May 1,
2022
Prospectus
USAA Extended
Market Index Fund
|
Fund
Shares |
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|
USMIX |
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USAA 500 Index
Fund
|
Member
Shares |
Reward
Shares |
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USSPX |
USPRX |
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|
USAA Nasdaq-100
Index Fund
|
Fund
Shares |
Institutional
Shares |
Class
A |
Class
C |
R6
Shares |
|
USNQX |
UINQX |
UANQX |
UCNQX |
URNQX |
Victory Capital means
Victory Capital Management Inc., the investment adviser of the USAA Mutual
Funds. USAA Mutual Funds are distributed by Victory Capital Services, Inc.,
member FINRA, an affiliate of Victory Capital. Victory Capital and its
affiliates are not affiliated with United Services Automobile Association or its
affiliates. USAA and the USAA logos are registered trademarks and the USAA
Mutual Funds and USAA Investments logos are trademarks of United Services
Automobile Association and are being used by Victory Capital and its affiliates
under license.
The Securities and
Exchange Commission has not approved or disapproved these securities or
determined whether this Prospectus is accurate or complete. Any representation
to the contrary is a criminal offense.
www.vcm.com
(800)
235-8396
TABLE
OF CONTENTS
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25 |
(fees paid
directly from your investment)
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Management
Fee
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Distribution
and/or Service (12b-1) Fees |
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Other
Expenses
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Acquired
Fund Fees and Expenses |
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Total
Annual Fund Operating Expenses |
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1The total
annual operating expenses for the Fund may not correlate to the ratio of
expenses to average daily net assets shown in the financial highlights, which
reflect the operating expenses of the Fund and do not include acquired fund fees
and expenses.
2Victory
Capital Management Inc. (the “Adviser”) has contractually agreed to waive fees
and/or reimburse expenses so that the total annual operating expenses (excluding
acquired fund fees and expenses, interest, taxes, brokerage commissions,
capitalized expenses, and other extraordinary expenses) do not exceed 0.43% of
the Fund through at least June 30,
2023 . The
Adviser is permitted to recoup fees waived and expenses reimbursed for up to
three years after the date of the waiver or reimbursement, subject to the lesser
of any operating expense limits in effect at the time of: (a) the original
waiver or expense reimbursement; or (b) the recoupment, after giving effect to
the recoupment amount. This agreement may only be terminated by the Fund’s Board
of Trustees.
Prospectus | 1
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1
Year |
3
Years |
5
Years |
10
Years |
|
$ |
$ |
$ |
$ |
2 | USAA Index Funds
Prospectus | 3
4 | USAA Index Funds
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1
Year |
5
Years |
10
Years |
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Fund
Shares |
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Return
Before Taxes |
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Return
After Taxes on Distributions |
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Return
After Taxes on Distributions and Sale of Fund
Shares |
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Index | |||
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Wilshire
4500 Completion Index (reflects no deduction for
fees,
expenses, or taxes) |
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Prospectus | 5
Management
of the Fund
Investment
Adviser
Victory
Capital Management Inc. (the “Adviser”) serves as the Fund’s investment
adviser.
The
Adviser is a diversified global asset manager comprised of multiple investment
teams, referred to as investment franchises, each of which utilizes an
independent approach to investing. The portfolio manager primarily responsible
for the day-to-day management of the Fund is a member of the Adviser’s Victory
Solutions platform.
Portfolio
Manager
|
|
Title |
Tenure
with
the
Fund |
|
Mannik
S. Dhillon,
CFA,
CAIA |
President,
VictoryShares and Solutions |
Since
2019 |
Purchase
and Sale of Shares
You may
purchase or sell shares of the Fund on any business day through VictoryFunds.com
or by telephone at (800) 235-8396. You also may purchase or sell shares of the
Fund through certain other financial intermediaries. If you have opened an
account directly with the Fund, you also may purchase and sell shares of the
Fund by mail at P.O. Box 182593, Columbus, Ohio 43218-2593. The Fund reserves
the right to waive or lower purchase minimums in certain
circumstances.
◾Minimum
initial purchase: $3,000
◾Minimum
subsequent investment: $50
Tax
Information
The Fund
intends to make distributions that generally will be taxed to you as ordinary
income or long-term capital gains, unless you are a tax-exempt investor or you
invest through an IRA, 401(k) plan, or other tax-deferred account (in which case
you may be taxed later, upon withdrawal of your investment from such
account).
6 | USAA Index Funds
Payments
to Broker-Dealers and Other Financial Intermediaries
If you
purchase shares of the Fund through a broker-dealer or other financial
intermediary (such as a bank), the Fund and its related companies may pay the
intermediary for the sale of such shares and certain servicing and
administrative functions. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your financial adviser
to recommend the Fund over another investment. Ask your financial adviser or
visit your financial intermediary’s website for more
information.
Prospectus | 7
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Member
Shares
|
Reward
Shares
|
|
Account
Maintenance Fee (for Fund account balances
below
$10,000) |
$ |
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Member
Shares |
Reward
Shares |
|
Management
Fee
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Distribution
and/or Service (12b-1) Fees |
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Other
Expenses
|
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Total
Annual Fund Operating Expenses |
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|
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Fee
Waiver/Reimbursement from Adviser |
|
( |
|
Total
Annual Fund Operating Expenses after
Reimbursement |
|
|
1Victory
Capital Management Inc. (the “Adviser”) has contractually agreed to waive fees
and/or reimburse expenses so that the total annual operating expenses (excluding
acquired fund fees and expenses, if any, interest, taxes, brokerage commissions,
capitalized expenses, and other extraordinary expenses) do not exceed 0.25% of
the Fund’s Member Shares and 0.15% of the Fund’s Reward Shares, through at least
June 30,
2023 . The
Adviser is permitted to recoup fees waived and expenses reimbursed for up to
three years after the date of the waiver or
8 | USAA Index Funds
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Member
Shares |
$ |
$ |
$ |
$ |
|
Reward
Shares |
$ |
$ |
$ |
$ |
Prospectus | 9
10 | USAA Index Funds
Prospectus | 11
12 | USAA Index Funds
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Prospectus | 13
|
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1
Year |
5
Years
(or
Life
of
Class) |
10
Years
(or
Life
of
Class) |
|
Member
Shares |
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|
Return
Before Taxes |
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Return
After Taxes on Distributions |
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|
Return
After Taxes on Distributions and Sale of Fund
Shares |
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|
Reward
Shares |
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|
Return
Before Taxes |
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|
Indexes | |||
|
Victory
US Large Cap 500 Index (reflects no deduction
for
fees, expenses, or taxes) |
|
|
|
|
S&P
500®
Index (reflects no deduction for fees,
expenses,
or taxes) |
|
|
|
*
Excludes
$10 account maintenance fee, which is waived for accounts of $10,000 or
more.
Management
of the Fund
Investment
Adviser
Victory
Capital Management Inc. (the “Adviser”) serves as the Fund’s investment
adviser.
The
Adviser is a diversified global asset manager comprised of multiple investment
teams, referred to as investment franchises, each of which utilizes an
independent approach to investing. The portfolio manager primarily responsible
for the day-to-day management of the Fund is a member of the Adviser’s Victory
Solutions platform.
Portfolio
Manager
|
|
Title |
Tenure
with
the
Fund |
|
Mannik
S. Dhillon,
CFA,
CAIA |
President,
VictoryShares and Solutions |
Since
2019 |
14 | USAA Index Funds
Purchase
and Sale of Shares
You may
purchase or sell shares of the Fund on any business day through VictoryFunds.com
or by telephone at (800) 235-8396. You also may purchase or sell shares of the
Fund through certain other financial intermediaries. If you have opened an
account directly with the Fund, you also may purchase and sell shares of the
Fund by mail at P.O. Box 182593, Columbus, Ohio 43218-2593. The Fund reserves
the right to waive or lower purchase minimums in certain
circumstances.
Member
Shares:
The
minimum initial purchase is $3,000. The minimum subsequent investment is
$50.
Reward
Shares:
The
minimum initial purchase is $100,000 for new investors; or shares of the Fund
held through a discretionary managed account program. The minimum subsequent
investment is $50.
Tax
Information
The Fund
intends to make distributions that generally will be taxed to you as ordinary
income or long-term capital gains, unless you are a tax-exempt investor or you
invest through an IRA, 401(k) plan, or other tax-deferred account (in which case
you may be taxed later, upon withdrawal of your investment from such
account).
Payments
to Broker-Dealers and Other Financial Intermediaries
If you
purchase shares of the Fund through a broker-dealer or other financial
intermediary (such as a bank), the Fund and its related companies may pay the
intermediary for the sale of such shares and certain servicing and
administrative functions. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your financial adviser
to recommend the Fund over another investment. Ask your financial adviser or
visit your financial intermediary’s website for more
information.
Prospectus | 15
|
|
Fund
Shares
|
Inst.
Shares
|
Class
A |
Class
C
|
R6
Shares |
|
Maximum
Sales Charge
(load)
Imposed on
Purchases
(as a percentage
of
offering price) |
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|
Maximum
Deferred Sales
Charge
(load)
(as
a percentage of the
lower
of purchase or sales
price) |
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16 | USAA Index Funds
|
|
Fund
Shares |
Inst.
Shares |
Class
A |
Class
C |
R6
Shares |
|
Management
Fee
|
|
|
|
|
|
|
Distribution
and/or Service
(12b-1)
Fees |
|
|
|
|
|
|
Other
Expenses
|
|
|
|
|
|
|
Total
Annual Fund
Operating
Expenses |
|
|
|
|
|
|
Fee
Waiver/Reimbursement
from
Adviser |
|
|
( |
( |
|
|
Total
Annual Fund
Operating
Expenses after
Reimbursement |
|
|
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|
3
Victory
Capital Management Inc. (the “Adviser”) has contractually agreed to waive fees
and/or reimburse expenses so that the total annual operating expenses (excluding
acquired fund fees and expenses, if any, interest, taxes, brokerage commissions,
capitalized expenses, and other extraordinary expenses) do not exceed an annual
rate of 0.48% of the Fund Shares, 0.44% of Institutional Shares, 0.70% of Class
A shares, 1.45% of Class C shares, and 0.40% of the R6 Shares, through at least
June 30,
2023 . The
Adviser is permitted to recoup fees waived and expenses reimbursed for up to
three years after the date of the waiver or reimbursement, subject to the lesser
of any operating expense limits in effect at the time of: (a) the original
waiver or expense reimbursement; or (b) the recoupment, after giving effect to
the recoupment amount. This agreement may only be terminated by the Fund’s Board
of Trustees.
Prospectus | 17
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Fund
Shares |
$ |
$ |
$ |
$ |
|
Inst.
Shares |
$ |
$ |
$ |
$ |
|
Class
A |
$ |
$ |
$ |
$ |
|
Class
C
(If
you sell your shares at the
end
of the period.) |
$ |
$ |
$ |
$ |
|
Class
C
(If
you do not sell your shares at
the
end of the period.) |
$148 |
$621 |
$1,135 |
$2,549 |
|
R6
Shares |
$ |
$ |
$ |
$ |
18 | USAA Index Funds
Prospectus | 19
20 | USAA Index Funds
Prospectus | 21
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22 | USAA Index Funds
|
|
1
Year |
5
Years
(or
Life
of
Class) |
10
Years
(or
Life
of
Class) |
|
Fund
Shares |
|
|
|
|
Return
Before Taxes |
|
|
|
|
Return
After Taxes on Distributions |
|
|
|
|
Return
After Taxes on Distributions and Sale of Fund
Shares |
|
|
|
|
Institutional
Shares |
|
|
|
|
Return
Before Taxes |
|
|
|
|
Class
A |
|
|
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|
Return
Before Taxes |
|
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|
Class
C |
|
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|
|
Return
Before Taxes |
|
|
|
|
R6
Shares |
|
|
|
|
Return
Before Taxes |
|
|
|
|
Indexes | |||
|
Nasdaq-100
Index (reflects no deduction for fees,
expenses,
or taxes) |
|
|
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Russell
1000®
Growth Index (reflects no deduction for
fees,
expenses, or taxes) |
|
|
|
*Inception
date of R6 Shares is March 1, 2017. Inception date of Institutional Shares,
Class A, and Class C
is June 29, 2020.
Management
of the Fund
Investment
Adviser
Victory
Capital Management Inc. (the “Adviser”) serves as the Fund’s investment
adviser.
The
Adviser is a diversified global asset manager comprised of multiple investment
teams, referred to as investment franchises, each of which utilizes an
independent approach to investing. The portfolio manager primarily responsible
for the day-to-day management of the Fund is a member of the Adviser’s Victory
Solutions platform.
Prospectus | 23
Portfolio
Manager
|
|
Title |
Tenure
with
the
Fund |
|
Mannik
S. Dhillon,
CFA,
CAIA |
President,
VictoryShares and Solutions |
Since
2019 |
Purchase
and Sale of Shares
|
Investment
Minimums |
Fund
Shares |
Inst.
Shares |
Class
A |
Class
C |
R6
Shares |
|
Minimum
Initial Investment |
$3,000 |
$1,000,000 |
$2,500 |
$2,500 |
None |
|
Minimum
Subsequent
Investments |
$50 |
None |
$50 |
$50 |
None |
You may
purchase or sell Fund Shares on any business day through VictoryFunds.com or by
telephone at (800) 235-8396. You also may purchase or sell Fund Shares through
certain other financial intermediaries. If you have opened an account directly
with the Fund, you also may purchase and sell Fund Shares by mail at P.O. Box
182593, Columbus, OH 43210-2593. The Fund reserves the right to waive or lower
purchase minimums in certain circumstances.
Institutional
Shares are not offered for sale directly to the general public. The Fund
reserves the right to waive or lower purchase minimums in certain
circumstances.
For Class
A and Class C shares, a $1,000 minimum initial purchase amount and a $50 minimum
subsequent purchase amount apply for Individual Retirement Accounts (“IRAs”),
gift/transfer to minor accounts, and purchases through automatic
investment plans.
Certain
broker-dealers and other financial intermediaries (such as a bank) may establish
higher or lower minimum initial and subsequent investment amounts to which you
may be subject if you invest through them.
R6 Shares
generally are available only through employer-sponsored retirement plans where a
financial intermediary provides retirement recordkeeping services to plan
participants. R6 Shares also are available to endowment funds and foundations.
Please contact your plan administrator or recordkeeper to purchase or sell
(redeem) shares from your retirement plan.
When you
buy and redeem shares, the Fund will price your transaction at the
next-determined net asset value (“NAV”) after the Fund receives your request in
good order, which means that your request contains all the required
documentation, and that all documents contain required signatures or signature
guarantees from a financial institution.
24 | USAA Index Funds
Tax
Information
The Fund
intends to make distributions that generally will be taxed to you as ordinary
income or long-term capital gains, unless you are a tax-exempt investor or you
invest through an IRA, 401(k) plan, or other tax-deferred account (in which case
you may be taxed later, upon withdrawal of your investment from such
account).
Payments
to Broker-Dealers and Other Financial Intermediaries
If you
purchase shares of the Fund through a broker-dealer or other financial
intermediary (such as a bank), the Fund and its related companies may pay the
intermediary for the sale of such shares and certain servicing and
administrative functions for investments in all share classes except the R6
Shares. These payments may create a conflict of interest by influencing the
broker-dealer or other intermediary and your financial adviser to recommend the
Fund over another investment. Ask your financial adviser or visit your financial
intermediary’s website for more information.
Prospectus | 25
Victory
Capital Management Inc. (“Victory Capital” or “Adviser”) manages these Funds.
For easier reading, Victory Capital may be referred to as “we” or “us”
throughout the prospectus.
Investment
Objective
As
described in this Prospectus, each Fund has its own investment objective,
policies, and strategies. There is no assurance that a Fund will achieve its
investment objective. The investment objective of each Fund may be changed
without shareholder approval. Except as otherwise noted, the investment policies
and strategies of a Fund are not fundamental policies and may be changed without
a shareholder vote.
Overview
of Index Funds
◼ What
are index funds?
Index
funds are mutual funds that attempt to track the performance of a specific
index. An index is an unmanaged group of securities whose overall performance is
used as a standard to measure investment performance of a particular market. It
is a passive measure of stock market returns. It does not factor in the costs of
buying, selling, and holding stocks, which are reflected in a fund’s
performance. In this prospectus, we offer you a choice of three index funds that
provide you a convenient and cost-efficient means of investing in a portfolio
that generally reflects the performance of some portion of the stock market. An
index fund has operating expenses and transaction costs, while the market index
does not. Keep in mind that the target index is a model, not an actual
portfolio, and you cannot invest directly in an index. Therefore, while a fund
attempts to track its target index as closely as possible, it typically will not
match the performance of the index exactly.
A
Brief Description of the Indices
◼ What
is the Wilshire 4500 Completion Index?
The
Wilshire 4500 Completion Index is a market cap-weighted index consisting of the
small and mid-cap companies in the U.S. equity market. It consists of the
securities within the Wilshire 5000 Total Market Index (“Parent Index”) after
eliminating the companies included in the S&P 500 Index. The Parent Index
measures performance of all U.S. equity securities with readily available price
data. The number of securities in the Wilshire 4500 Completion Index fluctuates
and may be more or less than 4,500. As of March 31, 2022, the market
capitalization range of the companies included in the Wilshire 4500 Completion
Index was between $781 billion and less than $2 million. The size of company in
the Wilshire 4500 Completion Index changes with market conditions and the
composition of the Wilshire 4500
26 | USAA Index Funds
Completion
Index. See Additional
Information on the Wilshire 4500 Completion Index for
further information.
◼ What
is the Victory US Large Cap 500 Index?
The
Victory US Large Cap 500 Index is a custom index published by Wilshire
Associates Incorporated. Each stock in the index contributes to the index in the
same proportion as the value of its shares. The index is rebalanced
semi-annually. Securities that no longer meet eligibility for the Index upon
rebalancing are omitted. A security also may be removed from the index in
between rebalancing if it no longer represents an investable asset due to legal
constraints or other independent factors.
◼ What
is the Nasdaq-100 Index?
The
Nasdaq-100 Index is an index composed of 100 of the largest nonfinancial
domestic and international companies listed on The Nasdaq Stock Market based on
market capitalization. The index reflects companies across major industry groups
including, computer hardware and software, telecommunications, retail/wholesale
trade, and biotechnology. It does not contain financial companies, including
investment companies. The index may include one or more depositary receipts
representing a security of a non-U.S. issuer. See Additional
Information on the Nasdaq-100 Index for
further information.
The
Basics of Index Investing
◼ How
are the Funds' portfolios managed?
Index
funds are not managed according to traditional methods of “active” investment
management, which involve the buying and selling of securities based upon
economic, financial, and market analyses and investment judgment. Instead, index
funds utilize a “passive” or “indexing” investment approach in an attempt to
match, as closely as possible, the performance of the relevant
index.
The Funds
generally seek to track the returns of their respective index before fees and
expenses by employing a full replication strategy that seeks to hold all the
stocks in that index. For the USAA Extended Market Index Fund, the Adviser may
choose instead to select a representative sample of stocks from the targeted
index that will resemble the full index in terms of industry weightings, market
capitalization, price/earnings ratios, dividend yield, and other
characteristics. For example, if 10% of an index was made up of technology
stocks, the Fund would invest approximately 10% of its assets in some, but not
all, of the technology stocks included in that index. This approach generally is
less expensive than buying and holding all of the stocks in a particular index
but may result in greater tracking error when compared to a full replication
strategy.
Prospectus | 27
The
ability of the Fund to replicate the total return of the index may be affected
by, among other things, transaction costs, administrative expenses, taxes,
changes in the composition of the index or the assets of the Fund, the timing
and amount of investors’ contributions and withdrawals, and other fees and
expenses borne by the Fund.
◼ As
an investor, what are the benefits of using a passive or indexing
approach?
Indexing
may appeal to many investors because it provides simplicity through a
straightforward market-matching strategy and may provide diversification by
investing in a wide variety of companies and industries. Indexing tends to
involve lower costs than actively managed funds because index funds do not have
many of the expenses of actively managed funds such as research, and usually
have relatively low trading activity, so total brokerage commissions tend to be
lower.
◼ How
closely will the Funds match their respective indices?
In seeking
to track the performance of a Fund's respective index, each Fund will attempt to
allocate the investments of the Fund among stocks in approximately the same
weightings as the respective index, beginning with the stocks that make up the
larger portion of the index’s value.
Over the
long term (i.e., periods of three to five years), each Fund will seek a
correlation between the performance of the Fund, before fees and expenses, and
that of the respective index of 0.95 or better. A figure of 1.00 would indicate
perfect correlation, meaning that the Fund always moves up in value when a
Fund's respective index rises and down in value when the index declines. In the
event that the targeted correlation is not achieved, alternative structures may
be considered.
◼ Will
the Funds purchase other types of securities?
Under
normal market conditions, each Fund’s assets generally will be invested in
stocks included in its respective index. However, each Fund may hold up to 20%
of its assets in short-term debt securities, money market instruments, stock
index futures, and options, in most cases to provide liquidity to pay
redemptions and fees. In addition, each Fund may lend securities with a value up
to 33 1/3% of its total assets.
Each Fund
may invest in derivative instruments, and may at times invest a significant
portion of its assets in futures contracts linked to the performance of the
index or other indices that are highly correlated with the index. Derivatives
allow the Fund to increase or decrease its exposure to the index quickly and at
less cost than buying or selling stocks. Each Fund may invest in options,
futures, and other derivative instruments in order to gain market exposure
quickly in the event of subscriptions, to maintain liquidity in the event of
redemptions, and to keep trading costs low. Each Fund also may purchase
exchange-traded funds (“ETFs”).
28 | USAA Index Funds
Each Fund
generally will invest in stock index futures and options in an attempt to reduce
any performance discrepancies between the Fund and its respective index. Each
Fund generally will not use these derivative instruments for speculative
purposes or as leveraged investments that magnify the gains or losses of an
investment. These investments tend to reduce transaction costs or add value when
they are favorably priced.
Risks
The
following provides additional information about the Funds' principal risks and
supplements those risks discussed in the Funds' Summary section of this
prospectus.
Market
Risk: The Funds
are subject to market risk, which is the risk that the securities markets will
move down, sometimes rapidly and unpredictably, based on overall economic
conditions and other factors. Changes in the financial condition of a single
issuer can impact a market as a whole and adverse market conditions may be
prolonged and may not have the same impact on all types of securities. In
addition, markets and market-participants are increasingly reliant upon both
publicly available and proprietary information data systems. Data imprecision,
software or other technology malfunctions, programming inaccuracies,
unauthorized use or access, and similar circumstances may impair the performance
of these systems and may have an adverse impact upon a single issuer, a group of
issuers, or the market at large. In certain cases, an exchange or market may
close or issue trading halts on either specific securities or even the entire
market, which may result in the Fund being, among other things, unable to buy or
sell certain securities or financial instruments or accurately price its
investments.
Market
turmoil may be reflected in perceptions of economic uncertainty, price
volatility in the equity and debt markets, and fluctuating trading liquidity. In
response, governments may adopt a variety of fiscal and monetary policy changes,
including but not limited to, direct capital infusions into companies, new
monetary programs, and lower interest rates. An unexpected or quick reversal of
these policies could increase volatility in the equity and debt markets. Market
conditions and economic risks could have a significant effect on domestic and
international economies, and could add significantly to the risks of increased
volatility and decreased liquidity for the Funds' portfolio. Equity securities
tend to be more volatile than debt securities.
◾Information
Technology and Operations Risk: Markets
and market participants are increasingly reliant upon both publicly available
and proprietary information data systems. Data imprecision, software or other
technology malfunctions, programming inaccuracies, unauthorized use or access,
and similar circumstances may impair the performance of these systems and may
have an adverse impact upon a single issuer, a group of issuers, or the market
at large. The information technology and other operational systems upon which a
Prospectus | 29
Fund’s
service providers rely may be subject to cyber attack or other technological
disruptions, and could otherwise disrupt the ability of these service providers
to perform essential tasks for the Funds. In certain cases, an exchange or
market may close or issue trading halts on either specific securities or even
the entire market, which may result in a Fund being, among other things, unable
to buy or sell certain securities or financial instruments or accurately price
its investments.
◾Geopolitical/Natural
Disaster Risk: Global
economies and financial markets are increasingly interconnected, which increases
the possibilities that conditions in one country or region might adversely
affect issuers in another country or region. Geopolitical and other risks,
including war, terrorism, trade disputes, political or economic dysfunction
within some nations, public health crises and related geopolitical events, as
well as environmental disasters such as earthquakes, fires, and floods, may add
to instability in world economies and markets generally. Changes in trade
policies and international trade agreements could affect the economies of many
countries in unpredictable ways. Epidemics and/or pandemics, such as the
coronavirus (or “COVID-19”), may result in, among other things, closing borders,
disruptions to healthcare service preparation and delivery, quarantines,
cancellations, disruptions to supply chains and consumer activity, as well as
general concern and uncertainty. The impact may be short-term or may last for
extended periods.
The
COVID-19 pandemic, which has spread rapidly across the world, has led
and will continue to lead for an unknown period of time to disruptions in local,
regional, national and global markets and economies. The outbreak has resulted
in, and until fully resolved is likely to continue to result in, among other
things (1) government imposition of various forms of “stay at home” orders and
the closing of “non-essential” businesses, resulting in significant disruption
to the businesses of many issuers as well as lay-offs of employees; (2)
increased requests by issuers of debt instruments for amendments and waivers of
agreements to avoid default and increased defaults; (3) volatility and
disruption of markets, including greater volatility in pricing and spreads; and
(4) rapidly evolving proposals and/or actions by state and federal governments
to address problems being experienced by the markets and by businesses and the
economy in general.
Foreign
Investing Risk: Because
the USAA 500 Index Fund and USAA Nasdaq-100 Index Fund may invest in securities
of foreign issuers, it is subject to the risks of foreign investing. These risks
include currency exchange rate fluctuations; foreign market illiquidity;
emerging-market risk; increased price volatility; uncertain political
conditions; exchange-control
30 | USAA Index Funds
regulations;
foreign ownership limits; different accounting, reporting, and disclosure
requirements; difficulties in obtaining legal judgments; and foreign withholding
taxes.
Small-
and Mid-Capitalization Company Risk: The USAA
Extended Market Index Fund is subject to small- and mid-capitalization company
risk. Small- and mid-cap companies may be more vulnerable than larger companies
to adverse business or economic conditions. These companies also may have
limited product lines, markets, or financial resources, and can be particularly
sensitive to interest rates, borrowing costs, and earnings. Securities of such
companies may be less liquid and more volatile than securities of larger
companies or the market in general and, therefore, may involve greater risk than
investing in securities of larger companies. In addition, small- and mid-cap
companies may not be well known to the investing public, may not have
institutional ownership, and may have only cyclical, static, or moderate growth
prospects. Investing more heavily in one market capitalization (large, medium,
or small) carries the risk that due to market conditions, that market
capitalization sector may underperform the others.
Large-Capitalization
Company Risk: Investments
in large-capitalization companies may go in and out of favor based on market and
economic conditions and may underperform other market segments. Some
large-capitalization companies may be unable to respond quickly to new
competitive challenges and attain the high growth rate of successful smaller
companies, especially during extended periods of economic expansion. As such,
returns on investments in stocks of large-capitalization companies could trail
the returns on investments in stocks of small- and mid-capitalization
companies.
Sector
Risk: The USAA
500 Index Fund and USAA Nasdaq-100 Index Fund are subject to sector risk. The
returns from a specific type of security may trail returns from other asset
classes or the overall market. For example, the stocks that make up the index
currently are heavily weighted in the technology sectors. Technology companies
may be particularly vulnerable to factors affecting the technology sector, such
as dependency on consumer and business acceptance as new technology evolves,
large and rapid price movements resulting from competition, rapid obsolescence
of products and services, and short product cycles. Many technology companies
are small and at an earlier stage of development and, therefore, may be subject
to risks such as those arising out of limited product lines, markets, and
financial and managerial resources. High volatility or poor performance of the
sectors will directly affect the Fund’s performance. Sectors will go through
cycles of doing better or worse than stocks or bonds in general. These periods
may last for several years.
Non-Diversification
Risk: The USAA
Nasdaq-100 Index Fund is non-diversified, which means that it may invest a
greater percentage of its assets in a single issuer or a limited number of
issuers, such as a single stock or bond. Because a relatively high percentage of
the Fund’s total assets may
Prospectus | 31
be
invested in the securities of a single issuer or a limited number of issuers,
the Fund’s portfolio may be more sensitive to changes in the market value of
these securities. Such a focused investment strategy may increase the volatility
of the Fund’s investment results, because this Fund may be more susceptible to
risks associated with a single issuer or economic, political, or regulatory
events than a diversified fund.
Index
Risk: Each Fund
attempts to track the performance of its respective index. The Fund’s
performance will be negatively affected by general declines in the securities
and asset classes represented in the index. In addition, because a Fund is not
actively managed, unless a specific security is removed from its index, the Fund
generally will not sell a security because the security’s issuer was in
financial trouble. The Fund also does not attempt to take defensive positions
under any market conditions, including declining markets. Therefore, the Fund’s
performance could be lower than funds that may actively shift their portfolio
assets to take advantage of market opportunities or to lessen the impact of a
market decline or a decline in the value of one or more issuers.
Tracking
Error Risk: While each
Fund attempts to match its respective index as closely as possible, the ability
of the Fund to meet its investment objective depends to some extent on the cash
flow in and out of the Fund. Each Fund’s performance may be affected by factors
such as the size of the Fund’s portfolio, transaction costs, management fees and
expenses, and brokerage commissions and fees. When a shareholder buys or sells
shares of a Fund, the Fund generally has to buy or sell stocks in its portfolio.
Changes in a Fund’s cash flow affect how closely the Fund will track its
respective index. Because of the differences between the index and a Fund’s
portfolio, a Fund may not track its respective index perfectly. If a Fund uses
representative sampling to track its Index, this may cause the tracking error to
be higher than would be the case if the Fund purchased all of the securities in
the Index.
Large
Shareholder Risk: Each Fund,
like all mutual funds, pools the investments of many investors. Actions by one
shareholder or multiple shareholders may have an impact on a Fund and,
therefore, indirectly on other shareholders. For example, significant levels of
new investments in a Fund by shareholders may cause a Fund to have more cash
than would otherwise be the case, which might have a positive or negative impact
on Fund performance. Similarly, redemption activity might cause a Fund to sell
portfolio securities, which may increase transaction costs and might generate a
capital gain or loss, or cause it to borrow funds on a short-term basis to cover
redemptions, which would cause a Fund to incur costs that, in effect, would be
borne by all shareholders, not just the redeeming shareholders. Shareholder
purchase and redemption activity also may affect the per share amount of a
Fund’s distributions of its net investment income and net realized capital
gains, if any, thereby affecting the tax burden on a Fund’s shareholders subject
to federal income tax. To the extent a larger shareholder (including,
32 | USAA Index Funds
for
example, an affiliated fund that operates as a fund-of-funds or 529 education
savings plan) is permitted to invest in a Fund, a Fund may experience large
inflows or outflows of cash from time to time. This activity could magnify these
adverse effects on a Fund.
Derivatives
Risk: A Fund
may invest in futures, options, swaps, and other types of derivatives. Risks
associated with derivatives include the risk that the derivative is not
well-correlated with the security, index, exchange-traded funds (“ETFs”), or
currency to which it relates; the risk that derivatives used for risk management
may not have the intended effects and may result in losses, underperformance, or
missed opportunities; the risk that a Fund will be unable to sell the derivative
because of an illiquid secondary market; the risk that a counterparty is
unwilling or unable to meet its obligation; the risk of interest rate movements;
and the risk that the derivatives transaction could expose a Fund to the effects
of leverage, which could increase a Fund’s market exposure, magnify investment
risks and losses, and cause losses to be realized more quickly. In addition,
proposed and current regulation may limit a Fund’s ability to invest in
derivatives. There is no guarantee that derivative techniques will be employed
or that they will work as intended, and their use could lower returns or even
result in losses to a Fund. In addition, proposed and current regulations may
limit the Fund’s ability to invest in derivatives.
ETF
Risk: ETFs,
which generally are registered investment companies, incur their own management
fees and other expenses, such as trustees’ fees, operating expenses,
registration fees, and marketing expenses, a proportionate share of which would
be borne by the Fund. As a result, an investment by a Fund in an ETF could cause
the Fund’s operating expenses to be higher and, in turn, its performance to be
lower than if it were to invest directly in the securities held by the ETF. In
addition, the Fund will be exposed indirectly to all of the risks of the
securities held by the ETFs.
Passive
ETFs that invest in the securities and sectors contained in the indexes they
seek to track do not attempt to take defensive positions in volatile or
declining markets or under other conditions. Furthermore, such ETFs will be
unable to duplicate exactly the performance of the underlying indexes they
track.
The price
of an ETF is determined by supply and demand. Thus, ETFs do not necessarily
trade at their net asset value (“NAV”), which means their shares may trade at a
premium or discount.
In
addition, although ETFs generally are listed on securities exchanges, there can
be no assurances that an ETF will continue to satisfy the listing qualifications
or that an active trading market for such ETFs will be maintained. Secondary
market trading in ETFs also may be halted by a national securities exchange
because of market conditions or for other reasons.
Futures
and Options Risk: Risks
associated with investments in futures and options include the risk that the
futures or options contract will not fully offset the underlying position and
that the investments in futures and options
Prospectus | 33
used for
risk management may not have the intended effects and may result in losses or
missed opportunities. The risk of loss of money from futures contracts and
options on futures contracts used for non-hedging purposes may be greater than
that of investments for hedging purposes.
Leveraging
Risk: The USAA
Extended Market Fund is subject to leveraging risk. Leveraging risk is the risk
associated with securities or practices that multiply small price movements into
large changes in value. The more a Fund invests in leveraged instruments or
strategies that use leveraged instruments, the more this leverage will magnify
any losses on those investments.
Liquidity
Risk: Certain
securities held by a Fund may be difficult (or impossible) to sell at the time
and at the price a Fund would like due to a variety of factors, including
general market conditions, the perceived financial strength of the issuer, or
specific restrictions on resale of the securities. Consequently, a Fund may have
to hold these securities longer than it would like and may forgo other
investment opportunities. It also is possible that a Fund could be prevented
from realizing capital gains or could be forced to incur capital losses if the
Adviser is unable to sell a position at the time or price of the Adviser’s
choosing. Lack of liquidity may impact valuation of such securities and a Fund’s
NAV adversely, especially during times of financial distress. In addition, a
Fund may not be able to raise cash when needed or may be forced to sell other
investments to raise cash, which could impact a Fund’s performance negatively.
Infrequent trading of securities also may lead to an increase in price
volatility. Liquidity is a general investment risk that potentially could impact
any security, but funds that invest in privately-placed securities, certain
small-company securities, high-yield bonds, mortgage-backed or asset-backed
securities, foreign or emerging-market securities, derivatives, or other
structured investments, which all have experienced periods of illiquidity,
generally are subject to greater liquidity risk than funds that do not invest in
these types of securities.
Additional
Risk Factors.
The Adviser may use several types of investment strategies in pursuing the
Funds' overall investment objective. The following risks are those that the
Adviser does not consider to be principal risks of the Fund. The SAI provides
more detail about these risks and other risks that the Fund may be subject to
that are not considered to be principal risks. You may request a copy of the
Funds' SAI for more information.
Securities
Lending Risk: Each Fund
may lend portfolio securities to broker-dealers or other institutions on a fully
collateralized basis. There is a risk of delay in recovering a loaned security
and/or risk of loss in collateral if the borrower becomes insolvent. There also
is risk of loss if the borrower defaults and fails to return the loaned
securities. Each Fund could incur losses on the reinvestment of cash collateral
from the loan, if the value of the short-term investments acquired with the cash
collateral is less than the amount of cash collateral required to be returned to
the borrower.
34 | USAA Index Funds
Organization
and
Management of the Fund
Management of the Fund
The Funds'
Board has the overall responsibility for overseeing the management of the Funds.
The
Investment Adviser
Victory
Capital Management Inc. (the “Adviser”), a New York corporation that is
registered as an investment adviser with the Securities and Exchange Commission
(“SEC”), serves as the investment adviser to the Funds pursuant to an investment
advisory agreement. Subject to the authority of the Board, the Adviser is
responsible for the overall management and administration of the Funds' business
affairs. The Adviser is responsible for selecting the Funds investments
according to its investment objective, policies, and restrictions. As of March
31, 2022, the Adviser managed and advised assets totaling in excess of $178.1
billion for individual and institutional clients. The Adviser’s principal
address is 15935 La Cantera Pkwy, San Antonio, Texas 78256.
A
discussion regarding the basis of the Board’s approval of the Funds' Advisory
Agreement is available in the Funds' most recent annual report to shareholders
for the period ended December 31.
The
Adviser is a diversified global asset manager comprised of multiple investment
teams, referred to as investment franchises, each of which utilizes an
independent approach to investment. Victory Capital’s Victory Solutions
platform oversees the rules-based investment strategies and is responsible for
the day-to-day investment management of the Funds.
With
respect to the USAA
Extended Market Index Fund, the Fund
pays the Adviser an investment management fee, which is accrued daily and paid
monthly, equal to an annualized rate of 0.10% of average daily net assets.
With
respect to the USAA
500 Index Fund, the Fund
pays the Adviser an investment management fee, which is accrued daily and paid
monthly, equal to an annualized rate of 0.10% of average daily net assets.
With
respect to the USAA
Nasdaq-100 Index Fund, the Fund
pays the Adviser an investment management fee, which is accrued daily and paid
monthly, equal to an annualized rate of 0.20% of average daily net assets.
See
Fund
Fees and Expenses in this
prospectus for information about any contractual agreement agreed to by the
Adviser to waive fees and/or reimburse expenses with respect to the Funds. From
time to time, the Adviser also may voluntarily waive fees and/or reimburse
expenses in amounts exceeding those required to be waived or reimbursed under
any contractual agreement that may be in place with respect to the
Funds.
Each Fund
is authorized, although the Adviser has no present intention of utilizing such
authority, to use a “manager-of-managers” structure. The
Prospectus | 35
Adviser
could select (with approval of the Board and without shareholder approval) one
or more subadvisers to manage the day-to-day investment of the Funds' assets.
The Adviser would monitor each subadviser’s performance through quantitative and
qualitative analysis and periodically report to the Board as to whether a
subadviser’s agreement should be renewed, terminated, or modified. The Adviser
also would be responsible for determining how the Funds' assets should be
allocated to the subadvisers. The allocation for a subadviser could range from
0% to 100% of the Funds' assets, and the Adviser could change the allocations
without shareholder approval.
Portfolio
Management
Mannik
S. Dhillon, CFA, CAIA,
President, VictoryShares and Solutions, has managed each Fund since 2019. Mr.
Dhillon served as Victory Capital’s Head of Investment Solutions, Product, and
Strategy from 2015-2017. He served as a managing director and head of manager
research with Wilshire Associates, where he evaluated asset managers and led
strategic consulting engagements from 2010-2015. He is a Chartered Financial
Analyst (“CFA”) and Chartered Alternative Investment Analyst
(“CAIA”).
The
SAI provides additional information about the portfolio manager's compensation,
other accounts managed, and ownership of Fund securities.
Investing
with the
USAA Mutual Funds
USAA Mutual Funds
If you are
looking for a convenient way to open an account or to add money to an existing
account, we can help. The sections that follow will serve as a guide to your
investment with the USAA Mutual Funds. These sections describe many of the share
classes currently offered by the USAA Mutual Funds. Choosing
a Share Class will help
you decide which share class may be to your advantage to buy.
Keep in
mind that Institutional Shares and R6 Shares are available for purchase only by
eligible shareholders. In addition, not all USAA Mutual Funds offer each class
of shares described below; and therefore, certain classes may be discussed that
are not necessarily offered by a Fund. The classes of shares that are offered by
a Fund are those listed on the cover page designated with a ticker symbol. A
Fund also may offer other share classes in different prospectuses.
This
section of the prospectus also describes how to open an account, how to access
information about your account, and how to buy, exchange, and sell shares of a
Fund. Note, this information may vary if you invest through a third party such
as a brokerage firm and will be dependent on that firm’s policies and practices.
Consult your Investment Professional for specific details. An Investment
Professional is an investment consultant, salesperson, financial planner,
investment adviser, or trust officer who provides you with
36 | USAA Index Funds
investment
information. Your Investment Professional also can help you decide which share
class is best for you. Investment Professionals and other financial
intermediaries may charge fees for their services.
We want to
make it simple for you to do business with us. If you have questions about any
of this information, please call your investment professional or one of our
customer service representatives at (800) 235-8396. They will be happy to assist
you.
Choosing
a Share Class
Fund
Shares
◾No
front-end sales charge or contingent deferred sales charge (“CDSC”).
All your money goes to work for you right away.
◾Fund
Shares do not pay any ongoing distribution and/or service (12b-1) fees.
◾Typically,
lower annual expenses than all classes except Institutional and R6
Shares.
Institutional
Shares
◾No
front-end sales charge or CDSC. All your money goes to work for you right
away.
◾Institutional
Shares do not pay any ongoing distribution and/or service (12b-1)
fees.
◾Institutional
Shares are only available to certain investors.
◾Typically,
lower annual expenses than all classes except R6 Shares.
Class
A
◾Front-end
sales charge, as described in this section. There are several ways to
reduce or eliminate this charge as discussed under Sales
Charge Reductions and Waivers for Class A Shares.
◾A
CDSC may be imposed if you sell your shares within 18 months of their
purchase. The CDSC may be waived or reduced in certain circumstances as
discussed under CDSC
Reductions for Class A and Class C Shares.
◾Class
A shares also pay ongoing distribution and/or service (12b-1) fees.
◾Lower
annual expenses than Class C shares.
Class
C
◾No
front-end sales charge. All your money goes to work for you right away.
Prospectus | 37
◾A
CDSC may be imposed if you sell your shares within 12 months of purchase.
The CDSC may be waived or reduced in certain circumstances as discussed
under CDSC
Reductions for Class A and Class C Shares.
◾Class
C shares also pay ongoing distribution and/or service (12b-1) fees.
◾Higher
annual expenses than all other classes of shares.
R6
Shares
◾No
front-end sales charge or CDSC. All your money goes to work for you right
away.
◾Class
R6 Shares do not pay any ongoing distribution and/or service (12b-1)
fees.
◾Class
R6 Shares are only available to certain investors.
◾Typically
lower annual expenses than all other classes of shares.
Member
and Reward Shares
USAA 500 Index Fund only
USAA 500 Index Fund only
◾No
front-end sales charge. All your money goes to work for you right away.
◾No
ongoing distribution and/or service (12b-1) fees.
◾Reward
Shares have lower annual expenses than Member Shares but are
subject to higher minimum investment.
Share
Classes
When you
purchase shares of the Fund, you must choose a share class. The Fund offers the
share classes listed on the prospectus cover that include a ticker symbol. Each
share class represents an interest in the same portfolio of securities and is
not a separate mutual fund. The classes differ in the sales charges, if any, and
expenses that apply to your investment, allowing you and your Investment
Professional to choose the class that best suits your investment
needs.
Deciding
which share class best suits your investment needs depends on a number of
factors that you should discuss with your Investment Professional, including:
whether you are eligible to invest in a particular class, how long you expect to
hold your investment, how much you intend to invest in the Fund, and the total
expenses associated with each share class.
The Fund
reserves the right, without notice, to change the eligibility criteria for
purchasing a particular share class. For example, a class of shares may be
available to purchase only by retirement plans or by institutional investors.
The Fund also may waive any applicable eligibility criteria or investment
38 | USAA Index Funds
minimums
at its discretion. In addition, a fund or any class may be closed at any time
for failure to achieve an economical level of assets or for other
reasons.
Certain
financial intermediaries who hold shares on behalf of their customers impose
fees when the amount of shares of a particular class falls below a minimum
threshold. To the extent that the amount of shares falls below that threshold,
the Fund reserves the right to liquidate the shares held in accounts maintained
by the financial intermediary.
Shares of
the Funds are only available for sale in the United States and certain other
areas subject to U.S. jurisdiction and may not be offered for sale in non-U.S.
jurisdictions, except as approved by the Adviser. Investors residing outside of
the United States (except those with Air/Army Post Office (“APO”), Fleet Post
Office (“FPO”), or Diplomatic Post Office (“DPO”) addresses) generally may not
purchase shares of the Funds, even if they are U.S. citizens or lawful permanent
residents.
Eligibility
Requirements to Purchase Member Shares
and Reward Shares
and Reward Shares
Member
Shares and Reward Shares are each a separate share class of the USAA 500 Index
Fund and are not separate mutual funds. Shares of the USAA 500 Index Fund are
available for purchase directly with the Fund on the Internet, by telephone, or
by mail.
If shares
of the USAA 500 Index Fund are purchased through a retirement account or an
investment professional (i.e., a financial intermediary), the policies and
procedures relating to these purchases may differ from those discussed in this
prospectus and may vary. Additional fees also may apply to your investment in
the Fund, including a transaction fee, if you buy or sell shares of the Fund
through a broker or other investment professional. For more information on these
fees, check with your investment professional.
Note: Reward
Shares are not available to: SIMPLE IRAs, SEP IRAs, KEOGHs, 403(b) custodian
accounts, accounts held in pension plans, profit sharing plans, accounts held by
corporations.
Eligibility
Requirements to Purchase Fund Shares
The Fund
Shares are a separate share class of the USAA Extended Market Index Fund and
USAA Nasdaq-100 Index Fund and are not a separate mutual fund. Fund Shares are
available for purchase directly with the Fund on the Internet, by telephone, or
by mail. Fund Shares also are available through certain financial
intermediaries.
Prospectus | 39
If Fund
Shares are purchased through a retirement account or an investment professional
(i.e., a
financial intermediary), the policies and procedures relating to these purchases
may differ from those discussed in this prospectus. Additional fees also may
apply to your investment in a Fund, including a transaction fee, if you buy or
sell shares of a Fund through a broker or other investment professional. For
more information on these fees, check with your investment
professional.
Eligibility
Requirements to Purchase Institutional Shares
The
Institutional Shares may be purchased by or through:
◾Investors
purchasing through discretionary managed account programs and
certain advisory programs sponsored by financial intermediaries, such as
brokerage firms, investment advisors, financial planners, third-party
administrators, and insurance companies.
◾Brokerage
platforms of firms that have agreements with the Distributor to offer
such shares solely when acting as an agent for the investor and the investor may
be required to pay a commission and/or other forms of compensation to the
broker.
◾Institutional
investors, which include retirement plans, endowments, foundations,
and bank trusts, as well as Affiliated Funds, and other persons or legal
entities that the Fund may approve from time to time.
Eligibility
Requirements to Purchase Class A and Class C Shares
Class A
and Class C shares generally are made available through broker-dealers and other
financial intermediaries and are subject to certain sales charges described
below.
Calculation
of Sales Charges for Class A Shares
Class A
shares are sold at their public offering price, which is the NAV plus any
applicable initial sales charge, also referred to as the “front-end sales load.”
The sales charge may be reduced or eliminated for larger purchases, as detailed
below or as described under Sales
Charge Reductions and Waivers for Class A Shares. The
investment levels required to obtain a reduced sales charge are commonly
referred to as “breakpoints.”
All Class
A purchases are subject to the terms described herein except for those purchases
made through an intermediary specified in Appendix
A – Variations in Sales Charge Reductions and Waivers Available Through Certain
Intermediaries.
In order
to obtain a breakpoint discount, you must inform the USAA Mutual Funds or your
investment professional at the time you purchase shares of the existence of the
other USAA accounts or purchases of USAA Mutual Funds that are eligible to be
linked for the purpose of calculating the initial sales
40 | USAA Index Funds
charge.
The Fund or your investment professional may ask you for records or other
information about other USAA Mutual Funds held in your USAA accounts and any
linked accounts, such as accounts opened with a different financial
intermediary.
The
current sales charge rates and breakpoint levels for Class A shares of the Fund
are listed below:
|
Your
Investment in the Fund |
Sales
Charge
as
a % of
Offering
Price |
Sales
Charge
as
a % of
Your
Investment |
|
Less
than $100,000 |
2.25% |
2.30% |
|
$100,000
up to $249,999 |
1.75% |
1.78% |
|
Over
$250,000 |
0.00% |
0.00% |
Sales
Charge Reductions and Waivers for Class A Shares
There are
a number of ways you can reduce your sales charges, which we describe below. In
order to obtain a Class A sales charge reduction or waiver, you must provide
your financial intermediary or the Funds, at the time of purchase, with current
information regarding shares of any USAA Mutual Funds held in other accounts.
This information must include account statements or other records (including
written representations from the intermediary holding the shares) that indicate
any accounts (e.g., retirement accounts) established (i) with the USAA Mutual
Funds and your investment professional; (ii) with other financial
intermediaries; and (iii) in the name of immediate family household members
(spouse or domestic partner and children under 21) with regard to Rights of
Accumulation.
The
availability of a sales charge reduction or waiver discussed below will depend
upon whether you purchase your shares directly from the Fund or through a
financial intermediary. If you are eligible for a sales charge reduction because
you own shares of other USAA Mutual Funds, you must notify the Fund or your
financial intermediary at the time of purchase of any relationship or other
facts qualifying you for sales charge reductions or waivers. Some intermediaries
impose different policies for sales charge waivers and reductions. These
variations are described in Appendix
A — Variations in Sales Charge Reductions and Waivers Available Through Certain
Intermediaries. Except
as described with respect to the intermediaries specified in Appendix A, all
Class A shares are subject to the terms stated below. In order to obtain waivers
and discounts that are not available through your intermediary, you must
purchase Fund shares directly from the Fund or through another intermediary.
Prospectus | 41
You can
find additional information regarding sales charges and their reductions, free
of charge, at vcm.com/policies, by clicking on Victory
Funds Pricing Policies.
You may
reduce or eliminate the sales charge applicable to Class A shares in a number
of ways:
❖ Breakpoint –
Purchase a sufficient amount to reach a breakpoint (see Calculation
of Sales Charges for Class A Shares above);
❖ Letter
of Intent – If you
anticipate purchasing $50,000 or more of Class A shares of the Fund, including
any purchase of other USAA Mutual Funds of any share class (except money market
funds and assets held in group retirement plans) within a 13-month period, you
may qualify for a sales charge breakpoint as though you were investing the total
amount in one lump sum. In order to qualify for the reduced sales charge, you
must submit a non-binding Letter of Intent (the “Letter”) within 90 days of the
start of the purchases. Each investment you make after signing the Letter will
be entitled to the sales charge applicable to the total investment indicated in
the Letter. You must start with a minimum initial investment of at least 5.00%
of the total amount you intend to purchase. A portion of the shares purchased
under the Letter will be held in escrow until the total investment has been
completed. In the event you do not complete your commitment set forth in the
Letter in the time period specified, sufficient escrowed shares will be redeemed
to pay any applicable front-end sales charges;
❖ Right
of Accumulation – Whereas
a Letter of Intent allows you to qualify for a discount by combining your
current purchase amount with purchases you intend to make in the near future, a
Right of Accumulation allows you to reduce the initial sales charge on a Class A
investment by combining the amount of your current purchase with the current
market value of prior investments made by you, your spouse (including domestic
partner), and your children under age 21 in any class of shares of any USAA
Mutual Funds (except money market funds and any assets held in group retirement
plans). The value of eligible existing holdings will be calculated by using the
greater of the current value or the original investment amount. To ensure that
you receive a reduced price using the Fund’s Right of Accumulation, you or your
Investment Professional must inform the Funds that the Right applies each time
shares are purchased and provide sufficient information to permit confirmation
of qualification;
❖ Reinstatement
Privilege – You may
reinvest at NAV all or part of your redemption proceeds within 90 days of a
redemption of Class A shares of the Fund;
❖ Waiver – The
USAA Mutual Funds will completely waive the sales charge for Class A shares in
the following cases:
◾Purchases
of $250,000 or more;
42 | USAA Index Funds
◾Purchases
by certain individuals associated with the USAA Mutual Funds or
service providers (see Eligibility
of Individuals Associated with the USAA Mutual Funds and Fund Service
Providers);
◾Purchases
by registered broker-dealers, financial intermediaries or their
agents, or affiliates who have agreements with the Fund’s distributor (the
“Distributor”), if the shares are purchased for their own account, purchased for
retirement plans of their employees, or sold to registered representatives or
full-time employees (or their immediate families), provided that such purchase
is for one of the foregoing types of accounts;
◾Purchases
for trust or other advisory accounts established with a financial
institution and fee-based investment products or accounts;
◾Reinvestment
of proceeds from a liquidation distribution of Class A shares of
USAA Mutual Funds held in a deferred compensation plan, agency, trust, or
custody account;
◾Purchases
by retirement plans, including Section 401 and 457 plans sponsored
by a Section 501(c)(3) organization and certain non-qualified deferred
compensation arrangements that operate in a similar manner to qualified plans.
Investors nonetheless may be charged a fee if they effect transactions in Class
A shares through a broker or agent;
◾Purchases
by participants in no transaction fee programs offered by certain
broker-dealers (sometimes referred to as “supermarkets”);
◾Purchases
by certain financial intermediaries who offer shares to self-directed
investment brokerage accounts that may or may not charge a transaction fee to
its customers;
◾Investors
that have an investment account with the Adviser; and
◾Individuals
who reinvest the proceeds of redemptions from Institutional
Shares or R6 Shares of USAA Mutual Funds within 60 days of
redemption.
You should
inform the Fund or your investment professional at the time of purchase of the
sales charge waiver category that you believe applies.
CDSC
for Class A Shares
A
contingent deferred sales charge (“CDSC”) of 0.75% may be imposed on certain
redemptions of Class A shares purchased without an initial sales charge if any
of those shares are redeemed within 18 months of purchase. This charge will be
based on either the cost of the shares or NAV at the time of redemption,
whichever is lower. No CDSC is imposed on shares representing reinvested
distributions.
Prospectus | 43
More
information is available in CDSC
Reductions and Waivers for Class A and Class C Shares and
Appendix
A – Variations in Sales Charge Reductions and Waivers Available Through Certain
Intermediaries. All
Class A purchases are subject to the terms described herein except for those
purchases made through the intermediaries specified in Appendix A.
CDSC
for Class C Shares
You will
pay a 1.00% CDSC on any Class C shares you sell within 12 months of purchase.
The CDSC is based on the current value of the shares being sold or their NAV
when purchased, whichever is less. There is no CDSC on shares you acquire by
reinvesting your dividends or capital gains distributions. You may be eligible
for reduction or waiver of this CDSC under certain circumstances. There is no
CDSC imposed when you exchange your shares for Class C shares of another USAA
Fund or Victory Fund; however, your exchange is subject to the same CDSC
schedule that applied to your original purchase.
An
investor may, within 90 days of a redemption of Class C shares, reinvest all or
part of the redemption proceeds in the Class C shares of any USAA Fund or
Victory Fund at the NAV next computed after receipt by the transfer agent of the
reinvestment order. Class C share proceeds reinvested do not result in a refund
of any CDSC paid by the shareholder, but the reinvested shares will be treated
as CDSC-exempt upon reinvestment. The shareholder must ask the Distributor for
such privilege at the time of reinvestment.
To keep
your CDSC as low as possible, each time you sell shares we will first sell any
shares in your account that are not subject to a CDSC. If there are not enough
of these to meet your sale, we will sell the shares in the order they were
purchased.
More
information is available in CDSC
Reductions and Waivers for Class A and Class C Shares and
Appendix
A – Variations in Sales Charge Reductions and Waivers Available Through Certain
Intermediaries.
CDSC
Reductions and Waivers for Class A and Class C Shares
No CDSC is
imposed on redemptions of Class A and Class C shares in the following
circumstances:
❖ To the
extent that the shares redeemed:
◾are
no longer subject to the holding period for such shares;
◾resulted
from reinvestment of distributions; or
◾were
exchanged for shares of another USAA Mutual Fund or Victory Fund as
allowed by the prospectus, provided that the shares acquired in such exchange or
subsequent exchanges will continue to remain subject to the CDSC, if applicable,
calculated from the original date
44 | USAA Index Funds
of
purchase until the applicable holding period expires. In determining
whether the CDSC applies to each redemption, shares not subject to a CDSC are
redeemed first;
❖ Following
the death or post-purchase disability of:
◾a
registered shareholder on an account; or
◾a
settlor of a living trust, of shares held in the account at the time of
death or
initial determination of post-purchase disability;
❖ Distributions
from individual retirement accounts, Section 403(b), Section 457, and Section
401 qualified plans, where redemptions result from:
◾required
minimum distributions with respect to that portion of such contributions
that does not exceed 12% annually;
◾tax
free returns of excess contributions or returns of excess deferral amounts;
◾distributions
on the death or disability of the account holder;
◾distributions
for the purpose of a loan or hardship withdrawal from a participant
plan balance; or
◾distributions
as a result of separation of service;
❖ Distributions
as a result of a Qualified Domestic Relations Order or Domestic Relations Order
required by a court settlement;
❖ In
instances where the investor’s dealer or institution waived its commission in
connection with the purchase and notifies the Distributor prior to the time of
investment;
❖ When the
redemption is made as part of a Systematic Withdrawal Plan (including
dividends), up to an annual amount of 12% of the account value on a per fund
basis, at the time the withdrawal plan is established; or
❖ Participant-initiated
distributions from employee benefit plans or participant-initiated exchanges
among investment choices in employee benefit plans.
Eligibility
Requirements to Purchase R6 Shares
Class R6
shares may only be purchased by or through:
◾Endowment
funds and foundations;
Prospectus | 45
◾Retirement
plans, including Section 401 and 457 plans, section 403 plans
sponsored by a section 501(c)(3) organization, employer sponsored benefit plans
(including health savings accounts) and certain non-qualified deferred
compensation arrangements that operate in a similar manner to qualified plans;
◾Advisory
programs with an approved financial intermediary in which the
financial intermediary typically charges the investor a fee based upon the value
of the account (“Advisory Program”); and
◾Registered
investment companies.
Such
investments may be subject to additional rules or requirements of the applicable
Advisory Program.
The R6
Shares are not available to retail accounts, traditional or Roth IRAs, SEPs,
SARSEPs, SIMPLE IRAs, or 529 Education Savings Plans.
Eligibility
of Individuals Associated with the Funds and Fund Service Providers
Current
and retired trustees of Victory advised funds and the officers, directors,
trustees, employees, and family members of employees of the Adviser or
Affiliated Providers are eligible to purchase the lowest expense share class
offered by the Fund. In the case of Class A shares, such purchases are not
subject to a front-end sales charge. “Affiliated Providers” are affiliates of
the Adviser and organizations that provide services to USAA Mutual Funds Trust
(the “Trust”).
Additional
Information Regarding Financial Intermediaries
Your
ability to purchase, exchange, redeem, and transfer shares will be affected by
the policies of the financial intermediary through which you do business. Some
policy differences may include: minimum investment requirements, exchange
policies, fund choices, cutoff time for investments, and trading
restrictions.
In
addition, your financial intermediary may charge a transaction or other fee for
the purchase or sale of shares of the Fund. Those charges are retained by the
financial intermediary and are not shared with us. Please contact your financial
intermediary or plan sponsor for a complete description of its policies.
Copies of
each Fund's annual report, semi annual report, and SAI are available from your
financial intermediary or plan sponsor.
46 | USAA Index Funds
How
to Buy Shares
Opening
an Account With the Funds
You may
purchase shares directly from the Fund or through certain investment
professionals (e.g., financial intermediaries) as described below. If you
already have an account with us, you will not need to fill out another
application to invest in another fund, including other funds managed by the
Adviser (together with the Fund, we refer to these as the “Affiliated Funds” or
so simply as the “Funds”), unless the registration is different or we need
further information to verify your identity.
As
required by federal law, we must obtain certain information from you prior to
opening an account with us. If we are unable to verify your identity, we may
refuse to open your account, or we may open your account and take certain
actions without prior notice to you, including restricting account transactions
pending verification of your identity. You may be asked for a copy of your
driver’s license, passport, or other identifying documents as part of this
process which may be cross-referenced against a consumer report or other
electronic database. Additional information may be required to open accounts for
corporations and other entities. If we subsequently are unable to verify your
identity within a reasonable time, we may close your account or take other
appropriate action. If your account is closed for this reason, your shares will
be redeemed at the next calculated NAV. We prohibit opening accounts for certain
investors, including but not limited to, foreign financial institutions, shell
banks, correspondent accounts for foreign shell banks, and correspondent
accounts for foreign financial institutions. A “foreign shell bank” is a foreign
bank without a physical presence in any country. A “correspondent account” is an
account established for a foreign bank to receive deposits from, or to make
payments or other disbursements on behalf of, the foreign bank, or to handle
other financial transactions related to such foreign bank.
Each
shareholder named on an account with us must provide a Social Security number or
other taxpayer identification number to avoid “backup” tax withholding required
by the Internal Revenue Code of 1986, as amended (the “Code”).
Effective
Date of Purchase
Purchase,
exchange, and redemption requests are not processed until received in proper
form. “Proper form” means actual receipt of the order along with all information
and supporting documentation necessary to effect the transaction. Complete
information may include any verification or confirmation of identity that the
Funds' transfer agent or other authorized Fund agent may request. For purchase
requests, “proper form” also generally includes receipt of sufficient funds to
effect the purchase. Each Fund, its transfer agent, or any authorized Fund agent
may, in its sole discretion, determine whether any particular
Prospectus | 47
transaction
request is in good order and reserve the right to change or waive any good order
requirement at any time. Financial intermediaries may have their own
requirements for recognizing a transaction in proper form or good order. If you
hold your shares through a financial intermediary, please contact them for
specific proper form or good order requirements.
When you
make a purchase, your purchase price will be the NAV per share next calculated
after we or the financial intermediary receive your request in “proper form.”
Each Fund’s NAV per share is calculated as of the close of the regular trading
session (generally 4 p.m. Eastern time) of the New York Stock Exchange (“NYSE”)
each day it is open for trading. If we or the financial intermediary receive
your purchase request in proper form prior to that time, your purchase price
will be the NAV per share calculated for that day. If we or the financial
intermediary receive your purchase request in proper form after that time, the
purchase price will be the NAV per share calculated as of the close of the next
regular trading session of the NYSE.
The Funds
or the Funds' Distributor or transfer agent may enter into agreements with
Servicing Agents (such as financial intermediaries or plan sponsors), which hold
shares of a Fund in omnibus accounts for their customers, under which the
Servicing Agents are authorized to receive orders for shares of a Fund on a
Fund’s behalf. Under these arrangements, a Fund will be deemed to have received
an order when an authorized Servicing Agent receives the order. Accordingly,
customer orders will be priced at the respective Fund’s NAV per share next
calculated after they are received by an authorized Servicing Agent even though
the orders may be transmitted to the Fund by the Servicing Agent after the time
a Fund calculates its NAV.
Paying
for Your Initial Purchase
If you
hold an account directly with a Fund and you plan to purchase shares from us
with a check, the instrument must be written in U.S. dollars and drawn on a U.S.
bank. In addition, initial purchases into an account by electronic funds
transfer or check may be held for up to 30 days before any redemptions may be
processed. We do not accept the following foreign instruments: checks, money
orders, traveler’s checks, or other similar instruments. In addition, we do not
accept cash or coins. If you plan to purchase shares through a financial
intermediary, please check with that financial intermediary regarding acceptable
forms of payment.
Minimum
Initial Purchase
Member
Shares: (USAA 500 Index Fund Only)
Fund Shares: (USAA Nasdaq-100 Index Fund and USAA Extended Market Index Fund)
Fund Shares: (USAA Nasdaq-100 Index Fund and USAA Extended Market Index Fund)
$3,000
minimum. However, financial intermediaries may set different investment
minimums, and the respective Fund reserves the right to waive or lower purchase
minimums in certain circumstances.
48 | USAA Index Funds
Reward
Shares: (USAA 500 Index Fund Only)
$100,000
minimum for new investors. Alternatively, investors who hold Member Shares and
whose account balance in the Fund is at least $100,000 or who have an account
through a discretionary managed account program will have their Member Shares
converted to Reward Shares (see the section titled How
to Exchange Shares and Class Conversions). Until
we verify that you are indeed eligible for Reward Shares, you will hold Member
Shares, which will be converted to Reward Shares upon verification.
Institutional
Shares: (USAA Nasdaq-100 Index Fund Only)
$1
million. However, the Fund reserves the right to waive or lower purchase
minimums in certain circumstances.
Class
A and Class C Shares: (USAA Nasdaq-100 Index Fund Only)
$2,500
minimum ($1,000 for IRA accounts, gift/transfer to minor accounts, and purchases
through automatic investment plans). However, financial intermediaries may set
different investment minimums, and the Fund reserves the right to waive or lower
purchase minimums in certain circumstances. For Class C shares, individual
purchases of $250,000 and above will automatically be made in Class A
shares.
If your
account falls below the minimum investment amount, we may ask you to reestablish
the minimum investment. If you do not do so within 60 days, we may close your
account and send you the value of your account.
The
minimum investment required to open an account may be waived or lowered for
employees, and immediate family members of the employee, of the Adviser, the
Administrator, and their affiliates. In addition, the minimum investment
required may be waived when the Fund is purchased through an Advisory Program or
within qualified retirement plans or in other similar
circumstances.
R6
Shares: (USAA Nasdaq-100 Index Fund Only)
There is
no minimum investment amount for R6 Shares. However, financial intermediaries or
plan recordkeepers may require participants to meet different investment
minimums.
Additional
Purchases
Member
Shares and Reward Shares: (USAA 500 Index Fund Only)
Fund Shares: (USAA Nasdaq-100 Index Fund and USAA Extended Market Index Fund)
Fund Shares: (USAA Nasdaq-100 Index Fund and USAA Extended Market Index Fund)
$50 per
transaction minimum, per account. A Fund reserves the right to waive or lower
purchase minimums in certain circumstances.
Prospectus | 49
Institutional
Shares: (USAA Nasdaq-100 Index Fund Only)
There is
no subsequent purchase minimum for investments in Institutional
Shares.
Class
A and Class C Shares: (USAA Nasdaq-100 Index Fund Only)
$50 per
transaction minimum, per account.
R6
Shares: (USAA Nasdaq-100 Index Fund Only)
There is
no subsequent purchase minimum investment amount for R6 Shares. However,
financial intermediaries or plan recordkeepers may require participants to meet
different subsequent purchase requirements.
Contacting
the USAA Mutual Funds
The
following features may be available to you to purchase, exchange, and redeem
shares of a Fund you hold in an account opened directly with a Fund. Once you
have an existing account, you can make additional investments at any time in any
amount (subject to any minimums) in the following ways. All website transactions
should be placed online at vcm.com.
Internet
Access
◾Review
account information and make most account transactions. This includes
making purchases, exchanges, and redemptions; reviewing account activity;
checking balances; and more.
Mobile
Access
◾Review
account information and make most account transactions.
Telephone
Access
◾To
access account information and make account transactions, call toll free (800)
235-8396 during normal business hours to speak with a member service
representative.
Mail
◾If
you would like to make a purchase or request a redemption by mail, send your
written instructions to:
Regular
Mail:
USAA
Mutual Funds
P.O. Box 182593
Columbus, OH 43218-2593
P.O. Box 182593
Columbus, OH 43218-2593
Registered
or Express Mail:
USAA
Mutual Funds
4249 Easton Way
Suite 400
Columbus, OH 43219
4249 Easton Way
Suite 400
Columbus, OH 43219
50 | USAA Index Funds
Bank
Wire
◾To
add to your account or request a redemption by bank wire, visit the vcm.com
website or call (800) 235-8396 for instructions. This helps to ensure that your
account will be credited or debited promptly and correctly. Any commercial bank
can transfer same-day funds by wire.
◾Although
the transfer agent currently does not charge you for receiving same-day
funds, it reserves the right to charge for this service in the future. Your bank
may charge you for wiring same-day funds.
Electronic
Funds Transfer
◾Additional
purchases on a regular basis may be deducted electronically from a
bank account. To sign up for these services when opening an account, visit the
vcm.com website or call (800) 235-8396 for assistance. Currently, the Fund does
not charge a fee for electronic transfers, but it reserves the right to charge
for this service in the future. Your originating bank may charge a fee for
electronic transfers.
How
to Exchange Shares and Class Conversions
The shares
of any class of a Fund may be exchanged for the shares of any other class
offered by the Fund or the same class, or any other class, of any other USAA
Mutual Funds, either through your investment professional or directly through
the Fund, subject to the conditions described below:
◾Exchanges
are subject to any CDSC, minimum investment limitation, or
eligibility requirements described in the applicable prospectus and SAI. You may
be required to provide sufficient information to establish eligibility to
exchange into a new share class.
◾To
exchange between USAA Mutual Funds, the other USAA Mutual Fund you
wish to exchange into must be eligible for exchange with your Fund.
◾Shares
of the USAA Mutual Fund selected for exchange must be available
for sale in your state of residence.
If you
have questions about these, or any of the Fund’s other exchange policies, please
consult your customer service representative or your Investment Professional
before requesting an exchange.
Before
exchanging, you should read the prospectus of the Fund you wish to exchange
into, which may be subject to different risks, fees, and
expenses.
Prospectus | 51
Other
Exchange Rules You Should Know
If you
have opened an account directly with a Fund, you may make exchanges on vcm.com.
After we receive the exchange orders, the Fund’s transfer agent will
simultaneously process exchange redemptions and purchases at the share prices
next calculated pursuant to the procedures set forth herein. See Effective
Date of Purchase for
additional information. The investment minimums applicable to share purchases
also apply to exchanges.
If you
hold shares of a Fund in an account with a financial intermediary or plan
sponsor, the policies and procedures on an exchange may differ from those
discussed in this prospectus. Additional fees also may apply to your investment
in a Fund, including a transaction fee, if you buy, sell, or exchange shares of
a Fund through a broker or other Investment Professional. For more information
on these fees, check with your Investment Professional.
An
exchange of Fund shares for shares of another USAA Mutual Fund constitutes a
sale for tax purposes unless the exchange is made within an IRA or other
tax-deferred account.
The Fund
may refuse any exchange purchase request if the Adviser determines that the
request is associated with a market timing strategy. The Fund may terminate or
modify the exchange privilege at any time upon 60 days’ notice to shareholders.
For
information on how to exchange shares of a Fund that were purchased through your
employer’s retirement plan, including any restrictions and charges that the plan
may impose, please consult your employer.
Conversion
into Reward Shares
The
following discussion applies to the USAA 500 Index Fund only. We will convert
Member Shares into Reward Shares if you meet either of the following
criteria:
◾Your
account balance in the Fund is at least $100,000; or
◾You
hold Member Shares through a discretionary managed account program.
Conversion
into Member Shares
If you no
longer meet the requirements for our Reward Shares, the Fund may reclassify your
Reward Shares into Member Shares. A decline in your account balance due to
redemption or exchange may result in such a conversion. Market movement alone,
however, will not result in a conversion. The Fund will notify you in writing
before any mandatory conversion into Member Shares.
52 | USAA Index Funds
If your
account held Reward Shares as of April 30, 2006, and does not satisfy the above
criteria, you may continue to hold Reward Shares and are eligible to purchase
additional Reward Shares in your account, provided that you continue to satisfy
the eligibility criteria that were previously in effect and on which the
purchase of your Reward Shares was based. A conversion between share classes of
the same fund is a non-taxable event.
Class
C Share Conversion
Class C
shares of the Fund will automatically convert to Class A shares in the month
following the eight-year anniversary date of the purchase of the Class C shares.
Your financial intermediary may have a conversion schedule that is shorter than
eight years. Class C conversions will be effected at the relative NAV of each
such class without the imposition of any sales charge, fee or other
charge.
You may be
able to voluntarily convert your Class C shares before the stated anniversary to
a different share class of the same Fund that has a lower total annual operating
expense ratio provided certain conditions are met. This voluntary conversion
feature is intended for shares held through a financial intermediary offering a
fee-based or wrap fee program that has an agreement with the Adviser or the
Distributor specific for this purpose. Generally, Class C shares are not
eligible for conversion until the applicable CDSC period has expired. Please
contact your financial intermediary for additional information.
Other
Conversions
Under
certain circumstances, we may convert your (i) Institutional Shares to Fund
Shares and (ii) Class A shares to Fund Shares or Institutional Shares, as
applicable.
The Fund
also may provide for other conversion privileges from time to time under which a
shareholder of the Fund may convert shares into another class of shares of the
same Fund under certain circumstances, subject to approval by the Fund’s
officers. For example, subject to approval by the Fund’s officers, a shareholder
may convert shares of one class of the Fund held through an eligible advisory
program into shares of another class of the Fund (if available) with a lower
expense ratio, provided that following the conversion the shareholder meets
applicable eligibility requirements for the class into which the shareholder
seeks to convert (as described in this prospectus).
Pricing
When a
conversion occurs, you receive shares of one class of a fund for shares of
another class of the same fund. At the time of conversion, the dollar value of
the “new” shares you receive equals the dollar value of the “old” shares that
were converted. In other words, the conversion has no effect on
Prospectus | 53
the value
of your investment in the fund at the time of the conversion. However, the
number of shares you own after the conversion may be greater than or less than
the number of shares you owned before the conversion, depending on the NAVs per
share of the two share classes. A conversion between share classes of the same
fund is a non-taxable event.
Conversions
are not subject to the Fund's restrictions on short-term trading activity
discussed under Excessive
Short-Term Trading.
How
to Sell Shares
Shareholders
will receive a redemption price of the NAV per share next calculated after we
receive the redemption request in “proper form” as provided under Effective
Date of Purchase. If we
receive the redemption request in proper form prior to the close of the NYSE’s
regular trading session (generally 4 p.m. Eastern time), the redemption price
will be the NAV per share calculated for that day. If we receive the redemption
request after that time, the redemption price will be the NAV per share
calculated as of the close of the next regular trading session of the
NYSE.
Under
certain circumstances and when deemed to be in the Fund’s best interests,
proceeds may not be sent to intermediaries for up to seven days after receipt of
the redemption order.
There are
a number of convenient ways to sell your shares. If you have a direct account
with a Fund, you may redeem shares of a Fund on the Internet, by telephone, or
by mail on any day the NAV per share is calculated. You can use the same mailing
addresses listed under the section titled How
to Buy Shares.
By
Internet
Log on to
your account using vcm.com and place your redemption request.
By
Telephone
Call toll
free (800) 235-8396 during normal business hours. You have the following options
for receiving your redemption proceeds:
◾Mail
a check to the address of record;
◾Wire
funds to a previously designated domestic financial institutional;
◾Mail
a check to a previously designated alternate address; or
◾Electronically
transfer your redemption via EFT to a previously designated
domestic financial institution.
Each Fund
has undertaken certain authentication procedures regarding telephone
transactions and will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. Before any discussion regarding your
account, we will obtain certain information from you to verify
54 | USAA Index Funds
your
identity. Additionally, your telephone calls may be recorded or monitored, and
confirmations of account transactions are sent to the address of record or by
electronic delivery to your designated e-mail address.
By
Mail
Use the
regular U.S. mail or overnight mail address to redeem shares. Send us a letter
of instruction indicating your Fund account number, amount of redemption, and
where to send the proceeds.
By
Wire
If you
want to receive your proceeds by wire, you must establish a Fund account that
will accommodate wire transactions. If you call before the close of trading on
the NYE, your funds will be wired on the next business day.
By
Electronic Funds Transfer (“EFT”)
Normally,
your redemptions will be processed on the same day, but will be processed on the
next day if received after close of trading on the NYSE. It will be transferred
by EFT as long as the transfer is to a domestic bank.
Additional
Information About Redemptions
Each Fund
may elect to suspend the redemption of shares or postpone the date of payment in
limited circumstances (e.g., if the NYSE is closed or when permitted by order of
the SEC).
Under
normal market conditions, each Fund typically expects to meet redemption
requests by paying out proceeds from cash or cash equivalent portfolio holdings,
or by selling portfolio holdings. Under deteriorating market conditions or
market stress, a Fund also may borrow to meet redemption requests. A Fund and
the other Affiliated Funds are limited as to the amount that each may
individually and collectively borrow in these circumstances. As a result,
borrowings available to a Fund may be insufficient to satisfy Fund redemption
requests. In addition, a Fund reserves the right to honor redemption orders
wholly or partly with in-kind distributions of Fund portfolio securities instead
of cash.
Fund
Shares, Member Shares, and Reward Shares:
If you
hold shares of a Fund through an account directly with a Fund, a Fund typically
expects to pay out redemption proceeds on the next business day after your order
is received in proper form; however, it may take up to seven days to send your
proceeds.
Payment
for redemption of shares purchased by electronic funds transfer (“EFT”) or check
will be sent after the EFT or check has cleared, which could take up to 30 days
from the initial purchase date into the Fund and, for any subsequent purchases
into the Fund, seven business days from the purchase date.
Prospectus | 55
If you
choose to have your redemption proceeds mailed to you and either the U.S. Postal
Service is unable to deliver the distribution check to you or the check remains
outstanding for more than six months, the Fund reserves the right to reinvest
the check in shares of the Fund at its then current NAV until you give the Fund
different instructions. No interest will accrue on amounts represented by
uncashed redemption checks.
If you
hold shares of a Fund with a financial intermediary, please contact your
financial intermediary regarding redemption policies. Normally, a Fund transmits
proceeds to intermediaries for redemption orders that are received in proper
form on the next business day after receipt.
Institutional
Shares:
Institutional
Shares typically expect to pay out redemption proceeds on the next business day
after your order is received in proper form; however, it may take up to seven
days to send your proceeds.
Class
A and Class C Shares:
Check with
your financial intermediary for its policies on redemptions. Class A and Class C
shares purchased through a financial intermediary should be redeemed through the
financial intermediary. The Fund typically expects to transmit proceeds to
intermediaries for redemption orders received in proper form on the next
business day after receipt.
R6
Shares:
R6 Shares
generally may be purchased or redeemed only through employer-sponsored
retirement plans where a financial intermediary provides retirement
recordkeeping services to plan participants. Check with your financial
intermediary or plan sponsor for its policies on redemptions. Normally, the Fund
transmits proceeds to intermediaries and eligible institutional investors
(foundations and endowment funds) for redemption orders received in proper form
on the next business day after receipt.
For
federal income tax purposes, a redemption of shares of a Fund is a taxable
event, upon which you may recognize a capital gain or loss (unless you hold the
shares of the Fund in a tax-deferred account or are a tax-exempt investor). A
capital gain or loss is based on the difference between your basis in the
redeemed shares and the proceeds you receive upon their redemption. See
Important
Information About Taxes for
information regarding basis election and reporting.
Information
About Fees
The Funds
are comprised of multiple classes of shares. Each class shares the respective
Fund's investment objective and investment portfolio. The classes have different
fees, expenses, and/or minimum investment requirements. The difference in the
fee structures between the classes is primarily the result of
56 | USAA Index Funds
their
separate arrangements for shareholder and distribution services and performance
fee arrangements. It is not the result of any difference in the base investment
management, custodial fee rate schedules, or other expenses related to the
management of the Funds' assets, which do not vary by class. Shareholders of R6
Shares do not require the same level of shareholder and administrative services
from the USAA
Nasdaq-100 Index Fund as
shareholders of the other classes. Different fees and expenses will affect
performance.
Except as
described below, the share classes have identical voting, dividend, liquidation,
and other rights, preferences, terms, and conditions. The primary differences
between the classes are: (a) each class may be subject to different expenses
specific to that class; (b) each class has a different identifying designation
or name; (c) each class has exclusive voting rights with respect to matters
solely affecting that class; and (d) each class may have different purchase,
exchange, and redemption privileges.
Distribution
and Service Plans
In
accordance with Rule 12b-1 under the Investment Company Act of 1940, the Trust
has adopted Distribution and Service Plans for Class A and Class C shares of the
Fund.
Under the
Class A Distribution and Service Plan, the Fund will pay to the Distributor a
monthly fee at an annual rate of up to 0.25% of its average daily net assets of
its Class A shares. The fee is paid for general distribution services and for
providing personal services to shareholders. Distribution and selling services
are provided by the Distributor or by agents of the Distributor and include
those services intended to result in the sale of the Fund’s shares.
Personal
services to shareholders generally are provided by broker-dealers or other
financial intermediaries and consist of responding to inquiries, providing
information to shareholders about their Fund accounts, establishing and
maintaining accounts and records, providing dividend and distribution payments,
arranging for bank wires, assisting in transactions, and changing account
information.
Under the
Class C Distribution and Service Plan, the Fund will pay to the Distributor a
monthly fee at an annual rate of 1.00% of the average daily net assets of its
Class C shares. Of this amount, 0.75% of the Fund’s Class C shares average daily
net assets will be paid for general distribution services and for selling Class
C shares. The Fund will pay 0.25% of its Class C shares average daily net assets
to compensate financial institutions that provide personal services to Class C
shareholders of the Fund. Distribution and selling services are provided by the
Distributor or by agents of the Distributor and include those services intended
to result in the sale of the Fund's Class C shares. Personal services to
shareholders are generally provided by broker-dealers or other financial
intermediaries and consist of responding to inquiries, providing information to
shareholders about their Fund accounts,
Prospectus | 57
establishing
and maintaining accounts and records, providing dividend and distribution
payments, arranging for bank wires, assisting in transactions and changing
account information.
Because
Rule 12b-1 fees are paid out of the Fund’s assets and on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges. For additional information about the
Rule 12b-1 Plan and its terms, see Distribution
and Service Plans in the
SAI.
Payments
to Financial Intermediaries
Certain
financial intermediaries perform recordkeeping, networking, administrative,
sub-transfer agency, and shareholder services for their clients with respect to
their investments in a Fund that otherwise would be performed by the Fund’s
transfer agent or administrator and shareholder servicing agent.
In some
circumstances, we, or one of our affiliates, will pay a financial intermediary
for these services out of our own resources, including any profits from the
advisory fees the Adviser receives from the Funds. In other circumstances, a
Fund will pay a fee to the financial intermediary for performing those services.
A Fund will not pay financial intermediaries more than it would pay its direct
service providers for transfer agency, administration, and/or shareholder
services. In cases where intermediary fees are higher due to differences in the
services being provided or other factors, the additional amounts will be paid by
us and/or the Distributor. In addition, these payments generally are based on
either (1) a percentage of the average daily net assets of Fund shareholders’
accounts serviced by a financial intermediary or (2) a fixed dollar amount for
each account serviced by a financial intermediary. The aggregate amount of these
payments may be substantial.
In
addition, we and the Funds' Distributor may make payments to intermediaries for
various additional services, other expenses, and/or the financial
intermediaries’ distribution of shares of a Fund. Such payments are sometimes
referred to as “revenue sharing” and generally are negotiated with a financial
intermediary on the basis of such factors as the number or value of shares of a
Fund that the financial intermediary sells or may sell; the value of client
assets invested; or the type and nature of services or support furnished by the
financial intermediary.
We (and
our affiliates) also may pay fixed fees for the listing of a Fund on a
broker-dealer’s or financial intermediary’s system. Such payments are not
considered to be revenue sharing payments.
The
USAA
Nasdaq-100 Index Fund does not
pay any service, distribution, or administrative fees to financial
intermediaries on R6 Shares. As a result, the R6 Shares pay lower
fees.
58 | USAA Index Funds
Distribution
and Taxes
Dividends
and Other Distributions
As a
shareholder, you are entitled to your share of net income and capital gains on
the Fund’s investments. The Fund passes its earnings along to investors in the
form of dividends. Dividends paid by the Fund represent the net income from
dividends and interest earned on investments after expenses. The Fund will
distribute short-term gains, as necessary; and if the Fund makes a long-term
capital gain distribution, it normally is paid once a year in
December.
You should
check the Fund’s distribution schedule before you invest. If you buy shares of
the Fund shortly before it makes a distribution, some of your investment may
come back to you as a taxable distribution.
The
USAA
500 Index Fund pays
distributions of net investment income (“dividends”) quarterly. The USAA
Nasdaq-100 Index Fund and
USAA
Extended Market Index Fund pay
distributions of net investment income (“dividends”) annually. Each Fund may
make additional distributions to shareholders, or may not make a distribution,
when considered appropriate or necessary. For example, a Fund could make one or
more additional distributions to avoid the imposition of any federal income or
excise taxes, or it may not make a distribution to limit returns of
capital.
Any
distribution made by a Fund will reduce the NAV per share of the class by the
amount of the distribution on the ex-distribution date. You should consider
carefully the effects of purchasing shares of the Fund shortly before any
distribution (as explained below under Important
Information About Taxes). Some or
all distributions may be subject to taxes.
Distributions
can be received in one of the following ways:
Reinvestment
Option
Each Fund
automatically reinvests all income dividends and capital gain distributions, if
any, on a share class in additional shares of that class unless you request to
receive those distributions in cash by way of check or by way of electronic
funds transfer.
Directed
Bank Account Option
When you
choose to receive cash dividends by way of electronic funds transfer to your
bank checking or savings account, we will send them to you after the
distribution date each month. The share price will be the NAV per share of the
class computed on the ex-distribution date.
Prospectus | 59
Cash
Option
If you
elect to receive your distributions by check, and the distribution amount is $25
or less, the amount will automatically be reinvested in the Fund. Otherwise, a
check will be mailed to you no later than seven days after the dividend payment
date. If you choose to have your distribution proceeds mailed to you and either
the U.S. Postal Service is unable to deliver the distribution check to you or
the check remains outstanding for at least six months, the distribution option
on your account will default to the reinvestment option as described above. Each
Fund reserves the right to reinvest the check in shares of the Fund at its then
current NAV until you give the Fund different instructions. No interest will
accrue on amounts represented by uncashed distribution checks. Each Fund will
invest in your account any dividend or other distribution payment returned to
the Fund by your financial institution at the current NAV per
share.
Income
Earned Option
You can
automatically reinvest your dividends in additional Fund shares and have your
capital gains paid in cash, or reinvest capital gains and have your dividends
paid in cash.
Directed
Distributions Option
If you own
shares in more than one USAA Mutual Fund, you may direct that dividends and/or
capital gain distributions received from one USAA Mutual Fund be used to
purchase shares automatically in the same class of another USAA Mutual
Fund.
Important
Information About Taxes
The
following tax information is quite general and refers to the federal income tax
law in effect as of the date of this prospectus.
Treatment
of the Fund
Each Fund,
which is treated as a separate corporation for federal tax purposes, has
qualified for each past taxable year, and intends to continue to qualify, for
treatment as a “regulated investment company” under the Internal Revenue Code of
1986, as amended (the “Code”). By doing so, each Fund (but not its shareholders)
is relieved of federal income tax on the part of its investment company taxable
income and net capital gain if any, that it distributes to its
shareholders.
Shareholder
Taxation
◾Distributions
that shareholders receive from a Fund generally are subject to
federal income tax and may be subject to state and/or local taxes.
60 | USAA Index Funds
◾Dividends
and distributions of net short-term gains are taxable to you as
ordinary income, whether received in cash or reinvested in additional shares of
a Fund or another USAA Mutual Fund.
◾A
portion of a Fund’s dividends (which is not expected to be substantial)
may qualify for (1) the 50% dividends-received deduction available to
corporations, and (2) the lower maximum federal income tax rates applicable to
“qualified dividend income” of individuals and certain other non-corporate
shareholders (each, an “individual shareholder”) who satisfy certain holding
period and other restrictions with respect to their shares of a Fund—a maximum
of 15% for a single shareholder with taxable income not exceeding $445,850
($501,600 for married shareholders filing jointly) and 20% for those individual
shareholders with taxable income exceeding those respective amounts (which are
effective for 2021 and will be adjusted for inflation annually thereafter).
◾Regardless
of the length of time you have held shares of a Fund, distributions
of net capital gains that a Fund realizes are taxable to you as long-term
capital gains, whether received in cash or reinvested in additional shares of a
Fund, and are taxed to individual shareholders at the 15% and 20% tax rates
described above.
◾You
may realize a capital gain or loss for federal income tax purposes on a
redemption or an exchange (which is treated like a redemption for those
purposes) of shares of a Fund. Your gain or loss is based on the difference, if
any, between your basis in the redeemed (or exchanged) shares and the redemption
proceeds (or the aggregate NAV of the shares of the fund into which you
exchange) you receive. Any capital gain an individual shareholder recognizes on
a redemption or exchange of his or her shares of a Fund that have been held for
more than one year will qualify for the 15% and 20% tax rates.
◾An
individual shareholder is subject to a 3.8% federal tax on the lesser
of (1) the
individual’s “net investment income,” which generally includes taxable
distributions a Fund pays and net gains realized on the redemption or exchange
of shares of the Fund, or (2) the excess of his or her “modified adjusted gross
income” over $200,000 (or $250,000 if married and filing jointly). This tax is
in addition to any other taxes due on that income.
◾Your
basis in shares of a Fund that you acquired after December 31, 2011,
(“Covered Shares”) will be determined in accordance with a Fund’s default
method, which is average basis, unless you affirmatively elect in writing (which
may be electronic) to use a different acceptable basis determination method,
such as a specific identification method. The basis determination method you
elect (or the default method) may not be changed with respect to a redemption of
Covered Shares after the settlement date of the redemption.
Prospectus | 61
◾The
Fund may provide estimated capital gain distribution information through
the website at VictoryFunds.com.
◾Tax
statements will be mailed from the Fund by mid-February showing the
amounts and tax status of distributions made to you in the prior calendar
year.
◾Because
your tax treatment depends on your purchase price and tax position,
you should keep your regular account statements for use in determining your
tax.
◾You
should review the more detailed discussion of federal income tax considerations
in the SAI and consult your tax adviser regarding the federal, state, local, or
foreign tax consequences resulting from your investment in the
Fund.
Taxpayer
Identification and Backup Withholding
◾Each
shareholder named on an account with us must provide a Social Security
number or other taxpayer identification number to avoid “backup” tax withholding
required by the Code. Federal law requires each Fund to withhold and remit to
the U.S. Treasury 24% of (1) dividends, capital gain distributions, and proceeds
of redemptions, regardless of the extent to which gain or loss may be realized,
otherwise payable to any individual shareholder who fails to furnish a Fund with
a correct taxpayer identification number and (2) those dividends and
distributions otherwise payable to any individual shareholder who underreports
dividend or interest income or fails to certify that he or she is not subject to
backup withholding.
◾Backup
withholding is not an additional tax, and any amounts so withheld
may be credited against a shareholder’s federal income tax liability or
refunded. To avoid this withholding, you must certify on your application, or on
a separate IRS Form W-9 supplied by the Funds' transfer agent, that your
taxpayer identification number is correct and you currently are not subject to
backup withholding.
Important
Fund Policies
and Other Information
and Other Information
Share
Price Calculation
The price
at which you purchase and redeem shares of a Fund is equal to the NAV per share
calculated on the effective date of the purchase or redemption. The NAV per
share is calculated by adding the value of a Fund’s assets (i.e., the value of
its investments and other assets), deducting liabilities, and dividing by the
number of shares outstanding. Shares of a Fund may be purchased and sold at the
NAV per share without a sales charge. A Fund’s NAV per share is calculated as of
the close of the NYSE (generally 4 p.m.
62 | USAA Index Funds
Eastern
time) each day that the NYSE is open for regular trading. The NYSE is closed on
most national holidays and Good Friday.
Valuation
of Securities
The
Adviser has established a Pricing and Liquidity Committee (the “Committee”); and
subject to Board oversight and approval, the Committee administers and oversees
a Fund's valuation policies and procedures. Among other things, these policies
and procedures allow a Fund to utilize independent pricing services, quotations
from securities dealers, and a wide variety of sources and information to
establish and adjust the fair value of securities as events occur and
circumstances warrant.
Equity
securities, including exchange-traded funds (“ETFs”), except as otherwise noted,
traded primarily on domestic securities exchanges or the over-the-counter
markets, are valued at the last sale price or official closing price on the
exchange or primary market on which they trade. Equity securities traded
primarily on foreign securities exchanges or markets are valued at the last
quoted sale price, or the most recently determined official closing price
calculated according to local market convention, available at the time the Fund
is valued. If no last sale or official closing price is reported or available,
the closing bid price generally is used for U.S.-listed equities and the average
of the bid and ask prices is used for foreign listed equities.
Short-term
debt securities with original or remaining maturities of 60 days or less
generally may be valued at amortized cost, provided that amortized cost
represents the fair value of such securities.
Repurchase
agreements are valued at cost.
Investments
in open-end investment companies, commingled, or other funds, other than ETFs,
are valued at their NAV at the end of each business day.
Futures
contracts are valued at the settlement price at the close of market on the
principal exchange on which they are traded or, in the absence of any
transactions that day, the values are based upon the settlement price on the
prior trading date.
Options
contracts are valued at the mean of the last bid and ask prices. Options on
futures are valued at the settlement price determined by the applicable
exchange.
In the
event that price quotations or valuations are not readily available, are not
reflective of market value, or a significant event has been recognized in
relation to a security or class of securities, the securities are valued in good
faith, at fair value, by the Committee in accordance with 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
Prospectus | 63
differ
materially from the fair value price. Valuing these securities at fair value is
intended to cause a Fund’s NAV to be more reliable than it otherwise would
be.
Fair value
methods used by the Funds include, but are not limited to, obtaining market
quotations from secondary pricing services, broker-dealers, other pricing
services, 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,
evaluation of credit quality, and an evaluation of the forces that influenced
the market in which the securities are purchased and sold.
For
additional information on how securities are valued, see Valuation
of Securities in the
Funds' SAI.
Customer
Identification Program
To help
the government fight the funding of terrorism and money laundering activities,
federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens a new account, and to
determine whether such person’s name appears on government lists of known or
suspected terrorists and terrorist organizations.
As a
result, the Victory Funds must obtain the following information for each person
who opens a new account:
◾Name;
◾Date
of birth (for individuals);
◾Residential
or business street address (although post office boxes are still
permitted for mailing); and
◾Social
security number, taxpayer identification number, or other identifying
number.
You may
also be asked for a copy of your driver’s license, passport, or other
identifying document in order to verify your identity. In addition, it may be
necessary to verify your identity by cross-referencing your identification
information with a consumer report or other electronic database. Additional
information may be required to open accounts for corporations and other
entities. Federal law prohibits the Victory Funds and other financial
institutions from opening a new account unless they receive the minimum
identifying information listed above. After an account is opened, the Victory
Funds may restrict your ability to purchase additional shares until your
identity is verified. The Victory Funds may close your account or take other
appropriate action if it is unable to verify your identity within a reasonable
time. If your account is closed for this reason, your shares will be redeemed at
the NAV next calculated after the account is closed.
64 | USAA Index Funds
Statements
and Reports
You will
receive a periodic statement reflecting any transactions that affect the balance
or registration of Fund shares in your account. You will receive a confirmation
after any purchase, exchange, or redemption. If your account has been set up by
an Investment Professional, Fund activity will be detailed in that account’s
statements. Share certificates are not issued. Twice a year, you will receive a
financial report of the Fund. By February 15th of each
year, you will be mailed an IRS form reporting distributions for the previous
year, which also will be filed with the IRS.
Each Fund
will report information to you annually concerning the tax status of your
dividends and other distributions for federal income tax purposes. In addition,
each Fund (or its administrative agent) must report to the IRS and furnish to
its shareholders the basis information for Covered Shares and indicate whether
they had a short-term (one year or less) or long-term (more than one year)
holding period. You should consult with your tax adviser to obtain more
information about how the basis reporting law applies to you.
Shareholder
Communications
In order
to eliminate duplicate mailings to an address at which two or more shareholders
with the same last name reside, each household will receive a single copy of a
Fund’s most recent shareholder reports, proxy statements, prospectuses, and
their supplements, unless you have instructed us to the contrary. This
eliminates duplicate copies and saves paper and postage costs for a Fund.
However, if you would like to receive individual copies, please contact us; and
they will be delivered promptly.
Portfolio
Holdings Disclosure
A
description of a Funds' policies and procedures with respect to the disclosure
of a Funds' portfolio securities is available in a Funds' SAI, which is
available upon request and on the Fund’s website at
VictoryFunds.com.
IRA
Distribution Fee
Each Fund
may apply a distribution fee to all full IRA distributions, except for those due
to death, disability, or divorce. Partial IRA distributions are not charged a
distribution fee.
Account
Balance
Victory
Capital Transfer Agency, Inc., the Funds' transfer agent, may assess annually a
small balance account fee of $12 to each shareholder account with a balance of
less than $2,000 at the time of assessment. Accounts exempt from the fee
include: (1) any account regularly purchasing additional shares each month
through an automatic investment plan; (2) any UGMA/UTMA account; (3) all
(non-IRA) money market fund accounts; (4) any account
Prospectus | 65
whose
registered owner has an aggregate balance of $50,000 or more invested in
Affiliated Funds; and (5) all IRAs (for the first year the account is open). The
fee is not currently being assessed. The Fund will provide advance notice in the
event it is assessed in the future.
Account
Maintenance Fee
With
respect to Member Shares held in the USAA
500 Index Fund, a
maximum account maintenance fee of $10 per year may be charged to your account
if you do not maintain an account balance greater than $10,000, or unless total
household assets with the Adviser exceed $500,000. Household assets include
Mutual Funds, 529 accounts, and other investable assets with the
Adviser.
The $10
account maintenance fee will be deducted automatically from your account by the
transfer agent at a rate of $2.50 per quarter based on your ending balance on
the date the fee is taken, which generally will take place within 30 days of the
Fund’s scheduled quarterly dividend payment. A sufficient number of shares may
be redeemed from your account to pay the account maintenance fee. The amount of
the annual account maintenance fee may be changed upon at least 30 days’ notice
to you.
Excessive
Short-Term Trading
The Funds
generally are not intended as short-term investment vehicles (except for the
money market funds, USAA Short-Term Bond Fund, USAA Ultra Short-Term Bond Fund,
and USAA Tax Exempt Short-Term Fund). Some investors try to profit by using
excessive short-term trading practices involving mutual fund shares, frequently
referred to as “market timing.”
Excessive
short-term trading activity can disrupt the efficient management of a fund and
raise its transaction costs by forcing portfolio managers to first buy and then
sell portfolio securities in response to a large investment or redemption by
short-term traders. While there is no assurance that the Funds can deter all
excessive and short-term trading, the Board has adopted the following policies
(except for the money market funds, USAA Short-Term Bond Fund, USAA Ultra
Short-Term Bond Fund, and USAA Tax Exempt Short-Term Fund). These policies are
designed to deter disruptive, excessive short-term trading without needlessly
penalizing bona fide investors.
To deter
such trading activities, the Funds’ policies and procedures state that:
◾Each
Fund reserves the right to reject any purchase order, including an exchange,
that it regards as disruptive to the efficient management of the particular
fund.
◾Each
Fund may use a fair value pricing service or other model to assist in
establishing the current value of foreign securities held by the Fund. Fair
value pricing is used to adjust for “stale pricing” that may occur between the
close of certain foreign exchanges or markets and the time
66 | USAA Index Funds
when
the Fund calculates its NAV per share. The use of fair value pricing is
intended to deter investors who may be trying to take advantage of time-zone
differences in the valuation of foreign securities and to prevent dilution to
long-term investors. Fair value pricing of a foreign security can result in a
Fund using a price that is higher or lower than the closing price of a foreign
security for purposes of calculating a Fund’s NAV.
The
Funds’ Right to Reject Purchase and Exchange Orders and Limit Trading in
Accounts
The Funds’
main safeguard against excessive short-term trading is their right to reject
purchase or exchange orders if in the best interest of the affected fund. In
exercising this discretion to reject purchase and exchange orders, the Funds
deem that certain excessive short-term trading activities are not in the best
interest of the fund because such activities can hamper the efficient management
of the fund. Generally, persons with a history of three short-term transactions
within 90 days or less are suspected of market timing and the shareholder’s
trading privileges (other than redemption of Fund shares) will be suspended. The
Funds also reserve the right to restrict future purchases or exchanges if an
investor is classified as engaged in other patterns of excessive short-term
trading, including after one large disruptive purchase and redemption or
exchange. Finally, each Fund reserves the right to reject any other purchase or
exchange order in other situations that do not involve excessive short-term
trading activities if in the best interest of the Fund. For this purpose, a
short-term transaction is a purchase or redemption of a Fund and, as applicable,
a subsequent redemption or purchase of the same Fund, or an exchange of all or
part of that same Fund.
The
following transactions are exempt from the excessive short-term trading activity
policies described above:
◾Transactions
in the money market funds, USAA Short-Term Bond Fund, USAA
Ultra Short-Term Bond Fund, and USAA Tax Exempt Short-Term Fund;
◾Purchases
and sales pursuant to automatic investment or withdrawal plans;
◾Purchases
and sales made through USAA 529 Education Savings Plan;
◾Purchases
and sales made in certain separately managed accounts in wrap fee
programs;
◾Purchases
and sales by the USAA Target Retirement Funds, USAA Cornerstone
Conservative Fund, and/or USAA Cornerstone Equity Fund; and
◾Other
transactions that are not motivated by short-term trading considerations
if they are approved by transfer agent management personnel and are not
disruptive to a fund.
Prospectus | 67
If a
person is classified as having engaged in excessive short-term trading, the
remedy will depend upon the trading activities of the investor in the account
and related accounts and its disruptive effect, and can include warnings to
cease such activity and/or restrictions or termination of trading privileges in
a particular Fund or all of the Funds.
The Funds
rely on the transfer agent to review trading activity for excessive short-term
trading. There can be no assurance, however, that its monitoring activities will
successfully detect or prevent all excessive short-term trading. The Funds or
the transfer agent may exclude transactions below a certain dollar amount from
monitoring and may change that dollar amount from time to time.
The Funds
seek to apply these policies and procedures uniformly to all investors; however,
some investors purchase shares of a Fund through financial intermediaries that
establish omnibus accounts to invest in the Funds for their clients and submit
net orders to purchase or redeem shares after combining their client orders. The
Funds subject to the short-term trading policies generally treat these omnibus
accounts as an individual investor and will apply the short-term trading
policies to the net purchases and sales submitted by the omnibus account unless
the Funds or their transfer agent have entered into an agreement requiring the
omnibus account to submit the underlying trading information for their clients
upon our request and/or monitor for excessive trading. For those omnibus
accounts for which we have entered into agreements to monitor excessive trading
or provide underlying trade information, the financial intermediary or Funds
will review net activity in these omnibus accounts for activity that indicates
potential, excessive short-term trading activity. If we detect suspicious
trading activity at the omnibus account level, we will request underlying
trading information and review the underlying trading activity to identify
individual accounts engaged in excessive short-term trading activity. We will
instruct the omnibus account to restrict, limit, or terminate trading privileges
in a particular fund for individual accounts identified as engaging in excessive
short-term trading through these omnibus accounts.
We also
may rely on the financial intermediary to review for and identify underlying
trading activity for individual accounts engaged in excessive short-term trading
activity, and to restrict, limit, or terminate trading privileges if the
financial intermediary’s policies are determined by us to be at least as
stringent as the Funds’ policy. For shares purchased through financial
intermediaries there may be additional or more restrictive policies. You may
wish to contact your financial intermediary to determine the policies applicable
to your account.
Because of
the increased costs to review underlying trading information, the Funds will not
enter into agreements with every financial intermediary that operates an omnibus
account. The Funds or their transfer agent could decide to enter into such
contracts with financial intermediaries for all funds or particular funds and
can terminate such agreements at any time.
68 | USAA Index Funds
Other
Fund Rights
The Funds
reserve the right to:
◾Reject
or restrict purchase or exchange orders when in the best interest of the
Fund;
◾Limit
or discontinue the offering of shares of the Fund without notice to the
shareholders;
◾Calculate
the NAV per share and accept purchase, exchange, and redemption
orders on a business day that the NYSE is closed;
◾Redeem
some or all of its shares in kind when in the best interest of the Fund;
◾Require
a signature guarantee for transactions or changes in account information
in those instances where the appropriateness of a signature authorization is in
question (the SAI contains information on acceptable guarantors);
◾Redeem
an account with less than $500, with certain limitations;
◾Restrict
or liquidate an account when necessary or appropriate to comply
with federal law; and
◾Discontinue
or otherwise limit the opening of accounts with us.
Additional
Information
The Trust
enters into contractual arrangements with various parties, including, among
others, the Funds' adviser, transfer agent, and distributor, who provide
services to the Fund. Shareholders are not parties to, or intended (or
“third-party”) beneficiaries of, any of those contractual arrangements, and
those contractual arrangements are not intended to create in any individual
shareholder or group of shareholders any right to enforce them against the
service providers or to seek any remedy under them against the service
providers, either directly or on behalf of the Trust or a Fund.
This
prospectus provides information concerning the Trust and the Funds that you
should consider in determining whether to purchase shares of a Fund. Neither
this prospectus nor the related SAI is intended to be, or should be read to give
rise to, an agreement or contract between the Trust or a Fund and any investor,
or to give rise to any rights in any shareholder or other person other than any
rights under federal or state law that may not be waived.
Prospectus | 69
Financial
Highlights
The
following financial highlights tables are intended to help you understand the
Funds' and relevant share classes' financial performance over the past five
years or since inception. Certain information reflects financial results for a
single share. To the extent the Fund invests in other funds, the Total Annual
Fund Operating Expenses included in the Fund’s Fees and Expenses Table may not
correlate to the ratio of expenses to average net assets in the financial
highlights below. The total returns in the tables represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all income dividends and capital gain distributions).
The
information has been derived from financial statements audited by Ernst &
Young LLP, an independent registered public accounting firm, whose report, along
with the Funds' financial statements, are included in each Fund’s annual report
to shareholders, which is available upon request.
70 | USAA Index Funds
USAA
Extended Market Index Fund
|
|
Year
Ended December 31, | ||||
|
|
2021 |
2020 |
2019 |
2018 |
2017 |
|
Net
Asset Value, Beginning of Period |
$25.40 |
$20.01 |
$16.14 |
$18.98 |
$17.34 |
|
Investment
Activities |
|
|
|
|
|
|
Net
Investment Income (Loss) |
0.22(a)
|
0.18(a)
|
0.20(a)
|
0.17 |
0.18 |
|
Net
Realized and Unrealized
Gains
(Losses) on Investments |
3.58 |
6.05 |
4.31 |
(1.96) |
2.88 |
|
Total
from Investment Activities |
3.80 |
6.23 |
4.51 |
(1.79) |
3.06 |
|
Distributions
to Shareholders From |
|
|
|
|
|
|
Net
Investment Income |
(0.23) |
(0.21) |
(0.26) |
(0.17) |
(0.18) |
|
Net
Realized Gains from
Investments |
(4.22) |
(0.63) |
(0.38) |
(0.88) |
(1.24) |
|
Total
Distributions |
(4.45) |
(0.84) |
(0.64) |
(1.05) |
(1.42) |
|
Net
Asset Value, End of Period |
$24.75 |
$25.40 |
$20.01 |
$16.14 |
$18.98 |
|
Total
Return* |
15.61% |
31.20% |
27.94% |
(9.70)% |
17.72% |
|
Ratios
to Average Net Assets |
|
|
|
|
|
|
Net
Expenses† |
0.34% |
0.38% |
0.41% |
0.43%(b)
|
0.44% |
|
Net
Investment Income (Loss) |
0.77% |
0.91% |
1.06% |
0.90%(b)
|
0.93% |
|
Gross
Expenses |
0.34% |
0.38% |
0.41% |
0.43%(b)
|
0.44% |
|
Supplemental
Data |
|
|
|
|
|
|
Net
Assets, End of Period (000’s) |
$969,905 |
$906,111 |
$788,664 |
$656,406 |
$765,211 |
|
Portfolio
Turnover |
24% |
31% |
24% |
12%(c)
|
11%(d)
|
*
Assumes
reinvestment of all net investment income and realized capital gain
distributions, if any, during the period. Includes adjustments in accordance
with U.S. Generally Accepted Accounting Principles and could differ from the
Lipper reported return.
†
The net
expense ratio may not correlate to the applicable expense limits in place during
the period since the current contractual expense limitation is applied for a
period beginning July 1, 2019, and in effect through June 30, 2023, instead of
coinciding with the Fund’s fiscal year end. Refer to the Fees and Expenses in
this prospectus for current contractual expense limitations.
(a)
Per share
net investment income (loss) has been calculated using the average daily shares
method.
(b)
Prior to
February 24, 2018, the Fund was a feeder fund in a master-feeder structure
investing in Master Extended Market Index Series (the “Series”) before
converting to a stand-alone fund. Expenses include expenses allocated to the
Fund by the Series prior to the conversion.
(c)
Reflects
the period of February 24, 2018 to December 31, 2018, after the Fund converted
to a stand-alone fund.
(d)
Represents
the portfolio turnover of the Master Extended Market Index
Series.
Prospectus | 71
USAA
500 Index Fund Member Shares
|
|
Year
Ended December 31, | ||||
|
|
2021 |
2020 |
2019 |
2018 |
2017 |
|
Net
Asset Value, Beginning of Period |
$51.33 |
$43.93 |
$35.22 |
$38.00 |
$31.81 |
|
Investment
Activities: |
|
|
|
|
|
|
Net
Investment Income (Loss) |
0.63(a)
|
0.65(a)
|
0.71(a)
|
0.68 |
0.59 |
|
Net
Realized and Unrealized
Gains
(Losses) on Investments |
13.37 |
8.48 |
10.19 |
(2.40) |
6.21 |
|
Total
from Investment Activities |
14.00 |
9.13 |
10.90 |
(1.72) |
6.80 |
|
Distributions
to Shareholders From |
|
|
|
|
|
|
Net
Investment Income |
(0.63) |
(0.66) |
(0.72) |
(0.66) |
(0.59) |
|
Net
Realized Gains from
Investments |
(2.47) |
(1.07) |
(1.47) |
(0.40) |
(0.02) |
|
Total
Distributions |
(3.10) |
(1.73) |
(2.19) |
(1.06) |
(0.61) |
|
Net
Asset Value, End of Period |
$62.23 |
$51.33 |
$43.93 |
$35.22 |
$38.00 |
|
Total
Return* |
27.50% |
21.22% |
31.19% |
(4.65)% |
21.53% |
|
Ratios
to Average Net Assets |
|
|
|
|
|
|
Net
Expenses† |
0.24% |
0.25% |
0.25% |
0.25% |
0.25% |
|
Net
Investment Income (Loss)
|
1.09% |
1.47% |
1.73% |
1.75% |
1.71% |
|
Gross
Expenses |
0.24% |
0.25% |
0.26% |
0.26% |
0.27% |
|
Supplemental
Data |
|
|
|
|
|
|
Net
Assets, End of Period (000’s) |
$4,410,258 |
$3,997,663 |
$3,603,465 |
$2,957,995 |
$3,285,829 |
|
Portfolio
Turnover(b)
|
8% |
5% |
13% |
4% |
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.
†
The net
expense ratio may not correlate to the applicable expense limits in place during
the period since the current contractual expense limitation is applied for a
period beginning July 1, 2019, and in effect through June 30, 2023, instead of
coinciding with the Fund’s fiscal year end. Refer to the Fees and Expenses in
this prospectus for current contractual expense limitations.
(a)
Per share
net investment income (loss) has been calculated using the average daily shares
method.
(b)
Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
72 | USAA Index Funds
USAA
500 Index Fund Reward Shares
|
|
Year
Ended December 31, | ||||
|
|
2021 |
2020 |
2019 |
2018 |
2017 |
|
Net
Asset Value, Beginning of Period |
$51.36 |
$43.95 |
$35.24 |
$38.01 |
$31.82 |
|
Investment
Activities: |
|
|
|
|
|
|
Net
Investment Income (Loss) |
0.68(a)
|
0.70(a)
|
0.75(a)
|
0.71 |
0.61 |
|
Net
Realized and Unrealized
Gains
(Losses) on Investments |
13.38 |
8.49 |
10.19 |
(2.38) |
6.22 |
|
Total
from Investment Activities |
14.06 |
9.19 |
10.94 |
(1.67) |
6.83 |
|
Distributions
to Shareholders From |
|
|
|
|
|
|
Net
Investment Income |
(0.68) |
(0.71) |
(0.76) |
(0.70) |
(0.62) |
|
Net
Realized Gains from
Investments |
(2.47) |
(1.07) |
(1.47) |
(0.40) |
(0.02) |
|
Total
Distributions |
(3.15) |
(1.78) |
(2.23) |
(1.10) |
(0.64) |
|
Net
Asset Value, End of Period |
$62.27 |
$51.36 |
$43.95 |
$35.24 |
$38.01 |
|
Total
Return* |
27.62% |
21.35% |
31.29% |
(4.53)% |
21.64% |
|
Ratios
to Average Net Assets |
|
|
|
|
|
|
Net
Assets† |
0.15% |
0.15% |
0.15% |
0.15% |
0.15% |
|
Investment
Income (Loss) |
1.17% |
1.58% |
1.83% |
1.85% |
1.81% |
|
Gross
Expenses |
0.18% |
0.18% |
0.18% |
0.18% |
0.18% |
|
Supplemental
Data |
|
|
|
|
|
|
Net
Assets, End of Period (000’s) |
$6,638,059 |
$5,010,367 |
$4,546,094 |
$3,606,745 |
$3,636,257 |
|
Portfolio
Turnover(b)
|
8% |
5% |
13% |
4% |
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.
†
The net
expense ratio may not correlate to the applicable expense limits in place during
the period since the current contractual expense limitation is applied for a
period beginning July 1, 2019, and in effect through June 30, 2023, instead of
coinciding with the Fund’s fiscal year end. Refer to the Fees and Expenses in
this prospectus for current contractual expense limitations.
(a)
Per share
net investment income (loss) has been calculated using the average daily shares
method.
(b)
Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
Prospectus | 73
USAA
Nasdaq-100 Index Fund Shares
|
|
Year
Ended December 31, | ||||
|
|
2021 |
2020 |
2019 |
2018 |
2017 |
|
Net
Asset Value, Beginning of Period |
$35.56 |
$24.35 |
$17.69 |
$17.89 |
$13.79 |
|
Investment
Activities |
|
|
|
|
|
|
Net
Investment Income (Loss) |
0.11(a)
|
0.13(a)
|
0.13(a)
|
0.11 |
0.07 |
|
Net
Realized and Unrealized
Gains
(Losses) on Investments |
9.43 |
11.62 |
6.74 |
(0.18) |
4.38 |
|
Total
from Investment Activities |
9.54 |
11.75 |
6.87 |
(0.07) |
4.45 |
|
Distributions
to Shareholders From |
|
|
|
|
|
|
Net
Investment Income |
(0.11) |
(0.13) |
(0.13) |
(0.12) |
(0.08) |
|
Net
Realized Gains from
Investments |
(1.83) |
(0.41) |
(0.08) |
(0.01) |
(0.27) |
|
Total
Distributions |
(1.94) |
(0.54) |
(0.21) |
(0.13) |
(0.35) |
|
Net
Asset Value, End of Period |
$43.16 |
$35.56 |
$24.35 |
$17.69 |
$17.89 |
|
Total
Return* |
26.96% |
48.30% |
38.86% |
(0.44)% |
32.29% |
|
Ratios/Supplemental
Data: |
|
|
|
|
|
|
Net
Expenses† |
0.42% |
0.44% |
0.48% |
0.48% |
0.51% |
|
Net
Investment Income (Loss) |
0.27% |
0.46% |
0.63% |
0.64% |
0.60% |
|
Gross
Expenses |
0.42% |
0.44% |
0.48% |
0.48% |
0.51% |
|
Supplemental
Data |
|
|
|
|
|
|
Net
Assets, End of Period (000’s) |
$4,436,357 |
$3,583,838 |
$2,442,662 |
$1,750,674 |
$1,623,579 |
|
Portfolio
Turnover(b)
|
10% |
17% |
9% |
5% |
5% |
*
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.
†
The net
expense ratio may not correlate to the applicable expense limit in place during
the period since the current contractual expense limitation is applied for a
period beginning July 1, 2019, and in effect through June 30, 2023, instead of
coinciding with the Fund’s fiscal year end. Refer to the Fees and Expenses in
this prospectus for current contractual expense limitations.
(a)
Per share
net investment income (loss) has been calculated using the average daily shares
method.
(b)
Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
74 | USAA Index Funds
USAA
Nasdaq-100 Index Fund Institutional Shares
|
|
|
Year
Ended
December
31, |
Period
Ended
December
31, |
|
|
|
2021 |
2020(a)
|
|
Net
Asset Value, Beginning of Period |
|
$35.64 |
$27.86 |
|
Investment
Activities |
|
|
|
|
Net
Investment Income (Loss) |
|
0.10(b)
|
0.07(b)
|
|
Net
Realized and Unrealized
Gains
(Losses) on Investments |
|
9.45 |
8.17 |
|
Total
from Investment Activities |
|
9.55 |
8.24 |
|
Distributions
to Shareholders From |
|
|
|
|
Net
Investment Income |
|
(0.10) |
(0.05) |
|
Net
Realized Gains From
Investments |
|
(1.83) |
(0.41) |
|
Total
Distributions |
|
(1.93) |
(0.46) |
|
Net
Asset Value, End of Period |
|
$43.26 |
$35.64 |
|
Total
Return*(c)
|
|
26.93% |
29.60% |
|
Ratios
to Average Net Assets |
|
|
|
|
Net
Expenses†(d)
|
|
0.44% |
0.44% |
|
Net
Investment Income (Loss)(d)
|
|
0.25% |
0.42% |
|
Gross
Expenses(d)
|
|
0.44% |
0.47% |
|
Supplemental
Data |
|
|
|
|
Net
Assets, End of Period (000’s) |
|
$82,846 |
$57,240 |
|
Portfolio
Turnover(c)(e)
|
|
10% |
17% |
*
Assumes
reinvestment of all net investment income and realized capital gain
distributions, if any, during the period. Includes adjustments in accordance
with U.S. Generally Accepted Accounting Principles and could differ from the
Lipper reported return.
†
The net
expense ratio may not correlate to the applicable expense limits in place during
the period since the current contractual expense limitation is applied for a
period beginning June 29, 2020, and in effect through June 30, 2023, instead of
coinciding with the Fund’s fiscal year end. Details of the current contractual
expense limitation in effect can be found under the Fees and Expenses in this
prospectus.
(a)
Commenced
operations on June 29, 2020.
(b)
Per share
net investment income (loss) has been calculated using the average daily shares
method.
(c)
Not
annualized for periods less than one year.
(d)
Annualized
for periods less than one year.
(e)
Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between classes of shares issued.
Prospectus | 75
USAA
Nasdaq-100 Index Fund Class A
|
|
|
Year
Ended
December
31, |
Period
Ended
December
31, |
|
|
|
2021 |
2020(a)
|
|
Net
Asset Value, Beginning of Period |
|
$35.64 |
$27.86 |
|
Investment
Activities |
|
|
|
|
Net
Investment Income (Loss) |
|
(0.01)(b)(f)
|
0.02(b)
|
|
Net
Realized and Unrealized
Gains
(Losses) on Investments |
|
9.44 |
8.18 |
|
Total
from Investment Activities |
|
9.43 |
8.20 |
|
Distributions
to Shareholders From |
|
|
|
|
Net
Investment Income |
|
(0.13) |
(0.01) |
|
Net
Realized Gains from
Investments |
|
(1.83) |
(0.41) |
|
Total
Distributions |
|
(1.96) |
(0.42) |
|
Net
Asset Value, End of Period |
|
$43.11 |
$35.64 |
|
Total
Return (Excludes Sales
Charges)*(c)
|
|
26.60% |
29.46% |
|
Ratios
to Average Net Assets |
|
|
|
|
Net
Expenses†(d)
|
|
0.70% |
0.70% |
|
Net
Investment Income (Loss)(d)
|
|
(0.02)% |
0.11% |
|
Gross
Expenses(d)
|
|
1.03% |
46.74% |
|
Supplemental
Data |
|
|
|
|
Net
Assets, End of Period (000’s) |
|
$14,070 |
$167 |
|
Portfolio
Turnover(c)(e)
|
|
10% |
17% |
*
Assumes
reinvestment of all net investment income and realized capital gain
distributions, if any, during the period. Includes adjustments in accordance
with U.S. Generally Accepted Accounting Principles and could differ from the
Lipper reported return.
†
The net
expense ratio may not correlate to the applicable expense limits in place during
the period since the current contractual expense limitation is applied for a
period beginning June 29, 2020, and in effect through June 30, 2023, instead of
coinciding with the Fund’s fiscal year end. Details of the current contractual
expense limitation in effect can be found under the Fees and Expenses in this
prospectus.
(a)
Commenced
operations on June 29, 2020.
(b)
Per share
net investment income (loss) has been calculated using the average daily shares
method.
(c)
Not
annualized for periods less than one year.
(d)
Annualized
for periods less than one year.
(e)
Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between classes of shares issued.
(f)
The amount
shown reflects a net realized and unrealized loss per share, whereas the
statement of operations reflected a net realized and unrealized gain for the
period for the Fund in total. The difference in realized and unrealized gains
and losses for the Fund versus the class is due to the timing of sales and
repurchases of the class in relation to fluctuating market values during the
period.
76 | USAA Index Funds
USAA
Nasdaq-100 Index Fund Class C
|
|
|
Year
Ended
December
31, |
Period
Ended
December
31, |
|
|
|
2021 |
2020(a)
|
|
Net
Asset Value, Beginning of Period |
|
$35.51 |
$27.86 |
|
Investment
Activities |
|
|
|
|
Net
Investment Income (Loss) |
|
(0.33)(b)(f)
|
(0.10)(b)
|
|
Net
Realized and Unrealized
Gains
(Losses) on Investments |
|
9.39 |
8.16 |
|
Total
from Investment Activities |
|
9.06 |
8.06 |
|
Distributions
to Shareholders From |
|
|
|
|
Net
Investment Income |
|
— |
— |
|
Net
Realized Gains From
Investments |
|
(1.83) |
(0.41) |
|
Total
Distributions |
|
(1.83) |
(0.41) |
|
Net
Asset Value, End of Period |
|
$42.74 |
$35.51 |
|
Total
Return (Excludes Sales
Charges)*(c)
|
|
25.67% |
28.95% |
|
Ratios
to Average Net Assets |
|
|
|
|
Net
Expenses†(d)
|
|
1.45% |
1.45% |
|
Net
Investment Income (Loss)(d)
|
|
(0.79)% |
(0.61)% |
|
Gross
Expenses(b)
|
|
2.29% |
19.93% |
|
Supplemental
Data |
|
|
|
|
Net
Assets, End of Period (000’s) |
|
$3,205 |
$194 |
|
Portfolio
Turnover(c)(e)
|
|
10% |
17% |
*
Assumes
reinvestment of all net investment income and realized capital gain
distributions, if any, during the period. Includes adjustments in accordance
with U.S. Generally Accepted Accounting Principles and could differ from the
Lipper reported return.
†
The net
expense ratio may not correlate to the applicable expense limits in place during
the period since the current contractual expense limitation is applied for a
period beginning June 29, 2020, and in effect through June 30, 2023, instead of
coinciding with the Fund’s fiscal year end. Details of the current contractual
expense limitation in effect can be found under the Fees and Expenses in this
prospectus.
(a)
Commenced
operations on June 29, 2020.
(b)
Per share
net investment income (loss) has been calculated using the average daily shares
method.
(c)
Not
annualized for periods less than one year.
(d)
Annualized
for periods less than one year.
(e)
Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between classes of shares issued.
(f)
The amount
shown reflects a net realized and unrealized loss per share, whereas the
statement of operations reflected a net realized and unrealized gain for the
period for the Fund in total. The difference in realized and unrealized gains
and losses for the Fund versus the class is due to the timing of sales and
repurchases of the class in relation to fluctuating market values during the
period.
Prospectus | 77
USAA
Nasdaq-100 Index Fund R6 Shares
|
|
|
Year
Ended December 31, |
Period
Ended
December
31, | ||
|
|
2021 |
2020 |
2019 |
2018 |
2017(a)
|
|
Net
Asset Value, Beginning of Period |
$35.57 |
$24.35 |
$17.68 |
$17.89 |
$15.31 |
|
Investment
Activities |
|
|
|
|
|
|
Net
Investment Income (Loss) |
0.15(b)
|
0.17(b)
|
0.15(b)
|
0.12 |
0.08 |
|
Net
Realized and Unrealized
Gains
(Losses) on Investments |
9.45 |
11.63 |
6.74 |
(0.18) |
2.87 |
|
Total
from Investment Activities |
9.60 |
11.80 |
6.89 |
(0.06) |
2.95 |
|
Distributions
to Shareholders From: |
|
|
|
|
|
|
Net
Investment Income |
(0.15) |
(0.17) |
(0.14) |
(0.14) |
(0.10) |
|
Net
Realized Gains from
Investments |
(1.83) |
(0.41) |
(0.08) |
(0.01) |
(0.27) |
|
Total
Distributions |
(1.98) |
(0.58) |
(0.22) |
(0.15) |
(0.37) |
|
Net
Asset Value, End of Period |
$43.19 |
$35.57 |
$24.35 |
$17.68 |
$17.89 |
|
Total
Return*(c)
|
27.14% |
48.51% |
38.99% |
(0.38%) |
19.27% |
|
Ratios
to Average Net Assets |
|
|
|
|
|
|
Net
Expenses†(d)
|
0.30% |
0.31% |
0.39% |
0.40% |
0.40% |
|
Net
Investment Income (Loss)(d)
|
0.38% |
0.59% |
0.71% |
0.72% |
0.66% |
|
Gross
Expenes(d)
|
0.30% |
0.31% |
0.42% |
0.45% |
1.01% |
|
Supplemental
Data |
|
|
|
|
|
|
Net
Assets, End of Period (000’s) |
$42,391 |
$35,511 |
$18,877 |
$12,667 |
$5,860 |
|
Portfolio
Turnover(c)(e)
|
10% |
17% |
9% |
5% |
5% |
*
Assumes
reinvestment of all net investment income and realized capital gain
distributions, if any, during the period. Includes adjustments in accordance
with U.S. Generally Accepted Accounting Principles and could differ from the
Lipper reported return.
†
The net
expense ratio may not correlate to the applicable expense limit in place during
the period since the current contractual expense limitation is applied for a
period beginning July 1, 2019, and in effect through June 30, 2023, instead of
coinciding with the Fund’s fiscal year end. Refer to the Fees and Expenses in
this prospectus for current contractual expense limitations.
(a)
R6 Shares
commenced operations on March 1, 2017.
(b)
Per share
net investment income (loss) has been calculated using the average daily shares
method.
(c)
Not
annualized for periods less than one year.
(d)
Annualized
for periods less than one year.
(e)
Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
78 | USAA Index Funds
Appendix
A — Variations in Sales Charge Reductions and Waivers Available Through Certain
Intermediaries
The
availability of certain initial and contingent deferred sales charge reductions
and waivers may depend on the particular financial intermediary or type of
account through which you purchase or hold Fund shares. The following
information about variations in sales charge reductions and waivers is
applicable only to investors who purchase Fund shares through a Merrill Lynch,
Ameriprise Financial, Morgan Stanley Wealth Management, Raymond James, Janney
Montgomery Scott, Edward D. Jones & Co., L.P., or Robert W. Baird & Co.
platform or account.
In all
instances, it is your responsibility to notify the Fund or your financial
intermediary at the time of purchase of any relationship or other facts
qualifying you for sales charge reductions or waivers. For reductions and
waivers not available through a particular intermediary, shareholders will have
to purchase Fund shares directly from the Fund or through another intermediary
to receive those reductions and waivers.
Merrill
Lynch
Shareholders
purchasing Fund shares through a Merrill Lynch platform or account will be
eligible only for the following load waivers (front-end sales charge waivers and
contingent deferred, or back-end, sales charge waivers) and discounts, which may
differ from those disclosed elsewhere in this Fund's Prospectus or in the
SAI.
Front-End
Sales Charge Waivers on Class A Shares available at Merrill
Lynch
◾Employer-sponsored
retirement, deferred compensation and employee benefit
plans (including health savings accounts) and trusts used to fund those plans,
provided that the shares are not held in a commission-based brokerage account
and shares are held for the benefit of the plan
◾Shares
purchased by a 529 Plan (does not include 529 Plan units or 529-specific
share classes or equivalents)
◾Shares
purchased through a Merrill Lynch affiliated investment advisory
program
◾Shares
exchanged due to the holdings moving from a Merrill Lynch affiliated
investment advisory program to a Merrill Lynch brokerage (non-advisory) account
pursuant to Merrill Lynch’s policies relating to sales load discounts and
waivers
| 79
◾Shares
purchased by third party investment advisors on behalf of their
advisory clients through Merrill Lynch's platform
◾Shares
of funds purchased through the Merrill Edge Self-Directed platform
(if applicable)
◾Shares
purchased through reinvestment of capital gains distributions and
dividend reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family)
◾Shares
exchanged from Class C (i.e. level-load) shares of the same fund
pursuant to Merrill Lynch's policies relating to sales load discounts and
waivers
◾Employees
and registered representatives of Merrill Lynch or its affiliates
and their family members
◾Directors
or Trustees of the Fund, and employees of the Fund's investment
adviser or any of its affiliates, as described in this
Prospectus
◾Eligible
shares purchased from the proceeds of redemptions within the same
fund family, provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and (3)
redeemed shares were subject to a front-end or deferred sales load (known as
Rights of Reinstatement). Automated transactions (i.e. systematic purchases and
withdrawals) and purchases made after shares are automatically sold to pay
Merrill Lynch’s account maintenance fees are not eligible for
reinstatement
CDSC
Waivers on A and C Shares available at Merrill Lynch
◾Death
or disability of the shareholder
◾Shares
sold as part of a systematic withdrawal plan as described in the Fund's
Prospectus
◾Return
of excess contributions from an IRA Account
◾Shares
sold as part of a required minimum distribution for IRA and retirement
accounts pursuant to the Internal Revenue Code
◾Shares
sold to pay Merrill Lynch fees but only if the transaction is initiated
by Merrill Lynch
◾Shares
acquired through a right of reinstatement
◾Shares
held in retirement brokerage accounts, that are exchanged for a lower
cost share class due to transfer to a fee based account or platform (applicable
to A and C shares only)
80 |
◾Shares
received through an exchange due to the holdings moving from a
Merrill Lynch affiliated investment advisory program to a Merrill Lynch
brokerage (non-advisory) account pursuant to Merrill Lynch’s policies relating
to sales load discounts and waivers
Front-end
load Discounts Available at Merrill Lynch: Breakpoints, Rights of Accumulation
& Letters of Intent
◾Breakpoints
as described in this Prospectus
◾Rights
of Accumulation (ROA) which entitle shareholders to breakpoint
discounts as described in the Fund’s prospectus will be automatically calculated
based on the aggregated holding of fund family assets held by accounts
(including 529 program holdings, where applicable) within the purchaser’s
household at Merrill Lynch. Eligible fund family assets not held at Merrill
Lynch may be included in the ROA calculation only if the shareholder notifies
his or her financial advisor about such assets
◾Letters
of Intent (LOI) which allow for breakpoint discounts based on anticipated
purchases within a fund family, through Merrill Lynch, over a 13-month period of
time (if applicable)
Ameriprise
Financial
Class
A Shares Front-End Sales Charge Waivers Available at Ameriprise
Financial
Shareholders
purchasing Fund shares through an Ameriprise Financial brokerage account are
eligible for the following front-end sales charge waivers, which may differ from
those disclosed elsewhere in this Fund’s prospectus or SAI:
◾Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored
403(b) plans, profit sharing and money purchase pension plans and defined
benefit plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, Simple IRAs or SAR-SEPs.
◾Shares
purchased through reinvestment of capital gains distributions and
dividend reinvestment when purchasing shares of the same Fund (but not any other
fund within the same fund family).
◾Shares
exchanged from Class C shares of the same fund in the month of or
following the 7-year anniversary of the purchase date. To the extent that this
prospectus elsewhere provides for a waiver with respect to exchanges of Class C
shares or conversion of Class C shares following a shorter holding period, that
waiver will apply.
◾Employees
and registered representatives of Ameriprise Financial or its
affiliates and their immediate family members.
| 81
◾Shares
purchased by or through qualified accounts (including IRAs, Coverdell
Education Savings Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and defined
benefit plans) that are held by a covered family member, defined as an
Ameriprise financial advisor and/or the advisor’s spouse, advisor’s lineal
ascendant (mother, father, grandmother, grandfather, great grandmother, great
grandfather), advisor’s lineal descendant (son, step-son, daughter,
step-daughter, grandson, granddaughter, great grandson, great granddaughter) or
any spouse of a covered family member who is a lineal descendant.
◾Shares
purchased from the proceeds of redemptions within the same fund
family, provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and (3)
redeemed shares were subject to a front-end or deferred sales load (i.e. Rights
of Reinstatement).
Morgan
Stanley Wealth Management
Shareholders
purchasing Fund shares through a Morgan Stanley Wealth Management transactional
brokerage account are eligible only for the following front-end sales charge
waivers with respect to Class A shares, which may differ from and may be more
limited than those disclosed elsewhere in the Fund's Prospectus or
SAI.
Front-end
Sales Charge Waivers on Class A Shares available at Morgan
Stanley
◾Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored
403(b) plans, profit sharing and money purchase pension plans and defined
benefit plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh
plans
◾Morgan
Stanley employee and employee-related accounts according to Morgan
Stanley's account linking rules
◾Shares
purchased through reinvestment of dividends and capital gains distributions
when purchasing shares of the same fund
◾Shares
purchased through a Morgan Stanley self-directed brokerage account
◾Class
C (i.e., level-load) shares that are no longer subject to a contingent
deferred sales charge and are converted to Class A shares of the same fund
pursuant to Morgan Stanley Wealth Management’s share class conversion
program
82 |
◾Shares
purchased from the proceeds of redemptions within the same fund
family, provided (i) the repurchase occurs within 90 days following the
redemption, (ii) the redemption and purchase occur in the same account, and
(iii) redeemed shares were subject to a front-end or deferred sales
charge
Raymond
James & Associates, Inc., Raymond James Financial Services, Inc. and each
entity’s affiliates (“Raymond James”)
Shareholders
purchasing fund shares through a Raymond James platform or account, or through
an introducing broker-dealer or independent registered investment adviser for
which Raymond James provides trade execution, clearance, and/or custody
services, will be eligible only for the following load waivers (front-end sales
charge waivers and contingent deferred, or back-end, sales charge waivers) and
discounts, which may differ from those disclosed elsewhere in this Fund's
Prospectus or SAI.
Front-End
Sales Charge Waivers on Class A Shares available at Raymond
James
◾Shares
purchased in an investment advisory program
◾Shares
purchased within the same fund family through a systematic reinvestment
of capital gains and dividend distributions
◾Employees
and registered representatives of Raymond James or its affiliates
and their family members as designated by Raymond James
◾Shares
purchased from the proceeds of redemptions within the same fund
family, provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and (3)
redeemed shares were subject to a front-end or deferred sales load (known as
Rights of Reinstatement)
◾A
shareholder in the Fund's Class C shares will have their shares converted
at net asset value to Class A shares (or the appropriate share class) of the
Fund if the shares are no longer subject to a CDSC and the conversion is in line
with the policies and procedures of Raymond James
CDSC
Waivers on Classes A and C Shares available at Raymond James
◾Death
or disability of the shareholder
◾Shares
sold as part of a systematic withdrawal plan as described in the Fund's
Prospectus
◾Return
of excess contributions from an IRA Account
| 83
◾Shares
sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based on applicable
IRS regulations as described in the fund's prospectus
◾Shares
sold to pay Raymond James fees but only if the transaction is initiated
by Raymond James
◾Shares
acquired through a right of reinstatement
Front-End
Load Discounts Available at Raymond James: Breakpoints, Rights of Accumulation,
and/or Letters of Intent
◾Breakpoints
as described in this Prospectus
◾Rights
of Accumulation which entitle shareholders to breakpoint discounts
will be automatically calculated based on the aggregated holding of fund family
assets held by accounts within the purchaser's household at Raymond James.
Eligible fund family assets not held at Raymond James may be included in the
calculation of rights of accumulation only if the shareholder notifies his or
her financial advisor about such assets
◾Letters
of intent which allow for breakpoint discounts based on anticipated
purchases within a fund family, over a 13-month time period. Eligible fund
family assets not held at Raymond James may be included in the calculation of
letters of intent only if the shareholder notifies his or her financial advisor
about such assets
Janney
Montgomery Scott LLC (“Janney”)
Shareholders
purchasing fund shares through a Janney brokerage account will be eligible only
for the following load waivers (front-end sales charge waivers and contingent
deferred sales charge (“CDSC”), or back-end, sales charge waivers) and
discounts, which may differ from those disclosed elsewhere in this Fund's
Prospectus or SAI.
Front-End
Sales Charge Waivers on Class A shares available at Janney1
◾Shares
purchased through reinvestment of capital gains distributions and
dividend reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family)
◾Shares
purchased by employees and registered representatives of Janney or
its affiliates and their family members as designated by
Janney
◾Shares
purchased from the proceeds of redemptions within the same fund
family, provided (1) the repurchase occurs within ninety (90) days following the
redemption, (2) the redemption and purchase occur in the same account, and (3)
redeemed shares were subject to a front-end or deferred sales load (i.e., right
of reinstatement)
84 |
◾Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored
403(b) plans, profit sharing and money purchase pension plans and defined
benefit plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh
plans
◾Shares
acquired through a right of reinstatement
◾Class
C shares that are no longer subject to a contingent deferred sales
charge and are converted to Class A shares of the same fund pursuant to Janney’s
policies and procedures
CDSC
Waivers on Class A and C shares available at Janney
◾Shares
sold upon the death or disability of the shareholder
◾Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus
◾Shares
purchased in connection with a return of excess contributions from an
IRA account
◾Shares
sold as part of a required minimum distribution for IRA and other
retirement accounts due to the shareholder reaching the qualified age based on
applicable Internal Revenue Service regulations as described in the fund’s
Prospectus.
◾Shares
sold to pay Janney fees but only if the transaction is initiated by
Janney
◾Shares
acquired through a right of reinstatement
◾Shares
exchanged into the same share class of a different fund.
Front-End
Load Discounts available at Janney: Breakpoints, Rights of Accumulation and/or
letters of intent1
◾Breakpoints
as described in this Prospectus
◾Rights
of accumulation (“ROA”), which entitle shareholders to breakpoint
discounts, will be automatically calculated based on the aggregated holding of
fund family assets held by accounts within the purchaser’s household at Janney.
Eligible fund family assets not held at Janney may be included in the ROA
calculation only if the shareholder notifies his or her financial advisor about
such assets
◾Letters
of intent which allow for breakpoint discounts based on anticipated
purchases within a fund family, over a 13-month time period. Eligible fund
family assets not held at Janney may be included in the calculation of letters
of intent only if the shareholder notifies his or her financial advisor about
such assets
1 Also
referred to as an “initial sales charge.”
| 85
Edward
D. Jones & Co., L.P. (“Edward Jones”)
The
following information supersedes prior information with respect to transactions
and positions held in fund shares through an Edward Jones system. Clients of
Edward Jones (also referred to as “shareholders”) purchasing fund shares on the
Edward Jones commission and fee-based platforms are eligible only for the
following sales charge discounts (also referred to as “breakpoints”) and
waivers, which can differ from discounts and waivers described elsewhere in the
mutual fund prospectus or statement of additional information (“SAI”) or through
another broker-dealer. In all instances, it is the shareholder's responsibility
to inform Edward Jones at the time of purchase of any relationship, holdings of
the USAA Mutual Funds, or other facts qualifying the purchaser for discounts or
waivers. Edward Jones can ask for documentation of such circumstance.
Shareholders should contact Edward Jones if they have questions regarding their
eligibility for these discounts and waivers.
Breakpoints
available at Edward Jones
◾Breakpoint
pricing, otherwise known as volume pricing, at dollar thresholds
as described in the prospectus.
Rights
of Accumulation (“ROA”)
◾The
applicable sales charge on a purchase of Class A shares is determined
by taking into account all share classes (except certain money market funds and
any assets held in group retirement plans) of the mutual fund family held by the
shareholder or in an account grouped by Edward Jones with other accounts for the
purpose of providing certain pricing considerations (“pricing groups”). If
grouping assets as a shareholder, this includes all share classes held on the
Edward Jones platform and/or held on another platform. The inclusion of eligible
fund family assets in the ROA calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Money market
funds are included only if such shares were sold with a sales charge at the time
of purchase or acquired in exchange for shares purchased with a sales charge.
◾The
employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect
to establish or change ROA for the IRA accounts associated with the plan to a
plan-level grouping as opposed to including all share classes at a shareholder
or pricing group level.
◾ROA
is determined by calculating the higher of cost minus redemptions
or market value (current shares x NAV).
86 |
Letter
of Intent (“LOI”)
◾Through
a LOI, shareholders can receive the sales charge and breakpoint
discounts for purchases shareholders intend to make over a 13-month period from
the date Edward Jones receives the LOI. The LOI is determined by calculating the
higher of cost or market value of qualifying holdings at LOI initiation in
combination with the value that the shareholder intends to buy over a 13-month
period to calculate the front-end sales charge and any breakpoint discounts.
Each purchase the shareholder makes during that 13-month period will receive the
sales charge and breakpoint discount that applies to the total amount. The
inclusion of eligible fund family assets in the LOI calculation is dependent on
the shareholder notifying Edward Jones of such assets at the time of
calculation. Purchases made before the LOI is received by Edward Jones are not
adjusted under the LOI and will not reduce the sales charge previously paid.
Sales charges will be adjusted if LOI is not met.
◾If
the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has
elected to establish or change ROA for the IRA accounts associated with the plan
to a plan-level grouping, LOIs will also be at the plan-level and may only be
established by the employer.
Sales
Charge Waivers available at Edward Jones
Sales
charges are waived for the following shareholders and in the following
situations:
◾Associates
of Edward Jones and its affiliates and their family members
who are in the same pricing group (as determined by Edward Jones under its
policies and procedures) as the associate. This waiver will continue for the
remainder of the associate's life if the associate retires from Edward Jones in
good-standing and remains in good standing pursuant to Edward Jones’ policies
and procedures.
◾Shares
purchased in an Edward Jones fee-based program.
◾Shares
purchased through reinvestment of capital gains distributions and
dividend reinvestment.
◾Shares
purchased from the proceeds of redeemed shares of the same fund
family so long as the following conditions are met: 1) the proceeds are from the
sale of shares within 60 days of the purchase, and 2) the sale and purchase are
made in the same share class and the same account or the purchase is made in an
individual retirement account with proceeds from liquidations in a
non-retirement account.
| 87
◾Shares
exchanged into Class A shares from another share class so long as
the exchange is into the same fund and was initiated at the discretion of Edward
Jones. Edward Jones is responsible for any remaining CDSC due to the fund
company, if applicable. Any future purchases are subject to the applicable sales
charge as disclosed in the prospectus.
◾Exchanges
from Class C shares to Class A shares of the same fund, generally,
in the 84th month
following the anniversary of the purchase date or earlier at the discretion of
Edward Jones.
Contingent
Deferred Sales Charge (“CDSC”) Waivers available at Edward Jones
If the
shareholder purchases shares that are subject to a CDSC and those shares are
redeemed before the CDSC is expired, the shareholder is responsible to pay the
CDSC except in the following conditions:
◾The
death or disability of the shareholder.
◾Systematic
withdrawals with up to 10% per year of the account value.
◾Return
of excess contributions from an Individual Retirement Account
(“IRA”).
◾Shares
sold as part of a required minimum distribution for IRA and retirement
accounts if the redemption is taken in or after the year the shareholder reaches
qualified age based on applicable IRS regulations.
◾Shares
sold to pay Edward Jones fees or costs in such cases where the
transaction is initiated by Edward Jones.
◾Shares
exchanged in an Edward Jones fee-based program.
◾Shares
acquired through NAV reinstatement.
◾Shares
redeemed at the discretion of Edward Jones for Minimum Balances,
as described below.
Other
Important Information Regarding Transactions Through Edward Jones
Minimum
Purchase Amounts
◾Initial
purchase minimum: $250
◾Subsequent
purchase minimum: none
88 |
Minimum
Balances
Edward
Jones has the right to redeem at its discretion fund holdings with a balance of
$250 or less. The following are examples of accounts that are not included in
this policy:
◾A
fee-based account held on an Edward Jones platform
◾A
529 account held on an Edward Jones platform
◾An
account with an active systematic investment plan or LOI
Exchanging
Share Classes
◾At
any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same
fund.
Oppenheimer
& Co. Inc. (“OPCO”)
Shareholders
purchasing Fund shares through an Oppenheimer & Co. Inc. platform or account
are eligible only for the following load waivers (front-end sales charge waivers
and contingent deferred, or back-end, sales charge waivers) and discounts, which
may differ from those disclosed elsewhere in this Fund’s prospectus or
SAI.
Front-End
Sales Charge Waivers on Class A Shares available at OPCO
◾Employer-sponsored
retirement, deferred compensation and employee benefit
plans (including health savings accounts) and trusts used to fund those plans,
provided that the shares are not held in a commission-based brokerage account
and shares are held for the benefit of the plan
◾Shares
purchased by or through a 529 Plan
◾Shares
purchased through an OPCO affiliated investment advisory program
◾Shares
purchased through reinvestment of capital gains distributions and
dividend reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family)
◾Shares
purchased from the proceeds of redemptions within the same fund
family, provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and (3)
redeemed shares were subject to a front-end or deferred sales load (known as
Rights of Restatement)
| 89
◾A
shareholder in the Fund’s Class C shares will have their shares converted
at net asset value to Class A shares (or the appropriate share class) of the
Fund if the shares are no longer subject to a CDSC and the conversion is in line
with the policies and procedures of OPCO
◾Employees
and registered representatives of OPCO or its affiliates and their
family members
◾Directors
or Trustees of the Fund, and employees of the Fund’s investment
adviser or any of its affiliates, as described in this
prospectus
CDSC
Waivers on A and C Shares available at OPCO
◾Death
or disability of the shareholder
◾Shares
sold as part of a systematic withdrawal plan as described in the Fund's
Prospectus
◾Return
of excess contributions from an IRA Account
◾Shares
sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based on applicable
IRS regulations as described in the prospectus
◾Shares
sold to pay OPCO fees but only if the transaction is initiated by
OPCO
◾Shares
acquired through a right of reinstatement
Front-end
load Discounts Available at OPCO: Breakpoints, Rights of Accumulation &
Letters of Intent
◾Breakpoints
as described in this Prospectus
◾Rights
of Accumulation (ROA) which entitle shareholders to breakpoint
discounts will be automatically calculated based on the aggregated holding of
fund family assets held by accounts within the purchaser’s household at OPCO.
Eligible fund family assets not held at OPCO may be included in the ROA
calculation only if the shareholder notifies his or her financial advisor about
such assets
Waivers
Specific to Stifel, Nicolaus & Company, Incorporated (“Stifel”)
Shareholders
purchasing Fund shares through a Stifel platform or account or who own shares
for which Stifel or an affiliate is the broker-dealer of record are eligible for
the following additional sales charge waiver.
90 |
Front-end
Sales Load Waiver on Class A Shares
◾Class
C shares that have been held for more than seven (7) years will be
converted to Class A shares of the same Fund pursuant to Stifel’s policies and
procedures
All other
sales charge waivers and reductions described elsewhere in the Fund’s Prospectus
or SAI still apply.
Robert
W. Baird & Co. (“Baird”):
Effective
June 15, 2020, shareholders purchasing fund shares through a Baird platform or
account will only be eligible for the following sales charge waivers (front-end
sales charge waivers and CDSC waivers) and discounts, which may differ from
those disclosed elsewhere in this prospectus or the SAI
Front-End
Sales Charge Waivers on Investors A-shares Available at Baird
◾Shares
purchased through reinvestment of capital gains distributions and
dividend reinvestment when purchasing shares of the same fund
◾Shares
purchase by employees and registers representatives of Baird or its
affiliate and their family members as designated by Baird
◾Shares
purchased using the proceeds of redemptions from a USAA Mutual
Fund, provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same accounts, and (3)
redeemed shares were subject to a front-end or deferred sales charge (known as
rights of reinstatement)
◾A
shareholder in the Funds Investor C Shares will have their share converted
at net asset value to Investor A shares of the same fund if the shares are no
longer subject to CDSC and the conversion is in line with the policies and
procedures of Baird
◾Employer-sponsored
retirement plans or charitable accounts in a transactional
brokerage account at Baird, including 401(k) plans, 457 plans,
employer-sponsored 403(b) plans, profit sharing and money purchase pension plans
and defined benefit plans. For purposes of this provision, employer-sponsored
retirement plans do not include SEP IRAs, Simple IRAs or SAR-SEPs
CDSC
Waivers on Investor A and C shares Available at Baird
◾Shares
sold due to death or disability of the shareholder
◾Shares
sold as part of a systematic withdrawal plan as described in the Fund’s
Prospectus
◾Shares
bought due to returns of excess contributions from an IRA Account
| 91
◾Shares
sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based on applicable
Internal Revenue Service regulations as described in the Fund’s
prospectus
◾Shares
sold to pay Baird fees but only if the transaction is initiated by
Baird
◾Shares
acquired through a right of reinstatement
Front-End
Sales Charge Discounts Available at Baird: Breakpoints and/or Rights of
Accumulations
◾Breakpoints
as described in this prospectus
◾Rights
of accumulations which entitles shareholders to breakpoint discounts
will be automatically calculated based on the aggregated holding of USAA Mutual
Funds assets held by accounts within the purchaser’s household at Baird.
Eligible USAA Mutual Funds assets not held at Baird may be included in the
rights of accumulations calculation only if the shareholder notifies his or her
financial advisor about such assets
◾Letters
of Intent (LOI) allow for breakpoint discounts based on anticipated
purchases of USAA Mutual Funds through Baird, over a 13-month period of
time
92 |
Additional
Information on the Wilshire 4500 Completion Index
Wilshire®, the
Wilshire IndexesSM
and
Wilshire 4500 Completion IndexSM are
service marks of Wilshire Associates Incorporated (“Wilshire”) and have been
licensed by the Adviser for use by USAA Extended Market Index Fund
(“Fund”). All content of the Wilshire IndexesSM and
Wilshire 4500 Completion IndexSM is ©2019
Wilshire Associates Incorporated, all rights reserved. Wilshire has no
relationship with the Fund, other than the licensing of the Wilshire 4500
Completion IndexSM and its
service marks for use in connection with the Fund.
Wilshire
does not:
◾sponsor,
endorse, sell or promote the Fund.
◾recommend
that any person invest in the Fund or any other securities.
◾have
any responsibility or liability for or make any decisions about the timing,
amount or pricing of the Fund.
◾have
any responsibility or liability for the administration, management or
marketing
of the Fund.
◾consider
the needs of the Fund or the owners of the Fund in determining, composing
or calculating the Wilshire 4500 Completion IndexSM or have
any obligation to do so.
Wilshire
shall have no liability in connection with the Fund.
Specifically,
◾Wilshire
makes no representation or warranty, express or implied, regarding:
◾The
results to be obtained by the Fund, the owner of the Fund or any other
person in connection with the use of the Wilshire 4500 Completion
IndexSM and the
data included in the Wilshire 4500 Completion IndexSM;
◾The
accuracy or completeness of the Wilshire 4500 Completion IndexSM and any
related data;
◾The
merchantability or the fitness for a particular purpose or use of the
Wilshire
4500 Completion IndexSM and/or its
related data;
◾Wilshire
shall not have any liability for any errors, omissions or interruptions
in the Wilshire 4500 Completion IndexSM or
related data;
◾Under
no circumstances will Wilshire be liable for any lost profits or indirect,
punitive, special or consequential damages or losses, even if Wilshire knows
that they might occur.
The
licensing agreement between Wilshire and the Adviser is solely for their benefit
and not for the benefit of the owners of the Fund or any other third
parties.
Prospectus | 93
Additional
Information on the Nasdaq-100 Index
The
Nasdaq-100 Index Fund is not sponsored, endorsed, sold, or promoted by The
Nasdaq Stock Market, Inc. (including its affiliates) (Nasdaq, with its
affiliates, are referred to as the “Corporations”). The Corporations have not
passed on the legality or suitability of, or the accuracy or adequacy of
descriptions and disclosures relating to, the Fund. The Corporations make no
representation or warranty, express or implied, to the owners of the Fund or any
member of the public regarding the advisability of investing in securities
generally or in the Fund particularly, or the ability of the Nasdaq-100
Index® to track
general stock market performance. The Corporations’ only relationship to USAA
Mutual Funds Trust (“Licensee”) is in the licensing of the
Nasdaq-100®,
Nasdaq-100 Index®, and
Nasdaq®
trademarks or service marks, certain trade names of the Corporations and the use
of the Nasdaq-100 Index® which is
determined, composed and calculated by Nasdaq without regard to the Licensee or
the Fund. Nasdaq has no obligation to take the needs of the Licensee or the
owners of the Fund into consideration in determining, composing or calculating
the Nasdaq-100 Index®. The
Corporations are not responsible for and have not participated in the
determination of the timing of, prices at, or quantities of the Fund to be
issued or in the determination or calculation of the equation by which the Fund
is to be converted into cash. The Corporations have no liability in connection
with the administration, marketing or trading of the Fund.
The
Corporations do not guarantee the accuracy and/or uninterrupted calculation of
the Nasdaq-100 Index® or any
data included therein. The Corporations make no warranty, express or implied, as
to results to be obtained by the Licensee, owners of the Fund, or any other
person or entity from the use of the Nasdaq-100 Index® or any
data included therein. The Corporations make no express or implied warranties,
and expressly disclaim all warranties of merchantability or fitness for a
particular purpose or use with respect to the Nasdaq-100 Index® or any
data included therein. Without limiting any of the foregoing, in no event shall
the Corporations have any liability for any lost profits or special, incidental,
punitive, indirect, or consequential damages, even if notified of the
possibility of such damages.
94 | USAA Index Funds
.
.
.
.
Statement
of Additional Information (“SAI”): A complete
description of the Funds' policies and procedures with respect to the disclosure
of the Funds' portfolio securities is available in the Funds' SAI. The SAI has
been filed with the Securities and Exchange Commission (“SEC”) and is
incorporated by reference into this prospectus, which means it is legally part
of the prospectus.
Annual
and Semi Annual Reports: Annual and
semi annual reports contain more information about the Funds' investments. In
the Funds' annual report, you will find a discussion of the market conditions
and investment strategies that significantly affected the Funds' performance
during the last fiscal year.
How
to Obtain Information: You may
obtain a free copy of the SAI, annual or semi annual reports, or to ask other
questions about the Funds or your accounts, online at VictoryFunds.com, by
contacting the USAA Mutual Funds at the address or telephone number below, or by
contacting your financial intermediary.
|
By
mail:
USAA
Mutual Funds
P.O.
Box 182593
Columbus,
OH 43218-2593 |
By
telephone:
Call
USAA Mutual Funds at
(800)
235-8396 |
You also
can obtain information about each Fund (including the SAI and other reports)
from the SEC on the SEC’s EDGAR database at http://www.sec.gov or, after payment
of a duplicating fee, by electronic request at the following e-mail address:
[email protected]
Investment
Company Act File No. 811-7852
28082-0522