Copyright © 2020 USAA.
This information is intended for U.S. residents.
Investing in securities products involves risk, including possible loss of principal.
Shares of ETFs are bought and sold in the market at a market price, which may differ from NAV. Investors selling ETF shares in the market may receive less than NAV. Investors buying and selling ETF shares at market price may pay brokerage commissions, which will reduce returns. Market returns are based upon the closing price, which is generally at 4:00 p.m. Eastern time and do not represent the returns you would receive if you traded shares at other times. Investors may acquire ETF shares and tender them for redemption in Creation Unit Aggregations only. Individual ETF shares are not redeemable.
Transactions in ETF shares have tax consequences.
As interest rates rise, existing bond prices fall.
Non-investment grade securities are considered speculative and are subject to significant credit risk. They are sometimes referred to as junk bonds since they represent a greater risk of default than more creditworthy investment-grade securities.
Diversification does not guarantee a profit or prevent a loss.
Mortgage-backed securities have prepayment, credit, interest rate, and extension risks. Generally, when interest rates decline, prepayments accelerate beyond the initial pricing assumptions and may cause the average life of the securities to shorten. Also the market value may decline when interest rates rise because prepayments decrease beyond the initial pricing assumptions and may cause the average life of the securities to extend.
The Fund's shares are traded on an exchange and are bought and sold on the secondary market at market prices. The shares may trade at a premium or discount to NAV and as a result investors may pay more than NAV when purchasing shares and receive less than NAV when selling shares. Investors buying or selling shares in the secondary market may pay brokerage commissions, which may be a significant proportional cost for investors seeking to buy or sell relatively small amounts of shares. The Fund's investments in other investment companies are subject to statutory limitations prescribed by the Investment Company Act of 1940 (the "1940 Act"). It is possible that an active trading market for the shares will not be maintained, or that trading in the shares will be halted such as due to market-wide trading halts or due to the shares no longer meeting the listing requirements of the exchange.
The ETF is actively managed. Judgments about a particular security, markets, or investment strategy may prove to be incorrect and may cause the ETF to incur losses.
The sale price the ETF could receive for a security may differ from the ETF's valuation of the security and may differ from the value used by the Index, particularly for securities that trade in low volume or volatile markets or that are valued using a fair value methodology.
Derivatives, including swap agreements and futures contracts, may involve risks different from, or greater than, those associated with more traditional investments.
Creations and redemptions of shares may be effected for cash, rather than in-kind, which means that the ETF may need to sell portfolio securities in order to complete an in-cash redemption, and may recognize net gains on these sales.
The ETF is subject to the risk that the market value of the bonds or debt securities in the ETF's portfolio will fluctuate because of changes in interest rates, changes in the supply and demand of debt securities, and other market factors. Bond prices generally are linked to the prevailing market interest rates. In general, when interest rates rise, bond prices fall; and conversely, when interest rates fall, bond prices rise. The price volatility of a bond also depends on its maturity. Generally, the longer the maturity of a bond, the greater is its sensitivity to interest rates.
Investments provided by USAA Investment Management Company and USAA Financial Advisors Inc., both registered broker dealers, and affiliates.
¹NAV quote times are Eastern Time (ET) and are calculated at the end of the business day.
²Represents the total annual operating expenses, 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.