on the Statement of Operations, categorized by risk exposure, for the six months ended November 30, 2021 (amounts in thousands):
Net Realized Gains (Losses) on Derivatives Recognized as a Result from Operations | Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized as a Result of Operations | ||||||||||
Net Realized Gains (Losses) from Futures Contracts | Net Change in Unrealized Appreciation/Depreciation on Futures Contracts | ||||||||||
Equity Risk Exposure | $ | (337 | ) | $ | 420 |
All open derivative positions at period end are reflected on the Fund's Schedule of Portfolio Investments. The underlying face value of open derivative positions relative to the Fund's net assets at period end is generally representative of the notional amount of open positions to net assets throughout the period.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis. Paydown
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gains or losses on applicable securities, if any, are recorded as components of Interest income on the Statement of Operations.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of November 30, 2021.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 9,627 | $ | — | $ | 10,026 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as Net realized gains (losses) from investment securities and foreign currency translations on the Statement of Operations.
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Foreign Taxes:
The Fund may be subject to foreign taxes related to foreign income received (a portion of which may be reclaimable), capital gains on the sale of securities, and certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
Cross-Trade Transactions:
Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades, which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the six months ended November 30, 2021, the Fund engaged in the following securities transactions with affiliated funds, which resulted in the following net realized gains (losses) (amounts in thousands):
Purchases | Sales | Net Realized Gains (Losses) | |||||||||
$ | — | $ | 3,610 | $ | 194 |
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding U.S. Government Securities | U.S. Government Securities | ||||||||||||||
Purchases | Sales | Purchases | Sales | ||||||||||||
$ | 58,814 | $ | 52,478 | $ | — | $ | 8,623 |
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4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive fees accrued daily and paid monthly at an annualized rate of 0.50% of the Fund's average daily net assets. Amounts incurred and paid to VCM for the six months ended November 30, 2021, are reflected on the Statement of Operations as Investment advisory fees.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six months ended November 30, 2021, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, which is based on the Fund's average daily net assets. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Administration fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Amounts incurred and paid to VCTA for the six months ended November 30, 2021, are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of November 30, 2021, the expense limit (excluding voluntary waivers) was 0.90%.
In addition, the Fund invests in affiliated VCM exchange-traded fund(s) ("affiliated ETFs"). The Fund's Adviser fee is reimbursed by VCM to the extent of the indirect Adviser fee incurred through the Fund's proportional investment in the affiliated ETF(s). These affiliated ETF Adviser fee reimbursements are not available for recoupment. As of November 30, 2021, the Fund's Adviser fee was reimbursed by VCM in an amount of $63 thousand, of which $28 thousand is receivable from VCM.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of November 30, 2021, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that repayments are not probable at November 30, 2021.
Expires 2023 | Expires 2024 | Expires 2025 | Total | ||||||||||||
$ | 251 | $ | 246 | $ | 46 | $ | 543 |
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six months ended November 30, 2021.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
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5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Tactical Allocation Risk — The Fund has a targeted risk tolerance and a corresponding asset allocation target; however, mere asset allocation and volatility are not the sole determination of risk. The Fund's managers will tactically allocate away from the target allocation as market conditions and the perceived risks warrant. The Fund bears the risk that the managers' tactical allocation will not be successful.
Affiliated Funds Risk — The risks of the Fund directly correspond to the risks of the underlying affiliated funds in which the Fund invests. By investing in the underlying affiliated funds, the Fund has exposure to the risk of many different areas of the market. The degree to which the risks described below apply to the Fund varies according to the Fund's asset allocation. For instance, the more the Fund is allocated to stock funds, the greater the risk associated with equity securities. The Fund also is subject to asset allocation risk (i.e., the risk that allocations will not produce the intended results) and to management risk (i.e., the risk that the selection of underlying affiliated funds will not produce the intended results).
Conflict of Interest Risk — In managing a Fund that invests in underlying affiliated funds, the Adviser may have conflicts of interest in allocating the Fund's assets among the various underlying affiliated funds. This is because the fees payable by some of the underlying affiliated funds to the Adviser and/or its affiliates are higher than the fees payable by other underlying affiliated funds, and because the Adviser also manages and administers the underlying affiliated funds.
ETF Risk — The Fund may invest in shares of ETFs, which generally are investment companies that hold a portfolio of common stocks or debt securities, the shares of which are traded on an exchange. ETFs incur their own management and other fees and expenses, such as trustees' fees, operating expenses, registration fees, and marketing expenses, a proportionate share of which will be borne indirectly by the Fund as a shareholder in an ETF. As a result, the Fund's investment in an ETF will cause the Fund to indirectly bear the fees and expenses of the ETF and, in turn, the Fund's performance may be lower than if the Fund were to invest directly in the underlying securities held by the ETF. For investments in affiliated ETFs, the Fund's management fee is reimbursed by the Adviser to the extent of the indirect management fee incurred through the Fund's investment in the affiliated ETFs. The Adviser may have conflicts of interest in allocating assets among affiliated and unaffiliated ETFs, because the Adviser also manages and administers the affiliated ETFs, and the Adviser and its affiliates receive other fees from the affiliated ETFs. In addition, the Fund also will be subject to the risks associated with the securities or other investments held by the ETFs.
LIBOR Discontinuation Risk — Many debt securities, derivatives, and other financial instruments, including some of the Fund's investments, use the London Interbank Offered Rate ("LIBOR") as the reference or benchmark rate for variable interest rate calculations. LIBOR is being discontinued as a floating rate benchmark. The Secured Overnight Financing Rate ("SOFR") is expected to replace U.S. dollar LIBOR as the principal floating rate benchmark. The LIBOR discontinuation has affected, and will continue to affect, financial markets generally. The date of the LIBOR discontinuation will vary depending on the LIBOR currency and tenor. The UK Financial Conduct Authority (the "FCA"), which is the regulator of the LIBOR administrator, has announced that, after specified dates, LIBOR settings will cease to be provided by any administrator or will no longer be representative. Those dates are: (i) June 30, 2023, in the case of the principal U.S. dollar LIBOR tenors (overnight and one-, three-, six-and 12-month; and (ii) December 31, 2021, in all other cases (i.e., one-week and two-month U.S. dollar LIBOR and all tenors of non-U.S. dollar LIBOR). Accordingly, many existing LIBOR obligations will transition to another benchmark after June 30, 2023, or, in some cases, after December 31, 2021. The FCA and certain U.S. regulators have stated that, despite expected publication of U.S. dollar LIBOR through June 30, 2023, no new contracts using U.S. dollar LIBOR should be entered into after December 31, 2021. Although the foregoing reflects the likely timing of the LIBOR discontinuation and certain consequences, there is no assurance that LIBOR, of any particular currency or tenor, will continue to be published until any particular date or in any particular form, and there is no assurance regarding the consequences of the LIBOR discontinuation. In the United States, there have been efforts to identify alternative reference interest rates for U.S. dollar LIBOR. The cash markets have
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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generally coalesced around recommendations from the Alternative Reference Rates Committee (the "ARRC"), which was convened by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York. The ARRC has recommended that U.S. dollar LIBOR be replaced by rates based on SOFR plus, in the case of existing LIBOR contracts and obligations, a spread adjustment. For purposes of the following discussion, the term "LIBOR" refers solely to U.S. dollar LIBOR. SOFR has a limited history, having been first published in April 2018. The future performance of SOFR, and SOFR-based reference rates, cannot be predicted based on SOFR's history or otherwise. SOFR has been more volatile than other benchmark or market rates, such as three-month LIBOR, during certain periods. Future levels of SOFR may bear little or no relation to historical levels of SOFR, LIBOR or other rates. SOFR-based rates will differ from LIBOR, and the differences may be material. SOFR is intended to be a broad measure of the cost of borrowing funds overnight in transactions that are collateralized by U.S. Treasury securities. In contrast, LIBOR is intended to be an unsecured rate that represents interbank funding costs for different short-term tenors. For these reasons, among others, there is no assurance that SOFR, or rates derived from SOFR, will perform in the same or a similar way as LIBOR would have performed at any time, and there is no assurance that SOFR-based rates will be a suitable substitute for LIBOR. Non-LIBOR floating rate obligations, including SOFR-based obligations, may have returns and values that fluctuate more than those of floating rate obligations that are based on LIBOR or other rates. Resulting changes in the financial markets may adversely affect financial markets generally and may also adversely affect our operations specifically, particularly as financial markets transition away from LIBOR.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period,
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is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is presented on the Statement of Operations under Interfund lending.
The Fund did not utilize or participate in the Facility during the six months ended November 30, 2021.
7. Federal Income Tax Information:
The Fund intends to distribute any net investment income quarterly. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had no capital loss carryforwards, for the federal income tax purposes.
8. Affiliated Securities:
An affiliated security is a security in which the Fund has ownership of at least 5% of the security's outstanding voting shares, an investment company managed by VCM, or an issuer under common control with a Fund or VCM determined as of the last business day of the month. The Fund does not invest in affiliated securities for the purpose of exercising management or control. These securities are noted as affiliated on the Fund's Schedule of Portfolio Investments. Transactions in affiliated securities during the six months ended November 30, 2021, were as follows (amounts in thousands):
Fair Value 5/31/2021 | Purchases at Cost | Proceeds from Sales | Realized Gains (Losses) | Capital Gain Distribution | Net Change in Unrealized Appreciation/ Depreciation | Fair Value 11/30/21 | Dividend Income | ||||||||||||||||||||||||||||
VictoryShares ESG Core Plus Bond ETF | $ | — | $ | 24,526 | $ | (12,263 | ) | $ | — | $ | — | $ | (7 | ) | $ | 12,256 | $ | 6 | |||||||||||||||||
VictoryShares USAA Core Intermediate-Term Bond ETF | 24,121 | 47,220 | (23,610 | ) | — | — | (124 | ) | 47,607 | 303 | |||||||||||||||||||||||||
VictoryShares USAA Core Short-Term Bond ETF | 2,838 | — | — | — | — | (19 | ) | 2,819 | 22 | ||||||||||||||||||||||||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF | 503 | — | — | — | — | (49 | ) | 454 | 14 | ||||||||||||||||||||||||||
$ | 27,462 | $ | 71,746 | $ | (35,873 | ) | $ | — | $ | — | $ | (199 | ) | $ | 63,136 | $ | 345 |
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USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
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Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Example
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21-11/30/21* | Hypothetical Expenses Paid During Period 6/1/21-11/30/21* | Annualized Expense Ratio During Period 6/1/21-11/30/21 | ||||||||||||||||||
$ | 1,000.00 | $ | 1,008.00 | $ | 1,020.61 | $ | 4.48 | $ | 4.51 | 0.89 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
29
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
97451-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA Cornerstone Aggressive Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 17 | ||||||
Statement of Operations | 18 | ||||||
Statements of Changes in Net Assets | 19 | ||||||
Financial Highlights | 20 | ||||||
Notes to Financial Statements | 22 | ||||||
Supplemental Information | 33 | ||||||
Proxy Voting and Portfolio Holdings Information | 33 | ||||||
Expense Example | 33 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks capital appreciation over the long term and also considers the potential for current income.
Asset Allocation*:
November 30, 2021
(% of Net Assets)
* Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
2
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Asset-Backed Securities (0.1%) | |||||||||||
Drive Auto Receivables Trust, Series 2018-4, Class D, 4.09%, 1/15/26, Callable 10/15/22 @ 100 | $ | 46 | $ | 46 | |||||||
Exeter Automobile Receivables Trust, Series 2019-2A, Class C, 3.30%, 3/15/24, Callable 8/15/23 @ 100 (a) | 44 | 44 | |||||||||
Exeter Automobile Receivables Trust, Series 2020-1A, Class B, 2.26%, 4/15/24, Callable 10/15/23 @ 100 (a) | 15 | 15 | |||||||||
Exeter Automobile Receivables Trust, Series 2017-3A, Class D, 5.28%, 10/15/24, Callable 6/15/22 @ 100 (a) | 50 | 51 | |||||||||
HPEFS Equipment Trust, Series 2019-1A, Class C, 2.49%, 9/20/29, Callable 7/20/22 @ 100 (a) | 50 | 51 | |||||||||
HPEFS Equipment Trust, Series 2020-1A, Class B, 1.89%, 2/20/30, Callable 1/20/23 @ 100 (a) | 29 | 29 | |||||||||
Navient Student Loan Trust, Series 2015-2, Class B, 1.59% (LIBOR01M+150bps), 8/25/50, Callable 2/25/30 @ 100 (b) | 50 | 50 | |||||||||
NP SPE II LLC, Series 2017-1A, Class A1, 3.37%, 10/21/47, Callable 12/20/21 @ 100 (a) | 27 | 28 | |||||||||
SCF Equipment Leasing LLC, Series 2020-1A, Class B, 2.02%, 3/20/28, Callable 11/20/23 @ 100 (a) | 47 | 47 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-2A, Class D, 4.00%, 1/16/24, Callable 2/15/22 @ 100 (a) | 22 | 22 | |||||||||
Westlake Automobile Receivables Trust, Series 2020-1A, Class B, 1.94%, 4/15/25, Callable 8/15/23 @ 100 (a) | 188 | 189 | |||||||||
Total Asset-Backed Securities (Cost $563) | 572 | ||||||||||
Collateralized Mortgage Obligations (0.0%) (h) | |||||||||||
Banc of America Commercial Mortgage Trust, Series 2008-1, Class AJ, 6.79%, 2/10/51 (c) | 7 | 6 | |||||||||
BTH Mortgage-Backed Securities Trust, Series 2018-21, Class A, 2.59% (LIBOR01M+250bps), 4/4/22 (a) (b) | 128 | 128 | |||||||||
Credit Suisse Commercial Mortgage Trust, Series 2007-C1, Class AMFL, 0.28% (LIBOR01M+19bps), 2/15/40 (b) | 1 | 1 | |||||||||
UBS Commercial Mortgage Trust, Series 2012-C1, Class XA, 2.17%, 5/10/45, Callable 3/10/22 @ 100 (a) (c) (d) | 617 | 1 | |||||||||
Total Collateralized Mortgage Obligations (Cost $135) | 136 | ||||||||||
Common Stocks (34.5%) | |||||||||||
Communication Services (2.4%): | |||||||||||
Alphabet, Inc. Class C (e) | 1,377 | 3,923 | |||||||||
AMC Networks, Inc. Class A (e) | 1,349 | 52 | |||||||||
AT&T, Inc. | 27,981 | 639 | |||||||||
Cargurus, Inc. (e) | 3,950 | 148 | |||||||||
Comcast Corp. Class A | 27,629 | 1,381 | |||||||||
Gray Television, Inc. | 2,455 | 51 | |||||||||
John Wiley & Sons, Inc. Class A | 844 | 44 | |||||||||
Match Group, Inc. (e) | 3,475 | 452 | |||||||||
Netflix, Inc. (e) | 1,175 | 754 |
See notes to financial statements.
3
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Nexstar Media Group, Inc. Class A | 210 | $ | 31 | ||||||||
Sirius XM Holdings, Inc. (f) | 78,749 | 480 | |||||||||
TechTarget, Inc. (e) | 1,654 | 160 | |||||||||
Telephone & Data Systems, Inc. | 8,422 | 149 | |||||||||
United States Cellular Corp. (e) | 2,868 | 83 | |||||||||
Verizon Communications, Inc. | 13,902 | 699 | |||||||||
World Wrestling Entertainment, Inc. Class A | 2,994 | 148 | |||||||||
Zillow Group, Inc. Class C (e) | 603 | 33 | |||||||||
9,227 | |||||||||||
Consumer Discretionary (3.4%): | |||||||||||
Adtalem Global Education, Inc. (e) | 5,253 | 156 | |||||||||
AutoNation, Inc. (e) | 2,002 | 248 | |||||||||
AutoZone, Inc. (e) | 289 | 525 | |||||||||
Best Buy Co., Inc. | 4,001 | 428 | |||||||||
Big Lots, Inc. | 3,144 | 136 | |||||||||
Crocs, Inc. (e) | 663 | 109 | |||||||||
Deckers Outdoor Corp. (e) | 169 | 69 | |||||||||
Dick's Sporting Goods, Inc. | 780 | 92 | |||||||||
eBay, Inc. | 7,857 | 530 | |||||||||
Foot Locker, Inc. | 1,769 | 81 | |||||||||
Ford Motor Co. | 59,243 | 1,137 | |||||||||
Garmin Ltd. | 3,700 | 494 | |||||||||
General Motors Co. (e) | 10,304 | 596 | |||||||||
G-III Apparel Group Ltd. (e) | 2,587 | 77 | |||||||||
Graham Holdings Co. Class B | 275 | 156 | |||||||||
Group 1 Automotive, Inc. | 798 | 155 | |||||||||
Harley-Davidson, Inc. | 4,535 | 166 | |||||||||
KB Home | 3,758 | 150 | |||||||||
Kohl's Corp. (g) | 1,931 | 99 | |||||||||
Kontoor Brands, Inc. | 2,786 | 150 | |||||||||
Lennar Corp. Class A | 5,075 | 533 | |||||||||
Lowe's Cos., Inc. | 5,608 | 1,372 | |||||||||
MarineMax, Inc. (e) | 973 | 52 | |||||||||
McDonald's Corp. | 2,698 | 660 | |||||||||
Meritage Homes Corp. (e) | 990 | 112 | |||||||||
O'Reilly Automotive, Inc. (e) | 847 | 541 | |||||||||
Perdoceo Education Corp. (e) | 10,197 | 100 | |||||||||
Smith & Wesson Brands, Inc. | 7,120 | 162 | |||||||||
Sonic Automotive, Inc. Class A | 1,517 | 68 | |||||||||
Sonos, Inc. (e) | 4,849 | 153 | |||||||||
Target Corp. (g) | 4,873 | 1,188 | |||||||||
Taylor Morrison Home Corp. (e) | 3,153 | 98 | |||||||||
The Home Depot, Inc. | 4,619 | 1,850 | |||||||||
Toll Brothers, Inc. | 1,552 | 98 | |||||||||
Tri Pointe Homes, Inc. (e) | 3,488 | 87 | |||||||||
Williams-Sonoma, Inc. | 653 | 127 | |||||||||
Wingstop, Inc. | 989 | 159 | |||||||||
YETI Holdings, Inc. (e) | 886 | 82 | |||||||||
12,996 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Consumer Staples (1.9%): | |||||||||||
Altria Group, Inc. | 13,610 | $ | 580 | ||||||||
Archer-Daniels-Midland Co. | 8,510 | 529 | |||||||||
Colgate-Palmolive Co. | 7,183 | 539 | |||||||||
Costco Wholesale Corp. | 1,403 | 757 | |||||||||
Ingles Markets, Inc. Class A | 1,185 | 91 | |||||||||
Medifast, Inc. | 731 | 150 | |||||||||
National Beverage Corp. | 2,797 | 145 | |||||||||
PepsiCo, Inc. | 4,369 | 698 | |||||||||
Philip Morris International, Inc. | 13,644 | 1,173 | |||||||||
SpartanNash Co. | 3,800 | 91 | |||||||||
Sprouts Farmers Market, Inc. (e) | 10,330 | 273 | |||||||||
The Clorox Co. | 3,057 | 498 | |||||||||
The Estee Lauder Cos., Inc. | 1,692 | 562 | |||||||||
Tyson Foods, Inc. Class A | 6,758 | 534 | |||||||||
Vector Group Ltd. | 5,535 | 86 | |||||||||
Walgreens Boots Alliance, Inc. | 11,217 | 503 | |||||||||
WD-40 Co. | 665 | 149 | |||||||||
Weis Markets, Inc. (g) | 1,906 | 120 | |||||||||
7,478 | |||||||||||
Energy (1.3%): | |||||||||||
Antero Resources Corp. (e) | 5,737 | 101 | |||||||||
Cactus, Inc. Class A | 2,361 | 86 | |||||||||
Chevron Corp. | 6,320 | 713 | |||||||||
ConocoPhillips | 16,128 | 1,131 | |||||||||
Continental Resources, Inc. | 2,275 | 101 | |||||||||
Devon Energy Corp. | 12,312 | 518 | |||||||||
EOG Resources, Inc. | 5,719 | 497 | |||||||||
Exxon Mobil Corp. | 11,796 | 706 | |||||||||
HollyFrontier Corp. | 3,158 | 102 | |||||||||
Marathon Petroleum Corp. | 8,270 | 503 | |||||||||
Ovintiv, Inc. | 7,070 | 246 | |||||||||
Texas Pacific Land Corp. | 71 | 86 | |||||||||
World Fuel Services Corp. (g) | 7,844 | 196 | |||||||||
4,986 | |||||||||||
Financials (4.8%): | |||||||||||
AGNC Investment Corp. | 1,416 | 22 | |||||||||
American National Group, Inc. | 517 | 98 | |||||||||
Annaly Capital Management, Inc. | 3,774 | 30 | |||||||||
Aon PLC Class A | 1,897 | 561 | |||||||||
Artisan Partners Asset Management, Inc. Class A | 3,252 | 145 | |||||||||
Bank of America Corp. | 17,771 | 790 | |||||||||
Bank of Hawaii Corp. | 686 | 55 | |||||||||
Berkshire Hathaway, Inc. Class B (e) | 3,036 | 840 | |||||||||
Blackstone, Inc. | 4,129 | 584 | |||||||||
Capital One Financial Corp. | 7,571 | 1,064 | |||||||||
Cathay General Bancorp | 5,287 | 222 | |||||||||
Citigroup, Inc. | 9,707 | 618 | |||||||||
Cohen & Steers, Inc. | 1,254 | 113 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Cowen, Inc. Class A | 4,228 | $ | 150 | ||||||||
Cullen/Frost Bankers, Inc. | 561 | 71 | |||||||||
Enova International, Inc. (e) | 2,365 | 90 | |||||||||
Essent Group Ltd. | 4,995 | 208 | |||||||||
First Republic Bank | 2,510 | 526 | |||||||||
International Bancshares Corp. | 4,425 | 186 | |||||||||
Jefferies Financial Group, Inc. | 3,408 | 128 | |||||||||
Lakeland Financial Corp. | 1,706 | 120 | |||||||||
Marsh & McLennan Cos., Inc. | 3,578 | 587 | |||||||||
MetLife, Inc. | 9,180 | 538 | |||||||||
MGIC Investment Corp. | 10,620 | 150 | |||||||||
Morgan Stanley | 13,011 | 1,234 | |||||||||
Mr. Cooper Group, Inc. (e) | 2,170 | 85 | |||||||||
MSCI, Inc. | 846 | 532 | |||||||||
NMI Holdings, Inc. Class A (e) | 9,856 | 193 | |||||||||
OneMain Holdings, Inc. | 3,091 | 154 | |||||||||
Peoples Bancorp, Inc. | 2,367 | 73 | |||||||||
PJT Partners, Inc. Class A | 1,991 | 151 | |||||||||
Primerica, Inc. | 256 | 38 | |||||||||
Prudential Financial, Inc. | 10,275 | 1,051 | |||||||||
Radian Group, Inc. | 10,679 | 217 | |||||||||
Regions Financial Corp. | 21,621 | 492 | |||||||||
RLI Corp. | 894 | 92 | |||||||||
S&P Global, Inc. | 1,305 | 595 | |||||||||
ServisFirst Bancshares, Inc. | 2,015 | 162 | |||||||||
Starwood Property Trust, Inc. | 3,503 | 87 | |||||||||
SVB Financial Group (e) | 1,460 | 1,011 | |||||||||
Synchrony Financial | 11,401 | 511 | |||||||||
T. Rowe Price Group, Inc. | 2,465 | 493 | |||||||||
The Allstate Corp. | 9,577 | 1,041 | |||||||||
The Goldman Sachs Group, Inc. | 3,160 | 1,204 | |||||||||
The Progressive Corp. | 5,811 | 540 | |||||||||
Unum Group | 3,784 | 87 | |||||||||
Webster Financial Corp. | 1,219 | 66 | |||||||||
Wells Fargo & Co. | 14,381 | 687 | |||||||||
18,692 | |||||||||||
Health Care (5.4%): | |||||||||||
AbbVie, Inc. | 6,190 | 714 | |||||||||
Agilent Technologies, Inc. | 3,471 | 524 | |||||||||
Amedisys, Inc. (e) | 562 | 78 | |||||||||
Amgen, Inc. | 5,881 | 1,170 | |||||||||
AMN Healthcare Services, Inc. (e) | 1,185 | 135 | |||||||||
Amneal Pharmaceuticals, Inc. (e) | 30,790 | 129 | |||||||||
ANI Pharmaceuticals, Inc. (e) | 1,970 | 81 | |||||||||
Anthem, Inc. | 1,462 | 594 | |||||||||
Biogen, Inc. (e) | 2,120 | 500 | |||||||||
Bristol-Myers Squibb Co. | 10,986 | 589 | |||||||||
Bruker Corp. | 1,420 | 115 | |||||||||
Chemed Corp. | 264 | 123 | |||||||||
Cigna Corp. | 2,784 | 534 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Collegium Pharmaceutical, Inc. (e) | 4,535 | $ | 80 | ||||||||
Computer Programs and Systems, Inc. (e) | 2,679 | 79 | |||||||||
Corcept Therapeutics, Inc. (e) | 5,122 | 107 | |||||||||
CVS Health Corp. | 6,941 | 618 | |||||||||
Danaher Corp. | 2,289 | 736 | |||||||||
Eli Lilly & Co. | 5,329 | 1,322 | |||||||||
Encompass Health Corp. | 1,716 | 99 | |||||||||
Exelixis, Inc. (e) | 5,464 | 92 | |||||||||
Fulgent Genetics, Inc. (e) (f) | 1,260 | 118 | |||||||||
Gilead Sciences, Inc. (g) | 9,216 | 635 | |||||||||
HCA Healthcare, Inc. | 2,335 | 527 | |||||||||
Hill-Rom Holdings, Inc. | 527 | 82 | |||||||||
IDEXX Laboratories, Inc. (e) | 1,774 | 1,079 | |||||||||
Innoviva, Inc. (e) | 8,268 | 138 | |||||||||
Intuitive Surgical, Inc. (e) | 1,730 | 561 | |||||||||
IQVIA Holdings, Inc. (e) | 2,196 | 569 | |||||||||
Johnson & Johnson (g) | 11,024 | 1,719 | |||||||||
LHC Group, Inc. (e) | 855 | 98 | |||||||||
Ligand Pharmaceuticals, Inc. (e) | 457 | 74 | |||||||||
MEDNAX, Inc. (e) | 3,011 | 74 | |||||||||
Medpace Holdings, Inc. (e) | 546 | 113 | |||||||||
Merck & Co., Inc. | 17,037 | 1,276 | |||||||||
Mettler-Toledo International, Inc. (e) | 345 | 522 | |||||||||
National HealthCare Corp. (g) | 2,198 | 142 | |||||||||
National Research Corp. | 686 | 27 | |||||||||
Owens & Minor, Inc. | 4,066 | 163 | |||||||||
Pfizer, Inc. | 15,876 | 853 | |||||||||
Phibro Animal Health Corp. Class A | 1,920 | 38 | |||||||||
Premier, Inc. Class A | 2,131 | 79 | |||||||||
Prestige Consumer Healthcare, Inc. (e) | 1,630 | 91 | |||||||||
Quidel Corp. (e) | 954 | 141 | |||||||||
Select Medical Holdings Corp. | 3,774 | 101 | |||||||||
SIGA Technologies, Inc. (e) | 11,708 | 95 | |||||||||
Supernus Pharmaceuticals, Inc. (e) | 5,045 | 151 | |||||||||
Tenet Healthcare Corp. (e) | 1,315 | 96 | |||||||||
The Ensign Group, Inc. | 1,280 | 98 | |||||||||
United Therapeutics Corp. (e) | 568 | 108 | |||||||||
UnitedHealth Group, Inc. | 3,896 | 1,731 | |||||||||
Waters Corp. (e) | 1,498 | 491 | |||||||||
West Pharmaceutical Services, Inc. | 1,312 | 581 | |||||||||
20,990 | |||||||||||
Industrials (3.6%): | |||||||||||
3M Co. | 6,765 | 1,150 | |||||||||
ACCO Brands Corp. | 14,319 | 118 | |||||||||
Allison Transmission Holdings, Inc. | 4,733 | 164 | |||||||||
American Woodmark Corp. (e) | 1,739 | 107 | |||||||||
ArcBest Corp. | 886 | 91 | |||||||||
Atkore, Inc. (e) | 1,336 | 142 | |||||||||
Boise Cascade Co. | 3,241 | 210 | |||||||||
CACI International, Inc. Class A (e) | 366 | 95 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Carrier Global Corp. | 10,152 | $ | 549 | ||||||||
Cimpress PLC (e) | 1,716 | 134 | |||||||||
Crane Co. | 515 | 50 | |||||||||
Cummins, Inc. | 2,401 | 504 | |||||||||
Eaton Corp. PLC | 3,307 | 536 | |||||||||
EMCOR Group, Inc. | 1,020 | 122 | |||||||||
Fastenal Co. | 9,101 | 538 | |||||||||
General Dynamics Corp. | 2,767 | 523 | |||||||||
Global Industrial Co. (e) | 1,176 | 47 | |||||||||
GrafTech International Ltd. | 7,447 | 87 | |||||||||
Hillenbrand, Inc. | 1,297 | 58 | |||||||||
HNI Corp. | 2,040 | 81 | |||||||||
Illinois Tool Works, Inc. | 2,416 | 561 | |||||||||
Insperity, Inc. | 659 | 76 | |||||||||
Johnson Controls International PLC | 7,391 | 552 | |||||||||
Kelly Services, Inc. Class A | 3,480 | 59 | |||||||||
Kforce, Inc. | 1,263 | 97 | |||||||||
Landstar System, Inc. | 432 | 73 | |||||||||
Lockheed Martin Corp. | 3,521 | 1,174 | |||||||||
ManpowerGroup, Inc. | 1,586 | 142 | |||||||||
Masonite International Corp. (e) | 1,328 | 142 | |||||||||
Matson, Inc. | 1,047 | 85 | |||||||||
Meritor, Inc. (e) | 5,218 | 132 | |||||||||
MSC Industrial Direct Co., Inc. | 1,964 | 155 | |||||||||
Mueller Industries, Inc. | 2,854 | 158 | |||||||||
Northrop Grumman Corp. | 3,158 | 1,101 | |||||||||
Old Dominion Freight Line, Inc. | 1,554 | 552 | |||||||||
Omega Flex, Inc. | 311 | 37 | |||||||||
Oshkosh Corp. | 1,171 | 126 | |||||||||
Otis Worldwide Corp. | 6,411 | 515 | |||||||||
PACCAR, Inc. | 6,381 | 532 | |||||||||
Republic Services, Inc. (g) | 4,077 | 539 | |||||||||
Rockwell Automation, Inc. | 1,608 | 541 | |||||||||
Rush Enterprises, Inc. Class A | 1,882 | 96 | |||||||||
SkyWest, Inc. (e) | 1,912 | 75 | |||||||||
Steelcase, Inc. Class A | 6,952 | 78 | |||||||||
The Timken Co. | 2,348 | 155 | |||||||||
The Toro Co. | 549 | 55 | |||||||||
TriNet Group, Inc. (e) | 759 | 76 | |||||||||
Triton International Ltd. | 2,702 | 151 | |||||||||
W.W. Grainger, Inc. | 1,087 | 523 | |||||||||
13,864 | |||||||||||
Information Technology (8.8%): | |||||||||||
Accenture PLC Class A | 3,895 | 1,392 | |||||||||
Adobe, Inc. (e) | 1,175 | 787 | |||||||||
Amkor Technology, Inc. | 7,354 | 159 | |||||||||
Apple, Inc. | 36,109 | 5,969 | |||||||||
Applied Materials, Inc. | 8,349 | 1,229 | |||||||||
Aspen Technology, Inc. (e) | 403 | 58 | |||||||||
Avid Technology, Inc. (e) | 3,551 | 114 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Badger Meter, Inc. | 1,029 | $ | 105 | ||||||||
Broadcom, Inc. | 2,603 | 1,441 | |||||||||
Cisco Systems, Inc. | 25,528 | 1,400 | |||||||||
Cognizant Technology Solutions Corp. Class A | 7,132 | 556 | |||||||||
CSG Systems International, Inc. | 2,858 | 151 | |||||||||
Digital Turbine, Inc. (e) | 1,386 | 73 | |||||||||
Diodes, Inc. (e) | 1,276 | 136 | |||||||||
DXC Technology Co. (e) | 3,240 | 97 | |||||||||
Ebix, Inc. | 1,799 | 55 | |||||||||
EPAM Systems, Inc. (e) | 770 | 469 | |||||||||
EVERTEC, Inc. | 2,999 | 126 | |||||||||
Fortinet, Inc. (e) | 1,602 | 532 | |||||||||
Gartner, Inc. (e) | 1,598 | 499 | |||||||||
HP, Inc. | 35,018 | 1,235 | |||||||||
Intel Corp. | 14,022 | 690 | |||||||||
International Business Machines Corp. | 5,225 | 612 | |||||||||
Intuit, Inc. | 1,082 | 706 | |||||||||
J2 Global, Inc. (e) | 663 | 75 | |||||||||
Jabil, Inc. | 1,708 | 100 | |||||||||
Kimball Electronics, Inc. (e) | 3,048 | 65 | |||||||||
Manhattan Associates, Inc. (e) | 692 | 108 | |||||||||
Mastercard, Inc. Class A | 2,241 | 706 | |||||||||
MAXIMUS, Inc. | 1,473 | 111 | |||||||||
Methode Electronics, Inc. | 3,542 | 157 | |||||||||
Micron Technology, Inc. | 8,086 | 679 | |||||||||
Microsoft Corp. (g) | 15,561 | 5,144 | |||||||||
Motorola Solutions, Inc. | 2,220 | 562 | |||||||||
NCR Corp. (e) | 3,060 | 119 | |||||||||
NVIDIA Corp. | 3,865 | 1,263 | |||||||||
Oracle Corp. | 14,421 | 1,309 | |||||||||
Perficient, Inc. (e) | 1,173 | 161 | |||||||||
QUALCOMM, Inc. | 8,228 | 1,486 | |||||||||
Qualys, Inc. (e) | 1,015 | 132 | |||||||||
Sanmina Corp. (e) | 2,610 | 95 | |||||||||
SMART Global Holdings, Inc. (e) | 1,553 | 88 | |||||||||
SPS Commerce, Inc. (e) | 899 | 127 | |||||||||
Super Micro Computer, Inc. (e) | 1,741 | 72 | |||||||||
Texas Instruments, Inc. | 6,975 | 1,342 | |||||||||
The Hackett Group, Inc. | 4,379 | 90 | |||||||||
TTEC Holdings, Inc. | 1,040 | 88 | |||||||||
VeriSign, Inc. (e) | 2,254 | 541 | |||||||||
Vishay Intertechnology, Inc. | 5,421 | 110 | |||||||||
VMware, Inc. Class A (e) | 4,348 | 508 | |||||||||
Xperi Holding Corp. | 5,350 | 96 | |||||||||
33,925 | |||||||||||
Materials (0.8%): | |||||||||||
Avery Dennison Corp. | 2,299 | 471 | |||||||||
Huntsman Corp. | 2,562 | 81 | |||||||||
Louisiana-Pacific Corp. | 3,488 | 228 | |||||||||
LyondellBasell Industries NV Class A | 6,021 | 525 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Minerals Technologies, Inc. | 867 | $ | 57 | ||||||||
Nucor Corp. | 4,819 | 512 | |||||||||
PPG Industries, Inc. | 3,340 | 515 | |||||||||
Reliance Steel & Aluminum Co. | 751 | 112 | |||||||||
The Sherwin-Williams Co. | 1,783 | 591 | |||||||||
Tredegar Corp. (e) | 4,592 | 50 | |||||||||
Tronox Holdings PLC Class A | 5,142 | 113 | |||||||||
3,255 | |||||||||||
Real Estate (1.2%): | |||||||||||
Alexandria Real Estate Equities, Inc. | 378 | 76 | |||||||||
American Tower Corp. | 1,227 | 322 | |||||||||
AvalonBay Communities, Inc. | 376 | 90 | |||||||||
Boston Properties, Inc. | 400 | 43 | |||||||||
Brixmor Property Group, Inc. | 2,598 | 59 | |||||||||
Camden Property Trust | 263 | 43 | |||||||||
CBRE Group, Inc. Class A (e) | 905 | 86 | |||||||||
Cousins Properties, Inc. | 1,378 | 52 | |||||||||
Crown Castle International Corp. | 1,166 | 212 | |||||||||
CubeSmart | 2,102 | 113 | |||||||||
Digital Realty Trust, Inc. | 759 | 127 | |||||||||
Duke Realty Corp. | 1,007 | 59 | |||||||||
Equinix, Inc. | 241 | 196 | |||||||||
Equity LifeStyle Properties, Inc. | 467 | 38 | |||||||||
Equity Residential | 958 | 82 | |||||||||
Essex Property Trust, Inc. | 175 | 59 | |||||||||
Extra Space Storage, Inc. | 360 | 72 | |||||||||
Federal Realty Investment Trust | 507 | 62 | |||||||||
First Industrial Realty Trust, Inc. | 1,825 | 110 | |||||||||
Forestar Group, Inc. (e) | 2,611 | 52 | |||||||||
Franklin Street Properties Corp. (e) | 16,457 | 95 | |||||||||
FRP Holdings, Inc. (e) | 447 | 26 | |||||||||
Gaming and Leisure Properties, Inc. | 1,545 | 70 | |||||||||
Healthpeak Properties, Inc. | 1,454 | 48 | |||||||||
Host Hotels & Resorts, Inc. (e) | 1,905 | 30 | |||||||||
Invitation Homes, Inc. | 1,531 | 62 | |||||||||
Iron Mountain, Inc. | 779 | 35 | |||||||||
Jones Lang LaSalle, Inc. (e) | 363 | 85 | |||||||||
Kimco Realty Corp. | 3,106 | 70 | |||||||||
Lamar Advertising Co. Class A | 465 | 51 | |||||||||
LTC Properties, Inc. | 1,829 | 58 | |||||||||
Medical Properties Trust, Inc. | 4,381 | 93 | |||||||||
Mid-America Apartment Communities, Inc. | 308 | 64 | |||||||||
National Health Investors, Inc. | 2,031 | 106 | |||||||||
Omega Healthcare Investors, Inc. | 635 | 18 | |||||||||
One Liberty Properties, Inc. (e) | 1,831 | 60 | |||||||||
Orion Office REIT, Inc. (e) | 140 | 2 | |||||||||
PotlatchDeltic Corp. | 658 | 36 | |||||||||
Prologis, Inc. | 1,996 | 301 | |||||||||
Public Storage | 425 | 139 | |||||||||
Realty Income Corp. | 1,440 | 98 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Regency Centers Corp. | 412 | $ | 29 | ||||||||
Saul Centers, Inc. (e) | 1,064 | 52 | |||||||||
SBA Communications Corp. | 295 | 101 | |||||||||
Simon Property Group, Inc. | 886 | 135 | |||||||||
SITE Centers Corp. | 7,123 | 107 | |||||||||
Sun Communities, Inc. | 301 | 57 | |||||||||
Tejon Ranch Co. (e) | 3,100 | 57 | |||||||||
Terreno Realty Corp. | 1,332 | 101 | |||||||||
UDR, Inc. | 801 | 45 | |||||||||
Ventas, Inc. | 1,061 | 50 | |||||||||
VICI Properties, Inc. | 1,656 | 45 | |||||||||
Vornado Realty Trust | 439 | 18 | |||||||||
Welltower, Inc. | 1,118 | 89 | |||||||||
Weyerhaeuser Co. | 2,021 | 76 | |||||||||
WP Carey, Inc. | 480 | 37 | |||||||||
4,499 | |||||||||||
Utilities (0.9%): | |||||||||||
American States Water Co. | 1,937 | 182 | |||||||||
Exelon Corp. | 10,410 | 549 | |||||||||
FirstEnergy Corp. | 13,970 | 526 | |||||||||
MDU Resources Group, Inc. | 5,622 | 153 | |||||||||
National Fuel Gas Co. | 2,194 | 127 | |||||||||
NorthWestern Corp. | 2,637 | 146 | |||||||||
NRG Energy, Inc. | 14,711 | 530 | |||||||||
Otter Tail Corp. (g) | 2,371 | 155 | |||||||||
The AES Corp. | 21,755 | 509 | |||||||||
UGI Corp. | 11,523 | 475 | |||||||||
3,352 | |||||||||||
Total Common Stocks (Cost $103,090) | 133,264 | ||||||||||
Preferred Stocks (0.1%) | |||||||||||
Communication Services (0.0%): (h) | |||||||||||
Qwest Corp., 6.50%, 9/1/56 | 8,000 | 201 | |||||||||
Financials (0.1%): | |||||||||||
Delphi Financial Group, Inc., 3.35% (LIBOR03M+319bps), 5/15/37 (b) (i) | 12,000 | 287 | |||||||||
Total Preferred Stocks (Cost $502) | 488 | ||||||||||
Corporate Bonds (0.8%) | |||||||||||
Consumer Discretionary (0.0%): (h) | |||||||||||
AutoNation, Inc., 4.75%, 6/1/30, Callable 3/1/30 @ 100 | $ | 38 | 44 | ||||||||
VF Corp., 2.95%, 4/23/30, Callable 1/23/30 @ 100 | 53 | 55 | |||||||||
99 | |||||||||||
Consumer Staples (0.0%): (h) | |||||||||||
McCormick & Co., Inc., 2.50%, 4/15/30, Callable 1/15/30 @ 100 | 32 | 32 | |||||||||
Sysco Corp., 5.95%, 4/1/30, Callable 1/1/30 @ 100 | 30 | 38 | |||||||||
70 |
See notes to financial statements.
11
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Energy (0.1%): | |||||||||||
Florida Gas Transmission Co. LLC, 2.55%, 7/1/30, Callable 4/1/30 @ 100 (a) | $ | 38 | $ | 39 | |||||||
ONEOK, Inc., 6.35%, 1/15/31, Callable 10/15/30 @ 100 | 46 | 58 | |||||||||
Targa Resources Partners LP/Targa Resources Partners Finance Corp., 5.50%, 3/1/30, Callable 3/1/25 @ 102.75 | 75 | 81 | |||||||||
178 | |||||||||||
Financials (0.3%): | |||||||||||
Ares Capital Corp., 3.63%, 1/19/22, Callable 12/23/21 @ 100 (g) | 100 | 100 | |||||||||
Belrose Funding Trust, 2.33%, 8/15/30, Callable 5/15/30 @ 100 (a) | 93 | 91 | |||||||||
Capital One NA, 2.15%, 9/6/22, Callable 8/6/22 @ 100 | 150 | 152 | |||||||||
Citizens Financial Group, Inc., 2.50%, 2/6/30, Callable 11/6/29 @ 100 | 112 | 114 | |||||||||
Cullen/Frost Capital Trust II, 1.67% (LIBOR03M+155bps), 3/1/34, Callable 1/10/22 @ 100 (b) | 175 | 168 | |||||||||
First Horizon Bank, 5.75%, 5/1/30, Callable 2/1/30 @ 100 | 53 | 64 | |||||||||
First Maryland Capital I, 1.12% (LIBOR03M+100bps), 1/15/27, Callable 1/10/22 @ 100 (b) | 50 | 48 | |||||||||
HSB Group, Inc., 1.03% (LIBOR03M+91bps), 7/15/27, Callable 1/10/22 @ 100 (b) | 200 | 182 | |||||||||
Loews Corp., 3.20%, 5/15/30, Callable 2/15/30 @ 100 | 68 | 73 | |||||||||
New York Community Bancorp, Inc., 5.90% (LIBOR03M+278bps), 11/6/28, Callable 11/6/23 @ 100 (b) | 23 | 25 | |||||||||
Santander Holdings USA, Inc., 3.45%, 6/2/25, Callable 5/2/25 @ 100 | 39 | 41 | |||||||||
Signature Bank, 4.13% (LIBOR03M+256bps), 11/1/29, Callable 11/1/24 @ 100 (b) | 150 | 157 | |||||||||
The Progressive Corp., 3.20%, 3/26/30, Callable 12/26/29 @ 100 | 23 | 25 | |||||||||
1,240 | |||||||||||
Health Care (0.1%): | |||||||||||
DENTSPLY SIRONA, Inc., 3.25%, 6/1/30, Callable 3/1/30 @ 100 | 72 | 76 | |||||||||
Duke University Health System, Inc., 2.60%, 6/1/30 | 60 | 61 | |||||||||
Viatris, Inc., 2.30%, 6/22/27, Callable 4/22/27 @ 100 | 23 | 23 | |||||||||
160 | |||||||||||
Industrials (0.1%): | |||||||||||
Caterpillar, Inc., 2.60%, 4/9/30, Callable 1/9/30 @ 100 | 55 | 58 | |||||||||
CoStar Group, Inc., 2.80%, 7/15/30, Callable 4/15/30 @ 100 (a) | 21 | 21 | |||||||||
Dover Corp., 2.95%, 11/4/29, Callable 8/4/29 @ 100 | 112 | 119 | |||||||||
The Conservation Fund A Nonprofit Corp., 3.47%, 12/15/29, Callable 9/15/29 @ 100 | 175 | 186 | |||||||||
384 | |||||||||||
Information Technology (0.0%): (h) | |||||||||||
HP, Inc., 3.40%, 6/17/30, Callable 3/17/30 @ 100 | 68 | 71 | |||||||||
Jabil, Inc., 3.00%, 1/15/31, Callable 10/15/30 @ 100 | 21 | 22 | |||||||||
93 | |||||||||||
Materials (0.0%): (h) | |||||||||||
Avery Dennison Corp., 2.65%, 4/30/30, Callable 2/1/30 @ 100 | 45 | 46 | |||||||||
Colonial Enterprises, Inc., 3.25%, 5/15/30, Callable 2/15/30 @ 100 (a) | 21 | 22 | |||||||||
WRKCo, Inc., 3.00%, 6/15/33, Callable 3/15/33 @ 100 (g) | 35 | 36 | |||||||||
104 |
See notes to financial statements.
12
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Real Estate (0.1%): | |||||||||||
AvalonBay Communities, Inc., 2.45%, 1/15/31, MTN, Callable 10/17/30 @ 100 | $ | 101 | $ | 103 | |||||||
Essex Portfolio LP, 2.65%, 3/15/32, Callable 12/15/31 @ 100 | 131 | 133 | |||||||||
GLP Capital LP/GLP Financing II, Inc., 4.00%, 1/15/31, Callable 10/15/30 @ 100 | 23 | 24 | |||||||||
Host Hotels & Resorts LP, 3.50%, 9/15/30, Callable 6/15/30 @ 100 | 19 | 20 | |||||||||
SBA Tower Trust, 2.84%, 1/15/25, Callable 1/15/24 @ 100 (a) | 87 | 90 | |||||||||
VICI Properties LP/VICI Note Co., Inc., 4.63%, 12/1/29, Callable 12/1/24 @ 102.31 (a) | 17 | 18 | |||||||||
388 | |||||||||||
Utilities (0.1%): | |||||||||||
Alabama Power Co., 3.85%, 12/1/42 | 112 | 129 | |||||||||
Ameren Corp., 3.50%, 1/15/31, Callable 10/15/30 @ 100 | 37 | 40 | |||||||||
Duke Energy Florida LLC, 3.85%, 11/15/42, Callable 5/15/42 @ 100 | 112 | 128 | |||||||||
297 | |||||||||||
Total Corporate Bonds (Cost $2,883) | 3,013 | ||||||||||
Yankee Dollars (0.1%) | |||||||||||
Energy (0.0%): (h) | |||||||||||
Petroleos Mexicanos, 6.49%, 1/23/27, Callable 11/23/26 @ 100 | 64 | 66 | |||||||||
Financials (0.0%): (h) | |||||||||||
Banco Santander Mexico SA Institucion de Banca Multiple Grupo Financiero Santand, 5.38%, 4/17/25 (a) (g) | 51 | 55 | |||||||||
Industrials (0.0%): (h) | |||||||||||
Ferguson Finance PLC, 3.25%, 6/2/30, Callable 3/2/30 @ 100 (a) | 42 | 45 | |||||||||
Materials (0.1%): | |||||||||||
CCL Industries, Inc., 3.05%, 6/1/30, Callable 3/1/30 @ 100 (a) | 71 | 74 | |||||||||
Total Yankee Dollars (Cost $228) | 240 | ||||||||||
U.S. Government Agency Mortgages (0.4%) | |||||||||||
Federal Home Loan Mortgage Corporation 3.00%, 10/1/46 – 10/1/47 | 1,117 | 1,172 | |||||||||
3.50%, 4/1/48 | 114 | 120 | |||||||||
1,292 | |||||||||||
Federal National Mortgage Association Series 2016-M2, Class AV2, 2.15%, 1/25/23 | 76 | 77 | |||||||||
4.00%, 4/1/49 | 177 | 188 | |||||||||
265 | |||||||||||
1,557 | |||||||||||
Total U.S. Government Agency Mortgages (Cost $1,488) | 1,557 | ||||||||||
U.S. Treasury Obligations (1.8%) | |||||||||||
U.S. Treasury Bonds | |||||||||||
3.00%, 8/15/48 (g) | 1,000 | 1,253 | |||||||||
3.38%, 11/15/48 (g) | 500 | 670 |
See notes to financial statements.
13
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
U.S. Treasury Inflation Indexed Bonds, 0.13%, 7/15/26 | $ | 1,144 | $ | 1,245 | |||||||
U.S. Treasury Notes | |||||||||||
1.63%, 4/30/23 | 1,567 | 1,595 | |||||||||
2.25%, 2/15/27 | 2,000 | 2,108 | |||||||||
Total U.S. Treasury Obligations (Cost $6,233) | 6,871 | ||||||||||
Exchange-Traded Funds (52.1%) | |||||||||||
Invesco DB Commodity Index Tracking Fund (e) | 28,600 | 557 | |||||||||
Invesco FTSE RAFI Developed Markets ex-US ETF | 43,991 | 2,005 | |||||||||
Invesco FTSE RAFI Emerging Markets ETF | 240,641 | 5,179 | |||||||||
iShares Core MSCI EAFE ETF | 103,179 | 7,530 | |||||||||
iShares Core MSCI Emerging Markets ETF | 265,390 | 15,955 | |||||||||
iShares Core S&P 500 ETF | 68,194 | 31,208 | |||||||||
iShares Core US Aggregate Bond ETF | 39,490 | 4,532 | |||||||||
iShares Core US REIT ETF (g) | 36,965 | 2,317 | |||||||||
iShares MSCI Canada ETF (f) | 158,669 | 5,931 | |||||||||
iShares MSCI International Momentum Factor ETF | 146,564 | 5,586 | |||||||||
iShares MSCI International Quality Factor ETF (f) | 165,207 | 6,321 | |||||||||
JPMorgan BetaBuilders Canada ETF (f) | 24,954 | 1,622 | |||||||||
Schwab Fundamental Emerging Markets Large Co. Index ETF | 430,014 | 13,240 | |||||||||
Schwab Fundamental International Large Co. Index ETF | 829,619 | 26,274 | |||||||||
Schwab Fundamental International Small Co. Index ETF (f) | 91,800 | 3,356 | |||||||||
SPDR Gold Shares (e) (f) | 4,604 | 762 | |||||||||
SPDR S&P Emerging Markets SmallCap ETF | 14,790 | 868 | |||||||||
U.S. Oil Fund LP (e) (f) | 17,827 | 854 | |||||||||
Vanguard FTSE All-World ex-US ETF | 115,478 | 6,922 | |||||||||
Vanguard FTSE Developed Markets ETF (f) | 451,194 | 22,424 | |||||||||
Vanguard FTSE Emerging Markets ETF (f) (g) | 23,072 | 1,135 | |||||||||
Vanguard Mortgage-Backed Securities ETF | 18,666 | 990 | |||||||||
Vanguard Real Estate ETF (f) | 42,607 | 4,548 | |||||||||
Vanguard S&P 500 ETF (g) | 27,797 | 11,649 | |||||||||
Vanguard Short-Term Bond ETF | 23,964 | 1,949 | |||||||||
Vanguard Short-Term Corporate Bond ETF | 23,551 | 1,921 | |||||||||
Vanguard Total Bond Market ETF | 78,203 | 6,680 | |||||||||
Vanguard Total Stock Market ETF (g) | 34,432 | 8,038 | |||||||||
Wisdom Tree Trust — WisdomTree Emerging Markets SmallCap Dividend Fund | 16,645 | 854 | |||||||||
Total Exchange-Traded Funds (Cost $162,978) | 201,207 | ||||||||||
Affiliated Exchange-Traded Funds (8.6%) | |||||||||||
Victoryshares ESG Core Plus Bond ETF | 216,269 | 5,404 | |||||||||
VictoryShares USAA Core Intermediate-Term Bond ETF | 408,915 | 21,824 | |||||||||
VictoryShares USAA Core Short-Term Bond ETF | 103,145 | 5,317 | |||||||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF (g) | 16,000 | 743 | |||||||||
Total Affiliated Exchange-Traded Funds (Cost $33,548) | 33,288 |
See notes to financial statements.
14
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Collateral for Securities Loaned^ (7.4%) | |||||||||||
Fidelity Investments Money Market Government Portfolio Institutional Shares, 0.01% (j) | 5,158,971 | $ | 5,159 | ||||||||
Goldman Sachs Financial Square Government Fund Institutional Shares, 0.03% (j) | 7,850,292 | 7,850 | |||||||||
HSBC U.S. Government Money Market Fund I Shares, 0.03% (j) | 15,632,748 | 15,633 | |||||||||
Total Collateral for Securities Loaned (Cost $28,642) | 28,642 | ||||||||||
Total Investments (Cost $340,290) — 105.9% | 409,278 | ||||||||||
Liabilities in excess of other assets — (5.9)% | (22,708 | ) | |||||||||
NET ASSETS — 100.00% | $ | 386,570 |
At November 30, 2021, the Fund's investments in foreign securities were 33.0% of net assets.
^ Purchased with cash collateral from securities on loan.
(a) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of November 30, 2021, the fair value of these securities was $1,060 (thousands) and amounted to 0.3% of net assets.
(b) Variable or Floating-Rate Security. Rate disclosed is as of November 30, 2021.
(c) The rate for certain asset-backed and mortgage-backed securities may vary based on factors relating to the pool of assets underlying the security. The rate disclosed is the rate in effect at November 30, 2021.
(d) Security is interest only.
(e) Non-income producing security.
(f) All or a portion of this security is on loan.
(g) All or a portion of this security has been segregated as collateral for derivative instruments.
(h) Amount represents less than 0.05% of net assets.
(i) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of November 30, 2021, illiquid securities were 0.1% of net assets.
(j) Rate disclosed is the daily yield on November 30, 2021.
bps — Basis points
ETF — Exchange-Traded Fund
LIBOR — London InterBank Offered Rate
LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of November 30, 2021, based on the last reset date of the security
LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of November 30, 2021, based on the last reset date of the security
LLC — Limited Liability Company
LP — Limited Partnership
See notes to financial statements.
15
USAA Mutual Funds Trust USAA Cornerstone Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Unaudited)
MTN — Medium Term Note
PLC — Public Limited Company
REIT — Real Estate Investment Trust
Futures Contracts Purchased
(Amounts not in thousands)
Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||
S&P/Toronto Stock Exchange 60 Index Futures | 18 | 12/16/21 | $ | 3,523,128 | $ | 3,511,783 | $ | 37,455 | |||||||||||||||
Swiss Market Index Futures | 34 | 12/17/21 | 4,445,473 | 4,518,640 | 53,786 | ||||||||||||||||||
$ | 91,241 | ||||||||||||||||||||||
Futures Contracts Sold |
(Amounts not in thousands)
Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||
ASX SPI 200 Index Futures | 11 | 12/16/21 | $ | 1,508,724 | $ | 1,417,227 | $ | 35,758 | |||||||||||||||
Euro Stoxx 50 Futures | 17 | 12/17/21 | 833,213 | 785,968 | 12,710 | ||||||||||||||||||
FTSE 100 Index Futures | 15 | 12/17/21 | 1,454,456 | 1,412,040 | 26,872 | ||||||||||||||||||
Russell 2000 E-Mini Index Futures | 62 | 12/17/21 | 6,893,480 | 6,811,630 | 81,850 | ||||||||||||||||||
Tokyo Price Index Futures | 12 | 12/09/21 | 2,236,467 | 2,013,095 | 171,696 | ||||||||||||||||||
$ | 328,886 | ||||||||||||||||||||||
Total unrealized appreciation | $ | 420,127 | |||||||||||||||||||||
Total unrealized depreciation | — | ||||||||||||||||||||||
Total net unrealized appreciation (depreciation) | $ | 420,127 |
See notes to financial statements.
16
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Cornerstone Aggressive Fund | |||||||
Assets: | |||||||
Affiliated investments, at value (Cost $33,548) | $ | 33,288 | |||||
Unaffiliated investments, at value (Cost $306,742) | 375,990 | (a) | |||||
Cash | 5,067 | ||||||
Deposit with broker for futures contracts | 1,392 | ||||||
Receivables: | |||||||
Interest and dividends | 300 | ||||||
Capital shares issued | 281 | ||||||
Variation margin on open futures contracts | 222 | ||||||
From Adviser | 55 | ||||||
Prepaid expenses | 12 | ||||||
Total Assets | 416,607 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 28,642 | ||||||
Collateral received from broker for futures contract | 96 | ||||||
Foreign currency | — | (b) | |||||
Investments purchased | 600 | ||||||
Capital shares redeemed | 199 | ||||||
Variation margin on open futures contracts | 103 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 196 | ||||||
Administration fees | 49 | ||||||
Custodian fees | 5 | ||||||
Transfer agent fees | 81 | ||||||
Compliance fees | — | (b) | |||||
Other accrued expenses | 66 | ||||||
Total Liabilities | 30,037 | ||||||
Net Assets: | |||||||
Capital | 283,832 | ||||||
Total accumulated earnings/(loss) | 102,738 | ||||||
Net Assets | $ | 386,570 | |||||
Shares (unlimited number of shares authorized with no par value): | 24,895 | ||||||
Net asset value, offering and redemption price per share: (c) | $ | 15.53 |
(a) Includes $27,564 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
17
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Cornerstone Aggressive Fund | |||||||
Investment Income: | |||||||
Income distributions from affiliated funds | $ | 210 | |||||
Dividends | 3,179 | ||||||
Interest | 296 | ||||||
Securities lending (net of fees) | 45 | ||||||
Foreign tax withholding | (1 | ) | |||||
Total Income | 3,729 | ||||||
Expenses: | |||||||
Investment advisory fees | 1,180 | ||||||
Administration fees | 295 | ||||||
Sub-Administration fees | 46 | ||||||
Custodian fees | 13 | ||||||
Transfer agent fees | 525 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 1 | ||||||
Legal and audit fees | 29 | ||||||
State registration and filing fees | 13 | ||||||
Other expenses | 40 | ||||||
Total Expenses | 2,166 | ||||||
Expenses waived/reimbursed by Adviser | (35 | ) | |||||
Net Expenses | 2,131 | ||||||
Net Investment Income (Loss) | 1,598 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from unaffiliated investment securities and foreign currency translations | 12,588 | ||||||
Net realized gains (losses) from futures contracts | 88 | ||||||
Net change in unrealized appreciation/depreciation on unaffiliated investment securities | (8,833 | ) | |||||
Net change in unrealized appreciation/depreciation on affiliated funds | (167 | ) | |||||
Net change in unrealized appreciation/depreciation on futures contracts | 331 | ||||||
Net realized/unrealized gains (losses) on investments | 4,007 | ||||||
Change in net assets resulting from operations | $ | 5,605 |
See notes to financial statements.
18
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Cornerstone Aggressive Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 1,598 | $ | 3,261 | |||||||
Net realized gains (losses) from investments | 12,676 | 26,897 | |||||||||
Net change in unrealized appreciation/depreciation on investments | (8,669 | ) | 74,955 | ||||||||
Change in net assets resulting from operations | 5,605 | 105,113 | |||||||||
Change in net assets resulting from distributions to shareholders | — | (7,114 | ) | ||||||||
Change in net assets resulting from capital transactions | (6,531 | ) | (54,063 | ) | |||||||
Change in net assets | (926 | ) | 43,936 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 387,496 | 343,560 | |||||||||
End of period | $ | 386,570 | $ | 387,496 | |||||||
Capital Transactions: | |||||||||||
Proceeds from shares issued | $ | 23,389 | $ | 43,105 | |||||||
Distributions reinvested | — | 6,811 | |||||||||
Cost of shares redeemed | (29,920 | ) | (103,979 | ) | |||||||
Change in net assets resulting from capital transactions | $ | (6,531 | ) | $ | (54,063 | ) | |||||
Share Transactions: | |||||||||||
Issued | 1,498 | 3,112 | |||||||||
Reinvested | — | 494 | |||||||||
Redeemed | (1,917 | ) | (7,566 | ) | |||||||
Change in Shares | (419 | ) | (3,960 | ) |
See notes to financial statements.
19
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Cornerstone Aggressive Fund | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 15.31 | 0.06 | (d) | 0.16 | 0.22 | — | — | |||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 11.74 | 0.12 | (d) | 3.71 | 3.83 | (0.18 | ) | (0.08 | ) | |||||||||||||||||
2020 | $ | 11.73 | 0.20 | (d) | 0.03 | 0.23 | (0.15 | ) | (0.07 | ) | |||||||||||||||||
2019 | $ | 12.81 | 0.15 | (0.57 | ) | (0.42 | ) | (0.18 | ) | (0.48 | ) | ||||||||||||||||
2018 | $ | 12.57 | 0.16 | 0.94 | 1.10 | (0.14 | ) | (0.72 | ) | ||||||||||||||||||
2017 | $ | 11.33 | 0.15 | 1.26 | 1.41 | (0.17 | ) | — |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) The expense ratios exclude the impact of fees/expenses paid by each underlying fund.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects increased trading activity due to usage of quantitative investment strategies.
See notes to financial statements.
20
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b)(c) | Net Investment Income (Loss)(b) | Gross Expenses(b)(c) | Net Assets, End of Period (000's) | Portfolio Turnover(a) | ||||||||||||||||||||||||||||
USAA Cornerstone Aggressive Fund | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | $ | 15.53 | 1.44 | % | 1.08 | % | 0.81 | % | 1.10 | % | $ | 386,570 | 21 | % | ||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.26 | ) | $ | 15.31 | 32.91 | % | 1.10 | % | 0.88 | % | 1.17 | % | $ | 387,496 | 64 | % | |||||||||||||||||||
2020 | (0.22 | ) | $ | 11.74 | 1.78 | % | 1.10 | % | 1.68 | % | 1.18 | % | $ | 343,560 | 90 | % | |||||||||||||||||||
2019 | (0.66 | ) | $ | 11.73 | (3.04 | )% | 1.10 | % | 1.54 | % | 1.24 | % | $ | 351,410 | 95 | %(e) | |||||||||||||||||||
2018 | (0.86 | ) | $ | 12.81 | 8.85 | % | 1.10 | % | 1.18 | % | 1.25 | % | $ | 344,768 | 65 | % | |||||||||||||||||||
2017 | (0.17 | ) | $ | 12.57 | 12.59 | % | 1.10 | % | 1.32 | % | 1.36 | % | $ | 283,867 | 70 | % |
See notes to financial statements.
21
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Cornerstone Aggressive Fund (the "Fund"). The Fund is classified as diversified under the 1940 Act.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs") and American Depositary Receipts ("ADRs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.
22
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Investments in open-end investment companies, including underlying funds, are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
Debt securities are valued each business day by a pricing service approved by the Board. The approved pricing service uses the evaluated bid or the last sale price to value securities. Debt obligations maturing within 60 days may be valued at their amortized cost, provided that the amortized cost represents the fair value of such securities. These valuations are typically categorized as Level 2 in the fair value hierarchy.
Futures contracts are valued at the settlement price established each day by the board of trade or an exchange on which they are traded. These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Asset-Backed Securities | $ | — | $ | 572 | $ | — | $ | 572 | |||||||||||
Collateralized Mortgage Obligations | — | 136 | — | 136 | |||||||||||||||
Common Stocks | 133,264 | — | — | 133,264 | |||||||||||||||
Preferred Stocks | 201 | 287 | — | 488 | |||||||||||||||
Corporate Bonds | — | 3,013 | — | 3,013 | |||||||||||||||
Yankee Dollars | — | 240 | — | 240 | |||||||||||||||
U.S. Government Agency Mortgages | — | 1,557 | — | 1,557 | |||||||||||||||
U.S. Treasury Obligations | — | 6,871 | — | 6,871 | |||||||||||||||
Exchange-Traded Funds | 201,207 | — | — | 201,207 | |||||||||||||||
Affiliated Exchange-Traded Funds | 33,288 | — | — | 33,288 | |||||||||||||||
Collateral for Securities Loaned | 28,642 | — | — | 28,642 | |||||||||||||||
Total | $ | 396,602 | $ | 12,676 | $ | — | $ | 409,278 | |||||||||||
Other Financial Investments* | |||||||||||||||||||
Assets: | |||||||||||||||||||
Futures Contracts | $ | 420 | $ | — | $ | — | $ | 420 | |||||||||||
Total | $ | 420 | $ | — | $ | — | $ | 420 |
* Futures contracts are valued at the unrealized appreciation (depreciation) on the investment.
For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
23
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a portfolio of securities often designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Mortgage and Asset-Backed Securities:
The values of some mortgage-related or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Fund to a lower rate of return upon reinvestment of principal. The values of mortgage- and asset-backed securities depend in part on the credit quality and adequacy of the underlying assets or collateral and may fluctuate in response to the market's perception of these factors as well as current and future repayment rates. Some mortgage-backed securities are backed by the full faith and credit of the U.S. government (e.g., mortgage-backed securities issued by the Government National Mortgage Association, commonly known as "Ginnie Mae"), while other mortgage-backed securities (e.g., mortgage-backed securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, commonly known as "Fannie Mae" and "Freddie Mac", respectively), are backed only by the credit of the government entity issuing them. In addition, some mortgage-backed securities are issued by private entities and, as such, are not guaranteed by the U.S. government or any agency or instrumentality of the U.S. government.
Derivative Instruments:
Futures Contracts:
The Fund may enter into contracts for the future delivery of securities or foreign currencies and futures contracts based on a specific security, class of securities, foreign currency or an index, and purchase or sell options on any such futures contracts. A futures contract on a securities index is an agreement obligating either party to pay, and entitling the other party to receive, while the contract is outstanding, cash payments based on the level of a specified securities index. No physical delivery of the underlying asset is made. The Fund may enter into futures contracts in an effort to hedge against market risks. The acquisition of put and call options on futures contracts will give the Fund the right (but not the obligation), for a specified price, to sell or to purchase the underlying futures contract, upon exercise of the option, at any time during the option period. Futures transactions involve brokerage costs and require the Fund to segregate assets to cover contracts that would require it to purchase securities or currencies. A good faith margin deposit, known as initial margin, of cash or government securities with a broker or custodian is required to initiate and maintain open positions in futures contracts. Subsequent payments, known as variation margin, are made or received by the Fund based on the change in the market value of the position and are recorded as unrealized appreciation or depreciation until the contract is closed out, at which time the gain or loss is realized. The Fund may lose the expected benefit of futures transactions if interest rates, exchange rates or securities prices change in an unanticipated
24
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
manner. Such unanticipated changes may also result in lower overall performance than if the Fund had not entered into any futures transactions. In addition, the value of the Fund's futures positions may not prove to be perfectly or even highly correlated with the value of its portfolio securities or foreign currencies, limiting the Fund's ability to hedge effectively against interest rate, exchange rate and/or market risk and giving rise to additional risks. There is no assurance of liquidity in the secondary market for purposes of closing out futures positions. The collateral held by the Fund is presented on the Statement of Assets and Liabilities under Deposit with broker for futures contracts and Collateral received from broker for futures contracts. During the six months ended November 30, 2021, the Fund entered into futures contracts primarily for the strategy of gaining exposure to a particular asset class or securities market.
Summary of Derivative Instruments:
The following table summarizes the fair values of derivative instruments on the Statement of Assets and Liabilities, categorized by risk exposure, as of November 30, 2021 (amounts in thousands):
Assets | Liabilities | ||||||||||
Variation Margin Receivable on Open Futures Contracts* | Variation Margin Payable on Open Futures Contracts* | ||||||||||
Equity Risk Exposure | $ | 420 | $ | — |
* Includes cumulative unrealized appreciation (depreciation) of futures contracts as reported on the Schedule of Portfolio Investments. Only current day's variation margin for futures contracts is reported within the Statement of Assets and Liabilities.
The following table presents the effect of derivative instruments on the Statement of Operations, categorized by risk exposure, for the six months ended November 30, 2021 (amounts in thousands):
Net Realized Gains (Losses) on Derivatives Recognized as a Result of Operations | Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized as a Result of Operations | ||||||||||
Net Realized Gains (Losses) from Futures Contracts | Net Change in Unrealized Appreciation/Depreciation on Futures Contracts | ||||||||||
Equity Risk Exposure | $ | 88 | $ | 331 |
All open derivative positions at period end are reflected on the Fund's Schedule of Portfolio Investments. The underlying face value of open derivative positions relative to the Fund's net assets at period end is generally representative of the notional amount of open positions to net assets throughout the period.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis. Paydown gains or losses on applicable securities, if any, are recorded as components of Interest income on the Statement of Operations.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
25
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of November 30, 2021.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 27,564 | $ | — | $ | 28,642 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as Net realized gains (losses) from investment securities and foreign currency translations on the Statement of Operations.
Foreign Taxes:
The Fund may be subject to foreign taxes related to foreign income received (a portion of which may be reclaimable), capital gains on the sale of securities, and certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.
26
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
Cross-Trade Transactions:
Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades, which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the six months ended November 30, 2021, the Fund engaged in the following securities transactions with affiliated funds, which resulted in the following net realized gains (losses) (amounts in thousands):
Purchases | Sales | Net Realized Gains (Losses) | |||||||||
$ | — | $ | 1,763 | $ | 86 |
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding U.S. Government Securities | U.S. Government Securities | ||||||||||||||
Purchases | Sales | Purchases | Sales | ||||||||||||
$ | 81,855 | $ | 88,007 | $ | — | $ | 3,086 |
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive fees accrued daily and paid monthly at an annualized rate of 0.60% of the Fund's average daily net assets. Amounts incurred and paid to VCM for the six months ended November 30, 2021, are reflected on the Statement of Operations as Investment advisory fees.
27
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six months ended November 30, 2021, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, which is based on the Fund's average daily net assets. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Administration fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Amounts incurred and paid to VCTA for the six months ended November 30, 2021, are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
K&L Gates LLP provides legal services to the Trust.
28
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of November 30, 2021, the expense limit (excluding voluntary waivers) was 1.10%.
In addition, the Fund invests in affiliated VCM exchange-traded fund(s) ("affiliated ETFs"). The Fund's Adviser fee is reimbursed by VCM to the extent of the indirect Adviser fee incurred through the Fund's proportional investment in the affiliated ETF(s). These affiliated ETF Adviser fee reimbursements are not available for recoupment. As of November 30, 2021, the Fund's Adviser fee was reimbursed by VCM in an amount of $35 thousand, of which $15 thousand is receivable from VCM.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of November 30, 2021, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that repayments are not probable at November 30, 2021.
Expires 2023 | Expires 2024 | Total | |||||||||
$ | 267 | $ | 236 | $ | 503 |
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six months ended November 30, 2021.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Tactical Allocation Risk — The Fund has a targeted risk tolerance and a corresponding asset allocation target; however, mere asset allocation and volatility are not the sole determination of risk. The Fund's managers will tactically allocate away from the target allocation as market conditions and the perceived risks warrant. The Fund bears the risk that the managers' tactical allocation will not be successful.
Affiliated Funds Risk — The risks of the Fund directly correspond to the risks of the underlying affiliated funds in which the Fund invests. By investing in the underlying affiliated funds, the Fund has exposure to the risk of many different areas of the market. The degree to which the risks described below apply to the Fund varies according to the Fund's asset allocation. For instance, the more the Fund is allocated to stock funds, the greater the risk associated with equity securities. The Fund also is subject to asset allocation risk (i.e., the risk that allocations will not produce the intended results) and to management risk (i.e., the risk that the selection of underlying affiliated funds will not produce the intended results).
Conflict of Interest Risk — In managing a Fund that invests in underlying affiliated funds, the Adviser may have conflicts of interest in allocating the Fund's assets among the various underlying affiliated
29
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
funds. This is because the fees payable by some of the underlying affiliated funds to the Adviser and/or its affiliates are higher than the fees payable by other underlying affiliated funds, and because the Adviser also manages and administers the underlying affiliated funds.
ETF Risk — The Fund may invest in shares of ETFs, which generally are investment companies that hold a portfolio of common stocks or debt securities, the shares of which are traded on an exchange. ETFs incur their own management and other fees and expenses, such as trustees' fees, operating expenses, registration fees, and marketing expenses, a proportionate share of which will be borne indirectly by the Fund as a shareholder in an ETF. As a result, the Fund's investment in an ETF will cause the Fund to indirectly bear the fees and expenses of the ETF and, in turn, the Fund's performance may be lower than if the Fund were to invest directly in the underlying securities held by the ETF. For investments in affiliated ETFs, the Fund's management fee is reimbursed by the Adviser to the extent of the indirect management fee incurred through the Fund's investment in the affiliated ETFs. The Adviser may have conflicts of interest in allocating assets among affiliated and unaffiliated ETFs, because the Adviser also manages and administers the affiliated ETFs, and the Adviser and its affiliates receive other fees from the affiliated ETFs. In addition, the Fund also will be subject to the risks associated with the securities or other investments held by the ETFs.
LIBOR Discontinuation Risk — Many debt securities, derivatives, and other financial instruments, including some of the Fund's investments, use the London Interbank Offered Rate ("LIBOR") as the reference or benchmark rate for variable interest rate calculations. LIBOR is being discontinued as a floating rate benchmark. The Secured Overnight Financing Rate ("SOFR") is expected to replace U.S. dollar LIBOR as the principal floating rate benchmark. The LIBOR discontinuation has affected, and will continue to affect, financial markets generally. The date of the LIBOR discontinuation will vary depending on the LIBOR currency and tenor. The UK Financial Conduct Authority (the "FCA"), which is the regulator of the LIBOR administrator, has announced that, after specified dates, LIBOR settings will cease to be provided by any administrator or will no longer be representative. Those dates are: (i) June 30, 2023, in the case of the principal U.S. dollar LIBOR tenors (overnight and one-, three-, six- and 12-month; and (ii) December 31, 2021, in all other cases (i.e., one-week and two-month U.S. dollar LIBOR and all tenors of non-U.S. dollar LIBOR). Accordingly, many existing LIBOR obligations will transition to another benchmark after June 30, 2023, or, in some cases, after December 31, 2021. The FCA and certain U.S. regulators have stated that, despite expected publication of U.S. dollar LIBOR through June 30, 2023, no new contracts using U.S. dollar LIBOR should be entered into after December 31, 2021. Although the foregoing reflects the likely timing of the LIBOR discontinuation and certain consequences, there is no assurance that LIBOR, of any particular currency or tenor, will continue to be published until any particular date or in any particular form, and there is no assurance regarding the consequences of the LIBOR discontinuation. In the United States, there have been efforts to identify alternative reference interest rates for U.S. dollar LIBOR. The cash markets have generally coalesced around recommendations from the Alternative Reference Rates Committee (the "ARRC"), which was convened by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York. The ARRC has recommended that U.S. dollar LIBOR be replaced by rates based on SOFR plus, in the case of existing LIBOR contracts and obligations, a spread adjustment. For purposes of the following discussion, the term "LIBOR" refers solely to U.S. dollar LIBOR. SOFR has a limited history, having been first published in April 2018. The future performance of SOFR, and SOFR-based reference rates, cannot be predicted based on SOFR's history or otherwise. SOFR has been more volatile than other benchmark or market rates, such as three-month LIBOR, during certain periods. Future levels of SOFR may bear little or no relation to historical levels of SOFR, LIBOR or other rates. SOFR-based rates will differ from LIBOR, and the differences may be material. SOFR is intended to be a broad measure of the cost of borrowing funds overnight in transactions that are collateralized by U.S. Treasury securities. In contrast, LIBOR is intended to be an unsecured rate that represents interbank funding costs for different short-term tenors. For these reasons, among others, there is no assurance that SOFR, or rates derived from SOFR, will perform in the same or a similar way as LIBOR would have performed at any time, and there is no assurance that SOFR-based rates will be a suitable substitute for LIBOR. Non-LIBOR floating rate obligations, including SOFR-based obligations, may have returns and values that fluctuate more than those of floating rate obligations that are based on LIBOR or other rates. Resulting changes in the financial markets may adversely affect financial markets generally and
30
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
may also adversely affect our operations specifically, particularly as financial markets transition away from LIBOR.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is presented on the Statement of Operations under Interfund lending.
The Fund did not utilize or participate in the Facility during the six months ended November 30, 2021.
7. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital.
31
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had no capital loss carryforwards, for the federal income tax purposes.
8. Affiliated Securities:
An affiliated security is a security in which the Fund has ownership of at least 5% of the security's outstanding voting shares, an investment company managed by VCM, or an issuer under common control with a Fund or VCM determined as of the last business day of the month. The Fund does not invest in affiliated underlying funds for the purpose of exercising management or control. These underlying funds are noted as affiliated on the Fund's Schedule of Portfolio Investments. Transactions in affiliated securities during the six months ended November 30, 2021, were as follows (amounts in thousands):
Fair Value 5/31/2021 | Purchases at Cost | Proceeds from Sales | Realized Gains (Losses) | Capital Gain Distribution | Net Change in Unrealized Appreciation/ Depreciation | Fair Value 11/30/21 | Dividend Income | ||||||||||||||||||||||||||||
VictoryShares ESG Core Plus Bond ETF | $ | — | $ | 10,814 | $ | (5,407 | ) | $ | — | $ | — | $ | (3 | ) | $ | 5,404 | $ | 3 | |||||||||||||||||
VictoryShares USAA Core Intermediate-Term Bond ETF | 11,794 | 20,155 | (10,078 | ) | — | — | (47 | ) | 21,824 | 142 | |||||||||||||||||||||||||
VictoryShares USAA Core Short-Term Bond ETF | 5,353 | — | — | — | — | (36 | ) | 5,317 | 42 | ||||||||||||||||||||||||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF | 824 | — | — | — | — | (81 | ) | 743 | 23 | ||||||||||||||||||||||||||
$ | 17,971 | $ | 30,969 | $ | (15,485 | ) | $ | — | $ | — | $ | (167 | ) | $ | 33,288 | $ | 210 |
32
USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Example
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21-11/30/21* | Hypothetical Expenses Paid During Period 6/1/21-11/30/21* | Annualized Expense Ratio During Period 6/1/21-11/30/21 | ||||||||||||||||||
$ | 1,000.00 | $ | 1,014.40 | $ | 1,019.65 | $ | 5.45 | $ | 5.47 | 1.08 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
33
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
97452-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA Cornerstone Conservative Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 4 | ||||||
Statement of Operations | 5 | ||||||
Statements of Changes in Net Assets | 6 | ||||||
Financial Highlights | 8 | ||||||
Notes to Financial Statements | 10 | ||||||
Supplemental Information | 18 | ||||||
Proxy Voting and Portfolio Holdings Information | 18 | ||||||
Expense Example | 18 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA Cornerstone Conservative Fund | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks current income and also considers the potential for capital appreciation.
Top 10 Holdings*:
November 30, 2021
(% of Net Assets)
USAA Intermediate-Term Bond Fund Institutional Shares | 18.1 | % | |||||
USAA Government Securities Fund Institutional Shares | 17.3 | % | |||||
USAA Income Fund Institutional Shares | 14.5 | % | |||||
VictoryShares USAA Core Short-Term Bond ETF | 13.9 | % | |||||
VictoryShares USAA Core Intermediate-Term Bond ETF | 7.2 | % | |||||
USAA High Income Fund Institutional Shares | 4.5 | % | |||||
USAA 500 Index Fund Reward Shares | 3.6 | % | |||||
USAA International Fund Institutional Shares | 3.2 | % | |||||
USAA Short-Term Bond Fund Institutional Shares | 2.7 | % | |||||
USAA Target Managed Allocation Fund | 2.5 | % |
Asset Allocation*:
November 30, 2021
(% of Net Assets)
* Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Cornerstone Conservative Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Affiliated Exchange-Traded Funds (27.5%) | |||||||||||
VictoryShares USAA Core Intermediate-Term Bond ETF | 334,133 | $ | 17,833 | ||||||||
VictoryShares USAA Core Short-Term Bond ETF (a) | 669,201 | 34,494 | |||||||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF | 67,940 | 3,157 | |||||||||
VictoryShares USAA MSCI International Value Momentum ETF | 113,561 | 5,349 | |||||||||
VictoryShares USAA MSCI USA Small Cap Value Momentum ETF | 18,550 | 1,311 | |||||||||
VictoryShares USAA MSCI USA Value Momentum ETF | 87,997 | 5,921 | |||||||||
Total Affiliated Exchange-Traded Funds (Cost $64,287) | 68,065 | ||||||||||
Affiliated Mutual Funds (72.0%) | |||||||||||
USAA 500 Index Fund Reward Shares | 142,547 | 8,916 | |||||||||
USAA Aggressive Growth Fund Institutional Shares | 33,578 | 2,146 | |||||||||
USAA Emerging Markets Fund Institutional Shares | 118,960 | 2,552 | |||||||||
USAA Government Securities Fund Institutional Shares | 4,400,738 | 43,051 | |||||||||
USAA Growth Fund Institutional Shares | 53,344 | 2,123 | |||||||||
USAA High Income Fund Institutional Shares | 1,451,693 | 11,178 | |||||||||
USAA Income Fund Institutional Shares | 2,636,449 | 35,829 | |||||||||
USAA Income Stock Fund Institutional Shares | 113,739 | 2,308 | |||||||||
USAA Intermediate-Term Bond Fund Institutional Shares | 4,194,508 | 44,995 | |||||||||
USAA International Fund Institutional Shares | 278,180 | 7,989 | |||||||||
USAA Precious Metals and Minerals Fund Institutional Shares | 61,064 | 1,156 | |||||||||
USAA Short-Term Bond Fund Institutional Shares | 738,736 | 6,751 | |||||||||
USAA Small Cap Stock Fund Institutional Shares | 57,415 | 1,227 | |||||||||
USAA Target Managed Allocation Fund | 453,527 | 6,136 | |||||||||
USAA Value Fund Institutional Shares | 130,416 | 2,405 | |||||||||
Total Affiliated Mutual Funds (Cost $162,918) | 178,762 | ||||||||||
Collateral for Securities Loaned^ (0.1%) | |||||||||||
Fidelity Investments Money Market Government Portfolio Institutional Shares, 0.01% (b) | 100,225 | 100 | |||||||||
HSBC U.S. Government Money Market Fund I Shares, 0.03% (b) | 63,300 | 64 | |||||||||
Total Collateral for Securities Loaned (Cost $164) | 164 | ||||||||||
Total Investments (Cost $227,369) — 99.6% | 246,991 | ||||||||||
Other assets in excess of liabilities — 0.4% | 964 | ||||||||||
NET ASSETS — 100.00% | $ | 247,955 |
At November 30, 2021, the Fund's investments in foreign securities were 7.7% of net assets.
^ Purchased with cash collateral from securities on loan.
(a) All or a portion of this security is on loan.
(b) Rate disclosed is the daily yield on November 30, 2021.
ETF — Exchange-Traded Fund
See notes to financial statements.
3
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Cornerstone Conservative Fund | |||||||
Assets: | |||||||
Affiliated investments, at value (Cost $227,205) | $ | 246,827 | |||||
Unaffiliated investments, at value (Cost $164) | 164 | (a) | |||||
Cash | 1,137 | ||||||
Receivables: | |||||||
Capital shares issued | 175 | ||||||
Prepaid expenses | 19 | ||||||
Total Assets | 248,322 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 164 | ||||||
Capital shares redeemed | 157 | ||||||
Accrued expenses and other payables: | |||||||
Custodian fees | 1 | ||||||
Transfer agent fees | — | (b) | |||||
Compliance fees | — | (b) | |||||
Trustees' fees | — | (b) | |||||
Other accrued expenses | 45 | ||||||
Total Liabilities | 367 | ||||||
Net Assets: | |||||||
Capital | 224,680 | ||||||
Total accumulated earnings/(loss) | 23,275 | ||||||
Net Assets | $ | 247,955 | |||||
Shares (unlimited number of shares authorized with no par value): | 20,983 | ||||||
Net asset value, offering and redemption price per share: (c) | $ | 11.82 |
(a) Includes $160 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
4
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Cornerstone Conservative Fund | |||||||
Investment Income: | |||||||
Income distributions from affiliated funds | $ | 2,501 | |||||
Interest | — | (a) | |||||
Securities lending (net of fees) | 1 | ||||||
Total Income | 2,502 | ||||||
Expenses: | |||||||
Sub-Administration fees | 9 | ||||||
Custodian fees | 3 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 1 | ||||||
Printing fees | 14 | ||||||
Legal and audit fees | 26 | ||||||
State registration and filing fees | 17 | ||||||
Other expenses | 11 | ||||||
Total Expenses | 105 | ||||||
Net Investment Income (Loss) | 2,397 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from sales of affiliated funds | 759 | ||||||
Net change in unrealized appreciation/depreciation on affiliated funds | (1,605 | ) | |||||
Net realized/unrealized gains (losses) on investments | (846 | ) | |||||
Change in net assets resulting from operations | $ | 1,551 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
5
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Cornerstone Conservative Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 2,397 | $ | 5,871 | |||||||
Net realized gains (losses) from investments | 759 | 3,646 | |||||||||
Net change in unrealized appreciation/depreciation on investments | (1,605 | ) | 15,992 | ||||||||
Change in net assets resulting from operations | 1,551 | 25,509 | |||||||||
Change in net assets resulting from distributions to shareholders | (2,410 | ) | (8,183 | ) | |||||||
Change in net assets resulting from capital transactions | 4,864 | 20,674 | |||||||||
Change in net assets | 4,005 | 38,000 | |||||||||
Net Assets: | |||||||||||
Beginning of period | 243,950 | 205,950 | |||||||||
End of period | $ | 247,955 | $ | 243,950 | |||||||
Capital Transactions: | |||||||||||
Proceeds from shares issued | $ | 33,643 | $ | 66,446 | |||||||
Distributions reinvested | 2,396 | 8,144 | |||||||||
Cost of shares redeemed | (31,175 | ) | (53,916 | ) | |||||||
Change in net assets resulting from capital transactions | $ | 4,864 | $ | 20,674 | |||||||
Share Transactions: | |||||||||||
Issued | 2,831 | 5,750 | |||||||||
Reinvested | 202 | 711 | |||||||||
Redeemed | (2,620 | ) | (4,674 | ) | |||||||
Change in Shares | 413 | 1,787 |
See notes to financial statements.
6
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7
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Cornerstone Conservative Fund | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 11.86 | 0.12 | (d) | (0.04 | ) | 0.08 | (0.12 | ) | — | |||||||||||||||||
Year Ended May 31: 2021 | $ | 10.96 | 0.30 | (d) | 1.03 | 1.33 | (0.31 | ) | (0.12 | ) | |||||||||||||||||
2020 | $ | 10.72 | 0.32 | (d) | 0.25 | 0.57 | (0.33 | ) | — | ||||||||||||||||||
2019 | $ | 10.64 | 0.32 | 0.08 | 0.40 | (0.32 | ) | — | |||||||||||||||||||
2018 | $ | 10.76 | 0.30 | (0.11 | ) | 0.19 | (0.31 | ) | — | ||||||||||||||||||
2017 | $ | 10.27 | 0.31 | 0.49 | 0.80 | (0.31 | ) | — |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) The expense ratios exclude the impact of expenses paid by each underlying fund.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects a return to normal trading levels after a prior year transition or allocation shift.
See notes to financial statements.
8
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b)(c) | Net Investment Income (Loss)(b) | Gross Expenses(b)(c) | Net Assets, End of Period (000's) | Portfolio Turnover(a) | ||||||||||||||||||||||||||||
USAA Cornerstone Conservative Fund | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | (0.12 | ) | $ | 11.82 | 0.66 | % | 0.09 | % | 1.94 | % | 0.09 | % | $ | 247,955 | 3 | % | |||||||||||||||||||
Year Ended May 31: 2021 | (0.43 | ) | $ | 11.86 | 12.28 | % | 0.10 | % | 2.61 | % | 0.10 | % | $ | 243,950 | 15 | % | |||||||||||||||||||
2020 | (0.33 | ) | $ | 10.96 | 5.45 | % | 0.09 | % | 2.92 | % | 0.10 | % | $ | 205,950 | 8 | % | |||||||||||||||||||
2019 | (0.32 | ) | $ | 10.72 | 3.84 | % | 0.10 | % | 2.99 | % | 0.12 | % | $ | 193,265 | 22 | % | |||||||||||||||||||
2018 | (0.31 | ) | $ | 10.64 | 1.79 | % | 0.10 | % | 2.87 | % | 0.12 | % | $ | 196,292 | 5 | % | |||||||||||||||||||
2017 | (0.31 | ) | $ | 10.76 | 7.93 | % | 0.10 | % | 3.02 | % | 0.15 | % | $ | 174,754 | 7 | %(e) |
See notes to financial statements.
9
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Cornerstone Conservative Fund (the "Fund"). The Fund is classified as diversified under the 1940 Act. The Fund is a "fund of funds" in that it invests in a selection of affiliated mutual funds and exchange-traded funds managed by the Fund's Adviser, Victory Capital Management Inc. ("VCM"), an affiliate of the Fund.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
The Adviser has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs") are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where
10
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies, including underlying funds, are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
Debt securities are valued each business day by a pricing service approved by the Board. The approved pricing service uses the evaluated bid or the last sale price to value securities. Debt obligations maturing within 60 days may be valued at their amortized cost, provided that the amortized cost represents the fair value of such securities. These valuations are typically categorized as Level 2 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Affiliated Exchange-Traded Funds | $ | 68,065 | $ | — | $ | — | $ | 68,065 | |||||||||||
Affiliated Mutual Funds | 178,762 | — | — | 178,762 | |||||||||||||||
Collateral for Securities Loaned | 164 | — | — | 164 | |||||||||||||||
Total | $ | 246,991 | $ | — | $ | — | $ | 246,991 |
For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a portfolio of securities often designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on
11
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of November 30, 2021.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 160 | $ | — | $ | 164 |
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
12
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 12,368 | $ | 7,781 |
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC. The Adviser does not receive any fees from the Fund for these services.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six months ended November 30, 2021, the Fund had no subadvisors.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM does not receive any fees from the Fund for these services.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA does not receive any fees from the Fund for these services.
13
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits.
As of November 30, 2021, the expense limit (excluding voluntary waivers) was 0.10%. The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that repayments are not probable at November 30, 2021.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment. As of November 30, 2021, the Fund had no amounts available to be repaid to the Adviser.
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six months ended November 30, 2021.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Tactical Allocation Risk — The Fund has a targeted risk tolerance and a corresponding asset allocation target; however, mere asset allocation and volatility are not the sole determination of risk. The Fund's managers will tactically allocate away from the target allocation as market conditions and the perceived risks warrant. The Fund bears the risk that the managers' tactical allocation will not be successful.
Affiliated Funds Risk — The risks of the Fund directly correspond to the risks of the underlying affiliated funds in which the Fund invests. By investing in the underlying affiliated funds, the Fund has exposure to the risk of many different areas of the market. The degree to which the risks described below apply to the Fund varies according to the Fund's asset allocation. For instance, the more the
14
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Fund is allocated to stock funds, the greater the risk associated with equity securities. The Fund also is subject to asset allocation risk (i.e., the risk that allocations will not produce the intended results) and to management risk (i.e., the risk that the selection of underlying affiliated funds will not produce the intended results).
Conflict of Interest Risk — In managing a Fund that invests in underlying affiliated funds, the Adviser may have conflicts of interest in allocating the Fund's assets among the various underlying affiliated funds. This is because the fees payable by some of the underlying affiliated funds to the Adviser and/or its affiliates are higher than the fees payable by other underlying affiliated funds, and because the Adviser also manages and administers the underlying affiliated funds.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is presented on the Statement of Operations under Interfund lending.
The Fund did not utilize or participate in the Facility during the six months ended November 30, 2021.
7. Federal Income Tax Information:
The Fund intends to distribute any net investment income quarterly. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax
15
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had no capital loss carryforwards, for the federal income tax purposes.
8. Affiliated Securities:
An affiliated security is a security in which the Fund has ownership of at least 5% of the security's outstanding voting shares, or an investment company managed by VCM. The Fund does not invest in affiliated underlying funds for the purpose of exercising management or control. These underlying funds are noted as affiliated on the Fund's Schedule of Portfolio Investments. The affiliated underlying fund's annual or semiannual reports may be viewed at vcm.com. Transactions in affiliated securities during the six months ended November 30, 2021, were as follows (amounts in thousands):
Fair Value 5/31/2021 | Purchases at Cost | Proceeds from Sales | Realized Gains (Losses) | Capital Gain Distribution | Net Change in Unrealized Appreciation/ Depreciation | Fair Value 11/30/21 | Dividend Income | ||||||||||||||||||||||||||||
USAA 500 Index Fund Reward Shares | $ | 9,138 | $ | 422 | $ | (1,470 | ) | $ | 196 | $ | — | $ | 630 | $ | 8,916 | $ | 53 | ||||||||||||||||||
USAA Aggressive Growth Fund Institutional Shares | 1,899 | — | — | — | — | 247 | 2,146 | — | |||||||||||||||||||||||||||
USAA Emerging Markets Fund Institutional Shares | 2,639 | 247 | — | — | — | (334 | ) | 2,552 | — | ||||||||||||||||||||||||||
USAA Government Securities Fund Institutional Shares | 42,504 | 1,143 | — | — | — | (596 | ) | 43,051 | 395 | ||||||||||||||||||||||||||
USAA Growth Fund Institutional Shares | 2,141 | — | (248 | ) | 80 | — | 150 | 2,123 | — | ||||||||||||||||||||||||||
USAA High Income Fund Institutional Shares | 12,325 | 296 | (1,230 | ) | (23 | ) | — | (190 | ) | 11,178 | 296 | ||||||||||||||||||||||||
USAA Income Fund Institutional Shares | 37,419 | 530 | (2,096 | ) | 1 | — | (25 | ) | 35,829 | 531 | |||||||||||||||||||||||||
USAA Income Stock Fund Institutional Shares | 2,749 | 265 | (736 | ) | 134 | — | (104 | ) | 2,308 | 19 | |||||||||||||||||||||||||
USAA Intermediate-Term Bond Fund Institutional Shares | 40,005 | 4,917 | — | — | — | 73 | 44,995 | 465 | |||||||||||||||||||||||||||
USAA International Fund Institutional Shares | 8,430 | 492 | (740 | ) | 52 | — | (245 | ) | 7,989 | — | |||||||||||||||||||||||||
USAA Precious Metals and Minerals Fund Institutional Shares | 1,408 | — | — | — | — | (252 | ) | 1,156 | — |
16
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Fair Value 5/31/2021 | Purchases at Cost | Proceeds from Sales | Realized Gains (Losses) | Capital Gain Distribution | Net Change in Unrealized Appreciation/ Depreciation | Fair Value 11/30/21 | Dividend Income | ||||||||||||||||||||||||||||
USAA Short-Term Bond Fund Institutional Shares | $ | 6,750 | $ | 67 | $ | — | $ | — | $ | — | $ | (66 | ) | $ | 6,751 | $ | 66 | ||||||||||||||||||
USAA Small Cap Stock Fund Institutional Shares | 1,486 | — | (252 | ) | 91 | — | (98 | ) | 1,227 | — | |||||||||||||||||||||||||
USAA Target Managed Allocation Fund | 6,359 | — | (509 | ) | 95 | — | 191 | 6,136 | — | ||||||||||||||||||||||||||
USAA Value Fund Institutional Shares | 2,195 | 246 | — | — | — | (36 | ) | 2,405 | — | ||||||||||||||||||||||||||
VictoryShares USAA Core Intermediate-Term Bond ETF | 17,831 | — | — | — | — | 2 | 17,833 | 159 | |||||||||||||||||||||||||||
VictoryShares USAA Core Short-Term Bond ETF | 30,971 | 3,743 | — | — | — | (220 | ) | 34,494 | 249 | ||||||||||||||||||||||||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF | 3,500 | — | — | — | — | (343 | ) | 3,157 | 99 | ||||||||||||||||||||||||||
VictoryShares USAA MSCI International Value Momentum ETF | 5,763 | — | — | — | — | (414 | ) | 5,349 | 126 | ||||||||||||||||||||||||||
VictoryShares USAA MSCI USA Small Cap Value Momentum ETF | 1,313 | — | — | — | — | (2 | ) | 1,311 | 4 | ||||||||||||||||||||||||||
VictoryShares USAA MSCI USA Value Momentum ETF | 6,261 | — | (500 | ) | 133 | — | 27 | 5,921 | 39 | ||||||||||||||||||||||||||
$ | 243,086 | $ | 12,368 | $ | (7,781 | ) | $ | 759 | $ | — | $ | (1,605 | ) | $ | 246,827 | $ | 2,501 |
17
USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Example
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21- 11/30/21* | Hypothetical Expenses Paid During Period 6/1/21- 11/30/21* | Annualized Expense Ratio During Period 6/1/21- 11/30/21 | ||||||||||||||||||
$ | 1,000.00 | $ | 1,006.60 | $ | 1,024.62 | $ | 0.45 | $ | 0.46 | 0.09 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
18
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
97450-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA Cornerstone Equity Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 4 | ||||||
Statement of Operations | 5 | ||||||
Statements of Changes in Net Assets | 6 | ||||||
Financial Highlights | 8 | ||||||
Notes to Financial Statements | 10 | ||||||
Supplemental Information | 18 | ||||||
Proxy Voting and Portfolio Holdings Information | 18 | ||||||
Expense Example | 18 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA Cornerstone Equity Fund | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks capital appreciation over the long term.
Top 10 Holdings*:
November 30, 2021
(% of Net Assets)
USAA 500 Index Fund Reward Shares | 18.6 | % | |||||
USAA International Fund Institutional Shares | 14.2 | % | |||||
VictoryShares USAA MSCI USA Value Momentum ETF | 12.7 | % | |||||
VictoryShares USAA MSCI International Value Momentum ETF | 11.4 | % | |||||
USAA Target Managed Allocation Fund | 6.9 | % | |||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF | 5.4 | % | |||||
USAA Growth Fund Institutional Shares | 5.1 | % | |||||
USAA Income Stock Fund Institutional Shares | 5.0 | % | |||||
USAA Emerging Markets Fund Institutional Shares | 5.0 | % | |||||
USAA Aggressive Growth Fund Institutional Shares | 5.0 | % |
Asset Allocation*:
November 30, 2021
(% of Net Assets)
* Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Cornerstone Equity Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Affiliated Exchange-Traded Funds (32.3%) | |||||||||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF | 266,858 | $ | 12,399 | ||||||||
VictoryShares USAA MSCI International Value Momentum ETF | 555,112 | 26,148 | |||||||||
VictoryShares USAA MSCI USA Small Cap Value Momentum ETF | 90,687 | 6,408 | |||||||||
VictoryShares USAA MSCI USA Value Momentum ETF | 431,467 | 29,033 | |||||||||
Total Affiliated Exchange-Traded Funds (Cost $66,396) | 73,988 | ||||||||||
Affiliated Mutual Funds (67.7%) | |||||||||||
USAA 500 Index Fund Reward Shares | 681,301 | 42,615 | |||||||||
USAA Aggressive Growth Fund Institutional Shares | 178,795 | 11,427 | |||||||||
USAA Emerging Markets Fund Institutional Shares | 536,483 | 11,508 | |||||||||
USAA Growth Fund Institutional Shares | 294,807 | 11,730 | |||||||||
USAA Income Stock Fund Institutional Shares | 569,689 | 11,559 | |||||||||
USAA International Fund Institutional Shares | 1,134,873 | 32,594 | |||||||||
USAA Precious Metals and Minerals Fund Institutional Shares | 43,865 | 830 | |||||||||
USAA Small Cap Stock Fund Institutional Shares | 265,433 | 5,670 | |||||||||
USAA Target Managed Allocation Fund | 1,162,728 | 15,732 | |||||||||
USAA Value Fund Institutional Shares | 619,656 | 11,426 | |||||||||
Total Affiliated Mutual Funds (Cost $108,345) | 155,091 | ||||||||||
Total Investments (Cost $174,741) — 100.0% | 229,079 | ||||||||||
Other assets in excess of liabilities — 0.0% (a) | 113 | ||||||||||
NET ASSETS — 100.00% | $ | 229,192 |
At November 30, 2021, the Fund's investments in foreign securities were 36.1% of net assets.
(a) Amount represents less than 0.05% of net assets.
ETF — Exchange-Traded Fund
See notes to financial statements.
3
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Cornerstone Equity Fund | |||||||
Assets: | |||||||
Affiliated investments, at value (Cost $174,741) | $ | 229,079 | |||||
Cash | 273 | ||||||
Receivables: | |||||||
Capital shares issued | 131 | ||||||
Prepaid expenses | 10 | ||||||
Total Assets | 229,493 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Capital shares redeemed | 249 | ||||||
Accrued expenses and other payables: | |||||||
Custodian fees | 1 | ||||||
Transfer agent fees | — | (a) | |||||
Compliance fees | — | (a) | |||||
Trustees' fees | — | (a) | |||||
Other accrued expenses | 51 | ||||||
Total Liabilities | 301 | ||||||
Net Assets: | |||||||
Capital | 169,309 | ||||||
Total accumulated earnings/(loss) | 59,883 | ||||||
Net Assets | $ | 229,192 | |||||
Shares (unlimited number of shares authorized with no par value): | 12,986 | ||||||
Net asset value, offering and redemption price per share: (b) | $ | 17.65 |
(a) Rounds to less than $1 thousand.
(b) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
4
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Cornerstone Equity Fund | |||||||
Investment Income: | |||||||
Income distributions from affiliated funds | $ | 1,543 | |||||
Interest | — | (a) | |||||
Securities lending (net of fees) | — | (a) | |||||
Total Income | 1,543 | ||||||
Expenses: | |||||||
Sub-Administration fees | 9 | ||||||
Custodian fees | 3 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 1 | ||||||
Printing fees | 17 | ||||||
Legal and audit fees | 26 | ||||||
State registration and filing fees | 11 | ||||||
Other expenses | 11 | ||||||
Total Expenses | 102 | ||||||
Net Investment Income (Loss) | 1,441 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from sales of affiliated funds | 1,136 | ||||||
Net change in unrealized appreciation/depreciation on affiliated funds | 304 | ||||||
Net realized/unrealized gains (losses) on investments | 1,440 | ||||||
Change in net assets resulting from operations | $ | 2,881 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
5
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Cornerstone Equity Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 1,441 | $ | 3,618 | |||||||
Net realized gains (losses) from investments | 1,136 | 1,909 | |||||||||
Net change in unrealized appreciation/depreciation on investments | 304 | 67,536 | |||||||||
Change in net assets resulting from operations | 2,881 | 73,063 | |||||||||
Change in net assets resulting from distributions to shareholders | — | (16,403 | ) | ||||||||
Change in net assets resulting from capital transactions | (5,925 | ) | (15,437 | ) | |||||||
Change in net assets | (3,044 | ) | 41,223 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 232,236 | 191,013 | |||||||||
End of period | $ | 229,192 | $ | 232,236 | |||||||
Capital Transactions: | |||||||||||
Proceeds from shares issued | $ | 13,657 | $ | 26,443 | |||||||
Distributions reinvested | — | 16,362 | |||||||||
Cost of shares redeemed | (19,582 | ) | (58,242 | ) | |||||||
Change in net assets resulting from capital transactions | $ | (5,925 | ) | $ | (15,437 | ) | |||||
Share Transactions: | |||||||||||
Issued | 767 | 1,681 | |||||||||
Reinvested | — | 1,061 | |||||||||
Redeemed | (1,099 | ) | (3,809 | ) | |||||||
Change in Shares | (332 | ) | (1,067 | ) |
See notes to financial statements.
6
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7
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Cornerstone Equity Fund | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 17.44 | 0.11 | (d) | 0.10 | 0.21 | — | — | |||||||||||||||||||
Year Ended: | |||||||||||||||||||||||||||
May 31, 2021 | $ | 13.28 | 0.27 | (d) | 5.16 | 5.43 | (0.20 | ) | (1.07 | ) | |||||||||||||||||
May 31, 2020 | $ | 13.90 | 0.34 | (d) | (0.24 | ) | 0.10 | (0.32 | ) | (0.40 | ) | ||||||||||||||||
May 31, 2019 | $ | 15.49 | 0.26 | (0.99 | ) | (0.73 | ) | (0.25 | ) | (0.61 | ) | ||||||||||||||||
May 31, 2018 | $ | 14.31 | 0.22 | 1.26 | 1.48 | (0.22 | ) | (0.08 | ) | ||||||||||||||||||
May 31, 2017 | $ | 12.51 | 0.19 | 2.02 | 2.21 | (0.19 | ) | (0.22 | ) |
* 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.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) The expense ratios exclude the impact of expenses paid by each underlying fund.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects increased usage of quantitative investment strategies.
(f) Reflects an increase in trading activity due to asset allocation shifts.
See notes to financial statements.
8
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b)(c) | Net Investment Income (Loss)(b) | Gross Expenses(b)(c) | Net Assets, End of Period (000's) | Portfolio Turnover(a) | ||||||||||||||||||||||||||||
USAA Cornerstone Equity Fund | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | $ | 17.65 | 1.20 | % | 0.09 | % | 1.23 | % | 0.09 | % | $ | 229,192 | 2 | % | ||||||||||||||||||||
Year Ended: | |||||||||||||||||||||||||||||||||||
May 31, 2021 | (1.27 | ) | $ | 17.44 | 42.26 | % | 0.10 | % | 1.74 | % | 0.11 | % | $ | 232,236 | 5 | % | |||||||||||||||||||
May 31, 2020 | (0.72 | ) | $ | 13.28 | 0.14 | % | 0.10 | % | 2.38 | % | 0.10 | % | $ | 191,013 | 6 | % | |||||||||||||||||||
May 31, 2019 | (0.86 | ) | $ | 13.90 | (4.35 | )% | 0.10 | % | 1.79 | % | 0.13 | % | $ | 202,288 | 11 | %(e) | |||||||||||||||||||
May 31, 2018 | (0.30 | ) | $ | 15.49 | 10.32 | % | 0.10 | % | 1.46 | % | 0.13 | % | $ | 200,186 | 38 | %(f) | |||||||||||||||||||
May 31, 2017 | (0.41 | ) | $ | 14.31 | 17.99 | % | 0.10 | % | 1.39 | % | 0.20 | % | $ | 143,657 | 7 | % |
See notes to financial statements.
9
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Cornerstone Equity Fund (the "Fund"). The Fund is classified as diversified under the 1940 Act. The Fund is a "fund of funds" in that it invests in a selection of affiliated mutual funds and exchange-traded funds managed by the Fund's Adviser, Victory Capital Management Inc. ("VCM"), an affiliate of the Fund.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
The Adviser has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs") are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where
10
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies, including underlying funds, are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Affiliated Exchange-Traded Funds | $ | 73,988 | $ | — | $ | — | $ | 73,988 | |||||||||||
Affiliated Mutual Funds | 155,091 | — | — | 155,091 | |||||||||||||||
Total | $ | 229,079 | $ | — | $ | — | $ | 229,079 |
For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a portfolio of securities often designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
11
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
As of November 30, 2021, the Fund did not have any securities on loan.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding U.S. Government Securities | |||||||
Purchases | Sales | ||||||
$ | 4,666 | $ | 8,719 |
12
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC. The Adviser does not receive any fees from the Fund for these services.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six months ended November 30, 2021, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM does not receive any fees from the Fund for these services.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA does not receive any fees from the Fund for these services.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
K&L Gates LLP provides legal services to the Trust.
13
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of November 30, 2021, the expense limit (excluding voluntary waivers) was 0.10%.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of November 30, 2021, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that repayment is not probable at November 30, 2021.
Expires 2024 | Total | ||||||
$ | 18 | $ | 18 |
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six months ended November 30, 2021.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Affiliated Funds Risk — The risks of the Fund directly correspond to the risks of the underlying affiliated funds in which the Fund invests. By investing in the underlying affiliated funds, the Fund has exposure to the risk of many different areas of the market. The degree to which the risks described below apply to the Fund varies according to the Fund's asset allocation. For instance, the more the Fund is allocated to stock funds, the greater the risk associated with equity securities. The Fund also is subject to asset allocation risk (i.e., the risk that allocations will not produce the intended results) and to management risk (i.e., the risk that the selection of underlying affiliated funds will not produce the intended results).
Conflict of Interest Risk — In managing a Fund that invests in underlying affiliated funds, the Adviser may have conflicts of interest in allocating the Fund's assets among the various underlying affiliated funds. This is because the fees payable by some of the underlying affiliated funds to the Adviser and/or its affiliates are higher than the fees payable by other underlying affiliated funds, and because the Adviser also manages and administers the underlying affiliated funds.
Equity Risk — The Fund may invest in underlying affiliated funds that invest in equity securities. The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or last for extended periods.
14
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
ETF Risk — The Fund may invest in shares of ETFs, which generally are investment companies that hold a portfolio of common stocks or debt securities, the shares of which are traded on an exchange. ETFs incur their own management and other fees and expenses, such as trustees' fees, operating expenses, registration fees, and marketing expenses, a proportionate share of which will be borne indirectly by the Fund as a shareholder in an ETF. As a result, the Fund's investment in an ETF will cause the Fund to indirectly bear the fees and expenses of the ETF and, in turn, the Fund's performance may be lower than if the Fund were to invest directly in the underlying securities held by the ETF. For investments in affiliated ETFs, the Fund's management fee is reimbursed by the Adviser to the extent of the indirect management fee incurred through the Fund's investment in the affiliated ETFs. The Adviser may have conflicts of interest in allocating assets among affiliated and unaffiliated ETFs, because the Adviser also manages and administers the affiliated ETFs, and the Adviser and its affiliates receive other fees from the affiliated ETFs. In addition, the Fund also will be subject to the risks associated with the securities or other investments held by the ETFs.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is presented on the Statement of Operations under Interfund lending.
The Fund did not utilize or participate in the Facility during the six months ended November 30, 2021.
15
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
7. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had no capital loss carryforwards, for the federal income tax purposes.
8. Affiliated Securities:
An affiliated security is a security in which the Fund has ownership of at least 5% of the security's outstanding voting shares, or an investment company managed by VCM. The Fund does not invest in affiliated securities for the purpose of exercising management or control. These underlying funds are noted as affiliated on the Fund's Schedule of Portfolio Investments. The affiliated underlying fund's annual or semiannual reports may be viewed at vcm.com. Transactions in affiliated securities during the six months ended November 30, 2021 were as follows (amounts in thousands):
Fair Value 5/31/2021 | Purchases at Cost | Proceeds from Sales | Realized Gains (Losses) | Capital Gain Distribution | Net Change in Unrealized Appreciation/ Depreciation | Fair Value 11/30/2021 | Dividend Income | ||||||||||||||||||||||||||||
USAA 500 Index Fund Reward Shares | $ | 39,191 | $ | 697 | $ | (943 | ) | $ | 57 | $ | — | $ | 3,613 | $ | 42,615 | $ | 230 | ||||||||||||||||||
USAA Aggressive Growth Fund Institutional Shares | 10,431 | — | (358 | ) | 90 | — | 1,264 | 11,427 | — | ||||||||||||||||||||||||||
USAA Emerging Markets Fund Institutional Shares | 11,042 | 1,995 | — | — | — | (1,529 | ) | 11,508 | — | ||||||||||||||||||||||||||
USAA Growth Fund Institutional Shares | 11,057 | — | (486 | ) | 90 | — | 1,069 | 11,730 | — | ||||||||||||||||||||||||||
USAA Income Stock Fund Institutional Shares | 12,321 | 102 | (951 | ) | 57 | — | 30 | 11,559 | 101 | ||||||||||||||||||||||||||
USAA International Fund Institutional Shares | 32,254 | 1,872 | (704 | ) | 23 | — | (851 | ) | 32,594 | — | |||||||||||||||||||||||||
USAA Precious Metals and Minerals Fund Institutional Shares | 1,011 | — | — | — | — | (181 | ) | 830 | — | ||||||||||||||||||||||||||
USAA Small Cap Stock Fund Institutional Shares | 5,781 | — | — | — | — | (111 | ) | 5,670 | — | ||||||||||||||||||||||||||
USAA Target Managed Allocation Fund | 15,092 | — | — | — | — | 640 | 15,732 | — |
16
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Fair Value 5/31/2021 | Purchases at Cost | Proceeds from Sales | Realized Gains (Losses) | Capital Gain Distribution | Net Change in Unrealized Appreciation/ Depreciation | Fair Value 11/30/2021 | Dividend Income | ||||||||||||||||||||||||||||
USAA Value Fund Institutional Shares | $ | 11,619 | $ | — | $ | — | $ | — | $ | — | $ | (193 | ) | $ | 11,426 | $ | — | ||||||||||||||||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF | 13,745 | — | — | — | — | (1,346 | ) | 12,399 | 390 | ||||||||||||||||||||||||||
VictoryShares USAA MSCI International Value Momentum ETF | 29,558 | — | (1,399 | ) | (74 | ) | — | (1,937 | ) | 26,148 | 614 | ||||||||||||||||||||||||
VictoryShares USAA MSCI USA Small Cap Value Momentum ETF | 6,641 | — | (240 | ) | 82 | — | (75 | ) | 6,408 | 22 | |||||||||||||||||||||||||
VictoryShares USAA MSCI USA Value Momentum ETF | 31,949 | — | (3,638 | ) | 811 | — | (89 | ) | 29,033 | 186 | |||||||||||||||||||||||||
$ | 231,692 | $ | 4,666 | $ | (8,719 | ) | $ | 1,136 | $ | — | $ | 304 | $ | 229,079 | $ | 1,543 |
17
USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Example
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21- 11/30/21* | Hypothetical Expenses Paid During Period 6/1/21- 11/30/21* | Annualized Expense Ratio During Period 6/1/21- 11/30/21 | ||||||||||||||||||
$ | 1,000.00 | $ | 1,012.00 | $ | 1,024.62 | $ | 0.45 | $ | 0.46 | 0.09 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
18
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
97453-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA Cornerstone Moderate Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 13 | ||||||
Statement of Operations | 14 | ||||||
Statements of Changes in Net Assets | 15 | ||||||
Financial Highlights | 16 | ||||||
Notes to Financial Statements | 18 | ||||||
Supplemental Information | 28 | ||||||
Proxy Voting and Portfolio Holdings Information | 28 | ||||||
Expense Example | 28 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA Cornerstone Moderate Fund | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks high total return.
Asset Allocation*:
November 30, 2021
(% of Net Assets)
* Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
2
USAA Mutual Funds Trust USAA Cornerstone Moderate Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Asset-Backed Securities (0.6%) | |||||||||||
BCC Funding Corp. XVI LLC, Series 2019-1A, Class A2, 2.46%, 8/20/24, Callable 6/20/23 @ 100 (a) | $ | 787 | $ | 792 | |||||||
Drive Auto Receivables Trust, Series 2018-4, Class D, 4.09%, 1/15/26, Callable 10/15/22 @ 100 | 487 | 495 | |||||||||
Exeter Automobile Receivables Trust, Series 2019-2A, Class C, 3.30%, 3/15/24, Callable 8/15/23 @ 100 (a) | 386 | 388 | |||||||||
Exeter Automobile Receivables Trust, Series 2020-1A, Class B, 2.26%, 4/15/24, Callable 10/15/23 @ 100 (a) | 127 | 128 | |||||||||
Exeter Automobile Receivables Trust, Series 2017-3A, Class D, 5.28%, 10/15/24, Callable 6/15/22 @ 100 (a) | 490 | 501 | |||||||||
HPEFS Equipment Trust, Series 2020-1A, Class B, 1.89%, 2/20/30, Callable 1/20/23 @ 100 (a) | 249 | 251 | |||||||||
HPEFS Equipment Trust, Series 2019-1A, Class C, 2.49%, 9/20/29, Callable 7/20/22 @ 100 (a) | 437 | 441 | |||||||||
Navient Student Loan Trust, Series 2015-2, Class B, 1.59% (LIBOR01M+150bps), 8/25/50, Callable 2/25/30 @ 100 (b) | 950 | 954 | |||||||||
NP SPE II LLC, Series 2017-1A, Class A1, 3.37%, 10/21/47, Callable 12/20/21 @ 100 (a) | 287 | 293 | |||||||||
SCF Equipment Leasing LLC, Series 2020-1A, Class B, 2.02%, 3/20/28, Callable 11/20/23 @ 100 (a) | 506 | 511 | |||||||||
Transportation Finance Equipment Trust, Series 2019-1, Class B, 2.06%, 5/23/24, Callable 4/23/23 @ 100 (a) | 900 | 915 | |||||||||
Trinity Rail Leasing LLC, Series 2019-2A, Class A1, 2.39%, 10/18/49, Callable 12/17/21 @ 100 (a) | 355 | 355 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-2A, Class D, 4.00%, 1/16/24, Callable 2/15/22 @ 100 (a) | 149 | 149 | |||||||||
Westlake Automobile Receivables Trust, Series 2020-1A, Class B, 1.94%, 4/15/25, Callable 8/15/23 @ 100 (a) | 1,618 | 1,629 | |||||||||
Total Asset-Backed Securities (Cost $7,648) | 7,802 | ||||||||||
Collateralized Mortgage Obligations (0.2%) | |||||||||||
Banc of America Commercial Mortgage Trust, Series 2008-1, Class AJ, 6.79%, 2/10/51 (c) | 130 | 132 | |||||||||
BTH Mortgage-Backed Securities Trust, Series 2018-21, Class A, 2.59% (LIBOR01M+250bps), 4/4/22 (a)(b) | 957 | 959 | |||||||||
Credit Suisse Commercial Mortgage Trust, Series 2007-C1, Class AMFL, 0.28% (LIBOR01M+19bps), 2/15/40 (b) | 25 | 25 | |||||||||
DBJPM Mortgage Trust, Series 2016-SFC, Class A, 2.83%, 8/10/36, Callable 8/10/26 @ 100 (a) | 1,500 | 1,521 | |||||||||
UBS Commercial Mortgage Trust, Series 2012-C1, Class XA, 2.17%, 5/10/45, Callable 3/10/22 @ 100 (a)(c)(d) | 9,053 | 13 | |||||||||
Total Collateralized Mortgage Obligations (Cost $2,638) | 2,650 | ||||||||||
Common Stocks (16.7%) | |||||||||||
Communication Services (1.2%): | |||||||||||
Alphabet, Inc. Class C (e) | 2,557 | 7,285 | |||||||||
AT&T, Inc. | 51,958 | 1,186 |
See notes to financial statements.
3
USAA Mutual Funds Trust USAA Cornerstone Moderate Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Comcast Corp. Class A | 51,305 | $ | 2,564 | ||||||||
Match Group, Inc. (e) | 6,453 | 839 | |||||||||
Netflix, Inc. (e) | 2,183 | 1,401 | |||||||||
Sirius XM Holdings, Inc. (f) | 146,514 | 894 | |||||||||
Verizon Communications, Inc. | 25,815 | 1,298 | |||||||||
Zillow Group, Inc. Class C (e) | 1,120 | 61 | |||||||||
15,528 | |||||||||||
Consumer Discretionary (1.5%): | |||||||||||
AutoZone, Inc. (e) | 538 | 978 | |||||||||
Best Buy Co., Inc. | 7,431 | 794 | |||||||||
eBay, Inc. | 14,591 | 984 | |||||||||
Ford Motor Co. | 110,008 | 2,111 | |||||||||
Garmin Ltd. | 6,871 | 918 | |||||||||
General Motors Co. (e) | 19,411 | 1,123 | |||||||||
Lennar Corp. Class A | 9,432 | 991 | |||||||||
Lowe's Cos., Inc. | 10,414 | 2,547 | |||||||||
McDonald's Corp. | 5,010 | 1,225 | |||||||||
O'Reilly Automotive, Inc. (e) | 1,573 | 1,004 | |||||||||
Target Corp. (g) | 9,049 | 2,207 | |||||||||
The Home Depot, Inc. | 8,577 | 3,436 | |||||||||
18,318 | |||||||||||
Consumer Staples (1.0%): | |||||||||||
Altria Group, Inc. | 25,272 | 1,078 | |||||||||
Archer-Daniels-Midland Co. | 16,241 | 1,010 | |||||||||
Colgate-Palmolive Co. | 12,848 | 964 | |||||||||
Costco Wholesale Corp. | 2,605 | 1,405 | |||||||||
PepsiCo, Inc. | 8,296 | 1,325 | |||||||||
Philip Morris International, Inc. | 25,336 | 2,177 | |||||||||
The Clorox Co. | 5,680 | 925 | |||||||||
The Estee Lauder Cos., Inc. | 3,141 | 1,043 | |||||||||
Tyson Foods, Inc. Class A | 12,547 | 991 | |||||||||
Walgreens Boots Alliance, Inc. | 20,816 | 933 | |||||||||
11,851 | |||||||||||
Energy (0.6%): | |||||||||||
Chevron Corp. | 11,737 | 1,325 | |||||||||
ConocoPhillips | 29,948 | 2,100 | |||||||||
Devon Energy Corp. | 22,862 | 962 | |||||||||
EOG Resources, Inc. | 10,619 | 924 | |||||||||
Exxon Mobil Corp. | 21,905 | 1,311 | |||||||||
Marathon Petroleum Corp. | 15,357 | 934 | |||||||||
7,556 | |||||||||||
Financials (2.3%): | |||||||||||
AGNC Investment Corp. | 2,798 | 43 | |||||||||
Annaly Capital Management, Inc. | 7,018 | 57 | |||||||||
Aon PLC Class A | 3,523 | 1,042 | |||||||||
Bank of America Corp. | 32,999 | 1,467 | |||||||||
Berkshire Hathaway, Inc. Class B (e) | 5,499 | 1,522 | |||||||||
Blackstone, Inc. | 7,667 | 1,084 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Cornerstone Moderate Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Capital One Financial Corp. | 14,058 | $ | 1,976 | ||||||||
Citigroup, Inc. | 18,026 | 1,148 | |||||||||
First Republic Bank | 4,661 | 977 | |||||||||
Marsh & McLennan Cos., Inc. | 6,645 | 1,090 | |||||||||
MetLife, Inc. | 17,046 | 1,000 | |||||||||
Morgan Stanley | 24,161 | 2,291 | |||||||||
MSCI, Inc. | 1,579 | 994 | |||||||||
Prudential Financial, Inc. | 19,080 | 1,951 | |||||||||
Regions Financial Corp. | 40,149 | 913 | |||||||||
S&P Global, Inc. | 2,472 | 1,127 | |||||||||
SVB Financial Group (e) | 2,711 | 1,877 | |||||||||
Synchrony Financial | 21,170 | 948 | |||||||||
T. Rowe Price Group, Inc. | 4,577 | 915 | |||||||||
The Allstate Corp. | 17,784 | 1,933 | |||||||||
The Goldman Sachs Group, Inc. | 5,931 | 2,260 | |||||||||
The Progressive Corp. | 10,790 | 1,003 | |||||||||
Wells Fargo & Co. | 26,704 | 1,276 | |||||||||
28,894 | |||||||||||
Health Care (2.7%): | |||||||||||
AbbVie, Inc. | 11,495 | 1,325 | |||||||||
Agilent Technologies, Inc. | 6,443 | 972 | |||||||||
Amgen, Inc. | 10,922 | 2,172 | |||||||||
Anthem, Inc. | 2,716 | 1,103 | |||||||||
Biogen, Inc. (e) | 3,937 | 928 | |||||||||
Bristol-Myers Squibb Co. | 20,401 | 1,094 | |||||||||
Cigna Corp. | 4,985 | 957 | |||||||||
CVS Health Corp. | 12,890 | 1,148 | |||||||||
Danaher Corp. | 4,250 | 1,367 | |||||||||
Eli Lilly & Co. | 9,895 | 2,454 | |||||||||
Gilead Sciences, Inc. (g) | 17,114 | 1,180 | |||||||||
HCA Healthcare, Inc. | 4,191 | 945 | |||||||||
IDEXX Laboratories, Inc. (e) | 3,294 | 2,003 | |||||||||
Intuitive Surgical, Inc. (e) | 3,212 | 1,042 | |||||||||
IQVIA Holdings, Inc. (e) | 4,027 | 1,044 | |||||||||
Johnson & Johnson (g) | 20,471 | 3,192 | |||||||||
Merck & Co., Inc. | 31,636 | 2,370 | |||||||||
Mettler-Toledo International, Inc. (e) | 640 | 969 | |||||||||
Pfizer, Inc. | 29,478 | 1,584 | |||||||||
UnitedHealth Group, Inc. | 7,236 | 3,214 | |||||||||
Waters Corp. (e) | 2,782 | 913 | |||||||||
West Pharmaceutical Services, Inc. | 2,437 | 1,079 | |||||||||
33,055 | |||||||||||
Industrials (1.6%): | |||||||||||
3M Co. | 12,562 | 2,136 | |||||||||
Carrier Global Corp. | 18,851 | 1,020 | |||||||||
Cummins, Inc. | 4,459 | 935 | |||||||||
Eaton Corp. PLC | 6,142 | 995 | |||||||||
Fastenal Co. | 17,396 | 1,029 | |||||||||
General Dynamics Corp. | 5,140 | 971 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Cornerstone Moderate Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Illinois Tool Works, Inc. | 4,488 | $ | 1,042 | ||||||||
Johnson Controls International PLC | 13,724 | 1,026 | |||||||||
Lockheed Martin Corp. | 6,539 | 2,180 | |||||||||
Northrop Grumman Corp. | 5,865 | 2,046 | |||||||||
Old Dominion Freight Line, Inc. | 2,887 | 1,025 | |||||||||
Otis Worldwide Corp. | 11,905 | 957 | |||||||||
PACCAR, Inc. | 11,849 | 989 | |||||||||
Republic Services, Inc. (g) | 7,571 | 1,001 | |||||||||
Rockwell Automation, Inc. | 3,072 | 1,033 | |||||||||
W.W. Grainger, Inc. | 2,020 | 973 | |||||||||
19,358 | |||||||||||
Information Technology (4.6%): | |||||||||||
Accenture PLC Class A | 7,232 | 2,585 | |||||||||
Adobe, Inc. (e) | 2,223 | 1,489 | |||||||||
Apple, Inc. | 67,050 | 11,083 | |||||||||
Applied Materials, Inc. | 15,503 | 2,282 | |||||||||
Broadcom, Inc. | 4,834 | 2,676 | |||||||||
Cisco Systems, Inc. | 46,804 | 2,567 | |||||||||
Cognizant Technology Solutions Corp. Class A | 13,244 | 1,033 | |||||||||
EPAM Systems, Inc. (e) | 1,430 | 870 | |||||||||
Fortinet, Inc. (e) | 2,975 | 988 | |||||||||
Gartner, Inc. (e) | 2,968 | 927 | |||||||||
HP, Inc. | 65,024 | 2,294 | |||||||||
Intel Corp. | 26,037 | 1,281 | |||||||||
International Business Machines Corp. | 9,703 | 1,136 | |||||||||
Intuit, Inc. | 2,010 | 1,311 | |||||||||
Mastercard, Inc. Class A | 4,162 | 1,311 | |||||||||
Micron Technology, Inc. | 15,015 | 1,261 | |||||||||
Microsoft Corp. (g) | 28,895 | 9,552 | |||||||||
Motorola Solutions, Inc. | 4,123 | 1,044 | |||||||||
NVIDIA Corp. | 7,178 | 2,345 | |||||||||
Oracle Corp. | 26,779 | 2,430 | |||||||||
QUALCOMM, Inc. | 15,278 | 2,759 | |||||||||
Texas Instruments, Inc. | 12,953 | 2,492 | |||||||||
VeriSign, Inc. (e) | 4,185 | 1,004 | |||||||||
VMware, Inc. Class A (e) | 8,074 | 943 | |||||||||
57,663 | |||||||||||
Materials (0.4%): | |||||||||||
Avery Dennison Corp. | 4,270 | 876 | |||||||||
LyondellBasell Industries NV Class A | 11,180 | 974 | |||||||||
Nucor Corp. | 9,136 | 971 | |||||||||
PPG Industries, Inc. | 6,202 | 956 | |||||||||
The Sherwin-Williams Co. | 3,311 | 1,097 | |||||||||
4,874 | |||||||||||
Real Estate (0.4%): | |||||||||||
Alexandria Real Estate Equities, Inc. | 636 | 127 | |||||||||
American Tower Corp. | 2,224 | 584 | |||||||||
AvalonBay Communities, Inc. | 708 | 169 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Cornerstone Moderate Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Boston Properties, Inc. | 747 | $ | 81 | ||||||||
Camden Property Trust | 487 | 80 | |||||||||
CBRE Group, Inc. Class A (e) | 1,679 | 161 | |||||||||
Crown Castle International Corp. | 2,209 | 401 | |||||||||
Digital Realty Trust, Inc. | 1,370 | 230 | |||||||||
Duke Realty Corp. | 1,869 | 109 | |||||||||
Equinix, Inc. | 447 | 363 | |||||||||
Equity LifeStyle Properties, Inc. | 879 | 72 | |||||||||
Equity Residential | 1,868 | 159 | |||||||||
Essex Property Trust, Inc. | 327 | 111 | |||||||||
Extra Space Storage, Inc. | 661 | 132 | |||||||||
Healthpeak Properties, Inc. | 2,671 | 88 | |||||||||
Host Hotels & Resorts, Inc. (e) | 3,450 | 54 | |||||||||
Invitation Homes, Inc. | 2,844 | 115 | |||||||||
Iron Mountain, Inc. | 1,461 | 66 | |||||||||
Medical Properties Trust, Inc. | 2,885 | 61 | |||||||||
Mid-America Apartment Communities, Inc. | 574 | 118 | |||||||||
Omega Healthcare Investors, Inc. | 1,149 | 32 | |||||||||
Orion Office REIT, Inc. (e) | 251 | 5 | |||||||||
Prologis, Inc. | 3,724 | 561 | |||||||||
Public Storage | 803 | 263 | |||||||||
Realty Income Corp. | 2,516 | 171 | |||||||||
Regency Centers Corp. | 861 | 60 | |||||||||
SBA Communications Corp. | 560 | 193 | |||||||||
Simon Property Group, Inc. | 1,694 | 259 | |||||||||
Sun Communities, Inc. | 501 | 95 | |||||||||
UDR, Inc. | 1,487 | 84 | |||||||||
Ventas, Inc. | 1,882 | 88 | |||||||||
VICI Properties, Inc. | 2,668 | 73 | |||||||||
Vornado Realty Trust | 808 | 32 | |||||||||
Welltower, Inc. | 2,095 | 167 | |||||||||
Weyerhaeuser Co. | 3,701 | 139 | |||||||||
WP Carey, Inc. | 880 | 67 | |||||||||
5,570 | |||||||||||
Utilities (0.4%): | |||||||||||
Exelon Corp. | 19,331 | 1,017 | |||||||||
FirstEnergy Corp. | 25,942 | 977 | |||||||||
NRG Energy, Inc. | 27,317 | 984 | |||||||||
The AES Corp. | 40,397 | 944 | |||||||||
UGI Corp. | 21,398 | 883 | |||||||||
4,805 | |||||||||||
Total Common Stocks (Cost $158,692) | 207,472 | ||||||||||
Preferred Stocks (0.6%) | |||||||||||
Communication Services (0.3%): | |||||||||||
Qwest Corp., 6.50%, 9/1/56 | 112,000 | 2,812 | |||||||||
Financials (0.3%): | |||||||||||
Delphi Financial Group, Inc., 3.35% (LIBOR03M+319bps), 5/15/37 (b)(h) | 167,198 | 4,004 | |||||||||
Total Preferred Stocks (Cost $6,862) | 6,816 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Cornerstone Moderate Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Corporate Bonds (2.8%) | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
AutoNation, Inc., 4.75%, 6/1/30, Callable 3/1/30 @ 100 | $ | 394 | $ | 457 | |||||||
VF Corp., 2.95%, 4/23/30, Callable 1/23/30 @ 100 | 488 | 509 | |||||||||
966 | |||||||||||
Consumer Staples (0.0%): (i) | |||||||||||
McCormick & Co., Inc., 2.50%, 4/15/30, Callable 1/15/30 @ 100 | 284 | 288 | |||||||||
Sysco Corp., 5.95%, 4/1/30, Callable 1/1/30 @ 100 | 252 | 316 | |||||||||
604 | |||||||||||
Energy (0.1%): | |||||||||||
ONEOK, Inc., 6.35%, 1/15/31, Callable 10/15/30 @ 100 | 404 | 510 | |||||||||
Targa Resources Partners LP/Targa Resources Partners Finance Corp., 5.50%, 3/1/30, Callable 3/1/25 @ 102.75 | 648 | 703 | |||||||||
1,213 | |||||||||||
Financials (1.5%): | |||||||||||
Ares Capital Corp., 3.63%, 1/19/22, Callable 12/23/21 @ 100 (f)(g) | 1,600 | 1,603 | |||||||||
Belrose Funding Trust, 2.33%, 8/15/30, Callable 5/15/30 @ 100 (a) | 994 | 975 | |||||||||
Citizens Financial Group, Inc., 2.50%, 2/6/30, Callable 11/6/29 @ 100 | 972 | 988 | |||||||||
Cullen/Frost Capital Trust II, 1.67% (LIBOR03M+155bps), 3/1/34, Callable 1/10/22 @ 100 (b) | 4,000 | 3,840 | |||||||||
First Horizon Bank, 5.75%, 5/1/30, Callable 2/1/30 @ 100 | 488 | 589 | |||||||||
First Maryland Capital I, 1.12% (LIBOR03M+100bps), 1/15/27, Callable 1/10/22 @ 100 (b) | 2,850 | 2,765 | |||||||||
HSB Group, Inc., 1.03% (LIBOR03M+91bps), 7/15/27, Callable 1/10/22 @ 100 (b) | 2,575 | 2,339 | |||||||||
Loews Corp., 3.20%, 5/15/30, Callable 2/15/30 @ 100 | 654 | 699 | |||||||||
New York Community Bancorp, Inc., 5.90% (LIBOR03M+278bps), 11/6/28, Callable 11/6/23 @ 100 (b) | 249 | 268 | |||||||||
Pinnacle Financial Partners, Inc., 4.13% (LIBOR03M+278bps), 9/15/29, Callable 9/15/24 @ 100 (b) | 1,000 | 1,046 | |||||||||
Santander Holdings USA, Inc., 3.45%, 6/2/25, Callable 5/2/25 @ 100 | 412 | 434 | |||||||||
Signature Bank, 4.13% (LIBOR03M+256bps), 11/1/29, Callable 11/1/24 @ 100 (b) | 2,600 | 2,726 | |||||||||
The Progressive Corp., 3.20%, 3/26/30, Callable 12/26/29 @ 100 | 194 | 211 | |||||||||
Toyota Motor Credit Corp., 3.38%, 4/1/30, MTN | 714 | 788 | |||||||||
19,271 | |||||||||||
Health Care (0.1%): | |||||||||||
DENTSPLY SIRONA, Inc., 3.25%, 6/1/30, Callable 3/1/30 @ 100 | 738 | 780 | |||||||||
Duke University Health System, Inc., 2.60%, 6/1/30 | 485 | 492 | |||||||||
Viatris, Inc., 2.30%, 6/22/27, Callable 4/22/27 @ 100 | 248 | 249 | |||||||||
1,521 | |||||||||||
Industrials (0.3%): | |||||||||||
Caterpillar, Inc., 2.60%, 4/9/30, Callable 1/9/30 @ 100 | 486 | 509 | |||||||||
CoStar Group, Inc., 2.80%, 7/15/30, Callable 4/15/30 @ 100 (a) | 222 | 225 | |||||||||
Dover Corp., 2.95%, 11/4/29, Callable 8/4/29 @ 100 | 971 | 1,032 | |||||||||
The Conservation Fund A Nonprofit Corp., 3.47%, 12/15/29, Callable 9/15/29 @ 100 | 1,300 | 1,381 | |||||||||
3,147 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Cornerstone Moderate Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Information Technology (0.1%): | |||||||||||
HP, Inc., 3.40%, 6/17/30, Callable 3/17/30 @ 100 | $ | 743 | $ | 781 | |||||||
Jabil, Inc., 3.00%, 1/15/31, Callable 10/15/30 @ 100 | 222 | 228 | |||||||||
1,009 | |||||||||||
Materials (0.1%): | |||||||||||
Avery Dennison Corp., 2.65%, 4/30/30, Callable 2/1/30 @ 100 | 389 | 397 | |||||||||
Colonial Enterprises, Inc., 3.25%, 5/15/30, Callable 2/15/30 @ 100 (a) | 204 | 216 | |||||||||
WRKCo, Inc., 3.00%, 6/15/33, Callable 3/15/33 @ 100 (g) | 373 | 386 | |||||||||
999 | |||||||||||
Real Estate (0.3%): | |||||||||||
AvalonBay Communities, Inc., 2.45%, 1/15/31, MTN, Callable 10/17/30 @ 100 | 983 | 1,007 | |||||||||
Essex Portfolio LP, 2.65%, 3/15/32, Callable 12/15/31 @ 100 | 1,134 | 1,147 | |||||||||
GLP Capital LP/GLP Financing II, Inc., 4.00%, 1/15/31, Callable 10/15/30 @ 100 | 249 | 263 | |||||||||
Host Hotels & Resorts LP, 3.50%, 9/15/30, Callable 6/15/30 @ 100 | 206 | 211 | |||||||||
SBA Tower Trust, 2.84%, 1/15/25, Callable 1/15/24 @ 100 (a) | 692 | 714 | |||||||||
VICI Properties LP/VICI Note Co., Inc., 4.63%, 12/1/29, Callable 12/1/24 @ 102.31 (a) | 149 | 159 | |||||||||
3,501 | |||||||||||
Utilities (0.2%): | |||||||||||
Alabama Power Co., 3.85%, 12/1/42 | 971 | 1,115 | |||||||||
Ameren Corp., 3.50%, 1/15/31, Callable 10/15/30 @ 100 | 323 | 351 | |||||||||
Duke Energy Florida LLC, 3.85%, 11/15/42, Callable 5/15/42 @ 100 | 971 | 1,106 | |||||||||
2,572 | |||||||||||
Total Corporate Bonds (Cost $33,273) | 34,803 | ||||||||||
Yankee Dollars (0.2%) | |||||||||||
Energy (0.1%): | |||||||||||
Petroleos Mexicanos, 6.49%, 1/23/27, Callable 11/23/26 @ 100 | 554 | 567 | |||||||||
Financials (0.0%): (i) | |||||||||||
Banco Santander Mexico SA Institucion de Banca Multiple Grupo Financiero Santand, 5.38%, 4/17/25 (a)(g) | 464 | 505 | |||||||||
Industrials (0.0%): (i) | |||||||||||
Ferguson Finance PLC, 3.25%, 6/2/30, Callable 3/2/30 @ 100 (a) | 444 | 472 | |||||||||
Materials (0.1%): | |||||||||||
CCL Industries, Inc., 3.05%, 6/1/30, Callable 3/1/30 @ 100 (a) | 739 | 774 | |||||||||
Total Yankee Dollars (Cost $2,198) | 2,318 | ||||||||||
U.S. Government Agency Mortgages (1.9%) | |||||||||||
Federal Home Loan Mortgage Corporation | |||||||||||
3.50%, 4/1/46-4/1/48 | 3,916 | 4,150 | |||||||||
3.00%, 6/1/46-8/1/47 | 18,368 | 19,266 | |||||||||
23,416 | |||||||||||
Federal National Mortgage Association | |||||||||||
Series 2016-M2, Class AV2, 2.15%, 1/25/23 | 688 | 693 | |||||||||
24,109 | |||||||||||
Total U.S. Government Agency Mortgages (Cost $23,115) | 24,109 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA Cornerstone Moderate Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
U.S. Treasury Obligations (5.7%) | |||||||||||
U.S. Treasury Bonds | |||||||||||
3.13%, 8/15/44 | $ | 8,600 | $ | 10,609 | |||||||
3.00%, 11/15/44 | 6,000 | 7,276 | |||||||||
2.38%, 11/15/49 | 5,000 | 5,646 | |||||||||
U.S. Treasury Notes | |||||||||||
1.63%, 4/30/23 | 14,658 | 14,915 | |||||||||
2.25%, 11/15/25 | 5,000 | 5,233 | |||||||||
1.63%, 2/15/26 | 15,000 | 15,333 | |||||||||
2.25%, 2/15/27 | 3,500 | 3,689 | |||||||||
2.38%, 5/15/29 | 7,850 | 8,404 | |||||||||
Total U.S. Treasury Obligations (Cost $65,763) | 71,105 | ||||||||||
Commercial Paper (0.2%) (j) | |||||||||||
Oge Energy Corp., 0.13%, 12/3/21 (a) | 1,300 | 1,300 | |||||||||
One Gas, Inc., 0.07%, 12/6/21 (a) | 1,300 | 1,300 | |||||||||
Total Commercial Paper (Cost $2,600) | 2,600 | ||||||||||
Exchange-Traded Funds (42.7%) | |||||||||||
Invesco DB Commodity Index Tracking Fund | 114,500 | 2,230 | |||||||||
Invesco FTSE RAFI Developed Markets ex-US ETF | 335,920 | 15,315 | |||||||||
Invesco FTSE RAFI Emerging Markets ETF | 686,690 | 14,778 | |||||||||
iShares 7-10 Year Treasury Bond ETF | 133,366 | 15,444 | |||||||||
iShares Core MSCI EAFE ETF | 123,049 | 8,980 | |||||||||
iShares Core MSCI Emerging Markets ETF | 507,551 | 30,514 | |||||||||
iShares Core S&P 500 ETF | 160,397 | 73,402 | |||||||||
iShares Core S&P Small-Cap ETF | 246,821 | 27,227 | |||||||||
iShares Core US Aggregate Bond ETF | 422,573 | 48,499 | |||||||||
iShares Core US REIT ETF (g) | 57,884 | 3,629 | |||||||||
iShares MSCI Canada ETF (f) | 243,518 | 9,103 | |||||||||
iShares MSCI International Momentum Factor ETF | 401,271 | 15,292 | |||||||||
iShares MSCI International Quality Factor ETF | 457,001 | 17,485 | |||||||||
JPMorgan BetaBuilders Canada ETF (f) | 56,001 | 3,641 | |||||||||
Schwab Fundamental Emerging Markets Large Co. Index ETF | 920,892 | 28,354 | |||||||||
Schwab Fundamental International Large Co. Index ETF | 1,549,839 | 49,083 | |||||||||
Schwab Fundamental International Small Co. Index ETF (f) | 266,700 | 9,751 | |||||||||
SPDR Gold Shares (f) | 16,344 | 2,705 | |||||||||
SPDR S&P Emerging Markets SmallCap ETF | 34,497 | 2,024 | |||||||||
U.S. Oil Fund LP (f) | 44,859 | 2,149 | |||||||||
Vanguard FTSE All-World ex-US ETF | 305,763 | 18,327 | |||||||||
Vanguard FTSE Developed Markets ETF (f) | 844,518 | 41,972 | |||||||||
Vanguard FTSE Emerging Markets ETF (f)(g) | 47,000 | 2,312 | |||||||||
Vanguard Mortgage-Backed Securities ETF | 65,405 | 3,469 | |||||||||
Vanguard Real Estate ETF (f) | 118,457 | 12,644 | |||||||||
Vanguard S&P 500 ETF (g) | 52,832 | 22,140 | |||||||||
Vanguard Short-Term Bond ETF | 78,165 | 6,356 | |||||||||
Vanguard Short-Term Corporate Bond ETF | 73,962 | 6,032 | |||||||||
Vanguard Total Bond Market ETF | 175,441 | 14,986 | |||||||||
Vanguard Total Stock Market ETF (g) | 77,469 | 18,085 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA Cornerstone Moderate Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Wisdom Tree Trust — WisdomTree Emerging Markets SmallCap Dividend Fund | 59,797 | $ | 3,068 | ||||||||
Xtrackers USD High Yield Corporate Bond ETF (f) | 97,710 | 3,828 | |||||||||
Total Exchange-Traded Funds (Cost $435,483) | 532,824 | ||||||||||
Affiliated Exchange-Traded Funds (27.2%) | |||||||||||
Victoryshares ESG Core Plus Bond ETF | 2,420,938 | 60,489 | |||||||||
VictoryShares USAA Core Intermediate-Term Bond ETF (f) | 4,841,265 | 258,378 | |||||||||
VictoryShares USAA Core Short-Term Bond ETF | 341,251 | 17,590 | |||||||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF (g) | 51,500 | 2,393 | |||||||||
Total Affiliated Exchange-Traded Funds (Cost $341,501) | 338,850 | ||||||||||
Collateral for Securities Loaned^ (3.6%) | |||||||||||
Fidelity Investments Money Market Government Portfolio Institutional Shares, 0.01% (k) | 4,159,637 | 4,160 | |||||||||
Goldman Sachs Financial Square Government Fund Institutional Shares, 0.03% (k) | 347,381 | 347 | |||||||||
HSBC U.S. Government Money Market Fund I Shares, 0.03% (k) | 40,634,118 | 40,634 | |||||||||
Total Collateral for Securities Loaned (Cost $45,141) | 45,141 | ||||||||||
Total Investments (Cost $1,124,914) — 102.4% | 1,276,490 | ||||||||||
Liabilities in excess of other assets — (2.4)% | (29,357 | ) | |||||||||
NET ASSETS — 100.00% | $ | 1,247,133 |
At November 30, 2021, the Fund's investments in foreign securities were 21.2% of net assets.
^ Purchased with cash collateral from securities on loan.
(a) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of November 30, 2021, the fair value of these securities was $15,485 (thousands) and amounted to 1.2% of net assets.
(b) Variable or Floating-Rate Security. Rate disclosed is as of November 30, 2021.
(c) The rate for certain asset-backed and mortgage-backed securities may vary based on factors relating to the pool of assets underlying the security. The rate disclosed is the rate in effect at November 30, 2021.
(d) Security is interest only.
(e) Non-income producing security.
(f) All or a portion of this security is on loan.
(g) All or a portion of this security has been segregated as collateral for derivative instruments.
(h) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of November 30, 2021, illiquid securities were 0.3% of net assets.
(i) Amount represents less than 0.05% of net assets.
(j) Rate represents the effective yield at November 30, 2021.
See notes to financial statements.
11
USAA Mutual Funds Trust USAA Cornerstone Moderate Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Unaudited)
(k) Rate disclosed is the daily yield on November 30, 2021.
bps — Basis points
ETF — Exchange-Traded Fund
LIBOR — London InterBank Offered Rate
LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of November 30, 2021, based on the last reset date of the security
LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of November 30, 2021, based on the last reset date of the security
LLC — Limited Liability Company
LP — Limited Partnership
MTN — Medium Term Note
PLC — Public Limited Company
REIT — Real Estate Investment Trust
Futures Contracts Purchased
(Amounts not in thousands)
Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||
S&P/Toronto Stock Exchange 60 Index Futures | 63 | 12/16/21 | $ | 12,223,352 | $ | 12,291,239 | $ | 192,370 | |||||||||||||||
Swiss Market Index Futures | 106 | 12/17/21 | 13,859,417 | 14,087,526 | 167,685 | ||||||||||||||||||
$ | 360,055 |
Futures Contracts Sold
(Amounts not in thousands)
Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||
ASX SPI 200 Index Futures | 42 | 12/16/21 | $ | 5,760,582 | $ | 5,411,229 | $ | 136,532 | |||||||||||||||
Euro Stoxx 50 Futures | 148 | 12/17/21 | 7,253,858 | 6,842,543 | 110,648 | ||||||||||||||||||
FTSE 100 Index Futures | 65 | 12/17/21 | 6,302,644 | 6,118,842 | 116,446 | ||||||||||||||||||
Tokyo Price Index Futures | 56 | 12/09/21 | 10,436,848 | 9,394,443 | 801,248 | ||||||||||||||||||
$ | 1,164,874 | ||||||||||||||||||||||
Total unrealized appreciation | $ | 1,524,929 | |||||||||||||||||||||
Total unrealized depreciation | — | ||||||||||||||||||||||
Total net unrealized appreciation (depreciation) | $ | 1,524,929 |
See notes to financial statements.
12
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Cornerstone Moderate Fund | |||||||
Assets: | |||||||
Affiliated investments, at value(Cost $341,501) | $ | 338,850 | |||||
Unaffiliated investments, at value (Cost $783,413) | 937,640 | (a) | |||||
Cash | 16,469 | ||||||
Deposit with broker for futures contracts | 1,562 | ||||||
Receivables: | |||||||
Interest and dividends | 1,021 | ||||||
Capital shares issued | 271 | ||||||
Variation margin on open futures contracts | 342 | ||||||
From Adviser | 212 | ||||||
Prepaid expenses | 23 | ||||||
Total Assets | 1,296,390 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 45,141 | ||||||
Collateral received from broker for futures contracts | 547 | ||||||
Payable for foreign currency | — | (b) | |||||
Investments purchased | 1,551 | ||||||
Capital shares redeemed | 625 | ||||||
Variation margin on open futures contracts | 323 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 616 | ||||||
Administration fees | 157 | ||||||
Custodian fees | 11 | ||||||
Transfer agent fees | 177 | ||||||
Compliance fees | 1 | ||||||
Trustees' fees | — | (b) | |||||
Other accrued expenses | 108 | ||||||
Total Liabilities | 49,257 | ||||||
Net Assets: | |||||||
Capital | 1,016,008 | ||||||
Total accumulated earnings/(loss) | 231,125 | ||||||
Net Assets | $ | 1,247,133 | |||||
Shares (unlimited number of shares authorized with no par value): | 73,215 | ||||||
Net asset value, offering and redemption price per share: (c) | $ | 17.03 |
(a) Includes $43,221 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
13
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Cornerstone Moderate Fund | |||||||
Investment Income: | |||||||
Income distributions from affiliated funds | $ | 1,994 | |||||
Dividends | 7,298 | ||||||
Interest | 3,236 | ||||||
Securities lending (net of fees) | 118 | ||||||
Foreign tax withholding | (2 | ) | |||||
Total Income | 12,644 | ||||||
Expenses: | |||||||
Investment advisory fees | 3,745 | ||||||
Administration fees | 952 | ||||||
Sub-Administration fees | 42 | ||||||
Custodian fees | 32 | ||||||
Transfer agent fees | 1,098 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 4 | ||||||
Legal and audit fees | 35 | ||||||
State registration and filing fees | 17 | ||||||
Interfund lending fees | — | (a) | |||||
Other expenses | 77 | ||||||
Total Expenses | 6,026 | ||||||
Expenses waived/reimbursed by Adviser | (359 | ) | |||||
Net Expenses | 5,667 | ||||||
Net Investment Income (Loss) | 6,977 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from unaffiliated investment securities and foreign currency translations | 37,804 | ||||||
Net realized gains (losses) from futures contracts | (1,324 | ) | |||||
Net change in unrealized appreciation/depreciation on unaffiliated investment securities | (31,219 | ) | |||||
Net change in unrealized appreciation/depreciation on affiliated funds | (1,168 | ) | |||||
Net change in unrealized appreciation/depreciation on futures contracts | 1,826 | ||||||
Net realized/unrealized gains (losses) on investments | 5,919 | ||||||
Change in net assets resulting from operations | $ | 12,896 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
14
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Cornerstone Moderate Fund | |||||||||||
Six Months Ended November 30, 2021 (unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 6,977 | $ | 15,524 | |||||||
Net realized gains (losses) from investments | 36,480 | 48,393 | |||||||||
Net change in unrealized appreciation/depreciation on investments | (30,561 | ) | 163,676 | ||||||||
Change in net assets resulting from operations | 12,896 | 227,593 | |||||||||
Change in net assets resulting from distributions to shareholders | (6,772 | ) | (18,770 | ) | |||||||
Change in net assets resulting from capital transactions | (24,523 | ) | (74,749 | ) | |||||||
Change in net assets | (18,399 | ) | 134,074 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 1,265,532 | 1,131,458 | |||||||||
End of period | $ | 1,247,133 | $ | 1,265,532 | |||||||
Capital Transactions: | |||||||||||
Proceeds from shares issued | $ | 44,652 | $ | 92,413 | |||||||
Distributions reinvested | 6,731 | 18,673 | |||||||||
Cost of shares redeemed | (75,906 | ) | (185,835 | ) | |||||||
Change in net assets resulting from capital transactions | $ | (24,523 | ) | $ | (74,749 | ) | |||||
Share Transactions: | |||||||||||
Issued | 2,602 | 5,807 | |||||||||
Reinvested | 397 | 1,216 | |||||||||
Redeemed | (4,424 | ) | (11,817 | ) | |||||||
Change in Shares | (1,425 | ) | (4,794 | ) |
See notes to financial statements.
15
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Cornerstone Moderate Fund | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (unaudited) | $ | 16.96 | 0.09 | (d) | 0.07 | 0.16 | (0.09 | ) | — | ||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 14.24 | 0.20 | (d) | 2.76 | 2.96 | (0.21 | ) | (0.03 | ) | |||||||||||||||||
2020 | $ | 14.11 | 0.29 | (d) | 0.13 | 0.42 | (0.29 | ) | — | ||||||||||||||||||
2019 | $ | 14.83 | 0.30 | (0.31 | ) | (0.01 | ) | (0.29 | ) | (0.42 | ) | ||||||||||||||||
2018 | $ | 15.05 | 0.26 | 0.55 | 0.81 | (0.26 | ) | (0.77 | ) | ||||||||||||||||||
2017 | $ | 14.01 | 0.31 | 1.06 | 1.37 | (0.33 | ) | — |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) The expense ratios exclude the impact of expenses paid by each underlying fund.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects increased trading activity due to usage of quantitative investment strategies.
See notes to financial statements.
16
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b)(c) | Net Investment Income (Loss)(b) | Gross Expenses(b)(c) | Net Assets, End of Period (000's) | Portfolio Turnover(a) | ||||||||||||||||||||||||||||
USAA Cornerstone Moderate Fund | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (unaudited) | (0.09 | ) | $ | 17.03 | 0.95 | % | 0.89 | % | 1.10 | % | 0.95 | % | $ | 1,247,133 | 23 | % | |||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.24 | ) | $ | 16.96 | 21.00 | % | 0.97 | % | 1.29 | % | 0.98 | % | $ | 1,265,532 | 53 | % | |||||||||||||||||||
2020 | (0.29 | ) | $ | 14.24 | 2.98 | % | 1.00 | % | 2.01 | % | 1.00 | % | $ | 1,131,458 | 87 | % | |||||||||||||||||||
2019 | (0.71 | ) | $ | 14.11 | 0.13 | % | 1.00 | % | 2.10 | % | 1.02 | % | $ | 1,163,374 | 81 | %(e) | |||||||||||||||||||
2018 | (1.03 | ) | $ | 14.83 | 5.42 | % | 1.00 | % | 1.73 | % | 1.03 | % | $ | 1,184,032 | 51 | % | |||||||||||||||||||
2017 | (0.33 | ) | $ | 15.05 | 9.91 | % | 1.00 | % | 2.14 | % | 1.10 | % | $ | 1,119,494 | 66 | % |
See notes to financial statements.
17
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Cornerstone Moderate Fund (the "Fund"). The Fund is classified as diversified under the 1940 Act.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies, including underlying funds, are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
Debt securities are valued each business day by a pricing service approved by the Board. The approved pricing service uses the evaluated bid or the last sale price to value securities. Debt obligations maturing within 60 days may be valued at their amortized cost, provided that the amortized cost represents the fair value of such securities. These valuations are typically categorized as Level 2 in the fair value hierarchy.
Futures contracts are valued at the settlement price established each day by the board of trade or an exchange on which they are traded. These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Asset-Backed Securities | $ | — | $ | 7,802 | $ | — | $ | 7,802 | |||||||||||
Collateralized Mortgage Obligations | — | 2,650 | — | 2,650 | |||||||||||||||
Common Stocks | 207,472 | — | — | 207,472 | |||||||||||||||
Preferred Stocks | 2,812 | 4,004 | — | 6,816 | |||||||||||||||
Corporate Bonds | — | 34,803 | — | 34,803 | |||||||||||||||
Yankee Dollars | — | 2,318 | — | 2,318 | |||||||||||||||
U.S. Government Agency Mortgages | — | 24,109 | — | 24,109 | |||||||||||||||
U.S. Treasury Obligations | — | 71,105 | — | 71,105 | |||||||||||||||
Commercial Paper | — | 2,600 | — | 2,600 | |||||||||||||||
Exchange-Traded Funds | 532,824 | — | — | 532,824 | |||||||||||||||
Affiliated Exchange-Traded Funds | 338,850 | — | — | 338,850 | |||||||||||||||
Collateral for Securities Loaned | 45,141 | — | — | 45,141 | |||||||||||||||
Total | $ | 1,127,099 | $ | 149,391 | $ | — | $ | 1,276,490 | |||||||||||
Other Financial Investments* | |||||||||||||||||||
Assets: | |||||||||||||||||||
Futures Contracts | $ | 1,525 | $ | — | $ | — | $ | 1,525 | |||||||||||
Total | $ | 1,525 | $ | — | $ | — | $ | 1,525 |
^ Futures contracts are valued at the unrealized appreciation (depreciation) on the investment.
For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real
19
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a portfolio of securities often designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Mortgage and Asset-Backed Securities:
The values of some mortgage-related or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Fund to a lower rate of return upon reinvestment of principal. The values of mortgage- and asset-backed securities depend in part on the credit quality and adequacy of the underlying assets or collateral and may fluctuate in response to the market's perception of these factors as well as current and future repayment rates. Some mortgage-backed securities are backed by the full faith and credit of the U.S. government (e.g., mortgage-backed securities issued by the Government National Mortgage Association, commonly known as "Ginnie Mae"), while other mortgage-backed securities (e.g., mortgage-backed securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, commonly known as "Fannie Mae" and "Freddie Mac", respectively), are backed only by the credit of the government entity issuing them. In addition, some mortgage-backed securities are issued by private entities and, as such, are not guaranteed by the U.S. government or any agency or instrumentality of the U.S. government.
Derivative Instruments:
Futures Contracts:
The Fund may enter into contracts for the future delivery of securities or foreign currencies and futures contracts based on a specific security, class of securities, foreign currency or an index, and purchase or sell options on any such futures contracts. A futures contract on a securities index is an agreement obligating either party to pay, and entitling the other party to receive, while the contract is outstanding, cash payments based on the level of a specified securities index. No physical delivery of the underlying asset is made. The Fund may enter into futures contracts in an effort to hedge against market risks. The acquisition of put and call options on futures contracts will give the Fund the right (but not the obligation), for a specified price, to sell or to purchase the underlying futures contract, upon exercise of the option, at any time during the option period. Futures transactions involve brokerage costs and require the Fund to segregate assets to cover contracts that would require it to purchase securities or currencies. A good faith margin deposit, known as initial margin, of cash or government securities with a broker or custodian is required to initiate and maintain open positions in futures contracts. Subsequent
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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payments, known as variation margin, are made or received by the Fund based on the change in the market value of the position and are recorded as unrealized appreciation or depreciation until the contract is closed out, at which time the gain or loss is realized. The Fund may lose the expected benefit of futures transactions if interest rates, exchange rates or securities prices change in an unanticipated manner. Such unanticipated changes may also result in lower overall performance than if the Fund had not entered into any futures transactions. In addition, the value of the Fund's futures positions may not prove to be perfectly or even highly correlated with the value of its portfolio securities or foreign currencies, limiting the Fund's ability to hedge effectively against interest rate, exchange rate and/or market risk and giving rise to additional risks. There is no assurance of liquidity in the secondary market for purposes of closing out futures positions. The collateral held by the Fund is presented on the Statement of Assets and Liabilities under Deposit with broker for futures contracts and Collateral received from broker for futures contracts. During the six months ended November 30, 2021, the Fund entered into futures contracts primarily for the strategy of gaining exposure to a particular asset class or securities market.
Summary of Derivative Instruments:
The following table summarizes the fair values of derivative instruments on the Statement of Assets and Liabilities, categorized by risk exposure, as of November 30, 2021 (amounts in thousands):
Assets | Liabilities | ||||||||||
Variation Margin Receivable on Open Futures Contracts* | Variation Margin Payable on Open Futures Contracts* | ||||||||||
Equity Risk Exposure | $ | 1,525 | $ | — |
* Includes cumulative unrealized appreciation (depreciation) of futures contracts as reported on the Schedule of Portfolio Investments. Only current day's variation margin for futures contracts is reported within the Statement of Assets and Liabilities.
The following table presents the effect of derivative instruments on the Statement of Operations, categorized by risk exposure, for the six months ended November 30, 2021 (amounts in thousands):
Net Realized Gains (Losses) on Derivatives Recognized as a Result of Operations | Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized as a Result of Operations | ||||||||||
Net Realized Gains (Losses) from Futures Contracts | Net Change in Unrealized Appreciation/Depreciation on Futures Contracts | ||||||||||
Equity Risk Exposure | $ | (1,324 | ) | $ | 1,826 |
All open derivative positions at period end are reflected on the Fund's Schedule of Portfolio Investments. The underlying face value of open derivative positions relative to the Fund's net assets at period end is generally representative of the notional amount of open positions to net assets throughout the period.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis. Paydown gains or losses on applicable securities, if any, are recorded as components of Interest income on the Statement of Operations.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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Withholding taxes on interest, dividends, and gains as a result of certain investments in American Depositary Receipts ("ADRs"), by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of November 30, 2021.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 43,221 | $ | — | $ | 45,141 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as Net realized gains (losses) from investment securities and foreign currency translations on the Statement of Operations.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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Foreign Taxes:
The Fund may be subject to foreign taxes related to foreign income received (a portion of which may be reclaimable), capital gains on the sale of securities, and certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
Cross-Trade Transactions:
Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades, which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the six months ended November 30, 2021, the Fund engaged in the following securities transactions with affiliated funds, which resulted in the following net realized gains (losses) (amounts in thousands):
Purchases | Sales | Net Realized Gains (Losses) | |||||||||
$ | — | $ | 22,207 | $ | 769 |
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding U.S. Government Securities | U.S. Government Securities | ||||||||||||||
Purchases | Sales | Purchases | Sales | ||||||||||||
$ | 281,453 | $ | 287,528 | $ | — | $ | 26,909 |
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive fees accrued daily and paid monthly at an annualized rate of 0.59% of the Fund's average daily net assets. Amounts incurred and paid to VCM for the six months ended November 30, 2021, are reflected on the Statement of Operations as Investment advisory fees.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six months ended November 30, 2021, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, which is based on the Fund's average daily net assets. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Administration fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Amounts incurred and paid to VCTA for the six months ended November 30, 2021, are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust and receives no fee or other compensation for these services.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of November 30, 2021, the expense limit (excluding voluntary waivers) was 1.00%.
In addition, the Fund invests in affiliated VCM exchange-traded fund(s) ("affiliated ETFs"). The Fund's Adviser fee is reimbursed by VCM to the extent of the indirect Adviser fee incurred through the Fund's proportional investment in the affiliated ETF(s). These affiliated ETF Adviser fee reimbursements are not available for recoupment. As of November 30, 2021, the Fund's Adviser fee was reimbursed by VCM in an amount of $359 thousand, of which $153 thousand is receivable from VCM.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment. As of November 31, 2021, there are no amounts available to be repaid to the Adviser.
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six months ended November 30, 2021.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Tactical Allocation Risk — The Fund has a targeted risk tolerance and a corresponding asset allocation target; however, mere asset allocation and volatility are not the sole determination of risk. The Fund's managers will tactically allocate away from the target allocation as market conditions and the perceived risks warrant. The Fund bears the risk that the managers' tactical allocation will not be successful.
Affiliated Funds Risk — The risks of the Fund directly correspond to the risks of the underlying affiliated funds in which the Fund invests. By investing in the underlying affiliated funds, the Fund has exposure to the risk of many different areas of the market. The degree to which the risks described below apply to the Fund varies according to the Fund's asset allocation. For instance, the more the Fund is allocated to stock funds, the greater the risk associated with equity securities. The Fund also is subject to asset allocation risk (i.e., the risk that allocations will not produce the intended results) and to management risk (i.e., the risk that the selection of underlying affiliated funds will not produce the intended results).
25
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Conflict of Interest Risk — In managing a Fund that invests in underlying affiliated funds, the Adviser may have conflicts of interest in allocating the Fund's assets among the various underlying affiliated funds. This is because the fees payable by some of the underlying affiliated funds to the Adviser and/or its affiliates are higher than the fees payable by other underlying affiliated funds, and because the Adviser also manages and administers the underlying affiliated funds.
ETF Risk — The Fund may invest in shares of ETFs, which generally are investment companies that hold a portfolio of common stocks or debt securities, the shares of which are traded on an exchange. ETFs incur their own management and other fees and expenses, such as trustees' fees, operating expenses, registration fees, and marketing expenses, a proportionate share of which will be borne indirectly by the Fund as a shareholder in an ETF. As a result, the Fund's investment in an ETF will cause the Fund to indirectly bear the fees and expenses of the ETF and, in turn, the Fund's performance may be lower than if the Fund were to invest directly in the underlying securities held by the ETF. For investments in affiliated ETFs, the Fund's management fee is reimbursed by the Adviser to the extent of the indirect management fee incurred through the Fund's investment in the affiliated ETFs. The Adviser may have conflicts of interest in allocating assets among affiliated and unaffiliated ETFs, because the Adviser also manages and administers the affiliated ETFs, and the Adviser and its affiliates receive other fees from the affiliated ETFs. In addition, the Fund also will be subject to the risks associated with the securities or other investments held by the ETFs.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is presented on the Statement of Operations under Interfund lending.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
The average borrowing or lending for the days outstanding and average interest rate for the Fund that utilized this Facility during the six months ended November 30, 2021, were as follows (amounts in thousands):
Borrower or Lender | Amount Outstanding at November 30, 2021 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
Borrower | $ | — | $ | 2,276 | 3 | 0.55 | % | $ | 2,276 |
* For the six months ended November 30, 2021, based on the number of days borrowings were outstanding.
7. Federal Income Tax Information:
The Fund intends to distribute any net investment income quarterly. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had no capital loss carryforwards, for the federal income tax purposes.
8. Affiliated Securities:
An affiliated security is a security in which the Fund has ownership of at least 5% of the security's outstanding voting shares, an investment company managed by VCM, or an issuer under common control with a Fund or VCM determined as of the last business day of the month. The Fund does not invest in affiliated securities for the purpose of exercising management or control. These securities are noted as affiliated on the Fund's Schedule of Portfolio Investments. Transactions in affiliated securities during the six months ended November 30, 2021, were as follows (amounts in thousands):
Fair Value 5/31/2021 | Purchases at Cost | Proceeds from Sales | Realized Gains (Losses) | Capital Gain Distribution | Net Change in Unrealized Appreciation/ Depreciation | Fair Value 11/30/21 | Dividend Income | ||||||||||||||||||||||||||||
VictoryShares ESG Core Plus Bond ETF | $ | — | $ | 121,052 | $ | (60,526 | ) | $ | — | $ | — | $ | (37 | ) | $ | 60,489 | $ | 31 | |||||||||||||||||
VictoryShares USAA Core Intermediate-Term Bond ETF | 146,328 | 225,603 | (112,801 | ) | — | — | (752 | ) | 258,378 | 1,749 | |||||||||||||||||||||||||
VictoryShares USAA Core Short-Term Bond ETF | 17,709 | — | — | — | — | (119 | ) | 17,590 | 139 | ||||||||||||||||||||||||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF | 2,653 | — | — | — | — | (260 | ) | 2,393 | 75 | ||||||||||||||||||||||||||
$ | 166,690 | $ | 346,655 | $ | (173,327 | ) | $ | — | $ | — | $ | (1,168 | ) | $ | 338,850 | $ | 1,994 |
27
USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Example
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21- 11/30/21* | Hypothetical Expenses Paid During Period 6/1/21- 11/30/21* | Annualized Expense Ratio During Period 6/1/21- 11/30/21 | ||||||||||||||||||
$ | 1,000.00 | $ | 1,009.50 | $ | 1,020.61 | $ | 4.48 | $ | 4.51 | 0.89 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
28
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
27804-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA Cornerstone Moderately
Aggressive Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
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USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 14 | ||||||
Statement of Operations | 15 | ||||||
Statements of Changes in Net Assets | 16 | ||||||
Financial Highlights | 18 | ||||||
Notes to Financial Statements | 20 | ||||||
Supplemental Information | 31 | ||||||
Proxy Voting and Portfolio Holdings Information | 31 | ||||||
Expense Example | 31 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA Cornerstone Moderately Aggressive Fund | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks capital appreciation with a secondary focus on current income.
Asset Allocation*:
November 30, 2021
(% of Net Assets)
* Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
2
USAA Mutual Funds Trust USAA Cornerstone Moderately Aggressive Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Asset-Backed Securities (0.4%) | |||||||||||
Drive Auto Receivables Trust, Series 2018-4, Class D, 4.09%, 1/15/26, Callable 10/15/22 @ 100 | $ | 836 | $ | 851 | |||||||
Exeter Automobile Receivables Trust, Series 2019-2A, Class C, 3.30%, 3/15/24, Callable 8/15/23 @ 100 (a) | 678 | 681 | |||||||||
Exeter Automobile Receivables Trust, Series 2017-3A, Class D, 5.28%, 10/15/24, Callable 6/15/22 @ 100 (a) | 850 | 869 | |||||||||
Exeter Automobile Receivables Trust, Series 2020-1A, Class B, 2.26%, 4/15/24, Callable 10/15/23 @ 100 (a) | 223 | 223 | |||||||||
HPEFS Equipment Trust, Series 2019-1A, Class C, 2.49%, 9/20/29, Callable 7/20/22 @ 100 (a) | 766 | 773 | |||||||||
HPEFS Equipment Trust, Series 2020-1A, Class B, 1.89%, 2/20/30, Callable 1/20/23 @ 100 (a) | 436 | 440 | |||||||||
Navient Student Loan Trust, Series 2015-2, Class B, 1.59% (LIBOR01M+150bps), 8/25/50, Callable 2/25/30 @ 100 (b) | 1,800 | 1,808 | |||||||||
NP SPE II LLC, Series 2017-1A, Class A1, 3.37%, 10/21/47, Callable 12/20/21 @ 100 (a) | 521 | 531 | |||||||||
SCF Equipment Leasing LLC, Series 2020-1A, Class B, 2.02%, 3/20/28, Callable 11/20/23 @ 100 (a) | 869 | 876 | |||||||||
Transportation Finance Equipment Trust, Series 2019-1, Class B, 2.06%, 5/23/24, Callable 4/23/23 @ 100 (a) | 600 | 610 | |||||||||
Westlake Automobile Receivables Trust, Series 2018-2A, Class D, 4.00%, 1/16/24, Callable 2/15/22 @ 100 (a) | 223 | 224 | |||||||||
Westlake Automobile Receivables Trust, Series 2020-1A, Class B, 1.94%, 4/15/25, Callable 8/15/23 @ 100 (a) | 2,836 | 2,855 | |||||||||
Total Asset-Backed Securities (Cost $10,482) | 10,741 | ||||||||||
Collateralized Mortgage Obligations (0.1%) | |||||||||||
Banc of America Commercial Mortgage Trust, Series 2008-1, Class AJ, 6.79%, 2/10/51 (c) | 130 | 132 | |||||||||
BTH Mortgage-Backed Securities Trust, Series 2018-21, Class A, 2.59% (LIBOR01M+250bps), 4/4/22 (a) (b) | 1,850 | 1,853 | |||||||||
Credit Suisse Commercial Mortgage Trust, Series 2007-C1, Class AMFL, 0.28% (LIBOR01M+19bps), 2/15/40 (b) | 55 | 54 | |||||||||
DBJPM Mortgage Trust, Series 2016-SFC, Class A, 2.83%, 8/10/36, Callable 8/10/26 @ 100 (a) | 1,000 | 1,014 | |||||||||
UBS Commercial Mortgage Trust, Series 2012-C1, Class XA, 2.17%, 5/10/45, Callable 3/10/22 @ 100 (a) (c) (d) | 16,694 | 25 | |||||||||
Total Collateralized Mortgage Obligations (Cost $3,047) | 3,078 | ||||||||||
Common Stocks (21.3%) | |||||||||||
Communication Services (1.6%): | |||||||||||
Alphabet, Inc. Class C (e) | 7,794 | 22,205 | |||||||||
AT&T, Inc. | 158,377 | 3,616 | |||||||||
Comcast Corp. Class A | 156,385 | 7,816 | |||||||||
Match Group, Inc. (e) | 19,671 | 2,557 | |||||||||
Netflix, Inc. (e) | 6,654 | 4,271 | |||||||||
Sirius XM Holdings, Inc. (f) | 431,383 | 2,632 |
See notes to financial statements.
3
USAA Mutual Funds Trust USAA Cornerstone Moderately Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Verizon Communications, Inc. | 78,690 | $ | 3,956 | ||||||||
Zillow Group, Inc. Class C (e) | 3,416 | 185 | |||||||||
47,238 | |||||||||||
Consumer Discretionary (1.9%): | |||||||||||
AutoZone, Inc. (e) | 1,640 | 2,980 | |||||||||
Best Buy Co., Inc. | 22,651 | 2,421 | |||||||||
eBay, Inc. | 44,476 | 3,000 | |||||||||
Ford Motor Co. | 335,320 | 6,435 | |||||||||
Garmin Ltd. | 20,945 | 2,797 | |||||||||
General Motors Co. (e) | 59,412 | 3,438 | |||||||||
Lennar Corp. Class A | 28,819 | 3,027 | |||||||||
Lowe's Cos., Inc. | 31,745 | 7,765 | |||||||||
McDonald's Corp. | 15,273 | 3,736 | |||||||||
O'Reilly Automotive, Inc. (e) | 4,794 | 3,059 | |||||||||
Target Corp. (g) | 27,584 | 6,726 | |||||||||
The Home Depot, Inc. | 26,145 | 10,474 | |||||||||
55,858 | |||||||||||
Consumer Staples (1.2%): | |||||||||||
Altria Group, Inc. | 77,035 | 3,285 | |||||||||
Archer-Daniels-Midland Co. | 48,171 | 2,997 | |||||||||
Colgate-Palmolive Co. | 39,265 | 2,946 | |||||||||
Costco Wholesale Corp. | 7,941 | 4,283 | |||||||||
PepsiCo, Inc. | 25,287 | 4,040 | |||||||||
Philip Morris International, Inc. | 77,228 | 6,637 | |||||||||
The Clorox Co. | 17,390 | 2,832 | |||||||||
The Estee Lauder Cos., Inc. | 9,577 | 3,180 | |||||||||
Tyson Foods, Inc. Class A | 38,372 | 3,030 | |||||||||
Walgreens Boots Alliance, Inc. | 63,796 | 2,858 | |||||||||
36,088 | |||||||||||
Energy (0.8%): | |||||||||||
Chevron Corp. | 35,776 | 4,038 | |||||||||
ConocoPhillips | 91,288 | 6,402 | |||||||||
Devon Energy Corp. | 69,687 | 2,931 | |||||||||
EOG Resources, Inc. | 32,370 | 2,816 | |||||||||
Exxon Mobil Corp. | 66,771 | 3,996 | |||||||||
Marathon Petroleum Corp. | 46,810 | 2,848 | |||||||||
23,031 | |||||||||||
Financials (2.9%): | |||||||||||
AGNC Investment Corp. | 8,827 | 135 | |||||||||
Annaly Capital Management, Inc. | 22,137 | 179 | |||||||||
Aon PLC Class A | 10,739 | 3,176 | |||||||||
Bank of America Corp. | 100,587 | 4,473 | |||||||||
Berkshire Hathaway, Inc. Class B (e) | 17,184 | 4,755 | |||||||||
Blackstone, Inc. | 23,371 | 3,306 | |||||||||
Capital One Financial Corp. | 42,853 | 6,022 | |||||||||
Citigroup, Inc. | 54,946 | 3,500 | |||||||||
First Republic Bank | 14,210 | 2,979 | |||||||||
Marsh & McLennan Cos., Inc. | 20,256 | 3,322 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Cornerstone Moderately Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
MetLife, Inc. | 51,961 | $ | 3,048 | ||||||||
Morgan Stanley | 73,646 | 6,983 | |||||||||
MSCI, Inc. | 4,814 | 3,030 | |||||||||
Prudential Financial, Inc. | 58,270 | 5,959 | |||||||||
Regions Financial Corp. | 122,381 | 2,784 | |||||||||
S&P Global, Inc. | 7,535 | 3,434 | |||||||||
SVB Financial Group (e) | 8,266 | 5,723 | |||||||||
Synchrony Financial | 64,530 | 2,890 | |||||||||
T. Rowe Price Group, Inc. | 13,952 | 2,790 | |||||||||
The Allstate Corp. | 54,209 | 5,894 | |||||||||
The Goldman Sachs Group, Inc. | 18,081 | 6,889 | |||||||||
The Progressive Corp. | 31,383 | 2,917 | |||||||||
Wells Fargo & Co. | 81,399 | 3,889 | |||||||||
88,077 | |||||||||||
Health Care (3.4%): | |||||||||||
AbbVie, Inc. | 33,857 | 3,903 | |||||||||
Agilent Technologies, Inc. | 19,641 | 2,964 | |||||||||
Amgen, Inc. | 33,291 | 6,621 | |||||||||
Anthem, Inc. | 8,280 | 3,363 | |||||||||
Biogen, Inc. (e) | 12,003 | 2,829 | |||||||||
Bristol-Myers Squibb Co. | 62,187 | 3,335 | |||||||||
Cigna Corp. | 15,294 | 2,935 | |||||||||
CVS Health Corp. | 39,291 | 3,499 | |||||||||
Danaher Corp. | 12,956 | 4,167 | |||||||||
Eli Lilly & Co. | 30,163 | 7,482 | |||||||||
Gilead Sciences, Inc. (g) | 52,165 | 3,596 | |||||||||
HCA Healthcare, Inc. | 12,775 | 2,882 | |||||||||
IDEXX Laboratories, Inc. (e) | 10,043 | 6,107 | |||||||||
Intuitive Surgical, Inc. (e) | 9,792 | 3,176 | |||||||||
IQVIA Holdings, Inc. (e) | 12,401 | 3,213 | |||||||||
Johnson & Johnson (g) | 62,399 | 9,730 | |||||||||
Merck & Co., Inc. | 96,432 | 7,224 | |||||||||
Mettler-Toledo International, Inc. (e) | 1,953 | 2,957 | |||||||||
Pfizer, Inc. | 89,852 | 4,828 | |||||||||
UnitedHealth Group, Inc. | 22,056 | 9,798 | |||||||||
Waters Corp. (e) | 8,481 | 2,782 | |||||||||
West Pharmaceutical Services, Inc. | 7,430 | 3,289 | |||||||||
100,680 | |||||||||||
Industrials (2.0%): | |||||||||||
3M Co. | 38,293 | 6,511 | |||||||||
Carrier Global Corp. | 57,462 | 3,110 | |||||||||
Cummins, Inc. | 13,114 | 2,751 | |||||||||
Eaton Corp. PLC | 18,722 | 3,034 | |||||||||
Fastenal Co. | 51,679 | 3,058 | |||||||||
General Dynamics Corp. | 16,173 | 3,056 | |||||||||
Illinois Tool Works, Inc. | 13,717 | 3,184 | |||||||||
Johnson Controls International PLC | 41,835 | 3,128 | |||||||||
Lockheed Martin Corp. | 19,932 | 6,644 | |||||||||
Northrop Grumman Corp. | 17,879 | 6,236 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Cornerstone Moderately Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Old Dominion Freight Line, Inc. | 8,800 | $ | 3,125 | ||||||||
Otis Worldwide Corp. | 36,288 | 2,918 | |||||||||
PACCAR, Inc. | 36,119 | 3,013 | |||||||||
Republic Services, Inc. (g) | 23,078 | 3,052 | |||||||||
Rockwell Automation, Inc. | 9,365 | 3,149 | |||||||||
W.W. Grainger, Inc. | 6,157 | 2,964 | |||||||||
58,933 | |||||||||||
Information Technology (5.9%): | |||||||||||
Accenture PLC Class A | 22,046 | 7,879 | |||||||||
Adobe, Inc. (e) | 6,778 | 4,540 | |||||||||
Apple, Inc. | 204,380 | 33,784 | |||||||||
Applied Materials, Inc. | 47,256 | 6,956 | |||||||||
Broadcom, Inc. | 14,737 | 8,159 | |||||||||
Cisco Systems, Inc. | 143,338 | 7,861 | |||||||||
Cognizant Technology Solutions Corp. Class A | 40,370 | 3,148 | |||||||||
EPAM Systems, Inc. (e) | 4,358 | 2,652 | |||||||||
Fortinet, Inc. (e) | 9,068 | 3,011 | |||||||||
Gartner, Inc. (e) | 9,047 | 2,825 | |||||||||
HP, Inc. | 198,205 | 6,993 | |||||||||
Intel Corp. | 79,367 | 3,905 | |||||||||
International Business Machines Corp. | 29,579 | 3,464 | |||||||||
Intuit, Inc. | 6,127 | 3,997 | |||||||||
Mastercard, Inc. Class A | 12,686 | 3,995 | |||||||||
Micron Technology, Inc. | 45,769 | 3,845 | |||||||||
Microsoft Corp. (g) | 88,077 | 29,117 | |||||||||
Motorola Solutions, Inc. | 12,568 | 3,182 | |||||||||
NVIDIA Corp. | 21,880 | 7,149 | |||||||||
Oracle Corp. | 81,626 | 7,407 | |||||||||
QUALCOMM, Inc. | 46,571 | 8,409 | |||||||||
Texas Instruments, Inc. | 39,483 | 7,595 | |||||||||
VeriSign, Inc. (e) | 12,649 | 3,035 | |||||||||
VMware, Inc. Class A (e) | 24,612 | 2,873 | |||||||||
175,781 | |||||||||||
Materials (0.5%): | |||||||||||
Avery Dennison Corp. | 13,015 | 2,669 | |||||||||
LyondellBasell Industries NV Class A | 34,079 | 2,969 | |||||||||
Nucor Corp. | 27,848 | 2,959 | |||||||||
PPG Industries, Inc. | 18,906 | 2,915 | |||||||||
The Sherwin-Williams Co. | 10,341 | 3,426 | |||||||||
14,938 | |||||||||||
Real Estate (0.6%): | |||||||||||
Alexandria Real Estate Equities, Inc. | 2,007 | 402 | |||||||||
American Tower Corp. | 7,016 | 1,842 | |||||||||
AvalonBay Communities, Inc. | 2,235 | 534 | |||||||||
Boston Properties, Inc. | 2,356 | 254 | |||||||||
Camden Property Trust | 1,537 | 254 | |||||||||
CBRE Group, Inc. Class A (e) | 5,297 | 506 | |||||||||
Crown Castle International Corp. | 6,601 | 1,199 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Cornerstone Moderately Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Digital Realty Trust, Inc. | 4,323 | $ | 725 | ||||||||
Duke Realty Corp. | 5,896 | 344 | |||||||||
Equinix, Inc. | 1,410 | 1,145 | |||||||||
Equity LifeStyle Properties, Inc. | 2,774 | 226 | |||||||||
Equity Residential | 5,893 | 503 | |||||||||
Essex Property Trust, Inc. | 1,030 | 350 | |||||||||
Extra Space Storage, Inc. | 2,085 | 417 | |||||||||
Healthpeak Properties, Inc. | 8,426 | 277 | |||||||||
Host Hotels & Resorts, Inc. (e) | 10,884 | 171 | |||||||||
Invitation Homes, Inc. | 8,971 | 363 | |||||||||
Iron Mountain, Inc. | 4,610 | 209 | |||||||||
Medical Properties Trust, Inc. | 9,101 | 194 | |||||||||
Mid-America Apartment Communities, Inc. | 1,812 | 374 | |||||||||
Omega Healthcare Investors, Inc. | 3,626 | 101 | |||||||||
Orion Office REIT, Inc. (e) | 793 | 14 | |||||||||
Prologis, Inc. | 11,300 | 1,703 | |||||||||
Public Storage | 2,533 | 829 | |||||||||
Realty Income Corp. | 7,938 | 539 | |||||||||
Regency Centers Corp. | 2,715 | 188 | |||||||||
SBA Communications Corp. | 1,767 | 607 | |||||||||
Simon Property Group, Inc. | 5,343 | 817 | |||||||||
Sun Communities, Inc. | 1,582 | 298 | |||||||||
UDR, Inc. | 4,691 | 266 | |||||||||
Ventas, Inc. | 5,937 | 279 | |||||||||
VICI Properties, Inc. | 8,417 | 229 | |||||||||
Vornado Realty Trust | 2,548 | 102 | |||||||||
Welltower, Inc. | 6,609 | 526 | |||||||||
Weyerhaeuser Co. | 11,676 | 439 | |||||||||
WP Carey, Inc. | 2,776 | 212 | |||||||||
17,438 | |||||||||||
Utilities (0.5%): | |||||||||||
Exelon Corp. | 58,923 | 3,107 | |||||||||
FirstEnergy Corp. | 79,076 | 2,978 | |||||||||
NRG Energy, Inc. | 83,267 | 2,999 | |||||||||
The AES Corp. | 117,799 | 2,754 | |||||||||
UGI Corp. | 65,224 | 2,691 | |||||||||
14,529 | |||||||||||
Total Common Stocks (Cost $476,999) | 632,591 | ||||||||||
Preferred Stocks (0.4%) | |||||||||||
Communication Services (0.2%): | |||||||||||
Qwest Corp., 6.50%, 9/1/56 | 220,000 | 5,522 | |||||||||
Financials (0.2%): | |||||||||||
Delphi Financial Group, Inc., 3.35% (LIBOR03M+319bps), 5/15/37 (b) (h) | 309,253 | 7,407 | |||||||||
Total Preferred Stocks (Cost $12,888) | 12,929 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Cornerstone Moderately Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Corporate Bonds (2.1%) | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
AutoNation, Inc., 4.75%, 6/1/30, Callable 3/1/30 @ 100 | $ | 683 | $ | 792 | |||||||
VF Corp., 2.95%, 4/23/30, Callable 1/23/30 @ 100 | 853 | 889 | |||||||||
Volkswagen Group of America Finance LLC, 3.20%, 9/26/26 (a) | 711 | 752 | |||||||||
2,433 | |||||||||||
Consumer Staples (0.0%): (i) | |||||||||||
McCormick & Co., Inc., 2.50%, 4/15/30, Callable 1/15/30 @ 100 | 497 | 504 | |||||||||
Sysco Corp., 5.95%, 4/1/30, Callable 1/1/30 @ 100 | 443 | 556 | |||||||||
1,060 | |||||||||||
Energy (0.1%): | |||||||||||
Florida Gas Transmission Co. LLC, 2.55%, 7/1/30, Callable 4/1/30 @ 100 (a) | 711 | 719 | |||||||||
ONEOK, Inc., 6.35%, 1/15/31, Callable 10/15/30 @ 100 | 711 | 897 | |||||||||
Targa Resources Partners LP/Targa Resources Partners Finance Corp., 5.50%, 3/1/30, Callable 3/1/25 @ 102.75 | 1,134 | 1,231 | |||||||||
2,847 | |||||||||||
Financials (1.2%): | |||||||||||
Ares Capital Corp., 3.63%, 1/19/22, Callable 12/23/21 @ 100 (g) | 5,950 | 5,961 | |||||||||
Belrose Funding Trust, 2.33%, 8/15/30, Callable 5/15/30 @ 100 (a) | 1,704 | 1,671 | |||||||||
Citizens Financial Group, Inc., 2.50%, 2/6/30, Callable 11/6/29 @ 100 | 1,701 | 1,728 | |||||||||
Cullen/Frost Capital Trust II, 1.67% (LIBOR03M+155bps), 3/1/34, Callable 1/10/22 @ 100 (b) | 9,000 | 8,639 | |||||||||
First Horizon Bank, 5.75%, 5/1/30, Callable 2/1/30 @ 100 | 853 | 1,029 | |||||||||
First Maryland Capital I, 1.12% (LIBOR03M+100bps), 1/15/27, Callable 1/10/22 @ 100 (b) | 4,000 | 3,880 | |||||||||
HSB Group, Inc., 1.03% (LIBOR03M+91bps), 7/15/27, Callable 1/10/22 @ 100 (b) | 4,550 | 4,134 | |||||||||
Loews Corp., 3.20%, 5/15/30, Callable 2/15/30 @ 100 | 1,138 | 1,216 | |||||||||
New York Community Bancorp, Inc., 5.90% (LIBOR03M+278bps), 11/6/28, Callable 11/6/23 @ 100 (b) | 426 | 459 | |||||||||
Pinnacle Financial Partners, Inc., 4.13% (LIBOR03M+278bps), 9/15/29, Callable 9/15/24 @ 100 (b) | 2,000 | 2,092 | |||||||||
Santander Holdings USA, Inc., 3.45%, 6/2/25, Callable 5/2/25 @ 100 | 714 | 753 | |||||||||
Signature Bank, 4.13% (LIBOR03M+256bps), 11/1/29, Callable 11/1/24 @ 100 (b) | 2,000 | 2,097 | |||||||||
The Progressive Corp., 3.20%, 3/26/30, Callable 12/26/29 @ 100 | 340 | 370 | |||||||||
Toyota Motor Credit Corp., 3.38%, 4/1/30, MTN | 1,071 | 1,182 | |||||||||
35,211 | |||||||||||
Health Care (0.1%): | |||||||||||
DENTSPLY SIRONA, Inc., 3.25%, 6/1/30, Callable 3/1/30 @ 100 | 1,282 | 1,354 | |||||||||
Duke University Health System, Inc., 2.60%, 6/1/30 | 850 | 862 | |||||||||
Viatris, Inc., 2.30%, 6/22/27, Callable 4/22/27 @ 100 | 427 | 429 | |||||||||
2,645 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Cornerstone Moderately Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Industrials (0.2%): | |||||||||||
Caterpillar, Inc., 2.60%, 4/9/30, Callable 1/9/30 @ 100 | $ | 853 | $ | 893 | |||||||
CoStar Group, Inc., 2.80%, 7/15/30, Callable 4/15/30 @ 100 (a) | 382 | 387 | |||||||||
Dover Corp., 2.95%, 11/4/29, Callable 8/4/29 @ 100 | 1,702 | 1,810 | |||||||||
The Conservation Fund A Nonprofit Corp., 3.47%, 12/15/29, Callable 9/15/29 @ 100 | 2,300 | 2,443 | |||||||||
5,533 | |||||||||||
Information Technology (0.1%): | |||||||||||
HP, Inc., 3.40%, 6/17/30, Callable 3/17/30 @ 100 | 1,285 | 1,350 | |||||||||
Jabil, Inc., 3.00%, 1/15/31, Callable 10/15/30 @ 100 | 382 | 393 | |||||||||
1,743 | |||||||||||
Materials (0.0%): (i) | |||||||||||
Avery Dennison Corp., 2.65%, 4/30/30, Callable 2/1/30 @ 100 | 680 | 694 | |||||||||
Colonial Enterprises, Inc., 3.25%, 5/15/30, Callable 2/15/30 @ 100 (a) | 356 | 377 | |||||||||
WRKCo, Inc., 3.00%, 6/15/33, Callable 3/15/33 @ 100 (g) | 647 | 670 | |||||||||
1,741 | |||||||||||
Real Estate (0.2%): | |||||||||||
AvalonBay Communities, Inc., 2.45%, 1/15/31, MTN, Callable 10/17/30 @ 100 | 1,705 | 1,747 | |||||||||
Essex Portfolio LP, 2.65%, 3/15/32, Callable 12/15/31 @ 100 | 1,985 | 2,008 | |||||||||
GLP Capital LP/GLP Financing II, Inc., 4.00%, 1/15/31, Callable 10/15/30 @ 100 | 426 | 450 | |||||||||
Host Hotels & Resorts LP, 3.50%, 9/15/30, Callable 6/15/30 @ 100 | 354 | 363 | |||||||||
SBA Tower Trust, 2.84%, 1/15/25, Callable 1/15/24 @ 100 (a) | 1,125 | 1,160 | |||||||||
VICI Properties LP/VICI Note Co., Inc., 4.63%, 12/1/29, Callable 12/1/24 @ 102.31 (a) | 262 | 279 | |||||||||
6,007 | |||||||||||
Utilities (0.1%): | |||||||||||
Alabama Power Co., 3.85%, 12/1/42 | 1,702 | 1,954 | |||||||||
Ameren Corp., 3.50%, 1/15/31, Callable 10/15/30 @ 100 | 569 | 619 | |||||||||
Duke Energy Florida LLC, 3.85%, 11/15/42, Callable 5/15/42 @ 100 | 1,702 | 1,939 | |||||||||
4,512 | |||||||||||
Total Corporate Bonds (Cost $61,089) | 63,732 | ||||||||||
Yankee Dollars (0.1%) | |||||||||||
Energy (0.0%): (i) | |||||||||||
Petroleos Mexicanos, 6.49%, 1/23/27, Callable 11/23/26 @ 100 | 973 | 996 | |||||||||
Financials (0.0%): (i) | |||||||||||
Banco Santander Mexico SA Institucion de Banca Multiple Grupo Financiero Santand, 5.38%, 4/17/25 (a) (g) | 812 | 883 | |||||||||
Industrials (0.0%): (i) | |||||||||||
Ferguson Finance PLC, 3.25%, 6/2/30, Callable 3/2/30 @ 100 (a) | 769 | 817 | |||||||||
Materials (0.1%): | |||||||||||
CCL Industries, Inc., 3.05%, 6/1/30, Callable 3/1/30 @ 100 (a) | 1,281 | 1,343 | |||||||||
Total Yankee Dollars (Cost $3,829) | 4,039 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA Cornerstone Moderately Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
U.S. Government Agency Mortgages (1.4%) | |||||||||||
Federal Home Loan Mortgage Corporation 3.50%, 4/1/46 – 4/1/48 | $ | 6,854 | $ | 7,278 | |||||||
3.00%, 6/1/46 – 6/1/47 | 31,463 | 33,000 | |||||||||
4.00%, 7/1/48 | 1,477 | 1,575 | |||||||||
41,853 | |||||||||||
Federal National Mortgage Association Series 2016-M2, Class AV2, 2.15%, 1/25/23 | 1,147 | 1,155 | |||||||||
Government National Mortgage Association 6.50%, 4/15/24 | 2 | 2 | |||||||||
43,010 | |||||||||||
Total U.S. Government Agency Mortgages (Cost $41,261) | 43,010 | ||||||||||
U.S. Treasury Obligations (3.6%) | |||||||||||
U.S. Treasury Bonds 3.13%, 8/15/44 | 19,200 | 23,685 | |||||||||
2.38%, 11/15/49 | 10,000 | 11,292 | |||||||||
U.S. Treasury Notes 1.63%, 4/30/23 | 29,000 | 29,509 | |||||||||
2.25%, 11/15/25 | 5,000 | 5,233 | |||||||||
1.63%, 2/15/26 | 30,000 | 30,666 | |||||||||
2.38%, 5/15/27 (g) | 6,100 | 6,476 | |||||||||
Total U.S. Treasury Obligations (Cost $98,658) | 106,861 | ||||||||||
Commercial Paper (0.2%) (j) | |||||||||||
Cabot Corp., 0.13%, 12/7/21 (a)) | 2,000 | 2,000 | |||||||||
CenterPoint Energy Resou, 0.12%, 12/1/21 (a) | 500 | 500 | |||||||||
Dollarama, Inc., 0.13%, 12/1/21 (a) | 2,000 | 2,000 | |||||||||
Dominion Resources, Inc., 0.13%, 12/2/21 (a) | 1,000 | 1,000 | |||||||||
Vw Credit, Inc., 0.13%, 12/8/21 (a) | 1,500 | 1,500 | |||||||||
Total Commercial Paper (Cost $7,000) | 7,000 | ||||||||||
Exchange-Traded Funds (47.9%) | |||||||||||
Invesco DB Commodity Index Tracking Fund | 256,100 | 4,989 | |||||||||
Invesco FTSE RAFI Developed Markets ex-US ETF (f) | 653,206 | 29,780 | |||||||||
Invesco FTSE RAFI Emerging Markets ETF (f) | 1,539,501 | 33,130 | |||||||||
iShares 7-10 Year Treasury Bond ETF (f) | 341,652 | 39,563 | |||||||||
iShares Core MSCI EAFE ETF | 32,626 | 2,381 | |||||||||
iShares Core MSCI Emerging Markets ETF | 1,811,728 | 108,921 | |||||||||
iShares Core S&P 500 ETF | 363,746 | 166,461 | |||||||||
iShares Core S&P Small-Cap ETF (f) | 560,045 | 61,779 | |||||||||
iShares Core US Aggregate Bond ETF | 779,768 | 89,494 | |||||||||
iShares Core US REIT ETF (g) | 184,539 | 11,569 | |||||||||
iShares MSCI Canada ETF (f) | 688,609 | 25,740 | |||||||||
iShares MSCI International Momentum Factor ETF | 1,164,448 | 44,377 | |||||||||
iShares MSCI International Quality Factor ETF (f) | 1,315,008 | 50,312 | |||||||||
JPMorgan BetaBuilders Canada ETF (f) | 160,445 | 10,431 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA Cornerstone Moderately Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Schwab Fundamental Emerging Markets Large Co. Index ETF | 2,206,197 | $ | 67,929 | ||||||||
Schwab Fundamental International Large Co. Index ETF (f) | 3,168,339 | 100,341 | |||||||||
Schwab Fundamental International Small Co. Index ETF (f) | 593,600 | 21,702 | |||||||||
SPDR Gold Shares (f) | 46,476 | 7,692 | |||||||||
SPDR S&P Emerging Markets SmallCap ETF | 107,983 | 6,335 | |||||||||
U.S. Oil Fund LP (f) | 110,788 | 5,308 | |||||||||
Vanguard FTSE All-World ex-US ETF | 866,986 | 51,967 | |||||||||
Vanguard FTSE Developed Markets ETF (f) | 4,194,994 | 208,491 | |||||||||
Vanguard Mid-Capital ETF (f) | 30,077 | 7,401 | |||||||||
Vanguard Mortgage-Backed Securities ETF | 264,207 | 14,014 | |||||||||
Vanguard Real Estate ETF (f) | 274,185 | 29,266 | |||||||||
Vanguard S&P 500 ETF (g) | 182,485 | 76,472 | |||||||||
Vanguard Short-Term Bond ETF | 325,167 | 26,443 | |||||||||
Vanguard Short-Term Corporate Bond ETF | 186,391 | 15,200 | |||||||||
Vanguard Small-Cap Value ETF (g) | 96,209 | 16,511 | |||||||||
Vanguard Total Bond Market ETF | 424,389 | 36,251 | |||||||||
Vanguard Total Stock Market ETF (g) | 160,507 | 37,470 | |||||||||
Wisdom Tree Trust — WisdomTree Emerging Markets SmallCap Dividend Fund (f) | 202,622 | 10,395 | |||||||||
Xtrackers USD High Yield Corporate Bond ETF (f) | 237,755 | 9,315 | |||||||||
Total Exchange-Traded Funds (Cost $1,174,418) | 1,427,430 | ||||||||||
Affiliated Exchange-Traded Funds (20.7%) | |||||||||||
Victoryshares ESG Core Plus Bond ETF | 4,186,778 | 104,609 | |||||||||
VictoryShares USAA Core Intermediate-Term Bond ETF (f) | 8,562,500 | 456,981 | |||||||||
VictoryShares USAA Core Short-Term Bond ETF (f) | 969,310 | 49,964 | |||||||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF (g) | 68,000 | 3,159 | |||||||||
Total Affiliated Exchange-Traded Funds (Cost $619,510) | 614,713 | ||||||||||
Collateral for Securities Loaned^ (5.0%) | |||||||||||
Fidelity Investments Money Market Government Portfolio Institutional Shares, 0.01% (k) | 6,185,481 | 6,186 | |||||||||
Goldman Sachs Financial Square Government Fund Institutional Shares, 0.03% (k) | 50,084,188 | 50,084 | |||||||||
HSBC U.S. Government Money Market Fund I Shares, 0.03% (k) | 91,277,890 | 91,278 | |||||||||
Total Collateral for Securities Loaned (Cost $147,548) | 147,548 | ||||||||||
Total Investments (Cost $2,656,729) — 103.2% | 3,073,672 | ||||||||||
Liabilities in excess of other assets — (3.2)% | (96,311 | ) | |||||||||
NET ASSETS — 100.00% | $ | 2,977,361 |
At November 30, 2021, the Fund's investments in foreign securities were 26.0% of net assets.
^ Purchased with cash collateral from securities on loan.
(a) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of November 30, 2021, the fair value of these securities was $26,362 (thousands) and amounted to 0.9% of net assets.
See notes to financial statements.
11
USAA Mutual Funds Trust USAA Cornerstone Moderately Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(b) Variable or Floating-Rate Security. Rate disclosed is as of November 30, 2021.
(c) The rate for certain asset-backed and mortgage-backed securities may vary based on factors relating to the pool of assets underlying the security. The rate disclosed is the rate in effect at November 30, 2021.
(d) Security is interest only.
(e) Non-income producing security.
(f) All or a portion of this security is on loan.
(g) All or a portion of this security has been segregated as collateral for derivative instruments.
(h) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of November 30, 2021, illiquid securities were 0.2% of net assets.
(i) Amount represents less than 0.05% of net assets.
(j) Rate represents the effective yield at November 30, 2021.
(k) Rate disclosed is the daily yield on November 30, 2021.
bps — Basis points
ETF — Exchange-Traded Fund
LIBOR — London InterBank Offered Rate
LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of November 30, 2021, based on the last reset date of the security
LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of November 30, 2021, based on the last reset date of the security
LLC — Limited Liability Company
LP — Limited Partnership
MTN — Medium Term Note
PLC — Public Limited Company
REIT — Real Estate Investment Trust
See notes to financial statements.
12
USAA Mutual Funds Trust USAA Cornerstone Moderately Aggressive Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
Futures Contracts Purchased
(Amounts not in thousands)
Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||
S&P/Toronto Stock Exchange 60 Index Futures | 118 | 12/16/21 | $ | 22,861,075 | $ | 23,021,686 | $ | 422,913 | |||||||||||||||
Swiss Market Index Futures | 244 | 12/17/21 | 31,902,808 | 32,427,890 | 385,992 | ||||||||||||||||||
$ | 808,905 |
Futures Contracts Sold
(Amounts not in thousands)
Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||
ASX SPI 200 Index Futures | 98 | 12/16/21 | $ | 13,441,358 | $ | 12,626,202 | $ | 318,574 | |||||||||||||||
Euro Stoxx 50 Futures | 480 | 12/17/21 | 23,472,200 | 22,192,033 | 333,438 | ||||||||||||||||||
FTSE 100 Index Futures | 151 | 12/17/21 | 14,641,527 | 14,214,540 | 270,512 | ||||||||||||||||||
Tokyo Price Index Futures | 109 | 12/9/21 | 20,314,580 | 18,285,613 | 1,559,572 | ||||||||||||||||||
$ | 2,482,096 | ||||||||||||||||||||||
Total unrealized appreciation | $ | 3,291,001 | |||||||||||||||||||||
Total unrealized depreciation | — | ||||||||||||||||||||||
Total net unrealized appreciation (depreciation) | $ | 3,291,001 |
See notes to financial statements.
13
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Cornerstone Moderately Aggressive Fund | |||||||
Assets: | |||||||
Affiliated investments, at value (Cost $619,510) | $ | 614,713 | |||||
Unaffiliated investments, at value (Cost $2,037,219) | 2,458,959 | (a) | |||||
Cash | 62,502 | ||||||
Deposit with broker for futures contracts | 3,431 | ||||||
Receivables: | |||||||
Interest and dividends | 2,349 | ||||||
Capital shares issued | 405 | ||||||
Variation margin on open futures contracts | 726 | ||||||
Reclaims | 8 | ||||||
From Adviser | 389 | ||||||
Prepaid expenses | 33 | ||||||
Total Assets | 3,143,515 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 147,548 | ||||||
Collateral received from broker for futures contracts | 3,524 | ||||||
Payable for foreign currency | — | (b) | |||||
Investments purchased | 10,882 | ||||||
Capital shares redeemed | 1,047 | ||||||
Variation margin on open futures contracts | 692 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 1,477 | ||||||
Administration fees | 368 | ||||||
Custodian fees | 25 | ||||||
Transfer agent fees | 432 | ||||||
Compliance fees | 2 | ||||||
Other accrued expenses | 157 | ||||||
Total Liabilities | 166,154 | ||||||
Net Assets: | |||||||
Capital | 2,311,803 | ||||||
Total accumulated earnings/(loss) | 665,558 | ||||||
Net Assets | $ | 2,977,361 | |||||
Shares (unlimited number of shares authorized with no par value): | 100,022 | ||||||
Net asset value, offering and redemption price per share: (c) | $ | 29.77 |
(a) Includes $142,751 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
14
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Cornerstone Moderately Aggressive Fund | |||||||
Investment Income: | |||||||
Income distributions from affiliated funds | $ | 3,664 | |||||
Dividends | 20,298 | ||||||
Interest | 5,547 | ||||||
Securities lending (net of fees) | 286 | ||||||
Foreign tax withholding | (8 | ) | |||||
Total Income | 29,787 | ||||||
Expenses: | |||||||
Investment advisory fees | 8,952 | ||||||
Administration fees | 2,276 | ||||||
Sub-Administration fees | 43 | ||||||
Custodian fees | 65 | ||||||
Transfer agent fees | 2,624 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 10 | ||||||
Legal and audit fees | 34 | ||||||
State registration and filing fees | 20 | ||||||
Interfund lending fees | 1 | ||||||
Other expenses | 148 | ||||||
Total Expenses | 14,197 | ||||||
Expenses waived/reimbursed by Adviser | (661 | ) | |||||
Net Expenses | 13,536 | ||||||
Net Investment Income (Loss) | 16,251 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from unaffiliated investment securities and foreign currency translations | 82,326 | ||||||
Net realized gains (losses) from futures contracts | (3,798 | ) | |||||
Net change in unrealized appreciation/depreciation on unaffiliated investment securities and foreign currency translations | (64,301 | ) | |||||
Net change in unrealized appreciation/depreciation on affiliated funds | (2,244 | ) | |||||
Net change in unrealized appreciation/depreciation on futures contracts | 4,740 | ||||||
Net realized/unrealized gains (losses) on investments | 16,723 | ||||||
Change in net assets resulting from operations | $ | 32,974 |
See notes to financial statements.
15
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Cornerstone Moderately Aggressive Fund | |||||||||||
Six Months Ended November 30, 2021 (unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 16,251 | $ | 33,724 | |||||||
Net realized gains (losses) from investments | 78,528 | 176,187 | |||||||||
Net change in unrealized appreciation/depreciation on investments | (61,805 | ) | 415,330 | ||||||||
Change in net assets resulting from operations | 32,974 | 625,241 | |||||||||
Change in net assets resulting from distributions to shareholders | — | (55,505 | ) | ||||||||
Change in net assets resulting from capital transactions | (82,588 | ) | (205,115 | ) | |||||||
Change in net assets | (49,614 | ) | 364,621 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 3,026,975 | 2,662,354 | |||||||||
End of period | $ | 2,977,361 | $ | 3,026,975 | |||||||
Capital Transactions: | |||||||||||
Proceeds from shares issued | $ | 89,585 | $ | 174,743 | |||||||
Distributions reinvested | — | 55,021 | |||||||||
Cost of shares redeemed | (172,173 | ) | (434,879 | ) | |||||||
Change in net assets resulting from capital transactions | $ | (82,588 | ) | $ | (205,115 | ) | |||||
Share Transactions: | |||||||||||
Issued | 2,994 | 6,386 | |||||||||
Reinvested | — | 2,015 | |||||||||
Redeemed | (5,755 | ) | (16,102 | ) | |||||||
Change in Shares | (2,761 | ) | (7,701 | ) |
See notes to financial statements.
16
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17
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Cornerstone Moderately Aggressive Fund | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (unaudited) | $ | 29.45 | 0.16 | (d) | 0.16 | 0.32 | — | — | |||||||||||||||||||
Year Ended May 31: 2021 | $ | 24.10 | 0.32 | (d) | 5.56 | 5.88 | (0.37 | ) | (0.16 | ) | |||||||||||||||||
2020 | $ | 23.97 | 0.48 | (d) | 0.18 | 0.66 | (0.39 | ) | (0.14 | ) | |||||||||||||||||
2019 | $ | 25.78 | 0.46 | (0.79 | ) | (0.33 | ) | (0.39 | ) | (1.09 | ) | ||||||||||||||||
2018 | $ | 26.09 | 0.42 | 1.28 | 1.70 | (0.44 | ) | (1.57 | ) | ||||||||||||||||||
2017 | $ | 24.08 | 0.45 | 2.06 | 2.51 | (0.50 | ) | — |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) The expense ratios exclude the impact of expenses paid by each underlying fund.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Effective June 22, 2018, USAA Asset Management Company ("AMCO") (previous Investment Adviser) voluntarily agreed to limit the annual expenses of the Fund to 0.98% of the Fund's average daily net assets.
(f) For the year ended May 31, 2019, the portfolio turnover calculation excludes the value of securities purchased of $370,785 thousand and sold of $3,096 thousand after the Fund's acquisition of First Start Growth Fund. Reflects increased trading activity due to usage of quantitative investment strategies.
See notes to financial statements.
18
USAA Mutual Funds Trust | Financial Highlights — continued |
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b)(c) | Net Investment Income (Loss)(b) | Gross Expenses(b)(c) | Net Assets, End of Period (000's) | Portfolio Turnover(a) | ||||||||||||||||||||||||||||
USAA Cornerstone Moderately Aggressive Fund | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (unaudited) | — | $ | 29.77 | 1.09 | % | 0.89 | % | 1.07 | % | 0.93 | % | $ | 2,977,361 | 21 | % | ||||||||||||||||||||
Year Ended May 31: 2021 | (0.53 | ) | $ | 29.45 | 24.58 | % | 0.96 | % | 1.18 | % | 0.97 | % | $ | 3,026,975 | 64 | % | |||||||||||||||||||
2020 | (0.53 | ) | $ | 24.10 | 2.59 | % | 0.98 | % | 1.94 | % | 0.99 | % | $ | 2,662,354 | 92 | % | |||||||||||||||||||
2019 | (1.48 | ) | $ | 23.97 | (1.20 | )% | 0.98 | %(e) | 1.91 | % | 1.01 | % | $ | 2,777,038 | 95 | %(f) | |||||||||||||||||||
2018 | (2.01 | ) | $ | 25.78 | 6.52 | % | 0.97 | % | 1.64 | % | 0.97 | % | $ | 2,493,883 | 56 | % | |||||||||||||||||||
2017 | (0.50 | ) | $ | 26.09 | 10.59 | % | 1.06 | % | 1.78 | % | 1.06 | % | $ | 2,398,407 | 69 | % |
For a Share Outstanding Throughout Each Period
See notes to financial statements.
19
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Cornerstone Moderately Aggressive Fund (the "Fund"). The Fund is classified as diversified under the 1940 Act.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs"), American Depositary Receipts ("ADRs"), and Rights are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.
20
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Investments in open-end investment companies, including underlying funds, are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
Debt securities are valued each business day by a pricing service approved by the Board. The approved pricing service uses the evaluated bid or the last sale price to value securities. Debt obligations maturing within 60 days may be valued at their amortized cost, provided that the amortized cost represents the fair value of such securities. These valuations are typically categorized as Level 2 in the fair value hierarchy.
Futures contracts are valued at the settlement price established each day by the board of trade or an exchange on which they are traded. These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Asset-Backed Securities | $ | — | $ | 10,741 | $ | — | $ | 10,741 | |||||||||||
Collateralized Mortgage Obligations | — | 3,078 | — | 3,078 | |||||||||||||||
Common Stocks | 632,591 | — | — | 632,591 | |||||||||||||||
Preferred Stocks | 5,522 | 7,407 | — | 12,929 | |||||||||||||||
Corporate Bonds | — | 63,732 | — | 63,732 | |||||||||||||||
Yankee Dollars | — | 4,039 | — | 4,039 | |||||||||||||||
U.S. Government Agency Mortgages | — | 43,010 | — | 43,010 | |||||||||||||||
U.S. Treasury Obligations | — | 106,861 | — | 106,861 | |||||||||||||||
Commercial Paper | — | 7,000 | — | 7,000 | |||||||||||||||
Exchange-Traded Funds | 1,427,430 | — | — | 1,427,430 | |||||||||||||||
Affiliated Exchange-Traded Funds | 614,713 | — | — | 614,713 | |||||||||||||||
Collateral for Securities Loaned | 147,548 | — | — | 147,548 | |||||||||||||||
Total | $ | 2,827,804 | $ | 245,868 | $ | — | $ | 3,073,672 | |||||||||||
Other Financial Investments* | |||||||||||||||||||
Assets: | |||||||||||||||||||
Futures Contracts | $ | 3,291 | $ | — | $ | — | $ | 3,291 | |||||||||||
Total | $ | 3,291 | $ | — | $ | — | $ | 3,291 |
^ Futures contracts are valued at the unrealized appreciation (depreciation) on the investment.
For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
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Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a portfolio of securities often designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Mortgage and Asset-Backed Securities:
The values of some mortgage-related or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Fund to a lower rate of return upon reinvestment of principal. The values of mortgage- and asset-backed securities depend in part on the credit quality and adequacy of the underlying assets or collateral and may fluctuate in response to the market's perception of these factors as well as current and future repayment rates. Some mortgage-backed securities are backed by the full faith and credit of the U.S. government (e.g., mortgage-backed securities issued by the Government National Mortgage Association, commonly known as "Ginnie Mae"), while other mortgage-backed securities (e.g., mortgage-backed securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, commonly known as "Fannie Mae" and "Freddie Mac", respectively), are backed only by the credit of the government entity issuing them. In addition, some mortgage-backed securities are issued by private entities and, as such, are not guaranteed by the U.S. government or any agency or instrumentality of the U.S. government.
Derivative Instruments:
Futures Contracts:
The Fund may enter into contracts for the future delivery of securities or foreign currencies and futures contracts based on a specific security, class of securities, foreign currency or an index, and purchase or sell options on any such futures contracts. A futures contract on a securities index is an agreement obligating either party to pay, and entitling the other party to receive, while the contract is outstanding, cash payments based on the level of a specified securities index. No physical delivery of the underlying asset is made. The Fund may enter into futures contracts in an effort to hedge against market risks. The acquisition of put and call options on futures contracts will give the Fund the right (but not the obligation), for a specified price, to sell or to purchase the underlying futures contract, upon exercise of the option, at any time during the option period. Futures transactions involve brokerage costs and require the Fund to segregate assets to cover contracts that would require it to purchase securities or currencies. A good faith margin deposit, known as initial margin, of cash or government securities with a broker or custodian is required to initiate and maintain open positions in futures contracts. Subsequent payments, known as variation margin, are made or received by the Fund based on the change in the market value of the position and are recorded as unrealized appreciation or depreciation until the contract is closed out, at which time the gain or loss is realized. The Fund may lose the expected benefit of futures transactions if interest rates, exchange rates or securities prices change in an unanticipated manner. Such unanticipated changes may also result in lower overall performance than if the Fund had not entered into any futures transactions. In addition, the value of the Fund's futures positions may not prove to be perfectly or even highly correlated with the value of its portfolio securities or
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foreign currencies, limiting the Fund's ability to hedge effectively against interest rate, exchange rate and/or market risk and giving rise to additional risks. There is no assurance of liquidity in the secondary market for purposes of closing out futures positions. The collateral held by the Fund is presented on the Statement of Assets and Liabilities under Deposit with broker for futures contracts and Collateral received from broker for futures contracts. During the six months ended November 30, 2021, the Fund entered into futures contracts primarily for the strategy of gaining exposure to a particular asset class or securities market.
Summary of Derivative Instruments:
The following table summarizes the fair values of derivative instruments on the Statement of Assets and Liabilities, categorized by risk exposure, as of November 30, 2021 (amounts in thousands):
Assets | Liabilities | ||||||||||
Variation Margin Receivable on Open Futures Contracts* | Variation Margin Payable on Open Futures Contracts* | ||||||||||
Equity Risk Exposure | $ | 3,291 | $ | — |
* Includes cumulative unrealized appreciation (depreciation) of futures contracts as reported on the Schedule of Portfolio Investments. Only current day's variation margin for futures contracts is reported within the Statement of Assets and Liabilities.
The following table presents the effect of derivative instruments on the Statement of Operations, categorized by risk exposure, for the six months ended November 30, 2021 (amounts in thousands):
Net Realized Gains (Losses) on Derivatives Recognized as a Result of Operations | Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized as a Result of Operations | ||||||||||
Net Realized Gains (Losses) from Futures Contracts | Net Change in Unrealized Appreciation/Depreciation on Futures Contracts | ||||||||||
Equity Risk Exposure | $ | (3,798 | ) | $ | 4,740 |
All open derivative positions at period end are reflected on the Fund's Schedule of Portfolio Investments. The underlying face value of open derivative positions relative to the Fund's net assets at period end is generally representative of the notional amount of open positions to net assets throughout the period.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis. Paydown gains or losses on applicable securities, if any, are recorded as components of Interest income on the Statement of Operations.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with
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increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of November 30, 2021.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 142,751 | $ | — | $ | 147,548 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as Net realized gains (losses) from investment securities and foreign currency translations on the Statement of Operations.
Foreign Taxes:
The Fund may be subject to foreign taxes related to foreign income received (a portion of which may be reclaimable), capital gains on the sale of securities, and certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
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Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
Cross-Trade Transactions:
Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades, which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the six months ended November 30, 2021, the Fund engaged in the following securities transactions with affiliated funds, which resulted in the following net realized gains (losses) (amounts in thousands):
Purchases | Sales | Net Realized Gains (Losses) | |||||||||
$ | — | $ | 36,528 | $ | 2,082 |
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding U.S. Government Securities | U.S. Government Securities | ||||||||||||||
Purchases | Sales | Purchases | Sales | ||||||||||||
$ | 634,212 | $ | 666,857 | $ | — | $ | 74,181 |
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive fees accrued daily and paid monthly at an annualized rate of 0.59% of the Fund's average daily net assets. Amounts incurred and paid to VCM for the six months ended November 30, 2021, are reflected on the Statement of Operations as Investment advisory fees.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six months ended November 30, 2021, the Fund had no subadvisers.
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Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, which is based on the Fund's average daily net assets. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Administration fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Amounts incurred and paid to VCTA for the six months ended November 30, 2021, are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of November 30, 2021, the expense limit (excluding voluntary waivers) was 0.98%.
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In addition, the Fund invests in affiliated VCM exchange-traded fund(s) ("affiliated ETFs"). These affiliated ETF Adviser fee reimbursements are not available for recoupment. The Fund's Adviser fee is reimbursed by VCM to the extent of the indirect Adviser fee incurred through the Fund's proportional investment in the affiliated ETF(s). As of November 30, 2021, the Fund's Adviser fee was reimbursed by VCM in an amount of $661 thousand, of which $280 thousand is receivable from VCM.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment. As of November 30, 2021, the Fund had no amounts available to be repaid to the Adviser.
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six months ended November 30, 2021.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Tactical Allocation Risk — The Fund has a targeted risk tolerance and a corresponding asset allocation target; however, mere asset allocation and volatility are not the sole determination of risk. The Fund's managers will tactically allocate away from the target allocation as market conditions and the perceived risks warrant. The Fund bears the risk that the managers' tactical allocation will not be successful.
Affiliated Funds Risk — The risks of the Fund directly correspond to the risks of the underlying affiliated funds in which the Fund invests. By investing in the underlying affiliated funds, the Fund has exposure to the risk of many different areas of the market. The degree to which the risks described below apply to the Fund varies according to the Fund's asset allocation. For instance, the more the Fund is allocated to stock funds, the greater the risk associated with equity securities. The Fund also is subject to asset allocation risk (i.e., the risk that allocations will not produce the intended results) and to management risk (i.e., the risk that the selection of underlying affiliated funds will not produce the intended results).
Conflict of Interest Risk — In managing a Fund that invests in underlying affiliated funds, the Adviser may have conflicts of interest in allocating the Fund's assets among the various underlying affiliated funds. This is because the fees payable by some of the underlying affiliated funds to the Adviser and/or its affiliates are higher than the fees payable by other underlying affiliated funds, and because the Adviser also manages and administers the underlying affiliated funds.
LIBOR Discontinuation Risk — Many debt securities, derivatives, and other financial instruments, including some of the Fund's investments, use the London Interbank Offered Rate ("LIBOR") as the reference or benchmark rate for variable interest rate calculations. LIBOR is being discontinued as a floating rate benchmark. The Secured Overnight Financing Rate ("SOFR") is expected to replace U.S. dollar LIBOR as the principal floating rate benchmark. The LIBOR discontinuation has affected, and will continue to affect, financial markets generally. The date of the LIBOR discontinuation will vary depending on the LIBOR currency and tenor. The UK Financial Conduct Authority (the "FCA"), which is the regulator of the LIBOR administrator, has announced that, after specified dates, LIBOR settings will cease to be provided by any administrator or will no longer be representative. Those dates are: (i) June 30, 2023, in the case of the principal U.S. dollar LIBOR tenors (overnight and one-, three-, six- and 12-month; and (ii) December 31, 2021, in all other cases (i.e., one-week and two-month U.S. dollar LIBOR and all tenors of non-U.S. dollar LIBOR). Accordingly, many existing LIBOR obligations will
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transition to another benchmark after June 30, 2023, or, in some cases, after December 31, 2021. The FCA and certain U.S. regulators have stated that, despite expected publication of U.S. dollar LIBOR through June 30, 2023, no new contracts using U.S. dollar LIBOR should be entered into after December 31, 2021. Although the foregoing reflects the likely timing of the LIBOR discontinuation and certain consequences, there is no assurance that LIBOR, of any particular currency or tenor, will continue to be published until any particular date or in any particular form, and there is no assurance regarding the consequences of the LIBOR discontinuation. In the United States, there have been efforts to identify alternative reference interest rates for U.S. dollar LIBOR. The cash markets have generally coalesced around recommendations from the Alternative Reference Rates Committee (the "ARRC"), which was convened by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York. The ARRC has recommended that U.S. dollar LIBOR be replaced by rates based on SOFR plus, in the case of existing LIBOR contracts and obligations, a spread adjustment. For purposes of the following discussion, the term "LIBOR" refers solely to U.S. dollar LIBOR. SOFR has a limited history, having been first published in April 2018. The future performance of SOFR, and SOFR-based reference rates, cannot be predicted based on SOFR's history or otherwise. SOFR has been more volatile than other benchmark or market rates, such as three-month LIBOR, during certain periods. Future levels of SOFR may bear little or no relation to historical levels of SOFR, LIBOR or other rates. SOFR-based rates will differ from LIBOR, and the differences may be material. SOFR is intended to be a broad measure of the cost of borrowing funds overnight in transactions that are collateralized by U.S. Treasury securities. In contrast, LIBOR is intended to be an unsecured rate that represents interbank funding costs for different short-term tenors. For these reasons, among others, there is no assurance that SOFR, or rates derived from SOFR, will perform in the same or a similar way as LIBOR would have performed at any time, and there is no assurance that SOFR-based rates will be a suitable substitute for LIBOR. Non-LIBOR floating rate obligations, including SOFR-based obligations, may have returns and values that fluctuate more than those of floating rate obligations that are based on LIBOR or other rates. Resulting changes in the financial markets may adversely affect financial markets generally and may also adversely affect our operations specifically, particularly as financial markets transition away from LIBOR.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
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Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is presented on the Statement of Operations under Interfund lending.
The Fund did not utilize or participate in the Facility during the six months ended November 30, 2021.
The average borrowing or lending for the days outstanding and average interest rate for the Fund that utilized this Facility during the six months ended November 30, 2021, were as follows (amounts in thousands):
Borrower or Lender | Amount Outstanding at November 30, 2021 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
Borrower | $ | — | $ | 7,552 | 12 | 0.59 | % | $ | 15,154 |
* For the six months ended November 30, 2021, based on the number of days borrowings were outstanding.
7. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had no capital loss carryforwards, for the federal income tax purposes.
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(Unaudited)
8. Affiliated Securities:
An affiliated security is a security in which the Fund has ownership of at least 5% of the security's outstanding voting shares, an investment company managed by VCM, or an issuer under common control with a Fund or VCM determined as of the last business day of the month. The Fund does not invest in affiliated securities for the purpose of exercising management or control. These securities are noted as affiliated on the Fund's Schedule of Portfolio Investments. Transactions in affiliated securities during the six months ended November 30, 2021, were as follows (amounts in thousands):
Fair Value 5/31/2021 | Purchases at Cost | Proceeds from Sales | Realized Gains (Losses) | Capital Gain Distribution | Net Change in Unrealized Appreciation/ Depreciation | Fair Value 11/30/21 | Dividend Income | ||||||||||||||||||||||||||||
VictoryShares ESG Core Plus Bond ETF | $ | — | $ | 209,342 | $ | (104,671 | ) | $ | — | $ | — | $ | (62 | ) | $ | 104,609 | $ | 52 | |||||||||||||||||
VictoryShares USAA Core Intermediate-Term Bond ETF | 257,355 | 402,253 | (201,127 | ) | — | — | (1,500 | ) | 456,981 | 3,119 | |||||||||||||||||||||||||
VictoryShares USAA Core Short-Term Bond ETF | 50,302 | — | — | — | — | (338 | ) | 49,964 | 394 | ||||||||||||||||||||||||||
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF | 3,503 | — | — | — | — | (344 | ) | 3,159 | 99 | ||||||||||||||||||||||||||
$ | 311,160 | $ | 611,595 | $ | (305,798 | ) | $ | — | $ | — | $ | (2,244 | ) | $ | 614,713 | $ | 3,664 |
30
USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Example
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21- 11/30/21* | Hypothetical Expenses Paid During Period 6/1/21- 11/30/21* | Annualized Expense Ratio During Period 6/1/21- 11/30/21 | ||||||||||||||||||
$ | 1,000.00 | $ | 1,010.90 | $ | 1,020.61 | $ | 4.49 | $ | 4.51 | 0.89 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
31
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
27800-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA Growth and Tax Strategy Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 29 | ||||||
Statement of Operations | 30 | ||||||
Statements of Changes in Net Assets | 31 | ||||||
Financial Highlights | 34 | ||||||
Notes to Financial Statements | 36 | ||||||
Supplemental Information | 48 | ||||||
Proxy Voting and Portfolio Holdings Information | 48 | ||||||
Expense Examples | 48 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks a conservative balance for the investor between income, the majority of which is exempt from federal income tax, and the potential for long-term growth of capital to preserve purchasing power.
Top 10 Sectors*:
November 30, 2021
(% of Net Assets)
Information Technology | 13.6 | % | |||||
Consumer Discretionary | 6.1 | % | |||||
Health Care | 5.8 | % | |||||
Financials | 5.1 | % | |||||
Communication Services | 4.8 | % | |||||
Industrials | 3.7 | % | |||||
Consumer Staples | 2.4 | % | |||||
Energy | 1.3 | % | |||||
Materials | 1.2 | % | |||||
Real Estate | 1.2 | % |
Top 5 Tax-Exempt Bonds:
November 30, 2021
(% of Net Assets)
Massachusetts Development Finance Agency Revenue | 1.7 | % | |||||
Port of Port Arthur Navigation District Revenue | 1.7 | % | |||||
Illinois Finance Authority Revenue | 1.2 | % | |||||
County of St. Lucie Revenue | 1.2 | % | |||||
Public Finance Authority Revenue | 1.0 | % |
Top 5 Blue Chip Stocks:
November 30, 2021
(% of Net Assets)
Apple, Inc. | 3.3 | % | |||||
Microsoft Corp. | 3.0 | % | |||||
Amazon.com, Inc. | 1.8 | % | |||||
Tesla, Inc. | 1.1 | % | |||||
Alphabet, Inc. Class A | 1.0 | % |
Refer to the Schedule of Portfolio Investments for a complete list of securities.
* Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
2
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (46.3%) | |||||||||||
Blue Chip Stocks: | |||||||||||
Communication Services (4.8%): | |||||||||||
Activision Blizzard, Inc. | 6,138 | $ | 360 | ||||||||
Alphabet, Inc. Class A (a) | 3,059 | 8,681 | |||||||||
Alphabet, Inc. Class C (a) | 2,961 | 8,436 | |||||||||
AT&T, Inc. | 52,398 | 1,196 | |||||||||
Charter Communications, Inc. Class A (a) | 1,764 | 1,140 | |||||||||
Comcast Corp. Class A | 45,562 | 2,277 | |||||||||
Discovery, Inc. (a) (b) | 1,962 | 46 | |||||||||
Electronic Arts, Inc. | 2,332 | 290 | |||||||||
Fox Corp. Class A | 4,287 | 153 | |||||||||
Fox Corp. Class B | 1,992 | 67 | |||||||||
Live Nation Entertainment, Inc. (a) | 1,845 | 197 | |||||||||
Lumen Technologies, Inc. | 11,587 | 143 | |||||||||
Meta Platforms, Inc. Class A (a) | 24,295 | 7,883 | |||||||||
Netflix, Inc. (a) | 4,641 | 2,979 | |||||||||
News Corp. Class A | 2,721 | 59 | |||||||||
Omnicom Group, Inc. | 2,667 | 179 | |||||||||
Take-Two Interactive Software, Inc. (a) | 1,245 | 206 | |||||||||
The Interpublic Group of Cos., Inc. | 4,839 | 161 | |||||||||
The Walt Disney Co. (a) | 18,329 | 2,656 | |||||||||
T-Mobile U.S., Inc. (a) | 3,497 | 380 | |||||||||
Twitter, Inc. (a) | 7,251 | 319 | |||||||||
Verizon Communications, Inc. | 49,349 | 2,481 | |||||||||
ViacomCBS, Inc. Class B | 6,762 | 209 | |||||||||
40,498 | |||||||||||
Consumer Discretionary (6.1%): | |||||||||||
Advance Auto Parts, Inc. | 832 | 184 | |||||||||
Amazon.com, Inc. (a) | 4,335 | 15,203 | |||||||||
Aptiv PLC (a) | 2,354 | 377 | |||||||||
AutoZone, Inc. (a) | 255 | 463 | |||||||||
Bath & Body Works, Inc. | 2,727 | 205 | |||||||||
Best Buy Co., Inc. | 2,415 | 258 | |||||||||
Booking Holdings, Inc. (a) | 441 | 927 | |||||||||
BorgWarner, Inc. | 1,420 | 61 | |||||||||
CarMax, Inc. (a) | 2,090 | 295 | |||||||||
Carnival Corp. (a) | 8,083 | 142 | |||||||||
Chipotle Mexican Grill, Inc. (a) | 325 | 534 | |||||||||
D.R. Horton, Inc. | 3,030 | 296 | |||||||||
Darden Restaurants, Inc. | 1,633 | 225 | |||||||||
Dollar General Corp. | 2,615 | 579 | |||||||||
Dollar Tree, Inc. (a) | 1,591 | 213 | |||||||||
Domino's Pizza, Inc. | 408 | 214 | |||||||||
eBay, Inc. | 7,658 | 517 | |||||||||
Etsy, Inc. (a) | 1,053 | 289 | |||||||||
Expedia Group, Inc. (a) | 1,583 | 255 | |||||||||
Ford Motor Co. | 48,980 | 940 | |||||||||
Garmin Ltd. | 1,580 | 211 |
See notes to financial statements.
3
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
General Motors Co. (a) | 13,698 | $ | 793 | ||||||||
Genuine Parts Co. | 1,110 | 142 | |||||||||
Hanesbrands, Inc. | 4,535 | 73 | |||||||||
Hasbro, Inc. | 1,600 | 155 | |||||||||
Hilton Worldwide Holdings, Inc. (a) | 3,015 | 407 | |||||||||
Las Vegas Sands Corp. (a) (c) | 3,468 | 124 | |||||||||
Leggett & Platt, Inc. | 859 | 35 | |||||||||
Lennar Corp. Class A | 2,669 | 280 | |||||||||
Lennar Corp. Class B | 1 | — | (d) | ||||||||
LKQ Corp. | 3,837 | 214 | |||||||||
Lowe's Cos., Inc. | 7,623 | 1,865 | |||||||||
Marriott International, Inc. Class A (a) | 2,953 | 436 | |||||||||
McDonald's Corp. | 7,151 | 1,749 | |||||||||
MGM Resorts International | 5,858 | 232 | |||||||||
Mohawk Industries, Inc. (a) | 618 | 104 | |||||||||
Newell Brands, Inc. | 4,177 | 90 | |||||||||
NIKE, Inc. Class B | 14,322 | 2,424 | |||||||||
Norwegian Cruise Line Holdings Ltd. (a) | 4,308 | 84 | |||||||||
NVR, Inc. (a) | 38 | 199 | |||||||||
O'Reilly Automotive, Inc. (a) | 961 | 613 | |||||||||
PulteGroup, Inc. | 2,360 | 118 | |||||||||
PVH Corp. | 928 | 99 | |||||||||
Ralph Lauren Corp. | 420 | 49 | |||||||||
Ross Stores, Inc. | 3,683 | 402 | |||||||||
Royal Caribbean Cruises Ltd. (a) | 2,147 | 150 | |||||||||
Starbucks Corp. | 12,390 | 1,358 | |||||||||
Tapestry, Inc. | 3,021 | 121 | |||||||||
Target Corp. (c) | 5,209 | 1,270 | |||||||||
Tesla, Inc. (a) | 7,743 | 8,864 | |||||||||
The Gap, Inc. | 2,315 | 38 | |||||||||
The Home Depot, Inc. | 11,047 | 4,426 | |||||||||
The TJX Cos., Inc. | 11,818 | 820 | |||||||||
Tractor Supply Co. | 1,578 | 356 | |||||||||
Ulta Beauty, Inc. (a) | 550 | 211 | |||||||||
Under Armour, Inc. Class A (a) | 2,357 | 56 | |||||||||
Under Armour, Inc. Class C (a) | 2,104 | 42 | |||||||||
VF Corp. | 3,213 | 230 | |||||||||
Victoria's Secret & Co. (a) | 1 | — | (d) | ||||||||
Whirlpool Corp. | 792 | 172 | |||||||||
Wynn Resorts Ltd. (a) | 1,220 | 99 | |||||||||
Yum! Brands, Inc. | 3,711 | 456 | |||||||||
51,744 | |||||||||||
Consumer Staples (2.4%): | |||||||||||
Altria Group, Inc. | 18,456 | 787 | |||||||||
Archer-Daniels-Midland Co. | 6,080 | 378 | |||||||||
Brown-Forman Corp. Class B | 2,315 | 163 | |||||||||
Campbell Soup Co. | 2,319 | 94 | |||||||||
Church & Dwight Co., Inc. | 2,959 | 265 | |||||||||
Colgate-Palmolive Co. | 5,736 | 430 | |||||||||
Conagra Brands, Inc. | 6,489 | 198 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Constellation Brands, Inc. Class A | 1,572 | $ | 354 | ||||||||
Costco Wholesale Corp. | 4,892 | 2,639 | |||||||||
General Mills, Inc. | 6,777 | 419 | |||||||||
Hormel Foods Corp. | 1,830 | 76 | |||||||||
Kellogg Co. | 1,080 | 66 | |||||||||
Kimberly-Clark Corp. | 2,741 | 357 | |||||||||
McCormick & Co., Inc. | 2,942 | 253 | |||||||||
Molson Coors Beverage Co. Class B | 2,045 | 91 | |||||||||
Mondelez International, Inc. Class A | 14,742 | 869 | |||||||||
Monster Beverage Corp. (a) | 3,965 | 332 | |||||||||
PepsiCo, Inc. | 11,883 | 1,899 | |||||||||
Philip Morris International, Inc. | 13,980 | 1,201 | |||||||||
Sysco Corp. | 5,774 | 404 | |||||||||
The Clorox Co. | 1,190 | 194 | |||||||||
The Coca-Cola Co. | 27,653 | 1,450 | |||||||||
The Estee Lauder Cos., Inc. | 2,324 | 772 | |||||||||
The Hershey Co. | 1,885 | 335 | |||||||||
The J.M. Smucker Co. | 828 | 105 | |||||||||
The Kraft Heinz Co. | 6,993 | 235 | |||||||||
The Kroger Co. | 8,771 | 364 | |||||||||
The Procter & Gamble Co. | 24,735 | 3,576 | |||||||||
Tyson Foods, Inc. Class A | 2,142 | 169 | |||||||||
Walgreens Boots Alliance, Inc. | 5,210 | 233 | |||||||||
Walmart, Inc. | 13,334 | 1,875 | |||||||||
20,583 | |||||||||||
Energy (1.3%): | |||||||||||
APA Corp. | 2,376 | 61 | |||||||||
Baker Hughes Co. | 8,513 | 199 | |||||||||
Chevron Corp. | 21,588 | 2,437 | |||||||||
ConocoPhillips | 15,168 | 1,064 | |||||||||
Coterra Energy, Inc. | 2,120 | 43 | |||||||||
Devon Energy Corp. | 4,751 | 200 | |||||||||
Diamondback Energy, Inc. | 2,111 | 225 | |||||||||
EOG Resources, Inc. | 4,759 | 414 | |||||||||
Exxon Mobil Corp. | 40,045 | 2,396 | |||||||||
Halliburton Co. | 9,010 | 194 | |||||||||
Hess Corp. | 2,683 | 200 | |||||||||
Kinder Morgan, Inc. | 19,808 | 306 | |||||||||
Marathon Oil Corp. | 10,479 | 162 | |||||||||
Marathon Petroleum Corp. | 8,076 | 491 | |||||||||
Occidental Petroleum Corp. | 10,574 | 313 | |||||||||
ONEOK, Inc. | 5,513 | 330 | |||||||||
Phillips 66 | 2,813 | 195 | |||||||||
Pioneer Natural Resources Co. | 2,039 | 364 | |||||||||
Schlumberger NV | 18,134 | 520 | |||||||||
The Williams Cos., Inc. | 14,342 | 384 | |||||||||
Valero Energy Corp. | 3,087 | 207 | |||||||||
10,705 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Financials (5.1%): | |||||||||||
Aflac, Inc. | 6,526 | $ | 353 | ||||||||
American Express Co. | 7,083 | 1,079 | |||||||||
American International Group, Inc. | 10,328 | 543 | |||||||||
Ameriprise Financial, Inc. | 1,259 | 365 | |||||||||
Aon PLC Class A | 2,698 | 798 | |||||||||
Arthur J. Gallagher & Co. | 2,370 | 386 | |||||||||
Assurant, Inc. | 653 | 99 | |||||||||
Bank of America Corp. | 80,700 | 3,589 | |||||||||
Berkshire Hathaway, Inc. Class B (a) | 18,580 | 5,141 | |||||||||
BlackRock, Inc. | 1,245 | 1,126 | |||||||||
Capital One Financial Corp. | 4,854 | 682 | |||||||||
Cboe Global Markets, Inc. | 680 | 88 | |||||||||
Chubb Ltd. | 4,174 | 749 | |||||||||
Cincinnati Financial Corp. | 1,898 | 216 | |||||||||
Citigroup, Inc. | 21,251 | 1,354 | |||||||||
Citizens Financial Group, Inc. | 5,249 | 248 | |||||||||
CME Group, Inc. | 3,122 | 688 | |||||||||
Comerica, Inc. | 1,808 | 149 | |||||||||
Discover Financial Services | 3,983 | 430 | |||||||||
Everest Re Group Ltd. | 440 | 113 | |||||||||
Fifth Third Bancorp | 8,885 | 374 | |||||||||
First Republic Bank | 833 | 175 | |||||||||
Franklin Resources, Inc. | 2,567 | 83 | |||||||||
Huntington Bancshares, Inc. | 12,687 | 188 | |||||||||
Intercontinental Exchange, Inc. | 5,422 | 709 | |||||||||
Invesco Ltd. | 4,735 | 106 | |||||||||
JPMorgan Chase & Co. | 31,056 | 4,933 | |||||||||
KeyCorp | 12,202 | 274 | |||||||||
Lincoln National Corp. | 1,769 | 117 | |||||||||
Loews Corp. | 3,046 | 163 | |||||||||
M&T Bank Corp. | 1,592 | 233 | |||||||||
Marsh & McLennan Cos., Inc. | 5,030 | 825 | |||||||||
MetLife, Inc. | 8,569 | 503 | |||||||||
Moody's Corp. | 1,624 | 634 | |||||||||
Morgan Stanley | 14,869 | 1,410 | |||||||||
MSCI, Inc. | 992 | 624 | |||||||||
Nasdaq, Inc. | 1,159 | 236 | |||||||||
Northern Trust Corp. (e) | 1,926 | 223 | |||||||||
People's United Financial, Inc. | 5,272 | 90 | |||||||||
Principal Financial Group, Inc. | 2,476 | 170 | |||||||||
Prudential Financial, Inc. | 4,971 | 508 | |||||||||
Raymond James Financial, Inc. | 1,989 | 195 | |||||||||
Regions Financial Corp. | 9,790 | 223 | |||||||||
S&P Global, Inc. | 2,529 | 1,153 | |||||||||
State Street Corp. | 3,118 | 277 | |||||||||
SVB Financial Group (a) | 645 | 447 | |||||||||
Synchrony Financial | 6,793 | 304 | |||||||||
T. Rowe Price Group, Inc. | 2,189 | 438 | |||||||||
The Allstate Corp. | 3,040 | 331 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
The Bank of New York Mellon Corp. | 8,002 | $ | 438 | ||||||||
The Charles Schwab Corp. | 15,972 | 1,236 | |||||||||
The Goldman Sachs Group, Inc. | 3,240 | 1,234 | |||||||||
The Hartford Financial Services Group, Inc. | 2,900 | 192 | |||||||||
The PNC Financial Services Group, Inc. | 4,807 | 947 | |||||||||
The Progressive Corp. | 5,434 | 505 | |||||||||
The Travelers Cos., Inc. | 3,045 | 447 | |||||||||
Truist Financial Corp. | 14,396 | 854 | |||||||||
U.S. Bancorp | 14,810 | 820 | |||||||||
W.R. Berkley Corp. | 1,826 | 140 | |||||||||
Wells Fargo & Co. | 35,551 | 1,699 | |||||||||
Willis Towers Watson PLC | 1,546 | 349 | |||||||||
Zions Bancorp NA | 2,017 | 127 | |||||||||
43,130 | |||||||||||
Health Care (5.8%): | |||||||||||
Abbott Laboratories | 18,379 | 2,311 | |||||||||
AbbVie, Inc. | 17,884 | 2,062 | |||||||||
ABIOMED, Inc. (a) | 568 | 179 | |||||||||
Agilent Technologies, Inc. | 4,127 | 623 | |||||||||
Align Technology, Inc. (a) | 809 | 495 | |||||||||
AmerisourceBergen Corp. | 1,410 | 163 | |||||||||
Amgen, Inc. | 6,171 | 1,227 | |||||||||
Anthem, Inc. | 2,398 | 974 | |||||||||
Baxter International, Inc. | 4,106 | 306 | |||||||||
Becton, Dickinson & Co. | 2,074 | 492 | |||||||||
Biogen, Inc. (a) | 1,356 | 320 | |||||||||
Bio-Rad Laboratories, Inc. Class A (a) | 83 | 62 | |||||||||
Boston Scientific Corp. (a) | 12,299 | 468 | |||||||||
Bristol-Myers Squibb Co. | 17,034 | 914 | |||||||||
Cardinal Health, Inc. | 2,310 | 107 | |||||||||
Catalent, Inc. (a) | 1,060 | 136 | |||||||||
Centene Corp. (a) | 5,336 | 381 | |||||||||
Cerner Corp. | 2,182 | 154 | |||||||||
Cigna Corp. | 3,445 | 661 | |||||||||
CVS Health Corp. | 13,617 | 1,213 | |||||||||
Danaher Corp. | 6,992 | 2,249 | |||||||||
DaVita, Inc. (a) | 972 | 92 | |||||||||
DENTSPLY SIRONA, Inc. | 1,578 | 77 | |||||||||
DexCom, Inc. (a) | 1,007 | 566 | |||||||||
Edwards Lifesciences Corp. (a) | 6,150 | 660 | |||||||||
Eli Lilly & Co. | 8,712 | 2,161 | |||||||||
Gilead Sciences, Inc. (c) | 12,961 | 893 | |||||||||
HCA Healthcare, Inc. | 2,625 | 592 | |||||||||
Henry Schein, Inc. (a) | 1,136 | 81 | |||||||||
Hologic, Inc. (a) | 2,461 | 184 | |||||||||
Humana, Inc. | 1,376 | 577 | |||||||||
IDEXX Laboratories, Inc. (a) | 1,036 | 630 | |||||||||
Illumina, Inc. (a) | 1,379 | 504 | |||||||||
Incyte Corp. (a) | 977 | 66 | |||||||||
Intuitive Surgical, Inc. (a) | 3,705 | 1,202 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
IQVIA Holdings, Inc. (a) | 1,890 | $ | 490 | ||||||||
Johnson & Johnson (c) | 30,403 | 4,741 | |||||||||
Laboratory Corp. of America Holdings (a) | 1,063 | 303 | |||||||||
McKesson Corp. | 1,670 | 362 | |||||||||
Medtronic PLC | 11,527 | 1,230 | |||||||||
Merck & Co., Inc. | 23,177 | 1,736 | |||||||||
Mettler-Toledo International, Inc. (a) | 250 | 379 | |||||||||
Moderna, Inc. (a) | 2,877 | 1,014 | |||||||||
Organon & Co. | 2,317 | 68 | |||||||||
PerkinElmer, Inc. | 1,164 | 212 | |||||||||
Pfizer, Inc. | 48,701 | 2,617 | |||||||||
Quest Diagnostics, Inc. | 1,226 | 182 | |||||||||
Regeneron Pharmaceuticals, Inc. (a) | 873 | 556 | |||||||||
ResMed, Inc. | 1,423 | 363 | |||||||||
STERIS PLC | 864 | 189 | |||||||||
Stryker Corp. | 3,361 | 795 | |||||||||
Teleflex, Inc. | 473 | 141 | |||||||||
The Cooper Cos., Inc. | 445 | 167 | |||||||||
Thermo Fisher Scientific, Inc. | 4,163 | 2,634 | |||||||||
UnitedHealth Group, Inc. | 10,015 | 4,449 | |||||||||
Universal Health Services, Inc. Class B | 844 | 100 | |||||||||
Vertex Pharmaceuticals, Inc. (a) | 2,479 | 463 | |||||||||
Viatris, Inc. | 14,027 | 173 | |||||||||
Waters Corp. (a) | 690 | 226 | |||||||||
West Pharmaceutical Services, Inc. | 489 | 216 | |||||||||
Zimmer Biomet Holdings, Inc. | 1,629 | 195 | |||||||||
Zoetis, Inc. | 4,796 | 1,065 | |||||||||
48,848 | |||||||||||
Industrials (3.7%): | |||||||||||
3M Co. | 4,740 | 806 | |||||||||
Alaska Air Group, Inc. (a) | 1,550 | 75 | |||||||||
Allegion PLC | 880 | 109 | |||||||||
American Airlines Group, Inc. (a) (b) | 7,471 | 132 | |||||||||
AMETEK, Inc. | 2,905 | 397 | |||||||||
AO Smith Corp. | 1,795 | 142 | |||||||||
C.H. Robinson Worldwide, Inc. | 779 | 74 | |||||||||
Carrier Global Corp. | 7,990 | 432 | |||||||||
Caterpillar, Inc. | 6,025 | 1,165 | |||||||||
Cintas Corp. | 1,066 | 450 | |||||||||
Copart, Inc. (a) | 2,286 | 332 | |||||||||
CSX Corp. | 24,039 | 833 | |||||||||
Cummins, Inc. | 1,364 | 286 | |||||||||
Deere & Co. | 3,919 | 1,354 | |||||||||
Delta Air Lines, Inc. (a) | 7,217 | 261 | |||||||||
Dover Corp. | 1,435 | 235 | |||||||||
Eaton Corp. PLC | 4,316 | 700 | |||||||||
Emerson Electric Co. | 5,920 | 520 | |||||||||
Equifax, Inc. | 1,334 | 372 | |||||||||
Expeditors International of Washington, Inc. | 1,610 | 196 | |||||||||
Fastenal Co. | 5,972 | 353 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
FedEx Corp. | 2,126 | $ | 490 | ||||||||
Fortive Corp. | 2,506 | 185 | |||||||||
Fortune Brands Home & Security, Inc. | 1,743 | 175 | |||||||||
General Dynamics Corp. | 1,726 | 326 | |||||||||
General Electric Co. | 11,822 | 1,123 | |||||||||
Honeywell International, Inc. | 6,699 | 1,355 | |||||||||
Howmet Aerospace, Inc. | 3,713 | 104 | |||||||||
Huntington Ingalls Industries, Inc. | 470 | 83 | |||||||||
IDEX Corp. | 757 | 170 | |||||||||
IHS Markit Ltd. | 3,349 | 428 | |||||||||
Illinois Tool Works, Inc. | 3,048 | 708 | |||||||||
Ingersoll Rand, Inc. (c) | 4,166 | 243 | |||||||||
J.B. Hunt Transport Services, Inc. | 757 | 145 | |||||||||
Jacobs Engineering Group, Inc. | 1,348 | 192 | |||||||||
Johnson Controls International PLC | 6,676 | 499 | |||||||||
Kansas City Southern | 960 | 279 | |||||||||
L3Harris Technologies, Inc. | 2,253 | 471 | |||||||||
Lockheed Martin Corp. | 2,228 | 743 | |||||||||
Masco Corp. | 2,915 | 192 | |||||||||
Nielsen Holdings PLC | 4,460 | 86 | |||||||||
Norfolk Southern Corp. | 2,671 | 709 | |||||||||
Northrop Grumman Corp. | 1,594 | 556 | |||||||||
Old Dominion Freight Line, Inc. | 1,111 | 395 | |||||||||
Otis Worldwide Corp. | 3,056 | 246 | |||||||||
PACCAR, Inc. | 3,278 | 273 | |||||||||
Parker-Hannifin Corp. | 1,216 | 367 | |||||||||
Pentair PLC | 909 | 67 | |||||||||
Quanta Services, Inc. | 1,444 | 164 | |||||||||
Raytheon Technologies Corp. | 17,973 | 1,454 | |||||||||
Republic Services, Inc. (c) | 2,086 | 276 | |||||||||
Robert Half International, Inc. | 1,284 | 143 | |||||||||
Rockwell Automation, Inc. | 1,436 | 483 | |||||||||
Roper Technologies, Inc. | 1,322 | 614 | |||||||||
Snap-on, Inc. | 594 | 122 | |||||||||
Southwest Airlines Co. (a) | 4,959 | 220 | |||||||||
Stanley Black & Decker, Inc. | 1,786 | 312 | |||||||||
Textron, Inc. | 2,070 | 147 | |||||||||
The Boeing Co. (a) | 5,520 | 1,092 | |||||||||
Trane Technologies PLC | 2,877 | 537 | |||||||||
TransDigm Group, Inc. (a) | 593 | 343 | |||||||||
Union Pacific Corp. | 7,288 | 1,717 | |||||||||
United Airlines Holdings, Inc. (a) | 3,768 | 159 | |||||||||
United Parcel Service, Inc. Class B | 7,664 | 1,520 | |||||||||
United Rentals, Inc. (a) | 750 | 254 | |||||||||
Verisk Analytics, Inc. | 1,450 | 326 | |||||||||
W.W. Grainger, Inc. | 582 | 280 | |||||||||
Waste Management, Inc. | 3,869 | 622 | |||||||||
Westinghouse Air Brake Technologies Corp. | 1,745 | 155 | |||||||||
Xylem, Inc. | 1,548 | 188 | |||||||||
30,962 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Information Technology (13.6%): | |||||||||||
Accenture PLC Class A | 6,903 | $ | 2,467 | ||||||||
Adobe, Inc. (a) | 4,939 | 3,308 | |||||||||
Advanced Micro Devices, Inc. (a) | 12,974 | 2,055 | |||||||||
Akamai Technologies, Inc. (a) | 1,627 | 183 | |||||||||
Amphenol Corp. Class A | 5,984 | 482 | |||||||||
Analog Devices, Inc. | 5,732 | 1,033 | |||||||||
ANSYS, Inc. (a) | 796 | 312 | |||||||||
Apple, Inc. | 166,060 | 27,450 | |||||||||
Applied Materials, Inc. | 10,258 | 1,510 | |||||||||
Arista Networks, Inc. (a) | 2,364 | 293 | |||||||||
Autodesk, Inc. (a) | 2,385 | 606 | |||||||||
Automatic Data Processing, Inc. | 4,190 | 967 | |||||||||
Broadcom, Inc. | 4,130 | 2,287 | |||||||||
Broadridge Financial Solutions, Inc. | 1,502 | 253 | |||||||||
Cadence Design Systems, Inc. (a) | 2,583 | 458 | |||||||||
CDW Corp. | 1,428 | 270 | |||||||||
Cisco Systems, Inc. | 42,070 | 2,307 | |||||||||
Citrix Systems, Inc. | 1,224 | 98 | |||||||||
Cognizant Technology Solutions Corp. Class A | 5,181 | 404 | |||||||||
Corning, Inc. | 8,056 | 299 | |||||||||
DXC Technology Co. (a) | 3,194 | 96 | |||||||||
Enphase Energy, Inc. (a) | 1,358 | 339 | |||||||||
F5, Inc. (a) | 561 | 128 | |||||||||
Fidelity National Information Services, Inc. | 7,284 | 761 | |||||||||
Fiserv, Inc. (a) | 3,938 | 380 | |||||||||
Fortinet, Inc. (a) | 1,459 | 485 | |||||||||
Gartner, Inc. (a) | 1,089 | 340 | |||||||||
Global Payments, Inc. | 3,409 | 406 | |||||||||
Hewlett Packard Enterprise Co. | 12,525 | 180 | |||||||||
HP, Inc. | 13,953 | 492 | |||||||||
Intel Corp. | 38,874 | 1,913 | |||||||||
International Business Machines Corp. | 5,693 | 667 | |||||||||
Intuit, Inc. | 2,547 | 1,661 | |||||||||
IPG Photonics Corp. (a) | 466 | 77 | |||||||||
Juniper Networks, Inc. | 2,447 | 76 | |||||||||
Keysight Technologies, Inc. (a) | 2,383 | 463 | |||||||||
KLA Corp. | 1,555 | 635 | |||||||||
Lam Research Corp. | 1,595 | 1,084 | |||||||||
Mastercard, Inc. Class A | 9,019 | 2,840 | |||||||||
Microchip Technology, Inc. | 5,448 | 455 | |||||||||
Micron Technology, Inc. | 10,918 | 917 | |||||||||
Microsoft Corp. (c) | 77,209 | 25,525 | |||||||||
Motorola Solutions, Inc. | 1,485 | 376 | |||||||||
NetApp, Inc. | 2,488 | 221 | |||||||||
NortonLifeLock, Inc. | 2,608 | 65 | |||||||||
NVIDIA Corp. | 25,972 | 8,487 | |||||||||
Oracle Corp. | 21,240 | 1,927 | |||||||||
Paychex, Inc. | 2,957 | 352 | |||||||||
Paycom Software, Inc. (a) | 617 | 270 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
PayPal Holdings, Inc. (a) | 11,657 | $ | 2,155 | ||||||||
Qorvo, Inc. (a) | 1,188 | 174 | |||||||||
QUALCOMM, Inc. | 12,125 | 2,189 | |||||||||
salesforce.com, Inc. (a) | 9,354 | 2,666 | |||||||||
Seagate Technology Holdings PLC | 2,345 | 241 | |||||||||
ServiceNow, Inc. (a) (c) | 2,007 | 1,300 | |||||||||
Skyworks Solutions, Inc. | 1,128 | 171 | |||||||||
Synopsys, Inc. (a) | 1,398 | 477 | |||||||||
TE Connectivity Ltd. | 3,470 | 534 | |||||||||
Teledyne Technologies, Inc. (a) | 165 | 69 | |||||||||
Teradyne, Inc. | 945 | 144 | |||||||||
Texas Instruments, Inc. | 8,950 | 1,722 | |||||||||
The Western Union Co. | 1,690 | 27 | |||||||||
VeriSign, Inc. (a) | 817 | 196 | |||||||||
Visa, Inc. Class A | 16,996 | 3,293 | |||||||||
Western Digital Corp. (a) | 3,265 | 189 | |||||||||
Xerox Holdings Corp. | 1 | — | (d) | ||||||||
Xilinx, Inc. | 2,527 | 577 | |||||||||
Zebra Technologies Corp. (a) | 706 | 416 | |||||||||
115,200 | |||||||||||
Materials (1.2%): | |||||||||||
Air Products & Chemicals, Inc. | 2,193 | 630 | |||||||||
Albemarle Corp. | 1,201 | 320 | |||||||||
Amcor PLC | 17,474 | 198 | |||||||||
Avery Dennison Corp. | 906 | 186 | |||||||||
Ball Corp. | 3,726 | 348 | |||||||||
Celanese Corp. | 1,286 | 195 | |||||||||
CF Industries Holdings, Inc. | 2,763 | 167 | |||||||||
Corteva, Inc. | 8,159 | 367 | |||||||||
Dow, Inc. | 9,091 | 499 | |||||||||
DuPont de Nemours, Inc. | 6,803 | 503 | |||||||||
Eastman Chemical Co. | 1,432 | 149 | |||||||||
Ecolab, Inc. | 2,743 | 608 | |||||||||
FMC Corp. | 1,425 | 143 | |||||||||
Freeport-McMoRan, Inc. | 15,889 | 589 | |||||||||
International Flavors & Fragrances, Inc. | 2,036 | 289 | |||||||||
International Paper Co. | 4,916 | 224 | |||||||||
Linde PLC | 5,503 | 1,751 | |||||||||
LyondellBasell Industries NV Class A | 2,696 | 235 | |||||||||
Martin Marietta Materials, Inc. | 721 | 291 | |||||||||
Newmont Corp. | 9,032 | 496 | |||||||||
Nucor Corp. | 2,642 | 281 | |||||||||
PPG Industries, Inc. | 2,183 | 337 | |||||||||
Sealed Air Corp. | 1,340 | 83 | |||||||||
The Mosaic Co. | 4,580 | 157 | |||||||||
The Sherwin-Williams Co. | 2,769 | 917 | |||||||||
Vulcan Materials Co. | 1,213 | 233 | |||||||||
Westrock Co. | 2,863 | 124 | |||||||||
10,320 |
See notes to financial statements.
11
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Real Estate (1.2%): | |||||||||||
Alexandria Real Estate Equities, Inc. | 1,101 | $ | 220 | ||||||||
American Tower Corp. | 4,297 | 1,128 | |||||||||
AvalonBay Communities, Inc. | 740 | 177 | |||||||||
Boston Properties, Inc. | 1,758 | 190 | |||||||||
CBRE Group, Inc. Class A (a) | 3,167 | 303 | |||||||||
Crown Castle International Corp. | 5,001 | 908 | |||||||||
Digital Realty Trust, Inc. | 2,408 | 404 | |||||||||
Duke Realty Corp. | 4,814 | 281 | |||||||||
Equinix, Inc. | 1,002 | 814 | |||||||||
Equity Residential | 2,215 | 189 | |||||||||
Essex Property Trust, Inc. | 290 | 98 | |||||||||
Extra Space Storage, Inc. | 1,147 | 229 | |||||||||
Federal Realty Investment Trust | 884 | 108 | |||||||||
Healthpeak Properties, Inc. | 4,797 | 158 | |||||||||
Host Hotels & Resorts, Inc. (a) | 8,818 | 138 | |||||||||
Iron Mountain, Inc. (b) | 3,600 | 164 | |||||||||
Kimco Realty Corp. | 5,368 | 120 | |||||||||
Mid-America Apartment Communities, Inc. | 1,273 | 263 | |||||||||
Prologis, Inc. | 7,489 | 1,129 | |||||||||
Public Storage | 1,221 | 400 | |||||||||
Realty Income Corp. | 3,322 | 226 | |||||||||
Regency Centers Corp. | 1,923 | 133 | |||||||||
SBA Communications Corp. | 1,109 | 381 | |||||||||
Simon Property Group, Inc. | 3,796 | 580 | |||||||||
UDR, Inc. | 3,662 | 208 | |||||||||
Ventas, Inc. | 4,666 | 219 | |||||||||
Vornado Realty Trust | 1,244 | 50 | |||||||||
Welltower, Inc. | 4,568 | 364 | |||||||||
Weyerhaeuser Co. | 6,892 | 259 | |||||||||
9,841 | |||||||||||
Utilities (1.1%): | |||||||||||
Alliant Energy Corp. | 3,054 | 167 | |||||||||
Ameren Corp. | 2,468 | 201 | |||||||||
American Electric Power Co., Inc. (c) | 4,277 | 347 | |||||||||
American Water Works Co., Inc. | 2,297 | 387 | |||||||||
CenterPoint Energy, Inc. | 6,318 | 164 | |||||||||
CMS Energy Corp. | 3,607 | 212 | |||||||||
Consolidated Edison, Inc. (c) | 1,808 | 140 | |||||||||
Dominion Energy, Inc. | 9,535 | 679 | |||||||||
DTE Energy Co. | 1,653 | 179 | |||||||||
Duke Energy Corp. (c) | 6,693 | 649 | |||||||||
Edison International | 4,086 | 267 | |||||||||
Entergy Corp. | 2,505 | 251 | |||||||||
Evergy, Inc. (c) | 2,714 | 172 | |||||||||
Eversource Energy (c) | 3,443 | 283 | |||||||||
Exelon Corp. | 10,726 | 566 | |||||||||
FirstEnergy Corp. | 5,729 | 216 | |||||||||
NextEra Energy, Inc. (c) | 18,576 | 1,612 | |||||||||
NiSource, Inc. | 4,671 | 114 |
See notes to financial statements.
12
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
NRG Energy, Inc. | 2,789 | $ | 100 | ||||||||
PPL Corp. | 8,145 | 227 | |||||||||
Public Service Enterprise Group, Inc. | 6,188 | 387 | |||||||||
Sempra Energy | 1,884 | 226 | |||||||||
The AES Corp. | 6,122 | 143 | |||||||||
The Southern Co. (c) | 9,551 | 584 | |||||||||
WEC Energy Group, Inc. (c) | 4,007 | 348 | |||||||||
Xcel Energy, Inc. (c) | 6,662 | 425 | |||||||||
9,046 | |||||||||||
Total Common Stocks (Cost $113,225) | 390,877 | ||||||||||
Municipal Bonds (53.0%) | |||||||||||
Alabama (0.6%): | |||||||||||
DCH Healthcare Authority Revenue, Series A, 4.00%, 6/1/51, Continuously Callable @100 | $ | 1,000 | 1,137 | ||||||||
Homewood Educational Building Authority Revenue, Series A, 4.00%, 12/1/51, Continuously Callable @100 | 2,000 | 2,272 | |||||||||
The Lower Alabama Gas District Revenue, Series A, 5.00%, 9/1/46 | 1,000 | 1,479 | |||||||||
4,888 | |||||||||||
Alaska (0.1%): | |||||||||||
Northern Tobacco Securitization Corp. Revenue, Series A, 4.00%, 6/1/50, Continuously Callable @100 | 500 | 581 | |||||||||
Arizona (2.2%): | |||||||||||
Arizona IDA Revenue 4.00%, 7/1/41, Continuously Callable @100 | 400 | 451 | |||||||||
5.00%, 7/1/47, Continuously Callable @100 | 1,000 | 1,188 | |||||||||
4.00%, 7/1/52, Continuously Callable @100 | 840 | 933 | |||||||||
Series A, 4.00%, 7/1/51, Continuously Callable @100 | 750 | 834 | |||||||||
City of Phoenix IDA Revenue, 5.00%, 7/1/46, Continuously Callable @100 | 1,300 | 1,435 | |||||||||
La Paz County IDA Revenue 4.00%, 2/15/41, Continuously Callable @100 | 425 | 482 | |||||||||
4.00%, 2/15/46, Continuously Callable @100 | 345 | 389 | |||||||||
4.00%, 2/15/51, Continuously Callable @100 | 300 | 337 | |||||||||
Maricopa County IDA Revenue Series A, 5.00%, 9/1/42, Continuously Callable @100 | 500 | 617 | |||||||||
Series A, 4.00%, 7/1/46, Continuously Callable @100 | 735 | 847 | |||||||||
Series A, 5.00%, 7/1/49, Continuously Callable @100 | 1,000 | 1,212 | |||||||||
Series A, 5.00%, 7/1/54, Continuously Callable @100 | 1,275 | 1,536 | |||||||||
Series A, 4.00%, 7/1/56, Continuously Callable @100 | 1,000 | 1,143 | |||||||||
Pima County IDA Revenue 4.00%, 4/1/46, Continuously Callable @100 | 2,000 | 2,342 | |||||||||
5.00%, 6/15/47, Continuously Callable @100 (f) | 1,000 | 1,013 | |||||||||
Student & Academic Services LLC Revenue, 5.00%, 6/1/44, Continuously Callable @100 | 1,000 | 1,100 | |||||||||
Tempe IDA Revenue, Series B, 4.00%, 12/1/46, Continuously Callable @102 | 1,185 | 1,304 | |||||||||
The IDA of the County of Pima Revenue, 4.00%, 6/15/51, Continuously Callable @100 (f) (g) | 1,000 | 1,032 | |||||||||
18,195 |
See notes to financial statements.
13
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Arkansas (0.1%): | |||||||||||
Arkansas Development Finance Authority Revenue, 4.00%, 12/1/44, Continuously Callable @100 | $ | 1,000 | $ | 1,140 | |||||||
California (2.2%): | |||||||||||
California Statewide Communities Development Authority Revenue (INS — Assured Guaranty Municipal Corp.), 5.00%, 11/15/49, Pre-refunded 11/15/24 @100 | 1,000 | 1,136 | |||||||||
City & County of San Francisco Revenue (LIQ — Deutsche Bank A.G.), Series DBE-8059, 0.45%, 12/1/52, Callable 1/10/22 @100 (f) (h) | 6,000 | 6,000 | |||||||||
Jurupa Public Financing Authority Special Tax, Series A, 5.00%, 9/1/42, Continuously Callable @100 | 1,200 | 1,325 | |||||||||
Sacramento City Financing Authority Revenue (LIQ — Deutsche Bank A.G.), Series XG0100, 0.11%, 12/1/33 (f) (h) | 600 | 600 | |||||||||
State of California, GO 5.00%, 2/1/43, Continuously Callable @100 | 1,000 | 1,050 | |||||||||
5.00%, 8/1/45, Continuously Callable @100 | 1,000 | 1,145 | |||||||||
Sutter Butte Flood Agency Special Assessment (INS — Build America Mutual Assurance Co.), 5.00%, 10/1/40, Continuously Callable @100 | 1,000 | 1,150 | |||||||||
Twin Rivers Unified School District, GO (INS — Build America Mutual Assurance Co.), Series A, 5.00%, 8/1/40, Pre-refunded 2/1/24 @100 | 1,500 | 1,649 | |||||||||
Val Verde Unified School District, GO (INS — Build America Mutual Assurance Co.), Series B, 5.00%, 8/1/44, Pre-refunded 8/1/25 @100 | 1,000 | 1,164 | |||||||||
West Contra Costa Unified School District, GO (INS — National Public Finance Guarantee Corp.), 8/1/34 (i) | 4,435 | 3,522 | |||||||||
18,741 | |||||||||||
Colorado (1.5%): | |||||||||||
Colorado Educational & Cultural Facilities Authority Revenue 5.00%, 12/1/38, Continuously Callable @100 | 1,000 | 1,220 | |||||||||
5.00%, 4/1/48, Continuously Callable @100 | 710 | 849 | |||||||||
Colorado Health Facilities Authority Revenue 5.00%, 12/1/42, Pre-refunded 6/1/22 @100 | 1,000 | 1,024 | |||||||||
5.00%, 6/1/45, Pre-refunded 6/1/25 @100 | 1,000 | 1,156 | |||||||||
Series A, 4.00%, 9/1/50, Continuously Callable @100 | 1,000 | 1,141 | |||||||||
Series A, 4.00%, 12/1/50, Continuously Callable @103 | 1,000 | 1,126 | |||||||||
Denver Convention Center Hotel Authority Revenue, 5.00%, 12/1/40, Continuously Callable @100 | 1,000 | 1,145 | |||||||||
Denver Health & Hospital Authority Certificate of Participation, 5.00%, 12/1/48, Continuously Callable @100 | 1,900 | 2,280 | |||||||||
Park Creek Metropolitan District Revenue 5.00%, 12/1/41, Continuously Callable @100 | 250 | 286 | |||||||||
5.00%, 12/1/45, Continuously Callable @100 | 1,000 | 1,140 | |||||||||
Rampart Range Metropolitan District No. 1 Revenue (INS — Assured Guaranty Municipal Corp.), 5.00%, 12/1/47, Continuously Callable @100 | 1,000 | 1,196 | |||||||||
12,563 | |||||||||||
Connecticut (0.8%): | |||||||||||
Connecticut State Health & Educational Facilities Authority Revenue Series A, 4.00%, 7/1/51, Continuously Callable @100 | 1,000 | 1,169 | |||||||||
Series T, 4.00%, 7/1/55, Continuously Callable @100 | 1,000 | 1,133 | |||||||||
Mashantucket Western Pequot Tribe Revenue, 7/1/31 (j) (k) | 4,889 | 1,060 |
See notes to financial statements.
14
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
State of Connecticut, GO Series A, 5.00%, 4/15/36, Continuously Callable @100 | $ | 1,500 | $ | 1,882 | |||||||
Series A, 5.00%, 4/15/37, Continuously Callable @100 | 1,000 | 1,231 | |||||||||
6,475 | |||||||||||
District of Columbia (0.1%): | |||||||||||
District of Columbia Revenue, 5.00%, 7/1/42, Pre-refunded 7/1/22 @100 | 1,100 | 1,131 | |||||||||
Florida (4.1%): | |||||||||||
Capital Trust Agency, Inc. Revenue 5.00%, 8/1/40, Continuously Callable @100 | 300 | 364 | |||||||||
5.00%, 8/1/55, Continuously Callable @100 | 400 | 475 | |||||||||
City of Atlantic Beach Revenue, Series A, 5.00%, 11/15/53, Continuously Callable @103 | 1,000 | 1,138 | |||||||||
City of Jacksonville Revenue, 5.00%, 10/1/29, Continuously Callable @100 | 1,000 | 1,039 | |||||||||
City of Pompano Beach Revenue, 4.00%, 9/1/50, Continuously Callable @103 | 1,500 | 1,618 | |||||||||
County of Miami-Dade Florida Water & Sewer System Revenue 4.00%, 10/1/51, Continuously Callable @100 | 1,500 | 1,773 | |||||||||
4.00%, 10/1/51, Continuously Callable @100 | 2,000 | 2,361 | |||||||||
County of Miami-Dade Seaport Department Revenue, Series A-2, 4.00%, 10/1/49, Continuously Callable @100 | 1,000 | 1,173 | |||||||||
County of Polk Florida Utility System Revenue, 4.00%, 10/1/43, Continuously Callable @100 | 2,000 | 2,373 | |||||||||
County of St. Lucie Revenue, 0.03%, 9/1/28, Continuously Callable @100 (h) | 10,000 | 10,000 | |||||||||
Halifax Hospital Medical Center Revenue, 5.00%, 6/1/46, Continuously Callable @100 | 1,000 | 1,125 | |||||||||
Lee County IDA Revenue, 5.50%, 10/1/47, Pre-refunded 10/1/22 @102 | 645 | 686 | |||||||||
Lee Memorial Health System Revenue, Series A-1, 5.00%, 4/1/44, Continuously Callable @100 | 1,450 | 1,788 | |||||||||
Miami Beach Health Facilities Authority Revenue, 4.00%, 11/15/51, Continuously Callable @100 | 500 | 581 | |||||||||
Miami-Dade County Health Facilities Authority Revenue, Series A, 4.00%, 8/1/51, Continuously Callable @100 | 1,000 | 1,167 | |||||||||
Palm Beach County Educational Facilities Authority Revenue, 4.00%, 10/1/51, Continuously Callable @100 | 1,000 | 1,123 | |||||||||
Sarasota County Health Facilities Authority Revenue, 5.00%, 5/15/38, Continuously Callable @103 | 700 | 800 | |||||||||
Seminole County IDA Revenue, 4.00%, 6/15/51, Continuously Callable @100 (f) | 830 | 923 | |||||||||
Southeast Overtown Park West Community Redevelopment Agency Tax Allocation, Series A-1, 5.00%, 3/1/30, Continuously Callable @100 (f) | 1,000 | 1,095 | |||||||||
Tampa-Hillsborough County Expressway Authority Revenue, Series A, 5.00%, 7/1/37, Pre-refunded 7/1/22 @100 | 1,505 | 1,547 | |||||||||
Volusia County Educational Facility Authority Revenue, Series B, 5.00%, 10/15/45, Pre-refunded 4/15/25 @100 | 1,000 | 1,151 | |||||||||
34,300 | |||||||||||
Georgia (2.5%): | |||||||||||
Appling County Development Authority Revenue 0.09%, 9/1/29, Continuously Callable @100 (h) | 1,500 | 1,500 | |||||||||
0.09%, 9/1/41, Continuously Callable @100 (h) | 1,600 | 1,600 |
See notes to financial statements.
15
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Crisp County Hospital Authority Revenue, 4.00%, 7/1/51, Continuously Callable @100 | $ | 575 | $ | 661 | |||||||
Development Authority of Heard County Revenue, 0.10%, 9/1/26, Continuously Callable @100 (h) | 1,600 | 1,600 | |||||||||
Gainesville & Hall County Hospital Authority Revenue, 4.00%, 2/15/45, Continuously Callable @100 | 2,000 | 2,287 | |||||||||
Glynn-Brunswick Memorial Hospital Authority Revenue, 5.00%, 8/1/47, Continuously Callable @100 | 1,000 | 1,182 | |||||||||
Milledgeville & Baldwin County Development Authority Revenue, 4.00%, 6/15/37, Continuously Callable @100 | 1,300 | 1,554 | |||||||||
Municipal Electric Authority of Georgia Revenue, 4.00%, 1/1/51, Continuously Callable @100 | 425 | 479 | |||||||||
Private Colleges & Universities Authority Revenue 4.00%, 6/1/45, Continuously Callable @100 | 750 | 866 | |||||||||
4.00%, 10/1/50, Continuously Callable @100 | 1,250 | 1,445 | |||||||||
The Burke County Development Authority Revenue, Series 1, 0.08%, 7/1/49, Continuously Callable @100 (h) | 1,500 | 1,500 | |||||||||
The Burke County Development Authority Revenue (NBGA — Southern Co.), 0.07%, 11/1/52, Continuously Callable @100 (h) | 1,000 | 1,000 | |||||||||
The Development Authority of Monroe County Revenue, 0.09%, 11/1/48, Continuously Callable @100 (h) | 3,165 | 3,165 | |||||||||
Valdosta Housing Authority Revenue (LIQ — Deutsche Bank A.G.), Series 2020-XF1089, 0.30%, 4/1/60, Callable 4/1/35 @100 (f) (h) | 2,300 | 2,300 | |||||||||
21,139 | |||||||||||
Guam (0.2%): | |||||||||||
Antonio B Won Pat International Airport Authority Revenue (INS — Assured Guaranty Municipal Corp.), 5.50%, 10/1/33, Pre-refunded 10/1/23 @100 | 750 | 820 | |||||||||
Guam Government Waterworks Authority Revenue, 5.50%, 7/1/43, Pre-refunded 7/1/23 @100 | 1,000 | 1,082 | |||||||||
1,902 | |||||||||||
Illinois (4.5%): | |||||||||||
Bureau County Township High School District No. 502, GO (INS — Build America Mutual Assurance Co.), Series A, 5.00%, 12/1/37, Pre-refunded 12/1/27 @100 | 1,000 | 1,242 | |||||||||
Chicago Board of Education, GO (LIQ — Deutsche Bank A.G.), Series 2017-XM0188, 0.13%, 12/1/39, Callable 1/10/22 @100 (f) (h) | 1,000 | 1,000 | |||||||||
Chicago Midway International Airport Revenue, Series B, 5.00%, 1/1/41, Continuously Callable @100 | 1,000 | 1,164 | |||||||||
Chicago O'Hare International Airport Revenue, Series C, 5.00%, 1/1/41, Continuously Callable @100 | 1,000 | 1,181 | |||||||||
Chicago O'Hare International Airport Revenue (INS — Assured Guaranty Municipal Corp.), 5.25%, 1/1/33, Continuously Callable @100 | 1,000 | 1,051 | |||||||||
Chicago Park District, GO, Series C, 4.00%, 1/1/42, Continuously Callable @100 | 1,250 | 1,439 | |||||||||
Chicago Transit Authority Sales Tax Receipts Fund Revenue, Series A, 4.00%, 12/1/55, Continuously Callable @100 | 2,000 | 2,274 | |||||||||
City of Chicago Wastewater Transmission Revenue 5.00%, 1/1/44, Continuously Callable @100 | 1,000 | 1,086 | |||||||||
Series A, 5.00%, 1/1/47, Continuously Callable @100 | 1,000 | 1,170 |
See notes to financial statements.
16
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
City of Chicago Waterworks Revenue, 5.00%, 11/1/44, Continuously Callable @100 | $ | 1,000 | $ | 1,110 | |||||||
City of Galesburg Revenue, Series A, 4.00%, 10/1/46, Continuously Callable @100 (g) | 1,000 | 1,130 | |||||||||
Cook County Community College District No. 508, GO (INS — Build America Mutual Assurance Co.), 5.00%, 12/1/47, Continuously Callable @100 | 1,000 | 1,183 | |||||||||
County of Cook Sales Tax Revenue, 5.00%, 11/15/38, Continuously Callable @100 | 1,000 | 1,203 | |||||||||
Illinois Educational Facilities Authority Revenue, 4.00%, 11/1/36, Continuously Callable @102 | 1,000 | 1,143 | |||||||||
Illinois Finance Authority Revenue 3.90%, 3/1/30, Continuously Callable @100 | 1,000 | 1,075 | |||||||||
5.00%, 5/15/37, Continuously Callable @100 | 1,000 | 1,149 | |||||||||
5.00%, 5/15/40, Continuously Callable @100 | 1,275 | 1,457 | |||||||||
5.00%, 8/15/44, Continuously Callable @100 | 1,000 | 1,136 | |||||||||
5.00%, 10/1/44, Continuously Callable @100 | 1,000 | 1,233 | |||||||||
5.00%, 5/15/45, Continuously Callable @100 | 1,000 | 1,089 | |||||||||
Series A, 4.00%, 10/1/40, Continuously Callable @100 | 1,000 | 1,119 | |||||||||
Series A, 4.00%, 8/1/51, Continuously Callable @100 | 1,000 | 1,134 | |||||||||
Series C, 4.00%, 2/15/41, Continuously Callable @100 | 955 | 1,088 | |||||||||
Series C, 4.00%, 2/15/41, Pre-refunded 2/15/27 @100 | 45 | 52 | |||||||||
Northern Illinois Municipal Power Agency Revenue, Series A, 4.00%, 12/1/41, Continuously Callable @100 | 1,000 | 1,119 | |||||||||
Northern Illinois University Revenue 4.00%, 10/1/37, Continuously Callable @100 | 550 | 651 | |||||||||
4.00%, 10/1/39, Continuously Callable @100 | 425 | 499 | |||||||||
Northern Illinois University Revenue (INS — Build America Mutual Assurance Co.), Series B, 4.00%, 4/1/40, Continuously Callable @100 | 600 | 692 | |||||||||
Sangamon County Water Reclamation District, GO Series A, 4.00%, 1/1/49, Continuously Callable @100 | 1,000 | 1,137 | |||||||||
Series A, 5.75%, 1/1/53, Continuously Callable @100 | 1,235 | 1,452 | |||||||||
State of Illinois, GO 5.50%, 5/1/39, Continuously Callable @100 | 225 | 289 | |||||||||
Series A, 5.00%, 3/1/46, Continuously Callable @100 | 1,000 | 1,249 | |||||||||
Series B, 4.00%, 10/1/32, Continuously Callable @100 | 2,300 | 2,700 | |||||||||
37,696 | |||||||||||
Indiana (0.6%): | |||||||||||
Evansville Redevelopment Authority Revenue (INS — Build America Mutual Assurance Co.), 4.00%, 2/1/39, Continuously Callable @100 | 1,000 | 1,119 | |||||||||
Indiana Finance Authority Revenue 5.00%, 2/1/40, Continuously Callable @100 | 1,000 | 1,085 | |||||||||
5.00%, 10/1/44, Pre-refunded 10/1/23 @100 | 1,000 | 1,086 | |||||||||
Richmond Hospital Authority Revenue, 5.00%, 1/1/39, Continuously Callable @100 | 1,500 | 1,678 | |||||||||
4,968 | |||||||||||
Iowa (0.1%): | |||||||||||
Iowa Tobacco Settlement Authority Revenue, Series A-2, 4.00%, 6/1/49, Continuously Callable @100 | 1,000 | 1,161 |
See notes to financial statements.
17
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Kansas (1.1%): | |||||||||||
City of Coffeyville Electric System Revenue (INS — National Public Finance Guarantee Corp.), Series B, 5.00%, 6/1/42, Pre-refunded 6/1/25 @100 (f) | $ | 1,000 | $ | 1,157 | |||||||
City of Lawrence Revenue 5.00%, 7/1/43, Continuously Callable @100 | 1,500 | 1,828 | |||||||||
Series A, 4.00%, 7/1/36, Continuously Callable @100 | 1,500 | 1,727 | |||||||||
City of Manhattan Revenue, Series A, 4.00%, 6/1/46, Continuously Callable @103 | 750 | 816 | |||||||||
City of Wichita Revenue, 4.63%, 9/1/33, Continuously Callable @100 | 1,000 | 1,009 | |||||||||
Wyandotte County-Kansas City Unified Government Utility System Revenue Series A, 5.00%, 9/1/44, Continuously Callable @100 | 1,250 | 1,385 | |||||||||
Series A, 5.00%, 9/1/45, Continuously Callable @100 | 1,000 | 1,140 | |||||||||
9,062 | |||||||||||
Kentucky (0.7%): | |||||||||||
City of Ashland Revenue, 5.00%, 2/1/40, Continuously Callable @100 | 1,000 | 1,144 | |||||||||
City of Hazard Revenue, 4.00%, 7/1/51, Continuously Callable @100 | 1,000 | 1,171 | |||||||||
Kentucky Bond Development Corp. Revenue, 4.00%, 6/1/46, Continuously Callable @100 | 750 | 873 | |||||||||
Kentucky Economic Development Finance Authority Revenue, 5.00%, 5/15/46, Continuously Callable @100 | 1,000 | 1,048 | |||||||||
Kentucky Economic Development Finance Authority Revenue (INS — Assured Guaranty Municipal Corp.), Series A, 5.00%, 12/1/45, Continuously Callable @100 | 1,000 | 1,223 | |||||||||
5,459 | |||||||||||
Louisiana (2.2%): | |||||||||||
City of Shreveport Water & Sewer Revenue 5.00%, 12/1/40, Continuously Callable @100 | 1,000 | 1,152 | |||||||||
Series B, 4.00%, 12/1/44, Continuously Callable @100 | 500 | 573 | |||||||||
City of Shreveport Water & Sewer Revenue (INS — Build America Mutual Assurance Co.), Series C, 5.00%, 12/1/39, Continuously Callable @100 | 1,000 | 1,120 | |||||||||
Jefferson Sales Tax District Revenue, Series B, 4.00%, 12/1/42, Continuously Callable @100 | 1,500 | 1,776 | |||||||||
Louisiana Local Government Environmental Facilities & Community Development Authority Revenue (INS — Assured Guaranty Municipal Corp.) | |||||||||||
5.00%, 10/1/39, Continuously Callable @100 | 1,000 | 1,205 | |||||||||
5.00%, 10/1/43, Continuously Callable @100 | 1,000 | 1,210 | |||||||||
4.00%, 10/1/46, Continuously Callable @100 | 1,000 | 1,119 | |||||||||
Louisiana Public Facilities Authority Revenue 5.00%, 11/1/45, Pre-refunded 11/1/25 @100 | 1,000 | 1,173 | |||||||||
4.00%, 10/1/51, Continuously Callable @100 | 1,175 | 1,339 | |||||||||
5.00%, 7/1/52, Continuously Callable @100 | 1,000 | 1,155 | |||||||||
4.00%, 1/1/56, Continuously Callable @100 | 1,000 | 1,064 | |||||||||
Louisiana Public Facilities Authority Revenue (INS — Build America Mutual Assurance Co.), 5.25%, 6/1/51, Pre-refunded 6/1/25 @100 | 1,000 | 1,165 | |||||||||
Parish of East Baton Rouge Capital Improvements District Revenue, 4.00%, 8/1/44, Continuously Callable @100 | 1,400 | 1,646 | |||||||||
State of Louisiana Gasoline & Fuels Tax Revenue, Series C, 5.00%, 5/1/45, Continuously Callable @100 | 1,500 | 1,823 |
See notes to financial statements.
18
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Tobacco Settlement Financing Corp. Revenue, Series A, 5.25%, 5/15/35, Continuously Callable @100 | $ | 1,000 | $ | 1,064 | |||||||
18,584 | |||||||||||
Maine (0.3%): | |||||||||||
Maine Health & Higher Educational Facilities Authority Revenue Series A, 4.00%, 7/1/46, Continuously Callable @100 | 1,000 | 1,061 | |||||||||
Series A, 4.00%, 7/1/50, Continuously Callable @100 | 1,175 | 1,378 | |||||||||
2,439 | |||||||||||
Maryland (0.3%): | |||||||||||
Maryland Health & Higher Educational Facilities Authority Revenue 4.00%, 7/1/45, Continuously Callable @100 | 1,100 | 1,259 | |||||||||
Series B, 4.00%, 1/1/51, Continuously Callable @100 | 1,000 | 1,147 | |||||||||
2,406 | |||||||||||
Massachusetts (1.7%): | |||||||||||
Massachusetts Development Finance Agency Revenue 5.00%, 4/15/40, Continuously Callable @100 | 1,000 | 1,096 | |||||||||
5.25%, 11/15/41, Pre-refunded 11/15/23 @100 | 1,000 | 1,097 | |||||||||
5.00%, 7/1/46, Continuously Callable @100 | 1,000 | 1,155 | |||||||||
4.00%, 9/1/48, Continuously Callable @100 (g) | 1,380 | 1,563 | |||||||||
4.00%, 7/1/51, Continuously Callable @100 | 1,500 | 1,732 | |||||||||
5.00%, 10/1/57, Continuously Callable @105 (f) | 1,000 | 1,080 | |||||||||
Series A, 5.00%, 6/1/39, Continuously Callable @100 | 1,000 | 1,226 | |||||||||
Series A, 5.50%, 7/1/44, Continuously Callable @100 | 500 | 509 | |||||||||
Series A, 5.00%, 7/1/44, Continuously Callable @100 | 1,600 | 1,933 | |||||||||
Series B, 4.00%, 7/1/50, Continuously Callable @100 | 850 | 971 | |||||||||
Series D, 5.00%, 7/1/44, Continuously Callable @100 | 1,000 | 1,118 | |||||||||
Series F, 5.75%, 7/15/43, Continuously Callable @100 | 1,000 | 1,052 | |||||||||
14,532 | |||||||||||
Michigan (1.3%): | |||||||||||
City of Wyandotte Electric System Revenue (INS — Build America Mutual Assurance Co.), Series A, 5.00%, 10/1/44, Continuously Callable @100 | 1,000 | 1,129 | |||||||||
Detroit Downtown Development Authority Tax Allocation (INS — Assured Guaranty Municipal Corp.), 5.00%, 7/1/43, Continuously Callable @100 | 1,750 | 1,912 | |||||||||
Jackson Public Schools, GO (NBGA — Michigan School Bond Qualification & Loan Program), 5.00%, 5/1/42, Continuously Callable @100 | 1,000 | 1,217 | |||||||||
Karegnondi Water Authority Revenue, 5.00%, 11/1/41, Continuously Callable @100 | 1,000 | 1,198 | |||||||||
Kentwood Economic Development Corp. Revenue, 4.00%, 11/15/45, Continuously Callable @103 | 500 | 560 | |||||||||
Lincoln Consolidated School District, GO (INS — Assured Guaranty Municipal Corp.), Series A, 5.00%, 5/1/40, Continuously Callable @100 | 1,250 | 1,459 | |||||||||
Livonia Public Schools, GO (INS — Assured Guaranty Municipal Corp.), 5.00%, 5/1/45, Continuously Callable @100 | 1,000 | 1,164 | |||||||||
Michigan Finance Authority Revenue, 4.00%, 9/1/45, Continuously Callable @100 | 1,000 | 1,131 |
See notes to financial statements.
19
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Wayne County Airport Authority Revenue, 5.00%, 12/1/44, Continuously Callable @100 | $ | 1,000 | $ | 1,116 | |||||||
10,886 | |||||||||||
Minnesota (0.3%): | |||||||||||
Housing & Redevelopment Authority Revenue 5.00%, 11/15/44, Pre-refunded 11/15/25 @100 | 1,000 | 1,173 | |||||||||
5.00%, 11/15/47, Continuously Callable @100 | 1,000 | 1,195 | |||||||||
2,368 | |||||||||||
Missouri (1.0%): | |||||||||||
Cape Girardeau County IDA Revenue, 4.00%, 3/1/46, Continuously Callable @100 | 750 | 838 | |||||||||
Health & Educational Facilities Authority of the State of Missouri Revenue 4.00%, 2/1/48, Continuously Callable @100 | 1,500 | 1,644 | |||||||||
4.00%, 2/15/51, Continuously Callable @100 | 480 | 558 | |||||||||
Health & Educational Facilities Authority Revenue 5.00%, 8/1/45, Continuously Callable @100 | 1,270 | 1,388 | |||||||||
4.00%, 2/15/49, Continuously Callable @100 | 250 | 284 | |||||||||
Missouri Development Finance Board Revenue, 4.00%, 3/1/51, Continuously Callable @100 | 1,000 | 1,120 | |||||||||
St. Louis Municipal Finance Corp. Revenue (INS — Assured Guaranty Municipal Corp.) 5.00%, 10/1/38, Continuously Callable @100 | 1,000 | 1,203 | |||||||||
5.00%, 10/1/49, Continuously Callable @100 | 1,000 | 1,240 | |||||||||
8,275 | |||||||||||
Montana (0.1%): | |||||||||||
Montana Facility Finance Authority Revenue, Series A, 4.00%, 6/1/45, Continuously Callable @100 | 485 | 572 | |||||||||
Nebraska (0.1%): | |||||||||||
Douglas County Hospital Authority No. 3 Revenue, 5.00%, 11/1/48, Continuously Callable @100 | 1,000 | 1,142 | |||||||||
Nevada (0.6%): | |||||||||||
City of Carson City Revenue, 5.00%, 9/1/42, Continuously Callable @100 | 1,000 | 1,190 | |||||||||
Las Vegas Convention & Visitors Authority Revenue, Series C, 4.00%, 7/1/41, Continuously Callable @100 | 1,555 | 1,725 | |||||||||
Las Vegas Redevelopment Agency Tax Allocation, 5.00%, 6/15/45, Continuously Callable @100 | 1,500 | 1,717 | |||||||||
4,632 | |||||||||||
New Jersey (2.8%): | |||||||||||
Essex County Improvement Authority Revenue, 4.00%, 6/15/51, Continuously Callable @100 | 1,100 | 1,235 | |||||||||
New Jersey Economic Development Authority Revenue 5.00%, 6/15/29, Continuously Callable @100 | 1,000 | 1,022 | |||||||||
5.00%, 6/15/42, Continuously Callable @100 | 2,000 | 2,357 | |||||||||
5.00%, 6/15/43, Continuously Callable @100 | 1,000 | 1,213 | |||||||||
Series A, 4.00%, 7/1/34, Continuously Callable @100 | 1,000 | 1,120 | |||||||||
Series A, 5.00%, 6/15/47, Continuously Callable @100 | 1,000 | 1,189 | |||||||||
Series B, 5.00%, 6/15/43, Continuously Callable @100 | 1,000 | 1,215 |
See notes to financial statements.
20
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
New Jersey Economic Development Authority Revenue (INS — Assured Guaranty Municipal Corp.), 5.00%, 6/1/37, Continuously Callable @100 | $ | 500 | $ | 605 | |||||||
New Jersey Educational Facilities Authority Revenue, Series B, 5.00%, 9/1/36, Continuously Callable @100 | 1,000 | 1,173 | |||||||||
New Jersey Educational Facilities Authority Revenue (INS — Assured Guaranty Municipal Corp.), Series C, 4.00%, 7/1/50, Continuously Callable @100 | 1,000 | 1,156 | |||||||||
New Jersey Health Care Facilities Financing Authority Revenue, 5.00%, 10/1/37, Continuously Callable @100 | 1,000 | 1,186 | |||||||||
New Jersey Transportation Trust Fund Authority Revenue Series A, 5.00%, 12/15/35, Continuously Callable @100 | 1,000 | 1,230 | |||||||||
Series AA, 5.00%, 6/15/44, Continuously Callable @100 | 1,000 | 1,089 | |||||||||
Series AA, 4.00%, 6/15/50, Continuously Callable @100 | 1,000 | 1,138 | |||||||||
New Jersey Turnpike Authority Revenue, Series A, 4.00%, 1/1/51, Continuously Callable @100 | 1,000 | 1,175 | |||||||||
South Jersey Transportation Authority LLC Revenue, Series A, 5.00%, 11/1/39, Continuously Callable @100 | 1,250 | 1,387 | |||||||||
South Jersey Transportation Authority Revenue, Series A, 4.00%, 11/1/50, Continuously Callable @100 | 2,250 | 2,573 | |||||||||
The Atlantic County Improvement Authority Revenue, 4.00%, 7/1/53, Continuously Callable @100 | 750 | 881 | |||||||||
Tobacco Settlement Financing Corp. Revenue, Series A, 5.25%, 6/1/46, Continuously Callable @100 | 500 | 604 | |||||||||
23,548 | |||||||||||
New Mexico (0.2%): | |||||||||||
New Mexico Hospital Equipment Loan Council Revenue, Series LA, 5.00%, 7/1/49, Continuously Callable @102 | 1,500 | 1,651 | |||||||||
New York (1.4%): | |||||||||||
Metropolitan Transportation Authority Revenue, Series C, 5.00%, 11/15/42, Continuously Callable @100 | 1,000 | 1,049 | |||||||||
New York Liberty Development Corp. Revenue 5.25%, 10/1/35 | 630 | 891 | |||||||||
5.50%, 10/1/37 | 1,500 | 2,241 | |||||||||
2.80%, 9/15/69, Continuously Callable @100 | 1,000 | 1,038 | |||||||||
New York State Dormitory Authority Revenue Series A, 4.00%, 3/15/47, Continuously Callable @100 | 2,000 | 2,358 | |||||||||
Series A, 4.00%, 9/1/50, Continuously Callable @100 | 2,000 | 2,256 | |||||||||
New York State Dormitory Authority Revenue (INS — AMBAC Assurance Corp.), Series 1, 5.50%, 7/1/40 | 1,205 | 1,819 | |||||||||
11,652 | |||||||||||
North Carolina (0.3%): | |||||||||||
North Carolina Medical Care Commission Revenue 5.00%, 10/1/35, Continuously Callable @100 | 1,000 | 1,157 | |||||||||
5.00%, 1/1/49, Continuously Callable @104 | 1,500 | 1,672 | |||||||||
2,829 | |||||||||||
North Dakota (0.3%): | |||||||||||
City of Grand Forks ND Revenue, 4.00%, 12/1/51, Continuously Callable @100 | 500 | 571 | |||||||||
County of Ward Revenue, Series C, 5.00%, 6/1/43, Continuously Callable @100 | 1,000 | 1,175 |
See notes to financial statements.
21
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
University of North Dakota Certificate of Participation, Series A, 4.00%, 6/1/51, Continuously Callable @100 | $ | 1,000 | $ | 1,149 | |||||||
2,895 | |||||||||||
Ohio (0.2%): | |||||||||||
County of Warren Revenue, Series A, 4.00%, 7/1/45, Continuously Callable @100 | 735 | 824 | |||||||||
Southeastern Ohio Port Authority Revenue, 5.00%, 12/1/43, Continuously Callable @100 | 750 | 795 | |||||||||
1,619 | |||||||||||
Oklahoma (0.5%): | |||||||||||
Comanche County Hospital Authority Revenue, Series A, 5.00%, 7/1/32, Continuously Callable @100 | 1,315 | 1,337 | |||||||||
Oklahoma Development Finance Authority Revenue, Series B, 5.50%, 8/15/57, Continuously Callable @100 | 1,000 | 1,229 | |||||||||
Oklahoma Municipal Power Authority Revenue, Series A, 4.00%, 1/1/47, Continuously Callable @100 | 1,000 | 1,174 | |||||||||
Tulsa County Industrial Authority Revenue, 5.25%, 11/15/37, Continuously Callable @102 | 750 | 845 | |||||||||
4,585 | |||||||||||
Oregon (0.4%): | |||||||||||
Medford Hospital Facilities Authority Revenue, Series A, 4.00%, 8/15/50, Continuously Callable @100 | 1,000 | 1,165 | |||||||||
Oregon State Facilities Authority Revenue, Series A, 4.00%, 10/1/51, Continuously Callable @100 | 1,000 | 1,138 | |||||||||
Salem Hospital Facility Authority Revenue, 5.00%, 5/15/53, Continuously Callable @102 | 1,250 | 1,424 | |||||||||
3,727 | |||||||||||
Pennsylvania (5.8%): | |||||||||||
Adams County General Authority Revenue, 4.00%, 8/15/45, Continuously Callable @100 | 1,455 | 1,684 | |||||||||
Allegheny County Hospital Development Authority Revenue 4.00%, 7/15/39, Continuously Callable @100 | 1,185 | 1,386 | |||||||||
5.00%, 4/1/47, Continuously Callable @100 | 1,000 | 1,198 | |||||||||
Altoona Area School District, GO (INS — Build America Mutual Assurance Co.), 5.00%, 12/1/48, Pre-refunded 12/1/25 @100 | 1,000 | 1,177 | |||||||||
Berks County IDA Revenue 5.00%, 5/15/43, Continuously Callable @102 | 350 | 387 | |||||||||
5.00%, 11/1/50, Continuously Callable @100 | 1,500 | 1,659 | |||||||||
Bucks County IDA Revenue, 4.00%, 8/15/44, Continuously Callable @100 | 1,000 | 1,114 | |||||||||
Butler County Hospital Authority Revenue, 5.00%, 7/1/39, Continuously Callable @100 | 1,125 | 1,257 | |||||||||
Canon Mcmillan School District, GO, 4.00%, 6/1/48, Continuously Callable @100 | 1,500 | 1,676 | |||||||||
Central Bradford Progress Authority Revenue, Series B, 4.00%, 12/1/51, Continuously Callable @100 | 2,000 | 2,307 | |||||||||
Chester County IDA Revenue, 5.00%, 10/1/44, Continuously Callable @100 | 1,000 | 1,092 | |||||||||
City of Erie Higher Education Building Authority Revenue, 5.00%, 5/1/47, Continuously Callable @100 | 1,050 | 1,302 |
See notes to financial statements.
22
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Commonwealth Financing Authority Revenue, 5.00%, 6/1/35, Continuously Callable @100 | $ | 1,000 | $ | 1,219 | |||||||
Commonwealth of Pennsylvania Certificate of Participation, Series A, 5.00%, 7/1/43, Continuously Callable @100 | 1,000 | 1,207 | |||||||||
County of Lehigh Revenue, 4.00%, 7/1/49, Continuously Callable @100 | 1,000 | 1,140 | |||||||||
Indiana County Hospital Authority Revenue, Series A, 6.00%, 6/1/39, Continuously Callable @100 | 1,625 | 1,694 | |||||||||
Lancaster County Hospital Authority Revenue, 5.00%, 11/1/35, Continuously Callable @100 | 1,000 | 1,129 | |||||||||
Lancaster IDA Revenue, 4.00%, 7/1/51, Continuously Callable @103 | 500 | 542 | |||||||||
Latrobe IDA Revenue, 4.00%, 3/1/51, Continuously Callable @100 | 800 | 866 | |||||||||
Montgomery County IDA Revenue 5.25%, 1/15/45, Continuously Callable @100 | 1,000 | 1,118 | |||||||||
4.00%, 10/1/46, Continuously Callable @100 | 625 | 722 | |||||||||
4.00%, 10/1/51, Continuously Callable @100 | 825 | 947 | |||||||||
Series C, 4.00%, 11/15/43, Continuously Callable @103 | 600 | 686 | |||||||||
Northampton County General Purpose Authority Revenue 4.00%, 8/15/40, Continuously Callable @100 | 1,000 | 1,093 | |||||||||
5.00%, 8/15/43, Continuously Callable @100 | 1,000 | 1,195 | |||||||||
Pennsylvania Economic Development Financing Authority Revenue 4.00%, 7/1/46, Continuously Callable @103 | 1,000 | 1,117 | |||||||||
Series A, 4.00%, 10/15/51, Continuously Callable @100 | 1,000 | 1,174 | |||||||||
Pennsylvania Higher Educational Facilities Authority Revenue, Series A, 4.00%, 7/15/46, Continuously Callable @100 | 1,575 | 1,808 | |||||||||
Pennsylvania Turnpike Commission Revenue Series A-1, 5.00%, 12/1/46, Continuously Callable @100 | 1,000 | 1,149 | |||||||||
Series A-1, 5.00%, 12/1/47, Continuously Callable @100 | 1,000 | 1,214 | |||||||||
Series B, 5.00%, 12/1/39, Continuously Callable @100 | 1,000 | 1,242 | |||||||||
Series B, 5.25%, 12/1/44, Continuously Callable @100 | 1,000 | 1,125 | |||||||||
Series B, 4.00%, 12/1/51, Continuously Callable @100 | 1,000 | 1,161 | |||||||||
Series B, 4.00%, 12/1/51, Continuously Callable @100 | 1,000 | 1,164 | |||||||||
Philadelphia IDA Revenue, 5.00%, 8/1/50, Continuously Callable @100 | 1,050 | 1,252 | |||||||||
Reading School District, GO (INS — Assured Guaranty Municipal Corp.), 5.00%, 3/1/38, Continuously Callable @100 | 1,500 | 1,785 | |||||||||
School District of Philadelphia, GO, Series F, 5.00%, 9/1/37, Continuously Callable @100 | 1,000 | 1,177 | |||||||||
The Philadelphia School District, GO, Series A, 5.00%, 9/1/38, Continuously Callable @100 | 1,000 | 1,221 | |||||||||
The School District of Philadelphia, GO, Series A, 4.00%, 9/1/46, Continuously Callable @100 | 1,000 | 1,169 | |||||||||
Wilkes-Barre Area School District, GO (INS — Build America Mutual Assurance Co.), 4.00%, 4/15/49, Continuously Callable @100 | 1,500 | 1,699 | |||||||||
49,254 | |||||||||||
Puerto Rico (0.1%): | |||||||||||
Commonwealth of Puerto Rico, GO (INS — Assured Guaranty Municipal Corp.), Series A, 5.00%, 7/1/35, Continuously Callable @100 | 1,000 | 1,008 | |||||||||
Rhode Island (0.2%): | |||||||||||
Rhode Island Housing & Mortgage Finance Corp. Revenue, Series 15-A, 6.85%, 10/1/24, Continuously Callable @100 | 40 | 40 |
See notes to financial statements.
23
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Rhode Island Turnpike & Bridge Authority Revenue, Series A, 5.00%, 10/1/40, Continuously Callable @100 | $ | 1,000 | $ | 1,167 | |||||||
1,207 | |||||||||||
South Carolina (0.6%): | |||||||||||
Patriots Energy Group Revenue Series A, 4.00%, 6/1/46, Continuously Callable @100 | 500 | 585 | |||||||||
Series A, 4.00%, 6/1/51, Continuously Callable @100 | 600 | 696 | |||||||||
Piedmont Municipal Power Agency Revenue (INS — Assured Guaranty Municipal Corp.), Series D, 5.75%, 1/1/34, Continuously Callable @100 | 2,000 | 2,000 | |||||||||
South Carolina Jobs-Economic Development Authority Revenue 5.00%, 11/15/47, Continuously Callable @103 | 1,000 | 1,163 | |||||||||
4.00%, 4/1/49, Continuously Callable @103 | 620 | 673 | |||||||||
5,117 | |||||||||||
Tennessee (0.8%): | |||||||||||
Greeneville Health & Educational Facilities Board Revenue, 5.00%, 7/1/37, Continuously Callable @100 | 1,500 | 1,832 | |||||||||
Metropolitan Government Nashville & Davidson Country Health & Educational Facilities Board Revenue, 4.00%, 10/1/51, Continuously Callable @100 | 1,000 | 1,093 | |||||||||
Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board Revenue 5.00%, 10/1/45, Continuously Callable @100 | 1,000 | 1,153 | |||||||||
5.00%, 7/1/46, Continuously Callable @100 | 1,000 | 1,162 | |||||||||
5.00%, 10/1/48, Continuously Callable @100 | 500 | 594 | |||||||||
The Metropolitan Nashville Airport Authority Revenue, Series A, 4.00%, 7/1/49, Continuously Callable @100 | 1,000 | 1,166 | |||||||||
7,000 | |||||||||||
Texas (7.5%): | |||||||||||
Arlington Higher Education Finance Corp. Revenue (NBGA — Texas Permanent School Fund), 4.00%, 8/15/44, Continuously Callable @100 | 2,165 | 2,486 | |||||||||
Bexar County Health Facilities Development Corp. Revenue, 5.00%, 7/15/37, Continuously Callable @105 | 1,000 | 1,106 | |||||||||
Central Texas Regional Mobility Authority Revenue 4.00%, 1/1/41, Continuously Callable @100 | 1,000 | 1,094 | |||||||||
Series A, 5.00%, 1/1/45, Pre-refunded 7/1/25 @100 | 1,000 | 1,159 | |||||||||
Central Texas Turnpike System Revenue, Series C, 5.00%, 8/15/42, Continuously Callable @100 | 1,000 | 1,108 | |||||||||
City of Arlington Special Tax (INS — Assured Guaranty Municipal Corp.), Series A, 5.00%, 2/15/48, Continuously Callable @100 | 1,000 | 1,208 | |||||||||
City of Garland Texas Electric Utility System Revenue, Series A, 4.00%, 3/1/51, Continuously Callable @100 | 1,000 | 1,174 | |||||||||
City of Houston Hotel Occupancy Tax & Special Revenue 5.00%, 9/1/39, Continuously Callable @100 | 1,000 | 1,107 | |||||||||
5.00%, 9/1/40, Continuously Callable @100 | 1,000 | 1,106 | |||||||||
City of Irving Texas Revenue, 5.00%, 8/15/43, Continuously Callable @100 | 1,000 | 1,189 | |||||||||
City of Laredo Waterworks & Sewer System Revenue, 4.00%, 3/1/41, Continuously Callable @100 | 1,000 | 1,110 |
See notes to financial statements.
24
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
City of Lewisville Special Assessment (INS — ACA Financial Guaranty Corp.), 5.80%, 9/1/25 (c) | $ | 2,895 | $ | 3,021 | |||||||
City of Lubbock Texas Electric Light & Power System Revenue, 4.00%, 4/15/51, Continuously Callable @100 | 2,500 | 2,896 | |||||||||
Clifton Higher Education Finance Corp. Revenue (NBGA — Texas Permanent School Fund) 5.00%, 8/15/39, Continuously Callable @100 | 1,000 | 1,110 | |||||||||
4.00%, 8/15/44, Continuously Callable @100 | 1,000 | 1,162 | |||||||||
County of Bexar Revenue, 4.00%, 8/15/44, Continuously Callable @100 | 1,500 | 1,702 | |||||||||
Everman Independent School District, GO (NBGA — Texas Permanent School Fund), 4.00%, 2/15/50, Continuously Callable @100 | 1,500 | 1,762 | |||||||||
Greater Texas Cultural Education Facilities Finance Corp. Revenue, 4.00%, 3/1/50, Continuously Callable @100 | 2,000 | 2,298 | |||||||||
Harris County Cultural Education Facilities Finance Corp. Revenue, 5.00%, 6/1/38, Continuously Callable @100 | 1,000 | 1,042 | |||||||||
Harris County Hospital District Revenue, 4.00%, 2/15/42, Continuously Callable @100 | 1,000 | 1,101 | |||||||||
Houston Higher Education Finance Corp. Revenue, 4.00%, 10/1/51, Continuously Callable @100 | 1,100 | 1,219 | |||||||||
Karnes County Hospital District Revenue, 5.00%, 2/1/44, Continuously Callable @100 | 1,000 | 1,086 | |||||||||
Martin County Hospital District, GO, 4.00%, 4/1/36, Continuously Callable @100 | 350 | 397 | |||||||||
Matagorda County Navigation District No. 1 Revenue, 4.00%, 6/1/30, Continuously Callable @100 | 1,000 | 1,044 | |||||||||
Mesquite Health Facilities Development Corp. Revenue, 2/15/35, Continuously Callable @100 (j) | 1,000 | 793 | |||||||||
New Hope Cultural Education Facilities Finance Corp. Revenue 2.25%, 7/1/47, Callable 7/1/25 @100 | 1,000 | 857 | |||||||||
Series A, 5.00%, 4/1/47, Pre-refunded 4/1/25 @100 | 1,600 | 1,838 | |||||||||
New Hope Cultural Education Facilities Finance Corp. Revenue (INS — Assured Guaranty Municipal Corp.), Series A1, 5.00%, 7/1/38, Continuously Callable @100 | 225 | 271 | |||||||||
North Texas Tollway Authority Revenue Series B, 5.00%, 1/1/31, Continuously Callable @100 | 1,500 | 1,635 | |||||||||
Series B, 5.00%, 1/1/45, Continuously Callable @100 | 1,000 | 1,122 | |||||||||
Port of Port Arthur Navigation District Revenue 0.13%, 11/1/40, Continuously Callable @100 (c) (h) | 4,650 | 4,650 | |||||||||
Series A, 0.06%, 4/1/40, Continuously Callable @100 (h) | 530 | 530 | |||||||||
Series B, 0.06%, 4/1/40, Continuously Callable @100 (h) | 300 | 300 | |||||||||
Series C, 0.08%, 4/1/40, Continuously Callable @100 (h) | 8,500 | 8,500 | |||||||||
Princeton Independent School District, GO (NBGA — Texas Permanent School Fund), 5.00%, 2/15/43, Continuously Callable @100 | 1,000 | 1,231 | |||||||||
Prosper Independent School District, GO (NBGA — Texas Permanent School Fund), 5.00%, 2/15/48, Continuously Callable @100 | 1,000 | 1,226 | |||||||||
San Antonio Education Facilities Corp. Revenue, 4.00%, 4/1/54, Continuously Callable @100 | 1,000 | 1,119 | |||||||||
Tarrant County Cultural Education Facilities Finance Corp. Revenue 5.00%, 11/15/46, Continuously Callable @100 | 1,000 | 1,164 | |||||||||
Series A, 11/15/45, Callable 11/15/25 @100 (j) | 1,000 | 800 | |||||||||
Series B, 11/15/36, Callable 11/15/25 @100 (j) | 1,000 | 800 |
See notes to financial statements.
25
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Series B, 5.00%, 7/1/48, Continuously Callable @100 | $ | 1,500 | $ | 1,843 | |||||||
Waco Educational Finance Corp. Revenue, 4.00%, 3/1/51, Continuously Callable @100 | 1,000 | 1,175 | |||||||||
63,541 | |||||||||||
Utah (0.1%): | |||||||||||
Utah Charter School Finance Authority Revenue, Series A, 4.00%, 10/15/46, Continuously Callable @100 | 860 | 1,011 | |||||||||
Vermont (0.1%): | |||||||||||
Vermont Economic Development Authority Revenue, Series A, 4.00%, 5/1/45, Continuously Callable @103 | 1,000 | 1,089 | |||||||||
Virginia (0.1%): | |||||||||||
Alexandria IDA Revenue, 5.00%, 10/1/45, Continuously Callable @100 | 1,000 | 1,124 | |||||||||
Washington (0.7%): | |||||||||||
King County Public Hospital District No 2, GO, Series A, 4.00%, 12/1/41, Continuously Callable @100 | 1,000 | 1,166 | |||||||||
Washington Health Care Facilities Authority Revenue 4.00%, 7/1/42, Continuously Callable @100 | 1,000 | 1,129 | |||||||||
5.00%, 1/1/47, Continuously Callable @100 | 1,000 | 1,172 | |||||||||
Washington Higher Education Facilities Authority Revenue, 4.00%, 5/1/45, Continuously Callable @100 | 1,100 | 1,264 | |||||||||
Washington State Housing Finance Commission Revenue 5.00%, 1/1/38, Continuously Callable @102 (f) | 1,000 | 1,167 | |||||||||
Series A-1, 3.50%, 12/20/35 | 298 | 348 | |||||||||
6,246 | |||||||||||
West Virginia (0.2%): | |||||||||||
West Virginia Hospital Finance Authority Revenue, 4.00%, 1/1/38, Continuously Callable @100 | 1,500 | 1,723 | |||||||||
Wisconsin (1.4%): | |||||||||||
Public Finance Authority Revenue 5.00%, 7/1/38, Continuously Callable @100 | 1,000 | 1,227 | |||||||||
4.00%, 1/1/45, Continuously Callable @100 | 1,440 | 1,651 | |||||||||
4.00%, 2/1/51, Continuously Callable @100 | 1,000 | 1,144 | |||||||||
Series A, 4.00%, 10/1/47, Continuously Callable @100 | 1,000 | 1,169 | |||||||||
Series A, 5.25%, 10/1/48, Continuously Callable @100 | 1,500 | 1,727 | |||||||||
Series A, 4.00%, 10/1/49, Continuously Callable @100 | 1,500 | 1,682 | |||||||||
Public Finance Authority Revenue (INS — Assured Guaranty Municipal Corp.), 5.00%, 7/1/44, Continuously Callable @100 | 600 | 733 | |||||||||
Wisconsin Health & Educational Facilities Authority Revenue 5.25%, 4/15/35, Pre-refunded 4/15/23 @100 | 1,000 | 1,068 | |||||||||
5.00%, 9/15/45, Pre-refunded 9/15/23 @100 | 1,000 | 1,083 | |||||||||
11,484 | |||||||||||
Total Municipal Bonds (Cost $424,324) | 447,547 | ||||||||||
U.S. Treasury Obligations (0.1%) | |||||||||||
U.S. Treasury Bills, 0.04%, 1/27/22 (l) | 700 | 700 | |||||||||
Total U.S. Treasury Obligations (Cost $700) | 700 |
See notes to financial statements.
26
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Collateral for Securities Loaned^ (0.0%) (m) | |||||||||||
HSBC U.S. Government Money Market Fund I Shares, 0.03% (n) | 254,451 | $ | 254 | ||||||||
Total Collateral for Securities Loaned (Cost $254) | 254 | ||||||||||
Total Investments (Cost $538,503) — 99.4% | 839,378 | ||||||||||
Other assets in excess of liabilities — 0.6% | 5,131 | ||||||||||
NET ASSETS — 100.00% | $ | 844,509 |
^ Purchased with cash collateral from securities on loan.
(a) Non-income producing security.
(b) All or a portion of this security is on loan.
(c) All or a portion of this security has been segregated as collateral for derivative instruments, delayed delivered and/or when-issued securities.
(d) Rounds to less than $1 thousand.
(e) Northern Trust Corp. is the parent of Northern Trust Investments Inc., which is the sub adviser of the Fund.
(f) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of November 30, 2021, the fair value of these securities was $17,367 (thousands) and amounted to 2.1% of net assets.
(g) Security or portion of security purchased on a delayed-delivery and/or when-issued basis.
(h) Variable Rate Demand Notes provide the rights to sell the security at face value on either that day or within the rate-reset period. The interest rate is reset on the put date at a stipulated daily, weekly, monthly, quarterly, or other specified time interval to reflect current market conditions. These securities do not indicate a reference rate and spread in their description.
(i) Zero-coupon bond.
(j) Currently the issuer is in default with respect to interest and/or principal payments.
(k) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of November 30, 2021, illiquid securities were 0.1% of net assets.
(l) Rate represents the effective yield at November 30, 2021.
(m) Amount represents less than 0.05% of net assets.
(n) Rate disclosed is the daily yield on November 30, 2021.
AMBAC — American Municipal Bond Assurance Corporation
Continuously callable — Investment is continuously callable or will be continuously callable on any date after the first call date until its maturity.
See notes to financial statements.
27
USAA Mutual Funds Trust USAA Growth and Tax Strategy Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Unaudited)
GO — General Obligation
IDA — Industrial Development Authority
LLC — Limited Liability Company
PLC — Public Limited Company
Credit Enhancements — Adds the financial strength of the provider of the enhancement to support the issuer's ability to repay the principal and interest payments when due. The enhancement may be provided by a high-quality bank, insurance company or other corporation, or a collateral trust. The enhancements do not guarantee the market values of the securities.
INS Principal and interest payments are insured by the name listed. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons, and there is no assurance that the insurance company will meet its obligations.
LIQ Liquidity enhancement that may, under certain circumstances, provide for repayment of principal and interest upon demand from the name listed.
NBGA Principal and interest payments or, under certain circumstances, underlying mortgages are guaranteed by a nonbank guarantee agreement from the name listed.
Futures Contracts Purchased
(Amounts not in thousands)
Number of Contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||||||||
E-Mini S&P 500 Futures | 13 | 12/17/21 | $ | 2,900,734 | $ | 2,968,062 | $ | 67,328 | |||||||||||||||
Total unrealized appreciation | $ | 67,328 | |||||||||||||||||||||
Total unrealized depreciation | — | ||||||||||||||||||||||
Total net unrealized appreciation (depreciation) | $ | 67,328 |
See notes to financial statements.
28
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Growth and Tax Strategy Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $538,503) | $ | 839,378 | (a) | ||||
Cash | 3,023 | ||||||
Deposit with broker for futures contracts | 37 | ||||||
Receivables: | |||||||
Interest and dividends | 5,215 | ||||||
Capital shares issued | 1,753 | ||||||
Prepaid expenses | 34 | ||||||
Total Assets | 849,440 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 254 | ||||||
Investments purchased | 3,682 | ||||||
Capital shares redeemed | 490 | ||||||
Variation margin on open futures contracts | 55 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 237 | ||||||
Administration fees | 101 | ||||||
Custodian fees | 3 | ||||||
Transfer agent fees | 44 | ||||||
Compliance fees | — | (b) | |||||
Trustees' fees | — | (b) | |||||
12b-1 fees | 2 | ||||||
Other accrued expenses | 63 | ||||||
Total Liabilities | 4,931 | ||||||
Net Assets: | |||||||
Capital | 550,203 | ||||||
Total accumulated earnings/(loss) | 294,306 | ||||||
Net Assets | $ | 844,509 | |||||
Net Assets | |||||||
Fund Shares | $ | 764,804 | |||||
Institutional Shares | 68,321 | ||||||
Class A | 7,894 | ||||||
Class C | 3,490 | ||||||
Total | $ | 844,509 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 29,073 | ||||||
Institutional Shares | 2,599 | ||||||
Class A | 301 | ||||||
Class C | 134 | ||||||
Total | 32,107 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 26.31 | |||||
Institutional Shares | $ | 26.29 | |||||
Class A | $ | 26.25 | |||||
Class C (d) | $ | 26.11 | |||||
Maximum Sales Charge — Class A | 2.25 | % | |||||
Maximum offering price (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 26.85 |
(a) Includes $239 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
(d) Redemption price per share varies by the length of time shares are held.
See notes to financial statements.
29
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Growth and Tax Strategy Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 2,662 | |||||
Interest | 6,025 | ||||||
Securities lending (net of fees) | — | (a) | |||||
Foreign tax withholding | — | (a) | |||||
Total Income | 8,687 | ||||||
Expenses: | |||||||
Investment advisory fees | 1,301 | ||||||
Administration fees — Fund Shares | 556 | ||||||
Administration fees — Institutional Shares | 30 | ||||||
Administration fees — Class A | 2 | ||||||
Administration fees — Class C | 2 | ||||||
Sub-Administration fees | 22 | ||||||
12b-1 fees — Class A | 4 | ||||||
12b-1 fees — Class C | 13 | ||||||
Custodian fees | 19 | ||||||
Transfer agent fees — Fund Shares | 201 | ||||||
Transfer agent fees — Institutional Shares | 30 | ||||||
Transfer agent fees — Class A | 2 | ||||||
Transfer agent fees — Class C | 1 | ||||||
Trustees' fees | 23 | ||||||
Compliance fees | 3 | ||||||
Legal and audit fees | 34 | ||||||
State registration and filing fees | 43 | ||||||
Other expenses | 57 | ||||||
Total Expenses | 2,343 | ||||||
Expenses waived/reimbursed by Adviser | (9 | ) | |||||
Net Expenses | 2,334 | ||||||
Net Investment Income (Loss) | 6,353 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 1,907 | ||||||
Net realized gains (losses) from futures contracts | 193 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | 30,015 | ||||||
Net change in unrealized appreciation/depreciation on futures contracts | (48 | ) | |||||
Net realized/unrealized gains (losses) on investments | 32,067 | ||||||
Change in net assets resulting from operations | $ | 38,420 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
30
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Growth and Tax Strategy Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 6,353 | $ | 12,399 | |||||||
Net realized gains (losses) from investments | 2,100 | 6,824 | |||||||||
Net change in unrealized appreciation/depreciation on investments | 29,967 | 116,209 | |||||||||
Change in net assets resulting from operations | 38,420 | 135,432 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (5,608 | ) | (11,933 | ) | |||||||
Institutional Shares (a) | (450 | ) | (467 | ) | |||||||
Class A (a) | (18 | ) | (1 | ) | |||||||
Class C (a) | (13 | ) | (5 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (6,089 | ) | (12,406 | ) | |||||||
Change in net assets resulting from capital transactions | 53,050 | 42,523 | |||||||||
Change in net assets | 85,381 | 165,549 | |||||||||
Net Assets: | |||||||||||
Beginning of period | 759,128 | 593,579 | |||||||||
End of period | $ | 844,509 | $ | 759,128 |
(a) Institutional Shares, Class A and Class C commenced operations on June 29, 2020.
(continues on next page)
See notes to financial statements.
31
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands) (continued)
USAA Growth and Tax Strategy Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 66,682 | $ | 128,688 | |||||||
Distributions reinvested | 5,363 | 11,096 | |||||||||
Cost of shares redeemed | (38,822 | ) | (149,077 | ) | |||||||
Total Fund Shares | $ | 33,223 | $ | (9,293 | ) | ||||||
Institutional Shares (a) | |||||||||||
Proceeds from shares issued | $ | 13,964 | $ | 56,777 | |||||||
Distributions reinvested | 109 | 130 | |||||||||
Cost of shares redeemed | (3,712 | ) | (6,753 | ) | |||||||
Total Institutional Shares | $ | 10,361 | $ | 50,154 | |||||||
Class A (a) | |||||||||||
Proceeds from shares issued | $ | 7,436 | $ | 520 | |||||||
Distributions reinvested | 13 | 1 | |||||||||
Cost of shares redeemed | (174 | ) | (22 | ) | |||||||
Total Class A | $ | 7,275 | $ | 499 | |||||||
Class C (a) | |||||||||||
Proceeds from shares issued | $ | 2,192 | $ | 1,181 | |||||||
Distributions reinvested | 12 | 4 | |||||||||
Cost of shares redeemed | (13 | ) | (22 | ) | |||||||
Total Class C | $ | 2,191 | $ | 1,163 | |||||||
Change in net assets resulting from capital transactions | $ | 53,050 | $ | 42,523 | |||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 2,568 | 5,514 | |||||||||
Reinvested | 209 | 491 | |||||||||
Redeemed | (1,494 | ) | (6,530 | ) | |||||||
Total Fund Shares | 1,283 | (525 | ) | ||||||||
Institutional Shares (a) | |||||||||||
Issued | 537 | 2,477 | |||||||||
Reinvested | 4 | 6 | |||||||||
Redeemed | (143 | ) | (282 | ) | |||||||
Total Institutional Shares | 398 | 2,201 | |||||||||
Class A (a) | |||||||||||
Issued | 286 | 22 | |||||||||
Reinvested | 1 | — | (b) | ||||||||
Redeemed | (7 | ) | (1 | ) | |||||||
Total Class A | 280 | 21 | |||||||||
Class C (a) | |||||||||||
Issued | 85 | 50 | |||||||||
Reinvested | — | (b) | — | (b) | |||||||
Redeemed | — | (b) | (1 | ) | |||||||
Total Class C | 85 | 49 | |||||||||
Change in Shares | 2,046 | 1,746 |
(a) Institutional Shares, Class A and Class C commenced operations on June 29, 2020.
(b) Rounds to less than 1 thousand shares.
See notes to financial statements.
32
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33
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
| Investment Activities | Distributions to Shareholders From | |||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Growth and Tax Strategy Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 25.25 | 0.21 | (d) | 1.05 | 1.26 | (0.20 | ) | — | ||||||||||||||||||
Year Ended May 31 | |||||||||||||||||||||||||||
2021 | $ | 20.96 | 0.43 | (d) | 4.29 | 4.72 | (0.43 | ) | — | ||||||||||||||||||
2020 | $ | 20.18 | 0.47 | (d) | 0.77 | 1.24 | (0.46 | ) | — | ||||||||||||||||||
2019 | $ | 19.77 | 0.47 | 0.47 | 0.94 | (0.48 | ) | (0.05 | ) | ||||||||||||||||||
2018 | $ | 18.76 | 0.44 | 1.01 | 1.45 | (0.44 | ) | — | |||||||||||||||||||
2017 | $ | 17.79 | 0.42 | 0.96 | 1.38 | (0.41 | ) | — | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 25.24 | 0.21 | (d) | 1.04 | 1.25 | (0.20 | ) | — | ||||||||||||||||||
June 29, 2020 (f) through May 31, 2021 | $ | 21.05 | 0.40 | (d) | 4.12 | 4.52 | (0.33 | ) | — | ||||||||||||||||||
Class A | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 25.22 | 0.17 | (d) | 1.04 | 1.21 | (0.18 | ) | — | ||||||||||||||||||
June 29, 2020 (f) through May 31, 2021 | $ | 21.05 | 0.31 | (d) | 4.16 | 4.47 | (0.30 | ) | — | ||||||||||||||||||
Class C | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 25.12 | 0.07 | (d) | 1.04 | 1.11 | (0.12 | ) | — | ||||||||||||||||||
June 29, 2020 (f) through May 31, 2021 | $ | 21.05 | 0.16 | (d) | 4.13 | 4.29 | (0.22 | ) | — |
* 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.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment are calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
See notes to financial statements.
34
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return (Excludes Sales Charge)*(a) | Net Expenses**^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Growth and Tax Strategy Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | (0.20 | ) | $ | 26.31 | 5.00 | % | 0.57 | % | 1.58 | % | 0.57 | % | $ | 764,804 | 4 | % | |||||||||||||||||||
Year Ended May 31 | |||||||||||||||||||||||||||||||||||
2021 | (0.43 | ) | $ | 25.25 | 22.79 | % | 0.59 | % | 1.86 | % | 0.59 | % | $ | 701,841 | 11 | % | |||||||||||||||||||
2020 | (0.46 | ) | $ | 20.96 | 6.25 | % | 0.57 | % | 2.25 | % | 0.57 | % | $ | 593,579 | 34 | %(e) | |||||||||||||||||||
2019 | (0.53 | ) | $ | 20.18 | 4.83 | % | 0.60 | % | 2.44 | % | 0.60 | % | $ | 526,320 | 7 | % | |||||||||||||||||||
2018 | (0.44 | ) | $ | 19.77 | 7.81 | % | 0.68 | % | 2.32 | % | 0.68 | % | $ | 459,682 | 10 | % | |||||||||||||||||||
2017 | (0.41 | ) | $ | 18.76 | 7.88 | % | 0.84 | % | 2.33 | % | 0.84 | % | $ | 391,020 | 4 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | (0.20 | ) | $ | 26.29 | 4.97 | % | 0.56 | % | 1.59 | % | 0.56 | % | $ | 68,321 | 4 | % | |||||||||||||||||||
June 29, 2020 (f) through May 31, 2021 | (0.33 | ) | $ | 25.24 | 21.62 | % | 0.56 | % | 1.80 | % | 0.59 | % | $ | 55,541 | 11 | % | |||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | (0.18 | ) | $ | 26.25 | 4.80 | % | 0.86 | % | 1.30 | % | 1.31 | % | $ | 7,894 | 4 | % | |||||||||||||||||||
June 29, 2020 (f) through May 31, 2021 | (0.30 | ) | $ | 25.22 | 21.35 | % | 0.86 | % | 1.38 | % | 13.45 | % | $ | 525 | 11 | % | |||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | (0.12 | ) | $ | 26.11 | 4.42 | % | 1.61 | % | 0.54 | % | 1.83 | % | $ | 3,490 | 4 | % | |||||||||||||||||||
June 29, 2020 (f) through May 31, 2021 | (0.22 | ) | $ | 25.12 | 20.47 | % | 1.60 | % | 0.70 | % | 5.63 | % | $ | 1,221 | 11 | % |
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects an overall increase in purchases and sales of securities.
(f) Commencement of operations.
See notes to financial statements.
35
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Growth and Tax Strategy Fund (the "Fund"). The Fund offers four classes of shares: Fund Shares, Institutional Shares, Class A, and Class C. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges, except with respect to sales charges, fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
36
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs") and American Depositary Receipts ("ADRs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
Debt securities are valued each business day by a pricing service approved by the Board. The approved pricing service uses the evaluated bid or the last sale price to value securities. Debt obligations maturing within 60 days may be valued at their amortized cost, provided that the amortized cost represents the fair value of such securities. These valuations are typically categorized as Level 2 in the fair value hierarchy.
Futures contracts are valued at the settlement price established each day by the board of trade or an exchange on which they are traded. These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 390,877 | $ | — | $ | — | $ | 390,877 | |||||||||||
Municipal Bonds | — | 447,547 | — | 447,547 | |||||||||||||||
U.S. Treasury Obligations | — | 700 | — | 700 | |||||||||||||||
Collateral for Securities Loaned | 254 | — | — | 254 | |||||||||||||||
Total | $ | 391,131 | $ | 448,247 | $ | — | $ | 839,378 | |||||||||||
Other Financial Investments* | |||||||||||||||||||
Assets: | |||||||||||||||||||
Futures Contracts | $ | 67 | $ | — | $ | — | $ | 67 | |||||||||||
Total | $ | 67 | $ | — | $ | — | $ | 67 |
^ Futures contracts are valued at the unrealized appreciation (depreciation) on the investment.
For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
37
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Investment Companies:
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Securities Purchased on a Delayed-Delivery or When-Issued Basis:
The Fund may purchase securities on a delayed-delivery or when-issued basis. Delivery and payment for securities that have been purchased by the Fund on a delayed-delivery or when-issued basis, or for delayed draws on loans can take place a month or more after the trade date. At the time the Fund makes the commitment to purchase a security on a delayed-delivery or when-issued basis, the Fund records the transaction and reflects the value of the security in determining NAV. No interest accrues to the Fund until the transaction settles and payment takes place. A segregated account is established and the Fund maintains cash and/or marketable securities at least equal in value to commitments for delayed-delivery or when-issued securities. If the Fund owns delayed-delivery or when-issued securities, these values are included in Payables for Investments purchased on the accompanying Statement of Assets and Liabilities and the segregated assets are identified on the Schedule of Portfolio Investments.
Municipal Obligations:
The values of municipal obligations can fluctuate and may be affected by adverse tax, legislative, or political changes, and by financial developments affecting municipal issuers. Payments of municipal obligations may depend on a relatively limited source of revenue, resulting in greater credit risk. Future changes in federal tax laws or the activity of an issuer may adversely affect the tax-exempt status of municipal obligations.
Below-Investment-Grade Securities:
The Fund may invest in below-investment-grade securities (i.e. lower-quality, "junk" debt), which are subject to various risks. Lower-quality debt is considered to be speculative because it is less certain that the issuer will be able to pay interest or repay the principal than in the case of investment grade debt. These securities can involve a substantially greater risk of default than higher-rated securities, and their values can decline significantly over short periods of time. Lower-quality debt securities tend to be more sensitive to adverse news about their issuers, the market and the economy in general, than higher-quality debt securities. The market for these securities can be less liquid, especially during periods of recession or general market decline.
Derivative Instruments:
Futures Contracts:
The Fund may enter into contracts for the future delivery of securities or foreign currencies and futures contracts based on a specific security, class of securities, foreign currency or an index, and purchase or sell options on any such futures contracts. A futures contract on a securities index is an agreement obligating either party to pay, and entitling the other party to receive, while the contract is outstanding, cash payments based on the level of a specified securities index. No physical delivery of the underlying asset is made. The Fund may enter into futures contracts in an effort to hedge against market risks. The acquisition of put and call options on futures contracts will give the Fund the right (but not the obligation), for a specified price, to sell or to purchase the underlying futures contract, upon exercise of the option, at any time during the option period. Futures transactions involve brokerage costs and require the Fund to segregate assets to cover contracts that would require it to purchase securities or currencies. A good faith margin deposit, known as initial margin, of cash or government securities with a broker or custodian is required to initiate and maintain open positions in futures contracts. Subsequent
38
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
payments, known as variation margin, are made or received by the Fund based on the change in the market value of the position and are recorded as unrealized appreciation or depreciation until the contract is closed out, at which time the gain or loss is realized. The Fund may lose the expected benefit of futures transactions if interest rates, exchange rates or securities prices change in an unanticipated manner. Such unanticipated changes may also result in lower overall performance than if the Fund had not entered into any futures transactions. In addition, the value of the Fund's futures positions may not prove to be perfectly or even highly correlated with the value of its portfolio securities or foreign currencies, limiting the Fund's ability to hedge effectively against interest rate, exchange rate and/or market risk and giving rise to additional risks. There is no assurance of liquidity in the secondary market for purposes of closing out futures positions. The collateral held by the Fund is presented on the Statement of Assets and Liabilities under Deposit with broker for futures contracts. During the six months ended November 30, 2021, the Fund entered into futures contracts primarily for the strategy of hedging or other purposes, including but not limited to, providing liquidity and equitizing cash.
Summary of Derivative Instruments:
The following table summarizes the fair values of derivative instruments on the Statement of Assets and Liabilities, categorized by risk exposure, as of November 30, 2021 (amounts in thousands):
Assets | Liabilities | ||||||||||
Variation Margin Receivable on Open Futures Contracts* | Variation Margin Payable on Open Futures Contracts* | ||||||||||
Equity Risk Exposure | $ | 67 | $ | — |
* Includes cumulative unrealized appreciation (depreciation) of futures contracts as reported on the Schedule of Portfolio Investments. Only current day's variation margin for futures contracts is reported within the Statement of Assets and Liabilities.
The following table presents the effect of derivative instruments on the Statement of Operations, categorized by risk exposure, for the six months ended November 30, 2021 (amounts in thousands):
Net Realized Gains (Losses) on Derivatives Recognized as a Result of Operations | Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized as a Result of Operations | ||||||||||
Net Realized Gains (Losses) from Futures Contracts | Net Change in Unrealized Appreciation/Depreciation on Futures Contracts | ||||||||||
Equity Risk Exposure | $ | 193 | $ | (48 | ) |
All open derivative positions at period end are reflected on the Fund's Schedule of Portfolio Investments. The underlying face value of open derivative positions relative to the Fund's net assets at period end is generally representative of the notional amount of open positions to net assets throughout the period.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis. Paydown gains or losses on applicable securities, if any, are recorded as components of Interest income on the Statement of Operations.
39
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of November 30, 2021.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 239 | $ | — | $ | 254 |
Foreign Taxes:
The Fund may be subject to foreign taxes related to foreign income received (a portion of which may be reclaimable), capital gains on the sale of securities, and certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, printing fees, and 12b-1 fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
Cross-Trade Transactions:
Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades, which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the six months ended November 30, 2021, the Fund engaged in the following securities transactions with affiliated funds, which resulted in the following net realized gains (losses) (amounts in thousands):
Purchases | Sales | Net Realized Gains (Losses) | |||||||||
$ | 20,300 | $ | 25,950 | $ | — |
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 90,635 | $ | 29,100 |
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.30% of the Fund's average daily net assets. Amounts incurred and paid to VCM for the six months ended November 30, 2021, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and calculated monthly by comparing each class' performance to that of the Lipper Composite Index which is comprised of 51% of the Lipper General & Insured Municipal Bond Funds Index and 49% of the Lipper Large-Cap Core Funds Index.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
+/- 20 to 50 | +/- 4 | ||||||
+/- 51 to 100 | +/- 5 | ||||||
+/- 101 and greater | +/- 6 |
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Composite Index over that period, even if the class has overall negative returns during the performance period.
For the period June 1, 2021 to November 30, 2021, performance adjustments were $90, less than $(1), less than $1, and less than $(1) for Fund Shares, Institutional Shares, Class A, and Class C, in thousands, respectively. Performance adjustments were 0.02%, less than (0.01)%, less than 0.01%, and less than (0.01)% for Fund Shares, Institutional Shares, Class A, and Class C, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets.
VCM entered into a Subadvisory Agreement with Northern Trust Investments, Inc. ("NTI") under which NTI directs the investment and reinvestment of the Fund's assets allocated to it in accordance with the Fund's investment objective, policies, and restrictions, subject to the general supervision of the Board and VCM. This arrangement provides for monthly fees that are paid by VCM. VCM (not the Fund) pays the subadviser fees.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, 0.10%, 0.15%, and 0.15%, which is based on the Fund's average daily net assets of the Fund Shares, Institutional Shares, Class A, and Class C, respectively.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Administration fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. Funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund Shares based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares, Class A, and Class C are paid monthly based on a fee accrued daily at an annualized rate of 0.10%, 0.10%, and 0.10%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred and paid to VCTA for the six months ended November 30, 2021, are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust. Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, up to an annual rate of 1.00% of the average daily net assets of Class C and 0.25% of the average daily net assets of Class A. The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A, and Class C. Amounts incurred and paid to the Distributor for the six months ended November 30, 2021, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions on sales of Class A. For the six months ended November 30, 2021, the Distributor received less than $1 thousand dollars from commissions earned on the sale of Class A.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of November 30, 2021, the expense limits (excluding voluntary waivers) were 0.61%, 0.57%, 0.86%, and 1.61% for Fund Shares, Institutional Shares, Class A, and Class C, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of November 30, 2021, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayment is not probable at November 30, 2021.
Expires 2024 | Expires 2025 | Total | |||||||||
$ | 38 | $ | 9 | $ | 47 |
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six months ended November 30, 2021.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Debt Securities Risk — The value of a debt security or other income-producing security changes in response to various factors including, for example, market-related factors (such as changes in interest rates or changes in the risk appetite of investors generally) and changes in the actual or perceived ability of the issuer (or of issuers generally) to meet its (or their) obligations.
Other factors that may affect the value of debt securities include, among others, public health crises and responses by governments and companies to such crises. These and other events may affect the creditworthiness of the issuer of a debt security and may impair an issuer's ability to timely meet its debt obligations as they come due.
Credit Risk — The fixed-income securities in the Fund's portfolio are subject to credit risk, which is the possibility that an issuer of a fixed-income security will fail to make timely interest and/or principal payments on its securities or that negative market perceptions of the issuer's ability to make such payments will cause the price of that security to decline. The Fund accepts some credit risk as a recognized means to enhance an investor's return. All fixed-income securities, varying from the highest quality to the very speculative, have some degree of credit risk.
Interest Rate Risk — The Fund is subject to the risk that the market value of the bonds in its portfolio will fluctuate because of changes in interest rates, changes in the supply of and demand for tax-exempt
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
securities, and other market factors. Bond prices generally are linked to the prevailing market interest rates. In general, when interest rates rise, bond prices fall; conversely, when interest rates fall, bond prices rise. The price volatility of a bond also depends on its duration. Generally, the longer the duration of a bond, the greater is its sensitivity to interest rates. To compensate investors for this higher interest rate risk, bonds with longer durations generally offer higher yields than bonds with shorter durations. The ability of an issuer of a debt security to repay principal prior to a security's maturity can increase the security's sensitivity to interest rate changes.
Decisions by the U.S. Federal Reserve (also known as the "Fed") regarding interest rate and monetary policy, which can be difficult to predict and sometimes change direction suddenly in response to economic and market events, can have a significant effect on the value of fixed-income securities as well as the overall strength of the U.S. economy. Precise interest rate predictions are difficult to make, and interest rates may change unexpectedly and dramatically in response to extreme changes in market or economic conditions. As a result, the value of fixed-income securities may vary widely under certain market conditions.
Equity Risk — The Fund may invest in underlying affiliated funds that invest in equity securities. The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or last for extended periods.
LIBOR Discontinuation Risk — Many debt securities, derivatives, and other financial instruments, including some of the Fund's investments, use the London Interbank Offered Rate ("LIBOR") as the reference or benchmark rate for variable interest rate calculations. LIBOR is being discontinued as a floating rate benchmark. The Secured Overnight Financing Rate ("SOFR") is expected to replace U.S. dollar LIBOR as the principal floating rate benchmark. The LIBOR discontinuation has affected, and will continue to affect, financial markets generally. The date of the LIBOR discontinuation will vary depending on the LIBOR currency and tenor. The UK Financial Conduct Authority (the "FCA"), which is the regulator of the LIBOR administrator, has announced that, after specified dates, LIBOR settings will cease to be provided by any administrator or will no longer be representative. Those dates are: (i) June 30, 2023, in the case of the principal U.S. dollar LIBOR tenors (overnight and one-, three-, six- and 12-month; and (ii) December 31, 2021, in all other cases (i.e., one-week and two-month U.S. dollar LIBOR and all tenors of non-U.S. dollar LIBOR). Accordingly, many existing LIBOR obligations will transition to another benchmark after June 30, 2023, or, in some cases, after December 31, 2021. The FCA and certain U.S. regulators have stated that, despite expected publication of U.S. dollar LIBOR through June 30, 2023, no new contracts using U.S. dollar LIBOR should be entered into after December 31, 2021. Although the foregoing reflects the likely timing of the LIBOR discontinuation and certain consequences, there is no assurance that LIBOR, of any particular currency or tenor, will continue to be published until any particular date or in any particular form, and there is no assurance regarding the consequences of the LIBOR discontinuation. In the United States, there have been efforts to identify alternative reference interest rates for U.S. dollar LIBOR. The cash markets have generally coalesced around recommendations from the Alternative Reference Rates Committee (the "ARRC"), which was convened by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York. The ARRC has recommended that U.S. dollar LIBOR be replaced by rates based on SOFR plus, in the case of existing LIBOR contracts and obligations, a spread adjustment. For purposes of the following discussion, the term "LIBOR" refers solely to U.S. dollar LIBOR. SOFR has a limited history, having been first published in April 2018. The future performance of SOFR, and SOFR-based reference rates, cannot be predicted based on SOFR's history or otherwise. SOFR has been more volatile than other benchmark or market rates, such as three-month LIBOR, during certain periods. Future levels of SOFR may bear little or no relation to historical levels of SOFR, LIBOR or other rates. SOFR-based rates will differ from LIBOR, and the differences may be material. SOFR is intended to be a broad measure of the cost of borrowing funds overnight in transactions that are collateralized by U.S. Treasury securities. In contrast, LIBOR is intended to be an unsecured rate that represents
45
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
interbank funding costs for different short-term tenors. For these reasons, among others, there is no assurance that SOFR, or rates derived from SOFR, will perform in the same or a similar way as LIBOR would have performed at any time, and there is no assurance that SOFR-based rates will be a suitable substitute for LIBOR. Non-LIBOR floating rate obligations, including SOFR-based obligations, may have returns and values that fluctuate more than those of floating rate obligations that are based on LIBOR or other rates. Resulting changes in the financial markets may adversely affect financial markets generally and may also adversely affect our operations specifically, particularly as financial markets transition away from LIBOR.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period is presented on the Statement of Operations under Interfund lending.
The Fund did not utilize or participate in the Facility during the six months ended November 30, 2021.
7. Federal Income Tax Information:
The Fund intends to distribute any net investment income quarterly. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had net capital loss carryforwards as shown in the table below (amounts in thousands).
Short-Term Amount | |||
$11,277 |
47
USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs , including sales charges (loads) on purchases; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21- 11/30/21* | Hypothetical Expenses Paid During Period 6/1/21- 11/30/21* | Annualized Expense Ratio During Period 6/1/21- 11/30/21 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,050.00 | $ | 1,022.21 | $ | 2.93 | $ | 2.89 | 0.57 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,049.70 | 1,022.26 | 2.88 | 2.84 | 0.56 | % | ||||||||||||||||||||
Class A | 1,000.00 | 1,048.00 | 1,020.76 | 4.42 | 4.36 | 0.86 | % | ||||||||||||||||||||
Class C | 1,000.00 | 1,044.20 | 1,017.00 | 8.25 | 8.14 | 1.61 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
48
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
27801-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA Managed Allocation Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
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USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 4 | ||||||
Statement of Operations | 5 | ||||||
Statements of Changes in Net Assets | 6 | ||||||
Financial Highlights | 8 | ||||||
Notes to Financial Statements | 10 | ||||||
Supplemental Information | 17 | ||||||
Proxy Voting and Portfolio Holdings Information | 17 | ||||||
Expense Example | 17 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA Managed Allocation Fund | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks to maximize total return, consisting primarily of capital appreciation.
Asset Allocation*:
November 30, 2021
(% of Net Assets)
* Does not include futures contracts, money market instruments, and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Managed Allocation Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Exchange-Traded Funds (99.9%) | |||||||||||
iShares Core S&P 500 ETF | 351,046 | $ | 160,649 | ||||||||
Vanguard Total World Stock ETF (a) | 4,613,248 | 481,023 | |||||||||
Total Exchange-Traded Funds (Cost $531,309) | 641,672 | ||||||||||
Collateral for Securities Loaned^ (0.1%) | |||||||||||
Fidelity Investments Money Market Government Portfolio Institutional Shares, 0.01% (b) | 874,800 | 875 | |||||||||
Total Collateral for Securities Loaned (Cost $875) | 875 | ||||||||||
Total Investments (Cost $532,184) — 100.0% | 642,547 | ||||||||||
Other assets in excess of liabilities — 0.0% (c) | 158 | ||||||||||
NET ASSETS — 100.00% | $ | 642,705 |
At November 30, 2021, the Fund's investments in foreign securities were 74.8% of net assets.
ETF — Exchange-Traded Fund
^ Purchased with cash collateral from securities on loan.
(a) All or a portion of this security is on loan.
(b) Rate disclosed is the daily yield on November 30, 2021.
(c) Amount represents less than 0.05% of net assets.
See notes to financial statements.
3
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Managed Allocation Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $532,184) | $ | 642,547 | (a) | ||||
Cash | 1,663 | ||||||
Receivables: | |||||||
Interest and dividends | 1 | ||||||
Capital shares issued | 79 | ||||||
From Adviser | 88 | ||||||
Prepaid expenses | 19 | ||||||
Total Assets | 644,397 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 875 | ||||||
Capital shares redeemed | 356 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 329 | ||||||
Administration fees | 27 | ||||||
Custodian fees | 5 | ||||||
Transfer agent fees | 27 | ||||||
Compliance fees | — | (b) | |||||
Other accrued expenses | 73 | ||||||
Total Liabilities | 1,692 | ||||||
Net Assets: | |||||||
Capital | 495,084 | ||||||
Total accumulated earnings/(loss) | 147,621 | ||||||
Net Assets | $ | 642,705 | |||||
Shares (unlimited number of shares authorized with no par value): | 43,860 | ||||||
Net asset value, offering and redemption price per share: (c) | $ | 14.65 |
(a) Includes $845 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
4
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Managed Allocation Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 5,453 | |||||
Interest | — | (a) | |||||
Securities lending (net of fees) | 11 | ||||||
Total Income | 5,464 | ||||||
Expenses: | |||||||
Investment advisory fees | 1,996 | ||||||
Administration fees | 166 | ||||||
Sub-Administration fees | 9 | ||||||
Custodian fees | 15 | ||||||
Transfer agent fees | 166 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 2 | ||||||
Legal and audit fees | 27 | ||||||
State registration and filing fees | 8 | ||||||
Other expenses | 66 | ||||||
Total Expenses | 2,479 | ||||||
Expenses waived/reimbursed by Adviser | (532 | ) | |||||
Net Expenses | 1,947 | ||||||
Net Investment Income (Loss) | 3,517 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 8,158 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | 12,218 | ||||||
Net realized/unrealized gains (losses) on investments | 20,376 | ||||||
Change in net assets resulting from operations | $ | 23,893 |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
5
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Managed Allocation Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 3,517 | $ | 7,373 | |||||||
Net realized gains (losses) from investments | 8,158 | 77,147 | |||||||||
Net change in unrealized appreciation/depreciation on investments | 12,218 | 58,529 | |||||||||
Change in net assets resulting from operations | 23,893 | 143,049 | |||||||||
Change in net assets resulting from distributions to shareholders | — | (8,738 | ) | ||||||||
Change in net assets resulting from capital transactions | (42,488 | ) | (133,803 | ) | |||||||
Change in net assets | (18,595 | ) | 508 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 661,300 | 660,792 | |||||||||
End of period | $ | 642,705 | $ | 661,300 | |||||||
Capital Transactions: | |||||||||||
Proceeds from shares issued | $ | 19,867 | $ | 31,378 | |||||||
Distributions reinvested | — | 8,737 | |||||||||
Cost of shares redeemed | (62,355 | ) | (173,918 | ) | |||||||
Change in net assets resulting from capital transactions | $ | (42,488 | ) | $ | (133,803 | ) | |||||
Share Transactions: | |||||||||||
Issued | 1,377 | 2,457 | |||||||||
Reinvested | — | 682 | |||||||||
Redeemed | (4,281 | ) | (13,694 | ) | |||||||
Total Fund Shares | (2,904 | ) | (10,555 | ) |
See notes to financial statements.
6
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7
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders from | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Managed Allocation Fund | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 14.14 | 0.08 | (c) | 0.43 | 0.51 | — | — | |||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 11.53 | 0.14 | (c) | 2.64 | 2.78 | (0.17 | ) | — | ||||||||||||||||||
2020 | $ | 11.10 | 0.28 | (c) | 0.47 | 0.75 | (0.32 | ) | — | ||||||||||||||||||
2019 | $ | 12.01 | 0.20 | (0.92 | ) | (0.72 | ) | (0.11 | ) | (0.08 | ) | ||||||||||||||||
2018 | $ | 11.61 | 0.23 | 0.46 | 0.69 | (0.29 | ) | — | |||||||||||||||||||
2017 | $ | 10.90 | 0.24 | 0.72 | 0.96 | (0.25 | ) | — |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Per share net investment income (loss) has been calculated using the average daily shares method.
(d) Reflects an increase in trading activity due to asset allocation shifts.
(e) Reflects a return to normal trading levels after a prior year transition or allocation shift.
See notes to financial statements.
8
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a) | ||||||||||||||||||||||||||||
USAA Managed Allocation Fund | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | $ | 14.65 | 3.61 | % | 0.59 | % | 1.06 | % | 0.75 | % | $ | 642,705 | 0 | % | ||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.17 | ) | $ | 14.14 | 24.31 | % | 0.59 | % | 1.12 | % | 0.75 | % | $ | 661,300 | 152 | % | |||||||||||||||||||
2020 | (0.32 | ) | $ | 11.53 | 6.66 | % | 0.60 | % | 2.38 | % | 0.74 | % | $ | 660,792 | 167 | % | |||||||||||||||||||
2019 | (0.19 | ) | $ | 11.10 | (5.92 | )% | 0.75 | % | 1.72 | % | 0.75 | % | $ | 724,519 | 156 | %(d) | |||||||||||||||||||
2018 | (0.29 | ) | $ | 12.01 | 5.91 | % | 0.74 | % | 1.83 | % | 0.74 | % | $ | 808,509 | 97 | %(e) | |||||||||||||||||||
2017 | (0.25 | ) | $ | 11.61 | 8.94 | % | 0.76 | % | 2.13 | % | 0.76 | % | $ | 765,879 | 194 | %(d) |
See notes to financial statements.
9
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Managed Allocation Fund (the "Fund"). The Fund is classified as diversified under the 1940 Act.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.
10
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Exchange-Traded Funds | $ | 641,672 | $ | — | $ | — | $ | 641,672 | |||||||||||
Collateral for Securities Loaned | 875 | — | — | 875 | |||||||||||||||
Total | $ | 642,547 | $ | — | $ | — | $ | 642,547 |
For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a portfolio of securities often designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the
11
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of November 30, 2021.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 845 | $ | — | $ | 875 |
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | — | $ | 38,507 |
12
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive fees accrued daily and paid monthly at an annualized rate of 0.60% of the Fund's average daily net assets. The Adviser has contractually agreed to waive its management fee from 0.60% to 0.44%. Amounts incurred and paid to VCM for the six months ended November 30, 2021, are reflected on the Statement of Operations as Investment advisory fees.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six months ended November 30, 2021, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.05%, which is based on the Fund's average daily net assets. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Administration fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. The funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund based on an annual rate of 0.05% of average daily net assets plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Amounts incurred and paid to VCTA for the six months ended November 30, 2021, are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
13
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of November 30, 2021, the expense limit was 0.74%.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of November 31, 2021, there were no amounts available to be repaid to the Adviser. The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that repayments are not probable at November 30, 2021.
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. These waivers are not available for recoupment and are reflected on the Statement of Operations as Expenses waived/reimbursed by Adviser.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Portfolio Reallocation Risk — The frequent changes in the allocation of the Fund's portfolio holdings may result in higher portfolio turnover. In purchasing and selling securities in order to reallocate the portfolio, the Fund will pay more brokerage commissions than it would without a reallocation policy. In addition, the Fund may have a higher proportion of capital gains and a potentially lower return than a fund that does not reallocate from time to time.
ETF Risk — ETFs, which generally are registered investment companies, incur their own management and other fees and expenses, such as trustees' fees, operating expenses, registration fees, and marketing expenses, a proportionate share of which will be borne indirectly by the Fund as a shareholder in an ETF. As a result, the Fund's investment in an ETF will cause the Fund to indirectly bear the fees and expenses of the ETF and, in turn, the Fund's performance may be lower than if the Fund were to invest directly in the underlying securities held by the ETF. For investments in affiliated ETFs, the Fund's management fee is reimbursed by the Adviser to the extent of the indirect management fee incurred
14
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
through the Fund's investment in the affiliated ETFs. The Adviser may have conflicts of interest in allocating assets among affiliated and unaffiliated ETFs, because the Adviser also manages and administers the affiliated ETFs, and the Adviser and its affiliates receive other fees from the affiliated ETFs. In addition, the Fund also will be subject to the risks associated with the securities or other investments held by the ETFs.
Market Risk — Overall stock market risks may affect the value of the Fund. Domestic and international factors such as political events, war, trade disputes, interest rate levels and other fiscal and monetary policy changes, pandemics and other public health crises, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods, may add to instability in world economies and markets generally. The impact of these and other factors may be short-term or may last for extended periods.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is presented on the Statement of Operations under Interfund lending fees.
The Fund did not utilize or participate in the Facility during the six months ended November 30, 2021.
7. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
15
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had no capital loss carryforwards, for the federal income tax purposes.
8. Subsequent Events:
On January 13, 2022, the Board approved a Plan of Liquidation and Dissolution pursuant to which the USAA Managed Allocation Fund will be liquidated on or about February 28, 2022. Effective February 1, 2022, the USAA Managed Allocation Fund will be closed to new investors. Through the end of business February 18, 2022, existing shareholders may continue to make additional investments into existing accounts. Distribution of liquidation proceeds to Fund shareholders, may result in a taxable event for shareholders, depending on their individual circumstances.
16
USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Example
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21- 11/30/21* | Hypothetical Expenses Paid During Period 6/1/21- 11/30/21* | Annualized Expense Ratio During Period 6/1/21- 11/30/21 | ||||||||||||||||||
$ | 1,000.00 | $ | 1,036.10 | $ | 1,022.11 | $ | 3.01 | $ | 2.99 | 0.59 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
17
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
93924-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA Emerging Markets Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 17 | ||||||
Statement of Operations | 18 | ||||||
Statements of Changes in Net Assets | 19 | ||||||
Financial Highlights | 22 | ||||||
Notes to Financial Statements | 24 | ||||||
Supplemental Information | 34 | ||||||
Proxy Voting and Portfolio Holdings Information | 34 | ||||||
Expense Examples | 34 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA Emerging Markets Fund | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks capital appreciation.
Top 10 Sectors:
November 30, 2021
(% of Net Assets)
Information Technology | 23.2 | % | |||||
Financials | 21.2 | % | |||||
Consumer Discretionary | 10.6 | % | |||||
Communication Services | 9.6 | % | |||||
Materials | 7.7 | % | |||||
Industrials | 7.6 | % | |||||
Energy | 5.8 | % | |||||
Health Care | 4.5 | % | |||||
Consumer Staples | 3.9 | % | |||||
Real Estate | 2.6 | % |
Country Allocation:
November 30, 2021
(% of Net Assets)
* Includes countries with less than 3.0% of portfolio and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (97.7%) | |||||||||||
Brazil (4.4%): | |||||||||||
Consumer Discretionary (0.8%): | |||||||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | 121,700 | $ | 295 | ||||||||
Vibra Energia SA (a) | 1,248,700 | 4,834 | |||||||||
5,129 | |||||||||||
Consumer Staples (0.6%): | |||||||||||
Sendas Distribuidora SA | 714,681 | 1,621 | |||||||||
SLC Agricola SA | 289,700 | 1,978 | |||||||||
3,599 | |||||||||||
Energy (0.5%): | |||||||||||
3R Petroleum Oleo e Gas SA (a) | 71,400 | 351 | |||||||||
Petro Rio SA (a) | 110,100 | 398 | |||||||||
Petroleo Brasileiro SA, ADR | 201,799 | 2,153 | |||||||||
2,902 | |||||||||||
Financials (1.2%): | |||||||||||
Banco Bradesco SA, ADR | 620,657 | 2,185 | |||||||||
Banco do Brasil SA | 508,495 | 2,881 | |||||||||
Banco do Estado do Rio Grande do Sul SA Preference Shares | 151,900 | 273 | |||||||||
Itau Unibanco Holding SA, ADR | 533,103 | 2,090 | |||||||||
Porto Seguro SA | 68,800 | 272 | |||||||||
7,701 | |||||||||||
Industrials (0.8%): | |||||||||||
CCR SA | 941,520 | 2,062 | |||||||||
Randon SA Implementos e Participacoes Preference Shares | 930,400 | 1,832 | |||||||||
SIMPAR SA | 843,856 | 1,581 | |||||||||
5,475 | |||||||||||
Information Technology (0.2%): | |||||||||||
Cielo SA | 648,400 | 239 | |||||||||
Pagseguro Digital Ltd. Class A (a) (b) | 51,935 | 1,327 | |||||||||
1,566 | |||||||||||
Materials (0.2%): | |||||||||||
Dexco SA | 489,600 | 1,571 | |||||||||
Utilities (0.1%): | |||||||||||
Eneva SA (a) | 134,700 | 334 | |||||||||
Equatorial Energia SA | 81,700 | 328 | |||||||||
Omega Geracao SA (a) | 47,000 | 227 | |||||||||
889 | |||||||||||
28,832 |
See notes to financial statements.
3
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Canada (1.8%): | |||||||||||
Energy (0.4%): | |||||||||||
Parex Resources, Inc. (b) | 144,302 | $ | 2,314 | ||||||||
Materials (1.4%): | |||||||||||
First Quantum Minerals Ltd. | 438,087 | 9,339 | |||||||||
11,653 | |||||||||||
Chile (0.3%): | |||||||||||
Financials (0.3%): | |||||||||||
Banco de Chile | 19,988,545 | 1,934 | |||||||||
China (23.5%): | |||||||||||
Communication Services (4.6%): | |||||||||||
Baidu, Inc., ADR (a) | 20,857 | 3,125 | |||||||||
NetEase, Inc., ADR | 44,291 | 4,771 | |||||||||
Tencent Holdings Ltd. | 391,963 | 22,860 | |||||||||
30,756 | |||||||||||
Consumer Discretionary (5.5%): | |||||||||||
Alibaba Group Holding Ltd., ADR (a) | 127,978 | 16,321 | |||||||||
BYD Co. Ltd. Class H | 58,000 | 2,281 | |||||||||
China Harmony Auto Holding Ltd. | 681,500 | 376 | |||||||||
Fuyao Glass Industry Group Co. Ltd. Class H (c) | 360,000 | 1,976 | |||||||||
Gree Electric Appliances, Inc. Class A | 313,600 | 1,700 | |||||||||
JD.com, Inc., ADR (a) | 71,923 | 6,050 | |||||||||
Jiumaojiu International Holdings Ltd. (c) | 704,000 | 1,454 | |||||||||
JNBY Design Ltd. | 192,500 | 325 | |||||||||
Meituan Class B (a) (c) | 119,500 | 3,632 | |||||||||
Q Technology Group Co. Ltd. | 259,000 | 365 | |||||||||
Tianneng Power International Ltd. (b) | 208,000 | 229 | |||||||||
Topsports International Holdings Ltd. (c) | 1,396,000 | 1,623 | |||||||||
36,332 | |||||||||||
Consumer Staples (1.5%): | |||||||||||
China Feihe Ltd. (c) | 837,000 | 1,120 | |||||||||
China Modern Dairy Holdings Ltd. (b) | 1,841,000 | 308 | |||||||||
Hengan International Group Co. Ltd. (b) | 467,500 | 2,258 | |||||||||
Inner Mongolia Yili Industrial Group Co. Ltd. Class A | 338,700 | 2,080 | |||||||||
Wuliangye Yibin Co. Ltd. Class A | 114,600 | 3,924 | |||||||||
9,690 | |||||||||||
Energy (0.6%): | |||||||||||
China Shenhua Energy Co. Ltd. Class H | 1,817,000 | 3,765 | |||||||||
Financials (3.7%): | |||||||||||
China Construction Bank Corp. Class H | 7,595,000 | 4,949 | |||||||||
China Merchants Bank Co. Ltd. Class H | 1,216,500 | 9,424 | |||||||||
China Renaissance Holdings Ltd. (c) | 143,200 | 298 | |||||||||
Ping An Insurance Group Co. of China Ltd. | 900,500 | 6,243 | |||||||||
Postal Savings Bank of China Co. Ltd. Class H (c) | 5,025,000 | 3,404 | |||||||||
24,318 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Health Care (1.8%): | |||||||||||
China Animal Healthcare Ltd. (a) (d) (e) | 1,673,000 | $ | — | ||||||||
China Medical System Holdings Ltd. | 207,000 | 339 | |||||||||
Hygeia Healthcare Holdings Co. Ltd. (c) | 239,400 | 1,847 | |||||||||
Pharmaron Beijing Co. Ltd. Class H (c) | 100,100 | 2,065 | |||||||||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd. Class A | 38,200 | 2,159 | |||||||||
Sinopharm Group Co. Ltd. Class H | 1,145,199 | 2,489 | |||||||||
Wuxi Biologics Cayman, Inc. (a) (c) | 250,431 | 3,378 | |||||||||
12,277 | |||||||||||
Industrials (1.9%): | |||||||||||
Airtac International Group | 73,344 | 2,245 | |||||||||
A-Living Smart City Services Co. Ltd. Class H (c) | 539,000 | 1,266 | |||||||||
China Lesso Group Holdings Ltd. | 326,000 | 473 | |||||||||
China Railway Group Ltd. Class H | 5,220,000 | 2,482 | |||||||||
Xinte Energy Co. Ltd. Class H | 760,400 | 1,733 | |||||||||
Zhefu Holding Group Co. Ltd. Class A | 1,806,500 | 1,899 | |||||||||
Zhejiang Expressway Co. Ltd. Class H (b) | 480,000 | 453 | |||||||||
ZTO Express Cayman, Inc., ADR | 55,130 | 1,743 | |||||||||
12,294 | |||||||||||
Information Technology (1.7%): | |||||||||||
Chinasoft International Ltd. | 2,876,000 | 4,782 | |||||||||
Luxshare Precision Industry Co. Ltd. Class A | 278,700 | 1,731 | |||||||||
WUS Printed Circuit Kunshan Co. Ltd. Class A | 1,106,050 | 2,639 | |||||||||
Yonyou Network Technology Co. Ltd. Class A | 393,600 | 2,011 | |||||||||
11,163 | |||||||||||
Materials (1.1%): | |||||||||||
Anhui Conch Cement Co. Ltd. Class H | 550,500 | 2,507 | |||||||||
China Hongqiao Group Ltd. | 2,221,000 | 2,150 | |||||||||
Wanhua Chemical Group Co. Ltd. Class A | 192,700 | 2,885 | |||||||||
7,542 | |||||||||||
Real Estate (0.7%): | |||||||||||
China Vanke Co. Ltd. Class H | 963,300 | 2,185 | |||||||||
KWG Living Group Holdings Ltd. | 481,000 | 291 | |||||||||
Shimao Services Holdings Ltd. (c) | 1,669,728 | 2,063 | |||||||||
Times Neighborhood Holdings Ltd. | 430,806 | 190 | |||||||||
4,729 | |||||||||||
Utilities (0.4%): | |||||||||||
China Longyuan Power Group Corp. Ltd. Class H | 1,184,000 | 2,420 | |||||||||
155,286 | |||||||||||
Colombia (0.6%): | |||||||||||
Financials (0.6%): | |||||||||||
Bancolombia SA, ADR | 124,685 | 3,972 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Egypt (0.4%): | |||||||||||
Communication Services (0.1%): | |||||||||||
Telecom Egypt Co. | 488,956 | $ | 446 | ||||||||
Financials (0.3%): | |||||||||||
Commercial International Bank Egypt SAE Registered Shares, GDR (a) | 764,229 | 2,365 | |||||||||
2,811 | |||||||||||
Greece (1.0%): | |||||||||||
Consumer Discretionary (0.2%): | |||||||||||
OPAP SA | 109,197 | 1,515 | |||||||||
Financials (0.4%): | |||||||||||
National Bank of Greece SA (a) | 872,294 | 2,597 | |||||||||
Industrials (0.3%): | |||||||||||
Mytilineos SA | 115,795 | 1,897 | |||||||||
Utilities (0.1%): | |||||||||||
Terna Energy SA | 26,946 | 412 | |||||||||
6,421 | |||||||||||
Hong Kong (4.2%): | |||||||||||
Communication Services (0.1%): | |||||||||||
NetDragon Websoft Holdings Ltd. | 140,000 | 319 | |||||||||
Consumer Discretionary (0.9%): | |||||||||||
Bosideng International Holdings Ltd. (b) | 3,276,000 | 2,306 | |||||||||
JS Global Lifestyle Co. Ltd. (c) | 1,872,000 | 3,675 | |||||||||
5,981 | |||||||||||
Financials (0.4%): | |||||||||||
BOC Hong Kong Holdings Ltd. | 892,500 | 2,698 | |||||||||
Health Care (0.0%): (f) | |||||||||||
The United Laboratories International Holdings Ltd. | 446,000 | 254 | |||||||||
Industrials (1.4%): | |||||||||||
Pacific Basin Shipping Ltd. | 5,648,000 | 2,145 | |||||||||
Sinotruk Hong Kong Ltd. | 171,000 | 253 | |||||||||
Techtronic Industries Co. Ltd. | 337,000 | 6,931 | |||||||||
9,329 | |||||||||||
Information Technology (0.6%): | |||||||||||
ASM Pacific Technology Ltd. | 190,000 | 1,989 | |||||||||
Lenovo Group Ltd. | 1,962,000 | 2,009 | |||||||||
3,998 | |||||||||||
Materials (0.1%): | |||||||||||
Nine Dragons Paper Holdings Ltd. | 335,000 | 374 | |||||||||
Real Estate (0.6%): | |||||||||||
China Overseas Grand Oceans Group Ltd. | 1,093,000 | 493 | |||||||||
China Resources Land Ltd. | 770,000 | 3,217 | |||||||||
3,710 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Utilities (0.1%): | |||||||||||
Canvest Environmental Protection Group Co. Ltd. | 674,000 | $ | 357 | ||||||||
China Water Affairs Group Ltd. | 520,000 | 597 | |||||||||
954 | |||||||||||
27,617 | |||||||||||
Hungary (0.5%): | |||||||||||
Financials (0.4%): | |||||||||||
OTP Bank Nyrt (a) | 53,506 | 2,956 | |||||||||
Health Care (0.1%): | |||||||||||
Richter Gedeon Nyrt | 24,664 | 656 | |||||||||
3,612 | |||||||||||
India (10.4%): | |||||||||||
Communication Services (0.0%): (f) | |||||||||||
Indus Towers Ltd. | 41,276 | 156 | |||||||||
Consumer Discretionary (0.9%): | |||||||||||
Bajaj Auto Ltd. | 33,294 | 1,438 | |||||||||
Balkrishna Industries Ltd. | 88,117 | 2,549 | |||||||||
KPR Mill Ltd. | 52,016 | 365 | |||||||||
Mahindra CIE Automotive Ltd. (a) | 148,616 | 472 | |||||||||
Orient Electric Ltd. | 91,378 | 474 | |||||||||
Welspun India Ltd. | 355,422 | 654 | |||||||||
5,952 | |||||||||||
Consumer Staples (0.1%): | |||||||||||
Emami Ltd. | 55,882 | 393 | |||||||||
Energy (1.1%): | |||||||||||
Hindustan Petroleum Corp. Ltd. | 988,956 | 3,886 | |||||||||
Reliance Industries Ltd. | 106,183 | 3,395 | |||||||||
7,281 | |||||||||||
Financials (3.3%): | |||||||||||
Axis Bank Ltd. (a) | 121,830 | 1,061 | |||||||||
Axis Bank Ltd., GDR (a) | 25,213 | 1,118 | |||||||||
Canara Bank (a) | 264,037 | 699 | |||||||||
Cholamandalam Investment & Finance Co. Ltd. | 349,180 | 2,556 | |||||||||
Federal Bank Ltd. | 2,102,332 | 2,424 | |||||||||
ICICI Bank Ltd., ADR | 563,764 | 10,407 | |||||||||
Power Finance Corp. Ltd. | 271,900 | 421 | |||||||||
UTI Asset Management Co. Ltd. | 213,043 | 3,108 | |||||||||
21,794 | |||||||||||
Health Care (1.0%): | |||||||||||
Ajanta Pharma Ltd. | 15,952 | 442 | |||||||||
Apollo Hospitals Enterprise Ltd. | 42,499 | 3,213 | |||||||||
Dr Reddy's Laboratories Ltd. | 34,834 | 2,172 | |||||||||
Eris Lifesciences, Ltd. (c) | 44,051 | 421 | |||||||||
JB Chemicals & Pharmaceuticals Ltd. | 17,569 | 383 | |||||||||
6,631 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Industrials (0.9%): | |||||||||||
Bharat Electronics Ltd. | 201,201 | $ | 546 | ||||||||
Cummins India Ltd. | 31,147 | 364 | |||||||||
Engineers India Ltd. | 303,326 | 289 | |||||||||
Grindwell Norton Ltd. | 23,747 | 511 | |||||||||
KEI Industries Ltd. | 59,967 | 882 | |||||||||
Larsen & Toubro Ltd. | 142,196 | 3,343 | |||||||||
5,935 | |||||||||||
Information Technology (1.9%): | |||||||||||
eClerx Services Ltd. | 35,218 | 1,025 | |||||||||
Infosys Ltd., ADR | 374,152 | 8,448 | |||||||||
Mindtree Ltd. | 23,346 | 1,340 | |||||||||
WNS Holdings Ltd., ADR (a) | 21,271 | 1,788 | |||||||||
12,601 | |||||||||||
Materials (1.0%): | |||||||||||
Birla Corp. Ltd. | 20,252 | 364 | |||||||||
Dalmia Bharat Ltd. | 87,485 | 2,179 | |||||||||
Finolex Industries Ltd. | 197,637 | 556 | |||||||||
Jindal Steel & Power Ltd. (a) | 137,214 | 625 | |||||||||
Tata Chemicals, Ltd. | 45,541 | 528 | |||||||||
Tata Steel Ltd. | 176,922 | 2,511 | |||||||||
6,763 | |||||||||||
Real Estate (0.1%): | |||||||||||
Prestige Estates Projects Ltd. | 95,253 | 534 | |||||||||
Utilities (0.1%): | |||||||||||
CESC Ltd. | 425,220 | 495 | |||||||||
Gujarat Gas Ltd. | 44,983 | 400 | |||||||||
895 | |||||||||||
68,935 | |||||||||||
Indonesia (2.4%): | |||||||||||
Communication Services (1.0%): | |||||||||||
PT Media Nusantara Citra Tbk | 5,579,200 | 373 | |||||||||
PT Telekomunikasi Indonesia Persero Tbk, ADR (b) | 144,681 | 4,062 | |||||||||
PT Telkom Indonesia Persero Tbk | 8,719,500 | 2,428 | |||||||||
6,863 | |||||||||||
Financials (1.3%): | |||||||||||
PT Bank Mandiri Persero Tbk | 6,859,790 | 3,349 | |||||||||
PT Bank Rakyat Indonesia Persero Tbk | 19,528,846 | 5,566 | |||||||||
8,915 | |||||||||||
Real Estate (0.1%): | |||||||||||
PT Puradelta Lestari Tbk | 26,178,300 | 398 | |||||||||
16,176 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Korea, Republic Of (16.2%): | |||||||||||
Communication Services (1.1%): | |||||||||||
AfreecaTV Co. Ltd. | 5,240 | $ | 895 | ||||||||
LG Uplus Corp. | 259,677 | 2,956 | |||||||||
NAVER Corp. | 9,262 | 2,957 | |||||||||
Neowiz (a) | 15,494 | 384 | |||||||||
7,192 | |||||||||||
Consumer Discretionary (1.0%): | |||||||||||
Coway Co. Ltd. | 5,106 | 291 | |||||||||
Hanon Systems | 197,079 | 2,146 | |||||||||
Hyundai Mobis Co. Ltd. | 16,154 | 2,999 | |||||||||
SL Corp. | 24,474 | 639 | |||||||||
Youngone Corp. | 11,329 | 370 | |||||||||
6,445 | |||||||||||
Consumer Staples (0.5%): | |||||||||||
Cosmax, Inc. (a) | 3,296 | 251 | |||||||||
Dongwon F&B Co. Ltd. | 1,977 | 302 | |||||||||
KT&G Corp. | 29,918 | 2,062 | |||||||||
Maeil Dairies Co. Ltd. | 8,807 | 505 | |||||||||
3,120 | |||||||||||
Financials (2.3%): | |||||||||||
BNK Financial Group, Inc. | 76,973 | 518 | |||||||||
DB Insurance Co. Ltd. | 57,684 | 2,615 | |||||||||
Hana Financial Group, Inc. | 80,828 | 2,687 | |||||||||
KIWOOM Securities Co. Ltd. | 5,307 | 435 | |||||||||
Samsung Securities Co. Ltd. | 60,663 | 2,260 | |||||||||
Shinhan Financial Group Co. Ltd. | 89,779 | 2,611 | |||||||||
Woori Financial Group, Inc. | 366,759 | 3,883 | |||||||||
15,009 | |||||||||||
Health Care (0.8%): | |||||||||||
Chong Kun Dang Pharmaceutical Corp. | 2,595 | 233 | |||||||||
Hugel, Inc. (a) | 10,487 | 1,252 | |||||||||
InBody Co. Ltd. | 49,092 | 909 | |||||||||
Osstem Implant Co. Ltd. | 5,944 | 559 | |||||||||
PharmaResearch Co. Ltd. | 8,303 | 538 | |||||||||
Samsung Biologics Co. Ltd. (a) (c) | 2,778 | 2,083 | |||||||||
5,574 | |||||||||||
Industrials (1.4%): | |||||||||||
CJ Corp. | 20,608 | 1,388 | |||||||||
DL E&C Co. Ltd. (a) | 5,706 | 531 | |||||||||
Hyundai Engineering & Construction Co. Ltd. | 44,898 | 1,668 | |||||||||
Hyundai Glovis Co. Ltd. | 2,687 | 329 | |||||||||
LG Corp. | 25,161 | 1,665 | |||||||||
LIG Nex1 Co. Ltd. | 9,172 | 414 | |||||||||
LX INTERNATIONAL CORP. | 14,306 | 278 | |||||||||
Samsung Engineering Co. Ltd. (a) | 161,817 | 2,826 | |||||||||
SFA Engineering Corp. | 5,383 | 152 | |||||||||
9,251 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Information Technology (8.3%): | |||||||||||
Innox Advanced Materials Co. Ltd. (a) | 55,719 | $ | 1,773 | ||||||||
LEENO Industrial, Inc. | 3,770 | 628 | |||||||||
LG Innotek Co. Ltd. | 3,436 | 877 | |||||||||
LX Semicon Co. Ltd. | 8,583 | 773 | |||||||||
Partron Co. Ltd. | 35,799 | 332 | |||||||||
Samsung Electronics Co. Ltd. | 634,216 | 38,076 | |||||||||
SK Hynix, Inc. | 131,708 | 12,594 | |||||||||
55,053 | |||||||||||
Materials (0.8%): | |||||||||||
Kolon Industries, Inc. | 24,441 | 1,453 | |||||||||
Korea Petrochemical Ind Co. Ltd. | 3,934 | 564 | |||||||||
LOTTE Fine Chemical Co. Ltd. | 6,215 | 408 | |||||||||
PI Advanced Materials Co. Ltd. | 52,923 | 2,056 | |||||||||
Poongsan Corp. | 20,319 | 489 | |||||||||
Soulbrain Co. Ltd. | 1,528 | 330 | |||||||||
5,300 | |||||||||||
106,944 | |||||||||||
Malaysia (1.0%): | |||||||||||
Communication Services (0.1%): | |||||||||||
Astro Malaysia Holdings Bhd | 2,674,500 | 609 | |||||||||
Consumer Discretionary (0.3%): | |||||||||||
MR DIY Group M Bhd (c) | 2,637,600 | 2,210 | |||||||||
Financials (0.3%): | |||||||||||
Public Bank Bhd | 2,449,500 | 2,294 | |||||||||
Information Technology (0.1%): | |||||||||||
V.S. Industry Bhd | 1,587,200 | 543 | |||||||||
Real Estate (0.1%): | |||||||||||
Eco World Development Group Bhd | 3,406,400 | 679 | |||||||||
Utilities (0.1%): | |||||||||||
Mega First Corp. Bhd | 456,100 | 380 | |||||||||
6,715 | |||||||||||
Mexico (3.8%): | |||||||||||
Communication Services (0.4%): | |||||||||||
America Movil SAB de CV, ADR | 143,363 | 2,497 | |||||||||
Megacable Holdings SAB de CV | 91,904 | 255 | |||||||||
2,752 | |||||||||||
Consumer Discretionary (0.2%): | |||||||||||
Alsea SAB de CV (a) (b) | 962,119 | 1,647 | |||||||||
Consumer Staples (0.3%): | |||||||||||
Kimberly-Clark de Mexico SAB de CV Class A (b) | 1,160,100 | 1,822 | |||||||||
Energy (0.1%): | |||||||||||
Vista Oil & Gas SAB de CV, ADR (a) | 110,889 | 557 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Financials (1.3%): | |||||||||||
Banco del Bajio SA (c) | 228,525 | $ | 384 | ||||||||
Grupo Financiero Banorte SAB de CV Class O | 1,415,951 | 8,463 | |||||||||
8,847 | |||||||||||
Industrials (0.0%): (f) | |||||||||||
Controladora Vuela Cia de Aviacion SAB de CV Class A (a) | 185,087 | 277 | |||||||||
Materials (1.1%): | |||||||||||
Cemex SAB de CV, ADR (a) | 453,727 | 2,790 | |||||||||
Grupo Cementos de Chihuahua SAB de CV | 128,734 | 898 | |||||||||
Grupo Mexico SAB de CV Class B | 790,709 | 3,309 | |||||||||
6,997 | |||||||||||
Real Estate (0.4%): | |||||||||||
Corp Inmobiliaria Vesta SAB de CV | 1,126,230 | 1,925 | |||||||||
Macquarie Mexico Real Estate Management SA de CV (c) | 344,987 | 398 | |||||||||
2,323 | |||||||||||
25,222 | |||||||||||
Netherlands (0.4%): | |||||||||||
Communication Services (0.4%): | |||||||||||
Yandex NV Class A (a) | 40,882 | 2,941 | |||||||||
Philippines (0.3%): | |||||||||||
Financials (0.3%): | |||||||||||
BDO Unibank, Inc. | 741,760 | 1,823 | |||||||||
Portugal (0.4%): | |||||||||||
Energy (0.4%): | |||||||||||
Galp Energia SGPS SA | 246,695 | 2,315 | |||||||||
Qatar (0.1%): | |||||||||||
Energy (0.1%): | |||||||||||
Qatar Gas Transport Co. Ltd. | 469,533 | 425 | |||||||||
Russian Federation (4.9%): | |||||||||||
Communication Services (0.5%): | |||||||||||
Mobile TeleSystems PJSC, ADR | 388,672 | 3,113 | |||||||||
Consumer Staples (0.3%): | |||||||||||
Magnit PJSC | 25,304 | 1,982 | |||||||||
Energy (2.1%): | |||||||||||
Gazprom PJSC | 1,087,480 | 4,882 | |||||||||
LUKOIL PJSC, ADR | 64,795 | 5,713 | |||||||||
Rosneft Oil Co. PJSC, GDR | 434,783 | 3,274 | |||||||||
13,869 | |||||||||||
Financials (2.0%): | |||||||||||
Moscow Exchange MICEX PJSC | 153,080 | 313 | |||||||||
Sberbank of Russia PJSC, ADR | 329,652 | 5,575 | |||||||||
Sberbank of Russia PJSC | 1,755,012 | 7,492 | |||||||||
13,380 | |||||||||||
32,344 |
See notes to financial statements.
11
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Saudi Arabia (1.0%): | |||||||||||
Consumer Discretionary (0.4%): | |||||||||||
Leejam Sports Co. JSC | 92,289 | $ | 2,571 | ||||||||
Financials (0.6%): | |||||||||||
The Saudi National Bank | 243,850 | 3,924 | |||||||||
Health Care (0.0%): (f) | |||||||||||
Mouwasat Medical Services Co. | 9,067 | 411 | |||||||||
6,906 | |||||||||||
Singapore (0.4%): | |||||||||||
Communication Services (0.4%): | |||||||||||
Sea Ltd., ADR (a) | 8,546 | 2,462 | |||||||||
South Africa (2.2%): | |||||||||||
Communication Services (0.5%): | |||||||||||
MTN Group Ltd. (a) | 322,298 | 3,253 | |||||||||
Consumer Discretionary (0.0%): (f) | |||||||||||
Truworths International Ltd. | 112,656 | 353 | |||||||||
Energy (0.1%): | |||||||||||
Exxaro Resources Ltd. | 39,936 | 381 | |||||||||
Financials (0.9%): | |||||||||||
Absa Group Ltd. | 261,431 | 2,196 | |||||||||
Capitec Bank Holdings Ltd. | 22,631 | 2,598 | |||||||||
Standard Bank Group Ltd. | 163,072 | 1,325 | |||||||||
6,119 | |||||||||||
Industrials (0.1%): | |||||||||||
KAP Industrial Holdings Ltd. | 1,639,049 | 438 | |||||||||
Materials (0.5%): | |||||||||||
African Rainbow Minerals Ltd. | 42,284 | 547 | |||||||||
Impala Platinum Holdings Ltd. | 211,823 | 2,654 | |||||||||
3,201 | |||||||||||
Real Estate (0.1%): | |||||||||||
Redefine Properties Ltd. (a) | 1,658,857 | 521 | |||||||||
14,266 | |||||||||||
Taiwan (12.8%): | |||||||||||
Communication Services (0.1%): | |||||||||||
International Games System Co. Ltd. | 16,000 | 448 | |||||||||
Consumer Discretionary (0.3%): | |||||||||||
Fulgent Sun International Holding Co. Ltd. | 103,000 | 363 | |||||||||
Global PMX Co. Ltd. | 81,000 | 526 | |||||||||
KMC Kuei Meng International, Inc. | 55,000 | 395 | |||||||||
O-TA Precision Industry Co., Ltd. | 65,000 | 360 | |||||||||
Taiwan Paiho Ltd. | 125,000 | 349 | |||||||||
1,993 |
See notes to financial statements.
12
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Financials (1.1%): | |||||||||||
CTBC Financial Holding Co. Ltd. | 3,560,000 | $ | 3,117 | ||||||||
King's Town Bank Co. Ltd. | 356,000 | 514 | |||||||||
Yuanta Financial Holding Co. Ltd. | 3,979,640 | 3,382 | |||||||||
7,013 | |||||||||||
Health Care (0.3%): | |||||||||||
Pegavision Corp. | 128,000 | 2,078 | |||||||||
Industrials (0.2%): | |||||||||||
Chicony Power Technology Co. Ltd. | 191,000 | 511 | |||||||||
China Airlines Ltd. (a) | 430,000 | 398 | |||||||||
Evergreen Marine Corp. Ltd. | 122,000 | 541 | |||||||||
1,450 | |||||||||||
Information Technology (10.3%): | |||||||||||
Alchip Technologies, Ltd. | 11,000 | 404 | |||||||||
ASE Technology Holding Co. Ltd., ADR (b) | 409,564 | 2,994 | |||||||||
ASE Technology Holding Co. Ltd. | 1,451,000 | 5,290 | |||||||||
AU Optronics Corp. | 475,000 | 342 | |||||||||
Chipbond Technology Corp. | 290,000 | 699 | |||||||||
Compal Electronics, Inc. | 456,000 | 379 | |||||||||
E Ink Holdings, Inc. | 169,000 | 765 | |||||||||
Elite Material Co. Ltd. | 82,000 | 825 | |||||||||
Gigabyte Technology Co. Ltd. | 176,000 | 860 | |||||||||
Hon Hai Precision Industry Co. Ltd., GDR | 391,875 | 2,881 | |||||||||
Hon Hai Precision Industry Co. Ltd. | 788,000 | 2,920 | |||||||||
King Yuan Electronics Co. Ltd. | 318,000 | 495 | |||||||||
Kinsus Interconnect Technology Corp. | 73,000 | 629 | |||||||||
Lite-On Technology Corp. | 195,000 | 422 | |||||||||
Macronix International Co. Ltd. | 277,000 | 420 | |||||||||
MediaTek, Inc. | 227,000 | 8,230 | |||||||||
Parade Technologies Ltd. | 15,000 | 1,143 | |||||||||
Quanta Computer, Inc. | 500,000 | 1,541 | |||||||||
Radiant Opto-Electronics Corp. | 131,000 | 452 | |||||||||
Silicon Motion Technology Corp., ADR | 95,468 | 6,590 | |||||||||
Simplo Technology Co. Ltd. | 44,000 | 518 | |||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 1,254,000 | 26,675 | |||||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 11,798 | 1,382 | |||||||||
Tong Hsing Electronic Industries Ltd. | 80,000 | 877 | |||||||||
67,733 | |||||||||||
Materials (0.5%): | |||||||||||
Cheng Loong Corp. | 384,000 | 468 | |||||||||
China General Plastics Corp. | 557,550 | 675 | |||||||||
Formosa Plastics Corp. | 642,000 | 2,355 | |||||||||
3,498 | |||||||||||
84,213 |
See notes to financial statements.
13
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Thailand (2.5%): | |||||||||||
Consumer Discretionary (0.0%): (f) | |||||||||||
Sri Trang Agro-Industry PCL | 354,100 | $ | 312 | ||||||||
Energy (0.4%): | |||||||||||
PTT PCL | 2,222,500 | 2,331 | |||||||||
Financials (0.5%): | |||||||||||
Thanachart Capital PCL | 332,600 | 347 | |||||||||
The Siam Commercial Bank PCL | 848,200 | 3,063 | |||||||||
3,410 | |||||||||||
Health Care (0.5%): | |||||||||||
Chularat Hospital PCL | 4,657,900 | 535 | |||||||||
Mega Lifesciences PCL | 1,666,200 | 2,613 | |||||||||
3,148 | |||||||||||
Information Technology (0.1%): | |||||||||||
Hana Microelectronics PCL Class R | 239,700 | 664 | |||||||||
Materials (0.5%): | |||||||||||
Indorama Ventures PCL | 1,728,800 | 2,008 | |||||||||
The Siam Cement PCL (d) | 135,000 | 1,507 | |||||||||
3,515 | |||||||||||
Real Estate (0.4%): | |||||||||||
AP Thailand PCL | 8,490,300 | 2,190 | |||||||||
Origin Property PCL | 1,583,500 | 493 | |||||||||
2,683 | |||||||||||
Utilities (0.1%): | |||||||||||
Gunkul Engineering PCL | 2,554,600 | 343 | |||||||||
16,406 | |||||||||||
Turkey (1.1%): | |||||||||||
Communication Services (0.3%): | |||||||||||
Turk Telekomunikasyon A/S | 3,004,581 | 2,171 | |||||||||
Consumer Discretionary (0.1%): | |||||||||||
Arcelik A/S (b) | 151,931 | 488 | |||||||||
Consumer Staples (0.1%): | |||||||||||
Coca-Cola Icecek A/S | 78,338 | 503 | |||||||||
Industrials (0.6%): | |||||||||||
KOC Holding AS | 726,368 | 1,495 | |||||||||
Tekfen Holding A/S | 187,310 | 258 | |||||||||
Turkiye Sise ve Cam Fabrikalari A/S | 2,328,723 | 2,123 | |||||||||
3,876 | |||||||||||
Utilities (0.0%): (f) | |||||||||||
Enerjisa Enerji A/S (c) | 336,642 | 328 | |||||||||
7,366 |
See notes to financial statements.
14
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
United Arab Emirates (0.1%): | |||||||||||
Real Estate (0.1%): | |||||||||||
Emaar Development PJSC (a) | 444,114 | $ | 553 | ||||||||
United Kingdom (1.0%): | |||||||||||
Consumer Staples (0.5%): | |||||||||||
Unilever PLC | 59,536 | 3,064 | |||||||||
Materials (0.5%): | |||||||||||
Anglo American PLC | 92,866 | 3,418 | |||||||||
6,482 | |||||||||||
Total Common Stocks (Cost $519,368) | 644,632 | ||||||||||
Rights (0.0%) | |||||||||||
Thailand (0.0%): | |||||||||||
Real Estate (0.0%): | |||||||||||
Origin Property PCL Expires 12/10/21 (a) (d) (e) | 22,327 | — | |||||||||
Total Rights (Cost $—) | — | ||||||||||
Exchange-Traded Funds (0.0%) (f) | |||||||||||
United States (0.0%): | |||||||||||
iShares MSCI Emerging Markets Small-Cap ETF | 3,057 | 183 | |||||||||
Total Exchange-Traded Funds (Cost $169) | 183 | ||||||||||
Collateral for Securities Loaned^ (0.7%) | |||||||||||
United States (0.7%): | |||||||||||
Fidelity Investments Money Market Government Portfolio Institutional Shares, 0.01% (g) | 1,154,559 | 1,155 | |||||||||
Goldman Sachs Financial Square Government Fund Institutional Shares, 0.03% (g) | 2,314,207 | 2,314 | |||||||||
HSBC U.S. Government Money Market Fund I Shares, 0.03% (g) | 1,303,958 | 1,304 | |||||||||
Total Collateral for Securities Loaned (Cost $4,773) | 4,773 | ||||||||||
Total Investments (Cost $524,310) — 98.4% | 649,588 | ||||||||||
Other assets in excess of liabilities — 1.6% | 10,470 | ||||||||||
NET ASSETS — 100.00% | $ | 660,058 |
^ Purchased with cash collateral from securities on loan.
(a) Non-income producing security.
(b) All or a portion of this security is on loan.
(c) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of November 30, 2021, the fair value of these securities was $33,625 (thousands) and amounted to 5.1% of net assets.
(d) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of November 30, 2021, illiquid securities were 0.2% of net assets.
See notes to financial statements.
15
USAA Mutual Funds Trust USAA Emerging Markets Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Unaudited)
(e) Security was fair valued based upon procedures approved by the Board of Trustees and represents 0.0% of net assets as of November 30, 2021. This security is classified as Level 3 within the fair value hierarchy. (See Note 2 in the Notes to Financial Statements)
(f) Amount represents less than 0.05% of net assets.
(g) Rate disclosed is the daily yield on November 30, 2021.
ADR — American Depositary Receipt
ETF — Exchange-Traded Fund
GDR — Global Depositary Receipt
PCL — Public Company Limited
PLC — Public Limited Company
See notes to financial statements.
16
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Emerging Markets Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $524,310) | $ | 649,588 | (a) | ||||
Foreign currency, at value (Cost $364) | 379 | ||||||
Cash | 16,731 | ||||||
Receivables: | |||||||
Interest and dividends | 280 | ||||||
Capital shares issued | 95 | ||||||
Investments sold | 249 | ||||||
Reclaims | 49 | ||||||
From Adviser | 26 | ||||||
Prepaid expenses | 32 | ||||||
Total Assets | 667,429 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 4,773 | ||||||
Capital shares redeemed | 195 | ||||||
Accrued foreign capital gains taxes | 1,531 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 543 | ||||||
Administration fees | 70 | ||||||
Custodian fees | 64 | ||||||
Transfer agent fees | 84 | ||||||
Compliance fees | — | (b) | |||||
12b-1 fees | — | (b) | |||||
Other accrued expenses | 111 | ||||||
Total Liabilities | 7,371 | ||||||
Net Assets: | |||||||
Capital | 547,408 | ||||||
Total accumulated earnings/(loss) | 112,650 | ||||||
Net Assets | $ | 660,058 | |||||
Net Assets | |||||||
Fund Shares | $ | 311,749 | |||||
Institutional Shares | 348,193 | ||||||
Class A | 116 | ||||||
Total | $ | 660,058 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 14,522 | ||||||
Institutional Shares | 16,229 | ||||||
Class A | 5 | ||||||
Total | 30,756 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 21.47 | |||||
Institutional Shares | $ | 21.45 | |||||
Class A | $ | 21.48 | |||||
Maximum Sales Charge — Class A | 5.75 | % | |||||
Maximum offering price (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 22.79 |
(a) Includes $4,465 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
17
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Emerging Markets Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 10,205 | |||||
Interest | — | (a) | |||||
Securities lending (net of fees) | 31 | ||||||
Foreign tax withholding | (940 | ) | |||||
Total Income | 9,296 | ||||||
Expenses: | |||||||
Investment advisory fees | 3,490 | ||||||
Administration fees — Fund Shares | 261 | ||||||
Administration fees — Institutional Shares | 187 | ||||||
Administration fees — Class A | — | (a) | |||||
Sub-Administration fees | 29 | ||||||
12b-1 fees — Class A | — | (a) | |||||
Custodian fees | 213 | ||||||
Transfer agent fees — Fund Shares | 342 | ||||||
Transfer agent fees — Institutional Shares | 187 | ||||||
Transfer agent fees — Class A | — | (a) | |||||
Trustees' fees | 24 | ||||||
Compliance fees | 2 | ||||||
Legal and audit fees | 57 | ||||||
State registration and filing fees | 26 | ||||||
Interfund lending fees | — | (a) | |||||
Other expenses | 71 | ||||||
Total Expenses | 4,889 | ||||||
Expenses waived/reimbursed by Adviser | (61 | ) | |||||
Net Expenses | 4,828 | ||||||
Net Investment Income (Loss) | 4,468 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities and foreign currency translations | 31,341 | ||||||
Foreign taxes on realized gains | (583 | ) | |||||
Net change in unrealized appreciation/depreciation on investment securities and foreign currency transactions | (133,429 | ) | |||||
Net change in accrued foreign taxes on unrealized gains | 381 | ||||||
Net realized/unrealized gains (losses) on investments | (102,290 | ) | |||||
Change in net assets resulting from operations | $ | (97,822 | ) |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
18
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Emerging Markets Fund | |||||||||||
Six Months Ended November 30, 2021 (unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 4,468 | $ | 6,334 | |||||||
Net realized gains (losses) from investments | 30,758 | 106,033 | |||||||||
Net change in unrealized appreciation/depreciation on investments | (133,048 | ) | 195,626 | ||||||||
Change in net assets resulting from operations | (97,822 | ) | 307,993 | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | — | (3,653 | ) | ||||||||
Institutional Shares | — | (4,890 | ) | ||||||||
Class A | — | (53 | ) | ||||||||
Change in net assets resulting from distributions to shareholders | — | (8,596 | ) | ||||||||
Change in net assets resulting from capital transactions | (15,299 | ) | (139,789 | ) | |||||||
Change in net assets | (113,121 | ) | 159,608 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 773,179 | 613,571 | |||||||||
End of period | $ | 660,058 | $ | 773,179 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 11,579 | $ | 26,675 | |||||||
Distributions reinvested | — | 3,610 | |||||||||
Cost of shares redeemed | (25,323 | ) | (77,583 | ) | |||||||
Total Fund Shares | $ | (13,744 | ) | $ | (47,298 | ) | |||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 20,873 | $ | 11,577 | |||||||
Distributions reinvested | — | 4,886 | |||||||||
Cost of shares redeemed | (22,414 | ) | (102,386 | ) | |||||||
Total Institutional Shares | $ | (1,541 | ) | $ | (85,923 | ) | |||||
Class A | |||||||||||
Proceeds from shares issued | $ | — | (a) | $ | 4,791 | ||||||
Distributions reinvested | — | 1 | |||||||||
Cost of shares redeemed | (14 | ) | (11,360 | ) | |||||||
Total Class A | $ | (14 | ) | $ | (6,568 | ) | |||||
Change in net assets resulting from capital transactions | $ | (15,299 | ) | $ | (139,789 | ) |
(a) Rounds to less than $1 thousand.
(continues on next page)
See notes to financial statements.
19
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands) (continued)
USAA Emerging Markets Fund | |||||||||||
Six Months Ended November 30, 2021 (unaudited) | Year Ended May 31, 2021 | ||||||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 495 | 1,211 | |||||||||
Reinvested | — | 167 | |||||||||
Redeemed | (1,085 | ) | (3,708 | ) | |||||||
Total Fund Shares | (590 | ) | (2,330 | ) | |||||||
Institutional Shares | |||||||||||
Issued | 904 | 537 | |||||||||
Reinvested | — | 227 | |||||||||
Redeemed | (939 | ) | (4,773 | ) | |||||||
Total Institutional Shares | (35 | ) | (4,009 | ) | |||||||
Class A | |||||||||||
Issued | — | (b) | 278 | ||||||||
Reinvested | — | — | (b) | ||||||||
Redeemed | (1 | ) | (551 | ) | |||||||
Total Class A | (1 | ) | (273 | ) | |||||||
Change in Shares | (626 | ) | (6,612 | ) |
(b) Rounds to less than 1,000 shares.
See notes to financial statements.
20
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21
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | ||||||||||||||||||||||
USAA Emerging Markets Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 24.66 | 0.14 | (e) | (3.33 | ) | (3.19 | ) | — | — | |||||||||||||||||
Year Ended Mary 31: 2021 | $ | 16.16 | 0.16 | (e) | 8.57 | 8.73 | (0.23 | ) | (0.23 | ) | |||||||||||||||||
2020 | $ | 17.14 | 0.25 | (e) | (1.17 | ) | (0.92 | ) | (0.06 | ) | (0.06 | ) | |||||||||||||||
2019 | $ | 18.84 | 0.17 | (1.67 | ) | (1.50 | ) | (0.20 | ) | (0.20 | ) | ||||||||||||||||
2018 | $ | 17.60 | 0.16 | 1.15 | 1.31 | (0.07 | ) | (0.07 | ) | ||||||||||||||||||
2017 | $ | 14.24 | 0.07 | 3.43 | 3.50 | (0.14 | ) | (0.14 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 24.62 | 0.15 | (e) | (3.32 | ) | (3.17 | ) | — | — | |||||||||||||||||
Year Ended May 31: 2021 | $ | 16.14 | 0.20 | (e) | 8.55 | 8.75 | (0.27 | ) | (0.27 | ) | |||||||||||||||||
2020 | $ | 17.10 | 0.29 | (e) | (1.17 | ) | (0.88 | ) | (0.08 | ) | (0.08 | ) | |||||||||||||||
2019 | $ | 18.79 | 0.18 | (1.62 | ) | (1.44 | ) | (0.25 | ) | (0.25 | ) | ||||||||||||||||
2018 | $ | 17.55 | 0.20 | 1.14 | 1.34 | (0.10 | ) | (0.10 | ) | ||||||||||||||||||
2017 | $ | 14.21 | 0.12 | (e) | 3.40 | 3.52 | (0.18 | ) | (0.18 | ) | |||||||||||||||||
Class A | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 24.58 | 0.24 | (e) | (3.34 | ) | (3.10 | ) | — | — | |||||||||||||||||
Year Ended May 31: 2021 | $ | 16.08 | 0.07 | (e) | 8.62 | 8.69 | (0.19 | ) | (0.19 | ) | |||||||||||||||||
2020 | $ | 17.08 | 0.20 | (e) | (1.16 | ) | (0.96 | ) | (0.04 | ) | (0.04 | ) | |||||||||||||||
2019 | $ | 18.76 | 0.10 | (1.62 | ) | (1.52 | ) | (0.16 | ) | (0.16 | ) | ||||||||||||||||
2018 | $ | 17.55 | 0.12 | 1.13 | 1.25 | (0.04 | ) | (0.04 | ) | ||||||||||||||||||
2017 | $ | 14.20 | 0.05 | 3.42 | 3.47 | (0.12 | ) | (0.12 | ) |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment are calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
See notes to financial statements.
22
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||
Net Asset Value, End of Period | Total Return (Excludes Sales Charge)*(a) | Net Expenses**^(b)(c) | Net Investment Income (Loss)(b) | Gross Expenses(b)(c) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(d) | |||||||||||||||||||||||||
USAA Emerging Markets Fund | |||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 21.47 | (12.94 | )% | 1.43 | % | 1.16 | % | 1.43 | % | $ | 311,749 | 27 | % | |||||||||||||||||
Year Ended Mary 31: 2021 | $ | 24.66 | 54.25 | % | 1.45 | % | 0.77 | % | 1.47 | % | $ | 372,624 | 73 | %(f) | |||||||||||||||||
2020 | $ | 16.16 | (5.41 | )% | 1.48 | % | 1.44 | % | 1.54 | % | $ | 281,937 | 124 | %(g) | |||||||||||||||||
2019 | $ | 17.14 | (7.86 | )% | 1.48 | % | 1.02 | % | 1.48 | % | $ | 340,465 | 68 | % | |||||||||||||||||
2018 | $ | 18.84 | 7.41 | % | 1.46 | % | 0.86 | % | 1.46 | % | $ | 402,401 | 59 | % | |||||||||||||||||
2017 | $ | 17.60 | 24.70 | % | 1.51 | % | 0.50 | % | 1.51 | % | $ | 374,130 | 45 | % | |||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 21.45 | (12.88 | )% | 1.26 | % | 1.31 | % | 1.28 | % | $ | 348,193 | 27 | % | |||||||||||||||||
Year Ended May 31: 2021 | $ | 24.62 | 54.46 | % | 1.26 | % | 0.96 | % | 1.29 | % | $ | 400,408 | 73 | %(f) | |||||||||||||||||
2020 | $ | 16.14 | (5.17 | )% | 1.29 | % | 1.67 | % | 1.33 | % | $ | 327,156 | 124 | %(g) | |||||||||||||||||
2019 | $ | 17.10 | (7.58 | )% | 1.25 | % | 1.24 | % | 1.25 | % | $ | 491,978 | 68 | % | |||||||||||||||||
2018 | $ | 18.79 | 7.62 | % | 1.28 | % | 1.09 | % | 1.28 | % | $ | 596,185 | 59 | % | |||||||||||||||||
2017 | $ | 17.55 | 24.93 | % | 1.29 | % | 0.75 | % | 1.29 | % | $ | 585,468 | 45 | % | |||||||||||||||||
Class A | |||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 21.48 | (12.61 | )% | 0.69 | % | 2.03 | % | 12.34 | % | $ | 116 | 27 | % | |||||||||||||||||
Year Ended May 31: 2021 | $ | 24.58 | 54.22 | % | 1.72 | % | 0.36 | % | 1.98 | % | $ | 147 | 73 | %(f) | |||||||||||||||||
2020 | $ | 16.08 | (5.65 | )% | 1.75 | % | 1.13 | % | 1.76 | % | $ | 4,478 | 124 | %(g) | |||||||||||||||||
2019 | $ | 17.08 | (8.07 | )% | 1.75 | % | 0.73 | % | 1.79 | % | $ | 4,745 | 68 | % | |||||||||||||||||
2018 | $ | 18.76 | 7.09 | % | 1.72 | %(h) | 0.61 | % | 1.81 | % | $ | 5,186 | 59 | % | |||||||||||||||||
2017 | $ | 17.55 | 24.53 | % | 1.66 | %(i) | 0.35 | % | 1.87 | % | $ | 4,864 | 45 | % |
(c) Reflects total annual operating expenses for reductions of expenses paid indirectly for the May 31 fiscal years ended 2019, 2018 and 2017. Expenses paid indirectly decreased the expense ratio for each of these respective years by less than 0.01%.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares.
(e) Per share net investment income (loss) has been calculated using the average daily share method.
(f) Reflects a return to normal trading levels after a prior year transition.
(g) Reflects increased trading activity due to current year transition or asset allocation shift.
(h) Prior to October 1, 2017, USAA Asset Management Company (AMCO) (previous Adviser) voluntarily agreed to limit the annual expenses of Class A to 1.65% of the Class A shares' average daily net assets.
(i) Prior to October 1, 2016, AMCO voluntarily agreed to limit the annual expenses of Class A to 1.75% of the Class A shares' average daily net assets.
See notes to financial statements.
23
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Emerging Markets Fund (the "Fund"). The Fund offers three classes of shares: Fund Shares, Institutional Shares, and Class A. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges, except with respect to sales charges, fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
24
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs"), American Depositary Receipts ("ADRs"), and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's NAV is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. The valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 157,164 | $ | 487,468 | $ | — | (a) | $ | 644,632 | ||||||||||
Rights | — | — | — | (a) | — | ||||||||||||||
Exchange-Traded Funds | 183 | — | — | 183 | |||||||||||||||
Collateral for Securities Loaned | 4,773 | — | — | 4,773 | |||||||||||||||
Total | $ | 162,120 | $ | 487,468 | $ | — | $ | 649,588 |
(a) Zero market value security.
As of November 30, 2021, there were no significant Level 3 holdings in the fair value hierarchy. For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a portfolio of securities often designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of
25
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Foreign Exchange Currency Contracts:
The Fund may enter into foreign exchange currency contracts to convert U.S. dollars to and from various foreign currencies. A foreign exchange currency contract is an obligation by the Fund to purchase or sell a specific currency at a future date at a price (in U.S. dollars) set at the time of the contract. The Fund does not engage in "cross-currency" foreign exchange contracts (i.e., contracts to purchase or sell one foreign currency in exchange for another foreign currency). The Fund's foreign exchange currency contracts might be considered spot contracts (typically a contract of one week or less) or forward contracts (typically a contract term over one week). A spot contract is entered into for purposes of hedging against foreign currency fluctuations relating to a specific portfolio transaction, such as the delay between a security transaction trade date and settlement date. Forward contracts are entered into for purposes of hedging portfolio holdings or concentrations of such holdings. Each foreign exchange currency contract is adjusted daily by the prevailing spot or forward rate of the underlying currency, and any appreciation or depreciation is recorded for financial statement purposes as unrealized until the contract settlement date, at which time the Fund records realized gains or losses equal to the difference between the value of a contract at the time it was opened and the value at the time it was closed. The Fund could be exposed to risk if a counterparty is unable to meet the terms of a foreign exchange currency contract or if the value of the foreign currency changes unfavorably. In addition, the use of foreign exchange currency contracts does not eliminate fluctuations in the underlying prices of the securities. As of November 30, 2021, the Fund had no open forward foreign exchange currency contracts.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange
26
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of November 30, 2021.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 4,465 | $ | — | $ | 4,773 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as Net realized gains (losses) from investment securities and foreign currency translations on the Statement of Operations.
Foreign Taxes:
The Fund may be subject to foreign taxes related to foreign income received (a portion of which may be reclaimable), capital gains on the sale of securities, and certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes
27
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, printing fees, and 12b-1 fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 187,855 | $ | 200,447 |
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi-annual reports may be viewed at vcm.com. As of November 30, 2021, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 0.4 | ||||||
USAA Cornerstone Equity Fund | 1.7 |
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 1.00% of the Fund's average daily net assets. Amounts incurred and paid to VCM for the six months ended November 30, 2021, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020.
28
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and calculated monthly by comparing each class' performance to that of the Lipper Emerging Markets Fund Index. The Lipper Emerging Markets Fund Index tracks the total return performance of the largest funds within the Lipper Emerging Markets Fund category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Emerging Markets Fund Index over that period, even if the class has overall negative returns during the performance period.
For the period June 1, 2021 to November 30, 2021, performance adjustments were $(56), $(64) and $(1) for Fund Shares, Institutional Shares, and Class A, in thousands, respectively. Performance adjustments were (0.03)%, (0.03)%, and (1.06)% for Fund Shares, Institutional Shares, and Class A, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets.
VCM entered into an Investment Subadvisory Agreement with Lazard Asset Management LLC ("Lazard"), under which Lazard directs the investment and reinvestment of a portion of the Fund's assets (as allocated from time to time by VCM). This arrangement provides for monthly fees that are paid by VCM. VCM (not the Fund) pays the subadviser fees.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, 0.10%, and 0.15%, which is based on the Fund's average daily net assets of the of the Fund Shares, of the Institutional Shares and of the Class A, respectively. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Administration fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement
29
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. The funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund Shares based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares and Class A are paid monthly based on a fee accrued daily at an annualized rate of 0.10% and 0.10%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred and paid to VCTA for the year ended November 30, 2021, are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.
Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, up to an annual rate of 0.25% of the average daily net assets of Class A. The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A. Amounts incurred and paid to the Distributor for the six months ended November 30, 2021, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions on sales of Class A. For the six months ended November 30, 2021, the Distributor did not receive any commissions.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of
30
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
November 30, 2021, the expense limits (excluding voluntary waivers) were 1.48%, 1.29%, and 1.75% for Fund Shares, Institutional Shares, and Class A, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of November 30, 2021, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that repayments are not probable at November 30, 2021.
Expires 2023 | Expires 2024 | Expires 2025 | Total | ||||||||||||
$ | 345 | $ | 215 | $ | 61 | $ | 621 |
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six months ended November 30, 2021.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, trade disputes, interest rate levels and other fiscal and monetary policy changes, pandemics and other public health crises, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods, may add to instability in world economies and markets generally. The impact of these and other factors may be short-term or may last for extended periods.
Equity Risk — The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or last for extended periods.
Foreign Securities Risk — Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up
31
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is presented on the Statement of Operations under Interfund lending fees.
The average borrowing or lending for the days outstanding and average interest rate for the Fund that utilized this Facility during the six months ended November 30, 2021, were as follows (amounts in thousands):
Borrower or Lender | Amount Outstanding at November 30, 2021 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
Borrower | $ | — | $ | 1,063 | 1 | 0.55 | % | $ | 1,063 |
* For the six months ended November 30, 2021, based on the number of days borrowings were outstanding.
8. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
32
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had net capital loss carryforwards as summarized in the table below (amounts in thousands). It is unlikely that the Board will authorize a distribution of capital gains realized in the future until the capital loss carryforwards have been used.
Short-Term Amount | Total | ||||||
$ | 43,301 | $ | 43,301 |
33
USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21- 11/30/21* | Hypothetical Expenses Paid During Period 6/1/21- 11/30/21* | Annualized Expense Ratio During Period 6/1/21- 11/30/21 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 870.60 | $ | 1,017.90 | $ | 6.71 | $ | 7.23 | 1.43 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 871.20 | 1,018.75 | 5.91 | 6.38 | 1.26 | % | ||||||||||||||||||||
Class A | 1,000.00 | 873.90 | 1,021.61 | 3.24 | 3.50 | 0.69 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year)
34
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593,
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
25559-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA Precious Metals and Minerals Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 6 | ||||||
Statement of Operations | 7 | ||||||
Statements of Changes in Net Assets | 8 | ||||||
Financial Highlights | 10 | ||||||
Notes to Financial Statements | 12 | ||||||
Supplemental Information | 21 | ||||||
Proxy Voting and Portfolio Holdings Information | 21 | ||||||
Expense Examples | 21 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust
USAA Precious Metals and Minerals Fund November 30, 2021
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks long-term capital appreciation and to protect the purchasing power of shareholders' capital against inflation.
Top 10 Equity Holdings*:
November 30, 2021
(% of Net Assets)
Newmont Corp. | 11.7 | % | |||||
Barrick Gold Corp. | 8.5 | % | |||||
Franco-Nevada Corp. | 6.1 | % | |||||
Kirkland Lake Gold Ltd. | 4.2 | % | |||||
Wheaton Precious Metals Corp. | 4.2 | % | |||||
Kinross Gold Corp. | 3.9 | % | |||||
B2Gold Corp. | 3.6 | % | |||||
Agnico Eagle Mines Ltd. | 3.6 | % | |||||
Newcrest Mining Ltd. | 3.6 | % | |||||
Gold Fields Ltd., ADR | 3.1 | % |
Portfolio Composition*:
November 30, 2021
(% of Net Assets)
* Does not include short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
(a) Percentage is less than 0.05%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Precious Metals and Minerals Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (99.8%) | |||||||||||
Metals & Mining (99.8%): | |||||||||||
Agnico Eagle Mines Ltd. | 431,673 | $ | 21,497 | ||||||||
Alamos Gold, Inc. (a) | 1,064,184 | 8,140 | |||||||||
Aneka Tambang Tbk | 27,567,500 | 4,428 | |||||||||
AngloGold Ashanti Ltd. | 760,198 | 16,502 | |||||||||
Argonaut Gold, Inc. (b) | 655,200 | 1,795 | |||||||||
B2Gold Corp. (a) | 5,459,170 | 21,626 | |||||||||
Barrick Gold Corp. | 2,673,456 | 50,769 | |||||||||
Centamin PLC | 4,216,310 | 5,381 | |||||||||
Centerra Gold, Inc. (a) | 1,499,019 | 11,032 | |||||||||
Cia de Minas Buenaventura SAA, ADR (a) (b) | 68,157 | 498 | |||||||||
Coeur Mining, Inc. (b) | 773,583 | 4,332 | |||||||||
De Grey Mining, Ltd. (b) | 1,771,859 | 1,522 | |||||||||
Dundee Precious Metals, Inc. | 1,781,264 | 11,338 | |||||||||
Eldorado Gold Corp. (b) | 640,839 | 5,755 | |||||||||
Endeavour Mining PLC (a) | 544,418 | 12,774 | |||||||||
Equinox Gold Corp. (b) | 68,782 | 487 | |||||||||
Evolution Mining Ltd. | 4,178,674 | 12,002 | |||||||||
Franco-Nevada Corp. | 267,224 | 36,649 | |||||||||
Gold Fields Ltd., ADR | 1,606,199 | 18,214 | |||||||||
Gold Resource Corp. | 202,002 | 388 | |||||||||
Gold Road Resources Ltd. | 548,139 | 568 | |||||||||
Golden Star Resources Ltd. (b) | 431,348 | 1,618 | |||||||||
Great Basin Gold Ltd. (b) (c) (d) | 8,566,400 | — | (e) | ||||||||
Great Basin Gold Ltd. (b) (c) (d) | 6,500,000 | — | (e) | ||||||||
Harmony Gold Mining Co. Ltd. (a) | 1,463,504 | 6,297 | |||||||||
IAMGOLD Corp. (b) | 1,265,194 | 3,909 | |||||||||
IAMGOLD Corp. (a) (b) | 411,532 | 1,266 | |||||||||
K92 Mining, Inc. (b) | 483,061 | 2,799 | |||||||||
Karora Resources, Inc. (b) | 419,439 | 1,350 | |||||||||
Kinross Gold Corp. | 3,928,329 | 23,374 | |||||||||
Kirkland Lake Gold Ltd. | 639,234 | 25,278 | |||||||||
Koza Altin Isletmeleri A/S (b) | 298,319 | 2,824 | |||||||||
Lundin Gold, Inc. (b) | 78,200 | 637 | |||||||||
Nautilus Minerals, Inc. (b) (c) (d) | 5,757,622 | — | (e) | ||||||||
New Gold, Inc. (a) (b) | 1,183,000 | 1,723 | |||||||||
Newcrest Mining Ltd. | 1,259,625 | 21,205 | |||||||||
Newmont Corp. | 1,267,934 | 69,635 | |||||||||
Northern Star Mining Corp. (b) (c) (d) | 375,000 | — | |||||||||
Northern Star Resources Ltd. | 1,656,343 | 11,144 | |||||||||
Novagold Resources, Inc. (a) (b) | 274,390 | 1,860 | |||||||||
OceanaGold Corp. (b) | 2,161,448 | 3,926 | |||||||||
Osisko Gold Royalties Ltd. | 303,400 | 3,708 | |||||||||
Perseus Mining Ltd. (b) (d) | 4,838,138 | 5,530 | |||||||||
Polymetal International PLC | 613,760 | 11,197 | |||||||||
Polyus PJSC (h) | 62,088 | 12,166 | |||||||||
Pretium Resources, Inc. (b) | 558,375 | 7,532 | |||||||||
Ramelius Resources Ltd. | 4,425,457 | 4,999 | |||||||||
Regis Resources Ltd. | 2,733,555 | 3,507 |
See notes to financial statements.
3
USAA Mutual Funds Trust USAA Precious Metals and Minerals Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Resolute Mining Ltd. (a) (b) | 490,758 | $ | 124 | ||||||||
Royal Gold, Inc. | 155,900 | 15,595 | |||||||||
Sandstorm Gold Ltd. (a) (b) | 1,079,600 | 6,686 | |||||||||
Shandong Gold Mining Co. Ltd. Class H (a) (f) | 1,656,200 | 2,973 | |||||||||
Silver Lake Resources Ltd. (a) (b) | 4,268,850 | 5,050 | |||||||||
SSR Mining, Inc. (a) | 803,122 | 14,593 | |||||||||
St Barbara Ltd. | 3,096,281 | 2,979 | |||||||||
Torex Gold Resources, Inc. (b) | 946,862 | 10,371 | |||||||||
Victoria Gold Corp. (b) | 112,390 | 1,416 | |||||||||
Wesdome Gold Mines Ltd. (b) | 639,921 | 6,262 | |||||||||
West African Resources, Ltd. (b) | 1,930,796 | 1,796 | |||||||||
Wheaton Precious Metals Corp. (a) | 604,258 | 25,272 | |||||||||
Yamana Gold, Inc. | 3,023,400 | 12,094 | |||||||||
Yamana Gold, Inc. (a) | 960,249 | 3,834 | |||||||||
Zhaojin Mining Industry Co. Ltd. Class H (a) | 2,609,000 | 2,723 | |||||||||
Zijin Mining Group Co. Ltd. Class H | 8,206,000 | 10,902 | |||||||||
595,851 | |||||||||||
Total Common Stocks (Cost $454,988) | 595,851 | ||||||||||
Rights (0.0%) | |||||||||||
Materials (0.0%): | |||||||||||
Chalice Mining, Ltd. (b) (c) | 71,841 | — | |||||||||
Total Rights (Cost $—) | — | ||||||||||
Collateral for Securities Loaned^ (6.5%) | |||||||||||
Fidelity Investments Money Market Government Portfolio Institutional Shares, 0.01% (g) | 26,714,982 | 26,715 | |||||||||
HSBC U.S. Government Money Market Fund I Shares, 0.03% (g) | 12,275,783 | 12,276 | |||||||||
Total Collateral for Securities Loaned (Cost $38,991) | 38,991 | ||||||||||
Total Investments (Cost $493,979) — 106.3% | 634,842 | ||||||||||
Liabilities in excess of other assets — (6.3)% | (37,815 | ) | |||||||||
NET ASSETS — 100.00% | $ | 597,027 |
At November 30, 2021, the Fund's investments in foreign securities were 84.4% of net assets.
^ Purchased with cash collateral from securities on loan.
(a) All or a portion of this security is on loan.
(b) Non-income producing security.
(c) Security was fair valued based upon procedures approved by the Board of Trustees and represents 0.0% of net assets as of November 30, 2021. This security is classified as Level 3 within the fair value hierarchy. (See Note 2 in the Notes to Financial Statements)
(d) The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. At November 30, 2021, illiquid securities were 0.9% of the Fund's net assets.
(e) Rounds to less than $1 thousand.
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Precious Metals and Minerals Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Unaudited)
(f) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of November 30, 2021, the fair value of these securities was $2,973 (thousands) and amounted to 0.5% of net assets.
(g) Rate disclosed is the daily yield on November 30, 2021.
(h) Security was fair valued based upon procedures approved by the Board of Trustees and represents 2.0% of net assets as of November 30, 2021. (See Note 2 in the Notes to Financial Statements)
ADR — American Depositary Receipt
PLC — Public Limited Company
See notes to financial statements.
5
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Precious Metals and Minerals Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $493,979) | $ | 634,842 | (a) | ||||
Foreign currency, at value (Cost $45) | 45 | ||||||
Cash | 1,842 | ||||||
Receivables: | |||||||
Interest and dividends | 979 | ||||||
Capital shares issued | 249 | ||||||
Investments sold | 537 | ||||||
From Adviser | 4 | ||||||
Prepaid expenses | 32 | ||||||
Total Assets | 638,530 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 38,991 | ||||||
Investments purchased | 246 | ||||||
Capital shares redeemed | 759 | ||||||
Accrued foreign capital gains taxes | 877 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 363 | ||||||
Administration fees | 76 | ||||||
Custodian fees | 18 | ||||||
Transfer agent fees | 102 | ||||||
Compliance fees | — | (b) | |||||
12b-1 fees | 3 | ||||||
Other accrued expenses | 68 | ||||||
Total Liabilities | 41,503 | ||||||
Net Assets: | |||||||
Capital | 1,218,758 | ||||||
Total accumulated earnings/(loss) | (621,731 | ) | |||||
Net Assets | $ | 597,027 | |||||
Net Assets | |||||||
Fund Shares | $ | 553,083 | |||||
Institutional Shares | 20,171 | ||||||
Class A | 23,773 | ||||||
Total | $ | 597,027 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 29,861 | ||||||
Institutional Shares | 1,065 | ||||||
Class A | 1,301 | ||||||
Total | 32,227 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 18.52 | |||||
Institutional Shares | $ | 18.93 | |||||
Class A | $ | 18.28 | |||||
Maximum Sales Charge — Class A | 5.75 | % | |||||
Maximum offering price (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 19.40 |
(a) Includes $36,383 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
6
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Precious Metals and Minerals Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 8,281 | |||||
Securities lending (net of fees) | 85 | ||||||
Foreign tax withholding | (927 | ) | |||||
Total Income | 7,439 | ||||||
Expenses: | |||||||
Investment advisory fees | 2,260 | ||||||
Administration fees — Fund Shares | 441 | ||||||
Administration fees — Institutional Shares | 11 | ||||||
Administration fees — Class A | 18 | ||||||
Sub-Administration fees | 12 | ||||||
12b-1 fees — Class A | 29 | ||||||
Custodian fees | 39 | ||||||
Transfer agent fees — Fund Shares | 561 | ||||||
Transfer agent fees — Institutional Shares | 11 | ||||||
Transfer agent fees — Class A | 12 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 2 | ||||||
Legal and audit fees | 36 | ||||||
State registration and filing fees | 28 | ||||||
Interest fees | — | (a) | |||||
Other expenses | 65 | ||||||
Total Expenses | 3,549 | ||||||
Expenses waived/reimbursed by Adviser | (13 | ) | |||||
Net Expenses | 3,536 | ||||||
Net Investment Income (Loss) | 3,903 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities and foreign currency translations | 6,754 | ||||||
Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations | (145,128 | ) | |||||
Net realized/unrealized gains (losses) on investments | (138,374 | ) | |||||
Change in net assets resulting from operations | $ | (134,471 | ) |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
7
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Precious Metals and Minerals Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 3,903 | $ | 3,056 | |||||||
Net realized gains (losses) from investments | 6,754 | 54,050 | |||||||||
Net change in unrealized appreciation/depreciation on investments | (145,128 | ) | 55,454 | ||||||||
Change in net assets resulting from operations | (134,471 | ) | 112,560 | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | — | (302 | ) | ||||||||
Institutional Shares | — | (40 | ) | ||||||||
Change in net assets resulting from distributions to shareholders | — | (342 | ) | ||||||||
Change in net assets resulting from capital transactions | (19,091 | ) | (72,907 | ) | |||||||
Change in net assets | (153,562 | ) | 39,311 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 750,589 | 711,278 | |||||||||
End of period | $ | 597,027 | $ | 750,589 | |||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 27,025 | $ | 104,788 | |||||||
Distributions reinvested | — | 294 | |||||||||
Cost of shares redeemed | (47,024 | ) | (172,453 | ) | |||||||
Total Fund Shares | $ | (19,999 | ) | $ | (67,371 | ) | |||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 462 | $ | 4,482 | |||||||
Distributions reinvested | — | 37 | |||||||||
Cost of shares redeemed | (1,814 | ) | (3,514 | ) | |||||||
Total Institutional Shares | $ | (1,352 | ) | $ | 1,005 | ||||||
Class A | |||||||||||
Proceeds from shares issued | $ | 6,617 | $ | 37,689 | |||||||
Cost of shares redeemed | (4,357 | ) | (44,230 | ) | |||||||
Total Class A | $ | 2,260 | $ | (6,541 | ) | ||||||
Change in net assets resulting from capital transactions | $ | (19,091 | ) | $ | (72,907 | ) | |||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,395 | 4,879 | |||||||||
Reinvested | — | 14 | |||||||||
Redeemed | (2,457 | ) | (8,129 | ) | |||||||
Total Fund Shares | (1,062 | ) | (3,236 | ) | |||||||
Institutional Shares | |||||||||||
Issued | 25 | 194 | |||||||||
Reinvested | — | 2 | |||||||||
Redeemed | (102 | ) | (160 | ) | |||||||
Total Institutional Shares | (77 | ) | 36 | ||||||||
Class A | |||||||||||
Issued | 346 | 1,864 | |||||||||
Redeemed | (224 | ) | (2,183 | ) | |||||||
Total Class A | 122 | (319 | ) | ||||||||
Change in Shares | (1,017 | ) | (3,519 | ) |
See notes to financial statements.
8
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9
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
| Investment Activities | Distributions to Shareholders From | |||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | ||||||||||||||||||||||
USAA Precious Metals and Minerals Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 22.57 | 0.12 | (d) | (4.17 | ) | (4.05 | ) | — | — | |||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 19.34 | 0.09 | (d) | 3.15 | 3.24 | (0.01 | ) | (0.01 | ) | |||||||||||||||||
2020 | $ | 12.16 | (0.04 | )(d) | 7.22 | 7.18 | — | — | |||||||||||||||||||
2019 | $ | 12.87 | (0.03 | )(d) | (0.68 | ) | (0.71 | ) | — | — | |||||||||||||||||
2018 | $ | 12.93 | (0.05 | )(d) | (0.01 | ) | (0.06 | ) | — | — | |||||||||||||||||
2017 | $ | 13.90 | 0.14 | (0.60 | ) | (0.46 | ) | (0.51 | ) | (0.51 | ) | ||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 23.06 | 0.14 | (d) | (4.27 | ) | (4.13 | ) | — | — | |||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 19.76 | 0.12 | (d) | 3.22 | 3.34 | (0.04 | ) | (0.04 | ) | |||||||||||||||||
2020 | $ | 12.40 | (0.01 | )(d) | 7.37 | 7.36 | — | — | |||||||||||||||||||
2019 | $ | 13.06 | 0.01 | (d) | (0.67 | ) | (0.66 | ) | — | — | |||||||||||||||||
2018 | $ | 13.07 | (0.01 | )(d) | — | (g) | (0.01 | ) | — | — | |||||||||||||||||
2017 | $ | 13.98 | 0.07 | (d) | (0.47 | ) | (0.40 | ) | (0.51 | ) | (0.51 | ) | |||||||||||||||
Class A | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 22.29 | 0.10 | (d) | (4.11 | ) | (4.01 | ) | — | — | |||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 19.13 | 0.04 | (d) | 3.12 | 3.16 | — | — | |||||||||||||||||||
2020 | $ | 12.04 | (0.05 | )(d) | 7.14 | 7.09 | — | — | |||||||||||||||||||
2019 | $ | 12.74 | (0.03 | )(d) | (0.67 | ) | (0.70 | ) | — | — | |||||||||||||||||
2018 | $ | 12.82 | 0.16 | (0.24 | ) | (0.08 | ) | — | — | ||||||||||||||||||
2017 | $ | 13.79 | 0.04 | (0.50 | ) | (0.46 | ) | (0.51 | ) | (0.51 | ) |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment are calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
See notes to financial statements.
10
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Redemption Fees added to Beneficial Interests | Net Asset Value, End of Period | Total Return (Excludes Sales Charge)*(a) | Net Expenses**^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | ||||||||||||||||||||||||||||
USAA Precious Metals and Minerals Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | $ | 18.52 | (17.94 | )% | 1.12 | % | 1.24 | % | 1.12 | % | $ | 553,083 | 3 | % | ||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||
2021 | — | $ | 22.57 | 16.69 | % | 1.12 | % | 0.41 | % | 1.12 | % | $ | 697,969 | 7 | % | ||||||||||||||||||||
2020 | — | $ | 19.34 | 59.13 | % | 1.19 | % | (0.25 | )% | 1.19 | % | $ | 660,770 | 47 | %(e) | ||||||||||||||||||||
2019 | — | $ | 12.16 | (5.52 | )% | 1.31 | % | (0.22 | )% | 1.31 | % | $ | 468,208 | 7 | % | ||||||||||||||||||||
2018 | — | $ | 12.87 | (0.46 | )% | 1.23 | % | (0.36 | )% | 1.23 | % | $ | 540,952 | 13 | % | ||||||||||||||||||||
2017 | — | $ | 12.93 | (2.68 | )% | 1.22 | % | 0.02 | % | 1.22 | % | $ | 585,515 | 14 | % | ||||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | $ | 18.93 | (17.91 | )% | 0.96 | % | 1.41 | % | 1.04 | % | $ | 20,171 | 3 | % | ||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||
2021 | — | $ | 23.06 | 16.90 | % | 0.99 | % | 0.55 | % | 1.05 | % | $ | 26,338 | 7 | % | ||||||||||||||||||||
2020 | — | $ | 19.76 | 59.35 | % | 1.00 | % | (0.05 | )% | 1.06 | % | $ | 21,855 | 47 | %(e) | ||||||||||||||||||||
2019 | — | $ | 12.40 | (5.05 | )% | 1.00 | %(f) | 0.12 | % | 1.19 | % | $ | 21,327 | 7 | % | ||||||||||||||||||||
2018 | — | $ | 13.06 | (0.08 | )% | 0.89 | % | (0.07 | )% | 0.89 | % | $ | 3,632 | 13 | % | ||||||||||||||||||||
2017 | — | $ | 13.07 | (2.23 | )% | 0.76 | % | 0.46 | % | 0.76 | % | $ | 2,893 | 14 | % | ||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | $ | 18.28 | (17.99 | )% | 1.30 | % | 1.00 | % | 1.34 | % | $ | 23,773 | 3 | % | ||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||
2021 | — | $ | 22.29 | 16.52 | % | 1.31 | % | 0.21 | % | 1.34 | % | $ | 26,282 | 7 | % | ||||||||||||||||||||
2020 | — | $ | 19.13 | 58.89 | % | 1.27 | % | (0.32 | )% | 1.27 | % | $ | 28,653 | 47 | %(e) | ||||||||||||||||||||
2019 | — | $ | 12.04 | (5.49 | )% | 1.38 | % | (0.27 | )% | 1.38 | % | $ | 17,744 | 7 | % | ||||||||||||||||||||
2018 | — | (g) | $ | 12.74 | (0.62 | )% | 1.30 | % | (0.43 | )% | 1.30 | % | $ | 16,881 | 13 | % | |||||||||||||||||||
2017 | — | (g) | $ | 12.82 | (2.68 | )% | 1.30 | % | (0.04 | )% | 1.30 | % | $ | 18,309 | 14 | % |
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects increased trading activity due to current year transition or asset allocation shift.
(f) Effective June 6, 2018, USAA Asset Management Company ("AMCO") (previous Adviser) has voluntarily agreed to limit the annual expenses of the Institutional Shares to 1.00% of the Institutional Shares' average daily net assets.
(g) Amount is less than $0.005 per share.
See notes to financial statements.
11
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Precious Metals and Minerals Fund (the "Fund"). The Fund offers three classes of shares: Fund Shares, Institutional Shares, and Class A. The Fund is classified as non-diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges, except with respect to sales charges, fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
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Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs"), American Depositary Receipts ("ADRs"), and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's NAV is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. The valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 583,685 | $ | 12,166 | $ | — | (a) | $ | 595,851 | ||||||||||
Rights | — | — | — | (a) | — | ||||||||||||||
Collateral for Securities Loaned | 38,991 | — | — | 38,991 | |||||||||||||||
Total | $ | 622,676 | $ | 12,166 | $ | — | $ | 634,842 |
(a) Zero market value security.
As of November 30, 2021, there were no significant Level 3 holdings in the fair value hierarchy. For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
Investment Companies:
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Foreign Exchange Currency Contracts:
The Fund may enter into foreign exchange currency contracts to convert U.S. dollars to and from various foreign currencies. A foreign exchange currency contract is an obligation by the Fund to purchase or sell a specific currency at a future date at a price (in U.S. dollars) set at the time of the contract. The Fund does not engage in "cross-currency" foreign exchange contracts (i.e., contracts to purchase or sell one foreign currency in exchange for another foreign currency). The Fund's foreign
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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exchange currency contracts might be considered spot contracts (typically a contract of one week or less) or forward contracts (typically a contract term over one week). A spot contract is entered into for purposes of hedging against foreign currency fluctuations relating to a specific portfolio transaction, such as the delay between a security transaction trade date and settlement date. Forward contracts are entered into for purposes of hedging portfolio holdings or concentrations of such holdings. Each foreign exchange currency contract is adjusted daily by the prevailing spot or forward rate of the underlying currency, and any appreciation or depreciation is recorded for financial statement purposes as unrealized until the contract settlement date, at which time the Fund records realized gains or losses equal to the difference between the value of a contract at the time it was opened and the value at the time it was closed. The Fund could be exposed to risk if a counterparty is unable to meet the terms of a foreign exchange currency contract or if the value of the foreign currency changes unfavorably. In addition, the use of foreign exchange currency contracts does not eliminate fluctuations in the underlying prices of the securities. As of November 30, 2021, the Fund had no open forward foreign exchange currency contracts.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
Litigation income received during the year is recorded as realized gains by the Fund when such information becomes known. Gains of this type are infrequent to the Fund are not expected to reoccur on a consistent basis. Class action litigation income received by the Fund for the six months ended November 30, 2021, amounted to $753 (amount in thousands) and is reflected on the Statement of Operations within Net realized gains (losses) from investment securities and foreign currency translations.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of November 30, 2021.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 36,383 | $ | — | $ | 38,991 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as Net realized gains (losses) from investment securities and foreign currency translations on the Statement of Operations.
Foreign Taxes:
The Fund may be subject to foreign taxes related to foreign income received (a portion of which may be reclaimable), capital gains on the sale of securities, and certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, printing fees, and 12b-1 fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$ | 19,514 | $ | 31,964 |
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi-annual reports may be viewed at vcm.com. As of November 30, 2021, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 0.2 | ||||||
USAA Cornerstone Equity Fund | 0.1 | ||||||
USAA Target Retirement Income Fund | 0.4 | ||||||
USAA Target Retirement 2030 Fund | 0.8 | ||||||
USAA Target Retirement 2040 Fund | 0.9 | ||||||
USAA Target Retirement 2050 Fund | 0.5 | ||||||
USAA Target Retirement 2060 Fund | 0.1 |
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.75% of the Fund's average daily net assets. Amounts incurred and paid to VCM for the six months ended November 30, 2021, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and calculated monthly by comparing each class' performance to that of the Lipper Precious Metals Equity Funds Index. The Lipper Precious Metals Equity Funds Index tracks the total return performance of the largest funds within the Lipper Precious Metals Equity Funds category.
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The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Precious Metals Equity Funds Index over that period, even if the class has overall negative returns during the performance period.
For the period June 1, 2021 to November 30, 2021, performance adjustments were $(105), $(4) and $(5) for Fund Shares, Institutional Shares, and Class A, in thousands, respectively. Performance adjustments were (0.04)%, (0.04)%, and (0.04)% for Fund Shares, Institutional Shares, and Class A, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six months ended November 30, 2021, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, 0.10%, and 0.15%, which is based on the Fund's average daily net assets of the of the Fund Shares, of the Institutional Shares, and of the Class A, respectively. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Administration fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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the Adviser, which pays the compensation of the CCO and support staff. The funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund Shares based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares and Class A are paid monthly based on a fee accrued daily at an annualized rate of 0.10% and 0.10%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred and paid to VCTA for the six months ended November 30, 2021, are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.
Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, up to an annual rate of 0.25% of the average daily net assets of Class A. The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A. Amounts incurred and paid to the Distributor for the six months ended November 30, 2021, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions on sales of Class A. For the six months ended November 30, 2021, the Distributor did not receive any commissions.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of November 30, 2021, the expense limits (excluding voluntary waivers) were 1.27%, 1.00%, and 1.34% for Fund Shares, Institutional Shares, and Class A, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of November 30, 2021, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that repayments are not probable at November 30, 2021.
Expires 2023 | Expires 2024 | Expires 2025 | Total | ||||||||||||
$ | 12 | $ | 23 | $ | 13 | $ | 48 |
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six months ended November 30, 2021.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Market Risk — Overall market risks may affect the value of the Fund. Domestic and international factors such as political events, war, trade disputes, interest rate levels and other fiscal and monetary policy changes, pandemics and other public health crises, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods, may add to instability in world economies and markets generally. The impact of these and other factors may be short-term or may last for extended periods.
Equity Risk — The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or last for extended periods.
Foreign Securities Risk — Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is presented on the Statement of Operations under Interfund lending fees.
The Fund did not utilize or participate in the Facility during the six months ended November 30, 2021.
8. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had net capital loss carryforwards as summarized in the table below (amounts in thousands). It is unlikely that the Board will authorize a distribution of capital gains realized in the future until the capital loss carryforwards have been used.
Short-Term Amount | Long-Term Amount | Total | |||||||||
$ | 9,939 | $ | 750,642 | $ | 760,581 |
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USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21- 11/30/21* | Hypothetical Expenses Paid During Period 6/1/21- 11/30/21* | Annualized Expense Ratio During Period 6/1/21- 11/30/21 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 820.60 | $ | 1,019.45 | $ | 5.11 | $ | 5.67 | $ | 1.12 | % | ||||||||||||||
Institutional Shares | 1,000.00 | 820.90 | 1,020.26 | 4.38 | 4.86 | 0.96 | % | ||||||||||||||||||||
Class A | 1,000.00 | 820.10 | 1,018.55 | 5.93 | 6.58 | 1.30 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
21
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
23408-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA International Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 24 | ||||||
Statement of Operations | 25 | ||||||
Statements of Changes in Net Assets | 26 | ||||||
Financial Highlights | 28 | ||||||
Notes to Financial Statements | 32 | ||||||
Supplemental Information | 42 | ||||||
Proxy Voting and Portfolio Holdings Information | 42 | ||||||
Expense Examples | 42 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA International Fund | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks capital appreciation.
Top 10 Sectors:
November 30, 2021
(% of Net Assets)
Financials | 17.3 | % | |||||
Industrials | 15.9 | % | |||||
Health Care | 11.8 | % | |||||
Information Technology | 11.2 | % | |||||
Consumer Discretionary | 11.3 | % | |||||
Consumer Staples | 7.2 | % | |||||
Materials | 6.3 | % | |||||
Communication Services | 6.1 | % | |||||
Energy | 5.2 | % | |||||
Utilities | 3.0 | % |
Country Allocation:
November 30, 2021
(% of Net Assets)
* Includes countries with less than 3.0% of portfolio and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (98.0%) | |||||||||||
Argentina (0.0%): (a) | |||||||||||
Energy (0.0%): | |||||||||||
YPF SA, ADR (b) | 99,984 | $ | 358 | ||||||||
Australia (4.7%): | |||||||||||
Consumer Discretionary (0.9%): | |||||||||||
Aristocrat Leisure Ltd. | 588,746 | 18,295 | |||||||||
Lovisa Holdings Ltd. | 226,325 | 3,291 | |||||||||
PWR Holdings Ltd. | 632,898 | 4,011 | |||||||||
25,597 | |||||||||||
Consumer Staples (0.0%): (a) | |||||||||||
Select Harvests Ltd. | 302,733 | 1,406 | |||||||||
Energy (0.1%): | |||||||||||
Santos Ltd. | 306,116 | 1,380 | |||||||||
Woodside Petroleum Ltd. | 120,151 | 1,823 | |||||||||
3,203 | |||||||||||
Financials (0.8%): | |||||||||||
Australia & New Zealand Banking Group Ltd. | 186,841 | 3,531 | |||||||||
Macquarie Group Ltd. | 152,897 | 21,288 | |||||||||
24,819 | |||||||||||
Health Care (0.9%): | |||||||||||
CSL Ltd. | 103,646 | 22,532 | |||||||||
Nanosonics Ltd. (b) | 435,857 | 1,680 | |||||||||
Sonic Healthcare Ltd. | 71,012 | 2,146 | |||||||||
26,358 | |||||||||||
Industrials (0.3%): | |||||||||||
Austal Ltd. | 1,436,152 | 1,860 | |||||||||
IPH Ltd. | 420,261 | 2,667 | |||||||||
Johns Lyng Group Ltd. | 867,380 | 4,581 | |||||||||
9,108 | |||||||||||
Information Technology (0.1%): | |||||||||||
Bravura Solutions Ltd. | 722,992 | 1,302 | |||||||||
Infomedia Ltd. | 1,535,148 | 1,601 | |||||||||
2,903 | |||||||||||
Materials (0.9%): | |||||||||||
BHP Group Ltd. (c) | 700,950 | 19,632 | |||||||||
Ramelius Resources Ltd. | 3,048,308 | 3,423 | |||||||||
Rio Tinto Ltd. | 35,538 | 2,358 | |||||||||
25,413 |
See notes to financial statements.
3
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Real Estate (0.7%): | |||||||||||
Charter Hall Group | 195,354 | $ | 2,653 | ||||||||
Scentre Group | 6,845,355 | 14,979 | |||||||||
Stockland | 726,692 | 2,243 | |||||||||
19,875 | |||||||||||
138,682 | |||||||||||
Austria (0.2%): | |||||||||||
Financials (0.2%): | |||||||||||
Erste Group Bank AG | 73,709 | 3,229 | |||||||||
Raiffeisen Bank International AG | 60,654 | 1,804 | |||||||||
5,033 | |||||||||||
Industrials (0.0%): (a) | |||||||||||
ANDRITZ AG | 40,878 | 1,951 | |||||||||
6,984 | |||||||||||
Belgium (0.7%): | |||||||||||
Financials (0.2%): | |||||||||||
Ageas SA | 73,531 | 3,802 | |||||||||
KBC Group NV | 23,088 | 1,938 | |||||||||
5,740 | |||||||||||
Information Technology (0.5%): | |||||||||||
Melexis NV | 132,095 | 15,380 | |||||||||
21,120 | |||||||||||
Brazil (0.5%): | |||||||||||
Communication Services (0.1%): | |||||||||||
Telefonica Brasil SA | 257,731 | 2,306 | |||||||||
Consumer Staples (0.1%): | |||||||||||
Sendas Distribuidora SA | 653,707 | 1,483 | |||||||||
Energy (0.1%): | |||||||||||
Petro Rio SA (b) | 677,200 | 2,444 | |||||||||
Ultrapar Participacoes SA | 347,048 | 891 | |||||||||
3,335 | |||||||||||
Financials (0.1%): | |||||||||||
Banco Santander Brasil SA | 451,500 | 2,648 | |||||||||
Utilities (0.1%): | |||||||||||
Cia de Saneamento Basico do Estado de Sao Paulo | 436,957 | 2,618 | |||||||||
Cia Energetica de Minas Gerais Preference Shares | 745,300 | 1,743 | |||||||||
4,361 | |||||||||||
14,133 | |||||||||||
Canada (1.8%): | |||||||||||
Energy (0.4%): | |||||||||||
ARC Resources Ltd. (c) | 176,289 | 1,547 | |||||||||
Cameco Corp. | 88,258 | 2,059 | |||||||||
Ovintiv, Inc. | 47,249 | 1,641 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Parex Resources, Inc. | 190,104 | $ | 3,048 | ||||||||
Suncor Energy, Inc. | 79,940 | 1,948 | |||||||||
Tourmaline Oil Corp. | 53,099 | 1,767 | |||||||||
12,010 | |||||||||||
Financials (0.6%): | |||||||||||
Bank of Montreal | 31,456 | 3,276 | |||||||||
iA Financial Corp., Inc. | 49,894 | 2,651 | |||||||||
IGM Financial, Inc. | 84,075 | 3,039 | |||||||||
National Bank of Canada | 54,743 | 4,255 | |||||||||
Sun Life Financial, Inc. | 67,579 | 3,589 | |||||||||
16,810 | |||||||||||
Industrials (0.2%): | |||||||||||
Finning International, Inc. | 70,479 | 1,796 | |||||||||
Savaria Corp. (c) | 174,865 | 2,541 | |||||||||
TFI International, Inc. | 21,503 | 2,135 | |||||||||
6,472 | |||||||||||
Information Technology (0.1%): | |||||||||||
Quarterhill, Inc. | 855,238 | 1,734 | |||||||||
Materials (0.5%): | |||||||||||
Barrick Gold Corp. (c) | 180,522 | 3,431 | |||||||||
Kinross Gold Corp. | 400,451 | 2,383 | |||||||||
Nutrien Ltd. | 36,634 | 2,429 | |||||||||
Teck Resources Ltd. Class B | 73,388 | 1,946 | |||||||||
Wesdome Gold Mines Ltd. (b) | 288,239 | 2,821 | |||||||||
West Fraser Timber Co. Ltd. | 27,880 | 2,293 | |||||||||
15,303 | |||||||||||
52,329 | |||||||||||
China (2.2%): | |||||||||||
Communication Services (0.6%): | |||||||||||
Focus Media Information Technology Co. Ltd. Class A | 2,947,905 | 3,284 | |||||||||
Tencent Holdings Ltd. | 270,500 | 15,776 | |||||||||
19,060 | |||||||||||
Consumer Discretionary (0.6%): | |||||||||||
Alibaba Group Holding Ltd., ADR (b) | 12,706 | 1,620 | |||||||||
BYD Co. Ltd. Class H | 57,500 | 2,262 | |||||||||
Dongfeng Motor Group Co. Ltd. Class H | 4,128,573 | 3,833 | |||||||||
Haier Smart Home Co. Ltd. Class H | 663,973 | 2,478 | |||||||||
JD.com, Inc., ADR (b) | 20,810 | 1,750 | |||||||||
Li Ning Co. Ltd. | 145,500 | 1,646 | |||||||||
Zhongsheng Group Holdings Ltd. | 479,000 | 3,923 | |||||||||
17,512 | |||||||||||
Consumer Staples (0.1%): | |||||||||||
Tingyi Cayman Islands Holding Corp. | 1,166,000 | 2,253 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Financials (0.5%): | |||||||||||
Bank of China Ltd. Class H | 5,783,000 | $ | 2,008 | ||||||||
China Construction Bank Corp. Class H | 2,760,000 | 1,799 | |||||||||
China Merchants Bank Co. Ltd. Class H | 774,000 | 5,996 | |||||||||
Huatai Securities Co. Ltd. Class H (d) | 1,586,200 | 2,273 | |||||||||
New China Life Insurance Co. Ltd. Class H | 615,500 | 1,644 | |||||||||
13,720 | |||||||||||
Health Care (0.1%): | |||||||||||
Shanghai Fosun Pharmaceutical Group Co. Ltd. Class H | 418,000 | 2,160 | |||||||||
Industrials (0.1%): | |||||||||||
China Railway Group Ltd. Class H | 4,164,000 | 1,980 | |||||||||
COSCO SHIPPING Holdings Co. Ltd. Class H (b) (c) | 1,028,700 | 1,753 | |||||||||
3,733 | |||||||||||
Materials (0.1%): | |||||||||||
Anhui Conch Cement Co. Ltd. Class H | 682,500 | 3,107 | |||||||||
Utilities (0.1%): | |||||||||||
China Longyuan Power Group Corp. Ltd. Class H | 976,000 | 1,995 | |||||||||
63,540 | |||||||||||
Denmark (1.2%): | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Pandora A/S | 15,113 | 1,881 | |||||||||
TCM Group A/S | 93,642 | 2,285 | |||||||||
4,166 | |||||||||||
Consumer Staples (0.6%): | |||||||||||
Carlsberg A/S Class B | 17,814 | 2,767 | |||||||||
Royal Unibrew A/S | 135,162 | 14,407 | |||||||||
17,174 | |||||||||||
Health Care (0.1%): | |||||||||||
Novo Nordisk A/S Class B | 41,687 | 4,463 | |||||||||
Industrials (0.3%): | |||||||||||
AP Moller — Maersk A/S Class B | 1,198 | 3,607 | |||||||||
INVISIO AB | 188,153 | 3,261 | |||||||||
Per Aarsleff Holding A/S | 44,295 | 1,868 | |||||||||
8,736 | |||||||||||
Utilities (0.1%): | |||||||||||
Orsted A/S (d) | 12,022 | 1,546 | |||||||||
36,085 | |||||||||||
Finland (0.4%): | |||||||||||
Health Care (0.1%): | |||||||||||
Revenio Group Oyj | 64,563 | 4,112 | |||||||||
Industrials (0.1%): | |||||||||||
Metso Outotec Oyj | 260,234 | 2,622 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Information Technology (0.2%): | |||||||||||
Nokia Oyj (b) | 1,010,236 | $ | 5,662 | ||||||||
12,396 | |||||||||||
France (8.4%): | |||||||||||
Communication Services (0.2%): | |||||||||||
Orange SA | 356,334 | 3,830 | |||||||||
Publicis Groupe SA | 44,617 | 2,887 | |||||||||
6,717 | |||||||||||
Consumer Discretionary (2.5%): | |||||||||||
La Francaise des Jeux SAEM (d) | 369,736 | 17,123 | |||||||||
LVMH Moet Hennessy Louis Vuitton SE | 67,257 | 52,294 | |||||||||
Renault SA (b) | 69,243 | 2,228 | |||||||||
71,645 | |||||||||||
Consumer Staples (0.2%): | |||||||||||
Carrefour SA | 164,448 | 2,720 | |||||||||
Pernod Ricard SA (c) | 15,460 | 3,547 | |||||||||
6,267 | |||||||||||
Energy (0.6%): | |||||||||||
Gaztransport Et Technigaz SA | 54,765 | 4,393 | |||||||||
TotalEnergies SE | 311,676 | 14,340 | |||||||||
18,733 | |||||||||||
Financials (0.9%): | |||||||||||
Amundi SA (d) | 18,533 | 1,541 | |||||||||
AXA SA | 314,854 | 8,654 | |||||||||
BNP Paribas SA | 152,351 | 9,468 | |||||||||
SCOR SE | 70,727 | 2,220 | |||||||||
Societe Generale SA | 172,592 | 5,370 | |||||||||
27,253 | |||||||||||
Health Care (0.3%): | |||||||||||
Korian SA | 1 | — | (e) | ||||||||
Pharmagest Interactive | 24,859 | 2,409 | |||||||||
Sanofi | 26,361 | 2,506 | |||||||||
Sartorius Stedim Biotech | 3,254 | 1,921 | |||||||||
Vetoquinol SA | 20,263 | 3,029 | |||||||||
9,865 | |||||||||||
Industrials (1.1%): | |||||||||||
Cie de Saint-Gobain | 170,107 | 10,789 | |||||||||
Dassault Aviation SA | 16,650 | 1,578 | |||||||||
Eiffage SA | 17,323 | 1,613 | |||||||||
Rexel SA | 111,379 | 2,042 | |||||||||
Safran SA | 87,954 | 9,823 | |||||||||
Teleperformance | 4,940 | 2,032 | |||||||||
Thermador Groupe | 38,551 | 4,090 | |||||||||
31,967 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Information Technology (1.5%): | |||||||||||
Capgemini SE | 144,831 | $ | 33,434 | ||||||||
Edenred | 35,055 | 1,568 | |||||||||
Esker SA | 12,820 | 5,041 | |||||||||
Lectra | 80,344 | 3,509 | |||||||||
MGI Digital Graphic Technology (b) (c) | 34,869 | 1,370 | |||||||||
44,922 | |||||||||||
Materials (0.8%): | |||||||||||
Arkema SA | 176,130 | 23,093 | |||||||||
Utilities (0.3%): | |||||||||||
Engie SA | 502,166 | 7,264 | |||||||||
247,726 | |||||||||||
Germany (7.3%): | |||||||||||
Communication Services (0.1%): | |||||||||||
Deutsche Telekom AG | 206,299 | 3,633 | |||||||||
Consumer Discretionary (1.0%): | |||||||||||
Ceconomy AG (b) | 229,825 | 912 | |||||||||
Continental AG (b) | 31,255 | 3,342 | |||||||||
Daimler AG | 57,090 | 5,346 | |||||||||
Volkswagen AG Preference Shares | 97,481 | 17,808 | |||||||||
27,408 | |||||||||||
Consumer Staples (0.0%): (a) | |||||||||||
METRO AG | 51,404 | 582 | |||||||||
Energy (0.3%): | |||||||||||
CropEnergies AG | 180,221 | 2,407 | |||||||||
VERBIO Vereinigte BioEnergie AG (c) | 79,395 | 6,140 | |||||||||
8,547 | |||||||||||
Financials (1.1%): | |||||||||||
Allianz SE Registered Shares | 133,370 | 28,943 | |||||||||
Hannover Rueck SE | 8,716 | 1,523 | |||||||||
Muenchener Rueckversicherungs-Gesellschaft AG Class R | 5,153 | 1,385 | |||||||||
31,851 | |||||||||||
Health Care (0.7%): | |||||||||||
Eckert & Ziegler Strahlen- und Medizintechnik AG | 45,348 | 4,994 | |||||||||
Fresenius SE & Co. KGaA | 136,034 | 5,148 | |||||||||
Merck KGaA | 17,084 | 4,222 | |||||||||
Nexus AG | 68,862 | 5,634 | |||||||||
19,998 | |||||||||||
Industrials (2.0%): | |||||||||||
2G Energy AG (c) | 29,918 | 3,622 | |||||||||
Amadeus Fire AG | 22,623 | 4,648 | |||||||||
Cewe Stiftung & Co. KGaA | 22,217 | 3,189 | |||||||||
Deutsche Post AG Registered Shares | 72,384 | 4,275 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Dr Hoenle AG (c) | 61,613 | $ | 2,781 | ||||||||
Siemens AG Registered Shares | 253,169 | 40,356 | |||||||||
58,871 | |||||||||||
Information Technology (1.8%): | |||||||||||
Basler AG | 37,081 | 6,179 | |||||||||
Infineon Technologies AG | 61,320 | 2,772 | |||||||||
PVA TePla AG (b) | 101,779 | 4,941 | |||||||||
SAP SE | 274,290 | 35,148 | |||||||||
Secunet Security Networks AG | 10,116 | 4,759 | |||||||||
53,799 | |||||||||||
Materials (0.1%): | |||||||||||
Covestro AG (d) | 48,828 | 2,754 | |||||||||
HeidelbergCement AG | 16,897 | 1,124 | |||||||||
3,878 | |||||||||||
Real Estate (0.1%): | |||||||||||
LEG Immobilien SE | 13,582 | 1,900 | |||||||||
Utilities (0.1%): | |||||||||||
E.ON SE | 256,633 | 3,166 | |||||||||
213,633 | |||||||||||
Hong Kong (2.1%): | |||||||||||
Communication Services (0.1%): | |||||||||||
NetDragon Websoft Holdings Ltd. | 835,000 | 1,902 | |||||||||
Consumer Discretionary (0.1%): | |||||||||||
Chow Tai Fook Jewellery Group Ltd. | 894,600 | 1,600 | |||||||||
Consumer Staples (0.0%): (a) | |||||||||||
WH Group Ltd. (d) | 1,538,061 | 968 | |||||||||
Financials (0.9%): | |||||||||||
AIA Group Ltd. | 2,384,800 | 25,106 | |||||||||
Information Technology (0.1%): | |||||||||||
Lenovo Group Ltd. | 4,138,000 | 4,237 | |||||||||
Real Estate (0.9%): | |||||||||||
CK Asset Holdings Ltd. | 4,329,830 | 24,768 | |||||||||
Sun Hung Kai Properties Ltd. | 165,000 | 2,009 | |||||||||
26,777 | |||||||||||
60,590 | |||||||||||
Hungary (0.1%): | |||||||||||
Financials (0.1%): | |||||||||||
OTP Bank Nyrt (b) | 62,641 | 3,461 | |||||||||
India (0.7%): | |||||||||||
Communication Services (0.1%): | |||||||||||
Zee Entertainment Enterprises Ltd. | 353,665 | 1,526 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Energy (0.2%): | |||||||||||
Oil & Natural Gas Corp. Ltd. | 1,329,154 | $ | 2,494 | ||||||||
Reliance Industries Ltd. | 111,241 | 3,557 | |||||||||
6,051 | |||||||||||
Financials (0.1%): | |||||||||||
Canara Bank (b) | 1,652,362 | 4,376 | |||||||||
Health Care (0.0%): (a) | |||||||||||
Cadila Healthcare Ltd. | 214,414 | 1,326 | |||||||||
Information Technology (0.1%): | |||||||||||
Infosys Ltd. | 171,642 | 3,904 | |||||||||
Materials (0.1%): | |||||||||||
UPL Ltd. | 203,230 | 1,846 | |||||||||
Utilities (0.1%): | |||||||||||
Power Grid Corp. of India Ltd. | 918,392 | 2,525 | |||||||||
21,554 | |||||||||||
Indonesia (0.2%): | |||||||||||
Communication Services (0.1%): | |||||||||||
PT Sarana Menara Nusantara Tbk | 25,752,000 | 2,084 | |||||||||
Financials (0.1%): | |||||||||||
PT Bank Mandiri Persero Tbk | 7,903,957 | 3,859 | |||||||||
5,943 | |||||||||||
Ireland (0.4%): | |||||||||||
Financials (0.2%): | |||||||||||
AIB Group PLC (b) | 945,432 | 2,072 | |||||||||
Bank of Ireland Group PLC (b) | 553,523 | 3,026 | |||||||||
5,098 | |||||||||||
Health Care (0.1%): | |||||||||||
ICON PLC (b) | 18,276 | 4,943 | |||||||||
Industrials (0.1%): | |||||||||||
DCC PLC | 38,054 | 2,802 | |||||||||
12,843 | |||||||||||
Israel (0.2%): | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Maytronics Ltd. | 134,933 | 3,422 | |||||||||
Information Technology (0.1%): | |||||||||||
Allot Ltd. (b) | 161,674 | 1,825 | |||||||||
Check Point Software Technologies Ltd. (b) | 15,947 | 1,775 | |||||||||
3,600 | |||||||||||
7,022 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Italy (3.6%): | |||||||||||
Energy (0.3%): | |||||||||||
Eni SpA | 524,080 | $ | 6,906 | ||||||||
Saipem SpA (b) (c) | 634,416 | 1,259 | |||||||||
8,165 | |||||||||||
Financials (0.6%): | |||||||||||
Assicurazioni Generali SpA | 246,796 | 4,944 | |||||||||
Banca Generali SpA (c) | 147,433 | 6,027 | |||||||||
BPER Banca | 682,381 | 1,297 | |||||||||
UniCredit SpA | 478,907 | 5,782 | |||||||||
18,050 | |||||||||||
Health Care (0.9%): | |||||||||||
El.En. SpA | 349,648 | 6,005 | |||||||||
Recordati Industria Chimica e Farmaceutica SpA | 305,519 | 19,167 | |||||||||
25,172 | |||||||||||
Industrials (0.0%): (a) | |||||||||||
Leonardo SpA (b) | 201,250 | 1,361 | |||||||||
Information Technology (0.3%): | |||||||||||
Nexi SpA (b) (c) (d) | 104,728 | 1,602 | |||||||||
Sesa SpA | 34,654 | 6,892 | |||||||||
8,494 | |||||||||||
Utilities (1.5%): | |||||||||||
ACEA SpA | 90,314 | 1,836 | |||||||||
Enel SpA | 3,264,981 | 24,738 | |||||||||
Snam SpA | 2,878,880 | 16,222 | |||||||||
42,796 | |||||||||||
104,038 | |||||||||||
Japan (22.8%): | |||||||||||
Communication Services (1.8%): | |||||||||||
Akatsuki, Inc. | 67,700 | 1,630 | |||||||||
Capcom Co. Ltd. | 558,100 | 13,893 | |||||||||
DeNA Co. Ltd. | 114,440 | 1,690 | |||||||||
Fuji Media Holdings, Inc. | 73,338 | 726 | |||||||||
Intage Holdings, Inc. (c) | 208,800 | 3,219 | |||||||||
Kakaku.com, Inc. | 546,900 | 15,283 | |||||||||
KDDI Corp. | 89,000 | 2,583 | |||||||||
MarkLines Co. Ltd. | 133,200 | 3,103 | |||||||||
Nippon Telegraph & Telephone Corp. | 82,300 | 2,265 | |||||||||
Nippon Television Holdings, Inc. | 141,244 | 1,425 | |||||||||
SoftBank Group Corp. | 17,600 | 925 | |||||||||
ValueCommerce Co. Ltd. | 110,500 | 4,398 | |||||||||
ZIGExN Co. Ltd. | 394,100 | 1,071 | |||||||||
52,211 |
See notes to financial statements.
11
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Consumer Discretionary (4.2%): | |||||||||||
Arcland Service Holdings Co. Ltd. (c) | 120,000 | $ | 2,380 | ||||||||
Benesse Holdings, Inc. | 9,309 | 181 | |||||||||
Honda Motor Co. Ltd. | 301,032 | 8,245 | |||||||||
IBJ, Inc. | 208,400 | 1,870 | |||||||||
Isuzu Motors Ltd. | 382,394 | 5,126 | |||||||||
Mitsubishi Motors Corp. (b) | 342,604 | 1,102 | |||||||||
Nikon Corp. | 231,545 | 2,397 | |||||||||
Nissan Motor Co. Ltd. (b) | 688,023 | 3,402 | |||||||||
Shimamura Co. Ltd. | 37,498 | 3,204 | |||||||||
Shoei Co. Ltd. | 98,200 | 4,153 | |||||||||
Sony Group Corp. | 100,700 | 12,288 | |||||||||
Subaru Corp. | 192,020 | 3,617 | |||||||||
Sumitomo Electric Industries Ltd. | 237,670 | 3,111 | |||||||||
The Furukawa Battery Co. Ltd. (c) | 188,500 | 2,427 | |||||||||
Toyo Tire Corp. | 99,300 | 1,507 | |||||||||
Toyota Motor Corp. | 2,994,300 | 53,124 | |||||||||
ZOZO, Inc. | 512,700 | 16,252 | |||||||||
124,386 | |||||||||||
Consumer Staples (1.1%): | |||||||||||
Ajinomoto Co., Inc. | 79,300 | 2,378 | |||||||||
Asahi Group Holdings Ltd. | 47,100 | 1,737 | |||||||||
Create SD Holdings Co. Ltd. (c) | 85,700 | 2,357 | |||||||||
G-7 Holdings, Inc. | 131,200 | 1,911 | |||||||||
Retail Partners Co. Ltd. | 189,300 | 2,025 | |||||||||
Rock Field Co. Ltd. | 104,800 | 1,327 | |||||||||
Seven & i Holdings Co. Ltd. | 43,500 | 1,752 | |||||||||
Toyo Suisan Kaisha Ltd. | 387,300 | 15,674 | |||||||||
Transaction Co. Ltd. (c) | 274,300 | 2,339 | |||||||||
31,500 | |||||||||||
Energy (0.1%): | |||||||||||
Inpex Corp. | 484,784 | 3,967 | |||||||||
Financials (2.7%): | |||||||||||
Dai-ichi Life Holdings, Inc. | 221,003 | 4,428 | |||||||||
JAFCO Group Co. Ltd. | 133,100 | 8,317 | |||||||||
Mitsubishi UFJ Financial Group, Inc. | 4,334,842 | 22,897 | |||||||||
Mizuho Financial Group, Inc. | 192,450 | 2,373 | |||||||||
Nomura Holdings, Inc. | 638,964 | 2,678 | |||||||||
ORIX Corp. | 205,300 | 4,046 | |||||||||
Resona Holdings, Inc. | 1,236,716 | 4,517 | |||||||||
Sumitomo Mitsui Financial Group, Inc. | 252,784 | 8,225 | |||||||||
Sumitomo Mitsui Trust Holdings, Inc. | 135,947 | 4,247 | |||||||||
T&D Holdings, Inc. | 453,733 | 5,334 | |||||||||
Tokio Marine Holdings, Inc. | 260,700 | 13,094 | |||||||||
80,156 |
See notes to financial statements.
12
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Health Care (2.6%): | |||||||||||
Alfresa Holdings Corp. | 115,650 | $ | 1,565 | ||||||||
BML, Inc. | 55,200 | 1,716 | |||||||||
Eisai Co. Ltd. | 23,576 | 1,425 | |||||||||
Hoya Corp. | 232,300 | 36,775 | |||||||||
Japan Lifeline Co. Ltd. | 180,000 | 1,678 | |||||||||
Japan Medical Dynamic Marketing, Inc. | 131,500 | 2,239 | |||||||||
Ono Pharmaceutical Co. Ltd. | 220,430 | 4,863 | |||||||||
Otsuka Holdings Co. Ltd. | 42,100 | 1,525 | |||||||||
Shionogi & Co. Ltd. | 293,182 | 20,470 | |||||||||
Takeda Pharmaceutical Co. Ltd. | 125,261 | 3,352 | |||||||||
75,608 | |||||||||||
Industrials (5.5%): | |||||||||||
AGC, Inc. | 52,700 | 2,567 | |||||||||
Altech Corp. | 120,500 | 1,988 | |||||||||
BeNext-Yumeshin Group Co. | 156,618 | 2,299 | |||||||||
Chiyoda Corp. (b) | 143,171 | 469 | |||||||||
CTI Engineering Co. Ltd. | 97,100 | 2,025 | |||||||||
Dai-Dan Co. Ltd. | 97,800 | 1,767 | |||||||||
Denyo Co. Ltd. | 149,100 | 2,174 | |||||||||
en Japan, Inc. | 328,200 | 10,210 | |||||||||
Fuji Corp. | 108,100 | 2,360 | |||||||||
Fuji Electric Co. Ltd. | 600,500 | 31,266 | |||||||||
Giken Ltd. | 38,600 | 1,407 | |||||||||
gremz, Inc. | 151,400 | 3,367 | |||||||||
Hino Motors Ltd. | 428,342 | 3,535 | |||||||||
Hitachi Ltd. | 61,600 | 3,609 | |||||||||
ITOCHU Corp. | 130,800 | 3,741 | |||||||||
JAC Recruitment Co. Ltd. | 120,200 | 2,103 | |||||||||
Japan Airlines Co. Ltd. Class C (b) | 181,210 | 3,267 | |||||||||
JGC Holdings Corp. | 265,868 | 2,235 | |||||||||
Kamigumi Co. Ltd. | 86,020 | 1,586 | |||||||||
Komatsu Ltd. | 66,300 | 1,500 | |||||||||
Maeda Kosen Co. Ltd. | 97,000 | 3,004 | |||||||||
METAWATER Co. Ltd. | 102,100 | 1,755 | |||||||||
Mirait Holdings Corp. | 140,300 | 2,425 | |||||||||
Mitsubishi Electric Corp. | 128,700 | 1,608 | |||||||||
Mitsubishi Heavy Industries Ltd. | 56,308 | 1,263 | |||||||||
Mitsui & Co. Ltd. | 112,200 | 2,523 | |||||||||
Nichireki Co. Ltd. | 218,000 | 2,505 | |||||||||
Nihon Flush Co. Ltd. | 169,800 | 1,591 | |||||||||
Nippon Yusen | 233,300 | 15,113 | |||||||||
NS Tool Co. Ltd. | 189,900 | 2,394 | |||||||||
OKUMA Corp. | 177,300 | 7,373 | |||||||||
Rheon Automatic Machinery Co. Ltd. | 154,400 | 1,779 | |||||||||
Sanwa Holdings Corp. | 1,002,800 | 10,699 | |||||||||
Shinwa Co. Ltd. | 122,800 | 2,096 | |||||||||
Sinko Industries Ltd. | 149,800 | 2,421 | |||||||||
S-Pool, Inc. | 402,100 | 4,484 | |||||||||
Sumitomo Heavy Industries Ltd. | 69,710 | 1,539 |
See notes to financial statements.
13
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
THK Co. Ltd. | 118,826 | $ | 2,816 | ||||||||
Tocalo Co. Ltd. | 222,000 | 2,895 | |||||||||
TOPPAN, Inc. | 84,330 | 1,278 | |||||||||
Weathernews, Inc. | 42,800 | 3,619 | |||||||||
Yamato Holdings Co. Ltd. | 66,000 | 1,457 | |||||||||
160,112 | |||||||||||
Information Technology (3.4%): | |||||||||||
Alps Alpine Co. Ltd. | 145,550 | 1,310 | |||||||||
Canon, Inc. | 78,300 | 1,722 | |||||||||
Comture Corp. | 113,400 | 3,519 | |||||||||
Cresco Ltd. | 110,100 | 1,861 | |||||||||
Digital Arts, Inc. | 41,600 | 3,428 | |||||||||
Double Standard, Inc. | 81,000 | 2,660 | |||||||||
Fujitsu Ltd. | 159,700 | 26,399 | |||||||||
Fukui Computer Holdings, Inc. | 117,000 | 3,937 | |||||||||
Future Corp. | 127,500 | 4,540 | |||||||||
Kanematsu Electronics Ltd. | 56,700 | 1,800 | |||||||||
Murata Manufacturing Co. Ltd. | 24,600 | 1,805 | |||||||||
NTT Data Corp. | 111,000 | 2,343 | |||||||||
Oracle Corp. | 95,900 | 9,409 | |||||||||
Poletowin Pitcrew Holdings, Inc. | 177,500 | 1,508 | |||||||||
SHIFT, Inc. (b) | 19,400 | 4,280 | |||||||||
Softcreate Holdings Corp. | 112,900 | 4,343 | |||||||||
TechMatrix Corp. | 128,000 | 2,191 | |||||||||
Tokyo Electron Ltd. | 8,400 | 4,414 | |||||||||
Ulvac, Inc. | 274,500 | 15,666 | |||||||||
V Technology Co. Ltd. | 49,000 | 1,479 | |||||||||
98,614 | |||||||||||
Materials (0.4%): | |||||||||||
Hokuetsu Industries Co. Ltd. (c) | 127,900 | 1,068 | |||||||||
JCU Corp. | 111,100 | 4,694 | |||||||||
Rengo Co. Ltd. | 163,600 | 1,101 | |||||||||
Shin-Etsu Chemical Co. Ltd. | 12,400 | 2,066 | |||||||||
Taiheiyo Cement Corp. | 87,800 | 1,695 | |||||||||
Tosoh Corp. | 94,700 | 1,354 | |||||||||
11,978 | |||||||||||
Real Estate (0.6%): | |||||||||||
Daiwa House Industry Co. Ltd. | 73,100 | 2,123 | |||||||||
Mitsubishi Estate Co. Ltd. | 272,546 | 3,746 | |||||||||
Open House Co. Ltd. | 40,800 | 2,313 | |||||||||
Sumitomo Realty & Development Co. Ltd. | 343,600 | 10,719 | |||||||||
18,901 | |||||||||||
Utilities (0.4%): | |||||||||||
Chubu Electric Power Co., Inc. | 1,074,800 | 10,844 | |||||||||
Osaka Gas Co. Ltd. | 87,000 | 1,398 | |||||||||
12,242 | |||||||||||
669,675 |
See notes to financial statements.
14
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Korea, Republic Of (1.4%): | |||||||||||
Communication Services (0.2%): | |||||||||||
KT Corp. | 188,437 | $ | 4,798 | ||||||||
NAVER Corp. | 5,239 | 1,673 | |||||||||
6,471 | |||||||||||
Consumer Discretionary (0.3%): | |||||||||||
Coway Co. Ltd. | 40,717 | 2,323 | |||||||||
Hankook Tire & Technology Co. Ltd. | 56,438 | 1,830 | |||||||||
Kia Corp. | 29,431 | 1,927 | |||||||||
LG Electronics, Inc. | 23,872 | 2,324 | |||||||||
8,404 | |||||||||||
Consumer Staples (0.0%): (a) | |||||||||||
E-MART, Inc. | 11,935 | 1,433 | |||||||||
Financials (0.4%): | |||||||||||
Hana Financial Group, Inc. | 54,998 | 1,828 | |||||||||
KB Financial Group, Inc. | 124,078 | 5,515 | |||||||||
Shinhan Financial Group Co. Ltd. | 162,825 | 4,736 | |||||||||
12,079 | |||||||||||
Industrials (0.1%): | |||||||||||
Samsung Engineering Co. Ltd. (b) | 124,759 | 2,179 | |||||||||
Information Technology (0.4%): | |||||||||||
LG Innotek Co. Ltd. | 25,730 | 6,568 | |||||||||
Samsung Electronics Co. Ltd. | 80,793 | 4,851 | |||||||||
11,419 | |||||||||||
41,985 | |||||||||||
Luxembourg (0.2%): | |||||||||||
Communication Services (0.1%): | |||||||||||
RTL Group SA | 44,254 | 2,276 | |||||||||
Energy (0.0%): (a) | |||||||||||
Tenaris SA | 162,777 | 1,594 | |||||||||
Materials (0.1%): | |||||||||||
ArcelorMittal SA | 68,087 | 1,848 | |||||||||
5,718 | |||||||||||
Malaysia (0.3%): | |||||||||||
Communication Services (0.1%): | |||||||||||
Telekom Malaysia Bhd | 1,637,400 | 2,163 | |||||||||
Financials (0.2%): | |||||||||||
CIMB Group Holdings Bhd | 1,619,594 | 1,991 | |||||||||
RHB Bank Bhd | 2,417,400 | 3,030 | |||||||||
5,021 | |||||||||||
7,184 |
See notes to financial statements.
15
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Mexico (0.2%): | |||||||||||
Communication Services (0.1%): | |||||||||||
America Movil SAB de CV, ADR | 207,673 | $ | 3,618 | ||||||||
Consumer Staples (0.1%): | |||||||||||
Arca Continental SAB de CV (c) | 301,935 | 1,842 | |||||||||
5,460 | |||||||||||
Netherlands (4.3%): | |||||||||||
Communication Services (0.6%): | |||||||||||
Koninklijke KPN NV | 4,935,739 | 14,538 | |||||||||
VEON Ltd., ADR (b) | 780,000 | 1,349 | |||||||||
15,887 | |||||||||||
Consumer Staples (0.2%): | |||||||||||
Koninklijke Ahold Delhaize NV | 133,528 | 4,493 | |||||||||
Energy (0.4%): | |||||||||||
Royal Dutch Shell PLC Class B | 588,028 | 12,320 | |||||||||
Financials (1.3%): | |||||||||||
ABN AMRO Bank NV (d) | 311,551 | 4,447 | |||||||||
ING Groep NV | 2,319,648 | 32,040 | |||||||||
NN Group NV | 49,256 | 2,447 | |||||||||
38,934 | |||||||||||
Health Care (0.1%): | |||||||||||
Pharming Group NV (b) (c) | 1,546,697 | 1,236 | |||||||||
QIAGEN NV (b) | 33,761 | 1,865 | |||||||||
3,101 | |||||||||||
Industrials (0.8%): | |||||||||||
PostNL NV | 302,239 | 1,291 | |||||||||
SIF Holding NV (c) | 160,874 | 2,231 | |||||||||
Wolters Kluwer NV | 185,695 | 20,881 | |||||||||
24,403 | |||||||||||
Information Technology (0.9%): | |||||||||||
ASM International NV | 41,830 | 18,801 | |||||||||
ASML Holding NV | 3,950 | 3,100 | |||||||||
STMicroelectronics NV | 88,078 | 4,289 | |||||||||
26,190 | |||||||||||
125,328 | |||||||||||
New Zealand (0.5%): | |||||||||||
Consumer Staples (0.0%): (a) | |||||||||||
Scales Corp. Ltd. | 534,312 | 1,938 | |||||||||
Health Care (0.4%): | |||||||||||
Fisher & Paykel Healthcare Corp. Ltd. | 491,110 | 11,108 | |||||||||
Information Technology (0.1%): | |||||||||||
Pushpay Holdings Ltd. (b) | 2,300,132 | 2,117 | |||||||||
15,163 |
See notes to financial statements.
16
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Norway (1.2%): | |||||||||||
Energy (0.3%): | |||||||||||
Aker BP ASA | 248,140 | $ | 7,803 | ||||||||
Equinor ASA | 79,818 | 1,999 | |||||||||
9,802 | |||||||||||
Financials (0.6%): | |||||||||||
SpareBank 1 SMN | 1,161,204 | 17,706 | |||||||||
Health Care (0.1%): | |||||||||||
Medistim ASA | 80,939 | 3,070 | |||||||||
Information Technology (0.1%): | |||||||||||
Bouvet ASA | 384,120 | 3,191 | |||||||||
Materials (0.1%): | |||||||||||
Norsk Hydro ASA | 276,789 | 1,794 | |||||||||
35,563 | |||||||||||
Russian Federation (0.5%): | |||||||||||
Consumer Staples (0.0%): (a) | |||||||||||
Magnit PJSC, GDR | 95,930 | 1,479 | |||||||||
Energy (0.3%): | |||||||||||
Gazprom PJSC, ADR | 501,648 | 4,490 | |||||||||
LUKOIL PJSC, ADR | 53,261 | 4,696 | |||||||||
9,186 | |||||||||||
Financials (0.2%): | |||||||||||
Sberbank of Russia PJSC, ADR | 128,844 | 2,179 | |||||||||
Sberbank of Russia PJSC | 574,270 | 2,452 | |||||||||
4,631 | |||||||||||
15,296 | |||||||||||
Saudi Arabia (0.2%): | |||||||||||
Financials (0.1%): | |||||||||||
Al Rajhi Bank | 77,809 | 2,734 | |||||||||
Health Care (0.1%): | |||||||||||
Mouwasat Medical Services Co. | 38,151 | 1,730 | |||||||||
4,464 | |||||||||||
Singapore (0.3%): | |||||||||||
Consumer Staples (0.1%): | |||||||||||
Wilmar International Ltd. | 741,500 | 2,224 | |||||||||
Financials (0.2%): | |||||||||||
DBS Group Holdings Ltd. | 102,400 | 2,231 | |||||||||
iFAST Corp. Ltd. | 543,900 | 3,315 | |||||||||
5,546 | |||||||||||
7,770 |
See notes to financial statements.
17
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
South Africa (0.4%): | |||||||||||
Communication Services (0.1%): | |||||||||||
MTN Group Ltd. (b) | 179,503 | $ | 1,812 | ||||||||
Naspers Ltd. Class N | 14,038 | 2,151 | |||||||||
3,963 | |||||||||||
Financials (0.1%): | |||||||||||
Old Mutual Ltd. | 2,258,079 | 1,724 | |||||||||
Materials (0.2%): | |||||||||||
Gold Fields Ltd. | 202,567 | 2,332 | |||||||||
Impala Platinum Holdings Ltd. | 139,647 | 1,750 | |||||||||
Kumba Iron Ore Ltd. | 66,059 | 1,871 | |||||||||
5,953 | |||||||||||
11,640 | |||||||||||
Spain (1.9%): | |||||||||||
Communication Services (0.6%): | |||||||||||
Telefonica SA (c) | 4,016,206 | 18,220 | |||||||||
Consumer Discretionary (0.1%): | |||||||||||
Industria de Diseno Textil SA | 57,428 | 1,815 | |||||||||
Financials (0.8%): | |||||||||||
Banco Bilbao Vizcaya Argentaria SA | 3,528,325 | 18,704 | |||||||||
Banco Santander SA | 444,119 | 1,381 | |||||||||
CaixaBank SA | 1,894,417 | 4,891 | |||||||||
24,976 | |||||||||||
Health Care (0.1%): | |||||||||||
Faes Farma SA | 600,210 | 2,257 | |||||||||
Information Technology (0.1%): | |||||||||||
Global Dominion Access SA (d) | 581,608 | 2,885 | |||||||||
Utilities (0.2%): | |||||||||||
Acciona SA | 12,414 | 2,214 | |||||||||
EDP Renovaveis SA | 91,540 | 2,354 | |||||||||
4,568 | |||||||||||
54,721 | |||||||||||
Sweden (3.3%): | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Boozt AB (b) (c) (d) | 114,228 | 2,175 | |||||||||
Consumer Staples (0.1%): | |||||||||||
Swedish Match AB | 319,830 | 2,335 | |||||||||
Financials (0.1%): | |||||||||||
Skandinaviska Enskilda Banken AB Class A | 181,469 | 2,640 | |||||||||
Health Care (0.8%): | |||||||||||
BioGaia AB B Shares | 45,423 | 2,587 | |||||||||
Biotage AB | 182,558 | 5,495 | |||||||||
Cellavision AB | 57,570 | 2,159 |
See notes to financial statements.
18
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Getinge AB B Shares | 47,055 | $ | 1,973 | ||||||||
Sectra AB Class B (b) | 216,848 | 5,396 | |||||||||
SwedenCare AB | 257,221 | 4,160 | |||||||||
Xvivo Perfusion AB (b) | 109,195 | 3,604 | |||||||||
25,374 | |||||||||||
Industrials (2.1%): | |||||||||||
Atlas Copco AB Class B | 565,030 | 29,364 | |||||||||
BTS Group AB B Shares | 108,097 | 4,944 | |||||||||
CTT Systems AB | 68,873 | 1,744 | |||||||||
Eolus Vind AB Class B (c) | 139,230 | 2,040 | |||||||||
GARO AB | 243,703 | 6,019 | |||||||||
Hexatronic Group AB | 68,547 | 3,815 | |||||||||
Nibe Industrier AB Class B | 599,716 | 8,553 | |||||||||
Sandvik AB | 108,121 | 2,671 | |||||||||
Volvo AB Class B | 97,206 | 2,094 | |||||||||
61,244 | |||||||||||
Information Technology (0.0%): (a) | |||||||||||
Telefonaktiebolaget LM Ericsson Class B | 181,138 | 1,822 | |||||||||
Materials (0.1%): | |||||||||||
Boliden AB | 71,776 | 2,476 | |||||||||
98,066 | |||||||||||
Switzerland (10.0%): | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Cie Financiere Richemont SA Registered Shares | 20,353 | 3,029 | |||||||||
Consumer Staples (2.7%): | |||||||||||
Coca-Cola HBC AG | 415,495 | 12,793 | |||||||||
Nestle SA Registered Shares | 529,882 | 67,927 | |||||||||
80,720 | |||||||||||
Financials (2.0%): | |||||||||||
Julius Baer Group Ltd. | 54,813 | 3,403 | |||||||||
Partners Group Holding AG | 10,646 | 18,376 | |||||||||
Swiss Life Holding AG | 9,865 | 5,663 | |||||||||
UBS Group AG | 1,744,093 | 30,163 | |||||||||
57,605 | |||||||||||
Health Care (3.6%): | |||||||||||
Coltene Holding AG Registered Shares | 26,804 | 2,957 | |||||||||
Lonza Group AG Registered Shares | 3,301 | 2,662 | |||||||||
Novartis AG Registered Shares | 466,062 | 37,154 | |||||||||
Roche Holding AG | 152,034 | 59,366 | |||||||||
Sonova Holding AG | 6,667 | 2,506 | |||||||||
104,645 | |||||||||||
Industrials (0.9%): | |||||||||||
Adecco Group AG | 343,355 | 15,915 | |||||||||
Kardex Holding AG Registered Shares | 18,715 | 5,635 |
See notes to financial statements.
19
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Schweiter Technologies AG Class BR | 1,498 | $ | 2,157 | ||||||||
Zehnder Group AG Registered Shares | 26,839 | 2,620 | |||||||||
26,327 | |||||||||||
Information Technology (0.2%): | |||||||||||
Landis+Gyr Group AG | 43,425 | 2,711 | |||||||||
u-blox Holding AG (b) | 44,878 | 3,194 | |||||||||
5,905 | |||||||||||
Materials (0.5%): | |||||||||||
Gurit Holding AG Class BR | 2,381 | 3,846 | |||||||||
Holcim Ltd. | 173,996 | 8,384 | |||||||||
Vetropack Holding AG | 50,122 | 2,890 | |||||||||
15,120 | |||||||||||
293,351 | |||||||||||
Taiwan (1.1%): | |||||||||||
Financials (0.3%): | |||||||||||
Chailease Holding Co. Ltd. | 305,846 | 2,706 | |||||||||
Fubon Financial Holding Co. Ltd. | 1,302,053 | 3,400 | |||||||||
Shin Kong Financial Holding Co. Ltd. | 3,424,873 | 1,298 | |||||||||
7,404 | |||||||||||
Information Technology (0.8%): | |||||||||||
Catcher Technology Co. Ltd. | 493,221 | 2,739 | |||||||||
Hon Hai Precision Industry Co. Ltd. | 894,724 | 3,316 | |||||||||
MediaTek, Inc. | 54,000 | 1,958 | |||||||||
Realtek Semiconductor Corp. | 267,000 | 5,298 | |||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 466,000 | 9,913 | |||||||||
Yageo Corp. | 107,000 | 1,748 | |||||||||
24,972 | |||||||||||
32,376 | |||||||||||
Thailand (0.2%): | |||||||||||
Financials (0.2%): | |||||||||||
Kasikornbank PCL | 1,200,243 | 4,675 | |||||||||
Turkey (0.1%): | |||||||||||
Communication Services (0.1%): | |||||||||||
Turk Telekomunikasyon A/S | 1,860,594 | 1,345 | |||||||||
Turkcell Iletisim Hizmetleri A/S | 1,103,834 | 1,550 | |||||||||
2,895 | |||||||||||
United Arab Emirates (0.1%): | |||||||||||
Real Estate (0.1%): | |||||||||||
Emaar Development PJSC (b) | 1,675,411 | 2,086 | |||||||||
United Kingdom (14.3%): | |||||||||||
Communication Services (1.1%): | |||||||||||
4imprint Group PLC | 69,686 | 2,626 | |||||||||
BT Group PLC (b) | 1,733,754 | 3,649 |
See notes to financial statements.
20
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Frontier Developments PLC (b) | 72,473 | $ | 1,700 | ||||||||
ITV PLC (b) | 8,474,871 | 12,450 | |||||||||
Team17 Group PLC (b) | 231,250 | 2,047 | |||||||||
Vodafone Group PLC | 1,238,574 | 1,795 | |||||||||
WPP PLC | 609,183 | 8,454 | |||||||||
32,721 | |||||||||||
Consumer Discretionary (1.2%): | |||||||||||
AB Dynamics PLC | 124,343 | 2,681 | |||||||||
Barratt Developments PLC | 230,350 | 2,133 | |||||||||
Focusrite PLC | 378,141 | 8,008 | |||||||||
Kingfisher PLC | 548,291 | 2,303 | |||||||||
Marks & Spencer Group PLC (b) | 486,452 | 1,526 | |||||||||
Next PLC | 136,688 | 14,278 | |||||||||
Stellantis NV | 295,964 | 5,050 | |||||||||
35,979 | |||||||||||
Consumer Staples (1.9%): | |||||||||||
British American Tobacco PLC | 45,914 | 1,536 | |||||||||
Diageo PLC | 592,290 | 29,886 | |||||||||
Imperial Brands PLC | 712,926 | 14,567 | |||||||||
J Sainsbury PLC | 1,084,410 | 3,983 | |||||||||
Tesco PLC | 939,768 | 3,466 | |||||||||
Unilever PLC | 41,009 | 2,094 | |||||||||
55,532 | |||||||||||
Energy (2.1%): | |||||||||||
BP PLC | 8,973,594 | 38,927 | |||||||||
Royal Dutch Shell PLC Class A | 1,080,785 | 22,605 | |||||||||
61,532 | |||||||||||
Financials (1.7%): | |||||||||||
3i Group PLC | 227,571 | 4,175 | |||||||||
Barclays PLC | 946,711 | 2,311 | |||||||||
Close Brothers Group PLC | 576,957 | 9,888 | |||||||||
CMC Markets PLC (d) | 460,469 | 1,421 | |||||||||
Intermediate Capital Group PLC | 468,712 | 13,018 | |||||||||
Legal & General Group PLC | 3,677,491 | 13,736 | |||||||||
Standard Chartered PLC | 1,106,717 | 6,089 | |||||||||
50,638 | |||||||||||
Health Care (0.8%): | |||||||||||
Advanced Medical Solutions Group PLC | 522,004 | 2,225 | |||||||||
AstraZeneca PLC | 25,815 | 2,830 | |||||||||
CVS Group PLC | 276,056 | 8,083 | |||||||||
EKF Diagnostics Holdings PLC | 1,989,087 | 2,001 | |||||||||
Ergomed PLC (b) | 192,616 | 3,263 | |||||||||
Hikma Pharmaceuticals PLC | 64,328 | 1,890 | |||||||||
Tristel PLC | 222,075 | 1,239 | |||||||||
21,531 |
See notes to financial statements.
21
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Industrials (2.3%): | |||||||||||
Ashtead Group PLC | 322,392 | $ | 25,931 | ||||||||
Avon Protection PLC | 93,933 | 1,351 | |||||||||
Babcock International Group PLC (b) | 430,183 | 1,691 | |||||||||
BAE Systems PLC | 1,057,416 | 7,700 | |||||||||
Bunzl PLC | 52,164 | 1,984 | |||||||||
Concentric AB | 121,948 | 3,782 | |||||||||
easyJet PLC (b) | 145,416 | 961 | |||||||||
Ferguson PLC | 12,978 | 1,975 | |||||||||
Judges Scientific PLC | 58,883 | 6,114 | |||||||||
Renew Holdings PLC | 294,817 | 3,123 | |||||||||
Robert Walters PLC | 328,150 | 3,356 | |||||||||
Royal Mail PLC | 319,921 | 2,130 | |||||||||
SThree PLC | 704,433 | 4,869 | |||||||||
Volex PLC | 580,513 | 2,831 | |||||||||
67,798 | |||||||||||
Information Technology (0.4%): | |||||||||||
Aptitude Software Group PLC | 350,141 | 2,440 | |||||||||
GB Group PLC | 229,590 | 2,333 | |||||||||
Kainos Group PLC | 256,061 | 6,334 | |||||||||
11,107 | |||||||||||
Materials (2.4%): | |||||||||||
Anglo American PLC | 302,738 | 11,142 | |||||||||
Croda International PLC | 203,898 | 27,339 | |||||||||
Endeavour Mining PLC (c) | 50,956 | 1,196 | |||||||||
Evraz PLC | 846,002 | 6,448 | |||||||||
Rio Tinto PLC | 326,061 | 19,985 | |||||||||
Treatt PLC | 340,389 | 5,040 | |||||||||
71,150 | |||||||||||
Real Estate (0.3%): | |||||||||||
Land Securities Group PLC | 248,674 | 2,397 | |||||||||
Safestore Holdings PLC | 122,651 | 2,172 | |||||||||
The British Land Co. PLC | 362,042 | 2,447 | |||||||||
Watkin Jones PLC | 738,809 | 2,400 | |||||||||
9,416 | |||||||||||
Utilities (0.1%): | |||||||||||
Centrica PLC (b) | 1,609,777 | 1,383 | |||||||||
418,787 | |||||||||||
Total Common Stocks (Cost $2,320,419) | 2,874,640 | ||||||||||
Exchange-Traded Funds (0.5%) | |||||||||||
United States (0.5%): | |||||||||||
iShares Core MSCI EAFE ETF | 88,906 | 6,489 | |||||||||
iShares Core MSCI Emerging Markets ETF | 18,180 | 1,093 | |||||||||
iShares MSCI EAFE Small-Cap ETF (c) | 113,947 | 8,195 | |||||||||
15,777 | |||||||||||
Total Exchange-Traded Funds (Cost $16,460) | 15,777 |
See notes to financial statements.
22
USAA Mutual Funds Trust USAA International Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Collateral for Securities Loaned^ (2.5%) | |||||||||||
United States (2.5%): | |||||||||||
Fidelity Investments Money Market Government Portfolio Institutional Shares, 0.01% (f) | 381,187 | $ | 381 | ||||||||
Goldman Sachs Financial Square Government Fund Institutional Shares, 0.03% (f) | 14,950,437 | 14,951 | |||||||||
HSBC U.S. Government Money Market Fund I Shares, 0.03% (f) | 56,865,902 | 56,866 | |||||||||
Total Collateral for Securities Loaned (Cost $72,198) | 72,198 | ||||||||||
Total Investments (Cost $2,409,077) — 101.0% | 2,962,615 | ||||||||||
Liabilities in excess of other assets — (1.0)% | (28,761 | ) | |||||||||
NET ASSETS — 100.00% | $ | 2,933,854 |
^ Purchased with cash collateral from securities on loan.
(a) Amount represents less than 0.05% of net assets.
(b) Non-income producing security.
(c) All or a portion of this security is on loan.
(d) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of November 30, 2021, the fair value of these securities was $38,735 (thousands) and amounted to 1.3% of net assets.
(e) Rounds to less than $1 thousand.
(f) Rate disclosed is the daily yield on November 30, 2021.
ADR — American Depositary Receipt
ETF — Exchange-Traded Fund
GDR — Global Depositary Receipt
PCL — Public Company Limited
PLC — Public Limited Company
See notes to financial statements.
23
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA International Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $2,409,077) | $ | 2,962,615 | (a) | ||||
Foreign currency, at value (Cost $2,669) | 2,676 | ||||||
Cash | 25,467 | ||||||
Receivables: | |||||||
Interest and dividends | 7,775 | ||||||
Capital shares issued | 4,414 | ||||||
Investments sold | 6,487 | ||||||
Reclaims | 7,337 | ||||||
From Adviser | 8 | ||||||
Prepaid expenses | 47 | ||||||
Total Assets | 3,016,826 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 72,198 | ||||||
Investments purchased | 6,029 | ||||||
Capital shares redeemed | 1,528 | ||||||
Accrued foreign capital gains taxes | 531 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 1,800 | ||||||
Administration fees | 319 | ||||||
Custodian fees | 139 | ||||||
Transfer agent fees | 256 | ||||||
Compliance fees | 1 | ||||||
12b-1 fees | — | (b) | |||||
Other accrued expenses | 171 | ||||||
Total Liabilities | 82,972 | ||||||
Net Assets: | |||||||
Capital | 2,173,028 | ||||||
Total accumulated earnings/(loss) | 760,826 | ||||||
Net Assets | $ | 2,933,854 | |||||
Net Assets | |||||||
Fund Shares | $ | 1,505,094 | |||||
Institutional Shares | 1,427,453 | ||||||
Class A | 1,056 | ||||||
Class R6 | 251 | ||||||
Total | $ | 2,933,854 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 52,248 | ||||||
Institutional Shares | 49,705 | ||||||
Class A | 37 | ||||||
Class R6 | 9 | ||||||
Total | 101,999 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 28.81 | |||||
Institutional Shares | $ | 28.72 | |||||
Class A | $ | 28.59 | |||||
Class R6 | $ | 29.21 | |||||
Maximum Sales Charge — Class A | 5.75 | % | |||||
Maximum offering price (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 30.33 |
(a) Includes $68,272 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
24
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA International Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 41,757 | |||||
Interest | 1 | ||||||
Securities lending (net of fees) | 312 | ||||||
Foreign tax withholding | (4,533 | ) | |||||
Total Income | 37,537 | ||||||
Expenses: | |||||||
Investment advisory fees | 11,264 | ||||||
Administration fees — Fund Shares | 1,197 | ||||||
Administration fees — Institutional Shares | 799 | ||||||
Administration fees — Class A | 1 | ||||||
Administration fees — Class R6 | — | (a) | |||||
Sub-Administration fees | 39 | ||||||
12b-1 fees — Class A | 1 | ||||||
Custodian fees | 361 | ||||||
Transfer agent fees — Fund Shares | 822 | ||||||
Transfer agent fees — Institutional Shares | 799 | ||||||
Transfer agent fees — Class A | 1 | ||||||
Transfer agent fees — Class R6 | — | (a) | |||||
Trustees' fees | 24 | ||||||
Compliance fees | 10 | ||||||
Legal and audit fees | 51 | ||||||
State registration and filing fees | 32 | ||||||
Interfund lending fees | — | (a) | |||||
Other expenses | 189 | ||||||
Total Expenses | 15,590 | ||||||
Expenses waived/reimbursed by Adviser | (47 | ) | |||||
Net Expenses | 15,543 | ||||||
Net Investment Income (Loss) | 21,994 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities and foreign currency translations | 83,103 | ||||||
Foreign taxes on realized gains | (438 | ) | |||||
Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations | (163,081 | ) | |||||
Net change in accrued foreign taxes on unrealized gains | 2 | ||||||
Net realized/unrealized gains (losses) on investments | (80,414 | ) | |||||
Change in net assets resulting from operations | $ | (58,420 | ) |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
25
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA International Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 21,994 | $ | 60,275 | |||||||
Net realized gains (losses) from investments | 82,665 | 194,425 | |||||||||
Net change in unrealized appreciation/depreciation on investments | (163,079 | ) | 764,549 | ||||||||
Change in net assets resulting from operations | (58,420 | ) | 1,019,249 | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | — | (28,796 | ) | ||||||||
Institutional Shares | — | (31,477 | ) | ||||||||
Class A | — | (127 | ) | ||||||||
Class R6 | — | (87 | ) | ||||||||
Change in net assets resulting from distributions to shareholders | — | (60,487 | ) | ||||||||
Change in net assets resulting from capital transactions | (261,623 | ) | (537,018 | ) | |||||||
Change in net assets | (320,043 | ) | 421,744 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 3,253,897 | 2,832,153 | |||||||||
End of period | $ | 2,933,854 | $ | 3,253,897 |
(continues on next page)
See notes to financial statements.
26
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands) (continued)
USAA International Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 40,379 | $ | 80,765 | |||||||
Distributions reinvested | — | 28,329 | |||||||||
Cost of shares redeemed | (110,571 | ) | (359,583 | ) | |||||||
Total Fund Shares | $ | (70,192 | ) | $ | (250,489 | ) | |||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 52,972 | $ | 78,811 | |||||||
Distributions reinvested | — | 31,451 | |||||||||
Cost of shares redeemed | (244,618 | ) | (384,872 | ) | |||||||
Total Institutional Shares | $ | (191,646 | ) | $ | (274,610 | ) | |||||
Class A | |||||||||||
Proceeds from shares issued | $ | 90 | $ | 6,788 | |||||||
Distributions reinvested | — | 16 | |||||||||
Cost of shares redeemed | (102 | ) | (14,243 | ) | |||||||
Total Class A | $ | (12 | ) | $ | (7,439 | ) | |||||
Class R6 | |||||||||||
Proceeds from shares issued | $ | 255 | $ | 50 | |||||||
Distributions reinvested | — | — | (a) | ||||||||
Cost of shares redeemed | (28 | ) | (4,530 | ) | |||||||
Total Class R6 | $ | 227 | $ | (4,480 | ) | ||||||
Change in net assets resulting from capital transactions | $ | (261,623 | ) | $ | (537,018 | ) | |||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,354 | 3,115 | |||||||||
Reinvested | — | 1,111 | |||||||||
Redeemed | (3,712 | ) | (14,241 | ) | |||||||
Total Fund Shares | (2,358 | ) | (10,015 | ) | |||||||
Institutional Shares | |||||||||||
Issued | 1,792 | 3,189 | |||||||||
Reinvested | — | 1,238 | |||||||||
Redeemed | (8,100 | ) | (15,106 | ) | |||||||
Total Institutional Shares | (6,308 | ) | (10,679 | ) | |||||||
Class A | |||||||||||
Issued | 3 | 305 | |||||||||
Reinvested | — | 1 | |||||||||
Redeemed | (3 | ) | (568 | ) | |||||||
Total Class A | — | (262 | ) | ||||||||
Class R6 | |||||||||||
Issued | 9 | 2 | |||||||||
Reinvested | — | — | (b) | ||||||||
Redeemed | (1 | ) | (157 | ) | |||||||
Total Class R6 | 8 | (155 | ) | ||||||||
Change in Shares | (8,658 | ) | (21,111 | ) |
(a) Rounds to less than $1 thousand.
(b) Rounds to less than 1,000 shares.
See notes to financial statements.
27
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA International Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 29.46 | 0.20 | (e) | (0.85 | ) | (0.65 | ) | — | — | |||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 21.53 | 0.49 | (e) | 7.94 | 8.43 | (0.50 | ) | — | ||||||||||||||||||
2020 | $ | 28.70 | 0.44 | (e) | (1.12 | ) | (0.68 | ) | (0.73 | ) | (5.76 | ) | |||||||||||||||
2019 | $ | 32.82 | 0.53 | (2.41 | ) | (1.88 | ) | (0.44 | ) | (1.80 | ) | ||||||||||||||||
2018 | $ | 31.16 | 0.60 | 2.08 | 2.68 | (0.63 | ) | (0.39 | ) | ||||||||||||||||||
2017 | $ | 26.40 | 0.42 | 4.76 | 5.18 | (0.42 | ) | — | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 29.36 | 0.21 | (e) | (0.85 | ) | (0.64 | ) | — | — | |||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 21.46 | 0.51 | (e) | 7.91 | 8.42 | (0.52 | ) | — | ||||||||||||||||||
2020 | $ | 28.61 | 0.47 | (e) | (1.12 | ) | (0.65 | ) | (0.74 | ) | (5.76 | ) | |||||||||||||||
2019 | $ | 32.72 | 0.56 | (2.41 | ) | (1.85 | ) | (0.46 | ) | (1.80 | ) | ||||||||||||||||
2018 | $ | 31.07 | 0.64 | 2.06 | 2.70 | (0.66 | ) | (0.39 | ) | ||||||||||||||||||
2017 | $ | 26.34 | 0.45 | 4.74 | 5.19 | (0.46 | ) | — |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment are calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Reflects total annual operating expenses for reductions of expenses paid indirectly for the May 31 fiscal years ended 2019, 2018, and 2017. Expenses paid indirectly decreased the expense ratio for each of these respective years by less than 0.01%.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(e) Per share net investment income (loss) has been calculated using the average daily shares method.
(f) Reflects a return to normal trading levels after a prior year transition.
(g) Reflects increased trading activity due to current year transition or asset allocation shift.
See notes to financial statements.
28
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return (Excludes Sales Charge)*(a) | Net Expenses**^(b)(c) | Net Investment Income (Loss)(b) | Gross Expenses(b)(c) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(d) | ||||||||||||||||||||||||||||
USAA International Fund | |||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | $ | 28.81 | (2.21 | )% | 1.00 | % | 1.34 | % | 1.00 | % | $ | 1,505,094 | 16 | % | ||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.50 | ) | $ | 29.46 | 39.52 | % | 1.01 | % | 1.94 | % | 1.03 | % | $ | 1,608,436 | 67 | %(f) | |||||||||||||||||||
2020 | (6.49 | ) | $ | 21.53 | (6.13 | )% | 1.06 | % | 1.68 | % | 1.07 | % | $ | 1,391,279 | 119 | %(g) | |||||||||||||||||||
2019 | (2.24 | ) | $ | 28.70 | (5.14 | )% | 1.08 | % | 1.76 | % | 1.08 | % | $ | 1,690,782 | 30 | % | |||||||||||||||||||
2018 | (1.02 | ) | $ | 32.82 | 8.61 | % | 1.08 | % | 1.58 | % | 1.08 | % | $ | 1,876,020 | 36 | % | |||||||||||||||||||
2017 | (0.42 | ) | $ | 31.16 | 19.87 | % | 1.11 | % | 1.33 | % | 1.11 | % | $ | 1,696,372 | 40 | % | |||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | $ | 28.72 | (2.18 | )% | 0.94 | % | 1.41 | % | 0.95 | % | $ | 1,427,453 | 16 | % | ||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.52 | ) | $ | 29.36 | 39.61 | % | 0.94 | % | 2.00 | % | 0.95 | % | $ | 1,644,340 | 67 | %(f) | |||||||||||||||||||
2020 | (6.50 | ) | $ | 21.46 | (6.05 | )% | 0.99 | % | 1.77 | % | 0.99 | % | $ | 1,431,107 | 119 | %(g) | |||||||||||||||||||
2019 | (2.26 | ) | $ | 28.61 | (5.06 | )% | 1.00 | % | 1.81 | % | 1.00 | % | $ | 1,979,758 | 30 | % | |||||||||||||||||||
2018 | (1.05 | ) | $ | 32.72 | 8.68 | % | 1.00 | % | 1.62 | % | 1.00 | % | $ | 2,349,281 | 36 | % | |||||||||||||||||||
2017 | (0.46 | ) | $ | 31.07 | 19.97 | % | 1.00 | % | 1.43 | % | 1.00 | % | $ | 2,308,470 | 40 | % |
(continues on next page)
See notes to financial statements.
29
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA International Fund | |||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 29.25 | 0.19 | (e) | (0.85 | ) | (0.66 | ) | — | — | |||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 21.39 | 0.37 | (e) | 7.93 | 8.30 | (0.44 | ) | — | ||||||||||||||||||
2020 | $ | 28.58 | 0.36 | (e) | (1.10 | ) | (0.74 | ) | (0.69 | ) | (5.76 | ) | |||||||||||||||
2019 | $ | 32.67 | 0.47 | (2.41 | ) | (1.94 | ) | (0.35 | ) | (1.80 | ) | ||||||||||||||||
2018 | $ | 31.04 | 0.53 | 2.04 | 2.57 | (0.55 | ) | (0.39 | ) | ||||||||||||||||||
2017 | $ | 26.31 | 0.35 | 4.74 | 5.09 | (0.36 | ) | — | |||||||||||||||||||
Class R6 | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 29.65 | 0.30 | (e) | (0.74 | ) | (0.44 | ) | — | — | |||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 21.52 | 0.49 | (e) | 8.19 | 8.68 | (0.55 | ) | — | ||||||||||||||||||
2020 | $ | 28.66 | 0.49 | (e) | (1.12 | ) | (0.63 | ) | (0.75 | ) | (5.76 | ) | |||||||||||||||
August 17, 2018 (h) through May 31, 2019 | $ | 32.01 | 0.52 | (e) | (1.54 | ) | (1.02 | ) | (0.53 | ) | (1.80 | ) |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment are calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Reflects total annual operating expenses for reductions of expenses paid indirectly for the May 31 fiscal years ended 2019, 2018, and 2017. Expenses paid indirectly decreased the expense ratio for each of these respective years by less than 0.01%.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(e) Per share net investment income (loss) has been calculated using the average daily shares method.
(f) Reflects a return to normal trading levels after a prior year transition.
(g) Reflects increased trading activity due to current year transition or asset allocation shift.
(h) Commencement of operations.
See notes to financial statements.
30
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period (continued)
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||
Total Distributions | Net Asset Value, End of Period | Total Return (Excludes Sales Charge)*(a) | Net Expenses**^(b)(c) | Net Investment Income (Loss)(b) | Gross Expenses(b)(c) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(d) | ||||||||||||||||||||||||||||
USAA International Fund | |||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | $ | 28.59 | (2.26 | )% | 1.08 | % | 1.28 | % | 2.50 | % | $ | 1,056 | 16 | % | ||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.44 | ) | $ | 29.25 | 39.11 | % | 1.30 | % | 1.47 | % | 1.56 | % | $ | 1,093 | 67 | %(f) | |||||||||||||||||||
2020 | (6.45 | ) | $ | 21.39 | (6.37 | )% | 1.35 | % | 1.37 | % | 1.39 | % | $ | 6,402 | 119 | %(g) | |||||||||||||||||||
2019 | (2.15 | ) | $ | 28.58 | (5.39 | )% | 1.35 | % | 1.52 | % | 1.41 | % | $ | 7,715 | 30 | % | |||||||||||||||||||
2018 | (0.94 | ) | $ | 32.67 | 8.29 | % | 1.35 | % | 1.29 | % | 1.42 | % | $ | 8,101 | 36 | % | |||||||||||||||||||
2017 | (0.36 | ) | $ | 31.04 | 19.58 | % | 1.35 | % | 1.08 | % | 1.51 | % | $ | 7,540 | 40 | % | |||||||||||||||||||
Class R6 | |||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | $ | 29.21 | (1.48 | )% | 0.23 | % | 2.00 | % | 4.49 | % | $ | 251 | 16 | % | ||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||
2021 | (0.55 | ) | $ | 29.65 | 40.78 | % | 0.80 | % | 1.95 | % | 1.22 | % | $ | 28 | 67 | %(f) | |||||||||||||||||||
2020 | (6.51 | ) | $ | 21.52 | (5.95 | )% | 0.85 | % | 1.83 | % | 1.18 | % | $ | 3,365 | 119 | %(g) | |||||||||||||||||||
August 17, 2018 (h) through May 31, 2019 | (2.33 | ) | $ | 28.66 | (2.55 | )% | 0.85 | % | 2.19 | % | 2.03 | % | $ | 4,477 | 30 | % |
See notes to financial statements.
31
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA International Fund (the "Fund"). The Fund offers four classes of shares: Fund Shares, Institutional Shares, Class A, and Class R6. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges, except with respect to sales charges, fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
32
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs"), and American Depositary Receipts ("ADRs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's NAV is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. The valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 96,339 | $ | 2,778,302 | $ | — | $ | 2,874,641 | |||||||||||
Exchange-Traded Funds | 15,776 | — | — | 15,776 | |||||||||||||||
Collateral for Securities Loaned | 72,198 | — | — | 72,198 | |||||||||||||||
Total | $ | 184,313 | $ | 2,778,302 | $ | — | $ | 2,962,615 |
For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a portfolio of securities often designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an
33
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Foreign Exchange Currency Contracts:
The Fund may enter into foreign exchange currency contracts to convert U.S. dollars to and from various foreign currencies. A foreign exchange currency contract is an obligation by the Fund to purchase or sell a specific currency at a future date at a price (in U.S. dollars) set at the time of the contract. The Fund does not engage in "cross-currency" foreign exchange contracts (i.e., contracts to purchase or sell one foreign currency in exchange for another foreign currency). The Fund's foreign exchange currency contracts might be considered spot contracts (typically a contract of one week or less) or forward contracts (typically a contract term over one week). A spot contract is entered into for purposes of hedging against foreign currency fluctuations relating to a specific portfolio transaction, such as the delay between a security transaction trade date and settlement date. Forward contracts are entered into for purposes of hedging portfolio holdings or concentrations of such holdings. Each foreign exchange currency contract is adjusted daily by the prevailing spot or forward rate of the underlying currency, and any appreciation or depreciation is recorded for financial statement purposes as unrealized until the contract settlement date, at which time the Fund records realized gains or losses equal to the difference between the value of a contract at the time it was opened and the value at the time it was closed. The Fund could be exposed to risk if a counterparty is unable to meet the terms of a foreign exchange currency contract or if the value of the foreign currency changes unfavorably. In addition, the use of foreign exchange currency contracts does not eliminate fluctuations in the underlying prices of the securities. As of November 30, 2021, the Fund had no open forward foreign exchange currency contracts.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio
34
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of November 30, 2021.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 68,272 | $ | — | $ | 72,198 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as Net realized gains (losses) from investment securities and foreign currency translations on the Statement of Operations.
Foreign Taxes:
The Fund may be subject to foreign taxes related to foreign income received (a portion of which may be reclaimable), capital gains on the sale of securities, and certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
35
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, printing fees, and 12b-1 fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$505,811 | $737,310 |
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi-annual reports may be viewed at vcm.com. As of November 30, 2021, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 0.3 | ||||||
USAA Cornerstone Equity Fund | 1.1 | ||||||
USAA Target Retirement Income Fund | 0.0 | (a) | |||||
USAA Target Retirement 2040 Fund | 0.0 | (a) | |||||
USAA Target Retirement 2050 Fund | 0.0 | (a) | |||||
USAA Target Retirement 2060 Fund | 0.0 | (a) |
(a) Amount is less than 0.05%.
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.75% of the Fund's average daily net assets. Amounts incurred and paid to VCM for the six months ended November 30, 2021, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019,
36
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and calculated monthly by comparing each class' performance to that of the Lipper International Funds Index. The Lipper International Funds Index tracks the total return performance of the largest funds within the Lipper International Funds category.
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper International Funds Index over that period, even if the class has overall negative returns during the performance period.
For the period June 1, 2021 to November 30, 2021, performance adjustments were $(353), $(366), $(1), and $(1) for Fund Shares, Institutional Shares, Class A, and Class R6, in thousands, respectively. Performance adjustments were (0.04)%, (0.05)%, (0.27)%, and (0.62)% for Fund Shares, Institutional Shares, Class A, and Class R6, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets.
VCM entered into an Investment Subadvisory Agreement with Wellington Management Company LLP ("Wellington Management"). Wellington Management directs the investment and reinvestment of a portion of the Fund's assets (as allocated from time to time by VCM). This arrangement provides for monthly fees that are paid by VCM. VCM (not the Fund) pays the subadviser fees.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.15%, 0.10%, 0.15%, and 0.05%, of average daily net assets of the Fund Shares, Institutional Shares, Class A, and Class R6, respectively. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Administration fees.
37
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. The funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund Shares based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares, Class A, and Class R6 are paid monthly based on a fee accrued daily at an annualized rate of 0.10%, 0.10%, and 0.01%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred and paid to VCTA for the six months ended November 30, 2021, are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.
Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, up to an annual rate of 0.25% of the average daily net assets of Class A. The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A. Amounts incurred and paid to the Distributor for the six months ended November 30, 2021, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions on sales of Class A. For the six months ended November 30, 2021, the Distributor did not receive any commissions.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any
38
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of November 30, 2021, the expense limits (excluding voluntary waivers) were 1.06%, 0.99%, 1.35%, and 0.85% for Fund Shares, Institutional Shares, Class A, and Class R6, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of November 30, 2021, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that repayments are not probable at November 30, 2021.
Expires 2023 | Expires 2024 | Expires 2025 | Total | ||||||||||||
$ | 91 | $ | 446 | $ | 47 | $ | 584 |
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six months ended November 30, 2021.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Market Risk — Overall stock market risks may affect the value of the Fund. Domestic and international factors such as political events, war, trade disputes, interest rate levels and other fiscal and monetary policy changes, pandemics and other public health crises, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods, may add to instability in world economies and markets generally. The impact of these and other factors may be short-term or may last for extended periods.
Equity Risk — The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or last for extended periods.
Foreign Securities Risk — Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market.
39
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is presented on the Statement of Operations under Interfund lending fees.
The average borrowing or lending for the days outstanding and average interest rate for the Fund that utilized this Facility during the six months ended November 30, 2021, were as follows (amounts in thousands):
Borrower or Lender | Amount Outstanding at November 30, 2021 | Average Borrowing* | Days Borrowing Outstanding | Average Interest Rate* | Maximum Borrowing During the Period | ||||||||||||||||||
Borrower | $ | — | $ | 1,150 | 3 | 0.55 | % | $ | 1,150 |
* For the six months ended November 30, 2021, based on the number of days borrowings were outstanding.
8. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in
40
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had no capital loss carryforwards, for the federal income tax purposes.
41
USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21- 11/30/21* | Hypothetical Expenses Paid During Period 6/1/21- 11/30/21* | Annualized Expense Ratio During Period 6/1/21- 11/30/21 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 977.90 | $ | 1,020.05 | $ | 4.96 | $ | 5.06 | 1.00 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 978.20 | 1,020.36 | 4.66 | 4.76 | 0.94 | % | ||||||||||||||||||||
Class A | 1,000.00 | 977.40 | 1,019.65 | 5.35 | 5.47 | 1.08 | % | ||||||||||||||||||||
Class R6 | 1,000.00 | 985.20 | 1,023.92 | 1.14 | 1.17 | 0.23 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
42
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
23410-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA Sustainable World Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 25 | ||||||
Statement of Operations | 26 | ||||||
Statements of Changes in Net Assets | 27 | ||||||
Financial Highlights | 30 | ||||||
Notes to Financial Statements | 32 | ||||||
Supplemental Information | 41 | ||||||
Proxy Voting and Portfolio Holdings Information | 41 | ||||||
Expense Examples | 41 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA Sustainable World Fund | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks capital appreciation.
Top 10 Sectors:
November 30, 2021
(% of Net Assets)
Information Technology | 24.5 | % | |||||
Financials | 14.1 | % | |||||
Consumer Discretionary | 12.3 | % | |||||
Health Care | 12.1 | % | |||||
Industrials | 9.4 | % | |||||
Communication Services | 8.0 | % | |||||
Consumer Staples | 6.2 | % | |||||
Materials | 4.4 | % | |||||
Energy | 3.2 | % | |||||
Utilities | 2.4 | % |
Country Allocation:
November 30, 2021
(% of Net Assets)
* Includes countries with less than 3.0% of portfolio and short-term investments purchased with cash collateral from securities loaned.
Percentages are of the net assets of the Fund and may not equal 100%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Common Stocks (98.3%) | |||||||||||
Australia (2.1%): | |||||||||||
Consumer Discretionary (0.6%): | |||||||||||
Aristocrat Leisure Ltd. | 283,417 | $ | 8,807 | ||||||||
Lovisa Holdings Ltd. | 39,845 | 579 | |||||||||
PWR Holdings Ltd. | 69,861 | 443 | |||||||||
9,829 | |||||||||||
Energy (0.0%): (a) | |||||||||||
Santos Ltd. | 62,608 | 282 | |||||||||
Woodside Petroleum Ltd. | 23,172 | 352 | |||||||||
634 | |||||||||||
Financials (0.6%): | |||||||||||
Australia & New Zealand Banking Group Ltd. | 45,274 | 855 | |||||||||
Macquarie Group Ltd. | 53,945 | 7,511 | |||||||||
8,366 | |||||||||||
Health Care (0.7%): | |||||||||||
CSL Ltd. | 44,779 | 9,735 | |||||||||
Nanosonics Ltd. (b) | 86,965 | 335 | |||||||||
Sonic Healthcare Ltd. | 14,791 | 447 | |||||||||
10,517 | |||||||||||
Industrials (0.0%): (a) | |||||||||||
Austal Ltd. | 248,175 | 321 | |||||||||
Johns Lyng Group Ltd. | 97,070 | 513 | |||||||||
834 | |||||||||||
Materials (0.1%): | |||||||||||
Ramelius Resources Ltd. (c) | 412,835 | 464 | |||||||||
Rio Tinto Ltd. | 9,785 | 649 | |||||||||
1,113 | |||||||||||
Real Estate (0.1%): | |||||||||||
Charter Hall Group | 38,542 | 524 | |||||||||
Stockland | 139,760 | 431 | |||||||||
955 | |||||||||||
32,248 | |||||||||||
Austria (0.0%): (a) | |||||||||||
Financials (0.0%): | |||||||||||
Raiffeisen Bank International AG | 9,118 | 271 | |||||||||
Industrials (0.0%): | |||||||||||
ANDRITZ AG | 8,461 | 404 | |||||||||
675 | |||||||||||
Belgium (0.5%): | |||||||||||
Financials (0.1%): | |||||||||||
KBC Group NV | 4,933 | 414 |
See notes to financial statements.
3
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Information Technology (0.4%): | |||||||||||
Melexis NV | 54,771 | $ | 6,377 | ||||||||
6,791 | |||||||||||
Bermuda (0.4%): | |||||||||||
Industrials (0.4%): | |||||||||||
Triton International Ltd. | 101,709 | 5,693 | |||||||||
Brazil (0.2%): | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Vibra Energia SA (b) | 238,500 | 923 | |||||||||
Consumer Staples (0.1%): | |||||||||||
Sendas Distribuidora SA | 172,322 | 391 | |||||||||
SLC Agricola SA | 60,600 | 414 | |||||||||
805 | |||||||||||
Financials (0.0%): (a) | |||||||||||
Itau Unibanco Holding SA, ADR | 152,421 | 598 | |||||||||
Industrials (0.0%): (a) | |||||||||||
Randon SA Implementos e Participacoes Preference Shares | 172,800 | 340 | |||||||||
SIMPAR SA | 156,100 | 293 | |||||||||
633 | |||||||||||
Materials (0.0%): (a) | |||||||||||
Dexco SA | 141,900 | 455 | |||||||||
3,414 | |||||||||||
Canada (3.4%): | |||||||||||
Consumer Discretionary (0.3%): | |||||||||||
Lululemon Athletica, Inc. (b) | 9,622 | 4,373 | |||||||||
Consumer Staples (0.6%): | |||||||||||
Alimentation Couche-Tard, Inc. Class B (c) | 263,834 | 9,667 | |||||||||
Energy (0.4%): | |||||||||||
Parex Resources, Inc. (c) | 351,461 | 5,635 | |||||||||
Industrials (0.5%): | |||||||||||
Canadian Pacific Railway Ltd. (c) | 102,591 | 7,180 | |||||||||
Savaria Corp. | 19,253 | 280 | |||||||||
7,460 | |||||||||||
Information Technology (1.0%): | |||||||||||
Constellation Software, Inc. | 7,166 | 12,195 | |||||||||
Shopify, Inc. Class A (b) | 2,217 | 3,374 | |||||||||
15,569 | |||||||||||
Materials (0.6%): | |||||||||||
Kirkland Lake Gold Ltd. | 214,120 | 8,467 | |||||||||
Wesdome Gold Mines Ltd. (b) | 60,276 | 590 | |||||||||
9,057 | |||||||||||
51,761 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Chile (0.0%): (a) | |||||||||||
Financials (0.0%): | |||||||||||
Banco de Chile | 5,791,022 | $ | 560 | ||||||||
China (3.7%): | |||||||||||
Communication Services (1.3%): | |||||||||||
Baidu, Inc., ADR (b) | 32,815 | 4,917 | |||||||||
NetEase, Inc., ADR | 13,640 | 1,469 | |||||||||
Tencent Holdings Ltd. | 228,700 | 13,338 | |||||||||
19,724 | |||||||||||
Consumer Discretionary (0.5%): | |||||||||||
Alibaba Group Holding Ltd., ADR (b) | 21,669 | 2,763 | |||||||||
BYD Co. Ltd. Class H | 16,500 | 649 | |||||||||
Fuyao Glass Industry Group Co. Ltd. Class H (d) | 104,400 | 573 | |||||||||
JD.com, Inc., ADR (b) | 20,649 | 1,737 | |||||||||
Jiumaojiu International Holdings Ltd. (d) | 194,000 | 401 | |||||||||
Meituan Class B (b) (d) | 26,400 | 802 | |||||||||
Topsports International Holdings Ltd. (d) | 403,000 | 469 | |||||||||
7,394 | |||||||||||
Consumer Staples (0.5%): | |||||||||||
China Feihe Ltd. (d) | 262,000 | 351 | |||||||||
Foshan Haitan Flavouring & Food Co. Ltd. Class A | 364,416 | 6,431 | |||||||||
Inner Mongolia Yili Industrial Group Co. Ltd. Class A | 96,300 | 591 | |||||||||
7,373 | |||||||||||
Financials (0.7%): | |||||||||||
China Merchants Bank Co. Ltd. Class H | 212,000 | 1,643 | |||||||||
Industrial & Commercial Bank of China Ltd. Class H | 15,990,370 | 8,450 | |||||||||
Postal Savings Bank of China Co. Ltd. Class H (d) | 1,494,000 | 1,012 | |||||||||
11,105 | |||||||||||
Health Care (0.2%): | |||||||||||
Hygeia Healthcare Holdings Co. Ltd. (d) | 69,400 | 536 | |||||||||
Pharmaron Beijing Co. Ltd. Class H (d) | 28,800 | 594 | |||||||||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd. Class A | 11,000 | 622 | |||||||||
Wuxi Biologics Cayman, Inc. (b) (d) | 72,000 | 971 | |||||||||
2,723 | |||||||||||
Industrials (0.1%): | |||||||||||
China Railway Group Ltd. Class H | 1,501,000 | 714 | |||||||||
Xinte Energy Co. Ltd. Class H | 218,000 | 497 | |||||||||
Zhefu Holding Group Co. Ltd. Class A | 518,600 | 545 | |||||||||
1,756 | |||||||||||
Information Technology (0.2%): | |||||||||||
Chinasoft International Ltd. | 752,000 | 1,250 | |||||||||
Luxshare Precision Industry Co. Ltd. Class A | 80,200 | 498 | |||||||||
WUS Printed Circuit Kunshan Co. Ltd. Class A | 320,430 | 765 | |||||||||
Yonyou Network Technology Co. Ltd. Class A | 94,075 | 481 | |||||||||
2,994 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Materials (0.1%): | |||||||||||
China Hongqiao Group Ltd. | 658,500 | $ | 637 | ||||||||
Wanhua Chemical Group Co. Ltd. Class A | 55,300 | 828 | |||||||||
1,465 | |||||||||||
Real Estate (0.0%): (a) | |||||||||||
Shimao Services Holdings Ltd. (d) | 475,000 | 587 | |||||||||
Utilities (0.1%): | |||||||||||
China Longyuan Power Group Corp. Ltd. Class H | 346,000 | 707 | |||||||||
55,828 | |||||||||||
Denmark (0.7%): | |||||||||||
Consumer Discretionary (0.0%): (a) | |||||||||||
Pandora A/S | 2,907 | 362 | |||||||||
Consumer Staples (0.5%): | |||||||||||
Carlsberg A/S Class B | 4,007 | 622 | |||||||||
Royal Unibrew A/S | 67,382 | 7,183 | |||||||||
7,805 | |||||||||||
Health Care (0.1%): | |||||||||||
Novo Nordisk A/S Class B | 8,814 | 943 | |||||||||
Industrials (0.1%): | |||||||||||
AP Moller — Maersk A/S Class B | 251 | 756 | |||||||||
INVISIO AB | 15,234 | 264 | |||||||||
1,020 | |||||||||||
Utilities (0.0%): (a) | |||||||||||
Orsted A/S (d) | 2,318 | 298 | |||||||||
10,428 | |||||||||||
Finland (0.0%): (a) | |||||||||||
Industrials (0.0%): | |||||||||||
Metso Outotec Oyj | 55,295 | 557 | |||||||||
France (2.7%): | |||||||||||
Communication Services (0.0%): (a) | |||||||||||
Publicis Groupe SA | 8,979 | 581 | |||||||||
Consumer Discretionary (0.6%): | |||||||||||
La Francaise des Jeux SAEM (d) | 157,393 | 7,289 | |||||||||
LVMH Moet Hennessy Louis Vuitton SE | 1,861 | 1,447 | |||||||||
8,736 | |||||||||||
Consumer Staples (0.0%): (a) | |||||||||||
Pernod Ricard SA (c) | 2,984 | 685 | |||||||||
Energy (0.3%): | |||||||||||
Gaztransport Et Technigaz SA | 50,126 | 4,020 | |||||||||
TotalEnergies SE | 16,733 | 770 | |||||||||
4,790 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Financials (0.1%): | |||||||||||
Amundi SA (d) | 3,648 | $ | 303 | ||||||||
AXA SA | 24,106 | 663 | |||||||||
BNP Paribas SA | 10,608 | 659 | |||||||||
1,625 | |||||||||||
Health Care (0.1%): | |||||||||||
Pharmagest Interactive | 2,628 | 255 | |||||||||
Sanofi | 6,822 | 648 | |||||||||
Sartorius Stedim Biotech | 663 | 391 | |||||||||
Vetoquinol SA | 2,414 | 361 | |||||||||
1,655 | |||||||||||
Industrials (0.7%): | |||||||||||
Cie de Saint-Gobain | 11,045 | 700 | |||||||||
Eiffage SA | 3,678 | 343 | |||||||||
Safran SA | 69,883 | 7,805 | |||||||||
Teleperformance | 1,182 | 486 | |||||||||
Thermador Groupe | 4,487 | 476 | |||||||||
9,810 | |||||||||||
Information Technology (0.2%): | |||||||||||
Capgemini SE | 3,528 | 815 | |||||||||
Edenred | 7,232 | 324 | |||||||||
Esker SA | 2,648 | 1,041 | |||||||||
Lectra | 8,890 | 388 | |||||||||
2,568 | |||||||||||
Materials (0.7%): | |||||||||||
Arkema SA | 79,552 | 10,430 | |||||||||
40,880 | |||||||||||
Germany (1.2%): | |||||||||||
Communication Services (0.1%): | |||||||||||
Deutsche Telekom AG | 43,429 | 765 | |||||||||
Consumer Discretionary (0.5%): | |||||||||||
Volkswagen AG Preference Shares | 37,880 | 6,920 | |||||||||
Energy (0.0%): (a) | |||||||||||
VERBIO Vereinigte BioEnergie AG (c) | 7,088 | 548 | |||||||||
Financials (0.1%): | |||||||||||
Allianz SE Registered Shares | 2,813 | 610 | |||||||||
Hannover Rueck SE | 1,652 | 289 | |||||||||
Muenchener Rueckversicherungs-Gesellschaft AG Class R | 975 | 262 | |||||||||
1,161 | |||||||||||
Health Care (0.1%): | |||||||||||
Eckert & Ziegler Strahlen- und Medizintechnik AG | 2,750 | 303 | |||||||||
Merck KGaA | 3,570 | 882 | |||||||||
Nexus AG | 4,466 | 365 | |||||||||
1,550 |
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Industrials (0.1%): | |||||||||||
2G Energy AG | 2,978 | $ | 360 | ||||||||
Amadeus Fire AG | 1,977 | 406 | |||||||||
Deutsche Post AG Registered Shares | 14,821 | 875 | |||||||||
Siemens AG Registered Shares | 2,839 | 453 | |||||||||
2,094 | |||||||||||
Information Technology (0.2%): | |||||||||||
AIXTRON SE | 13,296 | 267 | |||||||||
Basler AG | 4,173 | 695 | |||||||||
Infineon Technologies AG | 12,367 | 559 | |||||||||
LPKF Laser & Electronics AG (c) | 10,544 | 209 | |||||||||
PVA TePla AG (b) | 12,535 | 609 | |||||||||
SAP SE | 3,481 | 446 | |||||||||
Secunet Security Networks AG | 973 | 458 | |||||||||
3,243 | |||||||||||
Materials (0.1%): | |||||||||||
Covestro AG (d) | 9,851 | 556 | |||||||||
HeidelbergCement AG | 3,555 | 236 | |||||||||
792 | |||||||||||
Real Estate (0.0%): (a) | |||||||||||
LEG Immobilien SE | 2,878 | 403 | |||||||||
Utilities (0.0%): (a) | |||||||||||
E.ON SE | 53,555 | 661 | |||||||||
18,137 | |||||||||||
Greece (0.1%): | |||||||||||
Financials (0.1%): | |||||||||||
National Bank of Greece SA (b) | 192,036 | 572 | |||||||||
Industrials (0.0%): (a) | |||||||||||
Mytilineos SA | 32,803 | 537 | |||||||||
1,109 | |||||||||||
Hong Kong (0.3%): | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Bosideng International Holdings Ltd. | 938,000 | 660 | |||||||||
Chow Tai Fook Jewellery Group Ltd. | 171,800 | 307 | |||||||||
JS Global Lifestyle Co. Ltd. (d) | 259,000 | 509 | |||||||||
1,476 | |||||||||||
Consumer Staples (0.0%): (a) | |||||||||||
WH Group Ltd. (d) | 306,735 | 193 | |||||||||
Financials (0.1%): | |||||||||||
BOC Hong Kong Holdings Ltd. | 255,500 | 772 | |||||||||
Industrials (0.0%): (a) | |||||||||||
Pacific Basin Shipping Ltd. | 1,622,000 | 616 | |||||||||
Information Technology (0.0%): (a) | |||||||||||
ASM Pacific Technology Ltd. | 54,500 | 571 |
See notes to financial statements.
8
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Real Estate (0.1%): | |||||||||||
China Resources Land Ltd. | 218,000 | $ | 911 | ||||||||
CK Asset Holdings Ltd. | 44,817 | 256 | |||||||||
Sun Hung Kai Properties Ltd. | 29,909 | 364 | |||||||||
1,531 | |||||||||||
5,159 | |||||||||||
India (0.7%): | |||||||||||
Consumer Discretionary (0.0%): (a) | |||||||||||
Balkrishna Industries Ltd. | 25,522 | 738 | |||||||||
Energy (0.1%): | |||||||||||
Hindustan Petroleum Corp. Ltd. | 250,372 | 984 | |||||||||
Financials (0.1%): | |||||||||||
Cholamandalam Investment & Finance Co. Ltd. | 101,134 | 740 | |||||||||
Federal Bank Ltd. | 658,112 | 759 | |||||||||
UTI Asset Management Co. Ltd. | 47,808 | 698 | |||||||||
2,197 | |||||||||||
Health Care (0.1%): | |||||||||||
Apollo Hospitals Enterprise Ltd. | 12,278 | 928 | |||||||||
Dr Reddy's Laboratories Ltd. | 9,959 | 621 | |||||||||
1,549 | |||||||||||
Industrials (0.1%): | |||||||||||
Larsen & Toubro Ltd. | 40,435 | 951 | |||||||||
Information Technology (0.2%): | |||||||||||
Infosys Ltd., ADR | 106,316 | 2,401 | |||||||||
WNS Holdings Ltd., ADR (b) | 6,049 | 508 | |||||||||
2,909 | |||||||||||
Materials (0.1%): | |||||||||||
Dalmia Bharat Ltd. | 25,344 | 631 | |||||||||
Tata Steel Ltd. | 51,272 | 728 | |||||||||
1,359 | |||||||||||
10,687 | |||||||||||
Indonesia (0.7%): | |||||||||||
Communication Services (0.7%): | |||||||||||
PT Telkom Indonesia Persero Tbk | 38,676,638 | 10,770 | |||||||||
Ireland (1.1%): | |||||||||||
Health Care (0.1%): | |||||||||||
ICON PLC (b) | 3,592 | 972 | |||||||||
Industrials (1.0%): | |||||||||||
DCC PLC | 7,848 | 578 | |||||||||
Eaton Corp. PLC | 86,357 | 13,995 | |||||||||
Johnson Controls International PLC | 15,400 | 1,151 | |||||||||
15,724 | |||||||||||
16,696 |
See notes to financial statements.
9
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Israel (0.2%): | |||||||||||
Industrials (0.1%): | |||||||||||
Kornit Digital Ltd. (b) | 11,199 | $ | 1,735 | ||||||||
Information Technology (0.1%): | |||||||||||
Allot Ltd. (b) | 23,173 | 262 | |||||||||
Check Point Software Technologies Ltd. (b) | 3,148 | 350 | |||||||||
612 | |||||||||||
2,347 | |||||||||||
Italy (1.7%): | |||||||||||
Health Care (0.6%): | |||||||||||
El.En. SpA | 55,528 | 953 | |||||||||
Recordati Industria Chimica e Farmaceutica SpA | 131,246 | 8,234 | |||||||||
9,187 | |||||||||||
Industrials (0.0%): (a) | |||||||||||
Leonardo SpA (b) | 39,768 | 269 | |||||||||
Information Technology (0.1%): | |||||||||||
Nexi SpA (b) (c) (d) | 22,141 | 339 | |||||||||
Sesa SpA | 4,257 | 846 | |||||||||
1,185 | |||||||||||
Utilities (1.0%): | |||||||||||
ACEA SpA | 18,438 | 375 | |||||||||
Enel SpA | 811,208 | 6,146 | |||||||||
Snam SpA | 1,359,132 | 7,659 | |||||||||
14,180 | |||||||||||
24,821 | |||||||||||
Japan (5.9%): | |||||||||||
Communication Services (1.0%): | |||||||||||
Capcom Co. Ltd. | 243,708 | 6,067 | |||||||||
Kakaku.com, Inc. | 227,591 | 6,360 | |||||||||
KDDI Corp. | 20,349 | 591 | |||||||||
Nippon Telegraph & Telephone Corp. | 22,434 | 617 | |||||||||
SoftBank Group Corp. | 3,206 | 168 | |||||||||
ValueCommerce Co. Ltd. | 11,200 | 446 | |||||||||
ZIGExN Co. Ltd. | 71,700 | 195 | |||||||||
14,444 | |||||||||||
Consumer Discretionary (0.8%): | |||||||||||
Arcland Service Holdings Co. Ltd. (c) | 13,900 | 276 | |||||||||
Shoei Co. Ltd. | 13,100 | 554 | |||||||||
Sony Group Corp. | 21,751 | 2,654 | |||||||||
The Furukawa Battery Co. Ltd. (c) | 18,300 | 236 | |||||||||
Toyo Tire Corp. | 19,709 | 299 | |||||||||
Toyota Motor Corp. | 71,800 | 1,274 | |||||||||
ZOZO, Inc. | 228,000 | 7,227 | |||||||||
12,520 |
See notes to financial statements.
10
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Consumer Staples (0.4%): | |||||||||||
Ajinomoto Co., Inc. | 16,800 | $ | 504 | ||||||||
Asahi Group Holdings Ltd. | 10,391 | 383 | |||||||||
Create SD Holdings Co. Ltd. (c) | 6,300 | 173 | |||||||||
Seven & i Holdings Co. Ltd. | 8,316 | 335 | |||||||||
Toyo Suisan Kaisha Ltd. | 98,649 | 3,993 | |||||||||
5,388 | |||||||||||
Financials (0.9%): | |||||||||||
JAFCO Group Co. Ltd. | 65,331 | 4,083 | |||||||||
Mitsubishi UFJ Financial Group, Inc. | 1,505,212 | 7,951 | |||||||||
Mizuho Financial Group, Inc. | 41,611 | 513 | |||||||||
Nomura Holdings, Inc. | 59,472 | 249 | |||||||||
ORIX Corp. | 48,374 | 953 | |||||||||
Sumitomo Mitsui Financial Group, Inc. | 15,475 | 503 | |||||||||
14,252 | |||||||||||
Health Care (0.6%): | |||||||||||
BML, Inc. | 10,700 | 333 | |||||||||
Hoya Corp. | 53,302 | 8,438 | |||||||||
Japan Medical Dynamic Marketing, Inc. | 17,700 | 301 | |||||||||
Otsuka Holdings Co. Ltd. | 8,400 | 304 | |||||||||
9,376 | |||||||||||
Industrials (1.2%): | |||||||||||
AGC, Inc. | 9,700 | 472 | |||||||||
Altech Corp. | 14,900 | 246 | |||||||||
Denyo Co. Ltd. | 14,700 | 214 | |||||||||
Fuji Electric Co. Ltd. | 71,100 | 3,702 | |||||||||
gremz, Inc. | 15,200 | 338 | |||||||||
Hitachi Ltd. | 13,145 | 770 | |||||||||
ITOCHU Corp. | 29,709 | 850 | |||||||||
JAC Recruitment Co. Ltd. | 15,100 | 264 | |||||||||
Komatsu Ltd. | 12,900 | 292 | |||||||||
Maeda Kosen Co. Ltd. | 13,900 | 431 | |||||||||
Mirait Holdings Corp. | 16,400 | 284 | |||||||||
Mitsubishi Electric Corp. | 26,101 | 326 | |||||||||
Mitsui & Co. Ltd. | 26,320 | 592 | |||||||||
Nippon Yusen | 122,654 | 7,945 | |||||||||
Rheon Automatic Machinery Co. Ltd. | 22,400 | 258 | |||||||||
S-Pool, Inc. | 98,800 | 1,102 | |||||||||
Yamato Holdings Co. Ltd. | 13,061 | 288 | |||||||||
18,374 | |||||||||||
Information Technology (0.8%): | |||||||||||
Canon, Inc. | 16,000 | 352 | |||||||||
Comture Corp. | 14,400 | 447 | |||||||||
Digital Arts, Inc. | 3,700 | 305 | |||||||||
Double Standard, Inc. | 7,400 | 243 | |||||||||
Fujitsu Ltd. | 4,159 | 687 | |||||||||
Fukui Computer Holdings, Inc. | 14,900 | 501 | |||||||||
Future Corp. | 14,900 | 531 |
See notes to financial statements.
11
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Murata Manufacturing Co. Ltd. | 4,941 | $ | 363 | ||||||||
NTT Data Corp. | 23,661 | 499 | |||||||||
SHIFT, Inc. (b) | 3,000 | 662 | |||||||||
Softcreate Holdings Corp. | 11,200 | 431 | |||||||||
TechMatrix Corp. | 15,700 | 269 | |||||||||
Tokyo Electron Ltd. | 1,901 | 999 | |||||||||
Ulvac, Inc. | 94,482 | 5,392 | |||||||||
V Technology Co. Ltd. | 7,200 | 217 | |||||||||
11,898 | |||||||||||
Materials (0.1%): | |||||||||||
Rengo Co. Ltd. | 35,286 | 237 | |||||||||
Shin-Etsu Chemical Co. Ltd. | 2,243 | 374 | |||||||||
Tosoh Corp. | 19,182 | 274 | |||||||||
885 | |||||||||||
Real Estate (0.1%): | |||||||||||
Daiwa House Industry Co. Ltd. | 14,572 | 423 | |||||||||
Open House Co. Ltd. | 7,991 | 453 | |||||||||
876 | |||||||||||
Utilities (0.0%): (a) | |||||||||||
Osaka Gas Co. Ltd. | 18,537 | 298 | |||||||||
88,311 | |||||||||||
Korea, Republic Of (1.8%): | |||||||||||
Communication Services (0.1%): | |||||||||||
LG Uplus Corp. | 78,675 | 896 | |||||||||
NAVER Corp. | 2,825 | 902 | |||||||||
1,798 | |||||||||||
Consumer Discretionary (0.1%): | |||||||||||
Hanon Systems | 56,742 | 618 | |||||||||
Financials (0.2%): | |||||||||||
DB Insurance Co. Ltd. | 12,609 | 572 | |||||||||
Hana Financial Group, Inc. | 25,584 | 850 | |||||||||
Samsung Securities Co. Ltd. | 16,707 | 622 | |||||||||
Woori Financial Group, Inc. | 105,302 | 1,115 | |||||||||
3,159 | |||||||||||
Health Care (0.1%): | |||||||||||
Hugel, Inc. (b) | 3,011 | 359 | |||||||||
InBody Co. Ltd. | 14,096 | 261 | |||||||||
Samsung Biologics Co. Ltd. (b) (d) | 813 | 610 | |||||||||
1,230 | |||||||||||
Industrials (0.1%): | |||||||||||
CJ Corp. | 5,919 | 398 | |||||||||
Hyundai Engineering & Construction Co. Ltd. | 12,917 | 480 | |||||||||
LG Corp. | 6,837 | 453 | |||||||||
Samsung Engineering Co. Ltd. (b) | 34,995 | 611 | |||||||||
1,942 |
See notes to financial statements.
12
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Information Technology (1.1%): | |||||||||||
Innox Advanced Materials Co. Ltd. (b) | 15,830 | $ | 504 | ||||||||
Samsung Electronics Co. Ltd. | 272,682 | 16,371 | |||||||||
16,875 | |||||||||||
Materials (0.1%): | |||||||||||
Kolon Industries, Inc. | 7,017 | 417 | |||||||||
PI Advanced Materials Co. Ltd. | 15,369 | 597 | |||||||||
1,014 | |||||||||||
26,636 | |||||||||||
Luxembourg (0.1%): | |||||||||||
Energy (0.0%): (a) | |||||||||||
Tenaris SA | 38,907 | 381 | |||||||||
Materials (0.1%): | |||||||||||
ArcelorMittal SA | 14,726 | 400 | |||||||||
781 | |||||||||||
Malaysia (0.1%): | |||||||||||
Consumer Discretionary (0.0%): (a) | |||||||||||
MR DIY Group M Bhd (d) | 758,600 | 635 | |||||||||
Financials (0.1%): | |||||||||||
Public Bank Bhd | 709,900 | 665 | |||||||||
1,300 | |||||||||||
Mexico (0.2%): | |||||||||||
Consumer Discretionary (0.0%): (a) | |||||||||||
Alsea SAB de CV (b) | 275,324 | 471 | |||||||||
Financials (0.1%): | |||||||||||
Grupo Financiero Banorte SAB de CV Class O | 148,503 | 888 | |||||||||
Materials (0.1%): | |||||||||||
Cemex SAB de CV, ADR (b) | 120,064 | 738 | |||||||||
Real Estate (0.0%): (a) | |||||||||||
Corp Inmobiliaria Vesta SAB de CV | 321,642 | 550 | |||||||||
2,647 | |||||||||||
Netherlands (0.9%): | |||||||||||
Consumer Staples (0.1%): | |||||||||||
Koninklijke Ahold Delhaize NV | 27,520 | 926 | |||||||||
Financials (0.1%): | |||||||||||
ING Groep NV | 28,514 | 394 | |||||||||
NN Group NV | 9,811 | 487 | |||||||||
881 | |||||||||||
Health Care (0.0%): (a) | |||||||||||
Pharming Group NV (b) (c) | 255,818 | 205 | |||||||||
QIAGEN NV (b) | 7,027 | 388 | |||||||||
593 |
See notes to financial statements.
13
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Information Technology (0.7%): | |||||||||||
ASM International NV | 19,981 | $ | 8,981 | ||||||||
ASML Holding NV | 802 | 629 | |||||||||
STMicroelectronics NV | 18,738 | 912 | |||||||||
10,522 | |||||||||||
12,922 | |||||||||||
New Zealand (0.4%): | |||||||||||
Health Care (0.4%): | |||||||||||
Fisher & Paykel Healthcare Corp. Ltd. | 235,231 | 5,321 | |||||||||
Norway (0.8%): | |||||||||||
Energy (0.5%): | |||||||||||
Aker BP ASA | 201,800 | 6,346 | |||||||||
Equinor ASA | 17,321 | 434 | |||||||||
6,780 | |||||||||||
Financials (0.3%): | |||||||||||
SpareBank 1 SMN | 341,023 | 5,200 | |||||||||
11,980 | |||||||||||
Philippines (0.0%): (a) | |||||||||||
Financials (0.0%): | |||||||||||
BDO Unibank, Inc. | 212,880 | 523 | |||||||||
Russian Federation (0.3%): | |||||||||||
Consumer Staples (0.0%): (a) | |||||||||||
Magnit PJSC | 7,278 | 570 | |||||||||
Energy (0.2%): | |||||||||||
Gazprom PJSC | 303,950 | 1,365 | |||||||||
Rosneft Oil Co. PJSC, GDR | 124,892 | 940 | |||||||||
2,305 | |||||||||||
Financials (0.1%): | |||||||||||
Sberbank of Russia PJSC, ADR | 95,533 | 1,615 | |||||||||
4,490 | |||||||||||
Saudi Arabia (0.1%): | |||||||||||
Consumer Discretionary (0.0%): (a) | |||||||||||
Leejam Sports Co. JSC | 22,290 | 621 | |||||||||
Financials (0.1%): | |||||||||||
The Saudi National Bank | 70,444 | 1,133 | |||||||||
1,754 | |||||||||||
Singapore (0.4%): | |||||||||||
Communication Services (0.1%): | |||||||||||
Sea Ltd., ADR (b) | 2,509 | 723 | |||||||||
Consumer Staples (0.0%): (a) | |||||||||||
Wilmar International Ltd. | 162,129 | 486 |
See notes to financial statements.
14
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Financials (0.3%): | |||||||||||
DBS Group Holdings Ltd. | 22,805 | $ | 497 | ||||||||
iFAST Corp. Ltd. | 64,300 | 392 | |||||||||
Singapore Exchange Ltd. | 540,627 | 3,530 | |||||||||
4,419 | |||||||||||
5,628 | |||||||||||
South Africa (0.6%): | |||||||||||
Communication Services (0.1%): | |||||||||||
MTN Group Ltd. (b) | 91,646 | 925 | |||||||||
Consumer Discretionary (0.4%): | |||||||||||
Mr Price Group Ltd. | 527,233 | 6,595 | |||||||||
Financials (0.1%): | |||||||||||
Absa Group Ltd. | 76,430 | 642 | |||||||||
Capitec Bank Holdings Ltd. | 6,293 | 723 | |||||||||
1,365 | |||||||||||
Materials (0.0%): (a) | |||||||||||
Impala Platinum Holdings Ltd. | 61,371 | 769 | |||||||||
9,654 | |||||||||||
Spain (0.6%): | |||||||||||
Consumer Discretionary (0.0%): (a) | |||||||||||
Industria de Diseno Textil SA | 11,350 | 359 | |||||||||
Financials (0.5%): | |||||||||||
Banco Bilbao Vizcaya Argentaria SA | 1,250,936 | 6,632 | |||||||||
Banco Santander SA | 85,620 | 266 | |||||||||
6,898 | |||||||||||
Information Technology (0.0%): (a) | |||||||||||
Global Dominion Access SA (d) | 57,640 | 286 | |||||||||
Utilities (0.1%): | |||||||||||
Acciona SA | 2,474 | 441 | |||||||||
EDP Renovaveis SA | 18,982 | 488 | |||||||||
929 | |||||||||||
8,472 | |||||||||||
Sweden (1.5%): | |||||||||||
Consumer Discretionary (0.0%): (a) | |||||||||||
Boozt AB (b) (d) | 17,110 | 326 | |||||||||
Consumer Staples (0.0%): (a) | |||||||||||
Swedish Match AB | 72,736 | 531 | |||||||||
Financials (0.1%): | |||||||||||
Skandinaviska Enskilda Banken AB Class A | 37,029 | 539 | |||||||||
Health Care (0.2%): | |||||||||||
BioGaia AB B Shares | 7,645 | 435 | |||||||||
Biotage AB | 15,338 | 462 | |||||||||
Getinge AB B Shares | 9,943 | 417 |
See notes to financial statements.
15
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Sectra AB Class B (b) | 27,530 | $ | 685 | ||||||||
SwedenCare AB | 31,721 | 513 | |||||||||
Xvivo Perfusion AB (b) | 9,235 | 305 | |||||||||
2,817 | |||||||||||
Industrials (1.2%): | |||||||||||
Atlas Copco AB Class B | 181,562 | 9,436 | |||||||||
BTS Group AB B Shares | 10,552 | 482 | |||||||||
CTT Systems AB | 14,634 | 370 | |||||||||
Eolus Vind AB Class B | 18,355 | 269 | |||||||||
GARO AB | 27,790 | 686 | |||||||||
Hexatronic Group AB | 9,195 | 512 | |||||||||
Nibe Industrier AB Class B | 368,452 | 5,255 | |||||||||
Sandvik AB | 22,154 | 547 | |||||||||
Volvo AB Class B | 19,116 | 412 | |||||||||
17,969 | |||||||||||
Information Technology (0.0%): (a) | |||||||||||
Telefonaktiebolaget LM Ericsson Class B | 35,412 | 356 | |||||||||
Materials (0.0%): (a) | |||||||||||
Boliden AB | 13,909 | 480 | |||||||||
23,018 | |||||||||||
Switzerland (2.5%): | |||||||||||
Consumer Discretionary (0.0%): (a) | |||||||||||
Cie Financiere Richemont SA Registered Shares | 4,317 | 643 | |||||||||
Consumer Staples (0.1%): | |||||||||||
Coca-Cola HBC AG | 11,095 | 342 | |||||||||
Nestle SA Registered Shares | 11,175 | 1,432 | |||||||||
1,774 | |||||||||||
Financials (0.6%): | |||||||||||
Julius Baer Group Ltd. | 8,099 | 503 | |||||||||
Partners Group Holding AG | 4,215 | 7,276 | |||||||||
Swiss Life Holding AG | 2,250 | 1,291 | |||||||||
UBS Group AG | 23,675 | 409 | |||||||||
9,479 | |||||||||||
Health Care (1.3%): | |||||||||||
Coltene Holding AG Registered Shares | 4,194 | 463 | |||||||||
Lonza Group AG Registered Shares | 595 | 480 | |||||||||
Novartis AG Registered Shares | 14,206 | 1,132 | |||||||||
Roche Holding AG | 43,132 | 16,842 | |||||||||
Sonova Holding AG | 1,336 | 502 | |||||||||
19,419 | |||||||||||
Industrials (0.3%): | |||||||||||
Adecco Group AG | 83,747 | 3,882 | |||||||||
Kardex Holding AG Registered Shares | 1,944 | 585 | |||||||||
4,467 |
See notes to financial statements.
16
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Information Technology (0.1%): | |||||||||||
Landis+Gyr Group AG | 5,534 | $ | 345 | ||||||||
u-blox Holding AG (b) | 5,743 | 409 | |||||||||
754 | |||||||||||
Materials (0.1%): | |||||||||||
Gurit Holding AG Class BR | 233 | 377 | |||||||||
Holcim Ltd. | 7,726 | 372 | |||||||||
Vetropack Holding AG | 5,570 | 321 | |||||||||
1,070 | |||||||||||
37,606 | |||||||||||
Taiwan (2.0%): | |||||||||||
Financials (0.6%): | |||||||||||
Cathay Financial Holding Co. Ltd. | 3,308,000 | 7,108 | |||||||||
CTBC Financial Holding Co. Ltd. | 1,018,000 | 891 | |||||||||
Yuanta Financial Holding Co. Ltd. | 1,153,000 | 980 | |||||||||
8,979 | |||||||||||
Health Care (0.0%): (a) | |||||||||||
Pegavision Corp. | 30,000 | 487 | |||||||||
Information Technology (1.3%): | |||||||||||
ASE Technology Holding Co. Ltd. | 141,000 | 514 | |||||||||
Hon Hai Precision Industry Co. Ltd. | 228,000 | 845 | |||||||||
Lite-On Technology Corp. | 4,306,000 | 9,311 | |||||||||
MediaTek, Inc. | 43,000 | 1,559 | |||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 361,000 | 7,680 | |||||||||
19,909 | |||||||||||
Materials (0.1%): | |||||||||||
Formosa Plastics Corp. | 184,000 | 675 | |||||||||
30,050 | |||||||||||
Thailand (0.2%): | |||||||||||
Energy (0.1%): | |||||||||||
PTT PCL | 637,900 | 669 | |||||||||
Financials (0.1%): | |||||||||||
The Siam Commercial Bank PCL | 236,100 | 852 | |||||||||
Health Care (0.0%): (a) | |||||||||||
Mega Lifesciences PCL | 373,100 | 585 | |||||||||
Materials (0.0%): (a) | |||||||||||
Indorama Ventures PCL | 497,200 | 577 | |||||||||
Real Estate (0.0%): (a) | |||||||||||
AP Thailand PCL | 2,262,000 | 584 | |||||||||
3,267 | |||||||||||
Turkey (0.1%): | |||||||||||
Communication Services (0.0%): (a) | |||||||||||
Turk Telekomunikasyon A/S | 685,075 | 495 |
See notes to financial statements.
17
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Industrials (0.1%): | |||||||||||
KOC Holding AS | 208,932 | $ | 430 | ||||||||
Turkiye Sise ve Cam Fabrikalari A/S | 669,738 | 611 | |||||||||
1,041 | |||||||||||
1,536 | |||||||||||
United Kingdom (5.3%): | |||||||||||
Communication Services (0.3%): | |||||||||||
4imprint Group PLC | 6,897 | 260 | |||||||||
ITV PLC (b) | 2,267,809 | 3,331 | |||||||||
Team17 Group PLC (b) | 28,650 | 253 | |||||||||
Vodafone Group PLC | 281,310 | 408 | |||||||||
WPP PLC | 26,710 | 371 | |||||||||
4,623 | |||||||||||
Consumer Discretionary (0.7%): | |||||||||||
AB Dynamics PLC | 18,021 | 389 | |||||||||
Aptiv PLC (b) | 15,578 | 2,498 | |||||||||
Barratt Developments PLC | 48,324 | 447 | |||||||||
Focusrite PLC | 42,801 | 907 | |||||||||
Next PLC | 47,460 | 4,957 | |||||||||
Stellantis NV | 61,606 | 1,051 | |||||||||
10,249 | |||||||||||
Consumer Staples (0.5%): | |||||||||||
British American Tobacco PLC | 10,066 | 337 | |||||||||
Imperial Brands PLC | 282,118 | 5,764 | |||||||||
Tesco PLC | 191,891 | 708 | |||||||||
Unilever PLC | 9,454 | 483 | |||||||||
7,292 | |||||||||||
Energy (0.0%): (a) | |||||||||||
BP PLC | 174,413 | 756 | |||||||||
Financials (1.0%): | |||||||||||
3i Group PLC | 46,910 | 861 | |||||||||
Barclays PLC | 195,089 | 476 | |||||||||
Close Brothers Group PLC | 280,719 | 4,811 | |||||||||
CMC Markets PLC (d) | 45,163 | 139 | |||||||||
Intermediate Capital Group PLC | 156,333 | 4,342 | |||||||||
Legal & General Group PLC | 111,078 | 415 | |||||||||
Standard Chartered PLC | 54,858 | 302 | |||||||||
Willis Towers Watson PLC | 16,900 | 3,817 | |||||||||
15,163 | |||||||||||
Health Care (0.1%): | |||||||||||
AstraZeneca PLC | 5,193 | 569 | |||||||||
EKF Diagnostics Holdings PLC | 291,709 | 293 | |||||||||
Hikma Pharmaceuticals PLC | 12,885 | 379 | |||||||||
Tristel PLC (c) | 56,437 | 315 | |||||||||
1,556 |
See notes to financial statements.
18
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Industrials (0.9%): | |||||||||||
Alpha Financial Markets Consulting PLC | 49,436 | $ | 255 | ||||||||
Ashtead Group PLC | 93,818 | 7,546 | |||||||||
BAE Systems PLC | 56,652 | 412 | |||||||||
Bunzl PLC | 10,057 | 383 | |||||||||
Concentric AB | 13,990 | 434 | |||||||||
Ferguson PLC | 2,758 | 420 | |||||||||
Judges Scientific PLC | 5,411 | 562 | |||||||||
Robert Walters PLC | 34,399 | 352 | |||||||||
Royal Mail PLC | 66,561 | 443 | |||||||||
Sensata Technologies Holding PLC | 31,400 | 1,749 | |||||||||
SThree PLC | 103,488 | 715 | |||||||||
Volex PLC | 61,981 | 302 | |||||||||
13,573 | |||||||||||
Information Technology (0.1%): | |||||||||||
GB Group PLC | 24,928 | 253 | |||||||||
Kainos Group PLC | 22,249 | 551 | |||||||||
804 | |||||||||||
Materials (1.7%): | |||||||||||
Anglo American PLC | 49,472 | 1,821 | |||||||||
Croda International PLC | 83,443 | 11,188 | |||||||||
Evraz PLC | 566,872 | 4,321 | |||||||||
Rio Tinto PLC | 113,246 | 6,941 | |||||||||
Treatt PLC | 51,034 | 755 | |||||||||
25,026 | |||||||||||
Real Estate (0.0%): (a) | |||||||||||
Safestore Holdings PLC | 23,146 | 410 | |||||||||
79,452 | |||||||||||
United States (54.8%): | |||||||||||
Communication Services (4.3%): | |||||||||||
Alphabet, Inc. Class C (b) | 11,863 | 33,798 | |||||||||
Alphabet, Inc. Class A (b) | 600 | 1,703 | |||||||||
EverQuote, Inc. Class A (b) | 34,810 | 459 | |||||||||
Meta Platforms, Inc. Class A (b) | 81,865 | 26,562 | |||||||||
Snap, Inc. Class A (b) | 38,602 | 1,838 | |||||||||
64,360 | |||||||||||
Consumer Discretionary (7.6%): | |||||||||||
Airbnb, Inc. Class A (b) | 15,918 | 2,746 | |||||||||
Amazon.com, Inc. (b) | 10,011 | 35,109 | |||||||||
America's Car-Mart, Inc. | 3,090 | 303 | |||||||||
Bassett Furniture Industries, Inc. | 20,519 | 313 | |||||||||
BJ's Restaurants, Inc. | 11,375 | 340 | |||||||||
Burlington Stores, Inc. (b) | 13,361 | 3,916 | |||||||||
Century Communities, Inc. | 11,691 | 831 | |||||||||
General Motors Co. (b) | 30,500 | 1,765 | |||||||||
Las Vegas Sands Corp. (b) | 17,600 | 627 | |||||||||
Lazydays Holdings, Inc. (b) | 33,261 | 673 |
See notes to financial statements.
19
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
LKQ Corp. | 37,300 | $ | 2,085 | ||||||||
M/I Homes, Inc. | 10,999 | 615 | |||||||||
McDonald's Corp. | 83,420 | 20,405 | |||||||||
Movado Group, Inc. | 21,406 | 960 | |||||||||
NIKE, Inc. Class B | 23,284 | 3,941 | |||||||||
PulteGroup, Inc. | 291,222 | 14,570 | |||||||||
Ross Stores, Inc. | 117,088 | 12,773 | |||||||||
Ruth's Hospitality Group, Inc. (b) | 22,647 | 385 | |||||||||
Target Corp. | 6,700 | 1,634 | |||||||||
Tesla, Inc. (b) | 8,181 | 9,365 | |||||||||
Vera Bradley, Inc. (b) | 47,396 | 451 | |||||||||
113,807 | |||||||||||
Consumer Staples (3.4%): | |||||||||||
Colgate-Palmolive Co. | 151,462 | 11,363 | |||||||||
Keurig Dr Pepper, Inc. | 121,000 | 4,113 | |||||||||
Lamb Weston Holdings, Inc. | 22,100 | 1,147 | |||||||||
Mondelez International, Inc. Class A | 59,100 | 3,483 | |||||||||
PepsiCo, Inc. | 100,860 | 16,115 | |||||||||
The Estee Lauder Cos., Inc. | 45,104 | 14,978 | |||||||||
51,199 | |||||||||||
Energy (1.6%): | |||||||||||
Cactus, Inc. Class A | 190,830 | 6,965 | |||||||||
Clean Energy Fuels Corp. (c) | 68,814 | 493 | |||||||||
ConocoPhillips | 133,954 | 9,394 | |||||||||
Enterprise Products Partners LP | 97,000 | 2,075 | |||||||||
Expro Group Holdings NV (b) | 17,243 | 242 | |||||||||
Hess Corp. | 20,400 | 1,520 | |||||||||
Pioneer Natural Resources Co. | 9,500 | 1,694 | |||||||||
Renewable Energy Group, Inc. (b) | 8,463 | 404 | |||||||||
RPC, Inc. | 106,668 | 430 | |||||||||
TETRA Technologies, Inc. (b) | 173,719 | 454 | |||||||||
Valero Energy Corp. | 8,000 | 536 | |||||||||
24,207 | |||||||||||
Financials (7.0%): | |||||||||||
Bank of America Corp. | 335,263 | 14,909 | |||||||||
BayCom Corp. (b) | 24,256 | 442 | |||||||||
Cboe Global Markets, Inc. | 23,800 | 3,069 | |||||||||
Comerica, Inc. | 58,200 | 4,803 | |||||||||
First Busey Corp. | 52,623 | 1,352 | |||||||||
Heritage Financial Corp. | 18,372 | 430 | |||||||||
Interactive Brokers Group, Inc. | 28,400 | 2,096 | |||||||||
JPMorgan Chase & Co. | 114,444 | 18,177 | |||||||||
KeyCorp | 103,400 | 2,320 | |||||||||
LPL Financial Holdings, Inc. | 51,894 | 8,179 | |||||||||
MSCI, Inc. | 6,049 | 3,808 | |||||||||
Old Second Bancorp, Inc. | 58,689 | 725 | |||||||||
S&P Global, Inc. | 39,283 | 17,902 |
See notes to financial statements.
20
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
The PNC Financial Services Group, Inc. | 53,385 | $ | 10,517 | ||||||||
The Progressive Corp. | 121,118 | 11,257 | |||||||||
Trean Insurance Group, Inc. (b) | 20,399 | 172 | |||||||||
U.S. Bancorp | 63,600 | 3,520 | |||||||||
Voya Financial, Inc. (c) | 17,200 | 1,069 | |||||||||
104,747 | |||||||||||
Health Care (7.4%): | |||||||||||
AbbVie, Inc. | 23,100 | 2,663 | |||||||||
Addus HomeCare Corp. | 3,623 | 316 | |||||||||
Align Technology, Inc. (b) | 5,614 | 3,433 | |||||||||
Amedisys, Inc. (b) | 21,362 | 2,983 | |||||||||
Amgen, Inc. | 49,868 | 9,918 | |||||||||
Atrion Corp. | 633 | 449 | |||||||||
BioLife Solutions, Inc. (b) | 16,954 | 647 | |||||||||
Cigna Corp. | 14,400 | 2,763 | |||||||||
CryoLife, Inc. | 13,167 | 226 | |||||||||
CVS Health Corp. | 149,573 | 13,321 | |||||||||
Eli Lilly & Co. | 55,893 | 13,864 | |||||||||
Humana, Inc. | 9,400 | 3,945 | |||||||||
IDEXX Laboratories, Inc. (b) | 20,601 | 12,527 | |||||||||
Johnson & Johnson | 114,916 | 17,919 | |||||||||
Lantheus Holdings, Inc. | 10,797 | 289 | |||||||||
LeMaitre Vascular, Inc. | 13,427 | 628 | |||||||||
Masimo Corp. (b) | 11,227 | 3,122 | |||||||||
Medtronic PLC | 31,200 | 3,329 | |||||||||
Mesa Laboratories, Inc. | 1,295 | 400 | |||||||||
ModivCare, Inc. (b) | 3,043 | 417 | |||||||||
Orthofix Medical, Inc. | 15,064 | 461 | |||||||||
Pacira BioSciences, Inc. | 5,111 | 269 | |||||||||
Retractable Technologies, Inc. (b) (c) | 27,512 | 238 | |||||||||
Sotera Health Co. (b) | 102,800 | 2,194 | |||||||||
The Joint Corp. (b) | 3,903 | 312 | |||||||||
Thermo Fisher Scientific, Inc. | 7,180 | 4,544 | |||||||||
UnitedHealth Group, Inc. | 5,400 | 2,399 | |||||||||
Veeva Systems, Inc. Class A (b) | 10,988 | 3,105 | |||||||||
Vericel Corp. (b) | 9,233 | 344 | |||||||||
Zoetis, Inc. | 17,068 | 3,790 | |||||||||
110,815 | |||||||||||
Industrials (2.5%): | |||||||||||
Allied Motion Technologies, Inc. | 17,481 | 690 | |||||||||
Ameresco, Inc. Class A (b) | 5,769 | 521 | |||||||||
CIRCOR International, Inc. (b) | 13,623 | 367 | |||||||||
Concrete Pumping Holdings, Inc. (b) | 50,278 | 411 | |||||||||
CoStar Group, Inc. (b) | 28,490 | 2,215 | |||||||||
Generac Holdings, Inc. (b) | 9,512 | 4,007 | |||||||||
Graham Corp. | 19,564 | 250 | |||||||||
Harsco Corp. | 25,807 | 376 | |||||||||
Honeywell International, Inc. | 57,181 | 11,564 |
See notes to financial statements.
21
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Hyster-Yale Materials Handling, Inc. | 10,250 | $ | 402 | ||||||||
Insteel Industries, Inc. | 17,424 | 735 | |||||||||
L3Harris Technologies, Inc. | 5,500 | 1,150 | |||||||||
Leidos Holdings, Inc. | 17,400 | 1,530 | |||||||||
NN, Inc. (b) | 101,071 | 450 | |||||||||
Orion Group Holdings, Inc. | 63,636 | 261 | |||||||||
PACCAR, Inc. | 17,400 | 1,451 | |||||||||
Parker-Hannifin Corp. | 5,200 | 1,571 | |||||||||
Preformed Line Products Co. | 3,890 | 246 | |||||||||
Raytheon Technologies Corp. | 13,600 | 1,100 | |||||||||
The Greenbrier Cos., Inc. | 14,556 | 582 | |||||||||
TPI Composites, Inc. (b) | 12,935 | 231 | |||||||||
Transcat, Inc. | 14,168 | 1,260 | |||||||||
U.S. Xpress Enterprises, Inc. Class A | 33,841 | 266 | |||||||||
Uber Technologies, Inc. (b) | 81,938 | 3,114 | |||||||||
Union Pacific Corp. | 11,000 | 2,592 | |||||||||
Willdan Group, Inc. | 9,122 | 365 | |||||||||
37,707 | |||||||||||
Information Technology (18.0%): | |||||||||||
Adobe, Inc. (b) | 8,039 | 5,385 | |||||||||
Ambarella, Inc. | 2,913 | 523 | |||||||||
Apple, Inc. | 319,847 | 52,871 | |||||||||
Autodesk, Inc. (b) | 6,720 | 1,708 | |||||||||
Cadence Design Systems, Inc. (b) | 17,593 | 3,122 | |||||||||
Cisco Systems, Inc. | 291,492 | 15,985 | |||||||||
Crowdstrike Holdings, Inc. Class A (b) | 10,612 | 2,304 | |||||||||
Diodes, Inc. (b) | 3,819 | 406 | |||||||||
EPAM Systems, Inc. (b) | 7,378 | 4,490 | |||||||||
ePlus, Inc. | 7,668 | 809 | |||||||||
Euronet Worldwide, Inc. | 19,600 | 1,987 | |||||||||
Fidelity National Information Services, Inc. | 22,400 | 2,341 | |||||||||
FleetCor Technologies, Inc. (b) | 7,800 | 1,616 | |||||||||
Fortinet, Inc. (b) | 50,321 | 16,712 | |||||||||
Global Payments, Inc. | 28,000 | 3,333 | |||||||||
Grid Dynamics Holdings, Inc. (b) | 36,838 | 1,445 | |||||||||
Ichor Holdings Ltd. (b) | 13,733 | 658 | |||||||||
Iteris, Inc. (b) | 59,796 | 271 | |||||||||
Luna Innovations, Inc. (b) | 73,822 | 618 | |||||||||
Mastercard, Inc. Class A | 47,582 | 14,985 | |||||||||
Microsoft Corp. | 173,064 | 57,213 | |||||||||
Napco Security Technologies, Inc. (b) | 18,468 | 858 | |||||||||
NVIDIA Corp. | 127,234 | 41,575 | |||||||||
PAR Technology Corp. (c) | 10,800 | 566 | |||||||||
PayPal Holdings, Inc. (b) | 23,177 | 4,285 | |||||||||
Perficient, Inc. (b) | 9,823 | 1,346 | |||||||||
ServiceNow, Inc. (b) | 7,910 | 5,123 | |||||||||
Texas Instruments, Inc. | 83,311 | 16,027 | |||||||||
The Trade Desk, Inc. Class A (b) | 38,943 | 4,028 | |||||||||
Twilio, Inc. Class A (b) | 9,047 | 2,589 | |||||||||
Ultra Clean Holdings, Inc. | 13,455 | 737 |
See notes to financial statements.
22
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares | Value | |||||||||
Upland Software, Inc. | 12,313 | $ | 241 | ||||||||
Visa, Inc. Class A (c) | 25,473 | 4,936 | |||||||||
271,093 | |||||||||||
Materials (0.4%): | |||||||||||
Freeport-McMoRan, Inc. | 43,400 | 1,609 | |||||||||
Koppers Holdings, Inc. (b) | 17,507 | 529 | |||||||||
PPG Industries, Inc. | 3,700 | 570 | |||||||||
Sealed Air Corp. | 58,600 | 3,640 | |||||||||
UFP Technologies, Inc. (b) | 5,904 | 395 | |||||||||
6,743 | |||||||||||
Real Estate (1.4%): | |||||||||||
Host Hotels & Resorts, Inc. (b) | 198,800 | 3,121 | |||||||||
Prologis, Inc. | 117,221 | 17,671 | |||||||||
20,792 | |||||||||||
Utilities (1.2%): | |||||||||||
Exelon Corp. | 61,200 | 3,227 | |||||||||
FirstEnergy Corp. | 35,600 | 1,341 | |||||||||
MGE Energy, Inc. | 120,491 | 8,746 | |||||||||
Vistra Corp. | 200,000 | 3,976 | |||||||||
17,290 | |||||||||||
822,760 | |||||||||||
Total Common Stocks (Cost $1,107,255) | 1,476,669 | ||||||||||
Exchange-Traded Funds (0.2%) | |||||||||||
United States (0.2%): | |||||||||||
iShares Core MSCI EAFE ETF | 15,686 | 1,145 | |||||||||
iShares MSCI EAFE Small-Cap ETF | 8,102 | 583 | |||||||||
iShares Russell 2000 ETF (c) | 4,222 | 921 | |||||||||
2,649 | |||||||||||
Total Exchange-Traded Funds (Cost $2,822) | 2,649 | ||||||||||
Collateral for Securities Loaned^ (1.3%) | |||||||||||
United States (1.3%): | |||||||||||
HSBC U.S. Government Money Market Fund I Shares, 0.03% (e) | 19,884,151 | 19,884 | |||||||||
Total Collateral for Securities Loaned (Cost $19,884) | 19,884 | ||||||||||
Total Investments (Cost $1,129,961) — 99.8% | 1,499,202 | ||||||||||
Other assets in excess of liabilities — 0.2% | 2,767 | ||||||||||
NET ASSETS — 100.00% | $ | 1,501,969 |
^ Purchased with cash collateral from securities on loan.
(a) Amount represents less than 0.05% of net assets.
(b) Non-income producing security.
(c) All or a portion of this security is on loan.
See notes to financial statements.
23
USAA Mutual Funds Trust USAA Sustainable World Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Unaudited)
(d) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of November 30, 2021, the fair value of these securities was $17,779 (thousands) and amounted to 1.2% of net assets.
(e) Rate disclosed is the daily yield on November 30, 2021.
ADR — American Depositary Receipt
ETF — Exchange-Traded Fund
GDR — Global Depositary Receipt
LP — Limited Partnership
PCL — Public Company Limited
PLC — Public Limited Company
See notes to financial statements.
24
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Sustainable World Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,129,961) | $ | 1,499,202 | (a) | ||||
Foreign currency, at value (Cost $834) | 834 | ||||||
Cash | 15,096 | ||||||
Receivables: | |||||||
Interest and dividends | 1,925 | ||||||
Capital shares issued | 187 | ||||||
Investments sold | 10,221 | ||||||
Reclaims | 1,928 | ||||||
From Adviser | 6 | ||||||
Prepaid expenses | 32 | ||||||
Total Assets | 1,529,431 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 19,884 | ||||||
Investments purchased | 5,789 | ||||||
Capital shares redeemed | 310 | ||||||
Accrued foreign capital gains taxes | 67 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 961 | ||||||
Administration fees | 192 | ||||||
Custodian fees | 42 | ||||||
Transfer agent fees | 119 | ||||||
Compliance fees | 1 | ||||||
12b-1 fees | — | (b) | |||||
Other accrued expenses | 97 | ||||||
Total Liabilities | 27,462 | ||||||
Net Assets: | |||||||
Capital | 893,303 | ||||||
Total accumulated earnings/(loss) | 608,666 | ||||||
Net Assets | $ | 1,501,969 | |||||
Net Assets | |||||||
Fund Shares | $ | 1,496,081 | |||||
Institutional Shares | 3,090 | ||||||
Class A | 2,798 | ||||||
Total | $ | 1,501,969 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 47,140 | ||||||
Institutional Shares | 97 | ||||||
Class A | 88 | ||||||
Total | 47,325 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 31.74 | |||||
Institutional Shares | $ | 31.82 | |||||
Class A | $ | 31.73 | |||||
Maximum Sales Charge — Class A | 5.75 | % | |||||
Maximum offering price (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 33.67 |
(a) Includes $18,855 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
25
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Sustainable World Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 14,463 | |||||
Interest | 2 | ||||||
Securities lending (net of fees) | 41 | ||||||
Foreign tax withholding | (1,129 | ) | |||||
Total Income | 13,377 | ||||||
Expenses: | |||||||
Investment advisory fees | 5,769 | ||||||
Administration fees — Fund Shares | 1,150 | ||||||
Administration fees — Institutional Shares | 2 | ||||||
Administration fees — Class A | 2 | ||||||
Sub-Administration fees | 49 | ||||||
12b-1 fees — Class A | 4 | ||||||
Custodian fees | 177 | ||||||
Transfer agent fees — Fund Shares | 716 | ||||||
Transfer agent fees — Institutional Shares | 2 | ||||||
Transfer agent fees — Class A | 2 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 5 | ||||||
Legal and audit fees | 43 | ||||||
State registration and filing fees | 25 | ||||||
Other expenses | 100 | ||||||
Total Expenses | 8,070 | ||||||
Expenses waived/reimbursed by Adviser | (13 | ) | |||||
Net Expenses | 8,057 | ||||||
Net Investment Income (Loss) | 5,320 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities and foreign currency translations | 42,789 | ||||||
Foreign taxes on realized gains | (19 | ) | |||||
Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations | (13,427 | ) | |||||
Net change in accrued foreign taxes on unrealized gains | 70 | ||||||
Net realized/unrealized gains (losses) on investments | 29,413 | ||||||
Change in net assets resulting from operations | $ | 34,733 |
See notes to financial statements.
26
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Sustainable World Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 5,320 | $ | 11,845 | |||||||
Net realized gains (losses) from investments | 42,770 | 265,661 | |||||||||
Net change in unrealized appreciation/depreciation on investments | (13,357 | ) | 176,212 | ||||||||
Change in net assets resulting from operations | 34,733 | 453,718 | |||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | — | (64,664 | ) | ||||||||
Institutional Shares | — | (328 | ) | ||||||||
Class A | — | (321 | ) | ||||||||
Change in net assets resulting from distributions to shareholders | — | (65,313 | ) | ||||||||
Change in net assets resulting from capital transactions | (46,277 | ) | (116,446 | ) | |||||||
Change in net assets | (11,544 | ) | 271,959 | ||||||||
Net Assets: | |||||||||||
Beginning of period | 1,513,513 | 1,241,554 | |||||||||
End of period | $ | 1,501,969 | $ | 1,513,513 |
(continues on next page)
See notes to financial statements.
27
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands) (continued)
USAA Sustainable World Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 38,586 | $ | 72,139 | |||||||
Distributions reinvested | — | 63,933 | |||||||||
Cost of shares redeemed | (85,078 | ) | (241,694 | ) | |||||||
Total Fund Shares | $ | (46,492 | ) | $ | (105,622 | ) | |||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 760 | $ | 1,307 | |||||||
Distributions reinvested | — | 96 | |||||||||
Cost of shares redeemed | (390 | ) | (6,761 | ) | |||||||
Total Institutional Shares | $ | 370 | $ | (5,358 | ) | ||||||
Class A | |||||||||||
Proceeds from shares issued | $ | 98 | $ | 6,709 | |||||||
Distributions reinvested | — | 61 | |||||||||
Cost of shares redeemed | (253 | ) | (12,236 | ) | |||||||
Total Class A | $ | (155 | ) | $ | (5,466 | ) | |||||
Change in net assets resulting from capital transactions | $ | (46,277 | ) | $ | (116,446 | ) | |||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,209 | 2,582 | |||||||||
Reinvested | — | 2,305 | |||||||||
Redeemed | (2,666 | ) | (8,859 | ) | |||||||
Total Fund Shares | (1,457 | ) | (3,972 | ) | |||||||
Institutional Shares | |||||||||||
Issued | 23 | 48 | |||||||||
Reinvested | — | 3 | |||||||||
Redeemed | (12 | ) | (227 | ) | |||||||
Total Institutional Shares | 11 | (176 | ) | ||||||||
Class A | |||||||||||
Issued | 3 | 280 | |||||||||
Reinvested | — | 2 | |||||||||
Redeemed | (8 | ) | (464 | ) | |||||||
Total Class A | (5 | ) | (182 | ) | |||||||
Change in Shares | (1,451 | ) | (4,330 | ) |
See notes to financial statements.
28
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29
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
| Investment Activities | Distributions to Shareholders From | |||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains From Investments | ||||||||||||||||||||||
USAA Sustainable World Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 31.03 | 0.11 | (d) | 0.60 | 0.71 | — | — | |||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 23.38 | 0.23 | (d) | 8.74 | 8.97 | (0.18 | ) | (1.14 | ) | |||||||||||||||||
2020 | $ | 30.71 | 0.27 | (d) | 2.87 | 3.14 | (0.32 | ) | (10.15 | ) | |||||||||||||||||
2019 | $ | 31.82 | 0.33 | 0.51 | 0.84 | (0.28 | ) | (1.67 | ) | ||||||||||||||||||
2018 | $ | 31.16 | 0.30 | 1.78 | 2.08 | (0.23 | ) | (1.19 | ) | ||||||||||||||||||
2017 | $ | 27.20 | 0.19 | 4.55 | 4.74 | (0.21 | ) | (0.57 | ) | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 31.10 | 0.12 | (d) | 0.60 | 0.72 | — | — | |||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 23.42 | 0.24 | (d) | 8.77 | 9.01 | (0.19 | ) | (1.14 | ) | |||||||||||||||||
2020 | $ | 30.74 | 0.29 | (d) | 2.86 | 3.15 | (0.32 | ) | (10.15 | ) | |||||||||||||||||
2019 | $ | 31.75 | 0.38 | 0.48 | 0.86 | (0.20 | ) | (1.67 | ) | ||||||||||||||||||
2018 | $ | 31.14 | 0.29 | 1.80 | 2.09 | (0.29 | ) | (1.19 | ) | ||||||||||||||||||
2017 | $ | 27.14 | 0.20 | 4.55 | 4.75 | (0.18 | ) | (0.57 | ) | ||||||||||||||||||
Class A | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 31.06 | 0.07 | (d) | 0.60 | 0.67 | — | — | |||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 23.40 | 0.15 | (d) | 8.76 | 8.91 | (0.11 | ) | (1.14 | ) | |||||||||||||||||
2020 | $ | 30.77 | 0.19 | (d) | 2.86 | 3.05 | (0.27 | ) | (10.15 | ) | |||||||||||||||||
2019 | $ | 31.86 | 0.24 | (d) | 0.53 | 0.77 | (0.19 | ) | (1.67 | ) | |||||||||||||||||
2018 | $ | 31.07 | 0.18 | (d) | 1.80 | 1.98 | — | (h) | (1.19 | ) | |||||||||||||||||
2017 | $ | 27.13 | 0.12 | 4.53 | 4.65 | (0.14 | ) | (0.57 | ) |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment are calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 4 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.
See notes to financial statements.
30
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Total Distributions | Redemption Fees Added to Beneficial Interests: | Net Asset Value, End of Period | Total Return (Excludes Sales Charge)*(a) | Net Expenses**^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | |||||||||||||||||||||||||||||||
USAA Sustainable World Fund | |||||||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | — | $ | 31.74 | 2.29 | % | 1.05 | % | 0.69 | % | 1.05 | % | $ | 1,496,081 | 19 | % | |||||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||||||
2021 | (1.32 | ) | — | $ | 31.03 | 39.07 | % | 1.05 | % | 0.86 | % | 1.05 | % | $ | 1,507,963 | 88 | % | ||||||||||||||||||||||
2020 | (10.47 | ) | — | $ | 23.38 | 7.81 | % | 1.07 | % | 0.98 | % | 1.07 | % | $ | 1,228,986 | 103 | %(e) | ||||||||||||||||||||||
2019 | (1.95 | ) | — | $ | 30.71 | 3.23 | % | 1.09 | % | 1.09 | % | 1.09 | % | $ | 1,280,661 | 8 | % | ||||||||||||||||||||||
2018 | (1.42 | ) | — | $ | 31.82 | 6.68 | % | 1.10 | % | 0.98 | % | 1.10 | % | $ | 1,353,880 | 10 | % | ||||||||||||||||||||||
2017 | (0.78 | ) | — | $ | 31.16 | 17.81 | % | 1.13 | % | 0.72 | % | 1.13 | % | $ | 1,319,357 | 12 | % | ||||||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | — | $ | 31.82 | 2.32 | % | 1.00 | % | 0.72 | % | 1.39 | % | $ | 3,090 | 19 | % | |||||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||||||
2021 | (1.33 | ) | — | $ | 31.10 | 39.17 | % | 0.99 | % | 0.87 | % | 1.27 | % | $ | 2,660 | 88 | % | ||||||||||||||||||||||
2020 | (10.47 | ) | — | $ | 23.42 | 7.85 | % | 1.00 | % | 1.00 | % | 1.13 | % | $ | 6,143 | 103 | %(e) | ||||||||||||||||||||||
2019 | (1.87 | ) | — | $ | 30.74 | 3.29 | % | 1.05 | %(f) | 1.13 | % | 1.11 | % | $ | 12,567 | 8 | % | ||||||||||||||||||||||
2018 | (1.48 | ) | — | $ | 31.75 | 6.70 | % | 1.10 | % | 1.19 | % | 1.10 | % | $ | 30,127 | 10 | % | ||||||||||||||||||||||
2017 | (0.75 | ) | — | $ | 31.14 | 17.89 | % | 1.09 | % | 0.78 | % | 1.37 | % | $ | 6,877 | 12 | % | ||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | — | — | $ | 31.73 | 2.16 | % | 1.29 | % | 0.45 | % | 1.81 | % | $ | 2,798 | 19 | % | |||||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||||||
2021 | (1.25 | ) | — | $ | 31.06 | 38.73 | % | 1.32 | % | 0.53 | % | 1.62 | % | $ | 2,890 | 88 | % | ||||||||||||||||||||||
2020 | (10.42 | ) | — | $ | 23.40 | 7.49 | % | 1.35 | % | 0.68 | % | 1.43 | % | $ | 6,425 | 103 | %(e) | ||||||||||||||||||||||
2019 | (1.86 | ) | — | $ | 30.77 | 2.98 | % | 1.35 | % | 0.76 | % | 1.46 | % | $ | 8,133 | 8 | % | ||||||||||||||||||||||
2018 | (1.19 | ) | — | (h) | $ | 31.86 | 6.36 | % | 1.39 | %(g) | 0.57 | % | 1.43 | % | $ | 10,114 | 10 | % | |||||||||||||||||||||
2017 | (0.71 | ) | — | (h) | $ | 31.07 | 17.50 | % | 1.42 | % | 0.45 | % | 1.42 | % | $ | 19,722 | 12 | % |
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Reflects increased trading activity due to current year transition or asset allocation shift.
(f) Effective October 1, 2018, USAA Asset Management Company ("AMCO") (previous Adviser) had voluntarily agreed to limit the annual expenses of the Institutional Shares to 1.00% of the Institutional Shares' average daily net assets.
(g) Effective October 1, 2017, AMCO had voluntarily agreed to limit the annual expenses of the Class A shares to 1.35% of the Class A shares' average daily net assets.
(h) Amount is less than $0.005 per share.
See notes to financial statements.
31
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Sustainable World Fund (the "Fund"). The Fund offers three classes of shares: Fund Shares, Institutional Shares, and Class A. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges, except with respect to sales charges, fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
32
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Portfolio securities listed or traded on securities exchanges, including Exchange-Traded Funds ("ETFs"), and American Depositary Receipts ("ADRs"), are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's NAV is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value its international equity securities. The valuations are considered as Level 2 in the fair value hierarchy.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 928,673 | $ | 547,996 | $ | — | $ | 1,476,669 | |||||||||||
Exchange-Traded Funds | 2,649 | — | — | 2,649 | |||||||||||||||
Collateral for Securities Loaned | 19,884 | — | — | 19,884 | |||||||||||||||
Total | $ | 951,206 | $ | 547,996 | $ | — | $ | 1,499,202 |
For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
Real Estate Investment Trusts ("REITs"):
The Fund may invest in REITs, which report information on the source of their distributions annually. REITs are pooled investment vehicles that invest primarily in income producing real estate or real estate related loans or interests (such as mortgages). Certain distributions received from REITs during the year are recorded as realized gains or return of capital as estimated by the Fund or when such information becomes known.
Investment Companies:
Exchange-Traded Funds:
The Fund may invest in ETFs, the shares of which are bought and sold on a securities exchange. An ETF trades like common stock and represents a portfolio of securities often designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Foreign Exchange Currency Contracts:
The Fund may enter into foreign exchange currency contracts to convert U.S. dollars to and from various foreign currencies. A foreign exchange currency contract is an obligation by the Fund to purchase or sell a specific currency at a future date at a price (in U.S. dollars) set at the time of the contract. The Fund does not engage in "cross-currency" foreign exchange contracts (i.e., contracts to purchase or sell one foreign currency in exchange for another foreign currency). The Fund's foreign exchange currency contracts might be considered spot contracts (typically a contract of one week or less) or forward contracts (typically a contract term over one week). A spot contract is entered into for purposes of hedging against foreign currency fluctuations relating to a specific portfolio transaction, such as the delay between a security transaction trade date and settlement date. Forward contracts are entered into for purposes of hedging portfolio holdings or concentrations of such holdings. Each foreign exchange currency contract is adjusted daily by the prevailing spot or forward rate of the underlying currency, and any appreciation or depreciation is recorded for financial statement purposes as unrealized until the contract settlement date, at which time the Fund records realized gains or losses equal to the difference between the value of a contract at the time it was opened and the value at the time it was closed. The Fund could be exposed to risk if a counterparty is unable to meet the terms of a foreign exchange currency contract or if the value of the foreign currency changes unfavorably. In addition, the use of foreign exchange currency contracts does not eliminate fluctuations in the underlying prices of the securities. As of November 30, 2021, the Fund had no open forward foreign exchange currency contracts.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis.
Withholding taxes on interest, dividends, and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.
Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of November 30, 2021.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 18,855 | $ | — | $ | 19,884 |
Foreign Currency Translations:
The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations, including foreign currency arising from in-kind redemptions, are disclosed as Net realized gains (losses) from investment securities and foreign currency translations on the Statement of Operations.
Foreign Taxes:
The Fund may be subject to foreign taxes related to foreign income received (a portion of which may be reclaimable), capital gains on the sale of securities, and certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, printing fees, and 12b-1 fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding | |||||||
Purchases | Sales | ||||||
$284,758 | $331,607 |
4. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.75% of the Fund's average daily net assets. Amounts incurred and paid to VCM for the six months ended November 30, 2021, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and calculated monthly by comparing each class' performance to that of the Lipper Global Funds Index. The Lipper Global Funds Index tracks the total return performance of the largest funds within the Lipper Global Funds category.
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
+/- 100 to 400 | +/- 4 | ||||||
+/- 401 to 700 | +/- 5 | ||||||
+/- 701 and greater | +/- 6 |
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Global Funds Index over that period, even if the class has overall negative returns during the performance period.
For the period June 1, 2021 to November 30, 2021, performance adjustments were $0, $0, and $(1) for Fund Shares, Institutional Shares, and Class A, in thousands, respectively. Performance adjustments were 0.00%, 0.00%, and (0.06)% for Fund Shares, Institutional Shares, and Class A, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the year ended May 31, 2021, the Fund had no subadvisors.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, 0.10%, and 0.15%, which is based on the Fund's average daily net assets of the Fund Shares, Institutional Shares, and Class A, respectively. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Administration fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. The funds in the Trust, Victory
37
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund Shares based on an annual charge of $23 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares and Class A are paid monthly based on a fee accrued daily at an annualized rate of 0.10% and 0.10%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred and paid to VCTA for the six months ended November 30, 2021, are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.
Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, up to an annual rate of 0.25% of the average daily net assets of Class A. The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A. Amounts incurred and paid to the Distributor for the six months ended November 30, 2021, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions on sales of Class A. For the six months ended November 30, 2021, the Distributor received less than $1 thousand dollars from commissions earned on the sale of Class A.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of November 30, 2021, the expense limits (excluding voluntary waivers) were 1.09%, 1.00%, and 1.35% for Fund Shares, Institutional Shares, and Class A, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund
38
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of November 30, 2021, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that repayments are not probable at November 30, 2021.
Expires 2023 | Expires 2024 | Expires 2025 | Total | ||||||||||||
$ | 14 | $ | 37 | $ | 13 | $ | 64 |
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the six months ended November 30, 2021.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
5. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Market Risk — Overall stock market risks may affect the value of the Fund. Domestic and international factors such as political events, war, trade disputes, interest rate levels and other fiscal and monetary policy changes, pandemics and other public health crises, and related geopolitical events, as well as environmental disasters such as earthquakes, fires, and floods, may add to instability in world economies and markets generally. The impact of these and other factors may be short-term or may last for extended periods.
Equity Risk — The value of the equity securities in which the Fund invests may decline in response to developments affecting individual companies and/or general economic conditions. A company's earnings or dividends may not increase as expected due to poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations, war, terrorism, public health crises, or other events, conditions, and factors. Price changes may be temporary or last for extended periods.
Foreign Securities Risk — Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market.
6. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each Fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed.
39
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each Fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each Fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period, is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period, is presented on the Statement of Operations under Interfund lending fees.
The Fund did not utilize or participate in the Facility during the six months ended November 30, 2021.
7. Federal Income Tax Information:
The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had no capital loss carryforwards, for the federal income tax purposes.
40
USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21- 11/30/21* | Hypothetical Expenses Paid During Period 6/1/21- 11/30/21* | Annualized Expense Ratio During Period 6/1/21- 11/30/21 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 1,022.90 | $ | 1,019.80 | $ | 5.32 | $ | 5.32 | 1.05 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 1,023.20 | 1,020.05 | 5.07 | 5.06 | 1.00 | % | ||||||||||||||||||||
Class A | 1,000.00 | 1,021.60 | 1,018.60 | 6.54 | 6.53 | 1.29 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
41
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
23412-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA Government Securities Fund
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 9 | ||||||
Statement of Operations | 10 | ||||||
Statements of Changes in Net Assets | 11 | ||||||
Financial Highlights | 14 | ||||||
Notes to Financial Statements | 18 | ||||||
Supplemental Information | 28 | ||||||
Proxy Voting and Portfolio Holdings Information | 28 | ||||||
Expense Examples | 28 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA Government Securities Fund | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks to provide a high level of current income consistent with preservation of principal.
Asset Allocation:
November 30, 2021
(% of Net Assets)
Percentages are of the net assets of the Fund and may not equal 100%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Government Securities Fund | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Asset-Backed Securities (2.3%) | |||||||||||
Montana Higher Education Student Assistance Corp., Series 2012-1, Class A2, 1.09% (LIBOR01M+100bps) (a) | $ | 3,461 | $ | 3,479 | |||||||
Navient Student Loan Trust, Series 2014-1, Class A3, 0.60% (LIBOR01M+51bps), 6/25/31 (a) | 2,100 | 2,055 | |||||||||
Navient Student Loan Trust, Series 2016-2, Class A2, 1.14% (LIBOR01M+105bps), 6/25/65, Callable 6/25/33 @ 100 (a) (b) | 200 | 200 | |||||||||
Nelnet Student Loan Trust, Series 2015-3, Class A2, 0.69% (LIBOR01M+60bps), 2/27/51, Callable 5/25/34 @ 100 (a) (b) | 3,318 | 3,296 | |||||||||
Nelnet Student Loan Trust, Series 2019-5, Class A, 2.53%, 10/25/67, Callable 6/25/35 @ 100 (b) | 3,034 | 3,092 | |||||||||
Nelnet Student Loan Trust, Series 2006-3, Class B, 0.38% (LIBOR03M+25bps), 6/25/41, Callable 9/25/24 @ 100 (a) | 2,568 | 2,379 | |||||||||
SLM Student Loan Trust, Series 2006-4, Class B, 0.32% (LIBOR03M+20bps), 1/25/70, Callable 10/25/32 @ 100 (a) | 3,659 | 3,509 | |||||||||
SLM Student Loan Trust, Series 2013-6, Class A3, 0.74% (LIBOR01M+65bps), 6/25/55, Callable 11/25/29 @ 100 (a) | 2,799 | 2,797 | |||||||||
SunTrust Student Loan Trust, Series 2006-1A, Class B, 0.41% (LIBOR03M+27bps), 10/28/37, Callable 1/28/26 @ 100 (a) (b) | 962 | 891 | |||||||||
Wepco Environmental Trust Finance I LLC, Series 2021-1, Class A, 1.58%, 12/15/35 | 4,500 | 4,531 | |||||||||
Total Asset-Backed Securities (Cost $26,316) | 26,229 | ||||||||||
Municipal Bonds (5.3%) | |||||||||||
Hawaii (0.0%): (c) | |||||||||||
State of Hawaii Department of Business Economic Development & Tourism Revenue, Series A-2, 3.24%, 1/1/31 | 188 | 200 | |||||||||
Kansas (0.3%): | |||||||||||
Kansas Development Finance Authority Revenue, Series H, 3.94%, 4/15/26 | 3,000 | 3,294 | |||||||||
Louisiana (0.4%): | |||||||||||
State of Louisiana, GO, Series C-1, 0.84%, 6/1/25 | 5,000 | 4,963 | |||||||||
Michigan (0.1%): | |||||||||||
Michigan State Building Authority Revenue, Series II, 0.46%, 10/15/22 | 1,500 | 1,498 | |||||||||
Mississippi (0.9%): | |||||||||||
State of Mississippi, GO, Series E, 1.67%, 10/1/27 (d) | 10,000 | 10,113 | |||||||||
Ohio (0.3%): | |||||||||||
State of Ohio, GO, Series A, 1.78%, 8/1/32 | 3,000 | 2,982 | |||||||||
Tennessee (0.2%): | |||||||||||
State of Tennessee, GO, Series B, 1.73%, 11/1/32, Continuously Callable @ 100 | 2,400 | 2,380 | |||||||||
Texas (2.2%): | |||||||||||
Boerne School District, GO, 1.77%, 2/1/32, Continuously Callable @ 100 | 650 | 649 | |||||||||
City of Abilene, GO 2.41%, 2/15/26 | 1,715 | 1,797 | |||||||||
2.54%, 2/15/27 | 1,195 | 1,266 | |||||||||
2.64%, 2/15/29 | 1,000 | 1,069 |
See notes to financial statements.
3
USAA Mutual Funds Trust USAA Government Securities Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
City of Houston Texas Combined Utility System Revenue 3.82%, 11/15/29, Continuously Callable @ 100 | $ | 3,000 | $ | 3,389 | |||||||
Series E, 3.72%, 11/15/28 | 1,530 | 1,722 | |||||||||
State of Texas, GO 1.61%, 10/1/22 | 1,585 | 1,602 | |||||||||
2.53%, 10/1/31, Continuously Callable @ 100 | 3,500 | 3,699 | |||||||||
Texas Public Finance Authority Revenue, 0.93%, 2/1/26 | 2,000 | 1,967 | |||||||||
Texas Public Finance Authority State of Texas, GO Series C, 2.83%, 10/1/25 | 3,000 | 3,184 | |||||||||
Series C, 3.01%, 10/1/26, Continuously Callable @ 100 | 4,000 | 4,261 | |||||||||
24,605 | |||||||||||
Virginia (0.8%): | |||||||||||
Virginia Public Building Authority Revenue Series C, 2.25%, 8/1/26 | 1,370 | 1,423 | |||||||||
Series C, 2.40%, 8/1/27 | 1,475 | 1,540 | |||||||||
Series C, 2.56%, 8/1/29 | 2,700 | 2,837 | |||||||||
Virginia Public School Authority Revenue, Series C, 0.55%, 8/1/23 | 3,000 | 2,985 | |||||||||
8,785 | |||||||||||
Wisconsin (0.1%): | |||||||||||
State of Wisconsin, GO, Series 4, 1.90%, 5/1/33, Continuously Callable @ 100 | 1,000 | 995 | |||||||||
Total Municipal Bonds (Cost $57,889) | 59,815 | ||||||||||
U.S. Government Agency Mortgages (44.6%) | |||||||||||
Federal Home Loan Mortgage Corporation Series K019, Class A2, 2.27%, 3/25/22 | 1,862 | 1,866 | |||||||||
Series K026, Class A1, 1.69%, 4/25/22 | 253 | 253 | |||||||||
Series K720, Class A2, 2.72%, 6/25/22 | 3,738 | 3,760 | |||||||||
Series K022, Class A2, 2.36%, 7/25/22 | 2,900 | 2,926 | |||||||||
Series K026, Class A2, 2.51%, 11/25/22 | 5,000 | 5,078 | |||||||||
Series K027, Class A2, 2.64%, 1/25/23 | 5,000 | 5,090 | |||||||||
Series K029, Class A2, 3.32%, 2/25/23 (e) | 2,978 | 3,058 | |||||||||
Series K725, Class A2, 3.00%, 1/25/24 | 5,000 | 5,193 | |||||||||
Series K037, Class A2, 3.49%, 1/25/24 | 10,030 | 10,477 | |||||||||
Series K038, Class A2, 3.39%, 3/25/24 | 3,000 | 3,152 | |||||||||
Series K727, Class A2, 2.95%, 7/25/24 | 20,000 | 20,828 | |||||||||
Series K052, Class A1, 2.60%, 1/25/25 | 1,951 | 1,993 | |||||||||
Series K045, Class A2, 3.02%, 1/25/25 | 3,000 | 3,164 | |||||||||
Series K730, Class A2, 3.59%, 1/25/25 | 5,000 | 5,319 | |||||||||
Series K056, Class A1, 2.20%, 7/25/25 | 3,594 | 3,675 | |||||||||
Series K049, Class A2, 3.01%, 7/25/25 | 4,000 | 4,238 | |||||||||
Series KC02, Class A2, 3.37%, 7/25/25 (f) | 30,000 | 31,265 | |||||||||
Series K051, Class A2, 3.31%, 9/25/25 | 10,000 | 10,713 | |||||||||
Series K733, Class AM, 3.75%, 9/25/25 | 5,000 | 5,431 | |||||||||
Series KIR1, Class A2, 2.85%, 3/25/26 (f) | 7,709 | 8,137 | |||||||||
Series K056, Class A2, 2.53%, 5/25/26 | 5,000 | 5,241 | |||||||||
Series K057, Class A2, 2.57%, 7/25/26 | 7,000 | 7,357 | |||||||||
Series K061, Class A1, 3.01%, 8/25/26 | 1,652 | 1,714 | |||||||||
Series 3987, Class A, 2.00%, 9/15/26 | 612 | 618 | |||||||||
Series K059, Class A2, 3.12%, 9/25/26 (e) | 4,500 | 4,846 |
See notes to financial statements.
4
USAA Mutual Funds Trust USAA Government Securities Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
Series K061, Class A2, 3.35%, 11/25/26 (e) | $ | 4,000 | $ | 4,358 | |||||||
Series K066, Class A2, 3.12%, 6/25/27 | 3,000 | 3,252 | |||||||||
Series K067, Class A2, 3.19%, 7/25/27 | 9,274 | 10,108 | |||||||||
Series K069, Class A2, 3.19%, 9/25/27 (e) | 2,879 | 3,143 | |||||||||
Series K071, Class A2, 3.29%, 11/25/27 | 5,000 | 5,492 | |||||||||
Series K080, Class A2, 3.93%, 7/25/28 (e) | 15,000 | 17,140 | |||||||||
3.00%, 3/1/32 – 6/1/42 | 10,952 | 11,508 | |||||||||
3.50%, 10/1/33 – 8/1/48 | 8,499 | 9,028 | |||||||||
4.00%, 10/1/33 – 8/1/48 | 19,330 | 21,000 | |||||||||
5.50%, 12/1/35 | 267 | 303 | |||||||||
Series 3134, Class FA, 0.39% (LIBOR01M+30bps), 3/15/36 (a) | 478 | 479 | |||||||||
Series 4023, Class PF, 0.64% (LIBOR01M+55bps), 10/15/41 (a) | 506 | 509 | |||||||||
4.50%, 9/1/48 | 1,452 | 1,561 | |||||||||
Series K078, Class A2, 3.85%, 6/25/51 | 12,500 | 14,227 | |||||||||
257,500 | |||||||||||
Federal National Mortgage Association 2.42%, 11/1/22 | 19,029 | 19,161 | |||||||||
2.50%, 4/1/23 – 11/1/50 | 18,455 | 18,825 | |||||||||
Series M1, Class A2, 3.19%, 7/25/23 (e) | 760 | 778 | |||||||||
Series M7, Class AV2, 2.16%, 10/25/23 | 3,486 | 3,531 | |||||||||
Series M13, Class A2, 2.80%, 6/25/25 (e) | 2,015 | 2,096 | |||||||||
3.00%, 2/1/27 – 2/1/50 | 8,782 | 9,196 | |||||||||
Series M8, Class A2, 3.06%, 5/25/27 (e) | 4,000 | 4,309 | |||||||||
Series M12, Class A2, 3.17%, 6/25/27 (e) | 5,433 | 5,880 | |||||||||
Series 73, Class DC, 1.50%, 7/25/27 – 10/25/27 | 3,032 | 3,059 | |||||||||
Series 102, Class GA, 1.38%, 9/25/27 | 681 | 684 | |||||||||
Series M4, Class A2, 3.16%, 3/25/28 (e) | 2,637 | 2,869 | |||||||||
Series M10, Class A2, 3.48%, 7/25/28 (e) | 8,049 | 8,954 | |||||||||
Series 29, Class FY, 0.39% (LIBOR01M+60bps), 4/25/35 – 8/25/37 (a) | 1,595 | 1,599 | |||||||||
5.00%, 12/1/35 | 412 | 463 | |||||||||
5.50%, 11/1/37 | 160 | 182 | |||||||||
6.00%, 5/1/38 | 229 | 257 | |||||||||
4.00%, 8/1/39 – 2/1/50 | 16,260 | 17,337 | |||||||||
3.50%, 1/1/42 – 2/1/50 | 19,979 | 21,170 | |||||||||
3.50%, 3/1/48 – 9/1/49 (f) | 4,396 | 4,630 | |||||||||
4.00%, 8/1/49 (f) | 1,191 | 1,267 | |||||||||
2.00%, 11/1/51 – 12/1/51 | 29,460 | 29,533 | |||||||||
155,780 | |||||||||||
Government National Mortgage Association 6.00%, 8/15/22 – 12/15/38 | 6,205 | 7,100 | |||||||||
8.00%, 12/20/22 – 9/15/30 | 270 | 300 | |||||||||
4.50%, 4/20/24 – 3/20/41 | 15,934 | 17,750 | |||||||||
7.00%, 5/15/27 – 7/15/32 | 826 | 928 | |||||||||
7.50%, 2/15/28 – 11/15/31 | 174 | 194 | |||||||||
6.50%, 5/15/28 – 8/20/34 | 1,801 | 2,054 | |||||||||
6.75%, 5/15/28 | 6 | 6 | |||||||||
5.50%, 4/20/33 – 6/15/39 | 9,762 | 11,171 | |||||||||
5.00%, 5/20/33 – 2/15/39 | 2,793 | 3,076 | |||||||||
4.00%, 7/15/40 – 11/20/40 | 2,758 | 3,014 |
See notes to financial statements.
5
USAA Mutual Funds Trust USAA Government Securities Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
3.00%, 8/20/51 | $ | 9,807 | $ | 10,193 | |||||||
3.00%, 10/20/51 (d) | 12,941 | 13,472 | |||||||||
2.50%, 12/20/51 (d) | 20,000 | 20,622 | |||||||||
89,880 | |||||||||||
503,160 | |||||||||||
Total U.S. Government Agency Mortgages (Cost $482,060) | 503,160 | ||||||||||
U.S. Treasury Obligations (44.3%) | |||||||||||
U.S. Treasury Notes 2.00%, 2/15/22 | 3,000 | 3,012 | |||||||||
0.13%, 5/31/22 | 14,000 | 14,002 | |||||||||
2.13%, 6/30/22 | 20,000 | 20,234 | |||||||||
1.88%, 7/31/22 (f) | 10,000 | 10,116 | |||||||||
1.63%, 8/31/22 | 20,000 | 20,217 | |||||||||
2.00%, 11/30/22 | 11,000 | 11,191 | |||||||||
1.38%, 6/30/23 | 5,000 | 5,075 | |||||||||
0.13%, 9/15/23 | 6,000 | 5,961 | |||||||||
0.25%, 9/30/23 | 10,000 | 9,956 | |||||||||
0.38%, 10/31/23 (f) (g) | 30,000 | 29,918 | |||||||||
0.25%, 11/15/23 | 5,000 | 4,971 | |||||||||
2.13%, 11/30/23 | 22,000 | 22,683 | |||||||||
2.00%, 6/30/24 | 20,000 | 20,648 | |||||||||
0.38%, 8/15/24 | 5,000 | 4,949 | |||||||||
1.88%, 8/31/24 | 10,000 | 10,296 | |||||||||
2.25%, 11/15/24 | 5,000 | 5,207 | |||||||||
2.13%, 11/30/24 | 4,000 | 4,151 | |||||||||
2.50%, 1/31/25 (f) | 7,000 | 7,351 | |||||||||
2.00%, 2/15/25 | 4,000 | 4,137 | |||||||||
2.13%, 5/15/25 | 4,500 | 4,679 | |||||||||
0.25%, 7/31/25 | 6,000 | 5,837 | |||||||||
0.25%, 8/31/25 | 12,000 | 11,661 | |||||||||
0.25%, 10/31/25 | 20,000 | 19,391 | |||||||||
0.38%, 1/31/26 (f) | 5,000 | 4,855 | |||||||||
1.38%, 8/31/26 | 7,000 | 7,079 | |||||||||
0.88%, 9/30/26 | 25,000 | 24,680 | |||||||||
1.63%, 10/31/26 | 7,000 | 7,163 | |||||||||
1.13%, 2/29/28 | 15,000 | 14,859 | |||||||||
1.25%, 4/30/28 | 5,000 | 4,979 | |||||||||
1.25%, 5/31/28 | 10,000 | 9,954 | |||||||||
1.25%, 6/30/28 | 16,000 | 15,910 | |||||||||
1.00%, 7/31/28 | 3,000 | 2,933 | |||||||||
1.13%, 8/31/28 | 5,000 | 4,925 | |||||||||
1.38%, 10/31/28 | 80,000 | 80,037 | |||||||||
2.38%, 5/15/29 | 10,000 | 10,706 | |||||||||
0.88%, 11/15/30 | 7,000 | 6,694 | |||||||||
1.63%, 5/15/31 (f) | 10,000 | 10,197 | |||||||||
1.25%, 8/15/31 (f) | 40,000 | 39,369 | |||||||||
Total U.S. Treasury Obligations (Cost $497,133) | 499,983 |
See notes to financial statements.
6
USAA Mutual Funds Trust USAA Government Securities Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Shares or Principal Amount | Value | |||||||||
Investment Companies (0.2%) | |||||||||||
Federated Treasury Obligations Fund Institutional Shares, 0.35% (h) | 1,744,546 | $ | 1,745 | ||||||||
Total Investment Companies (Cost $1,745) | 1,745 | ||||||||||
Repurchase Agreements (7.1%) | |||||||||||
Credit Agricole CIB NY, 0.05%, 12/1/21, purchased on 11/30/21, with a maturity date of 12/1/21, with a value of $80,000 (collateralized by Federal National Mortgage Security, 2.00% – 2.50%, due 9/1/51 – 12/1/51, with a value of $81,600) | $ | 80,000 | 80,000 | ||||||||
Total Repurchase Agreements (Cost $80,000) | 80,000 | ||||||||||
Collateral for Securities Loaned^ (2.6%) | |||||||||||
HSBC U.S. Government Money Market Fund I Shares, 0.03% (h) | 29,543,750 | 29,544 | |||||||||
Total Collateral for Securities Loaned (Cost $29,544) | 29,544 | ||||||||||
Total Investments (Cost $1,174,687) — 106.4% | 1,200,476 | ||||||||||
Liabilities in excess of other assets — (6.4)% | (71,756 | ) | |||||||||
NET ASSETS — 100.00% | $ | 1,128,720 |
^ Purchased with cash collateral from securities on loan.
(a) Variable or Floating-Rate Security. Rate disclosed is as of November 30, 2021.
(b) Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid (unless otherwise noted as illiquid) based upon procedures approved by the Board of Trustees. As of November 30, 2021, the fair value of these securities was $7,479 (thousands) and amounted to 0.7% of net assets.
(c) Amount represents less than 0.05% of net assets.
(d) Security or portion of security purchased on a delayed-delivery and/or when-issued basis.
(e) The rate for certain asset-backed and mortgage-backed securities may vary based on factors relating to the pool of assets underlying the security. The rate disclosed is the rate in effect at November 30, 2021.
(f) All or a portion of this security has been segregated as collateral for securities purchased on a delayed-delivery and/or when-issued basis.
(g) All or a portion of this security is on loan.
(h) Rate disclosed is the daily yield on November 30, 2021.
bps — Basis points
Continuously callable — Investment is continuously callable or will be continuously callable on any date after the first call date until its maturity.
GO — General Obligation
LIBOR — London InterBank Offered Rate
See notes to financial statements.
7
USAA Mutual Funds Trust USAA Government Securities Fund | Schedule of Portfolio Investments — continued November 30, 2021 |
(Unaudited)
LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of November 30, 2021, based on the last reset date of the security
LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of November 30, 2021, based on the last reset date of the security
LLC — Limited Liability Company
See notes to financial statements.
8
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Government Securities Fund | |||||||
Assets: | |||||||
Investments, at value (Cost $1,094,687) | $ | 1,120,476 | (a) | ||||
Repurchase agreements, at value (Cost $80,000) | 80,000 | ||||||
Receivables: | |||||||
Interest | 2,684 | ||||||
Capital shares issued | 138 | ||||||
From Adviser | 4 | ||||||
Prepaid expenses | 35 | ||||||
Total Assets | 1,203,337 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Collateral received on loaned securities | 29,544 | ||||||
Distributions | 24 | ||||||
Investments purchased | 44,096 | ||||||
Capital shares redeemed | 597 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 81 | ||||||
Administration fees | 103 | ||||||
Custodian fees | 7 | ||||||
Transfer agent fees | 95 | ||||||
Compliance fees | 1 | ||||||
12b-1 fees | — | (b) | |||||
Other accrued expenses | 69 | ||||||
Total Liabilities | 74,617 | ||||||
Net Assets: | |||||||
Capital | 1,091,779 | ||||||
Total accumulated earnings/(loss) | 36,941 | ||||||
Net Assets | $ | 1,128,720 | |||||
Net Assets | |||||||
Fund Shares | $ | 305,533 | |||||
Institutional Shares | 822,248 | ||||||
Class A | 423 | ||||||
Class R6 | 516 | ||||||
Total | $ | 1,128,720 | |||||
Shares (unlimited number of shares authorized with no par value): | |||||||
Fund Shares | 30,884 | ||||||
Institutional Shares | 83,082 | ||||||
Class A | 43 | ||||||
Class R6 | 52 | ||||||
Total | 114,061 | ||||||
Net asset value, offering and redemption price per share: (c) | |||||||
Fund Shares | $ | 9.89 | |||||
Institutional Shares | $ | 9.90 | |||||
Class A | $ | 9.89 | |||||
Class R6 | $ | 9.89 | |||||
Maximum Sales Charge — Class A | 2.25 | % | |||||
Maximum offering price (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A | $ | 10.12 |
(a) Includes $28,921 of securities on loan.
(b) Rounds to less than $1 thousand.
(c) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
9
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Government Securities Fund | |||||||
Investment Income: | |||||||
Dividends | $ | 3 | |||||
Interest | 9,097 | ||||||
Securities lending (net of fees) | 5 | ||||||
Total Income | 9,105 | ||||||
Expenses: | |||||||
Investment advisory fees | 460 | ||||||
Administration fees — Fund Shares | 238 | ||||||
Administration fees — Institutional Shares | 298 | ||||||
Administration fees — Class A | — | (a) | |||||
Administration fees — Class R6 | — | (a) | |||||
Sub-Administration fees | 11 | ||||||
12b-1 fees — Class A | — | (a) | |||||
Custodian fees | 19 | ||||||
Transfer agent fees — Fund Shares | 186 | ||||||
Transfer agent fees — Institutional Shares | 298 | ||||||
Transfer agent fees — Class A | — | (a) | |||||
Transfer agent fees — Class R6 | — | (a) | |||||
Trustees' fees | 24 | ||||||
Compliance fees | 3 | ||||||
Legal and audit fees | 35 | ||||||
State registration and filing fees | 30 | ||||||
Other expenses | 54 | ||||||
Total Expenses | 1,656 | ||||||
Expenses waived/reimbursed by Adviser | (15 | ) | |||||
Net Expenses | 1,641 | ||||||
Net Investment Income (Loss) | 7,464 | ||||||
Realized/Unrealized Gains (Losses) from Investments: | |||||||
Net realized gains (losses) from investment securities | 811 | ||||||
Net change in unrealized appreciation/depreciation on investment securities | (12,632 | ) | |||||
Net realized/unrealized gains (losses) on investments | (11,821 | ) | |||||
Change in net assets resulting from operations | $ | (4,357 | ) |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
10
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Government Securities Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income (loss) | $ | 7,464 | $ | 19,586 | |||||||
Net realized gains (losses) from investments | 811 | 12,560 | |||||||||
Net change in unrealized appreciation/depreciation on investments | (12,632 | ) | (25,484 | ) | |||||||
Change in net assets resulting from operations | (4,357 | ) | 6,662 | ||||||||
Distributions to Shareholders: | |||||||||||
Fund Shares | (2,842 | ) | (8,877 | ) | |||||||
Institutional Shares | (5,487 | ) | (15,022 | ) | |||||||
Class A | (4 | ) | (110 | ) | |||||||
Class R6 | (3 | ) | (146 | ) | |||||||
Change in net assets resulting from distributions to shareholders | (8,336 | ) | (24,155 | ) | |||||||
Change in net assets resulting from capital transactions | 267,840 | (124,512 | ) | ||||||||
Change in net assets | 255,147 | (142,005 | ) | ||||||||
Net Assets: | |||||||||||
Beginning of period | 873,573 | 1,015,578 | |||||||||
End of period | $ | 1,128,720 | $ | 873,573 |
(continues on next page)
See notes to financial statements.
11
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands) (continued)
USAA Government Securities Fund | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
Capital Transactions: | |||||||||||
Fund Shares | |||||||||||
Proceeds from shares issued | $ | 18,337 | $ | 56,454 | |||||||
Distributions reinvested | 2,684 | 8,356 | |||||||||
Cost of shares redeemed | (38,175 | ) | (95,166 | ) | |||||||
Total Fund Shares | $ | (17,154 | ) | $ | (30,356 | ) | |||||
Institutional Shares | |||||||||||
Proceeds from shares issued | $ | 280,320 | $ | 7,535 | |||||||
Distributions reinvested | 5,483 | 15,018 | |||||||||
Cost of shares redeemed | (1,227 | ) | (104,247 | ) | |||||||
Total Institutional Shares | $ | 284,576 | $ | (81,694 | ) | ||||||
Class A | |||||||||||
Proceeds from shares issued | $ | 79 | $ | 5,434 | |||||||
Distributions reinvested | 4 | 20 | |||||||||
Cost of shares redeemed | (19 | ) | (10,287 | ) | |||||||
Total Class A | $ | 64 | $ | (4,833 | ) | ||||||
Class R6 | |||||||||||
Proceeds from shares issued | $ | 361 | $ | 186 | |||||||
Distributions reinvested | 3 | 27 | |||||||||
Cost of shares redeemed | (10 | ) | (7,842 | ) | |||||||
Total Class R6 | $ | 354 | $ | (7,629 | ) | ||||||
Change in net assets resulting from capital transactions | $ | 267,840 | $ | (124,512 | ) | ||||||
Share Transactions: | |||||||||||
Fund Shares | |||||||||||
Issued | 1,837 | 5,550 | |||||||||
Reinvested | 269 | 824 | |||||||||
Redeemed | (3,825 | ) | (9,376 | ) | |||||||
Total Fund Shares | (1,719 | ) | (3,002 | ) | |||||||
Institutional Shares | |||||||||||
Issued | 28,253 | 739 | |||||||||
Reinvested | 550 | 1,480 | |||||||||
Redeemed | (123 | ) | (10,224 | ) | |||||||
Total Institutional Shares | 28,680 | (8,005 | ) | ||||||||
Class A | |||||||||||
Issued | 9 | 531 | |||||||||
Reinvested | — | (a) | 2 | ||||||||
Redeemed | (2 | ) | (1,015 | ) | |||||||
Total Class A | 7 | (482 | ) | ||||||||
Class R6 | |||||||||||
Issued | 36 | 18 | |||||||||
Reinvested | — | (a) | 3 | ||||||||
Redeemed | (1 | ) | (777 | ) | |||||||
Total Class R6 | 35 | (756 | ) | ||||||||
Change in Shares | 27,003 | (12,245 | ) |
(a) Rounds to less than 1,000 shares.
See notes to financial statements.
12
This page is intentionally left blank.
13
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
| Investment Activities | Distributions to Shareholders From | |||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Government Securities Fund | |||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 10.03 | 0.08 | (d) | (0.13 | ) | (0.05 | ) | (0.09 | ) | — | ||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 10.23 | 0.21 | (d) | (0.15 | ) | 0.06 | (0.22 | ) | (0.04 | ) | ||||||||||||||||
2020 | $ | 9.84 | 0.24 | (d) | 0.39 | 0.63 | (0.24 | ) | — | ||||||||||||||||||
2019 | $ | 9.55 | 0.23 | 0.29 | 0.52 | (0.23 | ) | — | |||||||||||||||||||
2018 | $ | 9.86 | 0.20 | (0.31 | ) | (0.11 | ) | (0.20 | ) | — | |||||||||||||||||
2017 | $ | 10.00 | 0.20 | (0.14 | ) | 0.06 | (0.20 | ) | — | ||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 10.04 | 0.08 | (d) | (0.13 | ) | (0.05 | ) | (0.09 | ) | — | ||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 10.23 | 0.22 | (d) | (0.14 | ) | 0.08 | (0.23 | ) | (0.04 | ) | ||||||||||||||||
2020 | $ | 9.85 | 0.24 | (d) | 0.39 | 0.63 | (0.25 | ) | — | ||||||||||||||||||
2019 | $ | 9.55 | 0.24 | 0.30 | 0.54 | (0.24 | ) | — | |||||||||||||||||||
2018 | $ | 9.86 | 0.21 | (0.31 | ) | (0.10 | ) | (0.21 | ) | — | |||||||||||||||||
2017 | $ | 10.00 | 0.21 | (0.14 | ) | 0.07 | (0.21 | ) | — |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment are calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
See notes to financial statements.
14
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Total Distributions | Redemption Fees Added to Beneficial Interests | Net Asset Value, End of Period | Total Return (Excludes Sales Charge)*(a) | Net Expenses**^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | |||||||||||||||||||||||||||||||
USAA Government Securities Fund | |||||||||||||||||||||||||||||||||||||||
Fund Shares | |||||||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | (0.09 | ) | — | $ | 9.89 | (0.51 | )% | 0.40 | % | 1.60 | % | 0.40 | % | $ | 305,533 | 14 | % | ||||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||||||
2021 | (0.26 | ) | — | $ | 10.03 | 0.56 | % | 0.41 | % | 2.04 | % | 0.41 | % | $ | 327,111 | 15 | % | ||||||||||||||||||||||
2020 | (0.24 | ) | — | $ | 10.23 | 6.49 | % | 0.43 | % | 2.36 | % | 0.43 | % | $ | 364,077 | 11 | % | ||||||||||||||||||||||
2019 | (0.23 | ) | — | $ | 9.84 | 5.56 | % | 0.47 | % | 2.42 | % | 0.47 | % | $ | 328,123 | 9 | % | ||||||||||||||||||||||
2018 | (0.20 | ) | — | $ | 9.55 | (1.09 | )% | 0.48 | % | 2.09 | % | 0.48 | % | $ | 333,464 | 15 | % | ||||||||||||||||||||||
2017 | (0.20 | ) | — | $ | 9.86 | 0.62 | % | 0.48 | % | 2.02 | % | 0.48 | % | $ | 390,897 | 18 | % | ||||||||||||||||||||||
Institutional Shares | |||||||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | (0.09 | ) | — | $ | 9.90 | (0.47 | )% | 0.34 | % | 1.64 | % | 0.34 | % | $ | 822,248 | 14 | % | ||||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||||||
2021 | (0.27 | ) | — | $ | 10.04 | 0.75 | % | 0.32 | % | 2.12 | % | 0.32 | % | $ | 545,930 | 15 | % | ||||||||||||||||||||||
2020 | (0.25 | ) | — | $ | 10.23 | 6.45 | % | 0.36 | % | 2.43 | % | 0.36 | % | $ | 638,299 | 11 | % | ||||||||||||||||||||||
2019 | (0.24 | ) | — | $ | 9.85 | 5.76 | % | 0.38 | % | 2.55 | % | 0.38 | % | $ | 742,233 | 9 | % | ||||||||||||||||||||||
2018 | (0.21 | ) | — | $ | 9.55 | (1.01 | )% | 0.39 | % | 2.18 | % | 0.39 | % | $ | 251,297 | 15 | % | ||||||||||||||||||||||
2017 | (0.21 | ) | — | $ | 9.86 | 0.71 | % | 0.40 | % | 2.12 | % | 0.40 | % | $ | 133,607 | 18 | % |
(continues on next page)
See notes to financial statements.
15
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains from Investments | ||||||||||||||||||||||
USAA Government Securities Fund | |||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 10.03 | 0.09 | (d) | (0.13 | ) | (0.04 | ) | (0.10 | ) | — | ||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 10.22 | 0.19 | (d) | (0.14 | ) | 0.05 | (0.20 | ) | (0.04 | ) | ||||||||||||||||
2020 | $ | 9.84 | 0.20 | (d) | 0.39 | 0.59 | (0.21 | ) | — | ||||||||||||||||||
2019 | $ | 9.54 | 0.21 | 0.30 | 0.51 | (0.21 | ) | — | |||||||||||||||||||
2018 | $ | 9.85 | 0.18 | (0.31 | ) | (0.13 | ) | (0.18 | ) | — | |||||||||||||||||
2017 | $ | 10.00 | 0.17 | (0.15 | ) | 0.02 | (0.17 | ) | — | ||||||||||||||||||
Class R6 | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 10.01 | 0.09 | (d) | (0.11 | ) | (0.02 | ) | (0.10 | ) | — | ||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 10.22 | 0.23 | (d) | (0.15 | ) | 0.08 | (0.25 | ) | (0.04 | ) | ||||||||||||||||
2020 | $ | 9.84 | 0.24 | (d) | 0.39 | 0.63 | (0.25 | ) | — | ||||||||||||||||||
2019 | $ | 9.55 | 0.24 | 0.29 | 0.53 | (0.24 | ) | — | |||||||||||||||||||
2018 | $ | 9.85 | 0.22 | (0.30 | ) | (0.08 | ) | (0.22 | ) | — | |||||||||||||||||
December 1, 2016 (g) through May 31, 2017 | $ | 9.80 | 0.11 | 0.05 | 0.16 | (0.11 | ) | — |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
** For the period beginning July 1, 2019, the amount of any waivers or reimbursements and the amount of any recoupment are calculated without regard to the impact of any performance adjustment to the Fund's management fee.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 5 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
See notes to financial statements.
16
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period (continued)
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Total Distributions | Redemption Fees Added to Beneficial Interests | Net Asset Value, End of Period | Total Return (Excludes Sales Charge)*(a) | Net Expenses**^(b) | Net Investment Income (Loss)(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | Portfolio Turnover(a)(c) | |||||||||||||||||||||||||||||||
USAA Government Securities Fund | |||||||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | (0.10 | ) | — | $ | 9.89 | (0.42 | )% | 0.23 | % | 1.77 | % | 4.21 | % | $ | 423 | 14 | % | ||||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||||||
2021 | (0.24 | ) | — | $ | 10.03 | 0.43 | % | 0.70 | % | 1.89 | % | 1.06 | % | $ | 365 | 15 | % | ||||||||||||||||||||||
2020 | (0.21 | ) | — | $ | 10.22 | 6.04 | % | 0.75 | % | 2.03 | % | 0.80 | % | $ | 5,299 | 11 | % | ||||||||||||||||||||||
2019 | (0.21 | ) | — | $ | 9.84 | 5.37 | % | 0.75 | % | 2.14 | % | 0.87 | % | $ | 5,042 | 9 | % | ||||||||||||||||||||||
2018 | (0.18 | ) | — | (e) | $ | 9.54 | (1.36 | )% | 0.75 | % | 1.82 | % | 0.87 | % | $ | 4,804 | 15 | % | |||||||||||||||||||||
2017 | (0.17 | ) | — | $ | 9.85 | 0.25 | % | 0.75 | % | 1.76 | % | 0.93 | % | $ | 6,089 | 18 | % | ||||||||||||||||||||||
Class R6 | |||||||||||||||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | (0.10 | ) | — | $ | 9.89 | (0.19 | )% | 0.10 | %(f) | 1.81 | % | 4.66 | % | $ | 516 | 14 | % | ||||||||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||||||||||||||
2021 | (0.29 | ) | — | $ | 10.01 | 0.75 | % | 0.31 | % | 2.30 | % | 0.46 | % | $ | 167 | 15 | % | ||||||||||||||||||||||
2020 | (0.25 | ) | — | $ | 10.22 | 6.46 | % | 0.35 | % | 2.43 | % | 0.39 | % | $ | 7,903 | 11 | % | ||||||||||||||||||||||
2019 | (0.24 | ) | — | $ | 9.84 | 5.68 | % | 0.35 | % | 2.54 | % | 0.51 | % | $ | 6,425 | 9 | % | ||||||||||||||||||||||
2018 | (0.22 | ) | — | $ | 9.55 | (0.87 | )% | 0.35 | % | 2.22 | % | 0.64 | % | $ | 6,345 | 15 | % | ||||||||||||||||||||||
December 1, 2016 (g) through May 31, 2017 | (0.11 | ) | — | $ | 9.85 | 1.62 | % | 0.35 | % | 2.22 | % | 1.12 | % | $ | 5,027 | 18 | % |
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Amount is less than $0.005 per share.
(f) Includes impact of voluntary waiver. Without this voluntary waiver, the net expense ratio would have been 0.13% higher.
(g) Commencement of operations.
See notes to financial statements.
17
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Government Securities Fund (the "Fund"). The Fund offers four classes of shares: Fund Shares, Institutional Shares, Class A, and Class R6. The Fund is classified as diversified under the 1940 Act.
Each class of shares of the Fund has substantially identical rights and privileges, except with respect to sales charges, fees paid under distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters solely affecting a single class of shares, and the exchange privilege of each class of shares.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risks associated with entering into those investments.
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Trust's Board of Trustees' (the "Board") oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
18
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Investments in open-end investment companies are valued at their net asset value ("NAV"). These valuations are typically categorized as Level 1 in the fair value hierarchy.
Debt securities are valued each business day by a pricing service approved by the Board. The approved pricing service uses the evaluated bid or the last sale price to value securities. Debt obligations maturing within 60 days may be valued at their amortized cost, provided that the amortized cost represents the fair value of such securities. These valuations are typically categorized as Level 2 in the fair value hierarchy.
Repurchase agreements are valued at cost.
In the event that price quotations or valuations are not readily available, investments are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, and the actual price realized from the sale of a security may differ materially from the fair value price. Valuing these securities at fair value is intended to cause the Fund's NAV to be more reliable than it otherwise would be.
A summary of the valuations as of November 30, 2021, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed on the Schedule of Portfolio Investments (amounts in thousands):
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Asset-Backed Securities | $ | — | $ | 26,230 | $ | — | $ | 26,230 | |||||||||||
Municipal Bonds | — | 59,815 | — | 59,815 | |||||||||||||||
U.S. Government Agency Mortgages | — | 503,160 | — | 503,160 | |||||||||||||||
U.S. Treasury Obligations | — | 499,983 | — | 499,983 | |||||||||||||||
Investment Company | 1,744 | — | — | 1,744 | |||||||||||||||
Repurchase Agreements | — | 80,000 | — | 80,000 | |||||||||||||||
Collateral for Securities Loaned | 29,544 | — | — | 29,544 | |||||||||||||||
Total | $ | 31,288 | $ | 1,169,188 | $ | — | $ | 1,200,476 | �� |
For the six months ended November 30, 2021, there were no transfers in or out of Level 3 in the fair value hierarchy.
Repurchase Agreements:
The Fund may enter into repurchase agreements with commercial banks or recognized security dealers pursuant to the terms of a Master Repurchase Agreement. A repurchase agreement is an arrangement wherein the Fund purchases securities and the seller agrees to repurchase the securities at an agreed upon time and at an agreed upon price. The purchased securities are marked-to-market daily to ensure their value is equal to at least 102% of principal including accrued interest and are held by the Fund, either through its regular custodian or through a special "tri-party" custodian that maintains separate accounts for both the Fund and its counterparty, until maturity of the repurchase agreement. Master Repurchase Agreements typically contain netting provisions, which provide for the net settlement of all transactions and collateral with the Fund through a single payment in the event of default or termination. Repurchase agreements are subject to credit risk, and the Fund's Manager monitors the creditworthiness of sellers with which the Fund may enter into repurchase agreements.
Investments in repurchase agreements as presented on the Schedule of Portfolio Investments are not net settlement amounts but gross. At November 30, 2021, the value of the related collateral exceeded the value of the repurchase agreements, reducing the net settlement amount to zero. Details on the collateral are included on the Schedule of Portfolio Investments.
19
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Investment Companies:
Open-End Funds:
The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.
Securities Purchased on a Delayed-Delivery or When-Issued Basis:
The Fund may purchase securities on a delayed-delivery or when-issued basis. Delivery and payment for securities that have been purchased by the Fund on a delayed-delivery or when-issued basis, or for delayed draws on loans can take place a month or more after the trade date. At the time the Fund makes the commitment to purchase a security on a delayed-delivery or when-issued basis, the Fund records the transaction and reflects the value of the security in determining NAV. No interest accrues to the Fund until the transaction settles and payment takes place. A segregated account is established and the Fund maintains cash and/or marketable securities at least equal in value to commitments for delayed-delivery or when-issued securities. If the Fund owns delayed-delivery or when-issued securities, these values are included in Payables for Investments purchased on the accompanying Statement of Assets and Liabilities and the segregated assets are identified on the Schedule of Portfolio Investments.
Municipal Obligations:
The values of municipal obligations can fluctuate and may be affected by adverse tax, legislative, or political changes, and by financial developments affecting municipal issuers. Payments of municipal obligations may depend on a relatively limited source of revenue, resulting in greater credit risk. Future changes in federal tax laws or the activity of an issuer may adversely affect the tax-exempt status of municipal obligations.
Mortgage and Asset-Backed Securities:
The values of some mortgage-related or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Fund to a lower rate of return upon reinvestment of principal. The values of mortgage- and asset-backed securities depend in part on the credit quality and adequacy of the underlying assets or collateral and may fluctuate in response to the market's perception of these factors as well as current and future repayment rates. Some mortgage-backed securities are backed by the full faith and credit of the U.S. government (e.g., mortgage-backed securities issued by the Government National Mortgage Association, commonly known as "Ginnie Mae"), while other mortgage-backed securities (e.g., mortgage-backed securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, commonly known as "Fannie Mae" and "Freddie Mac", respectively), are backed only by the credit of the government entity issuing them. In addition, some mortgage-backed securities are issued by private entities and, as such, are not guaranteed by the U.S. government or any agency or instrumentality of the U.S. government.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are recorded on the identified cost basis. Paydown gains or losses on applicable securities, if any, are recorded as components of Interest income on the Statement of Operations.
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Securities Lending:
The Fund, through a Securities Lending Agreement with Citibank, N.A. ("Citibank"), may lend its securities to qualified financial institutions, such as certain broker-dealers and banks, to earn additional income, net of income retained by Citibank. Borrowers are required to initially secure their loans for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are generally cured the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities and other securities as permitted by Securities and Exchange Commission ("SEC") guidelines. The cash collateral is invested in short-term instruments or cash equivalents, primarily open-end investment companies, as noted on the Fund's Schedule of Portfolio Investments. The Fund does not have effective control of the non-cash collateral and therefore it is not disclosed on the Fund's Schedule of Portfolio Investments. Collateral requirements are determined daily based on the value of the Fund's securities on loan as of the end of the prior business day. During the time portfolio securities are on loan, the borrower will pay the Fund any dividends or interest paid on such securities plus any fee negotiated between the parties to the lending agreement. The Fund also earns a return from the collateral. The Fund pays Citibank various fees in connection with the investment of cash collateral and fees based on the investment income received from securities lending activities. Securities lending income (net of these fees) is disclosed on the Statement of Operations. Loans are terminable upon demand and the borrower must return the loaned securities within the lesser of one standard settlement period or five business days. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. In addition, there is a risk that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower.
The Fund's agreement with Citibank does not include master netting provisions. Non-cash collateral received by the Fund may not be sold or re-pledged, except to satisfy borrower default.
The following table (amounts in thousands) is a summary of the Fund's securities lending transactions as of November 30, 2021.
Value of Securities on Loan | Non-Cash Collateral | Cash Collateral | |||||||||
$ | 28,921 | $ | — | $ | 29,544 |
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
Income, expenses (other than class-specific expenses such as transfer agent fees, state registration fees, printing fees, and 12b-1 fees), and realized and unrealized gains or losses on investments are
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allocated to each class of shares based on its relative net assets on the date income is earned or expenses and realized and unrealized gains and losses are incurred.
3. Purchases and Sales:
Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the six months ended November 30, 2021, were as follows for the Fund (amounts in thousands):
Excluding U.S. Government Securities | U.S. Government Securities | ||||||||||||||
Purchases | Sales | Purchases | Sales | ||||||||||||
$ | 13,400 | $ | 4,679 | $ | 374,101 | $ | 118,693 |
4. Affiliated Fund Ownership:
The Fund offers its shares for investment by other USAA Mutual Funds. The fund-of-funds do not invest in the underlying funds for the purpose of exercising management or control, and the affiliated fund-of-funds' annual and semi-annual reports may be viewed at vcm.com. As of November 30, 2021, certain fund-of-funds owned total outstanding shares of the Fund as follows:
Affiliated USAA Mutual Funds | Ownership % | ||||||
USAA Cornerstone Conservative Fund | 3.8 | ||||||
USAA Target Retirement Income Fund | 20.3 | ||||||
USAA Target Retirement 2030 Fund | 18.0 | ||||||
USAA Target Retirement 2040 Fund | 9.0 | ||||||
USAA Target Retirement 2050 Fund | 1.9 | ||||||
USAA Target Retirement 2060 Fund | 0.4 |
5. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the SEC. The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base fee and a performance adjustment. The Fund's base fee is accrued daily and paid monthly at an annualized rate of 0.125% of the Fund's average daily net assets. Amounts incurred and paid to VCM for the six months ended November 30, 2021, are reflected on the Statement of Operations as Investment advisory fees.
On November 6, 2018, United Services Automobile Association ("USAA"), the parent company of USAA Asset Management Company ("AMCO"), the prior investment adviser to the Fund announced that AMCO would be acquired by Victory Capital Holdings Inc. (the "Transaction"). A special shareholder meeting was held on April 18, 2019, at which shareholders of the Fund approved a new investment advisory agreement between the Trust, on behalf of the Fund, and VCM. The Transaction closed on July 1, 2019, and effective July 1, 2019, VCM replaced AMCO as the investment adviser to the Fund and no performance adjustments were made for the period beginning July 1, 2019, through June 30, 2020. Only performance beginning as of July 1, 2019, and thereafter is utilized in calculating future performance adjustments.
The performance adjustment for each share class is accrued daily and calculated monthly by comparing each class' performance to that of the Lipper Intermediate U.S. Government Funds Index. The Lipper Intermediate U.S. Government Funds Index tracks the total return performance of the largest funds within the Lipper Intermediate U.S. Government Funds category.
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The performance period for each share class consists of the current month plus the previous 35 months (or the number of months beginning July 1, 2019, if fewer). The following table is utilized to determine the extent of the performance adjustment:
Over/Under Performance Relative to Index (in basis points)(a) | Annual Adjustment Rate (in basis points) | ||||||
+/- 20 to 50 | +/- 4 | ||||||
+/- 51 to 100 | +/- 5 | ||||||
+/- 101 and greater | +/- 6 |
(a) Based on the difference between the average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point.
Each class' annual performance adjustment rate is multiplied by the average daily net assets of each respective class over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance), or subtracted from (in the case of underperformance) the base fee.
Under the performance fee arrangement, each class pays a positive performance fee adjustment for a performance period whenever the class outperforms the Lipper Intermediate U.S. Government Funds Index over that period, even if the class has overall negative returns during the performance period.
For the period June 1, 2021 to November 30, 2021, performance adjustments were $(46), $(65), $(1) and less than $(1) for Fund Shares, Institutional Shares, Class A, and Class R6, in thousands, respectively. Performance adjustments were (0.03)%, (0.02)%, (0.52)% and (0.12)% for Fund Shares, Institutional Shares, Class A, and Class R6, respectively. The performance adjustment rate included in the investment advisory fee may differ from the maximum over/under Annual Adjustment Rate due to differences in average net assets for the reporting period and rolling 36 month performance periods.
The Trust relies on an exemptive order granted to VCM and its affiliated funds by the SEC in March 2019 permitting the use of a "manager-of-managers" structure for certain funds. Under a manager-of-managers structure, the investment adviser may select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the day-to-day investment of a fund's assets. For the six months ended November 30, 2021, the Fund had no subadvisers.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.15%, 0.10%, 0.15% and 0.05%, which is based on the Fund's average daily net assets of the Fund Shares, Institutional Shares, Class A, and Class R6, respectively. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Administration fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. The funds in the Trust, Victory
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Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. VCTA provides transfer agent services to the Fund Shares based on an annual charge of $25.50 per shareholder account plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Transfer agent's fees for Institutional Shares, Class A, and Class R6 are paid monthly based on a fee accrued daily at an annualized rate of 0.10%, 0.10% and 0.01%, respectively, of average daily net assets, plus out-of-pocket expenses. Amounts incurred and paid to VCTA for the six months ended November 30, 2021, are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.
Pursuant to the Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, up to an annual rate of 0.25% of the average daily net assets of Class A. The distribution and service fees paid to the Distributor may be used by the Distributor to pay for activity primarily intended to result in the sale of Class A. Amounts incurred and paid to the Distributor for the six months ended November 30, 2021, are reflected on the Statement of Operations as 12b-1 fees.
In addition, the Distributor is entitled to receive commissions on sales of Class A. For the six months ended November 30, 2021, the Distributor did not receive any commissions.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by certain classes of the Fund in any fiscal year exceed the expense limit for such classes of the Fund. Such excess amounts will be the liability of the Adviser. Acquired fund fees and expenses, interest, taxes, brokerage commissions, other expenditures, which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of November 30, 2021, the expense limits (excluding voluntary waivers) were 0.48%, 0.39%, 0.75% and 0.35% for Fund Shares, Institutional Shares, Class A, and Class R6, respectively.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
As of November 30, 2021, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayment is not probable at November 30, 2021.
Expires 2023 | Expires 2024 | Expires 2025 | Total | ||||||||||||
$ | 1 | $ | 25 | $ | 15 | $ | 41 |
The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining competitive expense ratios. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. For the six months ended November 30, 2021, the Adviser voluntarily waived fees of less than $1 thousand.
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
6. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Interest Rate Risk — The Fund is subject to the risk that the market value of the bonds in its portfolio will fluctuate because of changes in interest rates, changes in the supply of and demand for debt securities, and other market factors. Bond prices generally are linked to the prevailing market interest rates. In general, when interest rates rise, bond prices fall; conversely, when interest rates fall, bond prices rise. The price volatility of a bond also depends on its duration. Generally, the longer the duration of a bond, the greater is its sensitivity to interest rates. To compensate investors for this higher interest rate risk, bonds with longer durations generally offer higher yields than bonds with shorter durations. The ability of an issuer of a debt security to repay principal prior to a security's maturity can increase the security's sensitivity to interest rate changes.
Decisions by the U.S. Federal Reserve (also known as the "Fed") regarding interest rate and monetary policy, which can be difficult to predict and sometimes change direction suddenly in response to economic and market events, can have a significant effect on the value of fixed-income securities as well as the overall strength of the U.S. economy. Precise interest rate predictions are difficult to make, and interest rates may change unexpectedly and dramatically in response to extreme changes in market or economic conditions. As a result, the value of fixed-income securities may vary widely under certain market conditions.
Prepayment and Extension Risk — Mortgage-backed securities make regularly scheduled payments of principal along with interest payments. In addition, mortgagors generally have the option of paying off their mortgages without penalty at any time. For example, when a mortgaged property is sold, the old mortgage is usually prepaid. Also, when interest rates fall, the mortgagor may refinance the mortgage and prepay the old mortgage. A homeowner's default on the mortgage also may cause a prepayment of the mortgage. This unpredictability of the mortgage's cash flow is called prepayment risk. For the investor, prepayment risk usually means that principal is received at the least opportune time. For example, when interest rates fall, homeowners may find it advantageous to refinance their mortgages and prepay principal. In this case, the investor is forced to reinvest the principal at the current lower rate. On the other hand, when interest rates rise, homeowners generally will not refinance their mortgages and prepayments will fall. This causes the average life of the mortgage to extend and be more sensitive to interest rates, which is called extension risk. In addition, the amount of principal the investor has to invest in these higher interest rates is reduced.
Liquidity Risk — Market developments and other factors, including a general rise in interest rates, have the potential to cause investors to move out of fixed-income securities on a large scale, which may increase redemptions from mutual funds that hold large amounts of fixed-income securities. Such
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USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
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a move, coupled with a reduction in the ability or willingness of dealers and other institutional investors to buy or hold fixed-income securities, may result in decreased liquidity and increased volatility in the fixed-income markets. Heavy redemptions of fixed-income mutual funds and decreased liquidity from fixed-income securities could hurt the Fund's performance. In addition, significant securities market disruptions related to outbreaks of the coronavirus disease ("COVID-19") have led to dislocation in the market for a variety of fixed-income securities (including municipal obligations), which has decreased liquidity and sharply reduced returns.
LIBOR Discontinuation Risk — Many debt securities, derivatives, and other financial instruments, including some of the Fund's investments, use the London Interbank Offered Rate ("LIBOR") as the reference or benchmark rate for variable interest rate calculations. LIBOR is being discontinued as a floating rate benchmark. The Secured Overnight Financing Rate ("SOFR") is expected to replace U.S. dollar LIBOR as the principal floating rate benchmark. The LIBOR discontinuation has affected, and will continue to affect, financial markets generally. The date of the LIBOR discontinuation will vary depending on the LIBOR currency and tenor. The UK Financial Conduct Authority (the "FCA"), which is the regulator of the LIBOR administrator, has announced that, after specified dates, LIBOR settings will cease to be provided by any administrator or will no longer be representative. Those dates are: (i) June 30, 2023, in the case of the principal U.S. dollar LIBOR tenors (overnight and one-, three-, six- and 12-month; and (ii) December 31, 2021, in all other cases (i.e., one-week and two-month U.S. dollar LIBOR and all tenors of non-U.S. dollar LIBOR). Accordingly, many existing LIBOR obligations will transition to another benchmark after June 30, 2023, or, in some cases, after December 31, 2021. The FCA and certain U.S. regulators have stated that, despite expected publication of U.S. dollar LIBOR through June 30, 2023, no new contracts using U.S. dollar LIBOR should be entered into after December 31, 2021. Although the foregoing reflects the likely timing of the LIBOR discontinuation and certain consequences, there is no assurance that LIBOR, of any particular currency or tenor, will continue to be published until any particular date or in any particular form, and there is no assurance regarding the consequences of the LIBOR discontinuation. In the United States, there have been efforts to identify alternative reference interest rates for U.S. dollar LIBOR. The cash markets have generally coalesced around recommendations from the Alternative Reference Rates Committee (the "ARRC"), which was convened by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York. The ARRC has recommended that U.S. dollar LIBOR be replaced by rates based on SOFR plus, in the case of existing LIBOR contracts and obligations, a spread adjustment. For purposes of the following discussion, the term "LIBOR" refers solely to U.S. dollar LIBOR. SOFR has a limited history, having been first published in April 2018. The future performance of SOFR, and SOFR-based reference rates, cannot be predicted based on SOFR's history or otherwise. SOFR has been more volatile than other benchmark or market rates, such as three-month LIBOR, during certain periods. Future levels of SOFR may bear little or no relation to historical levels of SOFR, LIBOR or other rates. SOFR-based rates will differ from LIBOR, and the differences may be material. SOFR is intended to be a broad measure of the cost of borrowing funds overnight in transactions that are collateralized by U.S. Treasury securities. In contrast, LIBOR is intended to be an unsecured rate that represents interbank funding costs for different short-term tenors. For these reasons, among others, there is no assurance that SOFR, or rates derived from SOFR, will perform in the same or a similar way as LIBOR would have performed at any time, and there is no assurance that SOFR-based rates will be a suitable substitute for LIBOR. Non-LIBOR floating rate obligations, including SOFR-based obligations, may have returns and values that fluctuate more than those of floating rate obligations that are based on LIBOR or other rates. Resulting changes in the financial markets may adversely affect financial markets generally and may also adversely affect our operations specifically, particularly as financial markets transition away from LIBOR.
7. Borrowing and Interfund Lending:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination
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date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
Interfund Lending:
The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other fund in the Victory Funds Complex that is permitted to participate in the Facility, relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each Fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund, if any, during the period is reflected on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund, if any, during the period is presented on the Statement of Operations under Interfund lending fees.
The Fund did not utilize or participate in the Facility during the six months ended November 30, 2021.
8. Federal Income Tax Information:
Distributions from the Fund's net investment income are accrued daily and distributed on the last business day of each month. The Fund intends to distribute any net investment income annually. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had no capital loss carryforwards, for the federal income tax purposes.
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USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
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Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarter of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC's website at www.sec.gov.
Expense Examples
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21- 11/30/21* | Hypothetical Expenses Paid During Period 6/1/21- 11/30/21* | Annualized Expense Ratio During Period 6/1/21- 11/30/21 | ||||||||||||||||||||||
Fund Shares | $ | 1,000.00 | $ | 994.90 | $ | 1,023.06 | $ | 2.00 | $ | 2.03 | 0.40 | % | |||||||||||||||
Institutional Shares | 1,000.00 | 995.30 | 1,023.36 | 1.70 | 1.72 | 0.34 | % | ||||||||||||||||||||
Class A | 1,000.00 | 995.80 | 1,023.92 | 1.15 | 1.17 | 0.23 | % | ||||||||||||||||||||
Class R6 | 1,000.00 | 998.10 | 1,024.57 | 0.50 | 0.51 | 0.10 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
28
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
23414-0122
NOVEMBER 30, 2021
Semi Annual Report
USAA Treasury Money Market Trust®
Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. Victory Capital and its affiliates are not affiliated with United Services Automobile Association or its affiliates. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and USAA Investments logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.
www.vcm.com
News, Information And Education 24 Hours A Day, 7 Days A Week
The Victory Capital website gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:
• Detailed performance records
• Daily share prices
• The latest fund news
• Investment resources to help you become a better investor
• A section dedicated to investment professionals
Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.
USAA Mutual Funds Trust
TABLE OF CONTENTS
Investment Objective & Portfolio Holdings | 2 | ||||||
Schedule of Portfolio Investments | 3 | ||||||
Financial Statements | |||||||
Statement of Assets and Liabilities | 4 | ||||||
Statement of Operations | 5 | ||||||
Statements of Changes in Net Assets | 6 | ||||||
Financial Highlights | 8 | ||||||
Notes to Financial Statements | 10 | ||||||
Supplemental Information | 15 | ||||||
Proxy Voting and Portfolio Holdings Information | 15 | ||||||
Expense Example | 15 | ||||||
Privacy Policy (inside back cover) |
This report is for the information of the shareholders and others who have received a copy of the currently effective prospectus of the Fund, managed by Victory Capital Management Inc. It may be used as sales literature only when preceded or accompanied by a current prospectus, which provides further details about the Fund.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable portion of your distribution and, if you live in a state that requires state income tax withholding, at your state's tax rate. However, you may elect not to have withholding apply or to have income tax withheld at a higher rate. Any withholding election that you make will apply to any subsequent distribution unless and until you change or revoke the election. If you wish to make a withholding election, or change or revoke a prior withholding election, call (800) 235-8396, and form W-4P (OMB No. 1545-0074 withholding certificate for pension or annuity payments) will be electronically sent.
If you do not have a withholding election in place by the date of a distribution, federal income tax will be withheld from the taxable portion of your distribution at a rate of 10%. If you must pay estimated taxes, you may be subject to estimated tax penalties if your estimated tax payments are not sufficient and sufficient tax is not withheld from your distribution.
For more specific information, please consult your tax adviser.
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
1
USAA Mutual Funds Trust USAA Treasury Money Market Trust | November 30, 2021 |
(Unaudited)
Investment Objective and Portfolio Holdings:
The Fund seeks to provide maximum current income while maintaining the highest degree of safety and liquidity.
Portfolio Mix
November 30, 2021
(% of Net Assets)
Percentages are of the net assets of the Fund and may not equal 100%.
Refer to the Schedule of Portfolio Investments for a complete list of securities.
2
USAA Mutual Funds Trust USAA Treasury Money Market Trust | Schedule of Portfolio Investments November 30, 2021 |
(Amounts in Thousands, Except for Shares) (Unaudited)
Security Description | Principal Amount | Value | |||||||||
U.S. Treasury Obligations (52.1%) | |||||||||||
U.S. Treasury Bills 0.05%, 12/16/21 (a) | $ | 25,000 | $ | 25,001 | |||||||
0.06%, 12/30/21 (a) | 25,000 | 24,999 | |||||||||
0.02%, 1/13/22 (a) | 25,000 | 24,998 | |||||||||
0.04%, 2/10/22 (a) | 25,000 | 24,998 | |||||||||
0.05%, 2/24/22 (a) | 25,000 | 24,997 | |||||||||
0.05%, 3/10/22 (a) | 25,000 | 24,996 | |||||||||
0.06%, 4/14/22 (a) | 25,000 | 24,995 | |||||||||
0.08%, 5/5/22 (a) | 25,000 | 24,993 | |||||||||
0.09%, 5/26/22 (a) | 25,000 | 24,992 | |||||||||
0.12%, 6/16/22 (a) | 25,000 | 24,991 | |||||||||
Total U.S. Treasury Obligations (Cost $249,960) | 249,960 | ||||||||||
Repurchase Agreements (47.3%) | |||||||||||
Bank of America Corp., 0.05%, 12/1/21, purchased on 11/30/21, with a maturity date of 12/1/21, with a value of $197,000 (collateralized by U.S. Treasury Notes, 2.25% — 3.13%, due 11/15/27 — 11/15/28, with a value of $200,940) | 197,000 | 197,000 | |||||||||
Credit Agricole CIB NY, 0.04%, 12/1/21, purchased on 11/30/21, with a maturity date of 12/1/21, with a value of $30,000 (collateralized by U.S. Treasury Bonds, 1.88%, due 2/15/51, with a value of $30,600) | 30,000 | 30,000 | |||||||||
Total Repurchase Agreements (Cost $227,000) | 227,000 | ||||||||||
Total Investments (Cost $476,960) — 99.4% | 476,960 | ||||||||||
Other assets in excess of liabilities — 0.6% | 2,801 | ||||||||||
NET ASSETS — 100.00% | $ | 479,761 |
(a) Rate represents the effective yield at November 30, 2021.
See notes to financial statements.
3
USAA Mutual Funds Trust | Statement of Assets and Liabilities November 30, 2021 |
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
USAA Treasury Money Market Trust | |||||||
Assets: | |||||||
Investments, at value (Cost $249,960) | $ | 249,960 | |||||
Repurchase agreements, at value (Cost $227,000) | 227,000 | ||||||
Cash | 2,596 | ||||||
Receivables: | |||||||
Interest | — | (a) | |||||
Capital shares issued | 191 | ||||||
From Adviser | 267 | ||||||
Prepaid expenses | 18 | ||||||
Total Assets | 480,032 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Distributions | — | (a) | |||||
Capital shares redeemed | 77 | ||||||
Accrued expenses and other payables: | |||||||
Investment advisory fees | 50 | ||||||
Administration fees | 40 | ||||||
Custodian fees | 1 | ||||||
Transfer agent fees | 41 | ||||||
Compliance fees | — | (a) | |||||
Other accrued expenses | 62 | ||||||
Total Liabilities | 271 | ||||||
Net Assets: | |||||||
Capital | 479,761 | ||||||
Net Assets | $ | 479,761 | |||||
Shares (unlimited number of shares authorized with no par value): | 479,762 | ||||||
Net asset value, offering and redemption price per share: (b) | $ | 1.00 |
(a) Rounds to less than $1 thousand.
(b) Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.
See notes to financial statements.
4
USAA Mutual Funds Trust | Statement of Operations For the Six Months Ended November 30, 2021 |
(Amounts in Thousands) (Unaudited)
USAA Treasury Money Market Trust | |||||||
Investment Income: | |||||||
Interest | $ | 109 | |||||
Total Income | 109 | ||||||
Expenses: | |||||||
Investment advisory fees | 308 | ||||||
Administration fees | 246 | ||||||
Sub-Administration fees | 3 | ||||||
Custodian fees | 5 | ||||||
Transfer agent fees | 246 | ||||||
Trustees' fees | 24 | ||||||
Compliance fees | 2 | ||||||
Legal and audit fees | 29 | ||||||
State registration and filing fees | 20 | ||||||
Other expenses | 38 | ||||||
Total Expenses | 921 | ||||||
Expenses waived/reimbursed by Adviser | (837 | ) | |||||
Net Expenses | 84 | ||||||
Net Investment Income | 25 | ||||||
Change in net assets resulting from operations | $ | 25 |
See notes to financial statements.
5
USAA Mutual Funds Trust | Statements of Changes in Net Assets |
(Amounts in Thousands)
USAA Treasury Money Market Trust | |||||||||||
Six Months Ended November 30, 2021 (Unaudited) | Year Ended May 31, 2021 | ||||||||||
From Investments: | |||||||||||
Operations: | |||||||||||
Net investment income | $ | 25 | $ | 173 | |||||||
Net realized gains (losses) from investments | — | — | (a) | ||||||||
Change in net assets resulting from operations | 25 | 173 | |||||||||
Change in net assets resulting from distributions to shareholders | (25 | ) | (173 | ) | |||||||
Change in net assets resulting from capital transactions | (17,016 | ) | (47,136 | ) | |||||||
Change in net assets | (17,016 | ) | (47,136 | ) | |||||||
Net Assets: | |||||||||||
Beginning of period | 496,777 | 543,913 | |||||||||
End of period | $ | 479,761 | $ | 496,777 | |||||||
Capital Transactions: | |||||||||||
Proceeds from shares issued | $ | 55,343 | $ | 161,288 | |||||||
Distributions reinvested | 25 | 171 | |||||||||
Cost of shares redeemed | (72,384 | ) | (208,595 | ) | |||||||
Change in net assets resulting from capital transactions | $ | (17,016 | ) | $ | (47,136 | ) | |||||
Share Transactions: | |||||||||||
Issued | 55,343 | 161,289 | |||||||||
Reinvested | 25 | 171 | |||||||||
Redeemed | (72,384 | ) | (208,595 | ) | |||||||
Change in Shares | (17,016 | ) | (47,135 | ) |
(a) Rounds to less than $1 thousand.
See notes to financial statements.
6
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7
USAA Mutual Funds Trust | Financial Highlights |
For a Share Outstanding Throughout Each Period
Investment Activities | Distributions to Shareholders From | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | ||||||||||||||||||||||
USAA Treasury Money Market Trust | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 1.00 | — | (c)(d) | — | — | (c) | — | (c) | — | (c) | ||||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 1.00 | — | (c)(d) | — | (c) | — | (c) | — | (c) | — | (c) | |||||||||||||||
2020 | $ | 1.00 | 0.01 | (d) | — | 0.01 | (0.01 | ) | (0.01 | ) | |||||||||||||||||
2019 | $ | 1.00 | 0.02 | — | 0.02 | (0.02 | ) | (0.02 | ) | ||||||||||||||||||
2018 | $ | 1.00 | 0.01 | — | 0.01 | (0.01 | ) | (0.01 | ) | ||||||||||||||||||
2017 | $ | 1.00 | — | (c) | — | — | (c) | — | (c) | — | (c) |
* Assumes reinvestment of all net investment income and realized capital gain distributions, if any, during the period. Includes adjustments in accordance with U.S. Generally Accepted Accounting Principles and could differ from the Lipper reported return.
^ The net expense ratio may not correlate to the applicable expense limits in place during the period since the current contractual expense limitation is applied for a period beginning July 1, 2019, and in effect through June 30, 2023, instead of coinciding with the Fund's fiscal year end. Details of the current contractual expense limitation in effect can be found in Note 3 of the accompanying Notes to Financial Statements.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Amount is less than $0.005 per share.
(d) Per share net investment income (loss) has been calculated using the average daily shares method.
(e) Prior to August 1, 2017, USAA Asset Management Company ("AMCO") (previous Adviser) voluntarily agreed, on a temporary basis, to reimburse management, administrative, or other fees to limit the Fund's expenses and attempt to prevent a negative yield.
See notes to financial statements.
8
USAA Mutual Funds Trust | Financial Highlights — continued |
For a Share Outstanding Throughout Each Period
Ratios to Average Net Assets | Supplemental Data | ||||||||||||||||||||||||||
Net Asset Value, End of Period | Total Return*(a) | Net Expenses^(b) | Net Investment Income(b) | Gross Expenses(b) | Net Assets, End of Period (000's) | ||||||||||||||||||||||
USAA Treasury Money Market Trust | |||||||||||||||||||||||||||
Six Months Ended November 30, 2021 (Unaudited) | $ | 1.00 | 0.01 | % | 0.03 | % | 0.01 | % | 0.37 | % | $ | 479,761 | |||||||||||||||
Year Ended May 31: | |||||||||||||||||||||||||||
2021 | $ | 1.00 | 0.03 | % | 0.12 | % | 0.03 | % | 0.38 | % | $ | 496,777 | |||||||||||||||
2020 | $ | 1.00 | 1.23 | % | 0.33 | % | 1.21 | % | 0.34 | % | $ | 543,913 | |||||||||||||||
2019 | $ | 1.00 | 1.88 | % | 0.35 | % | 1.88 | % | 0.35 | % | $ | 4,858,998 | |||||||||||||||
2018 | $ | 1.00 | 0.89 | %(e) | 0.35 | %(e) | 0.91 | % | 0.35 | % | $ | 3,732,359 | |||||||||||||||
2017 | $ | 1.00 | 0.08 | % | 0.35 | % | 0.12 | % | 0.39 | % | $ | 2,626,050 |
See notes to financial statements.
9
USAA Mutual Funds Trust | Notes to Financial Statements November 30, 2021 |
(Unaudited)
1. Organization:
USAA Mutual Funds Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. The Trust is comprised of 46 funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with no par value.
The accompanying financial statements are those of the USAA Treasury Money Market Trust (the "Fund"). The Fund is classified as diversified under the 1940 Act.
The Fund operates as a government money market fund in compliance with the requirements of Rule 2a-7 under the 1940 Act; and as a government money market fund, shares of the Fund are available for sale only to accounts that are beneficially owned by natural persons.
The Fund has adopted policies and procedures permitting the Board of Trustees (the "Board") of the Fund to impose a liquidity fee or to temporarily suspend redemptions from the Fund (a "redemption gate") if the Fund's weekly liquid assets fall below specific thresholds, such as during times of market stress. The imposition of a liquidity fee would reduce the amount you would receive upon redemption of your shares of the Fund. The imposition of a redemption gate would temporarily delay your ability to redeem your investments in the Fund.
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with Generally Accepted Accounting Principles in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies under Accounting Standards Codification Topic 946.
Investment Valuation:
The inputs or methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. For example, money market securities are valued using amortized cost, in accordance with rules under the 1940 Act. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.
The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:
• Level 1 — quoted prices in active markets for identical securities
• Level 2 �� other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)
• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
10
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Victory Capital Management Inc. ("VCM" or the "Adviser") has established the Pricing and Liquidity Committee (the "Committee"), and subject to the Board's oversight, the Committee administers and oversees the Fund's valuation policies and procedures, which are approved by the Board.
Repurchase agreements are valued at cost.
All securities held in the Fund are short-term debt securities, which are valued pursuant to Rule 2a-7 under the 1940 Act. This method values a security at its purchase price, and thereafter, assumes a constant amortization to maturity of any premiums or discounts. Securities for which amortized cost valuations are considered unreliable or for whose values have been materially affected by a significant event are valued in good faith, at fair value, using methods determined by the Committee, under procedures to stabilize net assets and valuation procedures approved by the Board.
Repurchase Agreements:
The Fund may enter into repurchase agreements with commercial banks or recognized security dealers pursuant to the terms of a Master Repurchase Agreement. A repurchase agreement is an arrangement wherein the Fund purchases securities and the seller agrees to repurchase the securities at an agreed upon time and at an agreed upon price. The purchased securities are marked-to-market daily to ensure their value is equal to at least 102% of principal including accrued interest and are held by the Fund, either through its regular custodian or through a special "tri-party" custodian that maintains separate accounts for both the Fund and its counterparty, until maturity of the repurchase agreement. Master Repurchase Agreements typically contain netting provisions, which provide for the net settlement of all transactions and collateral with the Fund through a single payment in the event of default or termination. Repurchase agreements are subject to credit risk, and the Fund's Manager monitors the creditworthiness of sellers with which the Fund may enter into repurchase agreements.
Investments in repurchase agreements as presented on the Schedule of Portfolio Investments are not net settlement amounts but gross. At November 30, 2021, the value of the related collateral exceeded the value of the repurchase agreements, reducing the net settlement amount to zero. Details on the collateral are included on the Schedule of Portfolio Investments.
Investment Transactions and Related Income:
Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date or the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Gains or losses realized on sales of securities are recorded on the identified cost basis.
Federal Income Taxes:
It is the Fund's policy to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of May 31.
Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last four tax years, which includes the current fiscal tax year end). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
Allocations:
Expenses directly attributable to the Fund are charged to the Fund, while expenses that are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or an affiliated trust based upon net assets or another appropriate basis.
11
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
3. Fees and Transactions with Affiliates and Related Parties:
Investment Advisory Fees:
Investment advisory services are provided to the Fund by the Adviser, which is a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is an indirect wholly owned subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.
The Fund's Investment Adviser fee is accrued daily and paid monthly at an annualized rate of 0.125% of the Fund's average daily net assets. Amounts incurred and paid to VCM for the six months ended November 30, 2021, are reflected on the Statement of Operations as Investment advisory fees.
Administration and Servicing Fees:
VCM serves as the Fund's administrator and fund accountant. Under the Fund Administration, Servicing and Accounting Agreement, VCM is paid an administration and servicing fee that is accrued daily and paid monthly at an annualized rate of 0.10%, which is based on the Fund's average daily net assets. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Administration fees.
Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Fund reimburses VCM and Citi for out-of-pocket expenses incurred in providing these services and certain other expenses specifically allocated to the Fund. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Sub-Administration fees.
The Fund (as part of the Trust) has entered into an agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the Chief Compliance Officer ("CCO"), and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration, and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The CCO is an employee of the Adviser, which pays the compensation of the CCO and support staff. The funds in the Trust, Victory Variable Insurance Funds, Victory Portfolios, and Victory Portfolios II (collectively, the "Victory Funds Complex") in the aggregate, compensate the Adviser for these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Compliance fees.
Transfer Agency Fees:
Victory Capital Transfer Agency, Inc. ("VCTA"), an affiliate of the Adviser, provides transfer agency services to the Fund. Transfer agent's fees for the Fund are paid monthly based on a fee accrued daily at an annualized rate of 0.10% of average daily net assets, plus out-of-pocket expenses. VCTA pays a portion of these fees to certain intermediaries for the administration and servicing of accounts that are held with such intermediaries. Amounts incurred and paid to VCTA for the six months ended November 30, 2021, are reflected on the Statement of Operations as Transfer Agent fees.
FIS Investor Services LLC serves as sub-transfer agent and dividend disbursing agent for the Fund pursuant to a Sub-Transfer Agent Agreement between VCTA and FIS Investor Services LLC. VCTA provides FIS Investor Services LLC a fee for providing these services.
Distributor/Underwriting Services:
Victory Capital Services, Inc. (the "Distributor"), an affiliate of the Adviser, serves as Distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust and receives no fee or other compensation for these services.
Other Fees:
Citibank serves as the Fund's custodian. The Fund pays Citibank a fee for providing these services. Amounts incurred for the six months ended November 30, 2021, are reflected on the Statement of Operations as Custodian fees.
12
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
K&L Gates LLP provides legal services to the Trust.
The Adviser has entered into an expense limitation agreement with the Fund until at least June 30, 2023. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Expenses, interest, taxes, brokerage commissions, and other expenditures that are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business are excluded from the expense limits. As of May 31, 2021, the expense limit (excluding voluntary waivers) was 0.35%.
Under the terms of the expense limitation agreement, as amended May 1, 2021, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period of up to three years (thirty-six (36) months) after the waiver or reimbursement took place, subject to the lesser of any operating expense limits in effect at the time of: (a) the original waiver or expense reimbursement; or (b) the recoupment, after giving effect to the recoupment amount. Prior to May 1, 2021, the Fund was permitted to recoup fees waived and expenses reimbursed for up to three years after the fiscal year in which the waiver or reimbursement took place, subject to the limitations above. This change did not have any effect on the amounts previously reported for recoupment.
In addition, the Adviser agreed to further reimburse fees in excess of the Fund's expense limit agreement of 0.35%. These voluntary reductions, to the extent necessary, are to maintain a certain minimum net yield of the Fund. Under this agreement to reimburse additional fees, the Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three years after the fiscal year in which the waiver or reimbursement took place, to the extent any repayments would not cause the Fund's net yield to fall below the Fund's minimum yield at the time of: (a) the original waiver or expense reimbursement; or (b) the expense limit in effect at the time of the extra waiver.
As of November 30, 2021, the following amounts are available to be repaid to the Adviser (amounts in thousands). The Fund has not recorded any amounts available to be repaid as a liability due to an assessment that such repayment is not probable at November 30, 2021.
Expires 2023 | Expires 2024 | Expires 2025 | Total | ||||||||||||
$ | 745 | $ | 1,348 | $ | 837 | $ | 2,930 |
Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, administrator, fund accountant, sub-administrator, sub-fund accountant, custodian, and Distributor.
4. Risks:
The Fund may be subject to other risks in addition to these identified risks.
Stable Net Asset Value Risk — You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1 per share, it cannot guarantee it will do so. The Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation ("FDIC") or any other government agency. The Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.
Interest Rate Risk — When interest rates rise, debt security prices generally fall. The opposite also generally is true: debt security prices rise when interest rates fall. Interest rate changes are influenced by a number of factors including government policy, monetary policy, inflation expectations, perceptions of risk, and supply and demand of debt securities. The Fund's yield will vary. A sharp and unexpected rise in interest rates could cause the Fund's share price to drop below a dollar. A low interest rate environment may prevent the Fund from providing a positive yield and could also impair the Fund's ability to maintain a stable NAV.
13
USAA Mutual Funds Trust | Notes to Financial Statements — continued November 30, 2021 |
(Unaudited)
Large Shareholders Risk — The actions by one shareholder or multiple shareholders may have an impact on the Fund and, therefore, indirectly on other shareholders. Shareholder purchase and redemption activity may affect the per share amount of the Fund's distributions of its net investment income and net realized capital gains, if any, thereby affecting the tax burden on the Fund's shareholders subject to federal income tax. To the extent a larger shareholder (including, for example, an Affiliated Fund that operates as a fund-of-funds or 529 college savings plan) is permitted to invest in the Fund, the Fund may experience large inflows or outflows of cash from time to time. This activity could magnify these adverse effects on the Fund.
5. Borrowing:
Line of Credit:
The Victory Funds Complex participates in a short-term demand note "Line of Credit" agreement with Citibank. The Line of Credit agreement with Citibank was renewed on June 28, 2021, with a termination date of June 27, 2022. Under the agreement with Citibank, the Victory Funds Complex may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund, another series of the Victory Funds Complex, with Victory Floating Rate Fund paying the related commitment fees for that amount. The purpose of the Line of Credit is to meet temporary or emergency cash needs. For the six months ended November 30, 2021, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. Each fund in the Victory Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one-month LIBOR plus one percent, with LIBOR to be replaced by a different benchmark rate in accordance with the terms of the agreement) on amounts borrowed. Prior to June 29, 2021, the Victory Funds Complex paid an annual commitment fee of 0.15% and an upfront fee of 0.10%. Each fund in the Victory Funds Complex paid a pro-rata portion of the upfront fee. Interest charged to each fund during the period, if applicable, is reflected on the Statement of Operations under Line of credit fees.
The Fund had no borrowings under the Line of Credit agreement during the six months ended November 30, 2021.
6. Federal Income Tax Information:
The Fund intends to declare daily and distribute any net investment income monthly. Distributable net realized gains, if any, are declared and paid at least annually.
The amounts of dividends from net investment income and distributions from net realized gains (collectively distributions to shareholders) are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.
The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) will be determined at the end of the current tax year ending May 31, 2022.
As of the tax year ended May 31, 2021, the Fund had net capital loss carryforwards as shown in the table below (amounts in thousands).
Short-Term Amount | Total | ||||||
$ | 1 | $ | 1 |
14
USAA Mutual Funds Trust | Supplemental Information November 30, 2021 |
(Unaudited)
Proxy Voting and Portfolio Holdings Information
Proxy Voting:
Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 235-8396. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.
Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent 12 months ended June 30 is available on the SEC's website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Fund makes available on VCM.com a complete list of portfolio holdings no sooner than 5 business days after the end of each month. Form N-MFP is available on the SEC's website at www.sec.gov.
Expense Example
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2021, through November 30, 2021.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the hypothetical expenses in the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 6/1/21 | Actual Ending Account Value 11/30/21 | Hypothetical Ending Account Value 11/30/21 | Actual Expenses Paid During Period 6/1/21-11/30/21* | Hypothetical Expenses Paid During Period 6/1/21-11/30/21* | Annualized Expense Ratio During Period 6/1/21-11/30/21 | ||||||||||||||||||
$ | 1,000.00 | $ | 1,000.10 | $ | 1,024.92 | $ | 0.15 | $ | 0.15 | 0.03 | % |
* Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 183/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).
15
Privacy Policy
Protecting the Privacy of Information
The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.
We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.
To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic, and procedural safeguards to guard your personal information.*
* You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.
P.O. Box 182593
Columbus, Ohio 43218-2593
Visit our website at: | Call | ||||||
vcm.com | (800) 235-8396 |
23416-0122
Item 2. Code of Ethics.
Not applicable – only for annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable – only for annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable – only for annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Not applicable.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a)The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
(b)There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
(a)(1) Not applicable.
(a)(2) Not applicable.
(a)(3) Not applicable.
(a)(4) Not applicable.
(b) Not applicable.
Item 13. Exhibits.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) are attached hereto.
(a)(3) Not applicable.
(a)(4) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) are furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | USAA Mutual Fund Trust |
By (Signature and Title)* | /s/ James K. De Vries | |
James K. De Vries, Principal Financial Officer |
Date | January 26, 2022 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ Christopher K. Dyer | |
Christopher K. Dyer, Principal Executive Officer |
Date | January 26, 2022 |
By (Signature and Title)* | /s/ James K. De Vries | |
James K. De Vries, Principal Financial Officer |
Date | January 26, 2022 |