Rising interest rates typically have a negative effect on the price of bonds. Over the past ten years, the 10-Year Treasury Bond has spiked more than 50% during the first four time periods shown below, and from September 2017 through early February 2018, Treasury yields experienced an increase of over 38%. The chart below reflects the performance of the USAA Short-Term Bond Fund (retail share class) as well as other benchmarks during these five time periods. The Fund may not have outperformed these benchmarks in other time periods.
The 10-Year Treasury Bond rose to 2.84% (+38%)
The 10-Year Treasury Bond rose to 2.62% (+91%)
The 10-Year Treasury Bond rose to 3.04% (+111%)
The 10-Year Treasury Bond rose to 3.64% (+51%)
The 10-Year Treasury Bond rose to 3.89% (+89%)
Source: Morningstar as of 2/5/18
Morningstar’s calculation of total return is determined each month by taking the change in monthly net asset value, reinvesting all income and capital-gains distributions during that month, and dividing by the starting NAV. Reinvestments are made using the actual reinvestment NAV, and daily payoffs are reinvested monthly. Unless otherwise noted, Morningstar does not adjust total returns for sales charges (such as front-end loads, deferred loads and redemption fees), preferring to give a clearer picture of a fund’s performance. The total returns do account for management, administrative, 12b-1 fees and other costs taken out of fund assets. Total returns for periods longer than one year are expressed in terms of compounded average annual returns (also known as geometric total returns), affording a more meaningful picture of fund performance than non-annualized figures.
Driven by our focus on yield, the Fund’s 12-Month Dividend Distribution Yield and 30-Day SEC Yield currently exceed the category average. The Fund’s yields may not always beat the category averages. The Fund’s expenses are below the category average. The Fund's expenses may not always be below the category average.
|Total Returns as of 3/31/18¹||Yields as of 3/31/18|
|Fund||YTD||1-Year||3-Year||5-Year||10-Year||12-Month Yield²||30-Day SEC Yield³||Expense Ratio4|
|Retail – USSBX
|Institutional – UISBX
|Bloomberg Barclays US
Credit 1-3 Yr. TR USD Index5
|Morningstar Category Average
Investing in securities products involves risk, including possible loss of principal. The performance data quoted represents past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. For the most recent month-end performance, please go to advisorusaa.com.
The various share classes have a common portfolio and different expense structures.
1 Total return equals income yield plus share price change and assumes reinvestment of all dividends and capital gain distributions. No adjustment has been made for taxes payable by share holders on their reinvested dividends and capital gain distributions.
2 12-Month Distribution Yield: Computed by dividing income dividends paid during the previous 12 months by the latest NAV adjusted for capital gains.
3 30-Day SEC Yield: This is the SEC standardized yield computation. It is based on annualizing the past 30 days’ net investment income earned by the fund.
4 Represents the total annual operating expenses (which includes acquired fund fees and expenses (AFFE), if any), before reductions of any expenses paid indirectly, as reported in the Fund’s most current prospectus. It is calculated as a percentage of average net assets (ANA).
5 The Bloomberg Barclays US Credit 1-3 year Government/Credit Index is an unmanaged index of all the government, agency, and corporate bonds longer than one year and less than three years.
USAA SHORT-TERM BOND (RETAIL SHARE CLASS): USSBX
Morningstar Category: Short-Term Bond
* The Morningstar Rating™ for funds, or “star rating,” is calculated for managed products (including mutual funds, variable annuity and variable life sub accounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
Morningstar Rating is for the Retail share class only; other classes may have different performance characteristics.
With an average of 19 years of industry experience.
Consider the investment objectives, risks, charges and expenses of the USAA mutual funds carefully before investing. Download a prospectus containing this and other information about the funds from USAA Investment Management Company, Distributor. Read it carefully before investing.
†Brian Smith started his career at USAA as an accountant before going into portfolio management.
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