USAA INVESTMENT TRUST, 497, 1995-09-01

USAA INVESTMENT TRUST
497, 1995-09-01

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BALANCED PORTFOLIO FUND HAS A NEW NAME:
"GROWTH AND TAX STRATEGY FUND"

THIRD SUPPLEMENT dated September 5, 1995
to the PROSPECTUS
dated NOVEMBER 7, 1994

On July 12, 1995, the Board of Trustees approved that
effective September 5, 1995, the name of the Balanced Portfolio
Fund will be changed to the Growth and Tax Strategy Fund. The
name is being changed to describe more adequately the Fund's
specific investment strategy. The Trustees also approved an
increase in the minimum initial investment required for the Fund
from $1,000 to $3,000.

USAA BALANCED PORTFOLIO FUND

SUPPLEMENT DATED FEBRUARY 1, 1995
TO THE PROSPECTUS
DATED NOVEMBER 7, 1994

"Appendix A - Portfolio Management" on pages 23 and 24 of
the Prospectus is amended to reflect the following change
effective February 1, 1995.

Harry W. Miller assumed portfolio management
responsibilities of the Basic Value Stocks investment category
replacing Stephan J. Klaffke. Mr. Miller's biographical
information follows:

EDUCATION BS, Rider College, New Jersey
MBA, University of Southern California

EXPERIENCE(1) 37 years, investment management
20 years, IMCO

BUSINESS 10/87-present, Senior Vice President,
HISTORY Equity Investments
PAST FIVE
YEARS

PROFESSIONAL CFA, 1968
DESIGNATIONS(1)

PROFESSIONAL AIMR
MEMBERSHIPS(1) SAFAS

--------------
(1)Abbreviations of designations and organizations used in the above table:
IMCO - USAA Investment Management Company (the Manager)
CFA - Chartered Financial Analyst
AIMR - Association for Investment Management and Research
SAFAS - San Antonio Financial Analysts Society, Inc.

USAA BALANCED PORTFOLIO FUND

SUPPLEMENT DATED JANUARY 23, 1995
TO THE PROSPECTUS
DATED NOVEMBER 7, 1994

On May 1, 1995, the Balanced Portfolio Fund's asset
allocation ranges will be adjusted in accordance with new
percentage allocations approved by the Board of Trustees. The
percentage target range for each investment category has been
revised as follows:

Percentage Target Range
Investment Category of Net Assets
------------------- -------------
Short-Term Tax-Exempt Securities
(Maturities two years or less) 20-40%
Long-Term Tax-Exempt Securities
(Maturities ten years or more) 20-40%
Basic Value Stocks 36-44%

USAA BALANCED PORTFOLIO FUND

November 7, 1994 PROSPECTUS

USAA Balanced Portfolio Fund (the Fund) is one of eight
no-load mutual funds offered by USAA Investment Trust
(the Trust). The Fund is managed by USAA Investment
Management Company (the Manager).

WHAT IS THE INVESTMENT OBJECTIVE?

The Fund's investment objective is to seek a conservative
balance for the investor between income, the majority of
which is exempt from federal income tax, and the potential
for long-term growth of capital to preserve purchasing
power. Page 8.

HOW DO YOU BUY?
Fund shares are sold on a continuous basis at the
net asset value per share without a sales charge. Make
your initial investment directly with the Manager by mail
or in person. Page 12.

HOW DO YOU SELL?
You may redeem shares of the Fund by mail, telephone,
fax, or telegraph on any day that the net asset value is
calculated. Page 14.

This Prospectus, which should be read and retained
for future reference, provides information regarding the
Trust and the Fund that you should know before investing.

Shares of the USAA Balanced Portfolio Fund are not
deposits or other obligations of, or guaranteed by the USAA
Federal Savings Bank, are not insured by the FDIC or any
other Government Agency, and are subject to market risks.

If you would like more information, a STATEMENT OF
ADDITIONAL INFORMATION of the Trust, dated November 7,
1994, is available upon request and without charge by
writing to USAA INVESTMENT TRUST, 9800 Fredericksburg
Rd., San Antonio, TX 78288, or by calling 1-800-531-8181.
The Statement of Additional Information has been filed
with the Securities and Exchange Commission and is
incorporated by reference into this Prospectus.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

TABLE OF CONTENTS

Page
SUMMARY DATA
Fees and Expenses 3
Financial Highlights 4
Performance Information 5

USING MUTUAL FUNDS
USAA Family of No-Load Mutual Funds 6
Using Mutual Funds in an Investment Program 7

INVESTMENT PORTFOLIO INFORMATION
Investment Objective and Policies 8

SHAREHOLDER INFORMATION
Purchase of Shares 12
Redemption of Shares 14
Conditions of Purchase and Redemption 15
Exchanges 16
Other Services 17
Share Price Calculation 18
Dividends, Distributions and Taxes 18
Management of the Trust 20
Description of Shares 21
Service Providers 22
Telephone Assistance Numbers 22
Appendix A - Portfolio Management 23

FEES AND EXPENSES

The following summary is provided to assist you in understanding
the expenses you will bear directly or indirectly.

Shareholder Transaction Expenses
-------------------------------------------------------------------------
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee* None
Exchange Fee None

Annual Fund Operating Expenses** (as a percentage of average net assets)
-------------------------------------------------------------------------
Management Fee .50%
12b-1 Fee None
Other Expenses
Transfer Agent Fee*** .14%
Custodian Fee .05%
All Other Expenses .15%
---
Total Other Expenses .34%
---
Total Operating Expenses .84%
===
-------------------------------------------------------------------------
* A shareholder who requests delivery of redemption proceeds by wire
transfer will be subject to a $10 fee. See Redemption of Shares
- Bank Wire Redemption.
** Based upon the eight-month period ended May 31, 1994.
*** The Fund pays USAA Shareholder Account Services an annual fixed fee
per account for its services. See Transfer Agent in the Statement
of Additional Information, page 26.

Example of Effect of Fund Expenses
-------------------------------------------------------------------------
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of the
periods shown.

1 year - $ 9
3 years - $ 27
5 years - $ 47
10 years - $104

The above example should not be considered a representation of past or
future expenses and actual expenses may be greater or less than those shown.

<TABLE>

FINANCIAL HIGHLIGHTS

The following per share operating performance for a share outstanding
throughout the eight-month period ended May 31, 1994 and each period in the
five-year period ended September 30, 1993, has been derived from financial
statements audited by KPMG Peat Marwick LLP. This table should be read in
conjunction with the financial statements and related notes that appear in
the Fund's Annual Report. Further performance information is contained in
the Annual Report and is available upon request without charge.

EIGHT-MONTH
PERIOD ENDED
MAY 31, YEAR ENDED SEPTEMBER 30,
1994 1993 1992 1991 1990 1989*
<S> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $ 13.00 $ 12.00 $ 11.51 $ 10.59 $ 11.08 $ 10.00
Net investment income .29 .46 .48 .53 .52 .27
Net realized and
unrealized gain (loss) (.27) 1.01 .50 .93 (.49) .96
Distributions from net
investment income (.33) (.46) (.49) (.54) (.50) (.15)
Distributions of realized
capital gains (.37) (.01) - - (.02) -
-------- -------- -------- -------- -------- --------
Net asset value at
end of period $ 12.32 $ 13.00 $ 12.00 $ 11.51 $ 10.59 $ 11.08
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total return (%)** .13 12.57 8.74 14.19 .19 12.38
Net assets at end of
period ($000) $128,077 $118,532 $ 82,840 $ 53,535 $ 37,599 $ 23,823
Ratio of expenses to
average net assets (%) .84(a) .86 .92 1.00(c) 1.00(c) 1.29(a)(c)
Ratio of net investment
income to average net
assets (%) 3.56(a) 3.81 4.31 4.91(c) 5.05(c) 4.90(a)(c)
Portfolio turnover (%) 171.35(b) 98.83 106.83 81.22 105.78 119.76

</TABLE>

--------------
* From date of inception, January 11, 1989.
** Assumes reinvestment of all dividend income and capital gain distributions
during the period.
(a) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
(b) The Fund may simultaneously purchase and sell the same securities. If
these transactions, which can be high in volume and dissimilar to
other trade activity within the Fund, were excluded from the portfolio
turnover rate, the rate would be 93.56%. Purchases and sales of this type
are $98,639 and $98,761, respectively, in thousands.
(c) The information contained in this table is based on actual expenses for
the period, after giving effect to reimbursements of expenses by the
Manager. Absent such reimbursements the Fund's ratios would have been:

YEAR ENDED SEPTEMBER 30,
1991 1990 1989*
---- ---- ----
Ratio of expenses to average net assets (%) 1.06 1.24 1.48(a)
Ratio of net investment income to average
net assets (%) 4.85 4.81 4.71(a)

PERFORMANCE INFORMATION

Performance information should be considered in light of
the Fund's investment objective and policies and market
conditions during the time periods for which it is
reported. Historical performance should not be considered
as representative of the future performance of the Fund.
The Trust may quote the Fund's yield or total return
in advertisements and reports to shareholders or
prospective investors. The Fund's performance may also
be compared to that of other mutual funds with a similar
investment objective and to stock or relevant indexes
that are referenced in Appendix B in the Trust's
Statement of Additional Information. Standard total
return and yield results reported by the Fund do not take
into account recurring and nonrecurring charges for
optional services which only certain shareholders elect
and which involve nominal fees, such as the $10 fee for a
delivery of redemption proceeds by wire transfer.
The Fund's average annual total return is computed
by determining the average annual compounded rate of
return for a specified period which, when applied to a
hypothetical $1,000 investment in the Fund at the
beginning of the period, would produce the redeemable
value of that investment at the end of the period,
assuming reinvestment of all dividends and distributions
during the period.
The Fund may advertise performance in terms of a 30-
day yield quotation. The yield quotation is computed by
dividing the net investment income per share earned
during the period by the offering price per share on the
last day of the period. This income is then annualized.
Further information concerning the Fund's yield and
total return is included in the Trust's Statement of
Additional Information.

USAA FAMILY OF NO-LOAD MUTUAL FUNDS

The USAA Family of No-Load Mutual Funds includes a
variety of portfolios, each with different objectives and
policies. In combination, these portfolios are designed
to provide investors with the opportunity to formulate
their own investment program. An investor in any one
portfolio may exchange into any other portfolio. For
more complete information about the portfolios in the
USAA Family of Funds, including charges and expenses,
call the Manager for a Prospectus. Be sure to read it
carefully before you invest or send money.

USAA INVESTMENT TRUST
Balanced Portfolio Fund
Cornerstone Fund
Emerging Markets Fund
Gold Fund
International Fund
World Growth Fund
GNMA Trust
Treasury Money Market Trust

USAA MUTUAL FUND, INC.
Aggressive Growth Fund
Growth Fund
Growth & Income Fund
Income Stock Fund
Income Fund
Short-Term Bond Fund
Money Market Fund

USAA TAX EXEMPT FUND, INC.
Long-Term Fund
Intermediate-Term Fund
Short-Term Fund
Tax Exempt Money Market Fund
California Bond Fund*
California Money Market Fund*
New York Bond Fund*
New York Money Market Fund*
Virginia Bond Fund*
Virginia Money Market Fund*

USAA STATE TAX-FREE TRUST
Florida Tax-Free Income Fund*
Florida Tax-Free Money Market Fund*
Texas Tax-Free Income Fund*
Texas Tax-Free Money Market Fund*

* Available for sale only to residents
of these specific states.

USING MUTUAL FUNDS IN AN INVESTMENT PROGRAM

I. THE IDEA BEHIND MUTUAL FUNDS
Mutual funds were conceived as a vehicle that could give
small investors some of the advantages enjoyed by wealthy
investors. A relatively small investment buys part of a
widely diversified portfolio. That portfolio is managed
by investment professionals, relieving the shareholder of
the need to make individual stock or bond selections.
The investor also enjoys conveniences, such as daily
pricing, liquidity, and in the case of the USAA Family of
Funds, no sales charge. The portfolio, because of its
size, has lower transaction costs on its trades than most
individuals would have. As a result each shareholder
owns an investment that in earlier times would have been
available only to very wealthy people.

II. USING FUNDS IN AN INVESTMENT
PROGRAM
In choosing a mutual fund as an investment vehicle, the
shareholder is foregoing some investment decisions, but
must still make others. The decisions foregone are those
involved with choosing individual securities. The Fund
Manager will perform that function. In addition, the
Manager will arrange for the safekeeping of securities,
auditing the annual financial statements, and daily
valuation of the Fund, as well as other functions.
The shareholder, however, retains at least part of
the responsibility for an equally important decision.
That is determining a portfolio of mutual funds that
balances the investor's investment goals with his or her
tolerance for risk. It is likely that this decision may
involve the use of more than one fund of the USAA Family
of Funds.
For example, assume a shareholder wishes to
diversify internationally. He or she could do this by
adding positions in the Cornerstone, Emerging Markets,
Gold, International, or World Growth Funds to holdings in
domestic funds. This would give the investor exposure to
the opportunities of investment in many foreign countries
and to currency changes. This is just one example of how
an individual could combine funds to create a portfolio
tailored to his or her own risk and reward goals.

III. USAA'S FAMILY OF FUNDS
The Manager offers investors another alternative in its
portfolio funds, the Balanced Portfolio and Cornerstone
Funds. Both of these unique mutual funds provide a
professionally managed diversified investment portfolio
within a mutual fund. These Funds are designed for the
shareholder who prefers to delegate the asset allocation
process to an investment manager. The Funds are
structured to achieve diversification across a number of
investment categories.
Whether you prefer to create your own mix of mutual
funds or use a portfolio fund, the USAA Family of Funds
provides a broad range of choices covering just about any
investor's investment objectives. Our sales representatives
stand ready to inform you of your choices and to help you
craft a portfolio which meets your needs.

INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE
The Fund's investment objective is to seek a conservative
balance for the investor between income, the majority of
which is exempt from federal income tax, and the potential
for long-term growth of capital to preserve purchasing power.
The investment objective of the Fund cannot be changed
without shareholder approval. In view of the risks inherent
in all investments in securities, there is no assurance that
this objective will be achieved.
The investment policies and techniques used to pursue
the Fund's objective may be changed without shareholder
approval, except as otherwise noted. Further information
regarding the Fund's investment policies, restrictions and
risks is provided in the Trust's Statement of Additional
Information.

INVESTMENT POLICIES AND
TECHNIQUES
The Fund provides a professionally managed diversified
investment program within one mutual fund. The Manager
seeks to attain the objective by investing the Fund's
assets in each of the following investment categories
within the indicated ranges:
Percentage
Target Range
Investment Category of Net Assets
------------------- -------------
Short-Term Tax-Exempt Securities
(Maturities two years or less) 27 - 33%
Long-Term Tax-Exempt Securities
(Maturities ten years or more) 27 - 33%
Basic Value Stocks 36 - 44%

The target ranges may be revised by the Board of
Trustees upon 60 days' prior written notice to shareholders.
However, the Manager reserves the right, without shareholder
approval, to revise the ranges on a temporary defensive basis
when, in its opinion, such changes are believed to be in the
best interest of the Fund and its shareholders.
The ranges allow for a variance in each investment
category. Should market action cause investment categories
to move outside the ranges, portfolio adjustments will be
made by the Manager. In general, portfolio adjustments will
be made at least once during each calendar quarter to bring
each category within its range. These portfolio adjustments
may cause the Fund to sell securities in investment categories
which have appreciated in value and to buy securities in
investment categories which have depreciated in value. Such
adjustments may also cause the Fund to incur a higher
proportion of short-term capital gains than a fund that
does not have a similar policy.
The investment categories and their weightings have
been specifically selected to provide investors with a
diversified investment in a single mutual fund. Short
and long-term tax-exempt securities provide income exempt
from federal income tax. The short-term category seeks
to add stability of net asset value while the long-term
category seeks higher income. The Basic Value Stocks
have been selected for their potential to provide long-
term capital growth.
It is a fundamental policy of the Fund that during
normal market conditions the Fund's assets will be
invested so that at least 50% of the Fund's annual income
will be exempt from federal personal income tax and
excluded from the calculation of federal alternative
minimum taxes for individual taxpayers.

TAX-EXEMPT SECURITIES CATEGORIES
In general, interest rates for long-term tax-exempt
securities have exceeded those for short-term tax-exempt
securities. By investing in short-term tax-exempt
securities (maturities of two years or less) and in long-
term tax-exempt securities (maturities of ten years or
longer), the Manager believes that price volatility will
be lower than that of a portfolio of all long-term
maturities. Portfolio yields will generally be lower
under this investment policy than they would be in a
portfolio comprised of all long-term maturities. The
Manager believes that the trade-off in yield, if any, for
expected lower volatility is in the best interest of
shareholders.
To minimize federal income taxes on income distributed
by the Fund, approximately 60% of the Fund's assets will be
invested in tax-exempt securities, the interest from which,
in the opinion of counsel, is exempt from federal income tax
but may be subject to the federal alternative minimum tax.
Tax-exempt securities include general obligation
bonds, which are secured by the issuer's pledge of its
faith, credit and taxing power for the payment of
principal and interest; revenue bonds, which are payable
from the revenue derived from a particular facility or
class of facilities or, in some cases, from the proceeds
of a special excise tax or other specific revenue source,
but not from the general taxing power; and certain types
of industrial development bonds issued by or on behalf of
public authorities to obtain funds for privately-operated
facilities, provided that the interest paid on such
securities qualifies as exempt from federal income taxes.
Under normal market conditions, the Manager will
invest the combined assets of the Long-Term and Short-
Term Tax-Exempt Securities categories so that approximately
75% of the total market value of the tax-exempt securities
is rated within the three highest long-term rating categories
(at least A) by Moody's Investors Service, Inc. (Moody's),
Standard & Poor's Corporation (S&P), or Fitch Investors
Service, Inc. (Fitch), in the highest short-term rating
category by Moody's, S&P, or Fitch, or, if a security is
not rated by those rating agencies, it must be of equivalent
investment quality as determined by the Manager.
The Manager will not purchase a security if, as a
result of such purchase, more than 25% of the combined
total market value of the tax-exempt securities of both
categories would be invested in securities which do not
meet these quality standards. In no event will a
security be purchased in the tax-exempt securities
categories unless it is rated at least investment grade;
i.e., rated by Moody's, S&P, or Fitch at least in the
fourth highest rating category for long-term securities,
in the second highest rating category for short-term
securities, or, if not rated by those rating agencies,
determined by the Manager to be of equivalent investment
quality. Securities rated in the lowest level of
investment grade have some speculative characteristics
since adverse economic conditions and changing
circumstances are more likely to have an adverse impact
on such securities.
If the rating of a security is downgraded, the Manager
will determine whether it is in the best interest of the
Fund's shareholders to continue to hold such security in
the Fund's portfolio. For a more complete description of
tax-exempt securities and their ratings, see Appendix A in
the Statement of Additional Information.
Within the Short-Term Tax-Exempt Securities investment
category (maturities two years or less), the Fund may, on
a temporary basis due to market or other conditions, invest
in short-term securities which are not exempt from federal
income tax. These securities may consist of obligations of
the United States Government and its agencies or
instrumentalities, and repurchase agreements secured by such
instruments; certificates of deposit of domestic banks having
capital, surplus and undivided profits in excess of $100
million; banker's acceptances of similar banks; commercial
paper; and other corporate debt obligations.

BASIC VALUE STOCKS CATEGORY
Approximately 40% of the Fund's assets will be invested
in common stocks for their long-term potential to
increase in value. Within this category, investments
will consist of common stocks or securities which are
convertible into or which carry the right to buy common
stocks of U.S. companies which the Manager believes are
undervalued in relation to such factors as the company's
assets and current or prospective earnings. In most
cases, these securities will be listed on the New York
Stock Exchange.
The Basic Value Stocks category will include common
stocks of companies with one or more of the following
characteristics when purchased: (1) the price earnings
ratio is lower than the price earnings ratio of the S&P
500; (2) the price per share is lower than the book value
per share; (3) the dividend yield is higher than the
dividend yield of the S&P 500; or (4) the company has
assets with a perceived market value in excess of book
value. Loss of these characteristics will not
necessarily result in the sale of securities in this
investment category. The Manager believes that these
common stock investments in Basic Value Stocks will
provide an investor in the Fund the potential for
long-term increases in capital. Such potential does not
generally exist in a portfolio which is invested totally
in fixed income securities.

OTHER POLICIES
Repurchase Agreements - The Fund may invest in repurchase
agreements which are collateralized by obligations backed
by the full faith and credit of the U.S. Government or by
its agencies or instrumentalities. A repurchase
agreement is a transaction in which a security is
purchased with a simultaneous commitment to sell the
security back to the seller (a commercial bank or
recognized securities dealer) at an agreed upon price on
an agreed upon date, usually not more than 7 days from
the date of purchase. The resale price reflects the
purchase price plus an agreed upon market rate of
interest which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase
agreement involves the obligation of the seller to pay
the agreed upon price, which obligation is in effect
secured by the value of the underlying security. In
these transactions, the securities purchased by the Fund
will have a total value equal to or in excess of the
amount of the repurchase obligation and will be held by
the Fund's custodian until repurchased. If the seller
defaults and the value of the underlying security
declines, the Fund may incur a loss and may incur
expenses in selling the collateral. If the seller seeks
relief under the bankruptcy laws, the disposition of the
collateral may be delayed or limited.

When-Issued Securities - The Fund may invest in new issues
of debt securities offered on a when-issued basis; that is,
delivery and payment take place after the date of the
commitment to purchase, normally within 45 days. Both price
and interest rate are fixed at the time of commitment. The
market value at the time the transaction is completed may
be more or less than the fixed purchase price. Such
securities can be sold before settlement date.
Cash or high quality liquid debt securities equal to
the amount of the when-issued commitments are segregated
at the Fund's custodian bank. The segregated securities
are valued at market, and daily adjustments are made to
keep the value of the cash and segregated securities at
least equal to the amount of such commitments by the
Fund. On the settlement date, the Fund will meet its
obligations from then available cash, sale of segregated
securities, sale of other securities, or sale of the
when-issued securities themselves.

Variable Rate Securities - The Fund may invest in
securities that bear interest rates (coupons) which are
adjusted periodically to market rates. These interest
rate adjustments can both raise and lower the income
generated by such securities. These changes will have
the same effect on the income earned by a Fund depending
on the proportion of such securities held.
The market value of fixed coupon securities
fluctuates with changes in prevailing interest rates,
increasing in value when interest rates decline and
decreasing in value when interest rates rise. The value
of variable rate securities, however, is less affected by
changes in prevailing interest rates because of the
periodic adjustment of their coupons to a market rate.
The shorter the period between adjustments, the smaller
the impact of interest rate fluctuations on the value of
these securities. The market value of variable rate
securities usually tends toward par (100% of face value)
at interest rate adjustment time.

Put Bonds - The Fund may invest in tax-exempt securities
(including securities with variable interest rates) which may
be redeemed or sold back (put) to the issuer of the security
or other guarantor not affiliated with the issuer at face
value prior to stated maturity ("Put Bonds"). Such securities
will normally trade as if maturity is the earlier put date,
even though stated maturity is longer. Under the Fund's
portfolio allocation procedure, maturity for put bonds is
deemed to be the date on which the put becomes exercisable.

Municipal Lease Obligations - The Fund may invest in a
variety of instruments commonly referred to as municipal
lease obligations, including leases, installment purchase
contracts and certificates of participation in such
leases and contracts. In evaluating a potential
investment in a municipal lease obligation, the Manager
will consider: (1) the credit quality of the obligor,
(2) whether the underlying property is essential to a
governmental function, and (3) whether the lease
obligation contains covenants prohibiting the obligor
from substituting similar property if the obligor fails
to make appropriations for the lease obligation. For a
description of the risks associated with these
obligations, see Investment Policies - Municipal Lease
Obligations in the Trust's Statement of Additional
Information.

Liquidity - The Fund may not invest more than 15% of the
market value of its total assets in securities which are
illiquid or not readily marketable.
Municipal Lease Obligations, Rule 144A Securities
and certain Put Bonds that are subject to restrictions on
transfer may be determined to be liquid in accordance
with guidelines established by the Board of Trustees for
purposes of complying with the Fund's investment
restriction applicable to investments in illiquid
securities.

INVESTMENT RESTRICTIONS
The following restrictions may not be changed without
shareholder approval:

a. The Fund may not invest more than 25% of its total
assets in one industry.

b. The Fund will not purchase securities of any one
issuer (except the United States Government, its
agencies and instrumen-talities), if as a result of
such purchase more than 5% of the market value of
thetotal assets of the Fund would be invested in
securities of such issuer. The Fund will not
purchase more than 10% of any class of securities or
of the out-standing voting securities of any issuer.

c. The Fund will not borrow money, except from banks
for temporary or emergency purposes and then only in
an aggregate amount not in excess of 5% of the
market value of its total assets at the time of such
borrowing.

PURCHASE OF SHARES

OPENING AN ACCOUNT
You may open an account and make an investment by any of
the methods described in the following table. A complete,
signed application is required together with a check
(payable to USAA Investment Trust, Balanced Portfolio
Fund) for each new account.

TAX ID NUMBER
We require that each shareholder named on the account
provide the Trust with a social security number or tax
identification number to avoid possible withholding
requirements.

EFFECTIVE DATE
The purchase of shares will be effective on the day on
which a completed application and check are received by
the Manager at its principal office in San Antonio, TX,
if received before the time the net asset value (NAV)
per share is calculated. If an application, check, or
funds are received in San Antonio after the time at which
the NAV is calculated, the purchase will be effective on
the next business day. A check drawn on a foreign bank
will not be deemed received for the purchase of shares
until such time as the check has cleared and the Manager
has received good funds, which may take up to 4 to 6 weeks.
Furthermore, a bank charge may be assessed in the clearing
process, which will be deducted from the amount of the
purchase. To avoid a delay in the effectiveness of your
purchase, the Manager suggests that you convert your foreign
check to U.S. dollars prior to investment in the Fund.

PURCHASE OF SHARES
INITIAL PURCHASES: Minimum $1,000

Mail

Send your application and check to:

USAA Investment Management Company
9800 Fredericksburg Rd., San Antonio, TX 78288

In Person

Bring your application and check to:

USAA Investment Management Company
USAA Federal Savings Bank
10750 Robert F. McDermott Freeway
San Antonio, TX

Exchange

Call our telephone assistance numbers. The new account
must have the same registration as the account from which
you are exchanging.

ADDITIONAL PURCHASES: Minimum $50

Mail

Send your check and the "Invest By Mail" stub, which accompanies
your Fund's transaction confirmation, to the Transfer Agent:

USAA Shareholder Account Services
9800 Fredericksburg Rd., San Antonio, TX 78288

Bank Wire
Purchase

Instruct your bank (which may charge a fee for the service) to
wire the specified amount to the Trust as follows:

State Street Bank and Trust Company
Boston, MA 02101
ABA# 011000028
Attn: USAA Balanced Portfolio Fund
USAA AC-69384998
Shareholder(s) Name(s)
Shareholder Account Number

Electronic
Funds
Transfer (EFT)

You can pay for purchases electronically via electronic
funds transfer. Systematic (regular) purchases can be
deducted from your bank account, payroll, income-producing
investment, or from a USAA money market account.
Intermittent (as-needed) purchases can be deducted from
your bank account through our Buy/Sell Service.
Establish any of our electronic investing services
when you apply for your account, or later upon request.

REDEMPTION OF SHARES

You may redeem shares of the Fund by any of the methods
described in the following table on any day the NAV is
calculated. Redemptions will be effective on the day on
which instructions are received in accordance with the
requirements set forth below. However, if instructions
are received after the NAV calculation, redemption will
be effective on the next business day.

REDEMPTION PROCEEDS
Redemption proceeds are distributed within seven days
after the effective date of redemption. Payment upon
redemption of shares purchased by check or electronic
funds transfer will not be disbursed until the purchase
check or electronic funds transfer has cleared, which
could take up to 15 days from the purchase date. If you
are considering redeeming shares soon after purchase,
the Manager suggests you purchase by bank wire or
certified check to avoid delay.
In addition, the Trust may elect to suspend the
redemption of shares or postpone the date of payment
during any period that the New York Stock Exchange is
closed, or trading in the markets the Trust normally
utilizes is restricted, or during any period that
redemption is otherwise permitted to be suspended by the
Securities and Exchange Commission.

Redemption
of Shares

Any of the following methods may be used to authorize the
Transfer Agent to redeem shares from your account based
on instructions received.

Written,
Fax, or
Telegraph

Send your written instructions to:
USAA Shareholder Account Services
9800 Fredericksburg Rd., San Antonio, TX 78288
Send a signed fax to 210-498-2889, or send a telegraph to
USAA Shareholder Account Services.

Written redemption requests must include the following:
(1) a letter of instruction or stock assignment, and stock
certificate (if issued), specifying the Fund and the number
of shares or dollar amount to be redeemed; (2) signatures
of all owners of the shares exactly as their names appear
on the account; (3) other supporting legal documents, if
required, as in the case of estates, trusts, guardianships,
custodianships, partnerships, corporations, and pension and
profit- sharing plans; and (4) method of payment.

Telephone

Call toll free 1-800-531-8448, in San Antonio, 210-498-7290.

The Fund will employ reasonable procedures to
confirm that instructions communicated by telephone are
genuine, and if it does not, it may be liable for any
losses due to unauthorized or fraudulent instructions.
Information is obtained prior to any discussion regarding
an account including: (1) USAA number or account number,
(2) the name(s) on the account registration, and (3)
social security number or tax identification number for
the account registration. In addition, all telephone
communications with a shareholder are recorded and
confirmations of all account transactions are sent to the
address of record.

Redemption by telephone, fax, or telegraph is not
available to shares represented by stock certificates.

(continued)

Methods of
Payment

Any of the following methods of payment may be used with
your redemption request.

Bank Wire
Redemption

The wire redemption privilege allows redemptions of
$1,000 or more to be sent directly to your bank account.
Establish this service when you apply for your account,
or later upon request. If your account is at a savings
bank, savings and loan association, or credit union, please
obtain precise wiring instructions from your institution.
Specifically, include the name of the correspondent bank
and your institution's account number at that bank. USAA
Shareholder Account Services deducts a wire fee from the
account for the redemption by wire. The fee as of the date
of this Prospectus is $10 and is subject to change at any
time. The fee is paid to State Street Bank and Trust
Company and the Transfer Agent for their services in
connection with the wire redemption. Your bank may also
charge a fee for receiving funds by wire.

Electronic
Funds
Transfer (EFT)

You can request electronic redemptions via electronic funds
transfer. Systematic (regular) or intermittent (as-needed)
redemptions can be credited to your bank account.
Establish any of our electronic investing services
when you apply for your account, or later upon request.

Check
Redemption

You may request a redemption to be paid by check to the
registered shareholder(s) and mailed to the address of
record. This check redemption privilege is automatically
established when your application is completed and
accepted. There is a 15 day waiting period before a
check redemption can be processed following a telephone
address change.

CONDITIONS OF PURCHASE AND REDEMPTION

NONPAYMENT
If any order to purchase shares is cancelled due to
nonpayment or if the Trust does not receive good funds
either by check or electronic funds transfer, the
cancellation will be treated as a redemption of shares
purchased and you will be responsible for any resulting
loss incurred by the Fund or the Manager. If you are a
shareholder, shares can be redeemed from any of your
account(s) as reimbursement for all losses. In addition,
you may be prohibited or restricted from making future
purchases in any of the USAA Family of Funds. A $15 fee
is charged for all returned items, including checks and
electronic funds transfers.

TRANSFER OF SHARES
Fund shares may be transferred to another person by
sending written instructions to the Transfer Agent. The
account must be clearly identified and the shareholder
must include the number of shares to be transferred, the
signatures of all registered owners, and all stock
certificates, if any, which are the subject of transfer.
You also need to send written instructions and supporting
documents to change an account registration due to events
such as divorce, marriage, or death. If a new account
needs to be established, an application must be completed
and returned to the Transfer Agent.

ACCOUNT BALANCE
The Board of Trustees may cause the redemption of an
account with less than $900, subject to certain
limitations described in Additional Information Regarding
Redemption of Shares in the Trust's Statement of
Additional Information.

TRUST RIGHTS
The Trust reserves the right to:
(1) reject purchase or exchange orders when in the best
interest of the Trust;
(2) limit or discontinue the offering of shares of any
portfolio of the Trust without notice to the
shareholders;
(3) require a signature guarantee when deemed appropriate
by the Manager for purchases, redemptions, or changes
in account information. The section Additional
Information Regarding Redemption of Shares in the
Trust's Statement of Additional Information contains
information on acceptable guarantors.

EXCHANGES

EXCHANGE PRIVILEGE
The Exchange Privilege is automatically established when
you complete your application. You may exchange shares
among portfolios in the USAA Family of Funds, provided
you do not hold these shares in stock certificate form
and that the shares to be acquired are offered in your
state of residence. Exchange redemptions and purchases
will be processed simultaneously at the share prices next
determined after the exchange order is received. For
federal income tax purposes, an exchange between
portfolios is a taxable event. Accordingly, a capital
gain or loss may be realized.
The Fund has undertaken certain procedures regarding
telephone transactions. See Redemption of Shares - Telephone.

EXCHANGE LIMITATIONS,
EXCESSIVE TRADING
To minimize Fund costs and to protect the portfolios and
their shareholders from unfair expense burdens, the Funds
restrict excessive exchanges. Exchanges out of any
portfolio in the USAA Family of Funds are limited for
each account to six per calendar year except that there
is no limitation on exchanges out of the Tax Exempt
Short-Term Fund, Short-Term Bond Fund, or any of the
money market funds in the USAA Family of Funds.

OTHER SERVICES

INVESTMENT PLANS
You may establish a systematic investment plan by completing
the appropriate forms. At the time you sign up for any of
the following investment plans that utilize the electronic
funds transfer service, you will choose the day of the
month (the effective date) on which you would like to
regularly purchase shares. When this day falls on a weekend
or holiday, the electronic transfer will take place on the
last business day before the effective date. Call the
Manager to obtain instructions. More information about these
preauthorized plans is contained in the Trust's Statement of
Additional Information.

InvesTronic(registered trademark) - the periodic purchase
of shares through electronic funds transfer from a
checking or savings account.

Direct Purchase Service - the periodic purchase of shares
through electronic funds transfer from a non-governmental
employer, an income-producing investment, or an account
with a participating financial institution.

Automatic Purchase Plan - the periodic transfer of funds
from a USAA money market fund to purchase shares in
another non-money market USAA mutual fund.

Buy/Sell Service - the intermittent purchase or redemption
of shares through electronic funds transfer to or from a
checking or savings account.

Systematic Withdrawal Plan - the periodic redemption of
shares from one of your accounts permitting you to
receive a fixed amount of money monthly or quarterly.

SHAREHOLDER STATEMENTS
AND REPORTS
You will receive a confirmation after each account
transaction except reinvested dividends. At the end of
each quarter you will receive a consolidated statement
reflecting all of your mutual fund accounts, regardless of
account activity. The fourth quarter consolidated statement
mailed to each shareholder will reflect annual account
history for the prior tax year. There will be a $10 fee
charged for copies of historical statements for other than
the prior tax year for any one account. You will receive
the Fund's financial statements with a summary of its
investments and performance at least semiannually.
In an effort to reduce expenses and respond to
shareholders' requests to reduce mail, the Trust intends
to consolidate mailings of annual and semiannual reports
to households having multiple accounts with the same
address of record. One copy of each report will be
furnished to that address. You may request additional
reports by notifying the Trust.

DIRECTED DIVIDENDS
If you own shares in more than one of the funds in the
USAA Family of Funds, you may direct that dividends
and/or capital gain distributions earned in one fund be
used to automatically purchase shares in another fund.

TELEPHONE ASSISTANCE
Call our telephone assistance numbers for specific forms,
a copy of the Trust's Statement of Additional
Information, the most recent Annual Report and/or
Semiannual Report, or if you have any questions
concerning any of the services offered.

SHARE PRICE CALCULATION

The price at which shares of the Fund are purchased and
redeemed by shareholders is equal to the net asset value
(NAV) per share determined on the effective date of the
purchase or redemption.

WHEN
The NAV per share for the Fund is calculated at the close
of the regular trading session of the New York Stock
Exchange, which is usually 4:00 p.m. Eastern time. You
buy and sell Fund shares at NAV without a sales charge.

HOW
The NAV is calculated by adding the value of all
securities and other assets in the Fund, deducting
liabilities, and dividing by the number of shares
outstanding. Portfolio securities, except as otherwise
noted, traded primarily on a domestic securities exchange
are valued at the last sales price on that exchange. If
no sale is reported, the latest bid price is generally used.
Over-the-counter securities are generally priced at
the last sales price or, if not available, at the average
of the bid and asked prices.
Debt securities purchased with maturities of 60 days
or less are stated at amortized cost which approximates
market value. Other debt securities may be valued each
business day at their current market value as determined
by a pricing service approved by the Board of Trustees.
Securities which cannot be valued by the methods set
forth above are valued in good faith at fair value using
methods determined by the Manager under the general
supervision of the Board of Trustees.
For additional information, see Valuation of
Securities in the Trust's Statement of Additional
Information.

DIVIDENDS, DISTRIBUTIONS AND TAXES

DIVIDENDS AND DISTRIBUTIONS
Net investment income will be distributed to shareholders
quarterly. Any net capital gain generally will be
distributed after the end of the fiscal year. The Fund
intends to make such additional distributions as may be
necessary to avoid the imposition of any federal income
or excise tax.
All income dividends and capital gain distributions
are automatically reinvested, unless the shareholder
specifies otherwise. The share price will be the net
asset value of the Fund shares computed on the ex-
dividend date. Any income dividend or capital gain
distributions paid by the Fund will reduce the per share
net asset value by the amount of the dividend or
distribution. An investor should consider carefully the
effects of purchasing shares of the Fund shortly before
any dividend or distribution. Although in effect a return
of capital, these distributions are subject to taxes.
Any dividend or distribution payment returned to the
Manager as not deliverable will be invested in the
shareholder's Fund account at the then-current net asset
value. If any check for the payment of dividends or
distributions is not cashed within six months from the
date on the check, it becomes void. The amount of the
check will then be invested in the shareholder's account
at the then-current net asset value.

TAXES
The following discussion relates only to generally
applicable federal income tax provisions in effect as of
the date of this Prospectus. Therefore, shareholders are
urged to consult their own tax advisers about the status
of distributions from the Fund in their own states and
localities.

Fund - The Fund intends to qualify as a regulated
investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the Code). By
complying with the applicable provisions of the Code, the
Fund will not be subject to federal income tax on its net
investment income and net capital gains (capital gains in
excess of capital losses) distributed to shareholders.

Shareholder - Dividends from taxable net investment
income and distributions of net short-term capital gains
are taxable to shareholders as ordinary income, whether
received in cash or reinvested in additional shares. A
portion of these dividends may qualify for the 70%
dividends received deduction available to corporations.
Distributions of net long-term capital gains are
taxable as long-term capital gains whether received in cash
or reinvested in additional shares, and regardless of the
length of time the investor has held the shares of the Fund.
Distributions to shareholders derived from tax-
exempt interest received by the Fund will be excluded
from a shareholder's gross income for federal income tax
purposes, provided the Fund meets certain requirements.
However, interest on certain private activity bonds
issued after August 7, 1986, although otherwise exempt
from federal tax, is treated as a tax preference item for
purposes of the federal alternative minimum tax.
Pursuant to regulations to be promulgated, a shareholder
of a regulated investment company will be required to
treat the portion of any exempt-interest dividend
attributable to such private activity bonds as a tax
preference item.

Withholding - The Fund is required by federal law to
withhold and remit to the U.S. Treasury a portion of the
income dividends and capital gain distributions and
proceeds of redemptions paid to any non-corporate
shareholder who fails to furnish the Fund with a correct
tax identification number, who underreports dividend or
interest income, or who fails to certify to the Fund that
he is not subject to withholding. To avoid this withholding
requirement, you must certify on your application, or on a
separate Form W-9 supplied by the Transfer Agent, that your
tax identification number is correct and that you are not
currently subject to backup withholding.

Reporting - The Fund will report annually to their
shareholders the federal tax status of dividends and
distributions paid or declared by the Fund during the
preceding calendar year including the portion of the
dividends constituting interest on private activity
bonds, and the percentage and source, on a state-by-state
basis, of interest income earned on tax-exempt securities,
if any, held by the Fund during the preceding year.

MANAGEMENT OF THE TRUST

The business affairs of the Trust are subject to the
supervision of the Board of Trustees.
The Manager, USAA Investment Management Company, was
organized in May 1970 and is an affiliate of United Services
Automobile Association (USAA), a large diversified financial
services institu-tion. As of the date of this Prospectus,
the Manager had in excess of $24.6 billion in total assets
under management. The Manager has offices at 9800
Fredericksburg Rd., San Antonio, TX 78288, which is also
home office of USAA and other affiliates.

ADVISORY AGREEMENT
The Manager serves as the manager and investment adviser
of the Trust, providing services under an Advisory
Agreement. Under the Advisory Agreement, the Manager is
responsible for the management of the portfolios,
business affairs, and placement of brokerage orders,
subject to the authority of and supervision by the Board
of Trustees.
For its services under the Advisory Agreement, the
Fund pays the Manager an annual fee which is computed as
a percentage of the Fund's average net assets (ANA),
accrued daily, and paid monthly. The management fee for
the Fund was computed and paid at one-half of one percent
(.50%) of ANA (annualized) for the fiscal period ended
May 31, 1994.

OPERATING EXPENSES
For the fiscal period ended May 31, 1994, the total
annualized operating expenses for the Fund as a
percentage of the Fund's ANA equaled .84%.

PORTFOLIO TRANSACTIONS
Purchases and sales of equity securities for the Fund's
portfolio may be accomplished through USAA Brokerage
Services, a discount brokerage service of the Manager.
The Board of Trustees has adopted procedures to ensure
that any commissions paid to USAA Brokerage Services are
reasonable and fair.

PORTFOLIO MANAGERS
See Appendix A - Portfolio Management for a listing of
portfolio managers.

DESCRIPTION OF SHARES

MASTER TRUST AGREEMENT
The Trust is an open-end management investment company
established as a business trust under the laws of the
Commonwealth of Massachusetts pursuant to a Master Trust
Agreement dated May 9, 1984, as amended. The Trust is
authorized to issue an unlimited number of shares of
beneficial interest of separate series or portfolios,
without par value. The portfolio described in this
Prospectus is being offered to the public. The Fund is
classified as a diversified investment company. Under
the Master Trust Agreement, the Trustees are authorized
to create new portfolios in addition to those already
existing without shareholder approval.
Under the Master Trust Agreement, no annual or
regular meeting of shareholders is required. Ordinarily,
no shareholder meeting will be held unless required by
the 1940 Act. The Trustees may fill vacancies on the
Board or appoint new Trustees provided that immediately
after such action at least two-thirds of the Trustees
have been elected by shareholders. Shareholders are
entitled to one vote per share (with proportionate voting
for fractional shares) irrespective of the relative net
asset value of the shares. For matters affecting an
individual portfolio, a separate vote of the shareholders
of that portfolio is required. Shareholders holding an
aggregate of at least 10% of the outstanding shares of
the Trust may request a meeting of share-holders at any
time for the purpose of voting to remove one or more of
the Trustees, and the Trust will assist shareholders in
communicating with other shareholders in connection
with such a meeting.
Under Massachusetts law, shareholders of any
portfolio could, under certain circumstances, be held
personally liable for the obligations of the Trust.
However, the Master Trust Agreement disclaims shareholder
liability for acts or obligations of the Trust and requires
that notice of such disclaimer be given in each agreement,
obligation, or instrument entered into or executed by the
Trust or the Trustees. The Master Trust Agreement provides
for indemnification out of the Trust's property for all
losses and expenses of any shareholder held personally
liable for the obligations of the Trust. Thus, the
possibility of a shareholder incurring financial loss on
account of shareholder liability is remote.

SERVICE PROVIDERS

UNDERWRITER/ USAA Investment Management Company
DISTRIBUTOR 9800 Fredericksburg Rd., San Antonio, Texas 78288.

TRANSFER USAA Shareholder Account Services
AGENT 9800 Fredericksburg Rd., San Antonio, Texas 78288.

CUSTODIAN State Street Bank and Trust Company
P.O. Box 1713, Boston, Massachusetts 02105.

LEGAL Goodwin, Procter & Hoar
COUNSEL Exchange Place, Boston, Massachusetts 02109.

INDEPENDENT KPMG Peat Marwick LLP
AUDITORS 112 East Pecan, Suite 2400, San Antonio, Texas 78205.

TELEPHONE ASSISTANCE
(Call toll free, Monday-Saturday, Central Time)
For further information on mutual funds:
Office Hours: M-F 8:00 a.m. to 8:00 p.m.
Saturday: 8:30 a.m. to 5:00 p.m.
1-800-531-8181
In San Antonio 210-498-6505

For account servicing, exchanges or redemptions:
Office Hours: M-F 8:00 a.m. to 8:00 p.m.
Saturday: 8:30 a.m. to 5:00 p.m.
1-800-531-8448
In San Antonio 210-498-7290

RECORDED MUTUAL FUND PRICE QUOTES
(Accessible 24 hours from any phone)
1-800-531-8066
In San Antonio 210-498-8066

MUTUAL FUND TOUCHLINE(registered trademark)
(Accessible 24 hours from Touchtone phones)
For account balance, last transaction or fund prices:
1-800-531-8777
In San Antonio 210-498-8777

APPENDIX A - PORTFOLIO MANAGEMENT

The following are the portfolio managers of USAA Investment
Trust, Balanced Portfolio Fund:

NAME John W. Saunders, Jr. Kenneth E. Willmann

CATEGORY Asset Allocation Long-Term Tax-Exempt
MANAGED Manager since 01/89 Securities since 01/89

EDUCATION BS, Portland State BA, University of Texas
University, Oregon MBA, University of Texas

EXPERIENCE1 25 years, investment 21 years, investment
management management
24 years, IMCO 17 years, IMCO

BUSINESS 10/85-present, Senior 12/86-present, Vice
HISTORY Vice President, Fixed President, Fixed
PAST FIVE Income Investments Income Investments
YEARS

PROFESSIONAL CFA, 1976 CFA, 1978
DESIGNATIONS1

PROFESSIONAL AIMR AIMR
MEMBERSHIPS1 SAFAS SAFAS
NFMA

1 Abbreviations of designations and organizations used in above table:
IMCO - USAA Investment Management Company (the Manager)
CFA - Chartered Financial Analyst
AIMR - Association for Investment Management and Research
SAFAS - San Antonio Financial Analysts Society, Inc.
NFMA - National Federation of Municipal Analysts

NAME Clifford A. Gladson Stephan J. Klaffke

CATEGORY Short-Term Tax-Exempt Basic Value Stocks
MANAGED Securities since 04/94 since 01/94

EDUCATION BS, Marquette University, BS, Indiana University
Wisconsin MBA, Texas Christian
MS, University of Wisconsin, University
Milwaukee

EXPERIENCE1 7 years, investment 10 years, investment
management management
4 years, IMCO 2 years, IMCO

BUSINESS 05/92-present, Executive 01/94-present, Associate
HISTORY Director, Fixed Income Portfolio Manager, Equity
PAST FIVE Investments Investments
YEARS 03/91-04/92, Senior Director, 01/93-12/93, Senior Securities
Fixed Income Investments Analyst, Equity Investments
02/90-02/91, Securities 09/87-12/92, President,
Analyst, Fixed Income JKE Equity Research,
Investments Fort Worth, Texas
09/87-01/90, Assistant
Portfolio Manager,
MGIC, Wisconsin

PROFESSIONAL CFA, 1990 CFA, 1987
DESIGNATIONS1

PROFESSIONAL AIMR AIMR
MEMBERSHIPS1 SAFAS SAFAS
NFMA

CORNERSTONE FUND HAS A NEW NAME:
"CORNERSTONE STRATEGY FUND"

THIRD SUPPLEMENT dated September 5, 1995
to the PROSPECTUS
dated NOVEMBER 7, 1994

On July 12, 1995, the Board of Trustees approved that
effective September 5, 1995, the name of the Cornerstone Fund
will be changed to the Cornerstone Strategy Fund. The Trustees
also approved an increase in the minimum initial investment
required for the Fund from $1,000 to $3,000.

USAA CORNERSTONE FUND

SUPPLEMENT DATED FEBRUARY 1, 1995
TO THE PROSPECTUS
DATED NOVEMBER 7, 1994

"Appendix A - Portfolio Management" on pages 23 and 24 of
the Prospectus is amended to reflect the following change
effective February 1, 1995.

Harry W. Miller assumed portfolio management
responsibilities of the Basic Value Stocks investment category
replacing Stephan J. Klaffke. Mr. Miller's biographical
information follows:

EDUCATION BS, Rider College, New Jersey
MBA, University of Southern California

EXPERIENCE(1) 37 years, investment management
20 years, IMCO

BUSINESS 10/87-present, Senior Vice President,
HISTORY Equity Investments
PAST FIVE
YEARS

PROFESSIONAL CFA, 1968
DESIGNATIONS(1)

PROFESSIONAL AIMR
MEMBERSHIPS(1) SAFAS

USAA CORNERSTONE FUND

SUPPLEMENT DATED DECEMBER 5, 1994
TO THE PROSPECTUS
DATED NOVEMBER 7, 1994

"Appendix A - Portfolio Management" on page 23 of the
Prospectus is amended to reflect the following change effective
December 5, 1994.

David G. Peebles assumed portfolio management
responsibilities of the Foreign Stocks investment category
replacing W. Travis Selmier, II. Mr. Peeble's biographical
information follows:

EDUCATION BS, Texas Christian University
MBA, Texas Christian University

EXPERIENCE(1) 28 years, investment management
10 years, IMCO

BUSINESS 02/88-present, Vice President,
HISTORY Equity Investments
PAST FIVE
YEARS

PROFESSIONAL CFA, 1971
DESIGNATIONS(1)

PROFESSIONAL AIMR
MEMBERSHIPS1 SAFAS

------------------
1Abbreviations of designations and organizations used in the above table:
IMCO - USAA Investment Management Company (the Manager)
CFA - Chartered Financial Analyst
AIMR - Association for Investment Management and Research
SAFAS - San Antonio Financial Analysts Society, Inc.

USAA CORNERSTONE FUND

November 7, 1994 PROSPECTUS

USAA Cornerstone Fund (the Fund) is one of eight no-load
mutual funds offered by USAA Investment Trust (the Trust).
The Fund is managed by USAA Investment Management Company
(the Manager).

WHAT IS THE INVESTMENT OBJECTIVE?

The Fund's investment objective is to achieve a positive,
inflation-adjusted rate of return and a reasonably stable
value of Fund shares, thereby preserving purchasing power
of shareholders' capital. Inflation is measured by the
Consumer Price Index. Page 7.

HOW DO YOU SELL?
You may redeem shares of the Fund by mail,
telephone, fax, or telegraph on any day that the net
asset value is calculated. Page 14.

This Prospectus, which should be read and retained
for future reference, provides information regarding the
Trust and the Fund that you should know before investing.

Shares of the USAA Cornerstone Fund are not deposits
or other obligations of, or guaranteed by the USAA
Federal Savings Bank, are not insured by the FDIC or any
other Government Agency, and are subject to market risks.
Because this Fund invests in foreign securities it involves
a higher degree of risk and may not be appropriate for some
investors. See Special Risk Considerations, page 11.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

TABLE OF CONTENTS

Page
SUMMARY DATA
Fees and Expenses 3
Financial Highlights 4
Performance Information 6

USING MUTUAL FUNDS
USAA Family of No-Load Mutual Funds 6
Using Mutual Funds in an Investment Program 7

INVESTMENT PORTFOLIO INFORMATION
Investment Objective and Policies 7

SHAREHOLDER INFORMATION
Purchase of Shares 12
Redemption of Shares 14
Conditions of Purchase and Redemption 15
Exchanges 16
Other Services 17
Share Price Calculation 18
Dividends, Distributions and Taxes 19
Management of the Trust 20
Description of Shares 21
Service Providers 22
Telephone Assistance Numbers 22
Appendix A - Portfolio Management 23

FEES AND EXPENSES

The following summary is provided to assist you in understanding the
expenses you will bear directly or indirectly.

Annual Fund Operating Expenses** (as a percentage of average net assets)
-------------------------------------------------------------------------
Management Fee .75%
12b-1 Fee None
Other Expenses
Transfer Agent Fee*** .24%
Custodian Fee .06%
All Other Expenses .06%
---
Total Other Expenses .36%
----
Total Operating Expenses 1.11%
====
-------------------------------------------------------------------------
* A shareholder who requests delivery of redemption proceeds by wire
transfer will be subject to a $10 fee. See Redemption of Shares
- Bank Wire Redemption.
** Based upon the eight-month period ended May 31, 1994.
*** The Fund pays USAA Shareholder Account Services an annual fixed fee
per account for its services. See Transfer Agent in the Statement
of Additional Information, page 26.

1 year - $ 11
3 years - $ 35
5 years - $ 61
10 years - $135

The above example should not be considered a representation of past or
future expenses and actual expenses may be greater or less than those shown.

<TABLE>
FINANCIAL HIGHLIGHTS

The following per share operating performance for a share outstanding
throughout the eight-month period ended May 31, 1994 and each period in
the nine-year period ended September 30, 1993, has been derived from
financial statements audited by KPMG Peat Marwick LLP. This table
should be read in conjunction with the financial statements and related
notes that appear in the Fund's Annual Report. Further performance
information is contained in the Annual Report and is available upon
request without charge.

EIGHT-MONTH
PERIOD ENDED
MAY 31, YEAR ENDED SEPTEMBER 30,
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $ 23.43 $ 19.94 $ 18.62 $ 17.19 $ 19.31
Net investment income .40 .60 .65 .65 .63
Net realized and
unrealized gain (loss) .29 3.52 1.26 1.43 (2.04)
Distributions from net
investment income (.59) (.63) (.59) (.65) (.71)
Distributions of realized
capital gains (.29) - - - -
-------- -------- -------- -------- --------
Net asset value at
end of period $ 23.24 $ 23.43 $ 19.94 $ 18.62 $ 17.19
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return (%)* 3.00 21.35 10.53 12.61 (7.64)
Net assets at end of
period ($000) $814,869 $707,795 $567,212 $580,088 $535,308
Ratio of expenses to
average net assets (%) 1.11(a) 1.18 1.18 1.18 1.21
Ratio of net investment
income to average net
assets (%) 2.68(a) 2.92 3.25 3.58 3.50
Portfolio turnover (%) 30.87 45.18 32.71 28.02 40.89

</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $ 16.71 $ 19.76 $ 14.49 $ 10.58 $ 9.98
Net investment income .69 .59 .60 .45 .51
Net realized and
unrealized gain (loss) 2.57 (3.26) 5.18 3.83 .15
Distributions from net
investment income (.66) (.36) (.30) (.32) (.04)
Distributions of realized
capital gains - (.02) (.21) (.05) (.02)
-------- -------- -------- -------- --------
Net asset value at
end of period $ 19.31 $ 16.71 $ 19.76 $ 14.49 $ 10.58
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return (%)* 20.17 (13.39) 41.26 41.77 6.66
Net assets at end of
period ($000) $522,031 $544,118 $822,748 $ 28,947 $ 13,606
Ratio of expenses to
average net assets (%) 1.21 1.21 1.07 1.50 1.50
Ratio of net investment
income to average net
assets (%) 3.57 3.54 3.41 3.68 5.03
Portfolio turnover (%) 33.19 27.78 14.86 70.06 15.29

</TABLE>

--------------
* Assumes reinvestment of all dividend income and capital gain distributions
during the period.
(a) Annualized. The ratio is not necessarily indicative of 12 months of
operations.

PERFORMANCE INFORMATION

Performance information should be considered in light of
the Fund's investment objective and policies and market
conditions during the time periods for which it is
reported. Historical performance should not be considered
as representative of the future performance of the Fund.
The Trust may quote the Fund's total return in
advertisements and reports to shareholders or prospective
investors. The Fund's performance may also be compared
to that of other mutual funds with a similar investment
objective and to stock or relevant indexes that are
referenced in Appendix B in the Trust's Statement of
Additional Information. Standard total return results
reported by the Fund do not take into account recurring
and nonrecurring charges for optional services which only
certain shareholders elect and which involve nominal
fees, such as the $10 fee for a delivery of redemption
proceeds by wire transfer.
The Fund's average annual total return is computed
by determining the average annual compounded rate of
return for a specified period which, when applied to a
hypothetical $1,000 investment in the Fund at the
beginning of the period, would produce the redeemable
value of that investment at the end of the period,
assuming reinvestment of all dividends and distributions
during the period.
Further information concerning the Fund's total return
is included in the Trust's Statement of Additional Information.

USAA FAMILY OF NO-LOAD MUTUAL FUNDS

USAA INVESTMENT TRUST
Balanced Portfolio Fund
Cornerstone Fund
Emerging Markets Fund
Gold Fund
International Fund
World Growth Fund
GNMA Trust
Treasury Money Market Trust

USAA MUTUAL FUND, INC.
Aggressive Growth Fund
Growth Fund
Growth & Income Fund
Income Stock Fund
Income Fund
Short-Term Bond Fund
Money Market Fund

USAA STATE TAX-FREE TRUST
Florida Tax-Free Income Fund*
Florida Tax-Free Money Market Fund*
Texas Tax-Free Income Fund*
Texas Tax-Free Money Market Fund*

* Available for sale only to residents
of these specific states.

USING MUTUAL FUNDS IN AN INVESTMENT PROGRAM

II. USING FUNDS IN AN INVESTMENT
PROGRAM
In choosing a mutual fund as an investment vehicle, the
shareholder is foregoing some investment decisions, but
must still make others. The decisions foregone are those
involved with choosing individual securities. The Fund
Manager will perform that function. In addition, the
Manager will arrange for the safekeeping of securities,
auditing the annual financial statements, and daily
valuation of the Fund, as well as other functions.
The shareholder, however, retains at least part of
the responsibility for an equally important decision. That
is determining a portfolio of mutual funds that balances
the investor's investment goals with his or her tolerance
for risk. It is likely that this decision may involve the
use of more than one fund of the USAA Family of Funds.
For example, assume a shareholder wishes to
diversify internationally. He or she could do this by
adding positions in the Cornerstone, Emerging Markets,
Gold, International, or World Growth Funds to holdings in
domestic funds. This would give the investor exposure to
the opportunities of investment in many foreign countries
and to currency changes. This is just one example of how
an individual could combine funds to create a portfolio
tailored to his or her own risk and reward goals.

III. USAA'S FAMILY OF FUNDS
The Manager offers investors another alternative in its
portfolio funds, the Balanced Portfolio and Cornerstone
Funds. Both of these unique mutual funds provide a
professionally managed diversified investment portfolio
within a mutual fund. These Funds are designed for the
shareholder who prefers to delegate the asset allocation
process to an investment manager. The Funds are
structured to achieve diversification across a number of
investment categories.
Whether you prefer to create your own mix of mutual
funds or use a portfolio fund, the USAA Family of Funds
provides a broad range of choices covering just about any
investor's investment objectives. Our sales
representatives stand ready to inform you of your choices
and to help you craft a portfolio which meets your needs.

INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE
The Fund's investment objective is to achieve a positive,
inflation-adjusted rate of return and a reasonably stable
value of Fund shares, thereby preserving purchasing power
of shareholders' capital. Inflation is measured by the
Consumer Price Index.
The investment objective of the Fund cannot be
changed without shareholder approval. In view of the
risks inherent in all investments in securities, there is
no assurance that this objective will be achieved.
The investment policies and techniques used to
pursue the Fund's objective may be changed without
shareholder approval, except as otherwise noted. Further
information regarding the Fund's investment policies,
restrictions and risks is provided in the Trust's
Statement of Additional Information.

INVESTMENT POLICIES AND
TECHNIQUES
The Fund provides a professionally managed diversified
investment program within one mutual fund. The Manager
is responsible for managing the asset diversi-fication
balance within the prescribed securities mix consisting
of Basic Value Stocks, U.S. Government Securities,
Foreign Stocks, Real Estate Stocks, and Gold Stocks.
The Manager seeks to attain the objective by investing
the Fund's assets in each of the following investment
categories within the indicated ranges:

Percentage
Target Range
Investment Category of Net Assets
------------------- -------------
Basic Value Stocks 22 - 28%
U.S. Government Securities 22 - 28%
Foreign Stocks 22 - 28%
Real Estate Stocks 22 - 28%
Gold Stocks 0 - 10%

The target ranges may be revised by the Board of
Trustees upon 60 days' prior written notice to
shareholders. However, the Manager reserves the right,
without shareholder notification, to revise the ranges on
a temporary defensive basis when, in its opinion, such
changes are believed to be in the best interest of the
Fund and its shareholders.
The ranges allow for a variance in each investment
category. Should market action cause investment
categories to move outside the ranges, portfolio
adjustments will be made by the Manager. In general,
portfolio adjustments will be made at least once during
each calendar quarter to bring each category within its
range. These portfolio adjustments may cause the Fund
to sell securities in investment categories which have
appreciated in value and to buy secur-ities in investment
categories which have depreciated in value. Such
adjustments may also cause the Fund to incur a higher
proportion of short-term capital gains than a fund that
does not have a similar policy.
The Basic Value Stocks category was selected to
provide appreciation during rising stock market
conditions and to stabilize the value of the Fund during
adverse market conditions. The U.S. Government
Securities category was selected to provide safety of
principal in periods of deflation. The Foreign Stocks
category was selected to provide the potential for
appreciation during periods of adverse economic and
market conditions in the U.S. The Real Estate and Gold
Stocks categories were selected to provide a positive
total return during inflationary periods.

Characteristics and associated risks of each investment
category are as follows:

Basic Value Stocks - In this category, investments will
consist of common stocks or securities which are
convertible into or which carry the right to buy common
stocks of U.S. companies which the Manager believes are
undervalued in relation to such factors as the company's
assets and current or prospective earnings. In most
cases, these securities will be listed on the New York
Stock Exchange.
The Basic Value Stocks category will include common
stocks of companies with one or more of the following
characteristics when purchased: (1) the price earnings
ratio is lower than the price earnings ratio of the S&P
500; (2) the price per share is lower than the book value
per share; (3) the divi-dend yield is higher than the
dividend yield of the S&P 500; or (4) the company has
assets with a perceived market value in excess of book
value. Loss of these charac-teristics will not
necessarily result in the sale of securities in this
investment category.

U.S. Government Securities - In this category, investments
will consist of securities, without specific maturity
requirements or limits, issued or guaranteed as to both
principal and interest by the U.S. Government or by its
agencies or instrumentalities. Examples of these securities
are Treasury bills, notes and bonds, and securities issued
by the Federal Farm Credit Banks, Federal Home Loan Mortgage
Corporation, Federal National Mortgage Association, and
Government National Mortgage Association.
Within this investment category, the Fund may also invest
in repurchase agreements secured by securities of the U.S.
Government or by its agencies or instrumentalities.
The U.S. Government Securities investment category
is intended to provide both liquidity and interest income
with limited risk. Changes in interest rates may affect
the value of investments within this category. In
periods of rising interest rates, fixed coupon securities
will generally decline in market value. To minimize such
changes in value, the Manager may shorten maturities in
periods of rising interest rates, although there is no
assurance that this action will totally protect principal
from erosion. Conversely, the Manager may extend
maturities in periods of declining interest rates to
capitalize on the resulting impact on principal.

Foreign Stocks - In this category, investments will
consist of common stocks or securities which are
convertible into or which carry the right to buy common
stocks of companies organized and operating principally
outside the United States, other than companies whose
principal business is gold exploration, mining, or
processing. A company is deemed to be operating princi-
pally outside the U.S. if at least 50% of its revenues
are derived from operations outside the U.S. or if its
primary production or oper-ating facilities are located
outside the U.S.
The Manager believes that international
diversification may have a balancing impact with regard
to investments in the United States. For a discussion of
the risks associated with investments in foreign issuers,
see Special Risk Considerations.

Real Estate Stocks - In this category, investments will
consist of common stocks or securities which are convertible
into or which carry the right to buy common stocks of U.S.
Real Estate Investment Trusts (REITs) and U.S. companies
which operate as real estate corporations or which have a
significant portion of their assets in real estate. The
Manager will evaluate the nature of a company's real estate
holdings in determining whether the Fund's investment in the
company's common stock will be included in this category.
The Fund's investments in REITs may subject the Fund to many
of the same risks associated with the direct ownership of
real estate. In addition, REITs are dependent upon the
capabilities of the REIT manager(s) and have limited
diversification. The Fund will not acquire any direct
ownership of real estate.
The Manager believes that diversified investments
linked to real estate are a good hedge during an
inflationary environment.

Gold Stocks - In this category, at least 80% of the
investments will consist of common stocks or securities
which are convertible into or which carry the right to
buy common stocks of companies principally engaged in
gold exploration, mining, or processing. The remaining
investments in this category will consist of common
stocks of companies similarly engaged in other precious
metals and minerals. Gold stocks have been selected for
their perceived potential to increase in value during
inflationary periods. For a discussion of risks
associated with investments in this category, see Special
Risk Considerations.

OTHER POLICIES
Forward Currency Contracts - The Fund may hold securities
denominated in foreign currencies. As a result, the
value of the securities will be affected by changes in
the exchange rate between the dollar and foreign
currencies. In managing the currency exposure, the Fund
may enter into forward currency contracts. A forward
currency contract involves an agreement to purchase or
sell a specified currency at a specified future date or
over a specified time period at a price set at the time
of the contract.
The Fund may enter into forward currency contracts
under two circumstances. First, when the Fund enters into
a contract for the purchase or sale of a security
denominated in a foreign currency, it may desire to "lock
in" the U.S. dollar price of the security. Second, when
management of the Fund believes that the currency of a
specific country may deteriorate relative to the U.S.
dollar, it may enter into a forward contract to sell that
currency. The Fund may not hedge with respect to a
particular currency for an amount greater than the
aggregate market value (determined at the time of making
any sale of forward currency) of the securities held in
its portfolio denominated or quoted in, or bearing a
substantial correlation to, such currency.
The use of forward currency contracts to protect the
value of a Fund's assets against a decline in the value
of a currency does not eliminate fluctuations in the
value of the Fund's underlying security holdings. In
addition, although the use of forward currency contracts
can minimize the risk of loss due to a decline in value
of the foreign currency, the use of such contracts will
tend to limit any potential gain resulting from an
increase in the relative value of the foreign currency to
the U.S. dollar. Under certain circumstances, a fund
that has entered into forward currency contracts to hedge
its currency risks may be in a less favorable position
than a fund that had not entered into such contracts.
The projection of short-term currency market movements is
extremely difficult and successful execution of a short-
term hedging strategy is highly uncertain.

Repurchase Agreements - The Fund may invest in repurchase
agreements which are collateralized by obligations backed
by the full faith and credit of the U.S. Government or by
its agencies or instrumentalities. A repurchase
agreement is a transaction in which a security is
purchased with a simultaneous commitment to sell the
security back to the seller (a commercial bank or
recognized securities dealer) at an agreed upon price on
an agreed upon date, usually not more than 7 days from
the date of purchase. The resale price reflects the
purchase price plus an agreed upon market rate of
interest which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase
agreement involves the obligation of the seller to pay
the agreed upon price, which obligation is in effect
secured by the value of the underlying security. In
these transactions, the securities purchased by the Fund
will have a total value equal to or in excess of the
amount of the repurchase obligation and will be held by
the Fund's custodian until repurchased. If the seller
defaults and the value of the underlying security
declines, the Fund may incur a loss and may incur
expenses in selling the collateral. If the seller seeks
relief under the bankruptcy laws, the disposition of the
collateral may be delayed or limited.

When-Issued Securities - The Fund may invest in new
issues of debt securities offered on a when-issued basis;
that is, delivery and payment take place after the date
of the commitment to purchase, normally within 45 days.
Both price and interest rate are fixed at the time of
commitment. The market value at the time the transaction
is completed may be more or less than the fixed purchase
price. Such securities can be sold before settlement
date.
Cash or high quality liquid debt securities equal to
the amount of the when-issued commitments are segregated
at the Fund's custodian bank. The segregated securities
are valued at market, and daily adjustments are made to
keep the value of the cash and segregated securities at
least equal to the amount of such commitments by the
Fund. On the settlement date, the Fund will meet its
obligations from then available cash, sale of segregated
securities, sale of other securities, or sale of the
when-issued securities themselves.

Liquidity - The Fund may not invest more than 15% of the
market value of its total assets in securities which are
illiquid or not readily marketable. Rule 144A Securities
may be determined to be liquid in accordance with
guidelines established by the Board of Trustees for
purposes of complying with the Fund's investment
restriction applicable to investments in illiquid
securities.

INVESTMENT RESTRICTIONS
The following restrictions may not be changed without
shareholder approval:

a. The Fund may not invest more than 25% of its total
assets in one industry. The Foreign Stocks, U.S.
Government Securities, and Basic Value Stocks
investment categories are not considered industries
for this purpose.
b. The Fund will not purchase securities of any one
issuer (except the United States Government, its
agencies and instrumen-talities), if as a result of
such purchase more than 5% of the market value of
the total assets of the Fund would be invested in
securities of such issuer. The Fund will not
purchase more than 10% of any class of securities or
of the out-standing voting securities of any issuer.
c. The Fund will not borrow money, except from banks
for temporary or emergency purposes and then only in
an aggregate amount not in excess of 5% of the
market value of its total assets at the time of such
borrowing.

SPECIAL RISK CONSIDERATIONS
Investment in Foreign Securities - The Fund may purchase
foreign securities in foreign or U.S. markets or it may
purchase American Depositary Receipts (ADRs), Global
Depositary Receipts (GDRs), or similar forms of ownership
interest in securities of foreign issuers deposited with
a depositary. Investing in foreign securities presents
certain risks not present in domestic investments. Such
risks include currency exchange rate fluctuations,
foreign market illiquidity, increased price volatility,
exchange control regulations, different accounting,
reporting and disclosure require-ments, political or
social instability, and difficulties in obtaining
judgments or effecting collections thereon. Brokerage
commissions and custodial services may be more costly,
and stock trade settlements may be more lengthy, more
costly and more difficult than in domestic markets.
These investments may be subject to foreign withholding
taxes which may reduce the effective rates of return.
The Fund values its securities and other assets in U.S.
dollars.
Information which may impact the market value of
securities of a foreign issuer may not be available to
the Manager on a timely basis. The Manager will endeavor
to ascertain such information on as timely a basis as is
practicable, however, any impact on the net asset value
will be deemed to have occurred upon authentication by
the Manager.
Investments in developing countries involve exposure
to economic structures that are generally less diverse
and mature than in the United States, and to political
systems which may be less stable. A developing country
can be considered to be a country which is in the initial
stages of its industrialization cycle. Due to
illiquidity and lack of hedging instruments, it is
presently difficult or in some cases impossible to hedge
the currency risk in these markets. In the past, markets
of developing countries have been more volatile than
the markets of developed countries.
Political risk includes a greater potential for coup
d'etats, insurrections and expro-priation by governmental
organizations. For example, the Fund may invest in
Eastern Europe and former states of the Soviet Union
(also known as the CIS or the Commonwealth of Independent
States). These countries were under communist systems
which had nationalized private industry. There is no
guarantee that nationalization may not occur again in
this region or others in which the Fund invests, in which
case the Fund may lose all or part of its investment in
that country's issuers.

Volatility of Mining Stocks - Gold mining stocks involve
additional risk because of gold's price volatility and
the increased im-pact such volatility has on the
profitability of gold mining companies. However, since
the market action of such securities has tended to move
independently of the broader financial markets, the
addition of gold mining stocks to an investor's portfolio
may reduce overall fluctuations in portfolio value.

PURCHASE OF SHARES

TAX ID NUMBER
We require that each shareholder named on the account provide
the Trust with a social security number or tax identification
number to avoid possible tax withholding requirements.

EFFECTIVE DATE
The purchase of shares will be effective on the day on
which a completed application and check are received by
the Manager at its principal office in San Antonio, TX, if
received before the time the net asset value (NAV) per share
is calculated. If an application, check, or funds are
received in San Antonio after the time at which the NAV is
calculated, the purchase will be effective on the next
business day. A check drawn on a foreign bank will not be
deemed received for the purchase of shares until such time
as the check has cleared and the Manager has received good
funds, which may take up to 4 to 6 weeks. Furthermore, a
bank charge may be assessed in the clearing process, which
will be deducted from the amount of the purchase. To avoid
a delay in the effectiveness of your purchase, the Manager
suggests that you convert your foreign check to U.S. dollars
prior to investment in the Fund.

PURCHASE OF SHARES
INITIAL PURCHASES: Minimum $1,000 - (Except Spousal Individual
Retirement Accounts at $250).

Mail

Send your application and check to:

USAA Investment Management Company
9800 Fredericksburg Rd., San Antonio, TX 78288

In Person

Bring your application and check to:

USAA Investment Management Company
USAA Federal Savings Bank
10750 Robert F. McDermott Freeway
San Antonio, TX

InveStart(registered trademark)

An investment plan with a $100 minimum initial investment
and regular subsequent monthly investments of at least $50
through automatic electronic funds transfer. For more
details and to request an application, call our telephone
assistance numbers.

Exchange

Call our telephone assistance numbers. The new account
must have the same registration as the account from which
you are exchanging.

ADDITIONAL PURCHASES: Minimum $50

Mail

Send your check and the "Invest By Mail" stub, which
accompanies your Fund's transaction confirmation, to the
Transfer Agent:

USAA Shareholder Account Services
9800 Fredericksburg Rd., San Antonio, TX 78288

Bank Wire
Purchase

Instruct your bank (which may charge a fee for the service)
to wire the specified amount to the Trust as follows:

State Street Bank and Trust Company
Boston, MA 02101
ABA# 011000028
Attn: USAA Cornerstone Fund
USAA AC-69384998
Shareholder(s) Name(s)
Shareholder Account Number

Electronic
Funds
Transfer (EFT)

REDEMPTION OF SHARES

REDEMPTION PROCEEDS
Redemption proceeds are distributed within seven days
after the effective date of redemption. Payment upon
redemption of shares purchased by check or electronic
funds transfer will not be disbursed until the purchase
check or electronic funds transfer has cleared, which
could take up to 15 days from the purchase date. If
you are considering redeeming shares soon after purchase,
the Manager suggests you purchase by bank wire or
certified check to avoid delay.
In addition, the Trust may elect to suspend the
redemption of shares or postpone the date of payment
during any period that the New York Stock Exchange is
closed, or trading in the markets the Trust normally
utilizes is restricted, or during any period that
redemption is otherwise permitted to be suspended by
the Securities and Exchange Commission.

Redemption
of Shares

Any of the following methods may be used to authorize the
Transfer Agent to redeem shares from your account based
on instructions received.

Written,
Fax, or
Telegraph

Telephone

Call toll free 1-800-531-8448, in San Antonio, 210-498-7290.

The Fund will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, and
if it does not, it may be liable for any losses due to
unauthorized or fraudulent instructions. Information is
obtained prior to any discussion regarding an account
including: (1) USAA number or account number, (2) the
name(s) on the account registration, and (3) social security
number or tax identification number for the account
registration. In addition, all telephone communications with
a shareholder are recorded and confirmations of all account
transactions are sent to the address of record.

Redemption by telephone, fax, or telegraph is not
available to shares represented by stock certificates.

(continued)

Methods of
Payment

Any of the following methods of payment may be used with
your redemption request.

Bank Wire
Redemption

The wire redemption privilege allows redemptions of $1,000
or more to be sent directly to your bank account. Establish
this service when you apply for your account, or later upon
request. If your account is at a savings bank, savings and
loan association, or credit union, please obtain precise
wiring instructions from your institution. Specifically,
include the name of the correspondent bank and your
institution's account number at that bank. USAA Shareholder
Account Services deducts a wire fee from the account for the
redemption by wire. The fee as of the date of this Prospectus
is $10 and is subject to change at any time. The fee is paid
to State Street Bank and Trust Company and the Transfer Agent
for their services in connection with the wire redemption.
Your bank may also charge a fee for receiving funds by wire.

Electronic
Funds
Transfer (EFT)

Check
Redemption

You may request a redemption to be paid by check to the
registered shareholder(s) and mailed to the address of record.
This check redemption privilege is automatically established
when your application is completed and accepted. There is a
15 day waiting period before a check redemption can be
processed following a telephone address change.

CONDITIONS OF PURCHASE AND REDEMPTION

TRUST RIGHTS
The Trust reserves the right to:
(1) reject purchase or exchange orders when in the best
interest of the Trust;
(2) limit or discontinue the offering of shares of any
portfolio of the Trust without notice to the
shareholders;
(3) require a signature guarantee when deemed
appropriate by the Manager forpurchases,
redemptions, or changes in account information. The
section Additional Information Regarding Redemption
of Shares in the Trust's Statement of Additional
Information contains information on acceptable
guarantors.

EXCHANGES

OTHER SERVICES

INVESTMENT PLANS
You may establish a systematic investment plan by completing
the appropriate forms. At the time you sign up for any of
the following investment plans that utilize the electronic
funds transfer service, you will choose the day of the month
(the effective date) on which you would like to regularly
purchase shares. When this day falls on a weekend or
holiday, the electronic transfer will take place on the last
business day before the effective date. Call the Manager to
obtain instructions. More information about these
preauthorized plans is contained in the Trust's Statement
of Additional Information.

InveStart(registered trademark) - an optional purchase
plan may be authorized by signing an agreement to make
the minimum initial investment of $100 with regular
subsequent monthly investments of at least $50 using
automatic electronic funds transfer. Participation may
be discontinued by stopping your electronic funds
transfer. If discontinued prior to reaching $900, an
account is subject to review and redemption at the
discretion of the Board of Trustees. See Additional
Information Regarding Redemption of Shares in the Trust's
Statement of Additional Information.

InvesTronic(registered trademark) - the periodic purchase
of shares through electronic funds transfer from a
checking or savings account.

Automatic Purchase Plan - the periodic transfer of funds
from a USAA money market fund to purchase shares in
another non-money market USAA mutual fund.

Buy/Sell Service - the intermittent purchase or redemption
of shares through electronic funds transfer to or from a
checking or savings account.

Systematic Withdrawal Plan - the periodic redemption of
shares from one of your accounts permitting you to
receive a fixed amount of money monthly or quarterly.

Retirement Plans - plans are available for IRA (including
SEP/IRA) and 403(b)7. Federal taxes on current income
may be deferred if an investor qualifies.

SHAREHOLDER STATEMENTS
AND REPORTS
You will receive a confirmation after each account
transaction except reinvested dividends. At the end of
each quarter you will receive a consolidated statement
reflecting all of your mutual fund accounts, regardless
of account activity. The fourth quarter consolidated
statement mailed to each shareholder will reflect annual
account history for the prior tax year. There will be a
$10 fee charged for copies of historical statements for
other than the prior tax year for any one account. You
will receive the Fund's financial statements with a
summary of its investments and performance at least
semiannually.
In an effort to reduce expenses and respond to
shareholders' requests to reduce mail, the Trust intends
to consolidate mailings of annual and semiannual reports
to households having multiple accounts with the same
address of record. One copy of each report will be
furnished to that address. You may request additional
reports by notifying the Trust.

SHARE PRICE CALCULATION

The price at which shares of the Fund are purchased and
redeemed by shareholders is equal to the net asset value
(NAV) per share determined on the effective date of the
purchase or redemption.

HOW
The NAV is calculated by adding the value of all
securities and other assets in the Fund, deducting
liabilities, and dividing by the number of shares
outstanding. Portfolio securities, except as otherwise
noted, traded primarily on a domestic securities exchange
are valued at the last sales price on that exchange.
Portfolio securities traded primarily on foreign
securities exchanges are generally valued at the closing
values of such securities on the exchange where primarily
traded. If no sale is reported, the latest bid price is
generally used.
Over-the-counter securities are generally priced at
the last sales price or, if not available, at the average
of the bid and asked prices.
Debt securities purchased with maturities of 60 days
or less are stated at amortized cost which approximates
market value. Other debt securities may be valued each
business day at their current market value as determined
by a pricing service approved by the Board of Trustees.
Securities which cannot be valued by the methods set
forth above are valued in good faith at fair value using
methods determined by the Manager under the general
supervision of the Board of Trustees.
For additional information, see Valuation of
Securities in the Trust's Statement of Additional
Information.

DIVIDENDS, DISTRIBUTIONS AND TAXES

DIVIDENDS AND DISTRIBUTIONS
Net investment income will be distributed to shareholders
annually. Any net capital gain generally will be
distributed after the end of the fiscal year. The Fund
intends to make such additional distributions as may be
necessary to avoid the imposition of any federal income
or excise tax.
All income dividends and capital gain distributions
are automatically reinvested, unless the shareholder
specifies otherwise. The share price will be the net
asset value of the Fund shares computed on the ex-
dividend date. Any income dividend or capital gain
distributions paid by the Fund will reduce the per share
net asset value by the amount of the dividend or
distribution. An investor should consider carefully the
effects of purchasing shares of the Fund shortly before
any dividend or distribution. Although in effect a
return of capital, these distributions are subject to
taxes.
Any dividend or distribution payment returned to the
Manager as not deliverable will be invested in the
shareholder's Fund account at the then-current net asset
value. If any check for the payment of dividends or
distributions is not cashed within six months from the
date on the check, it becomes void. The amount of the
check will then be invested in the shareholder's account
at the then-current net asset value.

Withholding - The Fund is required by federal law to
withhold and remit to the U.S. Treasury a portion of the
income dividends and capital gain distributions and
proceeds of redemptions paid to any non-corporate
shareholder who fails to furnish the Fund with a correct
tax identification number, who underreports dividend or
interest income, or who fails to certify to the Fund that
he is not subject to withholding. To avoid this
withholding requirement, you must certify on your
application, or on a separate Form W-9 supplied by the
Transfer Agent, that your tax identification number is
correct and that you are not currently subject to backup
withholding.

Reporting - Information concerning the status of
dividends and distributions for federal income tax
purposes will be mailed to shareholders annually.

MANAGEMENT OF THE TRUST

The business affairs of the Trust are subject to the
supervision of the Board of Trustees.
The Manager, USAA Investment Management Company, was
organized in May 1970 and is an affiliate of United
Services Automobile Association (USAA), a large
diversified financial services institu-tion. As of the
date of this Prospectus, the Manager had in excess of
$24.6 billion in total assets under management. The
Manager has offices at 9800 Fredericksburg Rd., San
Antonio, TX 78288, which is also home office of USAA and
other affiliates.

ADVISORY AGREEMENT
The Manager serves as the manager and investment adviser
of the Trust, providing services under an Advisory
Agreement. Under the Advisory Agreement, the Manager is
responsible for the management of the portfolios,
business affairs, and placement of brokerage orders,
subject to the authority of and supervision by the Board
of Trustees.
For its services under the Advisory Agreement, the
Fund pays the Manager an annual fee which is computed as
a percen-tage of the Fund's average net assets (ANA),
accrued daily, and paid monthly. The management fee for
the Fund was computed and paid at three-fourths of one
percent (.75%) of ANA (annualized) for the fiscal period
ended May 31, 1994. This fee is higher than that charged
to most other mutual funds, but is comparable to fees
charged to other mutual funds with similar investment
objectives and policies.

OPERATING EXPENSES
For the fiscal period ended May 31, 1994, the total
annualized operating expenses for the Fund as a
percentage of the Fund's ANA equaled 1.11%.

PORTFOLIO MANAGERS
See Appendix A - Portfolio Management for a listing of
portfolio managers.

DESCRIPTION OF SHARES

MASTER TRUST AGREEMENT
The Trust is an open-end management investment company
established as a business trust under the laws of the
Commonwealth of Massachusetts pursuant to a Master Trust
Agreement dated May 9, 1984, as amended. The Trust is
authorized to issue an unlimited number of shares of
beneficial interest of separate series or portfolios,
without par value. The portfolio described in this
Prospectus is being offered to the public. The Fund is
classified as a diversified investment company. Under
the Master Trust Agreement, the Trustees are authorized
to create new portfolios in addition to those already
existing without shareholder approval.
Under the Master Trust Agreement, no annual or
regular meeting of shareholders is required. Ordinarily,
no shareholder meeting will be held unless required by
the 1940 Act. The Trustees may fill vacancies on the
Board or appoint new Trustees provided that immediately
after such action at least two-thirds of the Trustees
have been elected by shareholders. Shareholders are
entitled to one vote per share (with proportionate voting
for fractional shares) irrespective of the relative net
asset value of the shares. For matters affecting an
individual portfolio, a separate vote of the shareholders
of that portfolio is required. Shareholders holding an
aggregate of at least 10% of the outstanding shares of the
Trust may request a meeting of share-holders at any time
for the purpose of voting to remove one or more of the
Trustees, and the Trust will assist shareholders in
communicating with other shareholders in connection with
such a meeting.
Under Massachusetts law, shareholders of any
portfolio could, under certain circumstances, be held
personally liable for the obligations of the Trust.
However, the Master Trust Agreement disclaims shareholder
liability for acts or obligations of the Trust and
requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or
executed by the Trust or the Trustees. The Master Trust
Agreement provides for indemnification out of the Trust's
property for all losses and expenses of any shareholder
held personally liable for the obligations of the Trust.
Thus, the possibility of a shareholder incurring
financial loss on account of shareholder liability is
remote.