How USAA Funds Is Serving Advisors

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How USAA Funds Is Serving Advisors

June 21, 2016

by Robert Huebscher

USAA Investments, based in San Antonio, TX, manages over $68 billion in assets. It strives for superior performance over the long-term while adhering to the highest ethical standards. USAA is also widely known for its property and casualty insurance business and for its commitment to serving members of the military and their families.

Karyn Bostick, director of strategic relationship management for third-party distribution at USAA, and Regina Shafer, senior portfolio manager of the five-star and bronze-rated USAA Tax-Exempt Intermediate-Term Bond Fund (USATX), were at this year’s Morningstar conference in Chicago.

I spoke to Karyn and Regina on June 14.

USAA has traditionally been known for its focus on those who have served in the military and their families. How has your overall strategic focus been evolving?

Karyn: I think it would be pertinent to give a brief background on USAA because it gets us to where we are today. In 1922, USAA was established by 25 Army officers. Let’s jump ahead to 1970, when we launched our investment company. In 1971 our first mutual fund was launched. That is pertinent because at that time USAA funds became available to the investing public, though they were directly sold through USAA.

Let’s move forward to four years ago, when we started our third-party distribution team to make USAA funds broadly available to the public, advisors and, of course, our members through leading intermediaries. That focus has continued to expand and we are continuing to look at not only broadening our presence on existing platforms – we work with 44 of them – but also building awareness among leading advisors and research analysts. We also recently entered the DCIO space.

To be clear, your funds are available to the general public. There is no requirement that the investor has to be a current or former member of the military.

Karyn: Thank you for clarifying. The funds have been available since 1971, and we have been working diligently to raise awareness around that. Membership in USAA is for the property and casualty side of the business. From an investment perspective, you are absolutely available to work with USAA as a member of the investing public.

Karyn, your personal goal has been to grow USAA’s third-party distribution. How has that been going? What growth have you achieved within the wire-house, broker-dealer and independent channels? What has been your strategy?

Karyn: One of the biggest growth achievement numbers I can give you is that over the 12-month period ending March 31, 2016, our team has increased our assets under management by 20.8% to $4.3 billion. Remember, this is a team that was started four years ago. That growth has been across all three channels: wire-house, broker-dealer and independent.

As far as strategy goes, we are continuing to expand our focus and raise awareness. We do that in multiple ways, from one-on-one touch points to marketing campaigns. We have a website at USAA. It is, and that was created two-and-a-half years ago to give advisors a direct focus on our funds and the marketing resources we have available.

We continue to look to work with advisors in support of the military community, which represents over 60 million people across America. They are adopting our investment strategies broadly across industry channels.

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