USAA getting out of mutual fund biz

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Riprap
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USAA getting out of mutual fund biz

Post by Riprap » Tue Nov 06, 2018 10:11 pm

In an email from USAA...

"USAA is pleased to select Victory Capital, an investment industry leader, to acquire the USAA Asset Management Company, which includes our Mutual Fund and ETF businesses as well as the USAA 529 College Savings Plan."

I have a small amount in USAA's muni bond funds and money market fund. I have my reasons, however irrational they may be. That said, anyone ever hear of Victory Capital before? Seems like USAA is doing the membership a favor by getting out of a business they really aren't that competitive in anymore.

Might be time to go 100% Vanguard.

LarryAllen
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Re: USAA getting out of mutual fund biz

Post by LarryAllen » Tue Nov 06, 2018 10:14 pm

That's surprising but I trust USAA so it shows to me that they realized they couldn't reinvent the wheel. Never heard of Victory.

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White Coat Investor
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Re: USAA getting out of mutual fund biz

Post by White Coat Investor » Tue Nov 06, 2018 10:20 pm

One more reason not to invest at USAA.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

gwrvmd
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Re: USAA getting out of mutual fund biz

Post by gwrvmd » Tue Nov 06, 2018 10:28 pm

I have been and am a very loyal USAA client for 40 years. Their insurance is great but their mutual funds are not very good
Get your investments from an investment company and your insurance from an insurance company

Don't get your investments from an insurance company..........Gordon
I have followed mutual fund companies quite closely since I bought my first one from Vanguard in 1978. I have never heard of Victory Capital
Disciple of John Neff

rgramma
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Re: USAA getting out of mutual fund biz

Post by rgramma » Tue Nov 06, 2018 10:53 pm

My understanding is that it will not affect their brokerage business. They use Fidelity NFS for clearing services, so all Fidelity funds, including their index funds, should still be available commission free on their platform.

danaht
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Re: USAA getting out of mutual fund biz

Post by danaht » Tue Nov 06, 2018 11:00 pm

That's too bad. Here is my plan:

1) sell my USAA S&P 500 mutual fund in the first quarter of next year (before the fund transfers to Victory) and
2) open a USAA brokerage account and buy the VOO ETF with the funds.

I only have ~$2000 in unrealized gains for this - so no big deal. Also, according to the press release USAA's brokerage business is not transferring to Victory.
Other posters have mentioned that $500 or more in ETFs will still qualify as a multi-product discount. The only reason I had this account was to get the multi-product discount.

student
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Re: USAA getting out of mutual fund biz

Post by student » Tue Nov 06, 2018 11:23 pm

Riprap wrote:
Tue Nov 06, 2018 10:11 pm
That said, anyone ever hear of Victory Capital before?
No. Took a quick look. Not impressed.

columbia
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Re: USAA getting out of mutual fund biz

Post by columbia » Wed Nov 07, 2018 6:58 am

My first IRA was with USAA - and then I learned about the tyranny of fees.

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vineviz
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Re: USAA getting out of mutual fund biz

Post by vineviz » Wed Nov 07, 2018 7:42 am

Riprap wrote:
Tue Nov 06, 2018 10:11 pm
I have a small amount in USAA's muni bond funds and money market fund. I have my reasons, however irrational they may be. That said, anyone ever hear of Victory Capital before? Seems like USAA is doing the membership a favor by getting out of a business they really aren't that competitive in anymore.
Victory is more of a conglomerate than a consolidator: aside from providing some back-office support, they tend to let the investment managers they acquire keep doing what they've been doing. You can expect, barring some future announcement, your funds to continue being managed the same way they've been managed if history is any guide.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

Soon2BXProgrammer
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Re: USAA getting out of mutual fund biz

Post by Soon2BXProgrammer » Wed Nov 07, 2018 9:11 am

danaht wrote:
Tue Nov 06, 2018 11:00 pm
That's too bad. Here is my plan:

1) sell my USAA S&P 500 mutual fund in the first quarter of next year (before the fund transfers to Victory) and
2) open a USAA brokerage account and buy the VOO ETF with the funds.

I only have ~$2000 in unrealized gains for this - so no big deal. Also, according to the press release USAA's brokerage business is not transferring to Victory.
Other posters have mentioned that $500 or more in ETFs will still qualify as a multi-product discount. The only reason I had this account was to get the multi-product discount.
i have a brokerage account and just have 500 in my sweep fund. (which is a USAA Money market, i don't remember which one).. trying to figure out what this means.. if they are selling/paying Victory to take all the mutual funds

azanon
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Re: USAA getting out of mutual fund biz

Post by azanon » Wed Nov 07, 2018 9:17 am

columbia wrote:
Wed Nov 07, 2018 6:58 am
My first IRA was with USAA - and then I learned about the tyranny of fees.
This. Although I do remember making over 100% one year in USAA Aggressive Growth Fund though (late 90s, i forget the exact year).

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Re: USAA getting out of mutual fund biz

Post by TJH_10003 » Wed Nov 07, 2018 11:46 am

I've been a USAA member for 42 years. They had a great reputation for service, but in recent years they seem have become a marketing enterprise. Like everyone else in the financial business, they have moved to the Internet and automated many processes. That last part they have not done very well. The few people who remain are often not well trained or well informed.

I'll probably stay with USAA for some insurance and maybe banking. But it's time to move the investments to Vanguard.

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Taz
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Re: USAA getting out of mutual fund biz

Post by Taz » Thu Nov 08, 2018 7:22 am

I closed out my largely ignored brokerage account with them this spring by transferring an index EFT (CWI) with gains to start a small Fidelity donor advised fund. The account really served no purpose as everything else was at Vanguard and the TSP.
The destination matters.

typical.investor
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Re: USAA getting out of mutual fund biz

Post by typical.investor » Thu Nov 08, 2018 8:20 am

Their ETFs seem kinda funky...
VictoryShares is a specialist ETF provider with a focus on rules-based solutions that seek to bridge the gap between active and passive. The VictoryShares ETF product line includes single- and multi-factor strategies designed to seek a variety of outcomes, including maximum diversification, dividend income, and downside mitigation.
The Long/Cash Index tactically reduces its exposure to the equity markets during periods of significant market declines and reinvests when market prices have further declined or rebounded. The Nasdaq Victory US Large Cap 500 Long/Cash Volatility Weighted Index is based on the month-end price of the Nasdaq Victory US Large Cap 500 Volatility Weighted Index (the “Reference Index”).

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Re: USAA getting out of mutual fund biz

Post by dharrythomas » Fri Nov 09, 2018 4:36 pm

We started investing with USAA years ago, but then they started market timid with their funds and raised their fees significantly so we moved to Vanguard. I think the last move was 2001.

Still use them for banking and insurance. They've got the same problem with rapid expansion that Vanguard has had. Initially they just serviced officers, then they added children, then they added enlisted so they increased their potential customers by several orders of magnitude.

The bank and insurance are good for the customer, the mutual funds are a profit center, I think the S&P500 expense ratio is 0.5%. They couldn't achieve the economies of scale to have competitive rates.

brokenrecord
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Re: USAA getting out of mutual fund biz

Post by brokenrecord » Fri Nov 09, 2018 4:48 pm

columbia wrote:
Wed Nov 07, 2018 6:58 am
My first IRA was with USAA - and then I learned about the tyranny of fees.
Same. They were always a square peg.

brokenrecord
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Re: USAA getting out of mutual fund biz

Post by brokenrecord » Fri Nov 09, 2018 4:51 pm

TJH_10003 wrote:
Wed Nov 07, 2018 11:46 am
I've been a USAA member for 42 years. They had a great reputation for service, but in recent years they seem have become a marketing enterprise. Like everyone else in the financial business, they have moved to the Internet and automated many processes. That last part they have not done very well. The few people who remain are often not well trained or well informed.

I'll probably stay with USAA for some insurance and maybe banking. But it's time to move the investments to Vanguard.
I’ve noticed the same. I married into USAA so I was never fully bought in. Their customer service has been declining over the last couple of years IMO. To your point, probably due to lack of training.

MBB_Boy
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Re: USAA getting out of mutual fund biz

Post by MBB_Boy » Sat Nov 10, 2018 11:24 am

brokenrecord wrote:
Fri Nov 09, 2018 4:51 pm
TJH_10003 wrote:
Wed Nov 07, 2018 11:46 am
I've been a USAA member for 42 years. They had a great reputation for service, but in recent years they seem have become a marketing enterprise. Like everyone else in the financial business, they have moved to the Internet and automated many processes. That last part they have not done very well. The few people who remain are often not well trained or well informed.

I'll probably stay with USAA for some insurance and maybe banking. But it's time to move the investments to Vanguard.
I’ve noticed the same. I married into USAA so I was never fully bought in. Their customer service has been declining over the last couple of years IMO. To your point, probably due to lack of training.
Really? They are still top ranked, by far, in all the rankings for customer service and member satisfaction.

Then again, most banks are simply terrible....so it's possible they have been declining but are still top of class!

Gnirk
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Re: USAA getting out of mutual fund biz

Post by Gnirk » Sat Nov 10, 2018 7:08 pm

Hmmm. I inherited shares of their tax exempt funds, and have kept them at USAA. I also inherited Vanguard funds held at Vanguard. As the executor of the estate I found USAA to be far better, faster, and more courteous in handling the transition of the accounts to the beneficiaries than Vanguard was. This is the only area where I find Vanguard really sucks.

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celia
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Re: USAA getting out of mutual fund biz

Post by celia » Sat Nov 10, 2018 7:22 pm

Gnirk wrote:
Sat Nov 10, 2018 7:08 pm
Hmmm. I inherited shares of their tax exempt funds, and have kept them at USAA. I also inherited Vanguard funds held at Vanguard. As the executor of the estate I found USAA to be far better, faster, and more courteous in handling the transition of the accounts to the beneficiaries than Vanguard was. This is the only area where I find Vanguard really sucks.
Gnirk, Were you a client of Vanguard before you inherited funds being held there?

I was a trustee for someone who already had accounts at Vanguard before they died. I found Vanguard was very helpful and easy to work with to get the assets divided and re-titled. (There were no retirement accounts in this case, just taxable.)

Big Dog
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Re: USAA getting out of mutual fund biz

Post by Big Dog » Sat Nov 10, 2018 10:13 pm

Seems like USAA is doing the membership a favor by getting out of a business they really aren't that competitive in anymore.
They haven't been competitive for years. I'm a big fan of the company, and have been a member for (next month) 40 years, but now only for insurances. Used to have the USAA credit card, banking services, and investments accounts (IRA's), but I'm generally cheap and would rather pay less in fees, so I dropped all but insurance years ago.

Gnirk
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Re: USAA getting out of mutual fund biz

Post by Gnirk » Sun Nov 11, 2018 12:46 am

celia wrote:
Sat Nov 10, 2018 7:22 pm
Gnirk wrote:
Sat Nov 10, 2018 7:08 pm
Hmmm. I inherited shares of their tax exempt funds, and have kept them at USAA. I also inherited Vanguard funds held at Vanguard. As the executor of the estate I found USAA to be far better, faster, and more courteous in handling the transition of the accounts to the beneficiaries than Vanguard was. This is the only area where I find Vanguard really sucks.
Gnirk, Were you a client of Vanguard before you inherited funds being held there?

I was a trustee for someone who already had accounts at Vanguard before they died. I found Vanguard was very helpful and easy to work with to get the assets divided and re-titled. (There were no retirement accounts in this case, just taxable.)
Yes, I had been a client for 10 years, and my mom for a much longer time. These were taxable accounts, in a living trust with my brother and I as equal beneficiaries. Among other things, the woman who was in charge of the transitioning claimed, on two separate occasions, not to have received documents even though they were signed for each time.

Otherwise, the customer service I have experienced at Vanguard has been wonderful!
I had not been a client of USAA.
Last edited by Gnirk on Sun Nov 11, 2018 1:01 pm, edited 1 time in total.

MtPisgah
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Re: USAA getting out of mutual fund biz

Post by MtPisgah » Sun Nov 11, 2018 7:29 am

I have been a USAA member for 25 years and have always been happy with their service. I have four investment accounts with them but have never held any USAA funds, mainly Vanguard. I suppose I should open a Vanguard account but it is easier for me to have everything in one place.

columbia
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Re: USAA getting out of mutual fund biz

Post by columbia » Sun Nov 11, 2018 8:06 am

Big Dog wrote:
Sat Nov 10, 2018 10:13 pm
Seems like USAA is doing the membership a favor by getting out of a business they really aren't that competitive in anymore.
They haven't been competitive for years. I'm a big fan of the company, and have been a member for (next month) 40 years, but now only for insurances. Used to have the USAA credit card, banking services, and investments accounts (IRA's), but I'm generally cheap and would rather pay less in fees, so I dropped all but insurance years ago.
I like my 2.5% cash back (on all purchases) credit card from USAA. My auto policy is pretty reasonable, too.

MDCrab
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Re: USAA getting out of mutual fund biz

Post by MDCrab » Sun Nov 11, 2018 8:21 am

I have USAA for insurance, which is great. I have USAA for banking, which is also great. And I have a USAA brockerage, which mostly holds commission-free Fidelity funds. I don’t see any reason to change any of that.

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corn18
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Re: USAA getting out of mutual fund biz

Post by corn18 » Sun Nov 11, 2018 10:52 am

MDCrab wrote:
Sun Nov 11, 2018 8:21 am
I have USAA for insurance, which is great. I have USAA for banking, which is also great. And I have a USAA brockerage, which mostly holds commission-free Fidelity funds. I don’t see any reason to change any of that.
This is me as well. For some reason, I always get the best rates for insurance from them. The online banking is good. 2.5% cash back VISA is great. Rates are terrible. Brokerage works great to trade FIDO funds. It also makes life easy for my wife if I die. Everything except the 401k is at USAA.

NYnative
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Re: USAA getting out of mutual fund biz

Post by NYnative » Sun Nov 11, 2018 11:19 am

"Really? They are still top ranked, by far, in all the rankings for customer service and member satisfaction."

Yes - for insurance. I've been with them since I was in ROTC. But for life, home and car insurance only. That's why they were created - to provide insurance for the military with no war clause. Very few other companies (other than ones specifically for the military) offer that, which means they are useless if you are killed in combat or by an act of war.

I still remember their early ads - 3 out of 10 officers insure with USAA, then it was 5 out of 10, eventually 9 out of 10. After that, they stopped mentioning it. They were running out of prospective members, so they first opened the field of membership to military children, then senior NCOs, then lower enlisted ranks. I have no idea where they go from here. Eventually, they will run out of possible new members. I guess the decision then is to open it up for everyone and just become a regular insurance company or recognize that there are limits to growth.

One reason their car insurance rates were really great in comparison to everyone else in the past was that their membership was limited to military officers, who, compared to the general public, had a much lower accident rate. They were especially cheap when stationed overseas. With their field of membership so wide now, their rates can be beat by some companies. But I am sticking with them until I see such a large gap in prices that it's no longer worthwhile. Service has always been fantastic for the insurance I have. Never tried investments or banking with them, as they are really neither a bank nor an investment company.

DownToThis
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Re: USAA getting out of mutual fund biz

Post by DownToThis » Sun Nov 11, 2018 11:24 am

I have their target date fund (I think the ER is 0.78). I've had it for a while now and have thought about getting out of it but part of me feels like I don't want to pay the capital gains. I guess this might be an incentive to move it if this new company is taking it over

Soon2BXProgrammer
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Re: USAA getting out of mutual fund biz

Post by Soon2BXProgrammer » Sun Nov 11, 2018 11:37 am

NYnative wrote:
Sun Nov 11, 2018 11:19 am
"Really? They are still top ranked, by far, in all the rankings for customer service and member satisfaction."

Yes - for insurance. I've been with them since I was in ROTC. But for life, home and car insurance only. That's why they were created - to provide insurance for the military with no war clause. Very few other companies (other than ones specifically for the military) offer that, which means they are useless if you are killed in combat or by an act of war.

I still remember their early ads - 3 out of 10 officers insure with USAA, then it was 5 out of 10, eventually 9 out of 10. After that, they stopped mentioning it. They were running out of prospective members, so they first opened the field of membership to military children, then senior NCOs, then lower enlisted ranks. I have no idea where they go from here. Eventually, they will run out of possible new members. I guess the decision then is to open it up for everyone and just become a regular insurance company or recognize that there are limits to growth.

One reason their car insurance rates were really great in comparison to everyone else in the past was that their membership was limited to military officers, who, compared to the general public, had a much lower accident rate. They were especially cheap when stationed overseas. With their field of membership so wide now, their rates can be beat by some companies. But I am sticking with them until I see such a large gap in prices that it's no longer worthwhile. Service has always been fantastic for the insurance I have. Never tried investments or banking with them, as they are really neither a bank nor an investment company.

price depends on what company you end up getting insured through. if you are in the top tier.. (i.e. have a Subscribers Savings Account), yes, then rates are hard to beat.

NYnative
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Re: USAA getting out of mutual fund biz

Post by NYnative » Sun Nov 11, 2018 3:20 pm

"price depends on what company you end up getting insured through. if you are in the top tier.. (i.e. have a Subscribers Savings Account), yes, then rates are hard to beat."

I agree. I am in that tier.

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Raymond
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Re: USAA getting out of mutual fund biz

Post by Raymond » Sun Nov 11, 2018 3:48 pm

I've been a USAA member for over thirty years - insurance and banking.

Transferred what little I had with them in mutual funds and individual stocks over to Vanguard about ten years ago, never looked back.
"Ritter, Tod und Teufel"

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