ITEM 1. REPORT TO STOCKHOLDERS.
USAA MUTUAL FUNDS TRUST - ANNUAL REPORT FOR PERIOD ENDING DECEMBER 31, 2012
[LOGO OF USAA]
USAA(R)
[GRAPHIC OF USAA S&P 500 INDEX FUND]
ANNUAL REPORT
USAA S&P 500 INDEX FUND
MEMBER SHARES o REWARD SHARES
DECEMBER 31, 2012
PRESIDENT'S MESSAGE
"OVERALL, OUR OUTLOOK IS CAUTIOUS.
DESPITE SOME SIGNS OF IMPROVEMENT, [PHOTO OF DANIEL S. McNAMARA]
THE U.S. ECONOMY REMAINS FRAGILE."
FEBRUARY 2013
The financial markets recorded robust results during the one-year reporting
period, with almost every asset class generating a positive return. U.S.,
international, and emerging markets stocks posted double-digit gains, as did
many riskier fixed-income classes, including investment-grade bonds and
high-yield bonds.
The results came despite mixed economic data, political uncertainty, and record
low interest rates. Investors were optimistic at the beginning of 2012 as the
U.S. economy -- including the level of unemployment -- appeared to improve. We
were skeptical, mainly because we believed the data were temporarily influenced
by the unusually mild winter. Nevertheless, investors seized on the "good" news
and stocks and riskier asset classes performed well. They extended their gains
as the European Central Bank (ECB) continued its version of quantitative easing,
flooding the European banking system with euros.
Though many observers had hoped that U.S. economic activity would accelerate
during the spring, the warm winter weather did appear to have pulled demand (and
job gains) forward without permanently improving the U.S. economic outlook.
Europe was in a recession and economic growth slowed in China. Market sentiment,
however, remained upbeat, perhaps in anticipation of additional stimulative
action by global central banks.
And indeed, during September, the Federal Reserve (the Fed) announced a third
round of quantitative easing (QE3) to help boost U.S. economic growth. In QE3,
the Fed made an open-ended commitment to continue buying mortgage-backed
securities for as long as it takes to meaningfully drop the unemployment rate.
The Fed went even further in December, making another open-ended commitment --
in this case, to buy long-term U.S. Treasury securities every month starting in
January 2013.
Across the Atlantic, the ECB announced a new quantitative easing program,
extending a number of its liquidity operations to help the financial markets
deal with the effects of the European sovereign debt crisis. This action also
gave European Union (EU) policymakers time to address the problems of the EU's
weakest members, many of which are weighed down by a staggering amount of debt.
At the time of this writing, a lasting solution remains elusive and major
sticking points are left, particularly enforcement mechanisms to keep these
economies on track to fiscal balance.
Meanwhile, the U.S. election campaign built to a crescendo. In the end, the
voters chose to maintain the status quo -- President Barack Obama was re-elected
to a second term, Republicans retained their majority in the House of
Representatives, and Democrats stayed in control of the Senate. With the
election over, investors shifted their attention to the so-called "fiscal
cliff." Unless Congress acted, $600 to $700 billion in tax hikes and spending
cuts were scheduled to take effect on January 1, 2013. (At the time of this
writing, a temporary solution is in place and I am guardedly optimistic that
some kind of long-term agreement will be reached. Whatever happens, I expect
various tax increases and reduced spending at the federal level in 2013, which
could slow economic growth over the next few calendar quarters.)
Overall, our outlook is cautious. Despite some signs of improvement, the U.S.
economy remains fragile. In the long term, I am optimistic. First, the United
States is becoming increasingly energy self-reliant, using newly discovered
natural gas and oil resources. Second, the housing market is improving and has
begun to have a positive impact on the economy as a whole. Third, many companies
that reduced their capital expenditures in 2012 because of political and
economic uncertainties will eventually start reinvesting in their own growth. In
the short term, however, I am troubled about corporate fundamentals. Revenues
have been disappointing in recent calendar quarters, and year-over-year earnings
growth is near zero.
Going forward, we will continue working hard on your behalf. From everyone at
USAA Asset Management Company, thank you for the opportunity to help you with
your investment needs.
Sincerely,
/S/ DANIEL S. MCNAMARA
Daniel S. McNamara
President
USAA Asset Management Company
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Past performance is no guarantee of future results.
TABLE OF CONTENTS
FUND OBJECTIVE 1
MANAGER'S COMMENTARY 2
INVESTMENT OVERVIEW 4
FINANCIAL INFORMATION
Distributions to Shareholders 9
Report of Independent Registered Public Accounting Firm 10
Portfolio of Investments 11
Notes to Portfolio of Investments 32
Financial Statements 34
Notes to Financial Statements 37
EXPENSE EXAMPLE 54
TRUSTEES' AND OFFICERS' INFORMATION 56
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THIS REPORT IS FOR THE INFORMATION OF THE SHAREHOLDERS AND OTHERS WHO HAVE
RECEIVED A COPY OF THE CURRENTLY EFFECTIVE PROSPECTUS OF THE FUND, MANAGED BY
USAA ASSET MANAGEMENT COMPANY. IT MAY BE USED AS SALES LITERATURE ONLY WHEN
PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS, WHICH PROVIDES FURTHER DETAILS
ABOUT THE FUND.
(C)2013, USAA. All rights reserved.
FUND OBJECTIVE
THE USAA S&P 500 INDEX FUND (THE FUND) SEEKS TO MATCH, BEFORE FEES AND EXPENSES,
THE PERFORMANCE OF THE STOCKS COMPOSING THE S&P 500(R) INDEX. THE S&P 500 INDEX
EMPHASIZES STOCKS OF LARGE U.S. COMPANIES.
TYPES OF INVESTMENTS
The Fund's principal investment strategy is to invest at least 80% of the Fund's
assets in the common stocks of companies composing the S&P 500 Index. This
strategy may be changed upon 60 days' written notice to shareholders.
IRA DISTRIBUTION WITHHOLDING DISCLOSURE
We generally must withhold federal income tax at a rate of 10% of the taxable
portion of your distribution and, if you live in a state that requires state
income tax withholding, at your state's set rate. However, you may elect not to
have withholding apply or to have income tax withheld at a higher rate. If you
wish to make such an election, please call USAA Asset Management Company at
(800) 531-USAA (8722).
If you must pay estimated taxes, you may be subject to estimated tax penalties
if your estimated tax payments are not sufficient and sufficient tax is not
withheld from your distribution.
For more specific information, please consult your tax adviser.
FUND OBJECTIVE | 1
MANAGER'S COMMENTARY ON THE FUND
o HOW DID THE USAA S&P 500 INDEX FUND (THE FUND) PERFORM DURING THE REPORTING
PERIOD?
The Fund closely tracked its benchmark, the broad-based S&P 500(R) Index
(the Index), for the period ended December 31, 2012. The USAA S&P 500 Index
Fund Member Shares and Reward Shares returned 15.75% and 15.86%,
respectively, during the reporting period versus the Index which returned
16.00%. The Index is a group of large-company stocks that is not available
for direct investment.
o WHAT WERE THE MARKET CONDITIONS DURING THE PERIOD?
U.S. equities outpaced international-developed equities during the first
three quarters of the year, as strong corporate earnings and the easing of
negativity surrounding the U.S. economic outlook pushed investors towards
risk assets. Central bank largesse helped to ease investors' appetite for
risk and pushed those searching for a decent yield toward large-cap stocks.
However, U.S. equities fell behind international-developed equities during
the fourth quarter, narrowing the gap between their returns for the year,
as "fiscal cliff" fear and uncertainty over the U.S. election led to a
sharp October sell-off in U.S. markets. During this time, economists
nationwide cut U.S. growth expectations for 2013, and fear mounted that the
United States might contract into another recession if congressmen on both
sides of the aisle were unable to reach a bargain to avert the cliff.
However, U.S. equities improved in November and December as the domestic
economic picture lightened. For instance, housing sales, prices
Refer to pages 5 for benchmark definitions.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
2 | USAA S&P 500 INDEX FUND
and new-build activity, showed tangible improvement in a sector of the
economy that has long been dormant. Additionally, executives who are
responsible for purchases have been forecasted by the Institute for Supply
Management to increase their capital expenditures in 2013. These positives
helped the market, but were not enough to erase all of the losses that U.S.
large-cap stocks had experienced in October.
While a congressional bargain that extends the Bush era tax cuts for most
Americans did come to pass on January 1, 2013, the lack of a bargain to deal
with spending cuts means that the federal budget will continue to be a hot
issue into the year. Market volatility likely will continue to follow budget
negotiation news out of Capitol Hill, but improvements in housing and strong
corporate balance sheets should lead to growth in U.S. equities provided
congressional leaders can work out their differences.
o PLEASE DESCRIBE SECTOR PERFORMANCE.
The top performing sectors in the Index were Financials and Consumer
Discretionary, which returned 28.82% and 23.92%, respectively. Energy and
Utilities exhibited the weakest returns of 4.61% and 1.29%, respectively.
o WHAT INVESTMENT STRATEGIES WILL YOU PURSUE FOR THE FUND IN 2013?
We don't manage the Fund according to a given outlook for the equity markets
or the economy in general, because we're managing an index fund that seeks
to replicate as closely as possible (before deduction of expenses) the broad
diversification and returns of the Index. Nevertheless, we will monitor
economic conditions and their effect on the financial markets as we seek to
track the Index's performance closely.
Thank you for your investment in the Fund.
INVESTING IN SECURITIES PRODUCTS INVOLVES RISK, INCLUDING POSSIBLE LOSS OF
PRINCIPAL. o Diversification is a technique to help reduce risk and does not
guarantee a profit or prevent a loss.
MANAGER'S COMMENTARY ON THE FUND | 3
INVESTMENT OVERVIEW
USAA S&P 500 INDEX FUND MEMBER SHARES (MEMBER SHARES) (Ticker Symbol: USSPX)
--------------------------------------------------------------------------------
12/31/12 12/31/11
--------------------------------------------------------------------------------
Net Assets $2,116.2 Million $1,968.0 Million
Net Asset Value Per Share $20.34 $18.83
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/12*
--------------------------------------------------------------------------------
1 Year 5 Years 10 Years
15.75% 1.44% 6.84%
--------------------------------------------------------------------------------
EXPENSE RATIOS AS OF 12/31/11**
--------------------------------------------------------------------------------
Before Reimbursement 0.34% After Reimbursement 0.26%
|
(includes acquired fund fees and expenses of 0.01%)
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF
FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE
DATA QUOTED. THE RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE, SO
THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, VISIT
USAA.COM.
High double digit returns are attributable, in part, to unusually favorable
market conditions and may not be repeated or consistently achieved in the
future.
*Returns for the Member Shares exclude the account maintenance fee.
**The expense ratios represent the total annual operating expenses, before
reductions of any expenses paid indirectly and including any acquired fund fees
and expenses, as reported in the Fund's prospectus dated May 1, 2012, and are
calculated as a percentage of average net assets. USAA Asset Management Company
(the Manager) has agreed, through May 1, 2013, to make payments or waive
management, administration, and other fees so that the total expenses of the
Member Shares (exclusive of commission recapture, expense offset arrangements,
acquired fund fees and expenses, and extraordinary expenses) do not exceed an
annual rate of 0.25% of the Member Shares' average net assets. This
reimbursement arrangement may not be changed or terminated during this time
period without approval of the Fund's Board of Trustees and may be changed or
terminated by the Manager at any time after May 1, 2013. These expense ratios
may differ from the expense ratios disclosed in the Financial Highlights, which
excludes acquired fund fees and expenses.
Total return measures the price change in a share assuming the reinvestment of
all net investment income and realized capital gain distributions. The total
returns quoted do not reflect adjustments made to the enclosed financial
statements in accordance with U.S. generally accepted accounting principles or
the deduction of taxes that a shareholder would pay on distributions or the
redemption of shares. The performance data excludes the impact of a $10 account
maintenance fee that is assessed on acounts of less than $10,000. Performance of
Member Shares will vary from Reward Shares due to differences in expenses.
4 | USAA S&P 500 INDEX FUND
o CUMULATIVE PERFORMANCE COMPARISON o
[CHART OF CUMULATIVE PERFORMANCE COMPARISON]
MEMBER SHARES
USAA S&P 500 INDEX S&P 500
FUND MEMBER SHARES INDEX
12/31/2002 $10,000.00 $10,000.00
1/31/2003 9,727.89 9,738.04
2/28/2003 9,584.28 9,591.93
3/31/2003 9,667.26 9,685.06
4/30/2003 10,464.02 10,482.82
5/31/2003 11,010.36 11,035.13
6/30/2003 11,142.76 11,175.90
7/31/2003 11,340.65 11,372.95
8/31/2003 11,553.76 11,594.75
9/30/2003 11,424.31 11,471.62
10/31/2003 12,073.85 12,120.57
11/30/2003 12,173.20 12,227.21
12/31/2003 12,805.30 12,868.46
1/31/2004 13,035.33 13,104.66
2/29/2004 13,211.69 13,286.81
3/31/2004 13,011.79 13,086.36
4/30/2004 12,804.16 12,880.92
5/31/2004 12,973.34 13,057.69
6/30/2004 13,222.00 13,311.59
7/31/2004 12,782.29 12,871.02
8/31/2004 12,828.58 12,923.08
9/30/2004 12,962.31 13,063.05
10/31/2004 13,163.64 13,262.61
11/30/2004 13,690.18 13,799.24
12/31/2004 14,150.75 14,268.81
1/31/2005 13,807.70 13,921.01
2/28/2005 14,096.17 14,213.96
3/31/2005 13,845.03 13,962.26
4/30/2005 13,578.93 13,697.46
5/31/2005 14,009.39 14,133.29
6/30/2005 14,027.30 14,153.35
7/31/2005 14,545.96 14,679.69
8/31/2005 14,412.37 14,545.76
9/30/2005 14,526.90 14,663.57
10/31/2005 14,282.28 14,419.11
11/30/2005 14,818.85 14,964.48
12/31/2005 14,825.43 14,969.61
1/31/2006 15,213.91 15,366.05
2/28/2006 15,253.55 15,407.75
3/31/2006 15,442.09 15,599.53
4/30/2006 15,641.09 15,809.00
5/31/2006 15,195.34 15,353.99
6/30/2006 15,212.76 15,374.81
7/31/2006 15,300.70 15,469.65
8/31/2006 15,660.43 15,837.72
9/30/2006 16,062.74 16,245.86
10/31/2006 16,584.52 16,775.24
11/30/2006 16,897.59 17,094.24
12/31/2006 17,128.58 17,334.03
1/31/2007 17,386.64 17,596.19
2/28/2007 17,047.94 17,252.02
3/31/2007 17,234.93 17,444.98
4/30/2007 17,996.24 18,217.71
5/31/2007 18,619.88 18,853.42
6/30/2007 18,312.08 18,540.21
7/31/2007 17,742.88 17,965.37
8/31/2007 18,003.08 18,234.67
9/30/2007 18,676.58 18,916.63
10/31/2007 18,970.57 19,217.53
11/30/2007 18,170.26 18,414.11
12/31/2007 18,040.04 18,286.36
1/31/2008 16,956.66 17,189.52
2/29/2008 16,406.75 16,631.10
3/31/2008 16,327.01 16,559.29
4/30/2008 17,126.87 17,365.78
5/31/2008 17,341.26 17,590.71
6/30/2008 15,877.67 16,107.75
7/31/2008 15,745.08 15,972.35
8/31/2008 15,968.82 16,203.38
9/30/2008 14,538.22 14,759.54
10/31/2008 12,097.13 12,280.71
11/30/2008 11,222.34 11,399.51
12/31/2008 11,341.38 11,520.81
1/31/2009 10,384.37 10,549.76
2/28/2009 9,276.26 9,426.44
3/31/2009 10,089.23 10,252.15
4/30/2009 11,052.52 11,233.38
5/31/2009 11,669.36 11,861.70
6/30/2009 11,694.29 11,885.23
7/31/2009 12,577.52 12,784.19
8/31/2009 13,027.63 13,245.76
9/30/2009 13,510.80 13,740.03
10/31/2009 13,254.91 13,484.78
11/30/2009 14,048.16 14,293.64
12/31/2009 14,321.62 14,569.73
1/31/2010 13,807.38 14,045.60
2/28/2010 14,227.34 14,480.70
3/31/2010 15,089.30 15,354.53
4/30/2010 15,321.57 15,596.94
5/31/2010 14,091.37 14,351.52
6/30/2010 13,350.12 13,600.24
7/31/2010 14,283.33 14,553.11
8/31/2010 13,635.27 13,896.13
9/30/2010 14,847.98 15,136.28
10/31/2010 15,412.05 15,712.20
11/30/2010 15,412.05 15,714.22
12/31/2010 16,442.61 16,764.42
1/31/2011 16,826.22 17,161.77
2/28/2011 17,401.62 17,749.71
3/31/2011 17,397.99 17,756.77
4/30/2011 17,915.37 18,282.65
5/31/2011 17,704.91 18,075.70
6/30/2011 17,412.41 17,774.39
7/31/2011 17,051.30 17,412.95
8/31/2011 16,117.70 16,467.05
9/30/2011 14,983.01 15,309.43
10/31/2011 16,620.26 16,982.65
11/30/2011 16,576.01 16,945.12
12/31/2011 16,742.20 17,118.45
1/31/2012 17,489.07 17,885.62
2/29/2012 18,244.82 18,659.03
3/31/2012 18,837.10 19,273.09
4/30/2012 18,720.93 19,152.11
5/31/2012 17,586.06 18,001.05
6/30/2012 18,311.38 18,742.74
7/31/2012 18,562.83 19,003.06
8/31/2012 18,975.94 19,431.06
9/30/2012 19,465.35 19,933.19
10/31/2012 19,095.35 19,565.13
11/30/2012 19,203.65 19,678.63
12/31/2012 19,379.51 19,858.00
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[END CHART]
Data from 12/31/02 to 12/31/12.
The graph illustrates how a $10,000 hypothetical investment in the USAA S&P 500
Index Fund's Member Shares closely tracks the S&P 500 Index. The S&P 500 Index
is an unmanaged index representing the weighted average performance of a group
of 500 widely held, publicly traded stocks.
"Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard & Poor's 500," and
"500" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed
for our use. The USAA S&P 500 Index Fund is not sponsored, endorsed, sold, or
promoted by Standard & Poor's, and Standard & Poor's makes no representation
regarding the advisability of investing in the USAA S&P 500 Index Fund. o Index
products incur fees and expenses and may not always be invested in all
securities of the index the Fund attempts to mirror.
Past performance is no guarantee of future results, and the cumulative
performance quoted does not reflect the deduction of taxes that a shareholder
would pay on distributions or the redemption of shares Indexes are unmanaged and
you cannot invest directly in an index.
INVESTMENT OVERVIEW | 5
USAA S&P 500 INDEX FUND REWARD SHARES (REWARD SHARES) (Ticker Symbol: USPRX)
--------------------------------------------------------------------------------
12/31/12 12/31/11
--------------------------------------------------------------------------------
Net Assets $1,173.6 Million $1,316.8 Million
Net Asset Value Per Share $20.34 $18.83
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/12
--------------------------------------------------------------------------------
1 Year 5 Years 10 Years
15.86% 1.57% 6.98%
--------------------------------------------------------------------------------
EXPENSE RATIOS AS OF 12/31/11*
--------------------------------------------------------------------------------
Before Reimbursement 0.25% After Reimbursement 0.16%
|
(includes acquired fund fees and expenses of 0.01%)
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF
FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE
DATA QUOTED. THE RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE, SO
THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, VISIT
USAA.COM.
High double digit returns are attributable, in part, to unusually favorable
market conditions and may not be repeated or consistently achieved in the
future.
*The expense ratios represent the total annual operating expenses, before
reductions of any expenses paid indirectly and including any acquired fund fees
and expenses, as reported in the Fund's prospectus dated May 1, 2012, and are
calculated as a percentage of average net assets. USAA Asset Management Company
(the Manager) has agreed, through May 1, 2013, to make payments or waive
management, administration, and other fees so that the total expenses of the
Reward Shares (exclusive of commission recapture, expense offset arrangements,
acquired fund fees and expenses, and extraordinary expenses) do not exceed an
annual rate of 0.15% of the Reward Shares' average net assets. This
reimbursement arrangement may not be changed or terminated during this time
period without approval of the Fund's Board of Trustees and may be changed or
terminated by the Manager at any time after May 1, 2013. These expense ratios
may differ from the expense ratios disclosed in the Financial Highlights, which
excludes acquired fund fees and expenses.
Total return measures the price change in a share assuming the reinvestment of
all net investment income and realized capital gain distributions. The total
returns quoted do not reflect adjustments made to the enclosed financial
statements in accordance with U.S. generally accepted accounting principles or
the deduction of taxes that a shareholder would pay on distributions or the
redemption of shares.
The Reward Shares are currently offered for sale to qualified shareholders, a
USAA discretionary managed account program, and a USAA Fund participating in a
fund-of-funds investment strategy.
6 | USAA S&P 500 INDEX FUND
o CUMULATIVE PERFORMANCE COMPARISON o
[CHART OF CUMULATIVE PERFORMANCE COMPARISON]
REWARD SHARES
S&P 500 USAA S&P 500 INDEX
INDEX FUND REWARD SHARES
12/31/2002 $10,000.00 $10,000.00
1/31/2003 9,738.04 9,727.89
2/28/2003 9,591.93 9,584.28
3/31/2003 9,685.06 9,677.07
4/30/2003 10,482.82 10,466.41
5/31/2003 11,035.13 11,012.88
6/30/2003 11,175.90 11,151.31
7/31/2003 11,372.95 11,349.36
8/31/2003 11,594.75 11,562.63
9/30/2003 11,471.62 11,438.41
10/31/2003 12,120.57 12,088.75
11/30/2003 12,227.21 12,188.22
12/31/2003 12,868.46 12,826.63
1/31/2004 13,104.66 13,057.05
2/29/2004 13,286.81 13,241.39
3/31/2004 13,086.36 13,038.79
4/30/2004 12,880.92 12,830.72
5/31/2004 13,057.69 13,000.26
6/30/2004 13,311.59 13,257.21
7/31/2004 12,871.02 12,816.34
8/31/2004 12,923.08 12,862.75
9/30/2004 13,063.05 13,002.04
10/31/2004 13,262.61 13,196.22
11/30/2004 13,799.24 13,732.15
12/31/2004 14,268.81 14,194.90
1/31/2005 13,921.01 13,850.78
2/28/2005 14,213.96 14,140.15
3/31/2005 13,962.26 13,889.02
4/30/2005 13,697.46 13,629.93
5/31/2005 14,133.29 14,061.75
6/30/2005 14,153.35 14,075.34
7/31/2005 14,679.69 14,603.66
8/31/2005 14,545.76 14,469.61
9/30/2005 14,663.57 14,580.55
10/31/2005 14,419.11 14,335.03
11/30/2005 14,964.48 14,881.50
12/31/2005 14,969.61 14,884.08
1/31/2006 15,366.05 15,274.09
2/28/2006 15,407.75 15,313.88
3/31/2006 15,599.53 15,506.73
4/30/2006 15,809.00 15,714.56
5/31/2006 15,353.99 15,258.95
6/30/2006 15,374.81 15,280.73
7/31/2006 15,469.65 15,377.09
8/31/2006 15,837.72 15,738.43
9/30/2006 16,245.86 16,146.39
10/31/2006 16,775.24 16,670.62
11/30/2006 17,094.24 16,985.16
12/31/2006 17,334.03 17,221.72
1/31/2007 17,596.19 17,481.06
2/28/2007 17,252.02 17,140.67
3/31/2007 17,444.98 17,324.58
4/30/2007 18,217.71 18,097.99
5/31/2007 18,853.42 18,724.87
6/30/2007 18,540.21 18,411.85
7/31/2007 17,965.37 17,839.55
8/31/2007 18,234.67 18,109.35
9/30/2007 18,916.63 18,782.54
10/31/2007 19,217.53 19,078.19
11/30/2007 18,414.11 18,281.56
12/31/2007 18,286.36 18,155.49
1/31/2008 17,189.52 17,065.66
2/29/2008 16,631.10 16,504.24
3/31/2008 16,559.29 16,436.27
4/30/2008 17,365.78 17,232.78
5/31/2008 17,590.71 17,456.79
6/30/2008 16,107.75 15,990.05
7/31/2008 15,972.35 15,848.25
8/31/2008 16,203.38 16,081.81
9/30/2008 14,759.54 14,647.95
10/31/2008 12,280.71 12,181.46
11/30/2008 11,399.51 11,308.96
12/31/2008 11,520.81 11,425.46
1/31/2009 10,549.76 10,469.81
2/28/2009 9,426.44 9,353.48
3/31/2009 10,252.15 10,167.79
4/30/2009 11,233.38 11,147.10
5/31/2009 11,861.70 11,768.75
6/30/2009 11,885.23 11,789.85
7/31/2009 12,784.19 12,680.30
8/31/2009 13,245.76 13,142.65
9/30/2009 13,740.03 13,626.44
10/31/2009 13,484.78 13,376.96
11/30/2009 14,293.64 14,177.00
12/31/2009 14,569.73 14,450.04
1/31/2010 14,045.60 13,931.18
2/28/2010 14,480.70 14,363.56
3/31/2010 15,354.53 15,230.04
4/30/2010 15,596.94 15,464.48
5/31/2010 14,351.52 14,231.49
6/30/2010 13,600.24 13,480.40
7/31/2010 14,553.11 14,431.45
8/31/2010 13,896.13 13,777.06
9/30/2010 15,136.28 15,007.41
10/31/2010 15,712.20 15,577.20
11/30/2010 15,714.22 15,577.20
12/31/2010 16,764.42 16,616.37
1/31/2011 17,161.77 17,004.03
2/28/2011 17,749.71 17,585.51
3/31/2011 17,756.77 17,597.36
4/30/2011 18,282.65 18,111.54
5/31/2011 18,075.70 17,907.64
6/30/2011 17,774.39 17,608.40
7/31/2011 17,412.95 17,243.22
8/31/2011 16,467.05 16,308.03
9/30/2011 15,309.43 15,156.44
10/31/2011 16,982.65 16,812.63
11/30/2011 16,945.12 16,776.82
12/31/2011 17,118.45 16,941.23
1/31/2012 17,885.62 17,705.97
2/29/2012 18,659.03 18,461.72
3/31/2012 19,273.09 19,074.48
4/30/2012 19,152.11 18,947.86
5/31/2012 18,001.05 17,808.28
6/30/2012 18,742.74 18,537.90
7/31/2012 19,003.06 18,792.46
8/31/2012 19,431.06 19,210.68
9/30/2012 19,933.19 19,711.07
10/31/2012 19,565.13 19,345.54
11/30/2012 19,678.63 19,455.20
12/31/2012 19,858.00 19,628.81
|
[END CHART]
Data from 12/31/02 to 12/31/12.
See page 5 for benchmark definitions.
The graph illustrates how a $10,000 hypothetical investment in the USAA S&P 500
Index Fund's Reward Shares closely tracks the S&P 500 Index.
"Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard & Poor's 500," and
"500" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed
for our use. The USAA S&P 500 Index Fund is not sponsored, endorsed, sold, or
promoted by Standard & Poor's, and Standard & Poor's makes no representation
regarding the advisability of investing in the USAA S&P 500 Index Fund. o Index
products incur fees and expenses and may not always be invested in all
securities of the index the Fund attempts to mirror.
Past performance is no guarantee of future results, and the cumulative
performance quoted does not reflect the deduction of taxes that a shareholder
would pay on distributions or the redemption of shares. Indexes are unmanaged
and you cannot invest directly in an index.
INVESTMENT OVERVIEW | 7
o TOP 10 HOLDINGS o
AS OF 12/31/12
(% of Net Assets)
Apple, Inc. ............................................................... 3.9%
Exxon Mobil Corp. ......................................................... 3.1%
General Electric Co. ...................................................... 1.7%
Chevron Corp. ............................................................. 1.7%
International Business Machines Corp. ..................................... 1.6%
Microsoft Corp. ........................................................... 1.6%
Johnson & Johnson ......................................................... 1.5%
AT&T, Inc. ................................................................ 1.5%
Google, Inc. "A" .......................................................... 1.5%
Procter & Gamble Co. ...................................................... 1.4%
|
You will find a complete list of securities that the Fund owns on pages 11-31.
o SECTOR ALLOCATION* -- 12/31/2012 o
[PIE CHART OF SECTOR ALLOCATION]
INFORMATION TECHNOLOGY 19.0%
FINANCIALS 15.5%
HEALTH CARE 12.0%
CONSUMER DISCRETIONARY 11.4%
ENERGY 10.9%
CONSUMER STAPLES 10.6%
INDUSTRIALS 10.1%
MATERIALS 3.6%
UTILITIES 3.4%
TELECOMMUNICATION SERVICES 3.0%
|
[END CHART]
* Excludes money market instruments.
Percentages are of the net assets of the Fund, and may not equal 100%.
8 | USAA S&P 500 INDEX FUND
DISTRIBUTIONS TO SHAREHOLDERS
The following federal tax information related to the Fund's fiscal year ended
December 31, 2012, is provided for information purposes only and should not be
used for reporting to federal or state revenue agencies. Federal tax
information for the calendar year will be reported to you on Form 1099-DIV in
January 2013.
99.00% of ordinary income distributions qualify for the dividends-received
deductions eligible to corporations.
For the fiscal year ended December 31, 2012, the Fund hereby designates 100% of
its net taxable income as qualified dividends taxed at individual net capital
gain rates.
Pursuant to Section 852 of the Internal Revenue Code, as amended, the Fund
hereby designates $155,900,000 as long-term capital gains for the fiscal year
ended December 31, 2012.
For the fiscal year ended December 31, 2012, certain dividends paid by the Fund
qualify as interest-related dividends. The Fund designates $12,000 as qualifying
interest income.
DISTRIBUTIONS TO SHAREHOLDERS | 9
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE SHAREHOLDERS AND BOARD OF TRUSTEES OF USAA S&P 500 INDEX FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the USAA S&P 500 Index Fund (one of the
portfolios constituting USAA Mutual Funds Trust) (the "Fund") as of December 31,
2012, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of December 31, 2012, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
USAA S&P 500 Index Fund at December 31, 2012, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the five years
in the period then ended, in conformity with U.S. generally accepted accounting
principles.
/S/ ERNST & YOUNG LLP
San Antonio, Texas
February 19, 2013
|
10 | USAA S&P 500 INDEX FUND
PORTFOLIO OF INVESTMENTS
December 31, 2012
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
COMMON STOCKS (99.5%)
CONSUMER DISCRETIONARY (11.4%)
-----------------------------
ADVERTISING (0.1%)
110,135 Interpublic Group of Companies, Inc. $ 1,214
68,025 Omnicom Group, Inc. 3,398
----------
4,612
----------
APPAREL & ACCESSORIES & LUXURY GOODS (0.3%)
72,701 Coach, Inc. 4,036
14,047 Fossil, Inc.* 1,308
15,719 Ralph Lauren Corp. 2,356
22,587 VF Corp. 3,410
----------
11,110
----------
APPAREL RETAIL (0.6%)
20,778 Abercrombie & Fitch Co. "A" 997
76,481 Gap, Inc. 2,374
61,854 Limited Brands, Inc. 2,911
57,054 Ross Stores, Inc. 3,089
187,149 TJX Companies, Inc. 7,944
28,446 Urban Outfitters, Inc.* 1,120
----------
18,435
----------
AUTO PARTS & EQUIPMENT (0.3%)
30,108 BorgWarner, Inc.* 2,156
75,669 Delphi Automotive plc* 2,895
175,352 Johnson Controls, Inc. 5,383
----------
10,434
----------
AUTOMOBILE MANUFACTURERS (0.4%)
981,791 Ford Motor Co. 12,714
----------
AUTOMOTIVE RETAIL (0.3%)
10,604 AutoNation, Inc.* 421
9,466 AutoZone, Inc.* 3,355
59,478 CarMax, Inc.* 2,233
29,438 O'Reilly Automotive, Inc.* 2,632
----------
8,641
----------
|
PORTFOLIO OF INVESTMENTS | 11
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
BROADCASTING (0.3%)
152,597 CBS Corp. "B" $ 5,806
61,401 Discovery Communications, Inc. "A"* 3,898
22,173 Scripps Networks Interactive "A" 1,284
----------
10,988
----------
CABLE & SATELLITE (1.3%)
55,993 Cablevision Systems Corp. "A" 836
682,689 Comcast Corp. "A" 25,519
155,257 DIRECTV* 7,788
77,504 Time Warner Cable, Inc. 7,533
----------
41,676
----------
CASINOS & GAMING (0.1%)
67,511 International Game Technology 956
20,382 Wynn Resorts Ltd. 2,293
----------
3,249
----------
COMPUTER & ELECTRONICS RETAIL (0.0%)
67,352 Best Buy Co., Inc. 798
31,138 GameStop Corp. "A" 781
----------
1,579
----------
CONSUMER ELECTRONICS (0.1%)
27,986 Garmin Ltd. 1,142
17,447 Harman International Industries, Inc. 779
----------
1,921
----------
DEPARTMENT STORES (0.3%)
36,760 J.C. Penney Co., Inc. 725
54,211 Kohl's Corp. 2,330
101,540 Macy's, Inc. 3,962
39,195 Nordstrom, Inc. 2,097
----------
9,114
----------
DISTRIBUTORS (0.1%)
39,922 Genuine Parts Co. 2,538
----------
EDUCATION SERVICES (0.0%)
25,905 Apollo Group, Inc. "A"* 542
----------
FOOTWEAR (0.3%)
187,524 NIKE, Inc. "B" 9,676
----------
GENERAL MERCHANDISE STORES (0.5%)
14,478 Big Lots, Inc.* 412
67,029 Dollar General Corp.* 2,955
58,611 Dollar Tree, Inc.* 2,377
|
12 | USAA S&P 500 INDEX FUND
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
24,873 Family Dollar Stores, Inc. $ 1,577
167,137 Target Corp. 9,890
----------
17,211
----------
HOME FURNISHINGS (0.0%)
36,569 Leggett & Platt, Inc. 995
----------
HOME IMPROVEMENT RETAIL (1.0%)
383,983 Home Depot, Inc. 23,749
288,895 Lowe's Companies, Inc. 10,262
----------
34,011
----------
HOMEBUILDING (0.1%)
71,188 D.R. Horton, Inc. 1,408
42,269 Lennar Corp. "A" 1,635
87,161 Pulte Group, Inc.* 1,583
----------
4,626
----------
HOMEFURNISHING RETAIL (0.1%)
58,720 Bed Bath & Beyond, Inc.* 3,283
----------
HOTELS, RESORTS & CRUISE LINES (0.3%)
114,550 Carnival Corp. 4,212
63,156 Marriott International, Inc. "A" 2,354
49,990 Starwood Hotels & Resorts Worldwide, Inc. 2,867
36,508 Wyndham Worldwide Corp. 1,943
----------
11,376
----------
HOUSEHOLD APPLIANCES (0.1%)
20,090 Whirlpool Corp. 2,044
----------
HOUSEWARES & SPECIALTIES (0.1%)
75,105 Newell Rubbermaid, Inc. 1,673
----------
INTERNET RETAIL (1.1%)
93,128 Amazon.com, Inc.* 23,388
24,015 Expedia, Inc. 1,476
14,196 Netflix, Inc.* 1,317
12,772 Priceline.com, Inc.* 7,934
28,100 TripAdvisor, Inc.* 1,179
----------
35,294
----------
LEISURE PRODUCTS (0.1%)
30,359 Hasbro, Inc. 1,090
87,777 Mattel, Inc. 3,214
----------
4,304
----------
MOTORCYCLE MANUFACTURERS (0.1%)
58,509 Harley-Davidson, Inc. 2,858
----------
|
PORTFOLIO OF INVESTMENTS | 13
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
MOVIES & ENTERTAINMENT (1.6%)
518,116 News Corp. "A" $ 13,233
242,900 Time Warner, Inc. 11,618
118,745 Viacom, Inc. "B" 6,262
455,334 Walt Disney Co. 22,671
----------
53,784
----------
PUBLISHING (0.2%)
59,647 Gannett Co., Inc. 1,074
71,219 McGraw-Hill Companies, Inc. 3,894
1,136 Washington Post Co. "B" 415
----------
5,383
----------
RESTAURANTS (1.4%)
8,156 Chipotle Mexican Grill, Inc.* 2,426
32,821 Darden Restaurants, Inc. 1,479
257,978 McDonald's Corp. 22,756
191,092 Starbucks Corp. 10,247
115,791 Yum! Brands, Inc. 7,689
----------
44,597
----------
SPECIALIZED CONSUMER SERVICES (0.0%)
70,447 H&R Block, Inc. 1,308
----------
SPECIALTY STORES (0.2%)
27,752 PETSMART INC. 1,897
173,657 Staples, Inc. 1,980
30,564 Tiffany & Co. 1,752
----------
5,629
----------
TIRES & RUBBER (0.0%)
63,115 Goodyear Tire & Rubber Co.* 872
----------
Total Consumer Discretionary 376,477
----------
CONSUMER STAPLES (10.6%)
-----------------------
AGRICULTURAL PRODUCTS (0.1%)
168,877 Archer-Daniels-Midland Co. 4,625
----------
BREWERS (0.1%)
39,999 Molson Coors Brewing Co. "B" 1,712
----------
DISTILLERS & VINTNERS (0.2%)
40,999 Beam, Inc. 2,505
38,953 Brown-Forman Corp. "B" 2,464
38,924 Constellation Brands, Inc. "A"* 1,377
----------
6,346
----------
|
14 | USAA S&P 500 INDEX FUND
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
DRUG RETAIL (0.7%)
320,369 CVS Caremark Corp. $ 15,490
221,063 Walgreen Co. 8,181
----------
23,671
----------
FOOD DISTRIBUTORS (0.1%)
150,433 Sysco Corp. 4,763
----------
FOOD RETAIL (0.3%)
131,716 Kroger Co. 3,427
61,604 Safeway, Inc. 1,114
44,583 Whole Foods Market, Inc. 4,072
----------
8,613
----------
HOUSEHOLD PRODUCTS (2.2%)
33,255 Clorox Co. 2,435
114,269 Colgate-Palmolive Co. 11,946
100,492 Kimberly-Clark Corp. 8,485
702,600 Procter & Gamble Co. 47,699
----------
70,565
----------
HYPERMARKETS & SUPER CENTERS (1.2%)
111,353 Costco Wholesale Corp. 10,998
429,769 Wal-Mart Stores, Inc.(f) 29,323
----------
40,321
----------
PACKAGED FOODS & MEAT (1.6%)
46,052 Campbell Soup Co. 1,607
103,837 ConAgra Foods, Inc. 3,063
48,931 Dean Foods Co.* 808
166,008 General Mills, Inc. 6,708
82,797 H.J. Heinz Co. 4,776
38,347 Hershey Co. 2,769
35,142 Hormel Foods Corp. 1,097
27,909 J.M. Smucker Co. 2,407
63,257 Kellogg Co. 3,533
152,701 Kraft Foods Group Inc. "A" 6,943
34,104 McCormick & Co., Inc. 2,167
52,251 Mead Johnson Nutrition Co. 3,443
456,804 Mondelez International, Inc. 11,635
74,345 Tyson Foods, Inc. "A" 1,442
----------
52,398
----------
PERSONAL PRODUCTS (0.2%)
110,424 Avon Products, Inc. 1,586
61,581 Estee Lauder Companies, Inc. "A" 3,686
----------
5,272
----------
|
PORTFOLIO OF INVESTMENTS | 15
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
SOFT DRINKS (2.1%)
991,169 Coca-Cola Co. $ 35,930
69,473 Coca-Cola Enterprises, Inc. 2,204
53,210 Dr Pepper Snapple Group, Inc. 2,351
38,322 Monster Beverage Corp.* 2,027
397,446 PepsiCo, Inc. 27,197
----------
69,709
----------
TOBACCO (1.8%)
519,561 Altria Group, Inc. 16,325
33,075 Lorillard, Inc. 3,859
429,282 Philip Morris International, Inc. 35,905
83,829 Reynolds American, Inc. 3,473
----------
59,562
----------
Total Consumer Staples 347,557
----------
ENERGY (10.9%)
-------------
COAL & CONSUMABLE FUELS (0.1%)
58,196 CONSOL Energy, Inc. 1,868
69,779 Peabody Energy Corp. 1,857
----------
3,725
----------
INTEGRATED OIL & GAS (5.4%)
502,883 Chevron Corp. 54,382
1,171,208 Exxon Mobil Corp.(f) 101,368
76,685 Hess Corp. 4,061
47,330 Murphy Oil Corp. 2,819
208,266 Occidental Petroleum Corp. 15,955
----------
178,585
----------
OIL & GAS DRILLING (0.3%)
17,796 Diamond Offshore Drilling, Inc. 1,209
59,458 Ensco plc "A" 3,525
27,527 Helmerich & Payne, Inc. 1,542
73,230 Nabors Industries Ltd.* 1,058
64,717 Noble Corp. 2,254
32,240 Rowan Companies plc "A"* 1,008
----------
10,596
----------
OIL & GAS EQUIPMENT & SERVICES (1.5%)
112,661 Baker Hughes, Inc. 4,601
63,105 Cameron International Corp.* 3,563
61,290 FMC Technologies, Inc.* 2,625
239,187 Halliburton Co. 8,297
|
16 | USAA S&P 500 INDEX FUND
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
109,990 National Oilwell Varco, Inc. $ 7,518
341,019 Schlumberger Ltd. 23,629
----------
50,233
----------
OIL & GAS EXPLORATION & PRODUCTION (2.5%)
128,801 Anadarko Petroleum Corp. 9,571
100,914 Apache Corp. 7,922
53,843 Cabot Oil & Gas Corp. 2,678
133,065 Chesapeake Energy Corp. 2,212
312,104 ConocoPhillips 18,099
100,055 Denbury Resources, Inc.* 1,621
97,374 Devon Energy Corp. 5,067
69,636 EOG Resources, Inc. 8,411
38,207 EQT Corp. 2,254
182,326 Marathon Oil Corp. 5,590
34,544 Newfield Exploration Co.* 925
45,602 Noble Energy, Inc. 4,640
31,591 Pioneer Natural Resources Co. 3,367
45,298 QEP Resources, Inc. 1,371
41,750 Range Resources Corp. 2,623
89,500 Southwestern Energy Co.* 2,990
49,960 WPX Energy, Inc.* 743
----------
80,084
----------
OIL & GAS REFINING & MARKETING (0.6%)
87,178 Marathon Petroleum Corp. 5,492
160,706 Phillips 66 8,534
36,427 Tesoro Corp. 1,605
142,945 Valero Energy Corp. 4,877
----------
20,508
----------
OIL & GAS STORAGE & TRANSPORTATION (0.5%)
162,181 Kinder Morgan, Inc. 5,730
170,821 Spectra Energy Corp. 4,677
174,046 Williams Companies, Inc. 5,698
----------
16,105
----------
Total Energy 359,836
----------
FINANCIALS (15.5%)
-----------------
ASSET MANAGEMENT & CUSTODY BANKS (1.2%)
52,993 Ameriprise Financial, Inc. 3,319
300,617 Bank of New York Mellon Corp., Inc. 7,726
32,266 BlackRock, Inc. 6,670
35,484 Franklin Resources, Inc. 4,460
|
PORTFOLIO OF INVESTMENTS | 17
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
113,840 Invesco Ltd. $ 2,970
29,620 Legg Mason, Inc. 762
56,079 Northern Trust Corp.(c) 2,813
119,581 State Street Corp. 5,621
65,226 T. Rowe Price Group, Inc. 4,248
----------
38,589
----------
CONSUMER FINANCE (0.9%)
249,986 American Express Co. 14,369
149,865 Capital One Financial Corp. 8,682
129,485 Discover Financial Services 4,992
120,002 SLM Corp. 2,055
----------
30,098
----------
DIVERSIFIED BANKS (1.8%)
48,466 Comerica, Inc. 1,470
483,280 U.S. Bancorp 15,436
1,259,205 Wells Fargo & Co. 43,040
----------
59,946
----------
INSURANCE BROKERS (0.3%)
81,458 Aon plc 4,529
139,462 Marsh & McLennan Companies, Inc. 4,807
----------
9,336
----------
INVESTMENT BANKING & BROKERAGE (0.8%)
281,321 Charles Schwab Corp. 4,040
63,532 E*TRADE Financial Corp.* 569
113,562 Goldman Sachs Group, Inc. 14,486
354,677 Morgan Stanley 6,781
----------
25,876
----------
LIFE & HEALTH INSURANCE (0.9%)
120,061 AFLAC, Inc. 6,378
70,309 Lincoln National Corp. 1,821
280,572 MetLife, Inc. 9,242
71,177 Principal Financial Group, Inc. 2,030
119,509 Prudential Financial, Inc. 6,373
24,639 Torchmark Corp. 1,273
69,646 Unum Group 1,450
----------
28,567
----------
MULTI-LINE INSURANCE (0.6%)
379,863 American International Group, Inc.* 13,409
20,494 Assurant, Inc. 711
123,459 Genworth Financial, Inc. "A"* 927
|
18 | USAA S&P 500 INDEX FUND
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
112,936 Hartford Financial Services Group, Inc. $ 2,535
80,172 Loews Corp. 3,267
----------
20,849
----------
MULTI-SECTOR HOLDINGS (0.0%)
50,711 Leucadia National Corp. 1,206
----------
OTHER DIVERSIFIED FINANCIAL SERVICES (3.2%)
2,769,722 Bank of America Corp. 32,129
753,672 Citigroup, Inc. 29,815
976,933 JPMorgan Chase & Co. 42,956
----------
104,900
----------
PROPERTY & CASUALTY INSURANCE (2.2%)
87,526 ACE Ltd. 6,985
123,247 Allstate Corp. 4,951
468,903 Berkshire Hathaway, Inc. "B"* 42,061
67,426 Chubb Corp. 5,078
37,350 Cincinnati Financial Corp. 1,463
143,581 Progressive Corp. 3,029
97,862 Travelers Companies, Inc. 7,028
76,890 XL Group plc 1,927
----------
72,522
----------
REAL ESTATE SERVICES (0.0%)
77,590 CBRE Group, Inc.* 1,544
----------
REGIONAL BANKS (1.0%)
180,979 BB&T Corp. 5,268
231,233 Fifth Third Bancorp 3,513
61,655 First Horizon National Corp. 611
218,318 Huntington Bancshares, Inc. 1,395
238,456 KeyCorp 2,008
31,359 M&T Bank Corp. 3,088
135,781 PNC Financial Services Group, Inc. 7,917
362,477 Regions Financial Corp. 2,581
138,135 SunTrust Banks, Inc. 3,916
46,602 Zions Bancorp 997
----------
31,294
----------
REITs - DIVERSIFIED (0.1%)
43,404 Vornado Realty Trust 3,476
----------
REITs - INDUSTRIAL (0.1%)
118,169 Prologis, Inc. 4,312
----------
REITs - OFFICE (0.1%)
38,643 Boston Properties, Inc. 4,089
----------
|
PORTFOLIO OF INVESTMENTS | 19
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
REITs - RESIDENTIAL (0.3%)
37,405 Apartment Investment & Management Co. "A" $ 1,012
29,473 AvalonBay Communities, Inc. 3,996
82,925 Equity Residential Properties Trust 4,700
----------
9,708
----------
REITs - RETAIL (0.4%)
104,432 Kimco Realty Corp. 2,017
79,510 Simon Property Group, Inc. 12,570
----------
14,587
----------
REITs - SPECIALIZED (1.1%)
101,969 American Tower Corp. 7,879
116,003 HCP, Inc. 5,241
66,882 Health Care REIT, Inc. 4,099
185,344 Host Hotels & Resorts, Inc. 2,904
41,307 Plum Creek Timber Co., Inc. 1,833
36,944 Public Storage 5,356
75,713 Ventas, Inc. 4,900
139,677 Weyerhaeuser Co. 3,886
----------
36,098
----------
SPECIALIZED FINANCE (0.4%)
78,484 CME Group, Inc. 3,980
18,681 IntercontinentalExchange, Inc.* 2,313
50,082 Moody's Corp. 2,520
30,260 Nasdaq OMX Group, Inc. 757
62,276 NYSE Euronext 1,964
----------
11,534
----------
THRIFTS & MORTGAGE FINANCE (0.1%)
121,994 Hudson City Bancorp, Inc. 992
88,108 People's United Financial, Inc. 1,065
----------
2,057
----------
Total Financials 510,588
----------
HEALTH CARE (12.0%)
------------------
BIOTECHNOLOGY (1.6%)
50,028 Alexion Pharmaceuticals, Inc.* 4,693
197,003 Amgen, Inc. 17,006
60,982 Biogen Idec, Inc.* 8,944
108,666 Celgene Corp.* 8,554
194,646 Gilead Sciences, Inc.* 14,297
----------
53,494
----------
|
20 | USAA S&P 500 INDEX FUND
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
HEALTH CARE DISTRIBUTORS (0.4%)
60,367 AmerisourceBergen Corp. $ 2,607
87,316 Cardinal Health, Inc. 3,596
60,535 McKesson Corp. 5,869
21,752 Patterson Companies, Inc. 744
----------
12,816
----------
HEALTH CARE EQUIPMENT (2.5%)
406,183 Abbott Laboratories 26,605
141,120 Baxter International, Inc. 9,407
50,673 Becton, Dickinson & Co. 3,962
353,972 Boston Scientific Corp.* 2,028
19,503 C.R. Bard, Inc. 1,906
57,599 Carefusion Corp.* 1,646
121,624 Covidien plc 7,023
29,679 Edwards Lifesciences Corp.* 2,676
10,242 Intuitive Surgical, Inc.* 5,023
259,904 Medtronic, Inc. 10,661
79,161 St. Jude Medical, Inc. 2,861
74,211 Stryker Corp. 4,068
28,178 Varian Medical Systems, Inc.* 1,979
44,545 Zimmer Holdings, Inc. 2,970
----------
82,815
----------
HEALTH CARE FACILITIES (0.0%)
27,521 Tenet Healthcare Corp. 894
----------
HEALTH CARE SERVICES (0.6%)
21,412 DaVita, Inc.* 2,367
209,777 Express Scripts Holding Company* 11,328
24,373 Laboratory Corp. of America Holdings* 2,111
40,803 Quest Diagnostics, Inc. 2,377
----------
18,183
----------
HEALTH CARE SUPPLIES (0.1%)
36,007 DENTSPLY International, Inc. 1,426
----------
HEALTH CARE TECHNOLOGY (0.1%)
37,421 Cerner Corp.* 2,905
----------
LIFE SCIENCES TOOLS & SERVICES (0.4%)
89,426 Agilent Technologies, Inc. 3,661
44,657 Life Technologies Corp.* 2,192
29,129 PerkinElmer, Inc. 925
92,547 Thermo Fisher Scientific, Inc. 5,903
22,240 Waters Corp.* 1,937
----------
14,618
----------
|
PORTFOLIO OF INVESTMENTS | 21
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
MANAGED HEALTH CARE (1.0%)
85,723 Aetna, Inc. $ 3,969
74,009 CIGNA Corp. 3,957
35,004 Coventry Health Care, Inc. 1,569
40,540 Humana, Inc. 2,782
262,518 UnitedHealth Group, Inc. 14,239
77,858 WellPoint, Inc. 4,743
----------
31,259
----------
PHARMACEUTICALS (5.3%)
78,864 Allergan, Inc. 7,234
424,242 Bristol-Myers Squibb Co. 13,826
262,786 Eli Lilly and Co. 12,961
59,996 Forest Laboratories, Inc.* 2,119
42,208 Hospira, Inc.* 1,319
712,044 Johnson & Johnson 49,914
781,887 Merck & Co., Inc. 32,010
104,798 Mylan, Inc.* 2,880
22,543 Perrigo Co. 2,345
1,891,907 Pfizer, Inc.(f) 47,449
32,741 Watson Pharmaceuticals, Inc.* 2,816
----------
174,873
----------
Total Health Care 393,283
----------
INDUSTRIALS (10.1%)
------------------
AEROSPACE & DEFENSE (2.4%)
174,461 Boeing Co. 13,147
85,032 General Dynamics Corp. 5,890
201,415 Honeywell International, Inc. 12,784
23,988 L-3 Communications Holdings, Inc. 1,838
68,947 Lockheed Martin Corp. 6,363
62,880 Northrop Grumman Corp. 4,250
37,551 Precision Castparts Corp. 7,113
84,401 Raytheon Co. 4,858
36,145 Rockwell Collins, Inc. 2,103
71,696 Textron, Inc. 1,777
216,795 United Technologies Corp. 17,779
----------
77,902
----------
AIR FREIGHT & LOGISTICS (0.8%)
41,772 C.H. Robinson Worldwide, Inc. 2,641
54,361 Expeditors International of Washington, Inc. 2,150
74,905 FedEx Corp. 6,870
183,609 United Parcel Service, Inc. "B" 13,538
----------
25,199
----------
|
22 | USAA S&P 500 INDEX FUND
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
AIRLINES (0.1%)
190,645 Southwest Airlines Co. $ 1,952
----------
BUILDING PRODUCTS (0.0%)
91,546 Masco Corp. 1,525
----------
CONSTRUCTION & ENGINEERING (0.2%)
42,586 Fluor Corp. 2,501
32,904 Jacobs Engineering Group, Inc.* 1,401
55,397 Quanta Services, Inc.* 1,512
----------
5,414
----------
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS (1.0%)
168,113 Caterpillar, Inc. 15,060
45,410 Cummins, Inc. 4,920
100,647 Deere & Co. 8,698
27,137 Joy Global, Inc. 1,731
90,280 PACCAR, Inc. 4,081
----------
34,490
----------
DIVERSIFIED SUPPORT SERVICES (0.1%)
27,735 Cintas Corp. 1,134
42,205 Iron Mountain, Inc. 1,311
----------
2,445
----------
ELECTRICAL COMPONENTS & EQUIPMENT (0.7%)
119,200 Eaton Corp. plc 6,460
185,665 Emerson Electric Co. 9,833
35,810 Rockwell Automation, Inc. 3,008
25,306 Roper Industries, Inc. 2,821
----------
22,122
----------
ENVIRONMENTAL & FACILITIES SERVICES (0.2%)
76,800 Republic Services, Inc. 2,253
22,174 Stericycle, Inc.* 2,068
111,744 Waste Management, Inc. 3,770
----------
8,091
----------
HUMAN RESOURCE & EMPLOYMENT SERVICES (0.0%)
35,856 Robert Half International, Inc. 1,141
----------
INDUSTRIAL CONGLOMERATES (2.4%)
163,532 3M Co. 15,184
149,721 Danaher Corp. 8,369
2,694,647 General Electric Co.(f) 56,561
----------
80,114
----------
|
PORTFOLIO OF INVESTMENTS | 23
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
INDUSTRIAL MACHINERY (0.9%)
46,086 Dover Corp. $ 3,028
13,013 Flowserve Corp. 1,910
109,590 Illinois Tool Works, Inc. 6,664
71,945 Ingersoll-Rand plc 3,451
28,600 Pall Corp. 1,723
38,137 Parker-Hannifin Corp. 3,244
53,692 Pentair Ltd. 2,639
14,671 Snap-On, Inc. 1,159
43,269 Stanley Black & Decker, Inc. 3,201
48,511 Xylem, Inc. 1,315
----------
28,334
----------
OFFICE SERVICES & SUPPLIES (0.0%)
25,394 Avery Dennison Corp. 887
51,949 Pitney Bowes, Inc. 552
----------
1,439
----------
RAILROADS (0.8%)
264,153 CSX Corp. 5,212
81,679 Norfolk Southern Corp. 5,051
120,806 Union Pacific Corp. 15,187
----------
25,450
----------
RESEARCH & CONSULTING SERVICES (0.1%)
11,342 Dun & Bradstreet Corp. 892
30,776 Equifax, Inc. 1,666
----------
2,558
----------
SECURITY & ALARM SERVICES (0.2%)
60,131 ADT Corp. 2,796
119,797 Tyco International Ltd. 3,504
----------
6,300
----------
TRADING COMPANIES & DISTRIBUTORS (0.2%)
69,120 Fastenal Co. 3,227
15,396 W.W. Grainger, Inc. 3,116
----------
6,343
----------
TRUCKING (0.0%)
13,505 Ryder System, Inc. 674
----------
Total Industrials 331,493
----------
INFORMATION TECHNOLOGY (19.0%)
-----------------------------
APPLICATION SOFTWARE (0.6%)
127,255 Adobe Systems, Inc.* 4,795
57,954 Autodesk, Inc.* 2,049
|
24 | USAA S&P 500 INDEX FUND
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
47,965 Citrix Systems, Inc.* $ 3,154
71,666 Intuit, Inc. 4,264
33,570 salesforce.com, Inc.* 5,643
----------
19,905
----------
COMMUNICATIONS EQUIPMENT (2.0%)
1,364,410 Cisco Systems, Inc. 26,811
20,303 F5 Networks, Inc.* 1,972
29,693 Harris Corp. 1,454
58,955 JDS Uniphase Corp.* 798
132,422 Juniper Networks, Inc.* 2,605
72,140 Motorola Solutions, Inc. 4,017
437,911 QUALCOMM, Inc. 27,159
----------
64,816
----------
COMPUTER HARDWARE (4.3%)
241,735 Apple, Inc. 128,852
375,977 Dell, Inc. 3,809
504,042 Hewlett-Packard Co. 7,182
----------
139,843
----------
COMPUTER STORAGE & PERIPHERALS (0.8%)
541,581 EMC Corp.* 13,702
91,670 NetApp, Inc.* 3,075
62,118 SanDisk Corp.* 2,706
86,379 Seagate Technology plc 2,633
55,830 Western Digital Corp. 2,372
----------
24,488
----------
DATA PROCESSING & OUTSOURCED SERVICES (1.6%)
124,633 Automatic Data Processing, Inc. 7,105
39,718 Computer Sciences Corp. 1,591
64,250 Fidelity National Information Services, Inc. 2,236
34,128 Fiserv, Inc.* 2,697
27,514 MasterCard, Inc. "A" 13,517
82,720 Paychex, Inc. 2,576
41,090 Total System Services, Inc. 880
133,987 Visa, Inc. "A" 20,310
155,019 Western Union Co. 2,110
----------
53,022
----------
ELECTRONIC COMPONENTS (0.2%)
41,011 Amphenol Corp. "A" 2,654
379,973 Corning, Inc. 4,795
----------
7,449
----------
|
PORTFOLIO OF INVESTMENTS | 25
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.0%)
37,765 FLIR Systems, Inc. $ 843
----------
ELECTRONIC MANUFACTURING SERVICES (0.2%)
47,976 Jabil Circuit, Inc. 926
35,030 Molex, Inc. 957
108,432 TE Connectivity Ltd. 4,025
----------
5,908
----------
HOME ENTERTAINMENT SOFTWARE (0.0%)
77,400 Electronic Arts, Inc.* 1,125
----------
INTERNET SOFTWARE & SERVICES (2.2%)
45,590 Akamai Technologies, Inc.* 1,865
299,265 eBay, Inc.* 15,269
68,398 Google, Inc. "A"* 48,520
39,862 VeriSign, Inc.* 1,547
267,248 Yahoo!, Inc.* 5,318
----------
72,519
----------
IT CONSULTING & OTHER SERVICES (2.2%)
164,059 Accenture plc "A" 10,910
77,140 Cognizant Technology Solutions Corp. "A"* 5,712
272,929 International Business Machines Corp. 52,279
72,799 SAIC, Inc. 824
43,344 Teradata Corp.* 2,683
----------
72,408
----------
OFFICE ELECTRONICS (0.1%)
326,425 Xerox Corp. 2,226
----------
SEMICONDUCTOR EQUIPMENT (0.2%)
307,563 Applied Materials, Inc. 3,518
42,754 KLA-Tencor Corp. 2,042
44,056 Lam Research Corp.* 1,592
48,916 Teradyne, Inc.* 826
----------
7,978
----------
SEMICONDUCTORS (1.8%)
155,910 Advanced Micro Devices, Inc.* 374
82,642 Altera Corp. 2,846
77,513 Analog Devices, Inc. 3,260
133,295 Broadcom Corp. "A" 4,427
14,887 First Solar, Inc.* 460
1,278,627 Intel Corp. 26,378
60,134 Linear Technology Corp. 2,062
145,375 LSI Corp.* 1,029
|
26 | USAA S&P 500 INDEX FUND
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
50,192 Microchip Technology, Inc. $ 1,636
260,749 Micron Technology, Inc.* 1,656
159,957 NVIDIA Corp. 1,966
287,844 Texas Instruments, Inc. 8,906
67,129 Xilinx, Inc. 2,410
----------
57,410
----------
SYSTEMS SOFTWARE (2.8%)
36,493 BMC Software, Inc.* 1,447
87,203 CA, Inc. 1,917
1,946,540 Microsoft Corp. 52,031
965,918 Oracle Corp. 32,185
49,545 Red Hat, Inc.* 2,624
177,582 Symantec Corp.* 3,340
----------
93,544
----------
Total Information Technology 623,484
----------
MATERIALS (3.6%)
---------------
ALUMINUM (0.1%)
273,870 Alcoa, Inc. 2,377
----------
COMMODITY CHEMICALS (0.2%)
97,273 LyondellBasell Industries N.V. 5,553
----------
CONSTRUCTION MATERIALS (0.0%)
33,107 Vulcan Materials Co. 1,723
----------
DIVERSIFIED CHEMICALS (0.9%)
308,675 Dow Chemical Co. 9,976
239,643 E.I. du Pont de Nemours & Co. 10,777
39,251 Eastman Chemical Co. 2,671
35,696 FMC Corp. 2,089
39,533 PPG Industries, Inc. 5,351
----------
30,864
----------
DIVERSIFIED METALS & MINING (0.3%)
243,371 Freeport-McMoRan Copper & Gold, Inc. 8,323
17,600 Titanium Metals Corp. 291
----------
8,614
----------
FERTILIZERS & AGRICULTURAL CHEMICALS (0.6%)
16,078 CF Industries Holdings, Inc. 3,267
137,340 Monsanto Co. 12,999
70,920 Mosaic Co. 4,016
----------
20,282
----------
|
PORTFOLIO OF INVESTMENTS | 27
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
GOLD (0.2%)
127,190 Newmont Mining Corp. $ 5,907
----------
INDUSTRIAL GASES (0.4%)
54,889 Air Products & Chemicals, Inc. 4,612
18,179 Airgas, Inc. 1,659
76,464 Praxair, Inc. 8,369
----------
14,640
----------
METAL & GLASS CONTAINERS (0.1%)
39,738 Ball Corp. 1,778
41,739 Owens-Illinois, Inc.* 888
----------
2,666
----------
PAPER PACKAGING (0.0%)
27,127 Bemis Co., Inc. 907
50,015 Sealed Air Corp. 876
----------
1,783
----------
PAPER PRODUCTS (0.2%)
113,358 International Paper Co. 4,516
45,312 MeadWestvaco Corp. 1,444
----------
5,960
----------
SPECIALTY CHEMICALS (0.4%)
67,505 Ecolab, Inc. 4,854
20,717 International Flavors & Fragrances, Inc. 1,378
22,135 Sherwin-Williams Co. 3,405
30,955 Sigma-Aldrich Corp. 2,278
----------
11,915
----------
STEEL (0.2%)
27,990 Allegheny Technologies, Inc. 850
36,390 Cliffs Natural Resources, Inc. 1,403
81,414 Nucor Corp. 3,516
36,743 United States Steel Corp. 877
----------
6,646
----------
Total Materials 118,930
----------
TELECOMMUNICATION SERVICES (3.0%)
--------------------------------
INTEGRATED TELECOMMUNICATION SERVICES (2.7%)
1,459,753 AT&T, Inc. 49,208
160,935 CenturyLink, Inc. 6,296
251,625 Frontier Communications Corp. 1,077
733,526 Verizon Communications, Inc. 31,740
150,371 Windstream Corp. 1,245
----------
89,566
----------
|
28 | USAA S&P 500 INDEX FUND
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.3%)
75,141 Crown Castle International Corp.* $ 5,422
81,135 MetroPCS Communications, Inc.* 807
769,327 Sprint Nextel Corp.* 4,362
----------
10,591
----------
Total Telecommunication Services 100,157
----------
UTILITIES (3.4%)
---------------
ELECTRIC UTILITIES (1.6%)
125,395 American Electric Power Co., Inc. 5,352
83,549 Edison International 3,776
45,467 Entergy Corp. 2,898
218,814 Exelon Corp. 6,508
107,237 FirstEnergy Corp. 4,478
109,028 NextEra Energy, Inc. 7,544
80,609 Northeast Utilities 3,150
59,584 Pepco Holdings, Inc. 1,168
28,089 Pinnacle West Capital Corp. 1,432
150,361 PPL Corp. 4,305
225,168 Southern Co. 9,639
124,998 Xcel Energy, Inc. 3,339
----------
53,589
----------
GAS UTILITIES (0.1%)
30,059 AGL Resources, Inc. 1,201
52,317 ONEOK, Inc. 2,237
----------
3,438
----------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.1%)
159,243 AES Corp. 1,704
82,492 NRG Energy, Inc. 1,896
----------
3,600
----------
MULTI-UTILITIES (1.6%)
62,350 Ameren Corp. 1,916
109,317 CenterPoint Energy, Inc. 2,105
67,600 CMS Energy Corp. 1,648
75,032 Consolidated Edison, Inc. 4,167
147,955 Dominion Resources, Inc. 7,664
43,969 DTE Energy Co. 2,640
181,217 Duke Energy Corp. 11,562
19,749 Integrys Energy Group, Inc. 1,031
79,403 NiSource, Inc. 1,976
110,691 PG&E Corp. 4,448
129,682 Public Service Enterprise Group, Inc. 3,968
|
PORTFOLIO OF INVESTMENTS | 29
----------------------------------------------------------------------------------------
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
----------------------------------------------------------------------------------------
33,628 SCANA Corp. $ 1,535
58,286 Sempra Energy 4,135
51,502 TECO Energy, Inc. 863
59,297 Wisconsin Energy Corp. 2,185
----------
51,843
----------
Total Utilities 112,470
----------
Total Common Stocks (cost: $2,623,781) 3,274,275
----------
MONEY MARKET INSTRUMENTS (0.4%)
MONEY MARKET FUND (0.2%)
6,724,306 Northern Institutional Funds - Diversified
Assets Portfolio, 0.01%(a),(d) 6,724
----------
----------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
(000)
----------------------------------------------------------------------------------------
U.S. TREASURY BILLS (0.2%)
$4,910 0.14%, 04/25/2013(b),(e) 4,909
----------
Total Money Market Instruments (cost: $4,908) 11,633
----------
TOTAL INVESTMENTS (COST: $2,635,413) $3,285,908
==========
|
30 | USAA S&P 500 INDEX FUND
-----------------------------------------------------------------------------------------------------------
($ IN 000s) VALUATION HIERARCHY
-----------------------------------------------------------------------------------------------------------
(LEVEL 1) (LEVEL 2) (LEVEL 3)
QUOTED PRICES OTHER SIGNIFICANT SIGNIFICANT
IN ACTIVE MARKETS OBSERVABLE UNOBSERVABLE
FOR IDENTICAL ASSETS INPUTS INPUTS TOTAL
-----------------------------------------------------------------------------------------------------------
Equity Securities:
Common Stocks $3,274,275 $- $- $3,274,275
Money Market Instruments:
Money Market Fund 6,724 - - 6,724
U.S. Treasury Bills 4,909 - - 4,909
Other financial instruments* 30 - - 30
-----------------------------------------------------------------------------------------------------------
Total $3,285,938 $- $- $3,285,938
-----------------------------------------------------------------------------------------------------------
|
*Other financial instruments are derivative instruments not reflected in the
portfolio of investments, such as futures, which are valued at the unrealized
appreciation/depreciation on the investment.
Reconciliation of investments in which significant unobservable inputs (Level 3)
were used in determining value:
-------------------------------------------------------------------------------
COMMON PREFERRED
STOCKS STOCKS
-------------------------------------------------------------------------------
Balance as of December 31, 2011 $2 $2
Purchases - -
Sales - -
Transfers into Level 3 - -
Transfers out of Level 3 (2) (2)
Net realized gain (loss) - -
Change in net unrealized appreciation/depreciation - -
-------------------------------------------------------------------------------
Balance as of December 31, 2012 $- $-
-------------------------------------------------------------------------------
|
For the period of January 1, 2012, through December 31, 2012, common and
preferred stocks with a fair value of $4,000 were transferred from level 3 to
level 1 as trading resumed after a division spin-off was completed. The Fund's
policy is to recognize any transfers into and out of the levels as of the
beginning of the period in which the event or circumstance that caused the
transfer occurred.
PORTFOLIO OF INVESTMENTS | 31
NOTES TO PORTFOLIO OF INVESTMENTS
December 31, 2012
o GENERAL NOTES
Market values of securities are determined by procedures and practices
discussed in Note 1 to the financial statements.
The portfolio of investments category percentages shown represent the
percentages of the investments to net assets, and, in total, may not equal
100%. A category percentage of 0.0% represents less than 0.1% of net assets.
o PORTFOLIO ABBREVIATION(S) AND DESCRIPTION(S)
REIT -- Real estate investment trust
o SPECIFIC NOTES
(a) Rate represents the money market fund annualized seven-day yield at
December 31, 2012.
(b) Rate represents an annualized yield at time of purchase, not a coupon
rate.
(c) Northern Trust Corp. is the parent to Northern Trust Investments, N.A.
(NTI), which is the subadviser of the Fund.
(d) NTI is both the subadviser of the Fund and the adviser of the Northern
Institutional Funds.
(e) Security with a value of $4,909,000 is segregated as collateral for
initial margin requirements on open futures contracts.
32 | USAA S&P 500 INDEX FUND
(f) Security, or a portion thereof, is segregated to cover the value of open
futures contracts at December 31, 2012, as shown in the following table:
VALUE AT
DECEMBER 31, UNREALIZED
TYPE OF FUTURE EXPIRATION CONTRACTS POSITION 2012 APPRECIATION
-------------------------------------------------------------------------------------------
S&P 500 Index Futures March 14, 2013 42 Long $14,911,000 $30,000
|
* Non-income-producing security.
See accompanying notes to financial statements.
NOTES TO PORTFOLIO OF INVESTMENTS | 33
STATEMENT OF ASSETS AND LIABILITIES (IN THOUSANDS)
December 31, 2012
ASSETS
Investments in securities, at market value (cost of $2,635,413) $3,285,908
Receivables:
Capital shares sold:
Affiliated transactions (Note 8) 95
Nonaffiliated transactions 5,668
USAA Asset Management Company (Note 7D) 528
USAA Transfer Agency Company (Note 7E) 3
Dividends and interest 3,611
Securities sold 489
Other 11
Variation margin on futures contracts 399
----------
Total assets 3,296,712
----------
LIABILITIES
Payables:
Payable for return of collateral for securities loaned (Note 5) 773
Capital shares redeemed 5,413
Accrued management fees 286
Accrued administration and servicing fees 148
Accrued transfer agent's fees 130
Other accrued expenses and payables 171
----------
Total liabilities 6,921
----------
Net assets applicable to capital shares outstanding $3,289,791
==========
NET ASSETS CONSIST OF:
Paid-in capital $2,651,337
Accumulated undistributed net investment income 261
Accumulated net realized loss on investments and futures transactions (12,332)
Net unrealized appreciation of investments and futures contracts 650,525
----------
Net assets applicable to capital shares outstanding $3,289,791
==========
Net asset value, redemption price, and offering price per share:
Member Shares (net assets of $2,116,203/104,052 shares outstanding) $ 20.34
==========
Reward Shares (net assets of $1,173,588/57,699 shares outstanding) $ 20.34
==========
|
See accompanying notes to financial statements.
34 | USAA S&P 500 INDEX FUND
STATEMENT OF OPERATIONS (IN THOUSANDS)
Year ended December 31, 2012
INVESTMENT INCOME
Dividends $ 76,720
Interest 11
Other (Note 7B) 1
--------
Total income 76,732
--------
EXPENSES
Management fees 3,332
Administration and servicing fees:
Member Shares 1,261
Reward Shares 738
Transfer agent's fees:
Member Shares 2,790
Reward Shares 1,170
Custody and accounting fees:
Member Shares 22
Reward Shares 12
Postage:
Member Shares 211
Reward Shares 30
Shareholder reporting fees:
Member Shares 92
Reward Shares 3
Trustees' fees 11
Registration fees:
Member Shares 51
Reward Shares 44
Professional fees 232
Other 83
--------
Total expenses 10,082
--------
Expenses reimbursed:
Member Shares (1,479)
Reward Shares (1,503)
--------
Net expenses 7,100
--------
NET INVESTMENT INCOME 69,632
--------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FUTURES CONTRACTS
Net realized gain on:
Investments 207,580
Futures transactions 4,156
Change in net unrealized appreciation/depreciation of:
Investments 214,452
Futures contracts (3)
--------
Net realized and unrealized gain 426,185
--------
Increase in net assets resulting from operations $495,817
========
|
See accompanying notes to financial statements.
FINANCIAL STATEMENTS | 35
STATEMENTS OF CHANGES IN NET ASSETS (IN THOUSANDS)
Years ended December 31,
2012 2011
---------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 69,632 $ 68,261
Net realized gain on investments 207,580 9,834
Net realized gain on futures transactions 4,156 6,832
Change in net unrealized appreciation/depreciation of:
Investments 214,452 (23,077)
Futures contracts (3) (1,027)
--------------------------
Increase in net assets resulting from operations 495,817 60,823
--------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Member Shares (43,728) (38,810)
Reward Shares (26,855) (26,459)
--------------------------
Total distributions of net investment income (70,583) (65,269)
--------------------------
Net realized gains:
Member Shares (100,264) -
Reward Shares (55,636) -
--------------------------
Total distributions of net realized gains (155,900) -
--------------------------
Distributions to shareholders (226,483) -
--------------------------
NET INCREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS (NOTE 6)
Member Shares (11,173) (53,612)
Reward Shares (253,110) 161,404
--------------------------
Total net increase (decrease) in net assets
from capital share transactions (264,283) 107,792
--------------------------
Capital contribution from USAA Transfer Agency
Company (Note 7E):
Reward Shares 3 14
--------------------------
Net increase in net assets 5,054 103,360
NET ASSETS
Beginning of year 3,284,737 3,181,377
--------------------------
End of year $3,289,791 $3,284,737
==========================
Accumulated undistributed net investment income:
End of year $ 261 $ 3,309
==========================
|
See accompanying notes to financial statements.
36 | USAA S&P 500 INDEX FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USAA MUTUAL FUNDS TRUST (the Trust), registered under the Investment Company Act
of 1940 (the 1940 Act), as amended, is an open-end management investment
company organized as a Delaware statutory trust consisting of 50 separate funds.
The information presented in this annual report pertains only to the USAA S&P
500 Index Fund (the Fund), which is classified as diversified under the 1940
Act. The Fund seeks to match, before fees and expenses, the performance of the
S&P 500 Index.
The Fund has two classes of shares: Member Shares and Reward Shares. Each class
of shares has equal rights to assets and earnings, except that each class bears
certain class-related expenses specific to the particular class. These expenses
include administration and servicing fees, transfer agency fees, postage,
shareholder reporting fees, and certain registration and custodian fees.
Expenses not attributable to a specific class, income, and realized gains or
losses on investments are allocated to each class of shares based on each
class's relative net assets. Each class has exclusive voting rights on matters
related solely to that class and separate voting rights on matters that relate
to both classes. The Reward Shares are currently offered for sale to qualified
shareholders, a USAA discretionary managed account program, and a USAA Fund
participating in a fund-of-funds investment strategy (USAA fund-of-funds).
A. SECURITY VALUATION -- The Trust's Board of Trustees (the Board) has
established the Valuation Committee (the Committee), and subject to Board
oversight, the Committee administers and oversees the Fund's valuation
policies and procedures which are approved by the Board. Among other things,
these policies and procedures allow the Fund to utilize independent pricing
services, quotations from securities dealers, and a wide variety of sources
and information to establish
NOTES TO FINANCIAL STATEMENTS | 37
and adjust the fair value of securities as events occur and circumstances
warrant.
The Committee reports to the Board on a quarterly basis and makes
recommendations to the Board as to pricing methodologies and services used
by the Fund and presents additional information to the Board regarding
application of the pricing and fair valuation policies and procedures during
the preceding quarter.
The Committee meets as often as necessary to make pricing and fair value
determinations. In addition, the Committee holds regular monthly meetings to
review prior actions taken by the Committee and USAA Asset Management
Company (the Manager). Among other things, these monthly meetings include a
review and analysis of back testing reports, pricing service quotation
comparisons, illiquid securities and fair value determinations, pricing
movements, and daily stale price monitoring.
The value of each security is determined (as of the close of trading on the
New York Stock Exchange (NYSE) on each business day the NYSE is open) as set
forth below:
1. Equity securities, including exchange-traded funds (ETFs), except as
otherwise noted, traded primarily on a domestic securities exchange or
the Nasdaq over-the-counter markets, are valued at the last sales price
or official closing price on the exchange or primary market on which they
trade. If no last sale or official closing price is reported or
available, the average of the bid and asked prices generally is used.
2. Investments in open-end investment companies, hedge, or other funds,
other than ETFs, are valued at their net asset value (NAV) at the end of
each business day.
3. Debt securities purchased with original or remaining maturities of 60
days or less may be valued at amortized cost, which approximates market
value.
4. Debt securities with maturities greater than 60 days are valued each
business day by a pricing service (the Service) approved by
38 | USAA S&P 500 INDEX FUND
the Board. The Service uses an evaluated mean between quoted bid and
asked prices or the last sales price to price securities when, in the
Service's judgment, these prices are readily available and are
representative of the securities' market values. For many securities,
such prices are not readily available. The Service generally prices these
securities based on methods that include consideration of yields or
prices of securities of comparable quality, coupon, maturity, and type;
indications as to values from dealers in securities; and general market
conditions.
5. Repurchase agreements are valued at cost, which approximates market
value.
6. Futures are valued based upon the last sale price at the close of market
on the principal exchange on which they are traded.
7. Securities for which market quotations are not readily available or are
considered unreliable, or whose values have been materially affected by
events occurring after the close of their primary markets but before the
pricing of the Fund, are valued in good faith at fair value, using
methods determined by the Manager in consultation with the Fund's
subadviser, if applicable, under valuation procedures approved by the
Board. The effect of fair value pricing is that securities may not be
priced on the basis of quotations from the primary market in which they
are traded and the actual price realized from the sale of a security may
differ materially from the fair value price. Valuing these securities at
fair value is intended to cause the Fund's NAV to be more reliable than
it otherwise would be.
Fair value methods used by the Manager include, but are not limited to,
obtaining market quotations from secondary pricing services,
broker-dealers, or widely used quotation systems. General factors
considered in determining the fair value of securities include
fundamental analytical data, the nature and duration of any restrictions
on disposition of the securities, and an evaluation of the forces that
influenced the market in which the securities are purchased and sold.
NOTES TO FINANCIAL STATEMENTS | 39
B. FAIR VALUE MEASUREMENTS -- Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The
three-level valuation hierarchy disclosed in the portfolio of investments is
based upon the transparency of inputs to the valuation of an asset or
liability as of the measurement date. The three levels are defined as
follows:
Level 1 -- inputs to the valuation methodology are quoted prices
(unadjusted) in active markets for identical securities.
Level 2 -- inputs to the valuation methodology are other significant
observable inputs, including quoted prices for similar securities, inputs
that are observable for the securities, either directly or indirectly, and
market-corroborated inputs such as market indices.
Level 3 -- inputs to the valuation methodology are unobservable and
significant to the fair value measurement, including the Manager's own
assumptions in determining the fair value.
The inputs or methodologies used for valuing securities are not necessarily
an indication of the risks associated with investing in those securities.
C. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES -- The Fund may buy, sell, and
enter into certain types of derivatives, including, but not limited to
futures contracts, options, and options on futures contracts, under
circumstances in which such instruments are expected by the portfolio
manager to aid in achieving the Fund's investment objective. The Fund also
may use derivatives in circumstances where the portfolio manager believes
they offer an economical means of gaining exposure to a particular asset
class or securities market or to keep cash on hand to meet shareholder
redemptions or other needs while maintaining exposure to the market. With
exchange listed futures contracts and options, counterparty credit risk to
the Fund is limited to the exchange's clearinghouse which, as counterparty
to all exchange traded futures contracts and options, guarantees the
transactions against default from the actual counterparty to the trade.
40 | USAA S&P 500 INDEX FUND
FUTURES CONTRACTS -- The Fund is subject to cash flow and tracking error
risk in the normal course of pursuing its investment objectives. The Fund
may use stock index futures contracts in an attempt to reduce any
performance discrepancies between the Fund and the S&P 500 Index. A futures
contract represents a commitment for the future purchase or sale of an asset
at a specified price on a specified date. Upon entering into such contracts,
the Fund is required to deposit with the broker in either cash or securities
an initial margin in an amount equal to a certain percentage of the contract
amount. Subsequent payments (variation margin) are made or received by the
Fund each day, depending on the daily fluctuations in the value of the
contract, and are recorded for financial statement purposes as unrealized
gains or losses. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed. Upon
entering into such contracts, the Fund bears the risk of interest or
exchange rates or securities prices moving unexpectedly in an unfavorable
direction, in which case, the Fund may not achieve the anticipated benefits
of the futures contracts.
FAIR VALUES OF DERIVATIVE INSTRUMENTS AS OF DECEMBER 31, 2012*
(IN THOUSANDS)
ASSET DERIVATIVES LIABILITY DERIVATIVES
--------------------------------------------------------------------------------------------
STATEMENT OF STATEMENT OF
ASSETS AND ASSETS AND
DERIVATIVES NOT ACCOUNTED LIABILITIES LIABILITIES
FOR AS HEDGING INSTRUMENTS LOCATION FAIR VALUE LOCATION FAIR VALUE
--------------------------------------------------------------------------------------------
Equity contracts Net unrealized $30** - $-
appreciation of
investments and
futures contracts
--------------------------------------------------------------------------------------------
|
*For open derivative instruments as of December 31, 2012, see the portfolio
of investments, which also is indicative of activity for the year ended
December 31, 2012.
**Includes cumulative appreciation (depreciation) of futures as reported on
the portfolio of investments. Only current day's variation margin is
reported within the statement of assets and liabilities.
NOTES TO FINANCIAL STATEMENTS | 41
THE EFFECT OF DERIVATIVE INSTRUMENTS ON THE STATEMENT OF OPERATIONS FOR THE
YEAR ENDED DECEMBER 31, 2012 (IN THOUSANDS)
CHANGE IN
UNREALIZED
DERIVATIVES NOT REALIZED APPRECIATION
ACCOUNTED FOR AS STATEMENT OF GAIN (LOSS) (DEPRECIATION)
HEDGING INSTRUMENTS OPERATIONS LOCATION ON DERIVATIVES ON DERIVATIVES
---------------------------------------------------------------------------------
Equity contracts Net realized gain $4,156 ($3)
on futures transactions/
Change in net unrealized
appreciation/depreciation
of futures contracts
----------------------------------------------------------------------------------
|
D. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements with
commercial banks or recognized security dealers. These agreements are
collateralized by underlying securities. The collateral obligations are
marked-to-market daily to ensure their value is equal to or in excess of the
repurchase agreement price plus 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. 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.
E. FEDERAL TAXES -- The Fund's policy is to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its income to its shareholders. Therefore,
no federal income tax provision is required.
F. INVESTMENTS IN SECURITIES -- Security transactions are accounted for on the
date the securities are purchased or sold (trade date). Gains or losses from
sales of investment securities are computed on the identified cost basis.
Dividend income, less foreign taxes, if any, is recorded on the ex-dividend
date. If the ex-dividend date has passed, certain dividends from foreign
securities are recorded upon notification. Interest income is recorded daily
on the accrual basis. Discounts and
42 | USAA S&P 500 INDEX FUND
premiums on short-term securities are amortized on a straight-line basis
over the life of the respective securities.
G. EXPENSES PAID INDIRECTLY -- Through arrangements with banks utilized by the
Fund for cash management purposes, realized credits, if any, generated from
cash balances in the Fund's bank accounts may be used to directly reduce the
Fund's expenses. Effective January 1, 2013, the Fund's custodian will
suspend the bank credit arrangement. For the year ended December 31, 2012,
bank credits reduced the expenses of the Member Shares and Reward Shares by
less than $500.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, its officers
and trustees are indemnified against certain liabilities arising out of the
performance of their duties to the Trust. In addition, in the normal course
of business the Trust enters into contracts that contain a variety of
representations and warranties that provide general indemnifications. The
Trust's maximum exposure under these arrangements is unknown, as this would
involve future claims that may be made against the Trust that have not yet
occurred. However, the Trust expects the risk of loss to be remote.
I. USE OF ESTIMATES -- The preparation of financial statements in conformity
with U.S. generally accepted accounting principles requires management to
make estimates and assumptions that may affect the reported amounts in the
financial statements.
(2) LINE OF CREDIT
The Fund participates in a joint, short-term, revolving, committed loan
agreement of $500 million with USAA Capital Corporation (CAPCO), an affiliate of
the Manager. The purpose of the agreement is to meet temporary or emergency cash
needs, including redemption requests that might otherwise require the untimely
disposition of securities. Subject to availability, the Fund may borrow from
CAPCO an amount up to 5% of the Fund's total assets at a rate per annum equal to
the rate at which CAPCO obtains funding in the capital markets, with no markup.
NOTES TO FINANCIAL STATEMENTS | 43
The USAA Funds that are party to the loan agreement are assessed facility fees
by CAPCO in the amount of 7.0 basis points of the amount of the committed loan
agreement. Prior to September 30, 2012, the Funds were assessed facility fees by
CAPCO in the amount of 7.5 basis points of the amount of the committed loan
agreement. The facility fees are allocated among the Funds based on their
respective average net assets for the period.
For the year ended December 31, 2012, the Fund paid CAPCO facility fees of
$22,000, which represents 6.0% of the total fees paid to CAPCO by the USAA
Funds. The Fund had no borrowings under this agreement during the year ended
December 31, 2012.
(3) DISTRIBUTIONS
The character of any distributions made during the year from net investment
income or net realized gains is determined in accordance with federal tax
regulations and may differ from those determined in accordance with U.S.
generally accepted accounting principles. Also, due to the timing of
distributions, the fiscal year in which amounts are distributed may differ from
the year that the income or realized gains were recorded by the Fund.
During the current fiscal year, permanent differences between book-basis and
tax-basis accounting for distributions reclass and non-REIT return of capital
adjustments resulted in reclassifications to the statement of assets and
liabilities to decrease paid-in capital by $576,000, decrease accumulated
undistributed net investment income by $2,097,000, and decrease accumulated net
realized loss on investments by $2,673,000. These reclassifications had no
effect on net assets.
The tax character of distributions paid during the years ended December 31,
2012, and 2011, was as follows:
2012 2011
------------------------------
Ordinary income* $ 72,625,000 $65,269,000
Long-term realized capital gains 153,858,000 -
|
*Includes distribution of short-term realized capital gains, if any, which are
taxable as ordinary income.
44 | USAA S&P 500 INDEX FUND
As of December 31, 2012, the components of net assets representing distributable
earnings on a tax basis were as follows:
Accumulated capital and other losses $ (3,643,000)
Unrealized appreciation of investments 642,097,000
|
The difference between book-basis and tax-basis unrealized appreciation of
investments is attributable to the tax deferral of losses on wash sales and
non-REIT return of capital adjustments.
Distributions of net investment income are made quarterly. Distributions of
realized gains from security transactions not offset by capital losses are made
annually in the succeeding fiscal year or as otherwise required to avoid the
payment of federal taxes.
Under the Regulated Investment Company Modernization Act of 2010 (the Act), a
fund is permitted to carry forward net capital losses indefinitely.
Additionally, such capital losses that are carried forward will retain their
character as short-term and or long-term capital losses. Post-enactment capital
loss carryforwards must be used before pre-enactment capital loss carryforwards.
As a result, pre-enactment capital loss carryforwards may be more likely to
expire unused.
For the year ended December 31, 2012, the Fund utilized pre-enactment capital
loss carryforwards of $60,735,000, to offset capital gains. At December 31,
2012, the Fund had no pre-enactment or post-enactment capital loss
carryforwards, for federal income tax purposes. Net capital losses incurred
after October 31, and within the taxable year are deemed to arise on the first
day of the Fund's next taxable year. For the year ended December 31, 2012, the
Fund deferred to January 1, 2013, post-October capital losses of $3,643,000.
For the year ended December 31, 2012, the Fund did not incur any income tax,
interest, or penalties and has recorded no liability for net unrecognized tax
benefits relating to uncertain income tax positions. On an ongoing basis, the
Manager will monitor its tax positions to determine if adjustments to this
conclusion are necessary. The statute of limitations on the Fund's tax return
filings generally remain open for the three preceding fiscal
NOTES TO FINANCIAL STATEMENTS | 45
reporting year ends and remain subject to examination by the Internal Revenue
Service and state taxing authorities.
(4) INVESTMENT TRANSACTIONS
Cost of purchases and proceeds from sales/maturities of securities, excluding
short-term securities, for the year ended December 31, 2012, were $125,041,000
and $512,291,000, respectively.
As of December 31, 2012, the cost of securities, including short-term
securities, for federal income tax purposes, was $2,643,811,000.
Gross unrealized appreciation and depreciation of investments as of December 31,
2012, for federal income tax purposes, were $1,059,451,000 and $417,354,000,
respectively, resulting in net unrealized appreciation of $642,097,000.
(5) LENDING OF PORTFOLIO SECURITIES
The Fund, through its third-party securities-lending agent, Citibank, N.A.
(Citibank), may lend its securities to qualified financial institutions, such as
certain broker-dealers, to earn additional income. The borrowers are required to
secure their loans continuously with cash collateral in an amount at least equal
to the fair value of the securities loaned, initially in an amount at least
equal to 102% of the fair value of domestic securities loaned and 105% of the
fair value of international securities loaned. Cash collateral is invested in
high-quality short-term investments. Cash collateral requirements are determined
daily based on the prior business day's ending value of securities loaned.
Imbalances in cash collateral may occur on days where market volatility causes
security prices to change significantly, and are adjusted the next business day.
The Fund and Citibank retain 80% and 20%, respectively, of the income earned
from the investment of cash received as collateral, net of any expenses
associated with the lending transaction. Citibank receives no other fees from
the Fund for its services as securities-lending agent. Risks to the Fund in
securities-lending transactions are that the borrower may not provide additional
collateral when required or return the securities when due, and that the value
of the short-term investments will be less than the amount of cash collateral
required to be returned to the borrower. Citibank has agreed to indemnify
46 | USAA S&P 500 INDEX FUND
the Fund against any losses due to counterparty default in securities-lending
transactions. For the year ended December 31, 2012, the Fund received no
securities-lending income. As of December 31, 2012, the Fund had no securities
out on loan. However, a payable to Lehman Brothers, Inc. of $773,000 remains for
unclaimed cash collateral and interest on prior lending of securities.
(6) CAPITAL SHARE TRANSACTIONS
At December 31, 2012, there were an unlimited number of shares of capital stock
at no par value authorized for the Fund.
Capital share transactions were as follows, in thousands:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2012 DECEMBER 31, 2011
-----------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------
MEMBER SHARES:
Shares sold 12,185 $ 250,575 17,509 $ 333,794
Shares issued from reinvested
dividends 6,927 141,601 2,018 37,647
Shares redeemed (19,549) (403,349) (22,269) (425,053)
-----------------------------------------------
Net decrease from capital
share transactions (437) $ (11,173) (2,742) $ (53,612)
===============================================
REWARD SHARES:
Shares sold 13,312 $ 274,486 19,135 $ 366,091
Shares issued from reinvested
dividends 3,866 79,124 1,370 25,524
Shares redeemed (29,389) (606,720) (12,079) (230,211)
-----------------------------------------------
Net increase (decrease) from
capital share transactions (12,211) $(253,110) 8,426 $ 161,404
===============================================
|
(7) TRANSACTIONS WITH MANAGER
A. MANAGEMENT FEES -- The Manager provides investment management services to
the Fund pursuant to a Management Agreement. Under this agreement, the
Manager is responsible for managing the business and affairs of the Fund,
subject to the authority of and supervision by the Board. The Manager is
authorized to select (with approval of
NOTES TO FINANCIAL STATEMENTS | 47
the Board and without shareholder approval) one or more subadvisers to
manage the actual day-to-day investment of the Fund's assets. The Manager
monitors each subadviser's performance through quantitative and qualitative
analysis, and periodically recommends to the Board as to whether each
subadviser's agreement should be renewed, terminated, or modified. The
Manager also is responsible for allocating assets to the subadvisers. The
allocation for each subadviser can range from 0% to 100% of the Fund's
assets, and the Manager can change the allocations without shareholder
approval. The Fund's management fees are accrued daily and paid monthly at
an annualized rate of 0.10% of the Fund's average net assets for the fiscal
year. For the year ended December 31, 2012, the Fund incurred management
fees, paid or payable to the Manager, of $3,332,000.
B. SUBADVISORY ARRANGEMENT(S) -- The Manager has entered into an investment
subadvisory agreement with NTI, under which NTI directs the investment and
reinvestment of the Fund's assets (as allocated from time to time by the
Manager). The Manager (not the Fund) pays NTI a subadvisory fee in an annual
amount of 0.02% of the Fund's average net assets on amounts up to $1.5
billion; 0.01% of the Fund's average net assets for the next $1.5 billion;
and 0.005% of the Fund's average net assets that exceed $3 billion. For the
year ended December 31, 2012, the Manager incurred subadvisory fees, paid or
payable to NTI, of $467,000.
NTI has agreed to remit to the Fund all subadvisory fees earned on Fund
assets invested in any of NTI's affiliated money market funds. For the year
ended December 31, 2012, NTI remitted $1,000 to the Fund for the investments
in the Northern Institutional Funds Money Market Portfolios.
NTI is a direct subsidiary of The Northern Trust Company, the Fund's
custodian and accounting agent.
C. ADMINISTRATION AND SERVICING FEES -- The Manager provides certain
administration and servicing functions for the Fund. For such services, the
Manager receives a fee accrued daily and paid monthly at an
48 | USAA S&P 500 INDEX FUND
annualized rate of 0.06% of the Fund's average net assets for the fiscal
year. For the year ended December 31, 2012, the Member Shares and Reward
Shares incurred administration and servicing fees, paid or payable to the
Manager, of $1,261,000 and $738,000, respectively.
In addition to the services provided under its Administration and Servicing
Agreement with the Fund, the Manager also provides certain compliance and
legal services for the benefit of the Fund. The Board has approved the
reimbursement of a portion of these expenses incurred by the Manager. For
the year ended December 31, 2012, the Fund reimbursed the Manager $105,000
for these compliance and legal services. These expenses are included in the
professional fees on the Fund's statement of operations.
D. EXPENSE LIMITATION -- The Manager has agreed, through May 1, 2013, to limit
the annual expenses of the Member Shares and the Reward Shares to 0.25% and
0.15%, respectively, of their average net assets, excluding extraordinary
expenses and before reductions of any expenses paid indirectly, and will
reimburse the Fund for all expenses in excess of those amounts. This expense
limitation arrangement may not be changed or terminated through May 1, 2013,
without approval of the Board, and may be changed or terminated by the
Manager at any time after that date. For the year ended December 31, 2012,
the Fund incurred reimbursable expenses from the Manager for the Member
Shares and the Reward Shares of $1,479,000 and $1,503,000, respectively, of
which $528,000 in total was receivable from the Manager.
In addition, NTI has contractually agreed to reimburse the Fund for all
license fees paid by the Fund to Standard & Poor's, in amounts not exceeding
the annual rate of 0.001% of the average net assets of the Fund. For the
year ended December 31, 2012, the Fund incurred reimbursable expenses from
NTI for the Member Shares and the Reward Shares of $22,000 and $12,000,
respectively.
NOTES TO FINANCIAL STATEMENTS | 49
E. TRANSFER AGENT'S FEES -- USAA Transfer Agency Company, d/b/a USAA
Shareholder Account Services (SAS), an affiliate of the Manager, provides
transfer agent services to the Fund based on an annual charge of $20 per
shareholder account plus out-of-pocket expenses. The Fund also pays SAS fees
that are related to the administration and servicing of accounts that are
traded on an omnibus basis. For the year ended December 31, 2012, the Fund
incurred transfer agent's fees, paid or payable to SAS for the Member Shares
and Reward Shares, of $2,790,000 and $1,170,000, respectively.
Additionally, the Fund's Reward Shares recorded a capital contribution and
receivable from SAS of $3,000 at December 31, 2012, for adjustments related
to corrections to certain shareholder transactions.
F. UNDERWRITING SERVICES -- USAA Investment Management Company provides
exclusive underwriting and distribution of the Fund's shares on a continuing
best-efforts basis and receives no commissions or fees for this service.
G. ACCOUNT MAINTENANCE FEE -- For the Member Shares, SAS assesses a $10 annual
account maintenance fee to allocate part of the fixed cost of maintaining
shareholder accounts. This fee is charged directly to the shareholders'
accounts and does not impact the Fund. The fee is waived on accounts with
balances of $10,000 or more.
(8) TRANSACTIONS WITH AFFILIATES
The Fund's Reward Shares is one of 14 USAA mutual funds in which the affiliated
USAA fund-of-funds may invest. The USAA fund-of-funds do not invest in the
underlying funds for the purpose of exercising management or control. As of
December 31, 2012, the Fund recorded a receivable for capital shares sold of
$95,000 for the USAA fund-of-funds purchases of the Rewards Shares. As of
December 31, 2012, the USAA
50 | USAA S&P 500 INDEX FUND
fund-of-funds owned the following percentages of the total outstanding shares of
the Fund:
AFFILIATED USAA FUND OWNERSHIP %
--------------------------------------------------------------------------
USAA Cornerstone Equity Fund 0.0*
USAA Cornerstone Conservative Fund 0.0*
USAA Target Retirement Income Fund 0.3
USAA Target Retirement 2020 Fund 0.7
USAA Target Retirement 2030 Fund 1.5
USAA Target Retirement 2040 Fund 2.0
USAA Target Retirement 2050 Fund 1.0
|
*Represents less than 0.1%
Certain trustees and officers of the Fund are also directors, officers, and/or
employees of the Manager. None of the affiliated trustees or Fund officers
received any compensation from the Fund.
NOTES TO FINANCIAL STATEMENTS | 51
(9) FINANCIAL HIGHLIGHTS -- MEMBER SHARES
Per share operating performance for a share outstanding throughout each period
is as follows:
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
2012 2011 2010 2009 2008
---------------------------------------------------------------------
Net asset value at
beginning of period $ 18.83 $ 18.86 $ 16.71 $ 13.51 $ 21.98
---------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .41 .39 .30 .30 .39
Net realized and
unrealized gain (loss) 2.54 (.05) 2.15 3.20 (8.47)
---------------------------------------------------------------------
Total from investment operations 2.95 .34 2.45 3.50 (8.08)
---------------------------------------------------------------------
Less distributions from:
Net investment income (.43) (.37) (.30) (.30) (.39)
Realized capital gains (1.01) - - - -
---------------------------------------------------------------------
Total distributions (1.44) (.37) (.30) (.30) (.39)
---------------------------------------------------------------------
Net asset value at end of period $ 20.34 $ 18.83 $ 18.86 $ 16.71 $ 13.51
=====================================================================
Total return (%)* 15.75 1.82 14.81 26.28 (37.13)
Net assets at end of
period (000) $2,116,203 $1,967,983 $2,021,901 $1,831,645 $1,446,160
Ratios to average net assets:**
Expenses (%)(b) .25 .25 .25 .25 .23(a)
Expenses, excluding
reimbursements (%)(b) .32 .33 .36 .40 .37
Net investment income (%) 2.06 2.03 1.75 2.11 2.12
Portfolio turnover (%) 4 3 4 5 3
|
* Assumes reinvestment of all net investment income and realized capital
gain distributions, if any, during the period; does not reflect $10 annual
account maintenance fee. Includes adjustments in accordance with U.S.
generally accepted accounting principles and could differ from the Lipper
reported return. Total returns for periods of less than one year are not
annualized.
** For the year ended December 31, 2012, average net assets were
$2,101,016,000.
(a) Effective May 1, 2008, the Manager voluntarily agreed to reimburse the
Member Shares for expenses in excess of 0.25% of their average net assets.
Prior to May 1, 2008, the Manager voluntarily agreed to reimburse the Member
Shares for expenses in excess of 0.19% of their average net assets from
October 1, 2004, through April 30, 2008.
(b) Reflects total operating expenses of the Member Shares before reductions
of any expenses paid indirectly. The Member Shares' expenses paid indirectly
decreased the expense ratios by less than 0.01%.
52 | USAA S&P 500 INDEX FUND
(9) FINANCIAL HIGHLIGHTS (CONTINUED) -- REWARD SHARES
Per share operating performance for a share outstanding throughout
each period is as follows:
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
2012 2011 2010 2009 2008
--------------------------------------------------------------------
Net asset value at beginning
of period $ 18.83 $ 18.86 $ 16.71 $ 13.51 $ 21.99
--------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .43 .40 .33 .32 .41
Net realized and
unrealized gain (loss) 2.54 (.04) 2.15 3.20 (8.48)
--------------------------------------------------------------------
Total from investment operations 2.97 .36 2.48 3.52 (8.07)
--------------------------------------------------------------------
Less distributions from:
Net investment income (.45) (.39) (.33) (.32) (.41)
Realized capital gains (1.01) - - - -
--------------------------------------------------------------------
Total distributions (1.46) (.39) (.33) (.32) (.41)
--------------------------------------------------------------------
Net asset value at end of period $ 20.34 $ 18.83 $ 18.86 $ 16.71 $ 13.51
====================================================================
Total return (%)* 15.86 1.96 14.99 26.47 (37.07)
Net assets at end of period (000) $1,173,588 $1,316,754 $1,159,476 $894,035 $697,750
Ratios to average net assets:**
Expenses (%)(a) .15 .13(b) .09 .09 .09
Expenses, excluding
reimbursements (%)(a) .27 .24 .24 .23 .21
Net investment income (%) 2.15 2.14 1.92 2.26 2.27
Portfolio turnover (%) 4 3 4 5 3
|
* Assumes reinvestment of all net investment income and realized capital
gain distributions, if any, during the period. Includes adjustments in
accordance with U.S. generally accepted accounting principles and could
differ from the Lipper reported return. Total returns for periods of less
than one year are not annualized.
** For the year ended December 31, 2012, average net assets were
$1,230,588,000.
(a) Reflects total operating expenses of the Reward Shares before reductions
of any expenses paid indirectly. The Reward Shares' expenses paid indirectly
decreased the expense ratios by less than 0.01%.
(b) Effective May 1, 2011, the Manager voluntarily agreed to reimburse the
Reward Shares for expenses in excess of 0.15% of their average net assets.
Prior to May 1, 2011, the Manager voluntarily agreed to reimburse the Reward
Shares for expenses in excess of 0.09% of their average net assets.
NOTES TO FINANCIAL STATEMENTS | 53
EXPENSE EXAMPLE
December 31, 2012 (unaudited)
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: direct costs, such
as account maintenance fees, wire fees, redemption fees, and low balance fees;
and indirect costs, including management fees, transfer agency fees, and other
Fund operating expenses. This example is intended to help you understand your
indirect costs, also referred to as "ongoing costs" (in dollars), of investing
in the Fund and to compare these costs with the ongoing costs of investing in
other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire six-month period of July 1, 2012, through
December 31, 2012.
ACTUAL EXPENSES
The line labeled "actual" under each share class in the table on the next page
provides information about actual account values and actual expenses. You may
use the information in this line, together with the amount you invested at the
beginning of the period, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number for your share
class in the "actual" line under the heading "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Actual expenses in the table on the next page do not reflect the effect of the
Member Shares annual $10.00 account maintenance fee that is assessed on accounts
with balances of less than $10,000, at a rate of $2.50 per quarter. To include
the effect of this fee on the expenses that you paid, add $5.00 ($2.50 for two
quarters) to your calculated estimated expenses. If you are currently assessed
this fee, your ending account value reflects the quarterly deduction from your
account.
54 | USAA S&P 500 INDEX FUND
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The line labeled "hypothetical" under each share class in the table provides
information about hypothetical account values and hypothetical expenses based on
the Fund's actual expense ratios for each class and an assumed rate of return of
5% per year before expenses, which is not the Fund's actual return. The
hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any direct costs, such as account
maintenance fees, wire fees, redemption fees, or low balance fees. Therefore,
the line labeled "hypothetical" is useful in comparing ongoing costs only, and
will not help you determine the relative total costs of owning different funds.
In addition, if these direct costs were included, your costs would have been
higher.
EXPENSES PAID
BEGINNING ENDING DURING PERIOD*
ACCOUNT VALUE ACCOUNT VALUE JULY 1, 2012 -
JULY 1, 2012 DECEMBER 31, 2012 DECEMBER 31, 2012
-----------------------------------------------------------
MEMBER SHARES
Actual $1,000.00 $1,058.30 $1.29
Hypothetical
(5% return before expenses) 1,000.00 1,023.88 1.27
REWARD SHARES
Actual 1,000.00 1,058.80 0.78
Hypothetical
(5% return before expenses) 1,000.00 1,024.38 0.76
|
* Expenses are equal to the Fund's annualized expense ratio of 0.25% for Member
Shares and 0.15% for Reward Shares, which are net of any reimbursements and
expenses paid indirectly, multiplied by the average account value over the
period, multiplied by 184 days/366 days (to reflect the one-half-year
period). The Fund's actual ending account values are based on its actual total
returns of 5.83% for Member Shares and 5.88% for Reward Shares for the
six-month period of July 1, 2012, through December 31, 2012.
EXPENSE EXAMPLE | 55
TRUSTEES' AND OFFICERS' INFORMATION
TRUSTEES AND OFFICERS OF THE TRUST
The Board of Trustees (the Board) of the Trust consists of five Trustees. These
Trustees and the Trust's Officers supervise the business affairs of the USAA
family of funds. The Board is responsible for the general oversight of the
funds' business and for assuring that the funds are managed in the best
interests of each fund's respective shareholders. The Board periodically
reviews the funds' investment performance as well as the quality of other
services provided to the funds and their shareholders by each of the fund's
service providers, including USAA Asset Management Company (AMCO) and its
affiliates. The term of office for each Trustee shall be 20 years or until the
Independent Trustee reaches age 72 or an Interested Trustee reaches age 65. The
Board may change or grant exceptions from this policy at any time without
shareholder approval. A Trustee may resign or be removed by a vote of the other
Trustees or the holders of a majority of the outstanding shares of the Trust at
any time. Vacancies on the Board can be filled by the action of a majority of
the Trustees, provided that at least two-thirds of the Trustees have been
elected by the shareholders.
Set forth below are the Trustees and Officers of the Trust, their respective
offices and principal occupations during the last five years, length of time
served, and information relating to any other directorships held. Each serves on
the Board of the USAA family of funds consisting of one registered investment
company offering 50 individual funds. Unless otherwise indicated, the business
address of each is 9800 Fredericksburg Road, San Antonio, TX 78288.
If you would like more information about the funds' Trustees, you may call (800)
531-USAA (8722) to request a free copy of the funds' statement of additional
information (SAI).
56 | USAA S&P 500 INDEX FUND
INTERESTED TRUSTEE(1)
DANIEL S. McNAMARA(2, 4)
Trustee, President, and Vice Chair of the Board of Trustees
Born: December 1966
Year of Election or Appointment: 2009
President and Director of AMCO (01/12-present); President and Director, USAA
Investment Management Company (IMCO) and USAA Shareholder Account Services (SAS)
(10/09-present); Senior Vice President of USAA Financial Planning Services
Insurance Agency, Inc. (FPS) (04/11-present); President and Director of USAA
Financial Advisors, Inc. (FAI) and FPS (10/09-04/11); President, Banc of America
Investment Advisors (9/07-9/09); Managing Director Planning and Financial
Products Group, Bank of America (09/01-09/09). Mr. McNamara brings to the Board
extensive experience in the financial services industry, including experience as
an officer of the Trust.
NON-INTERESTED (INDEPENDENT) TRUSTEES
ROBERT L. MASON, PH.D.(2, 3, 4, 5, 6)
Trustee and Chairman
Born: July 1946
Year of Election or Appointment: 1997(+)
Institute Analyst, Southwest Research Institute (3/02-present), which focuses in
the fields of technological research. Dr. Mason brings to the Board particular
experience with information technology matters, statistical analysis, and human
resources as well as over 15 years' experience as a Board member of the USAA
family of funds. Dr. Mason holds no other directorships of any publicly held
corporations or other investment companies outside the USAA family of funds.
TRUSTEES' AND OFFICERS' INFORMATION | 57
BARBARA B. OSTDIEK, PH.D.(3, 4, 5, 6, 7)
Trustee
Born: March 1964
Year of Election or Appointment: 2008
Academic Director, El Paso Corporation Finance Center at Jesse H. Jones Graduate
School of Business at Rice University (7/02-present); Associate Professor of
Finance at Jesse H. Jones Graduate School of Business at Rice University
(7/01-present). Dr. Ostdiek brings to the Board particular experience with
financial investment management, education, and research as well as over four
years' experience as a Board member of the USAA family of funds. Dr. Ostdiek
holds no other directorships of any publicly held corporations or other
investment companies outside the USAA family of funds.
MICHAEL F. REIMHERR(3, 4, 5, 6)
Trustee
Born: August 1945
Year of Election or Appointment: 2000
President of Reimherr Business Consulting (5/95-present), an organization that
performs business valuations of large companies to include the development of
annual business plans, budgets, and internal financial reporting. Mr. Reimherr
brings to the Board particular experience with organizational development,
budgeting, finance, and capital markets as well as over 12 years' experience as
a Board member of the USAA family of funds. Mr. Reimherr holds no other
directorships of any publicly held corporations or other investment companies
outside the USAA family of funds.
58 | USAA S&P 500 INDEX FUND
PAUL L. McNAMARA(3, 4, 5, 6)
Trustee
Born: July 1948
Year of Election or Appointment: 2012
Director, Cantor Opportunistic Alternatives Fund, LLC (3/10-present), which is a
closed-end fund of funds managed by Cantor Fitzgerald Investment Advisors L.P.
Mr. McNamara retired from Lord Abbett & Co. LLC as an Executive Member on
9/30/09, a position he held since 10/02. He had been employed at Lord Abbett
since 1996. Mr. McNamara brings to the Board extensive experience with the
financial services industry and, in particular, institutional and retail mutual
fund markets, including experience with mutual fund marketing, distribution, and
risk management, as well as overall experience with compliance and corporate
governance issues. Mr. McNamara also has experience serving as a fund director.
Mr. McNamara holds no other directorships of any publicly held corporations or
other investment companies outside the USAA family of funds. Paul L. McNamara is
no relation to Daniel S. McNamara.
(1) Indicates the Trustee is an employee of AMCO or affiliated companies and
is considered an "interested person" under the Investment Company Act of
1940.
(2) Member of Executive Committee
(3) Member of Audit Committee
(4) Member of Pricing and Investment Committee
(5) Member of Corporate Governance Committee
(6) The address for all non-interested trustees is that of the USAA Funds,
P.O. Box 659430, San Antonio, TX 78265-9430.
(7) Dr. Ostdiek was appointed the Audit Committee Financial Expert for the
Funds' Board in November 2008.
(+) Mr. Mason was elected as Chair of the Board in January 2012.
TRUSTEES' AND OFFICERS' INFORMATION | 59
INTERESTED OFFICERS(1)
R. MATTHEW FREUND
Vice President
Born: July 1963
Year of Appointment: 2010
Senior Vice President, Investment Portfolio Management, AMCO (01/12-present);
Senior Vice President, Investment Portfolio Management, IMCO (02/10-12/11); Vice
President, Fixed Income Investments, IMCO (02/04-2/10). Mr. Freund also serves
as a director of SAS.
JOHN P. TOOHEY
Vice President
Born: March 1968
Year of Appointment: 2009
Vice President, Equity Investments, AMCO (01/12-present); Vice President, Equity
Investments, IMCO (02/09-01/12); Managing Director, AIG Investments,
(12/03-01/09).
ADYM W. RYGMYR
Secretary
Born: February 1969
Year of Appointment: 2012
Director, USAA IMCO (08/12-present); Vice President, Financial Advice &
Solutions Group General Counsel, USAA (03/12-present); Managing Director and
General Counsel, TIAA-CREF (04/04-03/12). Mr. Rygmyr also holds the officer
positions of Vice President and Secretary, IMCO, AMCO, and SAS.
JAMES G. WHETZEL
Assistant Secretary
Born: February 1978
Year of Appointment: 2010
Executive Director Securities Attorney, Financial Advice & Solutions Group
General Counsel, USAA (10/12-present); Attorney, Financial Advice & Solutions
Group General Counsel, USAA (11/08-10/12); Reed Smith, LLP, Associate
(08/05-11/08). Mr. Whetzel also serves as Assistant Secretary of AMCO and SAS.
60 | USAA S&P 500 INDEX FUND
ROBERTO GALINDO, JR.
Treasurer
Born: November 1960
Year of Appointment: 2008
Assistant Vice President, Portfolio Accounting/Financial Administration, USAA
(12/02-present); Assistant Treasurer, USAA family of funds (7/00-2/08).
WILLIAM A. SMITH
Assistant Treasurer
Born: June 1948
Year of Appointment: 2009
Vice President, Senior Financial Officer, and Treasurer, AMCO, FAI, FPS, SAS and
USAA Life (2/09-present); Vice President, Senior Financial Officer, USAA
(2/07-present).
JEFFREY D. HILL
Chief Compliance Officer
Born: December 1967
Year of Appointment: 2004
Assistant Vice President, Investments Compliance, USAA (03/12-present);
Assistant Vice President, Mutual Funds Compliance, USAA (09/04-02/12).
(1) Indicates those Officers who are employees of AMCO or affiliated companies
and are considered "interested persons" under the Investment Company
Act of 1940.
TRUSTEES' AND OFFICERS' INFORMATION | 61
TRUSTEES Daniel S. McNamara
Robert L. Mason, Ph.D.
Barbara B. Ostdiek, Ph.D.
Michael F. Reimherr
Paul L. McNamara
--------------------------------------------------------------------------------
ADMINISTRATOR AND USAA Asset Management Company
INVESTMENT ADVISER P.O. Box 659453
San Antonio, Texas 78265-9825
--------------------------------------------------------------------------------
UNDERWRITER AND USAA Investment Management Company
DISTRIBUTOR P.O. Box 659453
San Antonio, Texas 78265-9825
--------------------------------------------------------------------------------
TRANSFER AGENT USAA Shareholder Account Services
9800 Fredericksburg Road
San Antonio, Texas 78288
--------------------------------------------------------------------------------
CUSTODIAN AND The Northern Trust Company
ACCOUNTING AGENT 50 S. LaSalle St.
Chicago, Illinois 60603
--------------------------------------------------------------------------------
INDEPENDENT Ernst & Young LLP
REGISTERED PUBLIC 100 West Houston St., Suite 1800
ACCOUNTING FIRM San Antonio, Texas 78205
--------------------------------------------------------------------------------
MUTUAL FUND Under "My Accounts" on
SELF-SERVICE 24/7 usaa.com select "Investments,"
AT USAA.COM then "Mutual Funds"
OR CALL Under "Investments" view
(800) 531-USAA account balances, or click
(8722) "I want to...," and select
the desired action.
--------------------------------------------------------------------------------
|
Copies of the Manager's proxy voting policies and procedures, approved by the
Trust's Board of Trustees for use in voting proxies on behalf of the Fund, are
available without charge (i) by calling (800) 531-USAA (8722); (ii) at USAA.COM;
and (iii) on the SEC's website at HTTP://WWW.SEC.GOV. Information regarding how
the Fund voted proxies relating to portfolio securities during the most recent
12-month period ended June 30 is available without charge (i) at USAA.COM; and
(ii) on the SEC's website at HTTP://WWW.SEC.GOV.
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. These Forms N-Q are
available at no charge (i) by calling (800) 531-USAA (8722); (ii) at USAA.COM;
and (iii) on the SEC's website at HTTP://WWW.SEC.GOV. These Forms N-Q also may
be reviewed and copied at the SEC's Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be obtained by
calling (800) 732-0330.
USAA --------------
9800 Fredericksburg Road PRSRT STD
San Antonio, TX 78288 U.S. Postage
PAID
USAA
--------------
>> SAVE PAPER AND FUND COSTS
Under MY PROFILE on USAA.COM select MANAGE PREFERENCES
Set your DOCUMENT PREFERENCES to USAA DOCUMENTS ONLINE.
[LOGO OF USAA]
|
USAA WE KNOW WHAT IT MEANS TO SERVE.(R)
29237-0213 (C)2013, USAA. All rights reserved.
ITEM 11. CONTROLS AND PROCEDURES
The principal executive officer and principal financial officer of USAA Mutual
Funds Trust (Trust) have concluded that the Trust's disclosure controls and
procedures are sufficient to ensure that information required to be disclosed by
the Trust in this Form N-CSR was recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms, based upon such officers' evaluation of these controls and
procedures as of a date within 90 days of the filing date of the report.
There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Trust's internal controls
or in other factors that could significantly affect the Trust's internal
controls subsequent to the date of their evaluation. The only change to the
procedures was to document the annual disclosure controls and procedures
established for the new section of the shareholder reports detailing the factors
considering by the Trust's Board in approving the Trust's advisory agreements.
ITEM 12. EXHIBITS.
(a)(1). Code of Ethics pursuant to Item 2 of Form N-CSR is filed hereto exactly
as set forth below:
CODE OF ETHICS
FOR PRINCIPAL EXECUTIVE OFFICER
AND SENIOR FINANCIAL OFFICERS
USAA MUTUAL FUNDS TRUST
I. PURPOSE OF THE CODE OF ETHICS
USAA Mutual Funds Trust (the Trust or the Funds) has adopted this code
of ethics (the Code) to comply with Section 406 of the Sarbanes-Oxley Act of
2002 (the Act) and implementing regulations of the Securities and Exchange
Commission (SEC). The Code applies to the Trust's Principal Executive Officer,
Principal Financial Officer and Principal Accounting Officer (each a Covered
Officer), as detailed in Appendix A.
The purpose of the Code is to promote:
- honest and ethical conduct, including the ethical handling of
actual or apparent conflicts of interest between the Covered
Officers' personal and professional relationships;
- full, fair, accurate, timely and understandable disclosure in
reports and documents that the Trust files with, or submits
to, the SEC and in other public communications made by the
Trust;
- compliance with applicable laws and governmental rules and
regulations;
- prompt internal reporting of violations of the Code to the
Chief Legal Officer of the Trust, the President of the Trust
(if the violation concerns the Treasurer), the CEO of USAA,
and if deemed material to the Funds' financial condition or
reputation, the Chair of the Trust's Board of Trustees; and
- accountability for adherence to the Code.
Each Covered Officer should adhere to a high standard of business
ethics and should be sensitive to actual and apparent conflicts of interest.
II. CONFLICTS OF INTEREST
A. DEFINITION OF A CONFLICT OF INTEREST.
A conflict of interest exists when a Covered Officer's private interest
influences, or reasonably appears to influence, the Covered Officer's judgment
or ability to act in the best interests of the Funds and their shareholders. For
example, a conflict of interest could arise if a Covered Officer, or an
immediate family member, receives personal benefits as a result of his or her
position with the Funds.
Certain conflicts of interest arise out of relationships between
Covered Officers and the Funds and are already subject to conflict of interest
provisions in the Investment Company Act of 1940 (the 1940 Act) and the
Investment Advisers Act of 1940 (the Advisers Act). For example, Covered
Officers may not individually engage in certain transactions with the Funds
because of their status as "affiliated persons" of the Funds. The USAA Funds'
and USAA Investment Management Company's (IMCO) compliance programs and
procedures are designed to prevent, or identify and correct, violations of these
provisions. This Code does not, and is not intended to, repeat or replace these
programs and procedures, and such conflicts fall outside of the parameters of
this Code.
Although typically not presenting an opportunity for improper personal
benefit, conflicts could arise from, or as a result of, the contractual
relationships between the Funds and AMCO of which the Covered Officers are also
officers or employees. As a result, this Code recognizes that the Covered
Officers will, in the normal course of their duties (whether formally for the
Funds or for AMCO, or for both), be involved in establishing policies and
implementing decisions that will have different effects on AMCO and the Funds.
The participation of Covered Officers in such activities is inherent in the
contractual relationship between the Funds and AMCO and is consistent with the
performance by the Covered Officers of their duties as officers of the Funds.
Thus, if performed in compliance with the provisions of the 1940 Act and the
Advisers Act, such activities will be deemed to have been handled ethically.
B. GENERAL RULE. Covered Officers Should Avoid Actual and Apparent
Conflicts of Interest.
Conflicts of interest, other than the conflicts described in the two
preceding paragraphs, are covered by the Code. The following list provides
examples of conflicts of interest under the Code, but Covered Officers should
keep in mind that these examples are not exhaustive. The overarching principle
is that the personal interest of a Covered Officer should not be placed
improperly before the interest of the Funds and their shareholders.
Each Covered Officer must not engage in conduct that constitutes an
actual conflict of interest between the Covered Officer's personal interest and
the interests of the Funds and their shareholders. Examples of actual conflicts
of interest are listed below but are not exclusive. Each Covered Officer must
not:
- use his personal influence or personal relationships improperly to
influence investment decisions or financial reporting by the Funds
whereby the Covered Officer would benefit personally to the
detriment of the Funds and their shareholders;
- cause the Funds to take action, or fail to take action, for the
individual personal benefit of the Covered Officer rather than the
benefit of the Funds and their shareholders.
- accept gifts, gratuities, entertainment or any other benefit from
any person or entity that does business or is seeking to do
business with the Funds DURING CONTRACT NEGOTIATIONS.
- accept gifts, gratuities, entertainment or any other benefit with
a market value over $100 per person, per year, from or on behalf
of any person or entity that does, or seeks to do, business with
or on behalf of the Funds.
- EXCEPTION. Business-related entertainment such as meals,
and tickets to sporting or theatrical events, which are
infrequent and not lavish are excepted from this
prohibition. Such entertainment must be appropriate as to
time and place, reasonable and customary in nature, modest
in cost and value, incidental to the business, and not so
frequent as to raise any question of impropriety
(Customary Business Entertainment).
Certain situations that could present the appearance of a conflict of
interest should be discussed with, and approved by, or reported to, an
appropriate person. Examples of these include:
- service as a director on the board or an officer of any public or
private company, other than a USAA company or the Trust, must be
approved by the USAA Funds' and Investment Code of Ethics
Committee and reported to the Trust.
- the receipt of any non-nominal (I.E., valued over $25) gifts from
any person or entity with which a Trust has current or prospective
business dealings must be reported to the Chief Legal Officer. For
purposes of this Code, the individual holding the title of
Secretary of the Trust shall be considered the Chief Legal Officer
of the Trust.
- the receipt of any business-related entertainment from any person
or entity with which the Funds have current or prospective
business dealings must be approved in advance by the Chief Legal
Officer unless such entertainment qualifies as Customary Business
Entertainment.
- any ownership interest in, or any consulting or employment
relationship with, any of the Trust's service providers, other
than IMCO or any other USAA company, must be approved by the CEO
of USAA and reported to the Trust's Board.
- any material direct or indirect financial interest in commissions,
transaction charges or spreads paid by the Funds for effecting
portfolio transactions or for selling or redeeming shares other
than an interest arising from the Covered Officer's employment,
such as compensation or equity ownership should be approved by the
CEO of USAA and reported to the Trust's Board.
III. DISCLOSURE AND COMPLIANCE REQUIREMENTS
- Each Covered Officer should familiarize himself with the
disclosure requirements applicable to the Funds, and the
procedures and policies implemented to promote full, fair,
accurate, timely and understandable disclosure by the Trust.
- Each Covered Officer should not knowingly misrepresent, or
cause others to misrepresent, facts about the Funds to others,
whether within or outside the Funds, including to the Funds'
Trustees and auditors, and to government regulators and
self-regulatory organizations.
- Each Covered Officer should, to the extent appropriate within
his area of responsibility, consult with other officers and
employees of the Funds and AMCO with the goal of promoting
full, fair, accurate, timely and understandable disclosure in
the reports and documents filed by the Trust with, or
submitted to, the SEC, and in other public communications made
by the Funds.
- Each Covered Officer is responsible for promoting compliance
with the standards and restrictions imposed by applicable
laws, rules and regulations, and promoting compliance with the
USAA Funds' and AMCO's operating policies and procedures.
- A Covered Officer should not retaliate against any person
who reports a potential violation of this Code in good faith.
- A Covered Officer should notify the Chief Legal Officer
promptly if he knows of any violation of the Code. Failure
to do so itself is a violation of this Code.
IV. REPORTING AND ACCOUNTABILITY
A. INTERPRETATION OF THE CODE. The Chief Legal Officer of the Trust
is responsible for applying this Code to specific situations in
which questions are presented under it and has the authority to
interpret the Code in any particular situation. The Chief Legal
Officer should consult, if appropriate, the USAA Funds' outside
counsel or counsel for the Independent Trustees. However, any
approvals or waivers sought by a Covered Officer will be
reported initially to the CEO of USAA and will be considered by
the Trust's Board of Trustees.
B. REQUIRED REPORTS
- EACH COVERED OFFICER MUST:
- Upon adoption of the Code, affirm in writing to the
Board that he has received, read and understands the
Code.
- Annually thereafter affirm to the Chief Legal Officer
that he has complied with the requirements of the Code.
- THE CHIEF LEGAL OFFICER MUST:
- report to the Board about any matter or situation
submitted by a Covered Officer for interpretation under
the Code, and the advice given by the Chief Legal
Officer;
- report annually to the Board and the Corporate
Governance Committee describing any issues that arose
under the Code, or informing the Board and Corporate
Governance Committee that no reportable issues occurred
during the year.
C. INVESTIGATION PROCEDURES
The Funds will follow these procedures in investigating and enforcing
this Code:
- INITIAL COMPLAINT. All complaints or other inquiries
concerning potential violations of the Code must be reported
to the Chief Legal Officer. The Chief Legal Officer shall be
responsible for documenting any complaint. The Chief Legal
Officer also will report immediately to the President of the
Trust (if the complaint involves the Treasurer), the CEO of
USAA and the Chair of the Trust's Audit Committee (if the
complaint involves the President) any material potential
violations that could have a material effect on the Funds'
financial condition or reputation. For all other complaints,
the Chief Legal Officer will report quarterly to the Board.
- INVESTIGATIONS. The Chief Legal Officer will take all
appropriate action to investigate any potential violation
unless the CEO of USAA directs another person to undertake
such investigation. The Chief Legal Officer may utilize USAA's
Office of Ethics to do a unified investigation under this Code
and USAA's Code of Conduct. The Chief Legal Officer may direct
the Trust's outside counsel or the counsel to the Independent
Trustees (if any) to participate in any investigation under
this Code.
- STATUS REPORTS. The Chief Legal Officer will provide monthly
status reports to the Board about any alleged violation of the
Code that could have a material effect on the Funds' financial
condition or reputation, and quarterly updates regarding all
other alleged violations of the Code.
- VIOLATIONS OF THE CODE. If after investigation, the Chief
Legal Officer, or other investigating person, believes that a
violation of the Code has occurred, he will report immediately
to the CEO of USAA the nature of the violation, and his
recommendation regarding the materiality of the violation. If,
in the opinion of the investigating person, the violation
could materially affect the Funds' financial condition or
reputation, the Chief Legal Officer also will notify the Chair
of the Trust's Audit Committee. The Chief Legal Officer will
inform, and make a recommendation to, the Board, which will
consider what further action is appropriate. Appropriate
action could include: (1) review of, and modifications to, the
Code or other applicable policies or procedures;
(2) notifications to appropriate personnel of IMCO or USAA;
(3) dismissal of the Covered Officer; and/or (4) other
disciplinary actions including reprimands or fines.
- The Board of Trustees understands that Covered
Officers also are subject to USAA's Code of Business
Conduct. If a violation of this Code also violates
USAA's Code of Business Conduct, these procedures do
not limit or restrict USAA's ability to discipline
such Covered Officer under USAA's Code of Business
Conduct. In that event, the Chairman of the Board of
Trustees will report to the Board the action taken by
USAA with respect to a Covered Officer.
V. OTHER POLICIES AND PROCEDURES
This Code shall be the sole code of ethics adopted by the Funds for
purposes of Section 406 of the Act and the implementing regulations adopted by
the SEC applicable to registered investment companies. If other policies and
procedures of the Trust, AMCO, or other service providers govern or purport to
govern the behavior or activities of Covered Officers, they are superseded by
this Code to the extent that they overlap, conflict with, or are more lenient
than the provisions of this Code. The Investment Code of Ethics (designated to
address 1940 Act and Advisers Act requirements) and AMCO's more detailed
compliance policies and procedures (including its Insider Trading Policy) are
separate requirements applying to Covered Officers and other AMCO employees, and
are not part of this Code. Also, USAA's Code of Conduct imposes separate
requirements on Covered Officers and all employees of USAA, and also is not part
of this Code.
VI. AMENDMENTS
Any amendment to this Code, other than amendments to Appendix A, must
be approved or ratified by majority vote of the Board of Trustees.
VII. CONFIDENTIALITY AND DOCUMENT RETENTION
The Chief Legal Officer shall retain material investigation documents
and reports required to be prepared under the Code for six years from the date
of the resolution of any such complaint. All reports and records prepared or
maintained pursuant to this Code will be considered confidential and shall be
maintained and protected accordingly. Except as otherwise required by law or
this Code, such matters shall not be disclosed to anyone other than the Trust's
Board of Trustees and counsel for the Independent Trustees (if any), the Trust
and its counsel, AMCO, and other personnel of USAA as determined by the Trust's
Chief Legal Officer or the Chair of the Trust's Board of Trustees.
Approved and adopted by IMCO's Code of Ethics Committee: June 12, 2003.
Approved and adopted by the Boards of Directors/Trustees of USAA Mutual Fund,
Inc., USAA Tax-Exempt Fund, Inc., USAA Investment Trust & USAA State Tax-Free
Trust: June 25, 2003.
Approved and adopted by the Board of Trustees of USAA Life Investment Trust:
August 20, 2003.
Approved and adopted as amended by IMCO's Code of Ethics Committee: August 15,
2005.
Approved and adopted as amended by the Boards of Directors/Trustees of USAA
Mutual Fund, Inc., USAA Tax-Exempt Fund, Inc., USAA Investment Trust & USAA
State Tax-Free Trust: September 14, 2005.
Approved and adopted as amended by the Board of Trustees of USAA Life Investment
Trust: December 8, 2005.
Approved and adopted as amended by IMCO's Code of Ethics Committee: August 16,
2006.
Approved and adopted by the Board of Trustees of USAA Mutual Funds Trust:
September 13, 2006.
Approved and adopted by IMCO's Code of Ethics Committee: August 28, 2007.
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Approved and adopted by the Investment Code of Ethics Committee: August 29,
2008.
Approved and adopted as amended by the Board of Trustees of USAA Mutual Funds
Trust: September 19, 2008.
Approved and adopted by the Investment Code of Ethics Committee: August 17,
2009.
Approved and adopted by the Board of Trustees of USAA Mutual Funds Trust:
September 24, 2009.
Approved and adopted by the Investment Code of Ethics Committee: August 31,
2010.
Approved and adopted by the Board of Trustees of USAA Mutual Funds Trust:
September 22, 2010.
Approved and adopted by the Investment Code of Ethics Committee: August 22,
2011.
Approved and adopted by the Board of Trustees of USAA Mutual Funds Trust:
September 20, 2011.
Approved and adopted by the Investment Code of Ethics Committee: September 4,
2012.
Approved and adopted by the Board of Trustees of USAA Mutual Funds Trust:
September 27, 2012.
APPENDIX A
COVERED OFFICERS
PRESIDENT
TREASURER
(a)(2). Certification pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit
99.CERT.
(a)(3). Not Applicable.
(b). Certification pursuant to Rule 30a-2(b) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(b))is filed and attached hereto as Exhibit
99.906CERT.