American Beacon Balanced Fund (AABPX) N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-4984

AMERICAN BEACON FUNDS

(Exact name of registrant as specified in charter)

220 East Las Colinas Boulevard, Suite 1200

Irving, Texas 75039

(Address of principal executive offices)-(Zip code)

GENE L. NEEDLES, JR., PRESIDENT

220 East Las Colinas Boulevard, Suite 1200

Irving, Texas 75039

(Name and address of agent for service)

Registrant’s telephone number, including area code: (817) 391-6100

Date of fiscal year end: October 31, 2016

Date of reporting period: April 30, 2016

ITEM 1. REPORTS TO STOCKHOLDERS.

American Beacon®
FUNDS
2016 SEMI-ANNUAL REPORT
APRIL 30, 2016
LARGE CAP VALUE FUND

About American Beacon Advisors

Since 1986, American Beacon Advisors has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management.

Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company.

Contents

President’s Message	1
Performance Overview	2
Schedule of Investments	7
Financial Statements	13
Notes to the Financial Statements	17
Financial Highlights	29
Additional Information	Back Cover

Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The use of futures contracts for cash management may subject the Fund to losing more money than invested. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and the Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.

American Beacon Funds April 30, 2016

Dear Shareholders, During the six-month period ended April 30, 2016, disparate central bank policies, uneven economic growth and volatile oil prices set the stage for mixed returns around the globe. Early in the period, uncertainty over the timing of the U.S. Federal Reserve’s first interest rate increase since emergency lending rates were established during the 2008 financial crisis weighed heavily on investors’ minds. On December 16, 2015, following months of speculation, the Federal Open Market Committee (“FOMC”) increased its benchmark lending rates from a range of 0% to 0.25% to a range of 0.25% to 0.5%; it was the first interest rate hike in nearly a decade. On April 27, 2016, the FOMC decided to maintain short-term interest rates in the range of 0.25% to 0.5%. If the U.S. economy continues to expand, the FOMC plans to increase short-term interest rates. Conversely, during first quarter 2016, many central banks around the world decided to continue or expand their economic stimulation policies. The Bank of Japan pushed its rates into negative territory and the European Central Bank cut a key rate to zero in March 2016.

China’s slowing growth also escalated concerns for markets and companies around the globe. In this environment, international stocks fluctuated from one extreme to another; domestic stocks made modest gains thanks to a rally in oil prices and positive economic reports; and emerging-market stocks rebounded and outpaced developed-market stocks. Bonds outperformed stocks thanks to declining interest rates.

• For the six months ended April 30, 2016, the American Beacon Large Cap Value Fund (Investor Class) returned -1.70%. The Fund is designed to provide long-term capital appreciation and current income primarily through investments in large market capitalization U.S. stocks.

For the period under review, benchmarks measuring the performance of large-cap domestic stocks outperformed the Fund’s Investor Class: The broad-market S&P 500 Index returned 0.43% and the Russell 1000 Value Index returned 1.93%.

American Beacon Advisors identifies and partners with experienced asset managers from across all asset classes to help protect our shareholders’ portfolios over the long term. We are proud to offer a variety of funds that allow investors to invest in the asset classes best aligned with their long-term goals.

Thank you for your continued investment in the American Beacon Funds. For additional information about the Funds or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

American Beacon Large Cap Value Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

The Investor Class of the Large Cap Value Fund (the “Fund”) returned -1.70% for the six months ended April 30, 2016, underperforming the Russell 1000^® Value Index (the “Index”) return of 1.93% for the same period.

Total Returns for the Period ended 4/30/16

	Ticker	6 Months*			1 Year			5 Years			10 Years
Institutional Class (1,6)	AADEX		-1.54	%		-6.67	%		9.01	%		5.30	%
Y Class (1,2,6)	ABLYX		-1.60	%		-6.75	%		8.91	%		5.24	%
Investor Class (1,6)	AAGPX		-1.70	%		-6.96	%		8.63	%		4.97	%
Advisor Class (1,6)	AVASX		-1.76	%		-7.08	%		8.48	%		4.79	%
A Class with sales charge (1,3,6)	ALVAX		-7.38	%		-12.37	%		7.21	%		4.28	%
A Class without sales charge (1,3,6)	ALVAX		-1.72	%		-7.02	%		8.49	%		4.90	%
C Class with sales charge (1,4,6)	ALVCX		-3.09	%		-8.70	%		7.68	%		4.44	%
C Class without sales charge (1,4,6)	ALVCX		-2.09	%		-7.70	%		7.68	%		4.44	%
AMR Class (1,6)	AAGAX		-1.49	%		-6.48	%		9.28	%		5.57	%
Russell 1000 Value Index (5)			1.93	%		-0.40	%		10.13	%		5.67	%

* Not annualized

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please call 1-800-967-9009 or visit www.americanbeaconfunds.com. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.

2. Fund performance for the ten-year period represents the returns achieved by the Institutional Class from 4/30/06 up to 8/3/09, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/06.

3. Fund performance for the ten-year period represents the returns achieved by the Investor Class from 4/30/06 through 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 4/30/06. A Class shares have a maximum sales charge of 5.75%.

4. Fund performance for the ten-year period represents the returns achieved by the Investor Class from 4/30/06 through 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 4/30/06. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2012 and partially recovered in 2013 and 2014. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2012. C Class has a maximum contingent deferred sales charge of 1.00% for shares redeemed within one year of the date of purchase.

5. The Russell 1000 Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 1000 Value Index and Russell 1000 Index are registered trademarks of the Frank Russell Company. One cannot directly invest in an index.

6. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C, and AMR Class shares was 0.59%, 0.68%, 0.94%, 1.08%, 0.98%, 1.74%, and 0.33%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund underperformed the Index as both stock selection and sector allocation detracted value relative to the Index for the six-month period.

The Fund’s investments in the Financials, Health Care, and Industrials sectors contributed to most of the stock selection underperformance. In the Financials sector, Metlife Inc. (down 15.2%) and Citigroup Inc. (down 11.8%) were the largest negative contributors. Positions in Valeant Pharmaceuticals International (down 58.8%), Sanofi ADR (down 18.8%) and Johnson & Johnson (up12.3%) detracted from the Fund’s returns in the Health Care sector. In the Industrials sector, the

2

American Beacon Large Cap Value Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

Fund’s position in American Airlines Group Inc. (down 25.0%) contributed to the Fund’s underperformance. The aforementioned negative performance was somewhat offset by good stock selection in the Consumer Staples sector. In this sector, Philip Morris International (up 13.4%) and Imperial Tobacco Group Sponsored ADR (down 3.8%) helped the Fund’s returns.

Sector allocation detracted as a significant overweight in Consumer Discretionary - the worst performing sector in the Index - and an underweight in Utilities (down 3.0% and up 13.1%, respectively), hurt relative performance compared to the Index. The Fund’s underweight position in Financials (down 2.3%) and overweight position in Telecommunication Services (up 14.6%), the best performing sector in the Index, somewhat muted relative underperformance from sector allocation.

The sub-advisors continue to invest in a broadly diversified portfolio of companies that they believe have attractive valuations and above-average earnings growth potential. This approach should allow the Fund to benefit over the longer term.

3

American Beacon Large Cap Value Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

Top Ten Holdings (% Net Assets)
Bank of America Corp.		3.4
JPMorgan Chase & Co.		3.2
BP PLC, Sponsored ADR		2.1
Oracle Corp.		2.0
Microsoft Corp.		1.9
General Motors Co.		1.6
Medtronic PLC		1.6
Johnson Controls, Inc.		1.6
Pfizer, Inc.		1.5
Citigroup		3.3
Total Fund Holdings	205
Sector Allocation (% Equities)
Financials		25.8
Industrials		13.2
Energy		12.7
Health Care		12.4
Consumer Discretionary		12.3
Information Technology		9.5
Consumer Staples		5.0
Telecommunication Services		3.6
Utilities		3.0
Materials		2.5

4

American Beacon Large Cap Value Fund^SM

Fund Expenses

April 30, 2016 (Unaudited)

Fund Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and (2) ongoing costs, including management fees, administrative service fees, distribution (12b-1) fees, and other Fund expenses. The examples below are intended to help you understand the ongoing cost (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from November 1, 2015 through April 30, 2016.

Actual Expenses

The “Actual” lines of the table provide information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. Shareholders of the Investor and Institutional Classes that invest in the Fund through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

Hypothetical Example for Comparison Purposes

The “Hypothetical” lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed 5% per year rate of return before expenses (not the Fund’s actual return). You may compare the ongoing costs of investing in the Fund with other funds by contrasting this 5% hypothetical example and the 5% hypothetical examples that appear in the shareholder reports of the other funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. Shareholders of the Investor and Institutional Classes that invest in the Fund through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by the Fund, such as sales charges (loads). Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the “Hypothetical” lines of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.

5

American Beacon Large Cap Value Fund^SM

Fund Expenses

April 30, 2016 (Unaudited)

	Beginning Account Value 11/1/15		Ending Account Value 4/30/16		Expenses Paid During Period* 11/1/15 - 4/30/16
Institutional Class
Actual	$	1,000.00	$	984.60	$	2.96
Hypothetical **	$	1,000.00	$	1,021.88	$	3.02
Y Class
Actual	$	1,000.00	$	984.00	$	3.31
Hypothetical **	$	1,000.00	$	1,021.53	$	3.37
Investor Class
Actual	$	1,000.00	$	983.00	$	4.56
Hypothetical **	$	1,000.00	$	1,020.27	$	4.64
Advisor Class
Actual	$	1,000.00	$	982.40	$	5.29
Hypothetical **	$	1,000.00	$	1,019.53	$	5.39
A Class
Actual	$	1,000.00	$	982.80	$	4.81
Hypothetical **	$	1,000.00	$	1,020.01	$	4.90
C Class
Actual	$	1,000.00	$	979.10	$	8.51
Hypothetical **	$	1,000.00	$	1,016.26	$	8.67
AMR Class
Actual	$	1,000.00	$	985.10	$	2.42
Hypothetical **	$	1,000.00	$	1,022.43	$	2.46

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.60%, 0.67%, 0.92%, 1.07%, 0.98%, 1.73% and 0.49% for the Institutional, Y, Investor, Advisor, A, C and AMR Classes respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (182) by days in the year (366) to reflect the half-year period.

** 5% return before expenses.

6

American Beacon Large Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
COMMON STOCK - 97.91%
CONSUMER DISCRETIONARY - 12.06%
Auto Components - 2.33%
Delphi Automotive PLCA		85,894	$	6,324
Goodyear Tire & Rubber Co.		1,065,809		30,876
Johnson Controls, Inc.		3,421,485		141,650
Magna International, Inc., Class A		718,041		30,172
				209,022
Automobiles - 3.75%
Ford Motor Co.		4,974,352		67,452
General Motors Co.		4,571,705		145,380
Harley-Davidson, Inc.		521,147		24,926
Honda Motor Co., Ltd., Sponsored ADRB		1,335,972		36,018
Toyota Motor Corp., Sponsored ADRB		601,599		61,183
				334,959
Household Durables - 0.73%
Koninklijke Philips Electronics N.V.		1,222,790		33,639
Newell Rubbermaid, Inc.		73,979		3,369
Stanley Black & Decker, Inc.		47,992		5,371
Tupperware Brands Corp.		401,784		23,332
				65,711
Media - 1.72%
CBS Corp., Class BC		451,803		25,260
Comcast Corp., Class A		833,560		50,647
Discovery Communications, Inc., Class AD		1,310,944		35,802
Omnicom Group, Inc.		346,506		28,750
Time Warner, Inc.		116,152		8,728
Time, Inc.		10,905		160
Viacom, Inc., Class B		55,690		2,278
Walt Disney Co.		26,341		2,720
				154,345
Multiline Retail - 3.09%
Dillard’s, Inc., Class A		318,800		22,459
Kohl’s Corp.		640,356		28,368
Macy’s, Inc.		1,047,300		41,463
Michael Kors Holdings Ltd.D		1,468,648		75,870
Nordstrom, Inc.		383,877		19,628
Target Corp.		1,104,928		87,842
				275,630
Specialty Retail - 0.44%
Advance Auto Parts, Inc.		20,278		3,165
Bed Bath & Beyond, Inc.		776,133		36,649
				39,814
Total Consumer Discretionary				1,079,481
CONSUMER STAPLES - 4.86%
Beverages - 0.13%
Diageo PLC, Sponsored ADRA B		105,433		11,422
Food & Drug Retailing - 0.50%
CVS Caremark Corp.		173,849		17,472
Wal-Mart Stores, Inc.		401,982		26,880
				44,352
Food Products - 0.91%
Archer Daniels Midland Co.		199,745		7,978
Bunge Ltd.		184,614		11,538
Danone S.A., Sponsored ADRB		527,213		7,455
General Mills, Inc.		241,178		14,794
JM Smucker Co.		35,383		4,493

See accompanying notes

7

American Beacon Large Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Kellogg Co.		249,895	$	19,195
Nestle S.A., Sponsored ADRB		212,411		15,839
				81,292
Household Products - 0.05%
Procter & Gamble Co.		59,918		4,801
Tobacco - 3.27%
Altria Group, Inc.		1,183,361		74,209
Imperial Brands PLC, Sponsored ADRA B		762,307		82,786
Philip Morris International, Inc.		1,384,467		135,843
				292,838
Total Consumer Staples				434,705
ENERGY - 12.44%
Energy Equipment & Services - 0.57%
Cobalt International Energy, Inc.D		3,695,065		11,935
Helmerich & Payne, Inc.		334,100		22,090
National Oilwell Varco, Inc.		148,211		5,342
Schlumberger Ltd.		148,578		11,937
				51,304
Oil & Gas - 11.87%
Apache Corp.		698,268		37,986
BP PLC, Sponsored ADRA B		5,651,663		189,783
California Resources Corp.D		73,387		161
Canadian Natural Resources Ltd.		2,323,903		69,764
Chevron Corp.		114,874		11,738
Cimarex Energy Co.		374,268		40,750
ConocoPhillips		1,677,716		80,178
Devon Energy Corp.		2,400,566		83,252
EOG Resources, Inc.		115,510		9,543
Exxon Mobil Corp.		165,173		14,601
Hess Corp.		1,564,992		93,305
Kosmos Energy Ltd.D		2,461,045		15,948
Marathon Oil Corp.		6,462,886		91,062
Marathon Petroleum Corp.		1,339,739		52,357
Murphy Oil Corp.		1,059,560		37,869
Occidental Petroleum Corp.		1,394,077		106,856
Phillips 66		899,604		73,866
Royal Dutch Shell PLC, Class A, Sponsored ADRA B		868,022		45,910
Seadrill Ltd.D		1,652,986		7,901
				1,062,830
Total Energy				1,114,134
FINANCIALS - 25.25%
Banks - 2.95%
BB&T Corp.		150,608		5,329
Citizens Financial Group		2,355,153		53,815
PNC Financial Services Group, Inc.		1,525,128		133,876
Popular, Inc.		868,800		25,821
SunTrust Banks, Inc.		613,105		25,591
U.S. Bancorp		460,845		19,673
				264,105
Diversified Financials - 17.52%
American Express Co.		937,517		61,342
Bank of America Corp.		20,699,498		301,385
Bank of New York Mellon Corp.		272,014		10,946
BlackRock, Inc., Class A		27,285		9,722
Blackstone Group, LPE		2,407,848		66,071
Capital One Financial Corp.		1,390,264		100,641
Citigroup, Inc.		6,358,898		294,290
Franklin Resources, Inc.		246,291		9,197
Goldman Sachs Group, Inc.		280,434		46,022
JPMorgan Chase & Co.		4,585,720		289,818

See accompanying notes

8

American Beacon Large Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
KKR & Co., LPE		4,460,308	$	60,660
Morgan Stanley		1,789,878		48,434
Nasdaq OMX Group		156,317		9,646
Nomura Holdings, Inc., Sponsored ADRB		7,225,484		30,419
S&P Global, Inc.		19,491		2,083
Santander Consumer USA Holdings, Inc.		2,597,047		34,203
SLM Corp.D		3,321,130		22,484
State Street Corp.		679,616		42,340
Synchrony FinancialD		893,187		27,305
Wells Fargo & Co.		2,045,370		102,228
				1,569,236
Insurance - 4.34%
Allstate Corp.		396,947		25,821
American International Group, Inc.		2,162,983		120,738
Aon PLCA		150,021		15,770
Berkshire Hathaway, Inc., Class BD		507,310		73,803
Chubb Ltd.		150,972		17,794
MetLife, Inc.		1,441,966		65,033
Prudential Financial, Inc.		111,423		8,651
Travelers Cos., Inc.		184,622		20,290
Unum Group		1,178,937		40,331
				388,231
Real Estate - 0.44%
Hatteras Financial Corp.F		871,541		13,849
Two Harbors Investment Corp.F		3,291,254		25,770
				39,619
Total Financials				2,261,191
HEALTH CARE - 12.16%
Health Care Equipment & Supplies - 2.13%
Medtronic PLCA		1,816,717		143,793
St. Jude Medical, Inc.		104,410		7,956
Thermo Fisher Scientific, Inc.		85,363		12,314
Zimmer Biomet Holdings, Inc.		233,167		26,994
				191,057
Health Care Providers & Services - 2.16%
Anthem, Inc.		898,431		126,471
Cigna Corp.		33,715		4,671
Express Scripts Holding Co.D		455,455		33,581
Humana, Inc.		132,653		23,489
McKesson Corp.		28,480		4,780
				192,992
Pharmaceuticals - 7.87%
Abbott Laboratories		269,795		10,495
AbbVie, Inc.		699,884		42,693
Allergan PLCA D		10,866		2,353
Endo International PLCA D		321,840		8,690
GlaxoSmithKline PLC, Sponsored ADRA B		1,206,334		51,764
Horizon Pharma PLCA D		1,306,092		20,075
Jazz Pharmaceuticals PLCA D		132,668		19,993
Johnson & Johnson		1,035,934		116,107
Mallinckrodt PLCA D		381,107		23,827
Merck & Co., Inc.		1,682,297		92,257
Mylan N.V.D		557,385		23,249
Novartis AG, Sponsored ADRB		34,019		2,584
Pfizer, Inc.		4,190,899		137,083
Roche Holding AG, Sponsored ADRB		77,780		2,456
Sanofi, ADRB		2,716,445		111,646
Valeant Pharmaceuticals International, Inc.		1,190,900		39,728
				705,000
Total Health Care				1,089,049

See accompanying notes

9

American Beacon Large Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
INDUSTRIALS - 12.88%
Aerospace & Defense - 4.42%
AerCap Holdings N.V.D		1,592,100	$	63,700
B/E Aerospace, Inc.		545,600		26,533
Boeing Co.		182,085		24,545
Embraer S.A., Sponsored ADRB		445,100		10,282
General Dynamics Corp.		362,136		50,887
Lockheed Martin Corp.		67,384		15,659
Northrop Grumman Corp.		47,946		9,889
Raytheon Co.		576,467		72,837
Rockwell Collins, Inc.		303,416		26,758
United Technologies Corp.		910,433		95,022
				396,112
Air Freight & Couriers - 0.16%
United Parcel Service, Inc., Class B		136,494		14,341
Airlines - 1.42%
American Airlines Group, Inc.		1,811,300		62,834
Delta Air Lines, Inc.		1,548,200		64,513
				127,347
Commercial Services & Supplies - 0.03%
Equifax, Inc.		18,917		2,275
Construction & Engineering - 0.58%
AECOM Technology Corp.D		629,464		20,451
Chicago Bridge & Iron Co., N.V.		782,219		31,485
				51,936
Diversified Manufacturing - 0.74%
Eaton Corp., PLCA		1,049,379		66,394
Electrical Equipment - 0.15%
Tyco International PLCA		339,706		13,085
Industrial Conglomerates - 1.25%
3M Co.		125,219		20,959
Honeywell International, Inc.		797,710		91,154
				112,113
Machinery - 3.99%
Caterpillar, Inc.		620,152		48,199
CNH Industrial N.V.		5,469,939		42,337
Cummins, Inc.		712,643		83,402
Danaher Corp.		157,084		15,198
Deere & Co.		33,125		2,786
Illinois Tool Works, Inc.		81,768		8,546
Ingersoll-Rand PLCA		45,973		3,013
PACCAR, Inc.		379,951		22,383
Parker Hannifin Corp.		290,201		33,669
Pentair PLCA		78,484		4,558
Reliance Steel & Aluminum Co.		505,575		37,397
Terex Corp.		925,810		22,118
Xylem, Inc.		809,170		33,807
				357,413
Road & Rail - 0.14%
Canadian National Railway Co.		87,999		5,417
Union Pacific Corp.		79,783		6,960
				12,377
Total Industrials				1,153,393

See accompanying notes

10

American Beacon Large Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
INFORMATION TECHNOLOGY - 9.35%
Communications Equipment - 1.69%
Cisco Systems, Inc.		1,796,670	$	49,390
Corning, Inc.		5,478,840		102,290
				151,680
Computers & Peripherals - 0.94%
Hewlett Packard Enterprise Co.		2,568,044		42,784
HP, Inc.		1,365,944		16,760
International Business Machines Corp.		76,780		11,205
Teradata Corp.D		525,794		13,303
				84,052
IT Consulting & Services - 0.45%
Accenture PLC, Class AA		242,608		27,396
Fidelity National Information Services, Inc.		129,870		8,545
Fiserv, Inc.D		46,822		4,575
				40,516
Semiconductor Equipment & Products - 2.11%
Analog Devices, Inc.		54,646		3,078
Applied Materials, Inc.		1,246,525		25,516
Intel Corp.		969,856		29,367
Lam Research Corp.		327,712		25,037
Micron Technology, Inc.D		5,128,579		55,133
Qualcomm, Inc.		734,708		37,117
Texas Instruments, Inc.		234,706		13,388
				188,636
Software - 4.16%
Microsoft Corp.		3,435,135		171,310
Navient Corp.		1,651,601		22,577
Oracle Corp.		4,466,226		178,024
				371,911
Total Information Technology				836,795
MATERIALS - 2.48%
Chemicals - 1.77%
Air Products & Chemicals, Inc.		496,592		72,447
Dow Chemical Co.		611,097		32,150
Eastman Chemical Co.		256,826		19,616
EI du Pont de Nemours & Co.		125,651		8,282
Monsanto Co.		39,679		3,717
PPG Industries, Inc.		201,523		22,246
				158,458
Containers & Packaging - 0.21%
Crown Holdings, Inc.D		97,755		5,177
Packaging Corp. of America		211,015		13,691
				18,868
Paper & Forest Products - 0.50%
International Paper Co.		508,886		22,019
Louisiana-Pacific Corp.D		1,313,477		22,330
				44,349
Total Materials				221,675
TELECOMMUNICATION SERVICES - 3.50%
Diversified Telecommunication Services - 2.09%
AT&T, Inc.		830,926		32,257
Telefonaktiebolaget LM Ericsson, Sponsored ADRB		5,741,720		46,451
Verizon Communications, Inc.		2,116,674		107,823
				186,531

See accompanying notes

11

American Beacon Large Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Wireless Telecommunication Services - 1.41%
China Mobile Ltd., Sponsored ADRB		1,216,643	$	69,981
Vodafone Group PLC, Sponsored ADRA B		1,726,147		56,514
				126,495
Total Telecommunication Services				313,026
UTILITIES - 2.93%
Electric - 2.90%
Calpine Corp.D		4,848,178		76,505
CenterPoint Energy, Inc.		2,411,202		51,720
Duke Energy Corp.		102,557		8,079
Entergy Corp.		784,929		59,011
NRG Energy, Inc.		2,619,832		39,559
PPL Corp.		317,954		11,968
Southern Co.		256,199		12,836
				259,678
Multi-Utilities - 0.03%
Xcel Energy, Inc.		56,910		2,278
Total Utilities				261,956
Total Common Stock (Cost $8,224,390)				8,765,405
SHORT-TERM INVESTMENTS - 2.13% (Cost $190,753)
American Beacon U.S. Government Money Market Select Fund, Select ClassG		190,753,404		190,753
TOTAL INVESTMENTS - 100.04% (Cost $8,415,143)				8,956,158
LIABILITIES, NET OF OTHER ASSETS - (0.04%)				(3,309	)
TOTAL NET ASSETS - 100.00%			$	8,952,849

Percentages are stated as a percent of net assets.

^A  PLC - Public Limited Company.

^B  ADR - American Depositary Receipt.

^C  Non-voting participating shares.

^D  Non-income producing security.

^E  MLP - Master Limited Partnership.

^F  REIT - Real Estate Investment Trust.

^G  The Fund is affiliated by having the same investment advisor.

Futures Contracts Open on April 30, 2016:

Description	Type		Number of Contracts		Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
S&P 500 E-Mini Index June Futures		Long		1,731	June 2016	$	178,215,105	$	242,362
						$	178,215,105	$	242,362

See accompanying notes

12

American Beacon Large Cap Value Fund^SM

Statement of Assets and Liabilities

April 30, 2016 (Unaudited) (in thousands, except share and per share amounts)

Assets:
Investments in unaffiliated securities, at fair value A	$	8,765,405
Investments in affiliated securities, at fair value B		190,753
Deposit with brokers for futures contracts		7,313
Receivable for investments sold		4,130
Receivable for fund shares sold		6,107
Dividends and interest receivable		11,352
Receivable for tax reclaims		516
Receivable for variation margin from open futures contracts		246
Prepaid expenses		123
Total assets		8,985,945
Liabilities:
Payable for investments purchased		17,170
Payable for fund shares redeemed		6,305
Management and investment advisory fees payable		5,514
Administrative service and service fees payable		2,785
Transfer agent fees payable		216
Custody and fund accounting fees payable		136
Professional fees payable		135
Prospectus and shareholder reports fees payable		383
Trustee fees payable		296
Other liabilities		156
Total liabilities		33,096
Net assets	$	8,952,849
Analysis of Net Assets:
Paid-in-capital		8,356,669
Undistributed (or overdistribution of) net investment income		66,640
Accumulated net realized (loss)		(11,717	)
Unrealized appreciation of investments		541,015
Unrealized appreciation of futures contracts		242
Net assets	$	8,952,849

See accompanying notes

13

American Beacon Large Cap Value Fund^SM

Statement of Assets and Liabilities

April 30, 2016 (Unaudited) (in thousands, except share and per share amounts)

Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		235,300,037
Y Class		16,174,360
Investor Class		106,309,125
Advisor ClassC		5,627,388
A Class		1,623,282
C Class		483,668
AMR Class		222,725
Net assets (not in thousands):
Institutional Class	$	5,878,565,919
Y Class	$	401,656,789
Investor Class	$	2,488,188,300
Advisor ClassC	$	130,089,008
A Class	$	37,627,754
C Class	$	11,103,820
AMR Class	$	5,616,949
Net asset value, offering and redemption price per share:
Institutional Class	$	24.98
Y Class	$	24.83
Investor Class	$	23.41
Advisor Class	$	23.12
A Class	$	23.18
A Class (offering price)	$	24.59
C Class	$	22.96
AMR Class	$	25.22
A Cost of investments in unaffiliated securities	$	8,224,390
B Cost of investments in affiliated securities	$	190,753
C Includes Retirement Class (Note 1).

See accompanying notes

14

American Beacon Large Cap Value Fund^SM

Statement of Operations

For the Six Months Ended April 30, 2016 (Unaudited) (in thousands)

Investment income:
Dividend income from unaffiliated securities (net of foreign taxes) A	$	119,308
Dividend income from affiliated securities		61
Interest income		2
Total investment income		119,371
Expenses:
Management and investment advisory fees (Note 2)		10,473
Administrative service fees (Note 2):
Institutional Class		8,5958
Y Class		574
Investor Class		4,015
Advisor ClassB		200
A Class		56
C Class		17
AMR Class		3
Transfer agent fees:
Institutional Class		935
Y Class		6
Investor Class		60
Advisor ClassB		3
A Class		1
C Class		1
AMR Class		73
Custody and fund accounting fees		456
Professional fees		139
Registration fees and expenses		101
Service fees (Note 2):
Y Class		191
Investor Class		4,700
Advisor Class		166
A Class		28
C Class		9
Distribution fees (Note 2):
Advisor ClassB		171
A Class		47
C Class		57
Prospectus and shareholder report expenses		212
Trustee fees		327
Other expenses		317
Total expenses		31,867
Net fees and expenses recouped by Manager (Note 2)		2
Net expenses		31,869
Net investment income		87,502
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments		101,562
Commission recapture (Note 3)		73
Futures contracts		16,068
Change in net unrealized appreciation (depreciation) of:
Investments		(391,501	)
Futures contracts		(8,126	)
Net (loss) from investments		(281,924	)
Net (decrease) in net assets resulting from operations	$	(194,422	)
A Foreign taxes	$	1,031
B Include Retirement Class (Note 1)

See accompanying notes

15

American Beacon Large Cap Value Fund

Statement of Changes of Net Assets (in thousands)

	Six Months Ended April 30, 2016			Year Ended October 31, 2015
	(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	87,502		$	201,034
Net realized gain (loss) from investments, commission recapture, and futures contracts		117,703			1,203,996
Change in net unrealized appreciation (depreciation) from investments and futures contracts		(399,627	)		(1,484,221	)
Net (decrease) in net assets resulting from operations		(194,422	)		(79,191	)
Distributions to Shareholders:
Net investment income:
Institutional Class		(112,844	)		(124,764	)
Y Class		(7,022	)		(9,070	)
Investor Class		(44,778	)		(80,020	)
Advisor ClassA		(2,065	)		(3,033	)
Retirement Class		—			(254	)
A Class		(682	)		(603	)
C Class		(109	)		(151	)
AMR Class		—			(19,775	)
Net realized gain from investments:
Institutional Class		(517,126	)		(375,074	)
Y Class		(34,253	)		(27,794	)
Investor Class		(267,452	)		(281,035	)
Advisor ClassA		(13,186	)		(10,665	)
Retirement Class		—			(961	)
A Class		(3,722	)		(1,967	)
C Class		(1,105	)		(725	)
AMR Class		(577	)		(52,660	)
Net distributions to shareholders		(1,004,921	)		(988,551	)
Capital Share Transactions:
Proceeds from sales of shares		749,408			2,349,907
Reinvestment of dividends and distributions		959,962			953,937
Cost of shares redeemed		(1,573,771	)		(3,646,862	)
Net increase (decrease) in net assets from capital share transactions		135,599			(343,018	)
Net (decrease) in net assets		(1,063,744	)		(1,410,760	)
Net Assets:
Beginning of period		10,016,593			11,427,351
End of Period*	$	8,952,849		$	10,016,593
*Includes undistributed (or overdistribution of) net investment income	$	66,640		$	148,696

^A  Includes Retirement Class (Note 1).

See accompanying notes

16

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

1. Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”), is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. As of April 30, 2016, the Trust consists of twenty-four active series, one of which is presented in this filing (the “Fund”): American Beacon Large Cap Value Fund. The remaining twenty-three active series are reported in separate filings.

American Beacon Advisors, Inc. (the “Manager”) is a wholly-owned subsidiary of Astro AB Borrower, Inc., which is indirectly owned by investment funds affiliated with Kelso & Company, L.P. and Estancia Capital Management, LLC, and was organized in 1986 to provide business management, advisory, administrative and asset management consulting services to the Trust and other investors.

Class Disclosure

On September 21, 2015, the Board of Trustees (the “Board”) approved the liquidation of the AMR Class shares to be closed on or about May 31, 2016. The Board also approved the reclassification of the Retirement Class shares to the Advisor Class shares due to small asset size. The Retirement Class closed on January 15, 2016, and merged into the Advisor Class.

The Fund has multiple classes of shares designed to meet the needs of different groups of investors. The following table sets forth the differences among the classes:

Class:	Offered to:
Institutional Class	Investors making an initial investment of $250,000
Y Class	Investors making an initial investment of $100,000
Investor Class	General public and investors investing directly or through an intermediary
Advisor Class	Investors investing through an intermediary
A Class	General public and investors investing through an intermediary with applicable sales charges, which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”)
C Class	General public and investors investing through an intermediary with applicable sales charges, which may include a CDSC
AMR Class	Investors in the tax-exempt retirement and benefit plans of the Manager, AMR Corporation, and its affiliates

Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include administration fees, service fees, and distribution fees and vary among the classes as described more fully in Note 2.

2. Transactions with Affiliates

Management Agreement

The Trust and the Manager are parties to a Management Agreement that obligates the Manager to provide or oversee the provision of all investment advisory, fund management, and securities lending services. Investment assets of the Fund are managed by multiple investment advisors which have entered into separate investment advisory agreements with the Manager and the Trust. As compensation for performing the duties required under the Management Agreement, the Manager received from the Fund an annualized fee equal to 0.05% of the average daily net assets. The Fund pays the unaffiliated investment advisors hired to direct

17

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

investment activities of the Fund. Management fees paid during the six months ended April 30, 2016 were as follows (in thousands):

			Amounts paid to		Amounts Paid
Management Fee Rate	Management Fee		Investment Advisors		to Manager
0.23%	$	10,473	$	8,225	$	2,248

Administration Agreement

The Manager and the Trust entered into an Administration Agreement which obligates the Manager to provide or oversee administrative services to the Fund. As compensation for performing the duties required under the Administration Agreement, the Manager received an annualized fee of 0.30% of the average daily net assets of the Institutional, Y, Investor, Advisor, A, and C Classes of the Fund and 0.05% of the average daily net assets of the AMR Class of the Fund.

Distribution Plans

The Fund, except for the Advisor, A, and C Classes of the Fund, has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees will be charged to the Fund for distribution purposes. However, the Plan authorizes the management and administrative service fees received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Fund does not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.

Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, A, and C Classes of the Fund. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y, Investor, Advisor, A, and C Classes. As compensation for performing the duties required under the Service Plans, the Manager receives 0.10% of the average daily net assets of the Y Class, 0.15% of the average daily net assets of the A and C Classes, 0.25% of the average daily net assets of the Advisor Class and up to 0.375% of the average daily net assets of the Investor Class of the Fund.

Investment in Affiliated Funds

The Fund may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). The Fund and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management and administration fees of 0.10% of the average daily net assets of the USG Select Fund. During the six months ended April 30, 2016, the Manager earned fees totaling $24,041 on the Fund’s direct investment in the USG Select Fund.

Interfund Lending Program

Pursuant to an exemptive order issued by the Securities and Exchange Commission (“SEC”), the Fund, along with other registered investment companies having management contracts with the Manager, may participate in an interfund lending program. This program provides an alternative credit facility allowing the

18

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Fund to borrow from other participating Funds. During the six months ended April 30, 2016, the Fund did not participate in the program.

Expense Reimbursement Plan

The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of fees waived or expenses reimbursed for a period of up to three years. However, reimbursement will occur only if the Class’ average net assets have grown or expenses have declined sufficiently to allow reimbursement without causing its expense ratio to exceed the previously agreed upon contractual expense limit. During the six months ended April 30, 2016, there were no waived fees or reimbursed expenses.

Sales Commissions

The Fund’s distributor, Foreside Fund Services, LLC (“Foreside”) may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. During the six months ended April 30, 2016, Foreside collected $1,037 from the sale of Class A shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the six months ended April 30, 2016, $156 in CDSC fees were collected for the Fund.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the six months ended April 30, 2016, $1,444 in CDSC fees were collected for the Fund.

3. Security Valuation and Fair Value Measurements

Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally 4 p.m. ET, each day that the Exchange is open for business. Equity securities, including exchange-traded funds (“ETFs”), for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade.

Investments in open-end mutual funds are valued at the closing net asset value (“NAV”) per share of the mutual fund on the day of valuation.

Securities for which the market prices are not readily available or are not reflective of the fair value of the security, as determined by the Manager, will be priced at fair value following procedures approved by the Trust’s Board of Trustees (the “Board”).

Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, a Fund is required to deposit with its futures broker, an amount of cash or U.S. Government and Agency Obligations in accordance with the initial margin requirements of the broker or exchange. Futures contracts are marked to market daily and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by the Fund. Gains or losses are recognized, but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statement of Assets and Liabilities.

19

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Valuation Inputs

Various inputs may be used to determine the fair value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1	-	Quoted prices in active markets for identical securities.
Level 2	-	Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
Level 3	-	Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment.

Level 1 and Level 2 trading assets and trading liabilities, at fair value

Common stocks and financial derivative instruments, such as futures contracts that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are also categorized as Level 2 of the fair value hierarchy.

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2016, the Fund’s investments were classified as described below (in thousands):

	Level 1		Level 2		Level 3		Total
Common Stock*	$	8,765,405	$	—	$	—	$	8,765,405
Short-Term Investments - Money Markets		190,753		—		—		190,753
Total Investments in Securities	$	8,956,158	$	—	$	—	$	8,956,158
Financial Derivative Instruments - Assets
Futures Contracts	$	242	$	—	$	—	$	242

* Refer to the Schedules of Investments for Industry Information.

U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) also requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of each Fund’s assets and liabilities. During the six months ended April 30, 2016, there were no transfers between levels.

Security Transactions and Investment Income

Security transactions are recorded on the trade date of the security purchase or sale. The Fund may purchase securities with delivery or payment to occur at a later date. At the time the Fund enters into a commitment to purchase a security, the transaction is recorded, and the value of the security is reflected in the NAV. The value of the security may vary with market fluctuations.

Dividend income, net of foreign taxes, is recorded on the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Fund. Interest income is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of

20

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

discounts and amortization of premiums. For financial and tax reporting purposes, realized gains and losses are determined on the basis of specific lot identification.

Dividends to Shareholders

Dividends from net investment income of the Fund normally will be declared and paid at least annually. Distributions, if any, of net realized capital gains are generally paid at least annually and recorded on the ex-dividend date.

Commission Recapture

The Fund has established brokerage commission recapture arrangements with certain brokers or dealers. If the Fund’s investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. This amount is reported with the net realized gain in the Fund’s Statement of Operations.

Allocation of Income, Expenses, Gains, and Losses

Income, expenses (other than those attributable to a specific class), gains, and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.

Other

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.

4. Securities and Other Investments

American Depositary Receipts (“ADRs”)

ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Depositary receipts may not be denominated in the same currency as the securities into which they may be converted. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities. There is generally less publicly available information about foreign companies and there may be less governmental regulation and supervision of foreign stock exchanges, brokers and listed companies. In addition, such companies may use different accounting and financial standards (and certain currencies may become unavailable for transfer from a foreign currency), resulting in the Fund’s possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. In addition, the Fund may invest in unsponsored depositary receipts, the issuers of which are not obligated to disclose material information about the underlying securities to investors in the United States.

21

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Ownership of unsponsored depositary receipts may not entitle the Fund to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.

Real Estate Investment Trusts

The Fund may own shares of real estate investment trusts (“REITs”) which report information on the source of their distributions annually. The Fund re-characterizes distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-characterization will be estimated based on available information which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year. These re-characterizations are not recorded for financial statement purposes, but as an adjustment to the calculation of taxable income.

Other Investment Company Securities and Other Exchange Traded Products

The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, unit investment trusts, and other investment companies of the Trust. The Fund may invest in investment company securities advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Fund becomes a shareholder of that investment company. As a result, the Fund shareholders indirectly will bear a Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Fund’s shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

5. Financial Derivative Instruments

Futures Contracts

Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Fund may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.

Upon entering into a futures contract, the Fund is required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as Cash deposited with broker on the Statement of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.

For the six months ended April 30, 2016, the Fund entered into future contracts primarily for exposing cash to markets.

22

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

The Fund’s average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.

Average Futures Contracts Outstanding
Fund	Six Months ended April 30, 2016
Large Cap Value		2,835

The following is a summary of the Fund’s derivative financial instruments categorized by risk exposure (in thousands) ⁽¹⁾:

Fair Values of financial derivative instruments not accounted for as hedging instruments as of April 30, 2016:

Statement of Assets and Liabilities	Derivatives		Fair Value
Receivable for variation margin from open futures contracts(2)		Equity Contracts	$	242

The effect of financial derivative instruments not accounted for as hedging instruments during the six months ended April 30, 2016:

Statement of Operations	Derivatives		Total
Net realized gain from futures contracts		Equity Contracts	$	16,068
Change in net unrealized depreciation from futures contracts		Equity Contracts		(8,126	)

⁽¹⁾  See Note 3 in the Notes to Financial Statements for additional information.

⁽²⁾  Includes cumulative appreciation or (depreciation) of futures contracts as reported in the Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

6. Principal Risks

In the normal course of business the Fund trades financial instruments and enters into financial transactions where risk of potential loss exists. Security values fluctuate (market risk) and may decline due to factors affecting securities markets in general, particular industries represented in the securities markets or conditions specifically related to a particular company. Failure of the other party to a transaction to perform (credit and counterparty risk), for example by not making principal and interest payments when due, reduces the value of the issuer’s debt and could reduce the Fund’s income. Similar to credit risk, the Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which the Fund has unsettled or open transactions will fail to make required payments or otherwise comply with the terms of the instrument, transaction or contract. The potential loss could exceed the value of the financial assets recorded in the financial statements. Some of the Fund’s investments may be illiquid and the Fund may not be able to vary the portfolio investments in response to changes in economic and other conditions. If a Fund is required to liquidate all or a portion of its investments quickly, the Fund may realize significantly less than the value at which it previously recorded those investments.

Market Risks

The Fund’s investments in financial derivatives and other financial instruments expose the Fund to various risks such as, but not limited to, interest rate, foreign currency and equity risks.

Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by the Fund is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is useful primarily as a measure of the sensitivity of a fixed income’s market price to interest rate (i.e. yield) movements.

23

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

If the Fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in financial derivatives that provide exposure to foreign currencies, they will be subject to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, the Fund’s investments in foreign currency denominated securities may reduce the returns of the Fund.

The fair values of equities, such as common stocks and preferred securities or equity related investments such as futures, may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.

Counterparty Credit Risk

A derivative contract may suffer a mark to market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

With exchange traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, the credit risk is limited to failure of the offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally, credit risk exists in exchange traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.

Cash collateral that has been pledged to cover obligations of the Fund and cash collateral received from the counterparty, if any, is reported separately on the Statement of Assets and Liabilities as Deposits with brokers for futures contracts and Payable to brokers for futures contracts, respectively. Non-cash collateral pledged by the Fund, if any, is noted in the Schedule of Investments. Generally, the amount of collateral due from or to a party is determined at the close of business of the Fund and additional required collateral is delivered to/pledged by the Fund on the next business day. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty non-performance. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

Offsetting Assets and Liabilities

The Fund is a party to enforceable master netting agreements between brokers and counterparties such as International Swaps and Derivatives Association (“ISDA”) agreements which provide for the right to offset under certain circumstances. The Fund employs multiple money managers and counterparties and has elected not to offset qualifying financial and derivative instruments on the Statement of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting

24

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

arrangements that provide the right to offset are detailed below. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, April 30, 2016:

Offsetting of Financial Assets and Derivative Assets as of April 30, 2016:

Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Assets and Liabilities		Net Amounts of Assets Presented in the Statement of Assets and Liabilities
Futures Contracts(1)	$	242	$	—	$	242

Financial Assets, Derivative Assets, and Collateral Pledged by Counterparty as of April 30, 2016:

	Net amount of Assets		Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Presented in the Statement of Assets and Liabilities		Financial Instruments		Cash Collateral Received		Net Amount
Goldman Sachs & Co. (1)	$	242	$	—	$	—	$	242

⁽¹⁾  The securities presented here within are not subject to Master Netting Agreements. As such, this is disclosed for informational purposes only.

7. Federal Income and Excise Taxes

It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distribution of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, the Fund is treated as a single entity for the purpose of determining such qualification.

The Fund does not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2015 remains subject to examination by the Internal Revenue Service. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statement of Operations.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation or depreciation, as applicable, as the income is earned or capital gains are recorded.

Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

The tax character of distributions paid were as follows (in thousands):

	Six Months Ended April 30, 2016		Year Ended October 31, 2015
	(unaudited)
Distributions paid from:
Ordinary income*
Institutional Class	$	120,650	$	124,764
Y Class		7,539		9,070
Investor Class		48,815		80,020
Advisor Class		2,264		3,033
Retirement Class		—		254
A Class		738		603
C Class		126		151
AMR Class		9		19,775

25

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

	Six Months Ended April 30, 2016		Year Ended October 31, 2015
Ordinary income*
Institutional Class		—		375,074
Y Class		—		27,794
Investor Class		—		281,036
Advisor Class		—		10,665
Retirement Class		—		961
A Class		—		1,967
C Class		—		725
AMR Class		—		52,660
Total distributions paid	$	1,004,921	$	988,551

* For tax purposes, short-term capital gains are considered ordinary income distributions.

As of April 30, 2016, the components of distributable earnings on a tax basis were as follows (in thousands):

Cost basis of investments for federal income tax purposes	$	8,542,952
Unrealized appreciation		1,300,286
Unrealized depreciation		(887,079	)
Net unrealized appreciation		413,207
Undistributed ordinary income		57,247
Undistributed long-term capital gains		125,726
Accumulated capital and other losses		(242	)
Other temporary differences		242
Distributable earnings	$	596,180

Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The temporary differences between financial reporting and tax-basis reporting of unrealized appreciation or (depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains or (losses) on certain derivative instruments, and reclassifications of income from real estate investment securities and publicly traded partnerships.

Due to inherent differences in the recognition of income, expenses, and realized gains or (losses) under U.S. GAAP and federal income tax regulations, permanent differences between book and tax reporting have been identified and appropriately reclassified on the Statement of Assets and Liabilities.

Accordingly, the following amounts represent current year permanent differences derived from foreign currency and reclassifications of income from real estate investment securities and publicly traded partnerships as of April 30, 2016 (in thousands):

Paid-in-capital	$	4
Undistributed net investment income		(2,058	)
Accumulated net realized gain (loss)		2,053
Unrealized appreciation (depreciation) of investments and futures contracts		1

Under the Regulated Investment Company Modernization Act of 2010 (the “RIC MOD”), net capital losses recognized by the Fund in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses.

As of April 30, 2016, the Fund did not have capital loss carryovers.

26

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

8. Investment Transactions

The aggregate cost of purchases and proceeds from sales of investments, other than short-term obligations, for the six months ended April 30, 2016 were $1,132,436 and $1,897,207, respectively (in thousands).

A summary of the Fund’s direct transactions in the USG Select Fund for the six months ended April 30, 2016 is set forth below (in thousands):

Affiliate	October 31, 2015 Shares/Fair Value		Purchases		Sales		April 30, 2016 Shares/Fair Value		Dividend Income
USG Select Fund	$	30,000	$	430,709	$	269,956	$	190,753	$	60

9. Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Fund (dollars and shares in thousands):

For the Six Months Ended April 30, 2016

	Institutional Class						Y Class						Investor Class						Advisor Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		19,012		$	470,327			1,947		$	46,427			9,050		$	206,729			842		$	18,086
Reinvestment of dividends		24,301			593,678			1,655			40,195			13,342			305,666			600			13,584
Shares redeemed		(26,403	)		(649,534	)		(2,285	)		(56,692	)		(34,734	)		(801,073	)		(1,155	)		(26,488	)
Net increase (decrease) in shares outstanding		16,910		$	414,471			1,317		$	29,930			(12,342	)	$	(288,678	)		287		$	5,182
	Retirement Class						A Class						C Class						AMR Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		11		$	262			231		$	5,448			73		$	1,716			15		$	413
Reinvestment of dividends		40			899			189			4,296			47			1,067			23			577
Shares redeemed		(436	)		(9,117	)		(283	)		(6,318	)		(110	)		(2,502	)		(824	)		(22,047	)
Net increase (decrease) in shares outstanding		(385	)	$	(7,956	)		137		$	3,426			10		$	281			(786	)	$	(21,057	)
For the Year Ended October 31, 2015
	Institutional Class						Y Class						Investor Class						Advisor Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		53,940		$	1,563,915			4,072		$	118,729			20,038		$	556,590			1,285		$	35,421
Reinvestment of dividends		16,487			483,582			1,220			35,593			12,465			344,921			477			13,073
Shares redeemed		(38,409	)		(1,127,129	)		(4,445	)		(126,503	)		(54,777	)		(1,503,115	)		(1,531	)		(41,776	)
Net increase (decrease) in shares outstanding		32,018		$	920,368			847		$	27,819			(22,274	)	$	(601,604	)		231		$	6,718
	Retirement Class						A Class						C Class						AMR Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		159		$	4,293			954		$	26,677			177		$	4,792			1,347		$	39,489
Reinvestment of dividends		45			1,215			87			2,384			27			734	��		2,503			72,435
Shares redeemed		(260	)		(6,873	)		(330	)		(9,158	)		(74	)		(1,966	)		(29,483	)		(830,342	)
Net increase (decrease) in shares outstanding		(56	)	$	(1,365	)		711		$	19,903			130		$	3,560			(25,633	)	$	(718,418	)

27

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

10. Subsequent Events

On September 21, 2015, the Manager announced the Board’s approval of a plan to liquidate and terminate the AMR Class of the Fund on or about May 31, 2016.

28

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Six Months			Year Ended October 31,
	Ended April 30, 2016			2015			2014			2013			2012			2011D
	(unaudited)
Net asset value, beginning of period	$	28.38		$	31.21		$	27.59		$	21.58		$	18.99		$	18.56
Income from investment operations:
Net investment income		0.26			0.55			0.73			0.50			0.45			0.39
Net gains (losses) from investments (both realized and unrealized)		(0.76	)		(0.70	)		3.33			6.00			2.60			0.30
Total income (loss) from investment operations		(0.50	)		(0.15	)		4.06			6.50			3.05			0.69
Less distributions:
Dividends from net investment income		(0.52	)		(0.67	)		(0.44	)		(0.49	)		(0.46	)		(0.26	)
Distributions from net realized gains		(2.38	)		(2.01	)		—			—			—			—
Total distributions		(2.90	)		(2.68	)		(0.44	)		(0.49	)		(0.46	)		(0.26	)
Net asset value, end of period	$	24.98		$	28.38		$	31.21		$	27.59		$	21.58		$	18.99
Total return A		(1.54	)%B		(0.76	)%		14.89	%		30.70	%		16.48	%		3.69	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	5,878,566		$	6,198,883		$	5,816,013		$	5,428,755		$	3,914,173		$	3,380,918
Ratios to average net assets:
Expenses before reimbursements		0.60	%C		0.58	%		0.58	%		0.58	%		0.59	%		0.58	%
Expenses, net of reimbursements		0.60	%C		0.58	%		0.58	%		0.58	%		0.59	%		0.58	%
Net investment income (loss), before reimbursements		2.05	%C		1.88	%		2.35	%		1.99	%		2.23	%		1.96	%
Net investment income (loss), net of reimbursements		2.05	%C		1.88	%		2.35	%		1.99	%		2.23	%		1.96	%
Portfolio turnover rate		13	%B		32	%		29	%		34	%		30	%		90	%
	Y Class
	Six Months			Year Ended October 31,
	Ended April 30, 2016			2015			2014			2013			2012			2011D
	(unaudited)
Net asset value, beginning of period	$	28.21		$	31.04		$	27.46		$	21.47		$	18.92		$	18.49
Income from investment operations:
Net investment income		0.27			0.56			0.64			0.40			0.53			0.37
Net gains (losses) from investments (both realized and unrealized)		(0.78	)		(0.72	)		3.37			6.05			2.50			0.30
Total income (loss) from investment operations		(0.51	)		(0.16	)		4.01			6.45			3.03			0.67
Less distributions:
Dividends from net investment income		(0.49	)		(0.66	)		(0.43	)		(0.46	)		(0.48	)		(0.24	)
Distributions from net realized gains		(2.38	)		(2.01	)		—			—			—			—
Total distributions		(2.87	)		(2.67	)		(0.43	)		(0.46	)		(0.48	)		(0.24	)
Net asset value, end of period	$	24.83		$	28.21		$	31.04		$	27.46		$	21.47		$	18.92
Total return A		(1.60	)%B		(0.80	)%		14.78	%		30.59	%		16.43	%		3.58	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	401,657		$	419,097		$	434,881		$	327,939		$	88,509		$	134,968
Ratios to average net assets:
Expenses before reimbursements		0.67	%C		0.67	%		0.67	%		0.66	%		0.69	%		0.69	%
Expenses, net of reimbursements		0.67	%C		0.67	%		0.67	%		0.66	%		0.69	%		0.69	%
Net investment income (loss), before reimbursements		1.98	%C		1.80	%		2.24	%		1.78	%		2.12	%		1.88	%
Net investment income (loss), net of reimbursements		1.98	%C		1.80	%		2.24	%		1.78	%		2.12	%		1.88	%
Portfolio turnover rate		13	%B		32	%		29	%		34	%		30	%		90	%

^A  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B  Not annualized.

^C  Annualized.

^D  On December 1, 2010, MFS Institutional Advisors, Inc. assumed management of the Large Cap Value Fund’s assets previously managed by Metropolitan West Capital Management, LLC.

29

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Six Months			Year Ended October 31,
	Ended April 30, 2016			2015			2014			2013			2012			2011D
	(unaudited)
Net asset value, beginning of period	$	26.70		$	29.51		$	26.11		$	20.43		$	17.99		$	17.61
Income from investment operations:
Net investment income		0.22			0.45			0.57			0.39			0.36			0.30
Net gains (losses) from investments (both realized and unrealized)		(0.73	)		(0.68	)		3.18			5.69			2.47			0.29
Total income (loss) from investment operations		(0.51	)		(0.23	)		3.75			6.08			2.83			0.59
Less distributions:
Dividends from net investment income		(0.40	)		(0.57	)		(0.35	)		(0.40	)		(0.39	)		(0.21	)
Distributions from net realized gains		(2.38	)		(2.01	)		—			—			—			—
Total distributions		(2.78	)		(2.58	)		(0.35	)		(0.40	)		(0.39	)		(0.21	)
Net asset value, end of period	$	23.41		$	26.70		$	29.51		$	26.11		$	20.43		$	17.99
Total return A		(1.70	)%B		(1.07	)%		14.50	%		30.26	%		16.05	%		3.30	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	2,488,188		$	3,167,586		$	4,158,361		$	3,899,011		$	3,635,333		$	3,761,691
Ratios to average net assets:
Expenses before reimbursements		0.92	%C		0.93	%		0.93	%		0.93	%		0.96	%		0.95	%
Expenses, net of reimbursements		0.92	%C		0.93	%		0.93	%		0.93	%		0.96	%		0.95	%
Net investment income (loss), before reimbursements		1.75	%C		1.54	%		2.01	%		1.67	%		1.89	%		1.59	%
Net investment income (loss), net of reimbursements		1.75	%C		1.54	%		2.01	%		1.67	%		1.89	%		1.59	%
Portfolio turnover rate		13	%B		32	%		29	%		34	%		30	%		90	%

	Advisor ClassE
	Six Months			Year Ended October 31,
	Ended April 30, 2016			2015			2014			2013			2012			2011D
	(unaudited)
Net asset value, beginning of period	$	26.40		$	29.24		$	25.89		$	20.25		$	17.83		$	17.47
Income from investment operations:
Net investment income		0.21			0.40			0.47			0.35			0.31			0.27
Net gains (losses) from investments (both realized and unrealized)		(0.73	)		(0.66	)		3.20			5.65			2.48			0.28
Total income (loss) from investment operations		(0.52	)		(0.26	)		3.67			6.00			2.79			0.55
Less distributions:
Dividends from net investment income		(0.38	)		(0.57	)		(0.32	)		(0.36	)		(0.37	)		(0.19	)
Distributions from net realized gains		(2.38	)		(2.01	)		—			—			—			—
Total distributions		(2.76	)		(2.58	)		(0.32	)		(0.36	)		(0.37	)		(0.19	)
Net asset value, end of period	$	23.12		$	26.40		$	29.24		$	25.89		$	20.25		$	17.83
Total return A		(1.76	)%B		(1.193	)%		14.31	%		30.05	%		15.96	%		3.11	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	130,089		$	140,975		$	149,423		$	128,528		$	103,629		$	129,739
Ratios to average net assets:
Expenses before reimbursements		1.07	%C		1.07	%		1.07	%		1.07	%		1.08	%		1.08	%
Expenses, net of reimbursements		1.07	%C		1.07	%		1.07	%		1.07	%		1.08	%		1.08	%
Net investment income (loss), before reimbursements		1.58	%C		1.40	%		1.83	%		1.52	%		1.78	%		1.46	%
Net investment income (loss), net of reimbursements		1.58	%C		1.40	%		1.83	%		1.52	%		1.78	%		1.46	%
Portfolio turnover rate		13	%B		32	%		29	%		34	%		30	%		90	%

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B Not annualized.

^C  Annualized.

^D  On December 1, 2010, MFS Institutional Advisors, Inc. assumed management of the Large Cap Value Fund’s assets previously managed by Metropolitan West Capital Management, LLC.

^E  On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class.

30

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014			2013			2012			2011D
	(unaudited)
Net asset value, beginning of period	$	26.51		$	29.38		$	26.03		$	20.41		$	18.01		$	17.61
Income from investment operations:
Net investment income		0.20			0.47			0.54			0.38			0.36			0.24
Net gains (losses) from investments (both realized and unrealized)		(0.71	)		(0.71	)		3.16			5.65			2.44			0.31
Total income (loss) from investment operations		(0.51	)		(0.24	)		3.70			6.03			2.80			0.55
Less distributions:
Dividends from net investment income		(0.44	)		(0.62	)		(0.35	)		(0.41	)		(0.40	)		(0.15	)
Distributions from net realized gains		(2.38	)		(2.01	)		—			—			—			—
Total distributions		(2.82	)		(2.63	)		(0.35	)		(0.41	)		(0.40	)		(0.15	)
Net asset value, end of period	$	23.18		$	26.51		$	29.38		$	26.03		$	20.41		$	18.01
Total return A		(1.72	)%B		(1.14	)%		14.37	%		30.03	%		15.91	%		3.12	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	37,628		$	39,401		$	22,782		$	11,905		$	6,222		$	3,942
Ratios to average net assets:
Expenses before reimbursements		0.98	%C		0.97	%		1.04	%		1.08	%		1.12	%		1.16	%
Expenses, net of reimbursements		0.98	%C		0.97	%		1.04	%		1.08	%		1.12	%		1.16	%
Net investment income (loss), before reimbursements		1.67	%C		1.48	%		1.83	%		1.44	%		1.66	%		1.37	%
Net investment income (loss), net of reimbursements		1.67	%C		1.48	%		1.83	%		1.44	%		1.66	%		1.37	%
Portfolio turnover rate		13	%B		32	%		29	%		34	%		30	%		90	%
	C Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014			2013			2012			2011D
	(unaudited)
Net asset value, beginning of period	$	26.17		$	29.03		$	25.81		$	20.29		$	17.95		$	17.58
Income from investment operations:
Net investment income		0.12			0.27			0.35			0.23			0.22			0.10
Net gains (losses) from investments (both realized and unrealized)		(0.72	)		(0.70	)		3.11			5.58			2.42			0.32
Total income (loss) from investment operations		(0.60	)		(0.43	)		3.46			5.81			2.64			0.42
Less distributions:
Dividends from net investment income		(0.23	)		(0.42	)		(0.24	)		(0.29	)		(0.30	)		(0.05	)
Distributions from net realized gains		(2.38	)		(2.01	)		—			—			—			—
Total distributions		(2.61	)		(2.43	)		(0.24	)		(0.29	)		(0.30	)		(0.05	)
Net asset value, end of period	$	22.96		$	26.17		$	29.03		$	25.81		$	20.29		$	17.95
Total return A		(2.09	)%B		(1.83	)%		13.48	%		29.00	%		14.97	%		2.36	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	11,104		$	12,389		$	9,964		$	5,200		$	2,468		$	1,329
Ratios to average net assets:
Expenses before reimbursements		1.73	%C		1.73	%		1.79	%		1.84	%		1.88	%		2.54	%
Expenses, net of reimbursements		1.73	%C		1.73	%		1.81	%		1.92	%		1.87	%		1.84	%
Net investment income (loss), before reimbursements		0.92	%C		0.73	%		1.09	%		0.68	%		0.89	%		(0.01	)%
Net investment income (loss), net of reimbursements		0.92	%C		0.73	%		1.07	%		0.60	%		0.89	%		0.68	%
Portfolio turnover rate		13	%B		32	%		29	%		34	%		30	%		90	%

^A  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B  Not annualized.

^C  Annualized.

^D  On December 1, 2010, MFS Institutional Advisors, Inc. assumed management of the Large Cap Value Fund’s assets previously managed by Metropolitan West Capital Management, LLC.

31

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	AMR Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014			2013			2012			2011D
	(unaudited)
Net asset value, beginning of period	$	28.07		$	30.90		$	27.31		$	21.36		$	18.81		$	18.37
Income from investment operations:
Net investment income		22.34			6.57			0.77			0.57			0.52			0.41
Net gains (losses) from investments (both realized and unrealized)		(22.81	)		(6.63	)		3.33			5.92			2.54			0.32
Total income (loss) from investment operations		(0.47	)		(0.06	)		4.10			6.49			3.06			0.73
Less distributions:
Dividends from net investment income		—			(0.76	)		(0.51	)		(0.54	)		(0.51	)		(0.29	)
Distributions from net realized gains		(2.38	)		(2.01	)		—			—			—			—
Total distributions		(2.38	)		(2.77	)		(0.51	)		(0.54	)		(0.51	)		(0.29	)
Net asset value, end of period	$	25.22		$	28.07		$	30.90		$	27.31		$	21.36		$	18.81
Total return A		(1.49	)%B		(0.47	)%		15.20	%		31.05	%		16.75	%		3.94	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	5,617		$	28,308		$	823,261		$	729,175		$	602,667		$	568,768
Ratios to average net assets:
Expenses before reimbursements		0.49	%C		0.32	%		0.32	%		0.32	%		0.33	%		0.33	%
Expenses, net of reimbursements		0.49	%C		0.32	%		0.32	%		0.32	%		0.33	%		0.33	%
Net investment income (loss), before reimbursements		2.48	%C		2.16	%		2.59	%		2.26	%		2.51	%		2.21	%
Net investment income (loss), net of reimbursements		2.48	%C		2.16	%		2.59	%		2.26	%		2.51	%		2.21	%
Portfolio turnover rate		13	%B		32	%		29	%		34	%		30	%		90	%

^A  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B  Not annualized.

^C  Annualized.

^D On December 1, 2010, MFS Institutional Advisors, Inc. assumed management of the Large Cap Value Fund’s assets previously managed by Metropolitan West Capital Management, LLC.

32

Disclosure Regarding the Board of Trustees’ Approval of the Management Agreement of the Funds (Unaudited)

At its March 3-4, 2016 meetings, the Boards of Trustees (“Board”) considered the approval of a new Management Agreement (“New Agreement”) between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (the “Trust”) on behalf of the existing series of the Trust, including the series of the Trust covered in this shareholder report (each, a “Fund”). The New Agreement combines the terms of each Fund’s prior management agreement and administration agreement and establishes separate standardized fee schedules for four categories of Funds, which include fee schedule breakpoints. The Board considered that, with respect to each Fund, the single management fee rate under the New Agreement does not exceed the former combined investment management and administrative services fee rates, and there is no change to the investment management or administrative services provided or the aggregate fees charged to the Fund.

The Board reviewed information provided by the Manager in response to requests from the Board in connection with the Board’s consideration of the New Agreement. The Board also considered information that had been provided by the Manager to the Board at its November 9-10, 2015 meetings when the Board had met with various management personnel of the Manager regarding certain key aspects of the materials submitted in support of the New Agreement. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the approval of the Management Agreement. The memorandum explained the regulatory requirements surrounding the Trustees’ process for evaluating investment advisors and the terms of investment advisory contracts.

The Board determined that it did not need to consider certain factors that it typically considers during its review of the Funds’ management agreements because the Board had reviewed, among other matters, the nature, extent and quality of services being provided to the Funds by the Manager at in-person meetings held on June 2-3, 2015, when it reviewed the prior management agreement or, in connection with the initial approval of that agreement. The Board noted that it previously had considered and approved the prior management agreement at an in-person meeting held on November 12, 2014, at telephonic meetings held on November 26, 2014 and December 6, 2014 and at an in-person meeting held on December 10, 2014.

In connection with the Board’s review of the New Agreement, the Board considered, among other things, information provided by the Manager regarding the terms of the New Agreement and the relevant differences between the New Agreement and the prior management agreement and administration agreement. The Board considered the Manager’s representations that the New Agreement would not reduce or modify in any way the nature or level of the advisory or administration services provided to the Funds. The Board also considered that the fee rate payable by a Fund under the New Agreement would not exceed the aggregate fee rate payable by the Fund under the prior management agreement and administration agreement. Additionally, the Board considered the Manager’s representation that there would be no change in the professional personnel who primarily perform management and administrative services for the Funds and the Manager’s representations regarding disclosure of the New Agreement to new and existing shareholders. The Board also considered that an independent consultant retained to assist the Board in evaluating the Manager’s proposal to combine the prior management agreement and administration agreement had concluded that the proposal was reasonable and in the best interest of shareholders.

Based on the various considerations described above, the Board, including a majority of Trustees who are not “interested persons” of the Funds or the Manager, as that term is defined in the 1940 Act: (1) concluded that the proposed management fee is fair and reasonable with respect to each Fund; (2) determined that each Fund and its shareholders would benefit from the Manager’s continued management of the Fund; and (3) approved the Management Agreement on behalf of each Fund.

33

Delivery of Documents

eDelivery is NOW AVAILABLE- Stop traditional mail delivery and receive your

shareholder reports and summary prospectus on-line. Sign up at

www.americanbeaconfunds.com

If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.

To obtain more information about the Fund:

By E-mail:	On the Internet:
american_beacon.funds@ambeacon.com	Visit our website at www.americanbeaconfunds.com

By Telephone:	By Mail:
Institutional, Y, Investor, and Advisor Classes	American Beacon Funds
Call (800) 658-5811	P.O. Box 219643
AMR ClassesSM	Kansas City, MO 64121-9643
Call (800) 345-2345

Availability of Quarterly Portfolio Schedules

Availability of Proxy Voting Policy and Records

In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also at www.americanbeaconfunds.com approximately twenty days after the end of each month.

A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967- 9009.

Fund Service Providers:

CUSTODIAN	TRANSFER AGENT	INDEPENDENT REGISTERED	DISTRIBUTOR
State Street Bank and Trust Boston, Massachusetts	Boston Financial Data Services Kansas City, Missouri	PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas	Foreside Fund Services, LLC Portland, Maine

This report is prepared for shareholders of the American Beacon Funds and may be distributed to others only if preceded or accompanied by a current Prospectus or Summary Prospectus.

American Beacon Funds and the American Beacon Large Cap Value Fund are service marks of American Beacon Advisors, Inc.

SAR 4/16    

34

About American Beacon Advisors

Since 1986, American Beacon Advisors has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management.

Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company.

Contents

President’s Message	1
Performance Overview	2
Schedule of Investments	6
Financial Statements	20
Notes to the Financial Statements	24
Financial Highlights	37
Additional Information	Back Cover

Investing in small-capitalization stocks may involve greater volatility and lower liquidity than larger company stocks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund may participate in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and the Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.

American Beacon Funds April 30, 2016

Dear Shareholders,   During the six-month period ended April 30, 2016, disparate central bank policies, uneven economic growth and volatile oil prices set the stage for mixed returns around the globe. Early in the period, uncertainty over the timing of the U.S. Federal Reserve’s first interest rate increase since emergency lending rates were established during the 2008 financial crisis weighed heavily on investors’ minds. On December 16, 2015, following months of speculation, the Federal Open Market Committee (“FOMC”) increased its benchmark lending rates from a range of 0% to 0.25% to a range of 0.25% to 0.5%; it was the first interest rate hike in nearly a decade. On April 27, 2016, the FOMC decided to maintain short-term interest rates in the range of 0.25% to 0.5%. If the U.S. economy continues to expand, the FOMC plans to increase short-term interest rates.

Conversely, during first quarter 2016, many central banks around the world decided to continue or expand their economic stimulation policies. The Bank of Japan pushed its rates into negative territory and the European Central Bank cut a key rate to zero in March 2016. China’s slowing growth also escalated concerns for markets and companies around the globe. In this environment, international stocks fluctuated from one extreme to another; domestic stocks made modest gains thanks to a rally in oil prices and positive economic reports; and emerging-market stocks rebounded and outpaced developed-market stocks. Bonds outperformed stocks thanks to declining interest rates.

• For the six months ended April 30, 2016, the American Beacon Small Cap Value Fund (Investor Class) returned -0.51%. The Fund is designed to provide long-term capital appreciation and current income primarily through investments in small market capitalization U.S. stocks.

For the period under review, the Russell 2000 Value Index - which measures the performance of small-cap domestic stocks - returned 1.18%.

Our broad range of mutual funds helps investors navigate the economic storms and market downturns in the U.S. and abroad. Our years of experience evaluating sub-advisors have led us to identify and partner with several asset managers who have adhered to their disciplined processes for many years and through a variety of economic and market conditions.

Thank you for your continued investment in the American Beacon Funds. For additional information about the Funds or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

American Beacon Small Cap Value Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

The Investor Class of the Small Cap Value Fund (the “Fund”) returned -0.51% for the six months ended April 30, 2016, underperforming the Russell 2000^® Value Index (the “Index”) return of 1.18% for the same period.

Total Returns for the Period ended 4/30/16	Ticker	6 Months*			1 Year			5 Years			10 Years
Institutional Class (1,7)	AVFIX		-0.40	%		-3.14	%		7.88	%		6.15	%
Y Class (1,2,7)	ABSYX		-0.41	%		-3.19	%		7.78	%		6.06	%
Investor Class (1,7)	AVPAX		-0.51	%		-3.43	%		7.51	%		5.81	%
Advisor Class (1,3,7)	AASSX		-0.64	%		-3.59	%		7.35	%		5.62	%
A Class with sales charges (1,4,7)	ABSAX		-6.29	%		-9.06	%		6.09	%		5.09	%
A Class without sales charges (1,4,7)	ABSAX		-0.56	%		-3.51	%		7.35	%		5.72	%
C Class with sales charge (1,5,7)	ASVCX		-1.92	%		-5.23	%		6.53	%		5.26	%
C Class without sales charge (1,5,7)	ASVCX		-0.92	%		-4.23	%		6.53	%		5.26	%
Russell 2000 Value Index (6)			1.18	%		-3.71	%		6.77	%		4.61	%

* Not annualized

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.

2. Fund performance for the ten-year period represents the returns achieved by the Institutional Class from 4/30/06 up to 8/3/09, the inception date of the Y Class and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/06.

3. A portion of the fees charged to the Advisor Class of the Fund was waived in 2009. Performance prior to waiving fees was lower than the actual returns shown in 2009.

4. Fund performance for the ten-year period represents the returns achieved by the Investor Class from 4/30/06 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 4/30/06. A portion of the fees charged to the A Class of the Fund was waived in 2010 and 2012 through 2014 and partially recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown. The maximum sales charge for A Class is 5.75%.

5. Fund performance for the ten-year period represents the returns achieved by the Investor Class from 4/30/06 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 4/30/06. A portion of the fees charged to the C Class of the Fund was waived in 2010 and 2012 through 2014 and partially recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown in 2010 and 2012 through 2014. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

6. The Russell 2000 Value Index is an unmanaged index of those stocks in the Russell 2000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 2000 Value Index and Russell 2000 Index are registered trademarks of the Frank Russell Company. One cannot directly invest in an index.

7. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, and C Class shares was 0.82%, 0.91%, 1.16%, 1.32%, 1.23%, and 1.99%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

2

American Beacon Small Cap Value Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

The Fund lagged the Index entirely due to stock selection. Sector allocation added minimal value relative to the Index.

From a stock selection stand point, holdings in the Consumer Discretionary and Materials sectors detracted most from performance. The Fund’s Consumer Discretionary companies detracted more than 50 basis points (0.50%). In the Consumer Discretionary sector, The Men’s Wearhouse (down 65.3%) and American Axle & Manufacturing (down 29.6%) were the largest detractors. Not owning DreamWorks Animation, which was up 97.2% in the Index, also detracted from the Fund’s returns. In the Materials sector, TimkenSteel (down 89.2%) and Stillwater Mining (down 1.5%) hurt performance. The Fund’s smaller allocation to Helca Mining (up 63.8%) also detracted relative value.

The Fund’s underweight positions in Energy, the worst performing sector in the Index, and the Financials sector added approximately 20 (0.20%) and 10 (0.10%) basis points, respectively, to performance through sector allocation. An overweight position in Consumer Discretionary, the second worst performing sector, detracted from the Fund’s returns.

The sub-advisors continue to focus on uncovering investment opportunities through stock selection that should benefit the Fund’s performance over the longer-term.

Top Ten Holdings (% Net Assets)
Great Plains Energy, Inc.	0.9
Portland General Electric Co.	0.9
Vishay Intertechnology, Inc.	0.9
UMB Financial Corp.	0.7
Synovus Financial Corp.	0.7
First Horizon National Corp.	0.7
Prosperity Bancshares, Inc.	0.6
Tutor Perini Corp.	0.6
Geo Group, Inc.	0.6
Diodes, Inc.	0.6
Total Fund Holdings	624

Sector Allocation (% Equities)
Financials	30.8
Industrials	20.6
Consumer Discretionary	15.5
Information Technology	14.1
Materials	4.6
Utilities	4.3
Health Care	3.7
Energy	3.5
Consumer Staples	2.1
Telecommunication Services	1.0

3

American Beacon Small Cap Value Fund^SM

Fund Expenses

April 30, 2016 (Unaudited)

Fund Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs including sales charges (loads) on purchase payments and (2) ongoing costs, including management fees, administrative service fees, distribution (12b-1) fees, and other Fund expenses. The examples below are intended to help you understand the ongoing cost (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from November 1, 2015 through April 30, 2016.

Actual Expenses

The “Actual” lines of the table provide information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. Shareholders of the Investor and Institutional Classes that invest in the Fund through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

Hypothetical Example for Comparison Purposes

The “Hypothetical” lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed 5% per year rate of return before expenses (not the Fund’s actual return). You may compare the ongoing costs of investing in the Fund with other funds by contrasting this 5% hypothetical example and the 5% hypothetical examples that appear in the shareholder reports of the other funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. Shareholders of the Investor and Institutional Classes that invest in the Fund through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by the Fund, such as sales charges (loads). Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the “Hypothetical” lines of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.

4

American Beacon Small Cap Value Fund^SM

Fund Expenses

April 30, 2016 (Unaudited)

	Beginning Account Value 11/1/15		Ending Account Value 4/30/16		Expenses Paid During Period* 11/1/15 - 4/30/16
Institutional Class
Actual	$	1,000.00	$	996.00	$	4.11
Hypothetical **	$	1,000.00	$	1,020.74	$	4.16
Y Class
Actual	$	1,000.00	$	995.90	$	4.47
Hypothetical **	$	1,000.00	$	1,020.38	$	4.53
Investor Class
Actual	$	1,000.00	$	994.90	$	5.64
Hypothetical **	$	1,000.00	$	1,019.21	$	5.71
Advisor Class
Actual	$	1,000.00	$	993.60	$	6.47
Hypothetical **	$	1,000.00	$	1,018.38	$	6.55
A Class
Actual	$	1,000.00	$	994.40	$	5.99
Hypothetical **	$	1,000.00	$	1,018.86	$	6.06
C Class
Actual	$	1,000.00	$	990.80	$	9.70
Hypothetical **	$	1,000.00	$	1,015.12	$	9.81

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.83%, 0.90%, 1.14%, 1.30%, 1.21%, and 1.96% for the Institutional, Y, Investor, Advisor, A, and C Classes respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (182) by days in the year (366) to reflect the half-year period.

** 5% return before expenses.

See accompanying notes

5

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
COMMON STOCK - 96.53%
CONSUMER DISCRETIONARY - 14.95%
Auto Components - 1.46%
American Axle & Manufacturing Holdings, Inc.A		1,782,647	$	27,648
Cooper Tire & Rubber Co.		365,204		12,614
Cooper-Standard Holding, Inc.A		52,231		4,028
Dana Holding Corp.		788,521		10,196
Federal Signal Corp.		627,544		8,591
Modine Manufacturing Co.A		114,544		1,238
Superior Industries International, Inc.		127,210		3,323
Tenneco, Inc.A		298,954		15,934
				83,572
Automobiles - 0.65%
Federal-Mogul Holdings Corp.A		112,830		1,043
Hyster-Yale Materials Handling, Inc.		142,046		8,700
Thor Industries, Inc.		408,393		26,145
Winnebago Industries, Inc.		67,753		1,466
				37,354
Commercial Services - 0.06%
Sotheby’s, Class A		130,465		3,554
Homebuilders - 0.13%
William Lyon Homes, Inc., Class AA B		521,624		7,355
Hotels, Restaurants & Leisure - 0.96%
Belmond Ltd., Class AA		883,608		8,094
Bloomin’ Brands, Inc.		97,150		1,817
Bravo Brio Restaurant Group, Inc.A		213,452		1,573
Brinker International, Inc.		235,895		10,926
Cheesecake Factory, Inc.		329,287		16,796
Cracker Barrel Old Country Store, Inc.B		34,875		5,106
Golden Entertainment, Inc.A		71,300		863
International Speedway Corp., Class A		97,340		3,260
Ruby Tuesday, Inc.A		848,537		3,734
Speedway Motorsports, Inc.		151,076		2,647
				54,816
Household Durables - 3.23%
ACCO Brands Corp.A		772,954		7,374
Cavco Industries, Inc.A		76,629		6,720
Ethan Allen Interiors, Inc.B		422,032		14,366
Haverty Furniture Companies, Inc.		101,803		1,901
Helen of Troy Ltd.A		106,296		10,580
HNI Corp.		94,794		4,144
InvenSense, Inc.A B		179,247		1,377
KB HomeB		596,726		8,098
Knoll, Inc.		1,010,701		23,599
La-Z-Boy, Inc.		131,167		3,393
Libbey Glass, Inc.		35,132		653
Lifetime Brands, Inc.		34,911		603
M/I Homes, Inc.A		314,514		6,322
Matthews International Corp., Class A		74,265		3,909
MDC Holdings, Inc.		178,648		4,397
Meritage Homes Corp.		144,867		4,930
Taylor Morrison Home Corp., Class AA		120,927		1,741
Tempur Sealy International, Inc.A		382,103		23,182
Toll Brothers, Inc.A		97,100		2,651
TRI Pointe Homes, Inc.A		1,376,411		15,966
Tupperware Brands Corp.		178,635		10,373

See accompanying notes

6

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Universal Electronics, Inc.A		139,552	$	9,268
Whirlpool Corp.		111,457		19,409
				184,956
Household Products - 0.21%
CalAtlantic Group, Inc.		374,278		12,115
Internet & Catalog Retail - 0.16%
Insight Enterprises, Inc.A		362,491		8,957
Leisure Equipment & Products - 0.16%
Allegiant Travel Co.		57,300		9,200
Johnson Outdoors, Inc., Class A		10,056		243
				9,443
Media - 1.97%
AMC Networks, Inc., Class AA		110,614		7,215
Banner Corp.		85,773		3,669
Entercom Communications Corp., Class A		194,515		2,206
EW Scripps Co., Class A		1,056,640		16,040
John Wiley & Sons, Inc., Class A		65,047		3,226
Meredith Corp.		355,767		18,254
MSG Networks, Inc.A		177,800		3,039
New York Times Co., Class A		919,497		11,788
Scholastic Corp.		242,084		8,807
TEGNA, Inc.		804,500		18,794
Time, Inc.		744,477		10,944
TiVo, Inc.A		829,287		8,276
Travelzoo, Inc.A		67,671		516
				112,774
Multiline Retail - 0.14%
Big Lots, Inc.		79,731		3,657
Dillard’s, Inc., Class A		18,800		1,324
Fred’s, Inc., Class A		66,827		980
Stein Mart, Inc.		254,762		1,845
				7,806
Specialty Retail - 4.74%
Aaron’s, Inc.		302,389		7,926
America’s Car-Mart, Inc.A B		45,230		1,202
Asbury Automotive Group, Inc.A		55,400		3,358
Ascena Retail Group, Inc.A		221,920		1,955
AutoNation, Inc.A		364,800		18,477
Big 5 Sporting Goods Corp.		150,837		1,824
Buckle, Inc.B		183,408		5,308
Caleres, Inc.		299,481		7,550
Chico’s FAS, Inc.		424,586		5,354
Children’s Place Retail Stores, Inc.		120,159		9,362
Essendant, Inc.		323,759		9,969
Express, Inc.		1,077,184		19,583
Finish Line, Inc., Class A		266,531		5,264
GameStop Corp., Class AB		394,197		12,930
Genesco, Inc.A		79,982		5,533
Group 1 Automotive, Inc.		122,317		8,053
Hibbett Sports, Inc.A B		231,724		8,365
Kirkland’s, Inc.		173,916		2,856
Lithia Motors, Inc., Class A		80,500		6,683
Office Depot, Inc.A		4,304,800		25,311
PC Connection, Inc.		38,700		920
Penske Automotive Group, Inc.		319,690		12,509
Rent-A-Center, Inc.		119,767		1,761
Restoration Hardware Holdings, Inc.A		495,130		21,424
Rush Enterprises, Inc., Class AA		670,789		13,208
Select Comfort Corp.A		122,744		3,029
Shoe Carnival, Inc.		41,074		1,053

See accompanying notes

7

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Sonic Automotive, Inc., Class A		1,075,522	$	20,177
Tailored Brands, Inc.		416,360		7,253
Urban Outfitters, Inc.A		569,745		17,275
West Marine, Inc.A		36,788		369
Zumiez, Inc.A		379,196		6,363
				272,204
Textiles & Apparel - 1.08%
Chefs’ Warehouse, Inc.A		43,119		831
Deckers Outdoor Corp.A		422,034		24,398
Guess?, Inc.		748,073		13,727
Movado Group, Inc.		73,910		2,085
Oxford Industries, Inc.		156,891		10,421
Vera Bradley, Inc.A		599,204		10,510
				61,972
Total Consumer Discretionary				856,878
CONSUMER STAPLES - 2.02%
Beverages - 0.18%
The Boston Beer Co., Inc., Class AA B		66,524		10,383
Consumer Products - 0.01%
Tejon Ranch Co.A		20,735		467
Food & Drug Retailing - 0.77%
Andersons, Inc.		186,664		6,255
SpartanNash Co.		221,474		6,135
United Natural Foods, Inc.A		393,433		14,034
Vitamin Shoppe, Inc.A		557,893		15,269
Weis Markets, Inc.		55,468		2,525
				44,218
Food Products - 0.95%
Darling Ingredients, Inc.A		313,476		4,542
Fresh Del Monte Produce, Inc.		358,203		15,497
Hain Celestial Group, Inc.A		184,195		7,710
Herbalife Ltd.A B		314,808		18,244
Sanderson Farms, Inc.B		90,824		8,332
				54,325
Personal Products - 0.04%
Medifast, Inc.		69,787		2,200
Tobacco - 0.07%
Universal Corp.		77,271		4,215
Total Consumer Staples				115,808
ENERGY - 3.34%
Energy Equipment & Services - 1.78%
Atwood Oceanics, Inc.B		200,460		1,936
Cobalt International Energy, Inc.A		1,019,699		3,294
Diamond Offshore Drilling, Inc.A		200,600		4,867
Dril-Quip, Inc.A		111,500		7,227
Flotek Industries, Inc.A B		754,342		7,129
Gulf Island Fabrication, Inc.		200,856		1,508
McDermott International, Inc.A		1,196,393		5,432
Oceaneering International, Inc.		467,390		17,130
Oil States International, Inc.A		353,953		12,261
Patterson-UTI Energy, Inc.		560,768		11,075
PDC Energy, Inc.A		154,363		9,692
Rowan Cos., PLC, Class AC		182,500		3,433
RPC, Inc.B		938,539		14,191
SEACOR Holdings, Inc.		40,161		2,360
				101,535

See accompanying notes

8

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Oil & Gas - 1.56%
Callon Petroleum Co.A		975,392	$	10,251
Carrizo Oil & Gas, Inc.A		327,376		11,579
Denbury Resources, Inc.B		551,805		2,130
Gran Tierra Energy, Inc.A B		887,738		2,628
Kosmos Energy Ltd.A		1,289,167		8,354
Memorial Resource Development Corp.A		1,383,000		18,089
Natural Gas Services Group, Inc.A		233,294		5,363
Par Pacific Holdings, Inc.A		33,845		647
PBF Energy, Inc., Class A		349,416		11,244
QEP Resources, Inc.		317,000		5,684
RSP Permian, Inc.A		230,500		7,056
Synergy Resources Corp.A		919,647		6,640
				89,665
Total Energy				191,200
FINANCIALS - 29.71%
Banks - 14.07%
1st Source Corp.		79,985		2,755
Associated Banc-Corp.		1,596,829		29,126
Astoria Financial Corp.		382,864		5,758
Banc of California, Inc.		25,300		515
BancorpSouth, Inc.		282,457		6,635
Bank of Hawaii Corp.		182,888		12,511
BBCN Bancorp, Inc.		233,475		3,647
Berkshire Hills Bancorp, Inc.		77,626		2,107
BOK Financial Corp.B		171,261		10,306
Boston Private Financial Holdings, Inc.		717,620		8,769
Brookline Bancorp, Inc.		931,183		10,597
Bryn Mawr Bank Corp.		179,964		5,115
Capital Bank Financial Corp., Class A		263,546		7,967
Cardinal Financial Corp.		369,374		8,174
Cathay General Bancorp		238,043		7,265
Central Pacific Financial Corp.		436,972		10,199
Chemical Financial Corp.B		161,611		6,216
City Holding Co.		42,627		2,094
Clifton Bancorp, Inc.		95,513		1,421
CoBiz Financial, Inc.		354,823		4,297
Columbia Banking System, Inc.		470,677		13,880
Community Bank System, Inc.		31,379		1,242
Cullen/Frost Bankers, Inc.		63,395		4,057
CVB Financial Corp.		485,550		8,342
Dime Community Bancshares, Inc.		103,228		1,869
FCB Financial Holdings, Inc., Class AA		187,601		6,557
First Citizens BancShares, Inc., Class A		20,153		5,139
First Commonwealth Financial Corp.		339,479		3,116
First Financial Bancorp		151,681		2,958
First Financial Corp.		115,198		4,081
First Horizon National Corp.		2,937,002		41,352
First Interstate Bancsystem, Inc., Class A		391,557		10,611
First Merchants Corp.		101,856		2,613
First Midwest Bancorp, Inc.		847,226		15,657
First Niagara Financial Group, Inc.		2,920,728		30,843
FirstMerit Corp.		383,174		8,491
Flushing Financial Corp.		36,939		737
FNB Corp.		524,939		6,940
Fulton Financial Corp.		1,915,555		26,799
Hancock Holding Co.		518,412		13,463
Hanmi Financial Corp.		80,100		1,852
Iberiabank Corp.		227,238		13,405
International Bancshares Corp.		451,312		11,820

See accompanying notes

9

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Investors Bancorp, Inc.		1,254,601	$	14,491
MainSource Financial Group, Inc.		161,015		3,518
MB Financial, Inc.		481,751		16,746
National Bank Holdings Corp., Class A		85,633		1,712
NBT Bancorp, Inc.		121,144		3,433
Northwest Bancshares, Inc.		369,410		5,179
Old National Bancorp		919,397		12,320
Opus Bank		228,321		8,247
PacWest Bancorp		175,800		7,028
People’s United Financial, Inc.B		873,654		13,542
Popular, Inc.		806,538		23,970
PrivateBancorp, Inc.		197,607		8,222
Prosperity Bancshares, Inc.		660,029		34,830
Provident Financial Services, Inc.		212,258		4,241
Real Industry, Inc.A		722,432		6,386
Renasant Corp.		87,837		3,016
S&T Bancorp, Inc.		106,605		2,737
Sandy Spring Bancorp, Inc.		70,143		2,005
Seacoast Banking Corp. of FloridaA		388,595		6,303
Simmons First National Corp., Class A		165,736		7,740
South State Corp.		261,283		18,285
Sterling Bancorp		773,609		12,641
TCF Financial Corp.		788,776		10,759
TowneBank		129,441		2,718
Trustmark Corp.		396,487		9,718
UMB Financial Corp.		764,009		42,593
Umpqua Holdings Corp.		788,315		12,479
Union Bankshares Corp.		118,657		3,134
United Bankshares, Inc.B		142,314		5,506
United Community Banks, Inc.		636,795		12,819
United Financial Bancorp, Inc.		113,356		1,471
Valley National Bancorp		782,341		7,401
Washington Federal, Inc.		906,794		22,026
Washington Trust Bancorp, Inc.		148,097		5,425
Webster Financial Corp.		784,023		28,727
WesBanco, Inc.		203,531		6,539
Westamerica BancorporationB		103,585		5,047
Wintrust Financial Corp.		338,682		17,618
Zions Bancorporation		555,459		15,286
				807,156
Diversified Financials - 4.11%
Ashford, Inc.A F		1		—
Beneficial Bancorp, Inc.A		217,635		3,023
Calamos Asset Management, Inc., Class A		361,729		2,981
Capitol Federal Financial, Inc.		492,559		6,546
Cash America International, Inc.		72,767		2,689
Cohen & Steers, Inc.		234,299		9,201
Credit Acceptance Corp.A B		82,955		16,282
Customers Bancorp, Inc.A		401,559		10,433
Eaton Vance Corp.		246,900		8,525
Encore Capital Group, Inc.A B		176,034		4,955
Essent Group Ltd.A		138,990		2,838
EverBank Financial Corp.		262,300		3,955
First BanCorp Puerto RicoA		1,751,010		6,829
Flagstar Bancorp, Inc.A		148,461		3,514
Great Western Bancorp, Inc.		357,900		11,281
Greenhill & Co., Inc.		103,404		2,277
Heartland Financial USA, Inc.		56,200		1,883
Janus Capital Group, Inc.		511,819		7,473
KCG Holdings, Inc., Class AA		310,271		4,251
Meridian Bancorp, Inc.		115,637		1,691

See accompanying notes

10

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
MGIC Investment Corp.A		974,995	$	7,049
Nelnet, Inc., Class A		178,198		7,468
Northfield Bancorp, Inc.		205,255		3,255
Oppenheimer Holdings, Inc., Class A		279,305		4,268
Oritani Financial Corp.		133,836		2,319
Pacific Continental Corp.		247,972		4,131
Physicians Realty TrustD		461,478		8,367
Piper Jaffray Cos.A		169,845		7,084
Pzena Investment Management, Inc., Class A		12,996		118
Retail Opportunity Investments Corp.D		345,751		6,801
SLM Corp.A		624,900		4,231
Stifel Financial Corp.A		27,406		902
Synovus Financial Corp.		1,328,879		41,408
Texas Capital Bancshares, Inc.A		495,936	��	22,724
Virtus Investment Partners, Inc.		14,555		1,138
Waddell & Reed Financial, Inc., Class A		102,858		2,092
Walker & Dunlop, Inc.A		77,400		1,707
				235,689
Insurance - 7.18%
Allied World Assurance Co., Holdings AG		460,608		16,388
American Equity Investment Life Holding Co.		253,853		3,554
American Financial Group, Inc.		246,715		17,050
AMERISAFE, Inc.		28,000		1,509
Amtrust Financial Services, Inc.		487,270		12,109
Argo Group International Holdings Ltd.		80,081		4,402
Aspen Insurance Holdings Ltd.		384,601		17,826
Assurant, Inc.		194,923		16,485
Assured Guaranty Ltd.		407,579		10,544
Axis Capital Holdings Ltd.		255,198		13,594
CNO Financial Group, Inc.		863,667		15,866
Employers Holdings, Inc.		80,264		2,384
Endurance Specialty Holdings Ltd.		366,452		23,446
Enstar Group Ltd.A		125,754		19,924
FBL Financial Group, Inc., Class A		54,103		3,272
First American Financial Corp.		447,463		16,118
Global Indemnity PLCA C		401,933		12,641
Hanover Insurance Group, Inc.		224,293		19,235
Hilltop Holdings, Inc.A		535,344		10,632
Horace Mann Educators Corp.		932,081		28,988
Infinity Property & Casualty Corp.		52,362		4,197
Kemper Corp.		183,406		5,678
Maiden Capital Financing Trust		210,868		2,579
National Western Life Group, Inc., Class A		7,973		1,728
Navigators Group, Inc.A		47,515		3,925
Old Republic International Corp.		874,656		16,172
Primerica, Inc.		168,836		8,368
ProAssurance Corp.		157,928		7,538
Radian Group, Inc.		587,702		7,517
Reinsurance Group of America, Inc.		102,900		9,798
Renaissancere Holdings Ltd.		132,191		14,661
RLI Corp.		66,666		4,145
Safety Insurance Group, Inc.		173,618		9,829
Selective Insurance Group, Inc.		163,441		5,673
State Auto Financial Corp.		74,223		1,522
Stewart Information Services Corp.		57,570		2,005
Third Point Reinsurance Ltd.A		276,774		3,150
United Fire Group, Inc.		77,741		3,484
Universal Insurance Holdings, Inc.B		152,438		2,684
Validus Holdings Ltd.		298,071		13,738
White Mountains Insurance Group Ltd.		20,487		17,004
				411,362

See accompanying notes

11

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Real Estate - 4.23%
American Assets Trust, Inc.D		329,797	$	13,083
Apollo Residential Mortgage, Inc.D		268,645		3,643
Ashford Hospitality Prime, Inc.D		171,326		1,917
Ashford Hospitality Trust, Inc.D		542,152		3,031
Brandywine Realty TrustD		609,442		9,111
CBL & Associates Properties, Inc.D		368,288		4,302
DuPont Fabros Technology, Inc.D		208,100		8,287
Education Realty Trust, Inc.D		171,332		6,814
EPR PropertiesD		318,838		21,004
Equity CommonwealthA D		322,781		9,009
Geo Group, Inc.D		1,040,535		33,327
Granite Real Estate Investment TrustD		264,360		7,881
Healthcare Trust of America, Inc., Class AD		482,693		13,945
Hospitality Properties TrustD		124,145		3,177
Invesco Mortgage Capital, Inc.D		184,426		2,370
Kite Realty Group TrustD		428,671		11,673
LaSalle Hotel PropertiesD		179,560		4,291
Mack-Cali Realty Corp.D		334,177		8,542
Medical Properties Trust, Inc.D		1,067,075		14,203
New Residential Investment Corp.D		325,503		3,939
Pebblebrook Hotel TrustD		593,406		16,401
Pennsylvania Real Estate Investment TrustD		387,504		8,889
RAIT Financial TrustD		1,025,429		3,117
Ramco-Gershenson Properties TrustD		402,855		7,135
RLJ Lodging TrustD		271,272		5,716
Ryman Hospitality Properties, Inc.D		120,194		6,194
Select Income REITD		238,500		5,521
WCI Communities, Inc.A		358,485		5,729
				242,251
Specialty Finance - 0.12%
GATX Corp.		153,819		7,066
Total Financials				1,703,524
HEALTH CARE - 3.54%
Biotechnology - 0.07%
Charles River Laboratories International, Inc.A		39,781		3,153
PDL BioPharma, Inc.		276,123		1,041
				4,194
Health Care Equipment & Supplies - 0.94%
Globus Medical, Inc., Class AA		448,784		11,239
Hillenbrand, Inc.		374,480		11,351
Hill-Rom Holdings, Inc.		136,697		6,609
Integra LifeSciences Holdings Corp.A		16,540		1,171
Invacare Corp.B		930,071		10,454
Meridian Bioscience, Inc.		379,930		7,260
Natus Medical, Inc.A		186,272		5,936
				54,020
Health Care Providers & Services - 2.41%
Air Methods Corp.		322,206		11,915
AMN Healthcare Services, Inc.A		220,600		7,834
Hanger Orthopedic Group, Inc.A		697,921		4,809
HealthSouth Corp.		514,780		21,343
LifePoint Hospitals, Inc.A		477,919		32,287
Magellan Health Services, Inc.A		91,710		6,462
Omnicell, Inc.A		334,255		10,649
Owens & Minor, Inc.		303,261		11,036
Select Medical Holdings Corp.A		629,085		8,417
Triple-S Management Corp., Class BA		114,740		2,988
WellCare Health Plans, Inc.A		222,368		20,011
				137,751

See accompanying notes

12

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Pharmaceuticals - 0.12%
Sagent Pharmaceuticals, Inc.A		227,057	$	2,643
Supernus Pharmaceuticals, Inc.A		262,760		4,509
				7,152
Total Health Care				203,117
INDUSTRIALS - 19.85%
Aerospace & Defense - 1.53%
AAR Corp.		546,987		13,150
Aerovironment, Inc.A		364,444		10,525
Aircastle Ltd.		691,409		15,003
Cubic Corp.		133,789		5,562
Curtiss-Wright Corp.		117,403		8,991
Kaman Corp.		56,225		2,367
Moog, Inc., Class AA		113,300		5,536
Orbital ATK, Inc.		124,762		10,854
Triumph Group, Inc.		129,995		4,703
Vectrus, Inc.A		13,890		299
World Fuel Services Corp.		227,238		10,619
				87,609
Air Freight & Couriers - 0.07%
HUB Group, Inc., Class AA		98,776		3,805
Airlines - 0.15%
Skywest, Inc.		159,682		3,753
Spirit Airlines, Inc.A		104,600		4,595
				8,348
Building Products - 2.23%
Apogee Enterprises, Inc.		140,868		5,838
Crane Co.		342,477		19,031
Masonite International Corp.		341,306		23,093
Owens Corning		432,607		19,930
Simpson Manufacturing Co., Inc.		821,884		30,902
Trex Co., Inc.A		455,236		21,601
Universal Forest Products, Inc.		64,068		4,911
USG Corp.A		84,100		2,272
				127,578
Commercial Services & Supplies - 4.71%
ABM Industries, Inc.		329,405		10,597
Aceto Corp.		328,401		7,366
American Public Education, Inc.A		123,185		2,853
Apollo Group, Inc., Class AA		147,089		1,147
Atlas Air Worldwide Holdings, Inc.A		71,500		2,856
Bridgepoint Education, Inc.A		257,724		2,459
Brink’s Co.		377,515		12,775
Capella Education Co.		108,342		5,992
CDI Corp.		64,998		465
Convergys Corp.		369,552		9,793
CSG Systems International, Inc.		319,625		14,185
CyrusOne, Inc.D		281,987		12,444
Deluxe Corp.		269,517		16,920
DeVry, Inc.B		215,958		3,747
Dun & Bradstreet Corp.		127,949		14,127
Electro Rent Corp.		8,040		80
Heidrick & Struggles International, Inc.		159,718		3,151
Herman Miller, Inc.		183,410		5,533
Hudson Global, Inc.		623,926		1,616
Interface, Inc.		656,091		11,167
Kelly Services, Inc., Class A		423,339		7,946
Koppers Holdings, Inc.A		22,286		560
Korn/Ferry International		297,906		8,085
McGrath Rentcorp		285,352		6,957
Mobile Mini, Inc.		568,269		18,327

See accompanying notes

13

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Monotype Imaging Holdings, Inc.		264,671	$	5,831
Monster Worldwide, Inc.A		373,325		1,195
Morningstar, Inc.		73,810		6,141
MSA Safety, Inc.		73,172		3,519
Navigant Consulting, Inc.A		396,260		6,324
PHH Corp.A		502,220		6,443
Pitney Bowes, Inc.		700,676		14,693
Resources Connection, Inc.		289,574		4,277
RR Donnelley & Sons Co.		1,185,767		20,633
Strayer Education, Inc.A		107,033		5,313
Team, Inc.		85,009		2,442
TrueBlue, Inc.A		402,371		7,520
West Corp.		195,207		4,183
				269,662
Construction & Engineering - 2.93%
AECOM Technology Corp.A		440,215		14,303
Aegion Corp.A		279,971		5,944
Chicago Bridge & Iron Co., N.V.		226,073		9,099
Comfort Systems USA, Inc.		905,095		26,690
EMCOR Group, Inc.		425,650		20,636
Granite Construction, Inc.		263,390		11,745
Jacobs Engineering Group, Inc.A		436,826		19,474
MYR Group, Inc.A		43,987		1,122
Primoris Services Corp.		864,477		20,220
Quanta Services, Inc.A		193,032		4,579
Tutor Perini Corp.		2,174,752		34,404
				168,216
Diversified Manufacturing - 0.52%
Barnes Group, Inc.		913,648		29,684
Electrical Equipment - 1.58%
Encore Wire Corp.		346,208		13,242
EnerSys, Inc.		498,549		29,100
Geospace Technologies Corp.A B		266,571		4,361
II-VI, Inc.		1,577,850		32,931
Regal-Beloit Corp.		167,700		10,803
				90,437
Engineering & Construction - 0.34%
KBR, Inc.		1,266,195		19,702
Industrial Conglomerates - 0.06%
ICF International, Inc.A		26,518		1,044
Park-Ohio Industries, Inc.		30,523		777
Trimas Corp.A		100,874		1,826
				3,647
Machinery - 4.31%
Actuant Corp., Class A		175,019		4,675
AGCO Corp.		269,582		14,415
Altra Industrial Motion Corp.		72,930		2,093
American Railcar Industries, Inc.B		57,700		2,366
American Science & Engineering, Inc.		88,186		2,527
Applied Industrial Technologies, Inc.		109,548		5,021
Astec Industries, Inc.		212,060		10,264
Chart Industries, Inc.A		395,443		10,179
CIRCOR International, Inc.		176,497		9,963
CLARCOR, Inc.		227,014		13,342
Columbus McKinnon Corp.		115,120		1,901
EnPro Industries, Inc.		351,307		20,579
ESCO Technologies, Inc.		62,617		2,410
Esterline Technologies Corp.A		85,360		5,861
iRobot Corp.A		375,585		14,039
ITT Corp.		260,258		9,986
Lindsay Corp.B		164,101		12,547

See accompanying notes

14

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Meritor, Inc.A		1,100,823	$	9,357
Miller Industries, Inc.		226,733		4,820
Navistar International Corp.B		106,166		1,602
Oshkosh Corp.		616,084		30,095
Raven Industries, Inc.		362,698		5,836
Reliance Steel & Aluminum Co.		222,075		16,426
Rexnord Corp.A		156,462		3,411
Sun Hydraulics Corp.		118,671		4,199
Tennant Co.		56,536		3,020
Terex Corp.		969,439		23,159
Wabash National Corp.A		226,226		3,224
				247,317
Marine - 0.48%
Kirby Corp.A		100,390		6,407
Matson, Inc.		535,647		20,826
				27,233
Road & Rail - 0.42%
Knight Transportation, Inc.		358,884		9,536
Marten Transport Ltd.		393,283		7,339
Swift Transportation Co.A		162,282		2,697
Werner Enterprises, Inc.		180,758		4,580
				24,152
Trading Companies & Distributors - 0.50%
Air Lease Corp.		358,487		10,927
MRC Global, Inc.A		222,880		3,116
MSC Industrial Direct Co., Inc., Class A		143,250		11,102
WESCO International, Inc.A		61,700		3,627
				28,772
Transportation Infrastructure - 0.02%
Wesco Aircraft Holdings, Inc.A		95,662		1,380
Total Industrials				1,137,542
INFORMATION TECHNOLOGY - 13.60%
Communications Equipment - 1.19%
Adtran, Inc.		233,226		4,506
Anixter International, Inc.		123,248		7,678
Bel Fuse, Inc., Class B		8,878		148
Brocade Communications Systems, Inc.		1,755,860		16,874
Comtech Telecommunications Corp.		110,998		2,686
Digi International, Inc.A		90,929		961
Extreme NetworksA		2,063,494		7,243
Finisar Corp.A		221,633		3,648
IxiaA		451,734		4,572
Plantronics, Inc.		276,038		10,614
Polycom, Inc.A		317,437		3,793
Verint Systems, Inc.A		157,328		5,324
				68,047
Computers & Peripherals - 1.09%
Electronics for Imaging, Inc.A		224,925		8,961
Lexmark International, Inc., Class A		417,908		16,131
Mercury Systems, Inc.A		707,347		14,868
NCR Corp.A		480,015		13,964
Super Micro Computer, Inc.A		69,800		1,878
Synaptics, Inc.A		95,202		6,812
				62,614
Electronic Equipment & Instruments - 4.76%
Analogic Corp.		81,536		6,441
Arrow Electronics, Inc.		334,666		20,783
Avnet, Inc.		476,327		19,587
AVX Corp.		624,413		8,255
Benchmark Electronics, Inc.A		480,369		9,329

See accompanying notes

15

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Celestica, Inc.A		326,983	$	3,509
ChipMOS TECHNOLOGIES Bermuda Ltd.		82,107		1,381
DTS, Inc.A		83,264		1,817
FLIR Systems, Inc.		288,426		8,713
Ingram Micro, Inc., Class A		184,681		6,455
Itron, Inc.A		125,001		5,140
Jabil Circuit, Inc.		691,282		12,001
Keysight Technologies, Inc.A		250,500		6,533
Kimball Electronics, Inc.A		7,426		81
Littelfuse, Inc.		83,745		9,755
Methode Electronics, Inc.		54,000		1,605
MTS Systems Corp.		10,515		591
Nanometrics, Inc.A		343,909		6,142
Newport Corp.A		183,754		4,225
Plexus Corp.A		694,947		29,020
Rofin-Sinar Technologies, Inc.A		109,780		3,534
Sanmina Corp.A		714,123		16,889
Scansource, Inc.A		246,101		10,011
Taser International, Inc.A B		483,483		8,828
Tech Data Corp.A		315,150		21,648
Veeco Instruments, Inc.A		131,527		2,421
Vishay Intertechnology, Inc.		4,009,537		48,755
				273,449
Internet Software & Services - 0.29%
LivePerson, Inc.A		172,226		1,042
Netgear, Inc.A		205,650		8,720
NIC, Inc.		364,564		6,456
Zix Corp.		36,699		137
				16,355
IT Consulting & Services - 0.85%
Acxiom Corp.A		458,016		10,063
Computer Sciences Corp.		501,000		16,597
Mantech International Corp., Class A		172,003		5,814
Science Applications International Corp.		84,558		4,489
Sykes Enterprises, Inc.A		66,724		1,945
SYNNEX Corp.		101,728		8,400
Unisys Corp.A B		146,116		1,127
				48,435
Semiconductor Equipment & Products - 4.05%
Advanced Energy Industries, Inc.A		281,129		9,095
Amkor Technology, Inc.A		772,587		4,411
Brooks Automation, Inc.		2,691,185		25,459
Cirrus Logic, Inc.A		400,955		14,474
Cree, Inc.A		147,600		3,618
Diodes, Inc.A		1,773,369		33,020
Entegris, Inc.A		409,651		5,444
Fairchild Semiconductor International, Inc.A		1,448,900		28,978
Inphi Corp.A		188,098		5,581
IXYS Corp.		198,076		2,139
Kulicke & Soffa Industries, Inc.A		178,609		1,915
Microsemi Corp.		187,311		6,329
Novanta, Inc.A		10,686		155
ON Semiconductor Corp.A		1,349,816		12,783
Photronics, Inc.A		1,814,262		19,195
QLogic Corp.A		1,783,652		23,348
Rovi Corp.A		165,949		2,924
Semtech Corp.A		450,487		9,749
Teradyne, Inc.		607,838		11,494
Tessera Technologies, Inc.		173,596		4,986
Xcerra Corp.A		1,194,440		7,047
				232,144

See accompanying notes

16

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Software - 1.37%
Aspen Technology, Inc.A		214,285	$	8,149
DST Systems, Inc.		22,695		2,739
FARO Technologies, Inc.A		606,156		17,603
Interactive Intelligence Group, Inc.A		120,673		4,485
Mentor Graphics Corp.		1,521,299		30,365
MicroStrategy, Inc., Class AA		20,900		3,748
Qlik Technologies, Inc.A		28,380		874
Xura, Inc.A		459,786		10,295
				78,258
Total Information Technology				779,302
MATERIALS - 4.41%
Building Products - 0.03%
TopBuild Corp.A		61,169		1,910
Chemicals - 2.23%
A. Schulman, Inc.		96,974		2,705
American Vanguard Corp.A		540,845		8,951
Axiall Corp.		29,402		692
Cabot Corp.		233,454		11,390
Calgon Carbon Corp.		533,501		8,744
Cambrex Corp.		169,708		8,187
HB Fuller Co.		108,044		4,832
Innophos Holdings, Inc.		47,302		1,748
Innospec, Inc.		194,789		9,420
Kronos Worldwide, Inc.B		297,980		1,982
Minerals Technologies, Inc.		118,600		7,104
Olin Corp.		302,397		6,589
PolyOne Corp.		721,880		25,974
Quaker Chemical Corp.		31,432		2,799
Scotts Miracle-Gro Co., Class A		246,052		17,416
Stepan Co.		145,413		8,912
				127,445
Construction Materials - 0.02%
Boise Cascade Co.A		54,662		1,141
Containers & Packaging - 0.17%
Greif, Inc., Class A		101,137		3,509
Owens-Illinois, Inc.A		160,129		2,956
Packaging Corp. of America		54,300		3,523
				9,988
Metals & Mining - 1.42%
Carpenter Technology Corp.		253,112		8,963
Coeur d’Alene Mines Corp.B		496,550		4,022
Commercial Metals Co.		667,041		11,953
Ferroglobe plc		58,500		596
Gibraltar Industries, Inc.A		473,521		12,525
Global Brass & Copper Holdings, Inc.		152,672		4,137
Haynes International, Inc.		150,477		5,647
Hecla Mining Co.B		1,372,200		5,914
Kaiser Aluminum Corp.		35,388		3,356
Materion Corp.		140,354		4,069
Pan American Silver Corp.B		265,164		4,155
Royal Gold, Inc.		182,666		11,439
Stillwater Mining Co.A		256,856		3,134
Worthington Industries, Inc.		45,729		1,726
				81,636

See accompanying notes

17

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Paper & Forest Products - 0.54%
Domtar Corp.		233,016	$	9,004
Glatfelter Co.		237,647		5,449
Louisiana-Pacific Corp.A		728,148		12,378
Schweitzer-Mauduit International, Inc.		111,654		3,840
				30,671
Total Materials				252,791
TELECOMMUNICATION SERVICES - 0.94%
Diversified Telecommunication - 0.52%
ARRIS International PLCA C		1,249,406		28,449
FairPoint Communications, Inc.A B		108,010		1,432
				29,881
Diversified Telecommunication Services - 0.18%
EchoStar Corp., Class AA		162,948		6,668
Hawaiian Telcom Holdco, Inc.A		2,466		57
IDT Corp., Class B		37,705		578
Vonage Holdings Corp.A		664,883		3,105
				10,408
Wireless Telecommunication Services - 0.24%
Iridium Communications, Inc.A B		345,848		2,791
Telephone & Data Systems, Inc.		368,443		10,895
				13,686
Total Telecommunication Services				53,975
UTILITIES - 4.17%
Electric - 2.87%
Allete, Inc.		300,813		16,903
Black Hills Corp.B		165,465		10,026
Great Plains Energy, Inc.		1,691,001		52,810
Hawaiian Electric Industries, Inc.		442,930		14,479
IDACORP, Inc.		133,138		9,683
NRG Energy, Inc.		581,339		8,778
Portland General Electric Co.		1,298,046		51,558
				164,237
Gas - 0.74%
Chesapeake Utilities Corp.		154,198		9,178
Energen Corp.		312,913		13,296
New Jersey Resources Corp.		243,641		8,693
WGL Holdings, Inc.		164,249		11,151
				42,318
Multi-Utilities - 0.30%
Avista Corp.		189,305		7,585
Vectren Corp.		192,687		9,413
				16,998
Water - 0.17%
California Water Service Group		352,198		9,837
Water Utilities - 0.09%
American States Water Co.		128,070		5,339
Total Utilities				238,729
Total Common Stock (Cost $5,010,094)				5,532,866

See accompanying notes

18

American Beacon Small Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
SHORT-TERM INVESTMENTS - 3.31% (Cost $189,521)
American Beacon U.S. Government Money Market Select Fund, Select Class E		189,521,412	$	189,521
SECURITIES LENDING COLLATERAL - 3.14%
American Beacon U.S. Government Money Market Select Fund, Select Class E		135,799,215		135,799
DWS Government and Agency Securities Portfolio, Institutional Class		44,251,610		44,252
Total Securities Lending Collateral (Cost $180,051)				180,051
TOTAL INVESTMENTS - 102.98% (Cost $5,379,666)				5,902,438
LIABILITIES, NET OF OTHER ASSETS - (2.98%)				(170,656	)
TOTAL NET ASSETS - 100.00%			$	5,731,782

Percentages are stated as a percent of net assets.

^A  Non-income producing security.

^B  All or a portion of this security is on loan at April 30, 2016.

^C  PLC - Public Limited Company.

^D  REIT - Real Estate Investment Trust.

^E  The Fund is affiliated by having the same investment advisor.

^F  Amount is less than $500.

Futures Contracts Open on April 30, 2016:

Description	Type	Number of Contracts		Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
Russell 2000 E-Mini Index June Futures	Long		1,581	June 2016	$	178,273,560	$	5,820,894
					$	178,273,560	$	5,820,894

See accompanying notes

19

American Beacon Small Cap Value Fund^SM

Statement of Assets and Liabilities

April 30, 2016 (Unaudited) (in thousands, except share and per share amounts)

Assets:
Investments in unaffiliated securities, at fair value A C	$	5,577,118
Investments in affiliated securities, at fair value B		325,320
Deposit with brokers for futures contracts		799
Receivable for investments sold		13,587
Receivable for fund shares sold		7,057
Dividends and interest receivable		2,384
Receivable for variation margin from open futures contracts		5,824
Prepaid expenses		93
Total assets		5,932,182
Liabilities:
Payable for investments purchased		10,062
Payable for fund shares redeemed		5,748
Payable upon return of securities loaned		180,051
Management and investment advisory fees payable		2,095
Administrative service and service fees payable		1,585
Transfer agent fees payable		122
Custody and fund accounting fees payable		45
Professional fees payable		77
Prospectus and shareholder reports fees payable		466
Trustee fees payable		101
Other liabilities		48
Total liabilities		200,400
Net assets	$	5,731,782
Analysis of Net Assets:
Paid-in-capital		5,248,778
Undistributed net investment income		17,603
Accumulated net realized (loss)		(63,192	)
Unrealized appreciation of investments		522,772
Unrealized appreciation of futures contracts		5,821
Net assets	$	5,731,782

See accompanying notes

20

American Beacon Small Cap Value Fund^SM

Statement of Assets and Liabilities

April 30, 2016 (Unaudited) (in thousands, except share and per share amounts)

Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		197,784,706
Y Class		13,240,267
Investor Class		29,113,578
Advisor ClassD		5,014,832
A Class		2,837,015
C Class		573,706
Net assets (not in thousands):
Institutional Class	$	4,588,809,933
Y Class	$	303,553,415
Investor Class	$	653,248,012
Advisor ClassD	$	111,207,002
A Class	$	62,659,733
C Class	$	12,303,579
Net asset value, offering and redemption price per share:
Institutional Class	$	23.20
Y Class	$	22.93
Investor Class	$	22.44
Advisor ClassD	$	22.18
A Class	$	22.09
A Class (offering price)	$	23.44
C Class	$	21.45
A        Cost of investments in unaffiliated securities	$	5,054,346
B        Cost of investments in affiliated securities	$	325,320
C        Fair value of securities on loan	$	176,066
D           Includes Retirement Class (Note 1).

See accompanying notes

21

American Beacon Small Cap Value Fund^SM

Statement of Operations

For the Six Months ended April 30, 2016 (Unaudited) (in thousands)

Investment income:
Dividend income from unaffiliated securities (net of foreign taxes) A	$	46,451
Dividend income from affiliated securities		77
Miscellaneous Income		1
Income derived from securities lending		2,064
Total investment income		48,593
Expenses:
Management and investment advisory fees (Note 2)		12,317
Administrative service fees (Note 2):
Institutional Class		6,371
Y Class		390
Investor Class		970
Advisor ClassB		161
A Class		83
C Class		17
AMR Class		2
Transfer agent fees:
Institutional Class		649
Y Class		6
Investor Class		16
Advisor ClassB		5
A Class		3
C Class		1
AMR Class		1
Custody and fund accounting fees		279
Professional fees		98
Registration fees and expenses		80
Service fees (Note 2):
Y Class		130
Investor Class		1,078
Advisor ClassB		135
A Class		42
C Class		9
Distribution fees (Note 2):
Advisor ClassB		142
A Class		69
C Class		58
Prospectus and shareholder report expenses		184
Trustee fees		173
Other expenses		166
Total expenses		23,635
Net investment income		24,958
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments		(16,317	)
Commission recapture (Note 3)		70
Foreign currency transactions		(1	)
Futures contracts		(13,030	)
Change in net unrealized appreciation (depreciation) of:
Investments		(2,666	)
Futures contracts		3,215
Net (loss) from investments		(28,729	)
Net (decrease) in net assets resulting from operations	$	(3,771	)
A        Foreign taxes	$	78
B        Includes Retirement Class (Note 1).

See accompanying notes

22

American Beacon Small Cap Value Fund^SM

Statement of Changes of Net Assets (in thousands)

	Six Months Ended April 30, 2016			Year Ended October 31, 2015
	(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	24,958		$	54,550
Net realized gain (loss) from investments, commission recapture, foreign currency transactions, and futures contracts		(29,277	)		393,635
Change in net unrealized appreciation (depreciation) from investments and futures contracts		549			(406,282	)
Net increase (decrease) in net assets resulting from operations		(3,770	)		41,903
Distributions to Shareholders:
Net investment income:
Institutional Class		(35,442	)		(28,088	)
Y Class		(1,930	)		(1,184	)
Investor Class		(3,346	)		(2,646	)
Advisor ClassA		(382	)		(198	)
Retirement Class		—			(2	)
A Class		(300	)		(70	)
AMR Class		—			(3,576	)
Net realized gain from investments:
Institutional Class		(202,231	)		(464,691	)
Y Class		(11,745	)		(21,977	)
Investor Class		(34,526	)		(100,257	)
Advisor ClassA		(5,446	)		(12,392	)
Retirement Class		—			(1,430	)
A Class		(2,613	)		(3,740	)
C Class		(618	)		(1,223	)
AMR Class		—			(43,926	)
Net distributions to shareholders		(298,579	)		(685,400	)
Capital Share Transactions:
Proceeds from sales of shares		957,154			1,643,561
Reinvestment of dividends and distributions		288,838			664,480
Cost of shares redeemed		(690,811	)		(1,780,813	)
Net increase in net assets from capital share transactions		555,181			527,228
Net increase (decrease) in net assets		252,832			(116,269	)
Net Assets:
Beginning of period		5,478,950			5,595,220
End of Period *	$	5,731,782		$	5,478,950
*       Includes undistributed net investment income	$	17,603		$	34,045
			��
A        Includes Retirement Class (Note 1).

See accompanying notes

23

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

1. Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”), is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. As of April 30, 2016, the Trust consists of twenty-four active series, one of which is Small Cap Value Fund (the “Fund”). The remaining twenty-three active series are reported in separate filings.

American Beacon Advisors, Inc. (the “Manager”) is a wholly-owned subsidiary of Astro AB Borrower, Inc., which is indirectly owned by investment funds affiliated with Kelso & Company, L.P. and Estancia Capital Management, LLC, and was organized in 1986 to provide business management, advisory, administrative and asset management consulting services to the Trust and other investors.

Class Disclosure

On September 21, 2015, the Board of Trustees (the “Board”) approved the liquidation of the AMR Class shares. The Class closed on December 11, 2015. The Board also approved the reclassification of the Retirement Class shares to the Advisor Class shares due to small asset size. The Retirement Class closed on January 15, 2016, and merged into the Advisor Class.

The Fund has multiple classes of shares designed to meet the needs of different groups of investors. The following table sets forth the differences among the classes:

Class:	Offered to:
Institutional Class	Investors making an initial investment of $250,000
Y Class	Investors making an initial investment of $100,000
Investor Class	General public and investors investing directly or through an intermediary
Advisor Class	Investors investing through an intermediary
A Class	General public and investors investing through an intermediary with applicable sales charges, which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”)
C Class	General public and investors investing through an intermediary with applicable sales charges, which may include a CDSC

Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the Fund. Class specific expenses, where applicable, currently include administration fees, service fees, and distribution fees and vary among the classes as described more fully in Note 2.

2. Transactions with Affiliates

Management Agreement

The Trust and the Manager are parties to a Management Agreement that obligates the Manager to provide or oversee the provision of all investment advisory, fund management, and securities lending services. Investment assets of the Fund are managed by multiple investment advisors which have entered into separate investment advisory agreements with the Manager and the Trust. As compensation for performing the duties required under the Management Agreement, the Manager receives from the Fund an annualized fee equal to 0.05% of the average daily net assets. The Funds pay the unaffiliated investment advisors hired to direct

24

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

investment activities of the Fund. Management fees paid during the six months ended April 30, 2016 were as follows (in thousands):

Management Fee Rate	Management Fee		Amounts paid to Investment Advisors		Amounts paid to Manager
0.46%	$	12,317	$	10,754	$	1,563

As compensation for services provided by the Manager in connection with securities lending activities, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee up to 25% of the net monthly interest income (the gross interest income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee up to 25% of such loan fees. Currently the Manager receives 0.10% of such income for the lending Fund. This fee is included in Income derived from securities lending and Management and investment advisory fees on the Statement of Operations. During the six months ended April 30, 2016, securities lending fees paid to the Manager were $231,360.

Administration Agreement

The Manager and the Trust entered into an Administration Agreement which obligates the Manager to provide or oversee administrative services to the Fund. As compensation for performing the duties required under the Administration Agreement, the Manager receives an annualized fee of 0.30% of the average daily net assets of the Institutional, Y, Investor, Advisor, A, and C Classes of the Fund and 0.05% of the average daily net assets of the AMR Class of the Fund.

Distribution Plans

The Fund, except for the Advisor, A, and C Classes of the Fund, has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees will be charged to the Fund for distribution purposes. However, the Plan authorizes the management and administrative service fees received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Fund does not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.

Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, A, and C Classes of the Fund. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes, and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y, Investor, Advisor, A, and C Classes. As compensation for performing the duties required under the Service Plans, the Manager receives 0.10% of the average daily net assets of the Y Class, 0.15% of the average daily net assets of the A and C Classes, 0.25% of the average daily net assets of the Advisor Class, and up to 0.375% of the average daily net assets of the Investor Class of the Fund.

Investment in Affiliated Funds

The Fund may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). Cash collateral received by the Fund in connection with securities lending may also be invested in the USG Select Fund. The Fund and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives

25

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

management and administration fees of 0.10% of the average daily net assets of the USG Select Fund. During the six months ended April 30, 2016, the Manager earned fees totaling $30,782 on the Fund’s direct investment in the Select Fund and $68,452 from the Fund’s securities lending collateral invested in the USG Select Fund.

Interfund Lending Program

Pursuant to an exemptive order issued by the Securities and Exchange Commission (“SEC”), the Fund, along with other registered investment companies having management contracts with the Manager, may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating Funds. During the six months ended April 30, 2016, the Fund did not utilize the credit facility.

Expense Reimbursement Plan

The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of fees waived or expenses reimbursed for a period of up to three years. However, reimbursement will occur only if the Class’ average net assets have grown or expenses have declined sufficiently to allow reimbursement without causing its expense ratio to exceed the previously agreed upon contractual expense limit. The carryover of excess expenses potentially reimbursable to the Manager, but not recorded as a liability is $672 expiring in 2016 and $324 expiring in 2017. The Manager recovered $2,670 from the A Class and $2,719 from the C Class expiring in 2016.

Sales Commissions

The Fund’s distributor, Foreside Fund Services, LLC (“Foreside”), may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. For the six months ended April 30, 2016, Foreside collected $1,831 from the sale of Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the six months ended April 30, 2016, there were no CDSC fees collected for Class A Shares.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the six months ended April 30, 2016, $648 in CDSC fees were collected for the Fund.

3. Security Valuation and Fair Value Measurements

Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally 4 p.m. ET, each day that the Exchange is open for business. Equity securities, including exchange traded funds (“ETFs”) for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade.

Investments in open-end mutual funds are valued at the closing net asset value (“NAV”) per share of the mutual fund on the day of valuation.

Securities for which market prices are not readily available or are not reflective of the fair value of the security, as determined by the Manager, will be priced at fair value following procedures approved by the Trust’s Board of Trustees (the “Board”).

26

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, a Fund is required to deposit with its futures broker, an amount of cash or U.S. Government and Agency Obligations in accordance with the initial margin requirements of the broker or exchange. Futures contracts are marked to market daily and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by the Fund. Gains or losses are recognized, but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statement of Assets and Liabilities.

Valuation Inputs

Various inputs may be used to determine the fair value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1 -	Quoted prices in active markets for identical securities.
Level 2 -	Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
Level 3 -	Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

Level 1 and Level 2 trading assets and trading liabilities, at fair value

Common stocks and financial derivative instruments, such as futures contracts that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are also categorized as Level 2 of the fair value hierarchy.

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2016, the Fund’s investments were classified as described below (in thousands):

	Level 1		Level 2		Level 3		Total
Common Stock*	$	5,532,866	$	—	$	—	$	5,532,866
Short-Term Investments - Money Market Funds		189,521		—		—		189,521
Securities Lending Collateral Invested in Money Market Funds		180,051		—		—		180,051
Total Investments in Securities	$	5,902,438	$	—	$	—	$	5,902,438
Financial Derivative Instruments - Assets
Futures Contracts	$	5,821	$	—	$	—	$	5,821

* Refer to the Schedule of Investments for Industry Information.

U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) also requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of the Fund’s assets and liabilities. During the six months ended April 30, 2016, there were no transfers between levels.

27

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Security Transactions and Investment Income

Security transactions are recorded on the trade date of the security purchase or sale. The Fund may purchase securities with delivery or payment to occur at a later date. At the time the Fund enters into a commitment to purchase a security, the transaction is recorded, and the value of the security is reflected in the NAV. The value of the security may vary with market fluctuations.

Dividend income, net of foreign taxes, is recorded on the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Fund. Interest income is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. For financial and tax reporting purposes, realized gains and losses are determined on the basis of specific lot identification.

Dividends to Shareholders

Dividends from net investment income of the Fund normally will be declared and paid at least annually. Distributions, if any, of net realized capital gains are generally paid at least annually and recorded on the ex-dividend date.

Commission Recapture

The Fund has established brokerage commission recapture arrangements with certain brokers or dealers. If the Fund’s investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. This amount is reported with the net realized gain in the Fund’s Statement of Operations.

Allocation of Income, Expenses, Gains, and Losses

Income, expenses (other than those attributable to a specific class), gains, and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.

Other

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.

28

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

4. Securities and Other Investments

Real Estate Investment Trusts

The Fund may own shares of real estate investment trusts (“REITs”) which report information on the source of their distributions annually. The Fund re-characterizes distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-characterization will be estimated based on available information which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year. These re-characterizations are not recorded for financial statement purposes, but as an adjustment to the calculation of taxable income.

Other Investment Company Securities and Other Exchange Traded Products

The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, unit investment trusts, and other investment companies of the Trust. The Fund may invest in investment company securities advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Fund becomes a shareholder of that investment company. As a result, the Fund’s shareholders indirectly will bear a Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Fund shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

5. Financial Derivative Instruments

Futures Contracts

Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Fund may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.

Upon entering into a futures contract, the Fund is required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as Cash deposited with broker on the Statement of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.

For the six months ended April 30, 2016, the Fund entered into future contracts primarily for exposing cash to markets.

29

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

The Fund’s average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.

Average Futures Contracts Outstanding
Fund	Six Months ended April 30, 2016
Small Cap Value		1,919

The following is a summary of the Fund’s derivative financial instruments categorized by risk exposure (in thousands) ⁽¹⁾:

Fair Values of financial derivative instruments not accounted for as hedging instruments as of April 30, 2016:

Statement of Assets and Liabilities	Derivatives	Fair Value
Receivable for variation margin from open futures contracts	Equity Contracts	$	5,821

The effect of financial derivative instruments not accounted for as hedging instruments during the six months ended April 30, 2016:

Statement of Operations	Derivatives	Fair Value
Net realized (loss) of futures contracts	Equity Contracts	$	(13,030	)
Change in net unrealized appreciation of futures contracts	Equity Contracts		3,215

⁽¹⁾  See Note 3 in the Notes to Financial Statements for additional information.

6. Principal Risks

In the normal course of business the Fund trades financial instruments and enters into financial transactions where risk of potential loss exists. Security values fluctuate (market risk) and may decline due to factors affecting securities markets in general, particular industries represented in the securities markets or conditions specifically related to a particular company. Failure of the other party to a transaction to perform (credit and counterparty risk), for example by not making principal and interest payments when due, reduces the value of the issuer’s debt and could reduce the Fund’s income. Similar to credit risk, the Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which the Fund has unsettled or open transactions will fail to make required payments or otherwise comply with the terms of the instrument, transaction or contract. The potential loss could exceed the value of the financial assets recorded in the financial statements. Some of the Fund’s investments may be illiquid and the Fund may not be able to vary the portfolio investments in response to changes in economic and other conditions. If a Fund is required to liquidate all or a portion of its investments quickly, the Fund may realize significantly less than the value at which it previously recorded those investments.

Market Risks

The Fund’s investments in financial derivatives and other financial instruments expose the Fund to various risks such as, but not limited to, interest rate, foreign currency and equity risks.

Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by the Fund is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is useful primarily as a measure of the sensitivity of a fixed income’s market price to interest rate (i.e. yield) movements.

If the Fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in financial derivatives that provide exposure to foreign currencies, they will be subject

30

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, the Fund’s investments in foreign currency denominated securities may reduce the returns of the Fund.

The fair values of equities, such as common stocks and preferred securities or equity related investments such as futures, may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.

Counterparty Credit Risk

A derivative contract may suffer a mark to market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

With exchange traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, the credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally, credit risk exists in exchange traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.

Cash collateral that has been pledged to cover obligations of the Fund and cash collateral received from the counterparty, if any, is reported separately on the Statement of Assets and Liabilities as Deposits with brokers for futures contracts and Payable to brokers for futures contracts, respectively. Non-cash collateral pledged by the Fund, if any, is noted in the Schedule of Investments. Generally, the amount of collateral due from or to a party is determined at the close of business of the Fund and additional required collateral is delivered to/pledged by the Fund on the next business day. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty non-performance. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

Offsetting Assets and Liabilities

The Fund is a party to enforceable master netting agreements between brokers and counterparties such as International Swaps and Derivatives Association (“ISDA”) agreements which provide for the right to offset under certain circumstances. The Fund employs multiple money managers and counterparties and has elected not to offset qualifying financial and derivative instruments on the Statement of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below. The net amount represents the net receivable or payable

31

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, April 30, 2016 (in thousands):

Offsetting of Financial and Derivative Assets as of April 30, 2016:

Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Assets and Liabilities		Net Amounts of Assets Presented in the Statement of Assets and Liabilities
Futures Contracts (1)	$	5,821		—	$	5,821
Securities on Loan		176,066		—		176,066
	$	181,887		—	$	181,887

Financial Assets, Derivative Assets, and Collateral Pledged by Counterparty as of April 30, 2016:

	Net amount of Assets Presented in the Statement of Assets and Liabilities		Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty			Financial Instruments		Cash Collateral Received (2)			Net Amount
Barclays Capital, Inc.	$	14,463	$	—	$	(14,463	)	$	—
BNP Paribas Prime Brokerage		19,602		—		(19,602	)		—
Credit Suisse Securities (USA)		6,871		—		(6,871	)		—
Goldman Sachs & Co.		30,627		—		(30,627	)		—
Goldman Sachs Bank USA (1)		5,821		—		—			5,821
JPMorgan Clearing Corp.		10,450		—		(10,450	)		—
Merrill Lynch, Pierce, Fenner		11,901		—		(11,901	)		—
MS Securities Services Inc.		29,267		—		(29,267	)		—
National Financial Services Corp (NFS)		16,070		—		(16,070	)		—
Scotia Capital USA Inc.		3,645		—		(3,645	)		—
SG Americas Securities, LLC		3,093		—		(3,093	)		—
UBS Securities LLC		30,077		—		(30,077	)		—
Total:	$	181,887	$	—	$	(176,066	)	$	(5,821	)

⁽¹⁾  The securities presented here within are not subject to Master Netting Agreements. As such, this is disclosed for informational purposes only.

⁽²⁾  Excess of collateral received from the individual counterparty is not shown for financial reporting purposes. Collateral with a value of $180,051 has been received in connection with securities lending transactions.

7. Federal Income and Excise Taxes

It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distribution of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, the Fund is treated as a single entity for the purpose of determining such qualification.

The Fund does not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years for the four year period ended October 31, 2015 remains subject to examination by the Internal Revenue Service. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statement of Operations.

A Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation or depreciation, as applicable, as the income is earned or capital gains are recorded.

Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

32

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

The tax character of distributions paid were as follows (in thousands):

	Six Months Ended April 30, 2016		Year Ended October 31, 2015
	(unaudited)
Distributions paid from:
Ordinary income*
Institutional Class	$	35,441	$	103,614
Y Class		1,930		4,756
Investor Class		3,346		18,940
Advisor Class		382		2,212
Retirement Class		—		234
A Class		300		678
C Class		—		199
AMR Class		—		10,714
Long-Term Capital gain
Institutional Class		202,232		389,165
Y Class		11,745		18,406
Investor Class		34,526		83,963
Advisor Class		5,446		10,378
Retirement Class		—		1,197
A Class		2,613		3,132
C Class		618		1,024
AMR Class		—		36,788
Total distributions paid	$	289,579	$	685,400

* For tax purposes, short-term capital gains are considered ordinary income distributions.

As of April 30, 2016, the components of distributable earnings (deficits) on a tax basis were as follows (in thousands):

Cost basis of investments for federal income tax purposes	$	5,421,859
Unrealized appreciation		823,500
Unrealized depreciation		(342,921	)
Net unrealized appreciation		480,579
Undistributed ordinary income		15,339
Accumulated long-term (loss)		(18,395	)
Other temporary differences		5,821
Distributable earnings (deficits)	$	483,344

Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The temporary differences between financial reporting and tax-basis reporting of unrealized appreciation or (depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains or (losses) on certain derivative instruments, and reclassifications of income from real estate investment securities and publicly traded partnerships.

Due to inherent differences in the recognition of income, expenses and realized gains/losses under U.S. GAAP and federal income tax regulations, permanent differences between book and tax reporting have been identified and appropriately reclassified on the Statement of Assets and Liabilities.

Accordingly, the following amounts represent current year permanent differences derived from foreign currency, reclassifications of dividends, and reclassifications of income from real estate investment securities and publicly traded partnerships as of April 30, 2016 (in thousands):

Paid-in-capital	$	(340	)
Undistributed net investment income		(635	)
Accumulated net realized gain (loss)		975
Unrealized appreciation (depreciation) of investments and futures contracts		—

33

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Under the Regulated Investment Company Modernization Act of 2010 (the “RIC MOD”), net capital losses recognized by the Fund are carried forward indefinitely and retain their character as short-term and/or long-term losses.

As of April 30, 2016, the Fund did not have capital loss carryforwards.

8. Investment Transactions

The aggregate cost of purchases and proceeds from sales of investments, other than short-term obligations, for the six months ended April 30, 2016 were $1,623,779 and $1,256,802, respectively (in thousands).

A summary of the Fund’s direct transactions and security lending collateral transactions in the USG Select Fund for the six months ended April 30, 2016 are set forth below (in thousands):

Types of Transaction	October 31, 2015 Shares/Fair Value		Purchases		Sales		April 30, 2016 Shares/Fair Value		Dividend Income
Direct	$	15,000	$	393,802	$	219,281	$	189,521	$	77
Securities Lending		134,818		383,296		382,315		135,799		N/A

9. Securities Lending

The Fund may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked to market daily. Daily mark to market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark to market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.

To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the “Agent”) in money market mutual funds, and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Fund’s Schedule of Investments and the collateral is shown on the Statements of Assets and Liabilities as a payable.

Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retained 80%, 10%, and 10%, respectively, of the income generated from securities lending.

While securities are on loan, the Fund continues to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Fund would be subject to on the dividend.

Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term

34

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.

As of April 30, 2016, the value of outstanding securities on loan and the value of collateral was as follows (in thousands):

Fair Value of Securities on Loan		Non-Cash Collateral		Cash Collateral Posted by Borrower
$	176,066	$	—	$	180,051

Cash collateral is listed in the Fund’s Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in Income derived from securities lending in the Statement of Operations.

Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund’s Schedule of Investments or Statement of Assets and Liabilities.

10. Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Fund (dollars and shares in thousands):

For the Six Months Ended April 30, 2016

	Institutional Class						Y Class						Investor Class						Advisor Class(2)
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		32,264		$	718,155			4,198		$	90,847			4,042		$	87,407			1,653		$	34,394
Reinvestment of dividends		10,230			229,981			561			12,479			1,706			37,152			271			5,828
Shares redeemed		(19,422	)		(437,369	)		(1,817	)		(40,421	)		(6,932	)		(148,068	)		(1,672	)		(34,731	)
Net increase (decrease) in shares outstanding		23,072		$	510,767			2,942		$	62,905			(1,184	)	$	(23,509	)		252		$	5,491

	A Class						C Class						AMR Class(1)
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		1,143		$	23,925			111		$	2,353			3		$	73
Reinvestment of dividends		134			2,863			26			535			—			—
Shares redeemed		(768	)		(16,541	)		(76	)		(1,568	)		(508	)		(12,113	)
Net increase (decrease) in shares outstanding		509		$	10,247			61		$	1,320			(505	)	$	(12,040	)

⁽¹⁾  The AMR Class closed on December 11, 2015.

⁽²⁾  The Retirement Class was closed on January 15, 2016 and the assets were merged into the Advisor Class.

35

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

For the Year Ended October 31, 2015

	Institutional Class						Y Class						Investor Class						Advisor Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		47,133		$	1,203,810			5,301		$	132,321			7,676		$	189,079			1,480		$	36,026
Reinvestment of dividends		19,188			477,005			841			20,682			4,173			100,563			528			12,590
Shares redeemed		(35,606	)		(908,703	)		(2,763	)		(68,782	)		(13,149	)		(322,523	)		(1,692	)		(40,626	)
Net increase (decrease) in shares outstanding		30,715		$	772,112			3,379		$	84,221			(1,300	)	$	(32,881	)		316		$	7,990
	Retirement Class						A Class						C Class						AMR Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		281		$	6,659			1,730		$	42,130			167		$	3,970			1,164		$	29,566
Reinvestment of dividends		61			1,432			154			3,671			45			1,036			1,919			47,502
Shares redeemed		(200	)		(4,788	)		(666	)		(16,044	)		(70	)		(1,656	)		(16,861	)		(417,692	)
Net increase (decrease) in shares outstanding		142		$	3,303			1,218		$	29,757			142		$	3,350			(13,778	)	$	(340,624	)

36

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014E			2013			2012			2011A
	(unaudited)
Net asset value, beginning of period	$	24.69		$	27.80		$	28.04		$	21.04		$	18.75		$	17.84
Income from investment operations:
Net investment income		0.10			0.24			0.17			0.25			0.17			0.08
Net gains (losses) from investments (both realized and unrealized)		(0.24	)		0.02			2.18			7.60			2.20			0.92
Total income (loss) from investment operations		(0.14	)		0.26			2.35			7.85			2.37			1.00
Less distributions:
Dividends from net investment income		(0.20	)		(0.19	)		(0.14	)		(0.27	)		(0.08	)		(0.09	)
Distributions from net realized gains		(1.15	)		(3.18	)		(2.45	)		(0.58	)		—			—
Total distributions		(1.35	)		(3.37	)		(2.59	)		(0.85	)		(0.08	)		(0.09	)
Net asset value, end of period	$	23.20		$	24.69		$	27.80		$	28.04		$	21.04		$	18.75
Total return B		(0.40	)%C		0.87	%		8.78	%		38.59	%		12.71	%		5.57	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	4,588,811		$	4,313,523		$	4,002,884		$	3,430,107		$	2,189,761		$	1,843,285
Ratios to average net assets:
Expenses before reimbursements		0.83	%D		0.81	%		0.80	%		0.82	%		0.82	%		0.82	%
Expenses, net of reimbursements		0.83	%D		0.81	%		0.80	%		0.82	%		0.82	%		0.82	%
Net investment income (loss), before reimbursements		0.99	%D		0.99	%		0.67	%		1.01	%		0.87	%		0.47	%
Net investment income (loss), net of reimbursements		0.99	%D		0.99	%		0.67	%		1.01	%		0.87	%		0.47	%
Portfolio turnover rate		24	%C		47	%		73	%		48	%		51	%		59	%
	Y Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014E			2013			2012			2011A
	(unaudited)
Net asset value, beginning of period	$	24.41		$	27.52		$	27.81		$	20.89		$	18.66		$	17.76
Income from investment operations:
Net investment income		0.11			0.23			0.18			0.22			0.15			0.06
Net gains (losses) from investments (both realized and unrealized)		(0.25	)		0.01			2.12			7.55			2.19			0.92
Total income (loss) from investment operations		(0.14	)		0.24			2.30			7.77			2.34			0.98
Less distributions:
Dividends from net investment income		(0.19	)		(0.17	)		(0.14	)		(0.27	)		(0.11	)		(0.08	)
Distributions from net realized gains		(1.15	)		(3.18	)		(2.45	)		(0.58	)		—			—
Total distributions		(1.34	)		(3.35	)		(2.59	)		(0.85	)		(0.11	)		(0.08	)
Net asset value, end of period	$	22.93		$	24.41		$	27.52		$	27.81		$	20.89		$	18.66
Total return B		(0.41	)%C		0.79	%		8.67	%		38.45	%		12.58	%		5.49	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	303,553		$	251,360		$	190,416		$	122,850		$	38,982		$	29,234
Ratios to average net assets:
Expenses before reimbursements		0.90	%D		0.90	%		0.89	%		0.91	%		0.91	%		0.94	%
Expenses, net of reimbursements		0.90	%D		0.90	%		0.89	%		0.91	%		0.91	%		0.94	%
Net investment income (loss), before reimbursements		0.91	%D		0.90	%		0.58	%		0.74	%		0.77	%		0.30	%
Net investment income (loss), net of reimbursements		0.91	%D		0.90	%		0.58	%		0.74	%		0.77	%		0.30	%
Portfolio turnover rate		24	%C		47	%		73	%		48	%		51	%		59	%

^A On November 30, 2010, Metropolitan West Capital Management LLC was terminated and ceased managing assets of the Small Cap Value Fund.

^B Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^C Not annualized.

^D  Annualized.

^E  On August 19, 2014, Opus Capital Group, LLC was terminated and ceased managing assets of the Small Cap Value Fund. On March 17, 2014, Barrow, Hanley, Mewhinney & Strauss, LLC began managing additional assets of the Small Cap Value Fund. On September 19, 2014, Hillcrest Asset Management, LLC began managing assets of the Small Cap Value Fund.

37

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014E			2013			2012			2011A
	(unaudited)
Net asset value, beginning of period	$	23.86		$	26.96		$	27.27		$	20.47		$	18.23		$	17.40
Income from investment operations:
Net investment income		0.08			0.18			0.10			0.18			0.11			0.02
Net gains (losses) from investments (both realized and unrealized)		(0.24	)		(0.02	)		2.09			7.38			2.13			0.88
Total income (loss) from investment operations		(0.16	)		0.16			2.19			7.56			2.24			0.90
Less distributions:
Dividends from net investment income		(0.11	)		(0.08	)		(0.05	)		(0.18	)		—			(0.07	)
Distributions from net realized gains		(1.15	)		(3.18	)		(2.45	)		(0.58	)		—			—
Total distributions		(1.26	)		(3.26	)		(2.50	)		(0.76	)		—			(0.07	)
Net asset value, end of period	$	22.44		$	23.86		$	26.96		$	27.27		$	20.47		$	18.23
Total return B		(0.51	)%C		0.50	%		8.40	%		38.11	%		12.31	%		5.20	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	653,248		$	723,045		$	851,732		$	934,041		$	748,550		$	843,400
Ratios to average net assets:
Expenses before reimbursements		1.14	%D		1.15	%		1.16	%		1.18	%		1.18	%		1.17	%
Expenses, net of reimbursements		1.14	%D		1.15	%		1.16	%		1.18	%		1.18	%		1.17	%
Net investment income (loss), before reimbursements		0.70	%D		0.67	%		0.33	%		0.73	%		0.51	%		0.12	%
Net investment income (loss), net of reimbursements		0.70	%D		0.67	%		0.33	%		0.73	%		0.51	%		0.12	%
Portfolio turnover rate		24	%C		47	%		73	%		48	%		51	%		59	%
	Advisor ClassF
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014E			2013			2012			2011A
	(unaudited)
Net asset value, beginning of period	$	23.60		$	26.69		$	27.06		$	20.35		$	18.15		$	17.33
Income from investment operations:
Net investment income (loss)		0.05			0.13			0.06			0.14			0.06			(0.01	)
Net gains (losses) from investments (both realized and unrealized)		(0.24	)		0.01			2.07			7.34			2.14			0.89
Total income (loss) from investment operations		(0.19	)		0.14			2.13			7.48			2.20			0.88
Less distributions:
Dividends from net investment income		(0.08	)		(0.05	)		(0.05	)		(0.19	)		—			(0.06	)
Distributions from net realized gains		(1.15	)		(3.18	)		(2.45	)		(0.58	)		—			—
Total distributions		(1.23	)		(3.23	)		(2.50	)		(0.77	)		—			(0.06	)
Net asset value, end of period	$	22.18		$	23.60		$	26.69		$	27.06		$	20.35		$	18.15
Total return B		(0.64	)%C		0.41	%		8.22	%		37.93	%		12.12	%		5.07	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	111,206		$	98,224		$	102,682		$	88,033		$	44,731		$	33,032
Ratios to average net assets:
Expenses before reimbursements		1.30	%D		1.31	%		1.29	%		1.31	%		1.32	%		1.32	%
Expenses, net of reimbursements		1.30	%D		1.31	%		1.29	%		1.31	%		1.32	%		1.32	%
Net investment income (loss), before reimbursements		0.51	%D		0.51	%		0.18	%		0.46	%		0.35	%		(0.02	)%
Net investment income (loss), net of reimbursements		0.51	%D		0.51	%		0.18	%		0.46	%		0.35	%		(0.02	)%
Portfolio turnover rate		24	%C		47	%		73	%		48	%		51	%		59	%

^A On November 30, 2010, Metropolitan West Capital Management LLC was terminated and ceased managing assets of the Small Cap Value Fund.

^B Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^C Not annualized.

^D Annualized.

^E  On August 19, 2014, Opus Capital Group, LLC was terminated and ceased managing assets of the Small Cap Value Fund. On March 17, 2014, Barrow, Hanley, Mewhinney & Strauss, LLC began managing additional assets of the Small Cap Value Fund. On September 19, 2014, Hillcrest Asset Management, LLC began managing assets of the Small Cap Value Fund.

^F  On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class.

38

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014E			2013			2012			2011A
	(unaudited)
Net asset value, beginning of period	$	23.54		$	26.63		$	27.03		$	20.35		$	18.19		$	17.39
Income from investment operations:
Net investment income		0.08			0.13			0.11			0.16			0.08			0.03
Net gains (losses) from investments (both realized and unrealized)		(0.25	)		0.02			2.03			7.30			2.12			0.83
Total income (loss) from investment operations		(0.17	)		0.15			2.14			7.46			2.20			0.86
Less distributions:
Dividends from net investment income		(0.13	)		(0.06	)		(0.09	)		(0.20	)		(0.04	)		(0.06	)
Distributions from net realized gains		(1.15	)		(3.18	)		(2.45	)		(0.58	)		—			—
Total distributions		(1.28	)		(3.24	)		(2.54	)		(0.78	)		(0.04	)		(0.06	)
Net asset value, end of period	$	22.09		$	23.54		$	26.63		$	27.03		$	20.35		$	18.19
Total return B		(0.56	)%C		0.45	%		8.30	%		37.83	%		12.11	%		4.92	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	62,660		$	54,815		$	29,570		$	13,418		$	4,064		$	1,822
Ratios to average net assets:
Expenses before reimbursements		1.21	%D		1.21	%		1.27	%		1.35	%		1.44	%		1.57	%
Expenses, net of reimbursements		1.21	%D		1.22	%		1.27	%		1.32	%		1.34	%		1.57	%
Net investment income (loss), before reimbursements		0.62	%D		0.56	%		0.19	%		0.30	%		0.21	%		(0.32	)%
Net investment income (loss), net of reimbursements		0.62	%D		0.54	%		0.20	%		0.34	%		0.32	%		(0.32	)%
Portfolio turnover rate		24	%C		47	%		73	%		48	%		51	%		59	%
	C Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014E			2013			2012			2011A
	(unaudited)
Net asset value, beginning of period	$	22.84		$	26.05		$	26.60		$	20.07		$	18.04		$	17.37
Income from investment operations:
Net investment income (loss)		0.01			0.03			(0.07	)		0.03			(0.03	)		(0.04	)
Net gains (losses) from investments (both realized and unrealized)		(0.25	)		(0.06	)		1.97			7.17			2.06			0.74
Total income (loss) from investment operations		(0.24	)		(0.03	)		1.90			7.20			2.03			0.70
Less distributions:
Dividends from net investment income		—			—			0.00			(0.09	)		—			(0.03	)
Distributions from net realized gains		(1.15	)		(3.18	)		(2.45	)		(0.58	)		—			—
Total distributions		(1.15	)		(3.18	)		(2.45	)		(0.67	)		—			(0.03	)
Net asset value, end of period	$	21.45		$	22.84		$	26.05		$	26.60		$	20.07		$	18.04
Total return B		(0.92	)%C		(0.31	)%		7.46	%		36.88	%		11.25	%		4.06	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	12,304		$	11,719		$	9,676		$	6,396		$	2,330		$	1,106
Ratios to average net assets:
Expenses before reimbursements		1.96	%D		1.97	%		2.03	%		2.09	%		2.21	%		2.60	%
Expenses, net of reimbursements		1.96	%D		1.98	%		2.03	%		2.07	%		2.10	%		2.60	%
Net investment income (loss), before reimbursements		(0.14	)%D		(0.17	)%		(0.56	)%		(0.41	)%		(0.54	)%		(1.36	)%
Net investment income (loss), net of reimbursements		(0.14	)%D		(0.17	)%		(0.56	)%		(0.39	)%		(0.43	)%		(1.36	)%
Portfolio turnover rate		24	%C		47	%		73	%		48	%		51	%		59	%

^A  On November 30, 2010, Metropolitan West Capital Management LLC was terminated and ceased managing assets of the Small Cap Value Fund.

^B  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^C  Not annualized.

^D  Annualized.

^E  On August 19, 2014, Opus Capital Group, LLC was terminated and ceased managing assets of the Small Cap Value Fund. On March 17, 2014, Barrow, Hanley, Mewhinney & Strauss, LLC began managing additional assets of the Small Cap Value Fund. On September 19, 2014, Hillcrest Asset Management, LLC began managing assets of the Small Cap Value Fund.

39

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement of the Funds (Unaudited)

At its March 3-4, 2016 meetings, the Boards of Trustees (“Board”) considered the approval of a new Management Agreement (“New Agreement”) between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (the “Trust”) on behalf of the existing series of the Trust, including the series of the Trust covered in this shareholder report (each, a “Fund”). The New Agreement combines the terms of each Fund’s prior management agreement and administration agreement and establishes separate standardized fee schedules for four categories of Funds, which include fee schedule breakpoints. The Board considered that, with respect to each Fund, the single management fee rate under the New Agreement does not exceed the former combined investment management and administrative services fee rates, and there is no change to the investment management or administrative services provided or the aggregate fees charged to the Fund.

The Board reviewed information provided by the Manager in response to requests from the Board in connection with the Board’s consideration of the New Agreement. The Board also considered information that had been provided by the Manager to the Board at its November 9-10, 2015 meetings when the Board had met with various management personnel of the Manager regarding certain key aspects of the materials submitted in support of the New Agreement. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the approval of the Management Agreement. The memorandum explained the regulatory requirements surrounding the Trustees’ process for evaluating investment advisors and the terms of investment advisory contracts.

The Board determined that it did not need to consider certain factors that it typically considers during its review of the Funds’ management agreements because the Board had reviewed, among other matters, the nature, extent and quality of services being provided to the Funds by the Manager at in-person meetings held on June 2-3, 2015, when it reviewed the prior management agreement or, in connection with the initial approval of that agreement. The Board noted that it previously had considered and approved the prior management agreement at an in-person meeting held on November 12, 2014, at telephonic meetings held on November 26, 2014 and December 6, 2014 and at an in-person meeting held on December 10, 2014.

In connection with the Board’s review of the New Agreement, the Board considered, among other things, information provided by the Manager regarding the terms of the New Agreement and the relevant differences between the New Agreement and the prior management agreement and administration agreement. The Board considered the Manager’s representations that the New Agreement would not reduce or modify in any way the nature or level of the advisory or administration services provided to the Funds. The Board also considered that the fee rate payable by a Fund under the New Agreement would not exceed the aggregate fee rate payable by the Fund under the prior management agreement and administration agreement. Additionally, the Board considered the Manager’s representation that there would be no change in the professional personnel who primarily perform management and administrative services for the Funds and the Manager’s representations regarding disclosure of the New Agreement to new and existing shareholders. The Board also considered that an independent consultant retained to assist the Board in evaluating the Manager’s proposal to combine the prior management agreement and administration agreement had concluded that the proposal was reasonable and in the best interest of shareholders.

Based on the various considerations described above, the Board, including a majority of Trustees who are not “interested persons” of the Funds or the Manager, as that term is defined in the 1940 Act: (1) concluded that the proposed management fee is fair and reasonable with respect to each Fund; (2) determined that each Fund and its shareholders would benefit from the Manager’s continued management of the Fund; and (3) approved the Management Agreement on behalf of each Fund.

40

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41

Delivery of Documents

eDelivery is NOW AVAILABLE- Stop traditional mail delivery and receive your

shareholder reports and summary prospectus on-line. Sign up at

www.americanbeaconfunds.com

If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Summary Prospectus, Annual Report and Semi-Annual Report, by email. If you are interest in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.

To obtain more information about the Fund:

By E-mail: american_beacon.funds@ambeacon.com	On the Internet: Visit our website at www.americanbeaconfunds.com
By Telephone: Institutional, Y, Investor, and Advisor Classes Call (800) 658-5811	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	Availability of Proxy Voting Policy and Records A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN State Street Bank and Trust Boston, Massachusetts TRANSFER AGENT Boston Financial Data Services Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas DISTRIBUTOR Foreside Fund Services, LLC Portland, Maine

This report is prepared for shareholders of the American Beacon Funds and may be distributed to others only if preceded or accompanied by a current Prospectus or Summary Prospectus.

American Beacon Funds and American Beacon Small Cap Value Fund are service marks of American Beacon Advisors, Inc.

SAR 04/16        

About American Beacon Advisors

Since 1986, American Beacon Advisors has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management.

Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company.

Contents

President’s Message	1
Performance Overview	2
Schedule of Investments	7
Financial Statements	14
Notes to the Financial Statements	18
Financial Highlights	35
Additional Information	Back Cover

INTERNATIONAL EQUITY FUND Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund may participate in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and each Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.

American Beacon Funds April 30, 2016

Dear Shareholders,   During the six-month period ended April 30, 2016, disparate central bank policies, uneven economic growth and volatile oil prices set the stage for mixed returns around the globe. Early in the period, uncertainty over the timing of the U.S. Federal Reserve’s first interest rate increase since emergency lending rates were established during the 2008 financial crisis weighed heavily on investors’ minds. On December 16, 2015, following months of speculation, the Federal Open Market Committee (“FOMC”) increased its benchmark lending rates from a range of 0% to 0.25% to a range of 0.25% to 0.5%; it was the first interest rate hike in nearly a decade. On April 27, 2016, the FOMC decided to maintain short-term interest rates in the range of 0.25% to 0.5%. If the U.S. economy continues to expand, the FOMC plans to increase short-term interest rates.

Conversely, during first quarter 2016, many central banks around the world decided to continue or expand their economic stimulation policies. The Bank of Japan pushed its rates into negative territory and the European Central Bank cut a key rate to zero in March 2016. China’s slowing growth also escalated concerns for markets and companies around the globe. In this environment, international stocks fluctuated from one extreme to another; domestic stocks made modest gains thanks to a rally in oil prices and positive economic reports; and emerging-market stocks rebounded and outpaced developed-market stocks. Bonds outperformed stocks thanks to declining interest rates.

• For the six months ended April 30, 2016, the American Beacon International Equity Fund (Investor Class) returned -4.34%. The Fund is designed to provide long-term capital appreciation primarily through investments in equity securities of issuers based outside the U.S.

For the period under review, the MSCI EAFE Index - which represents the stocks of developed countries - returned -3.07%.

Our broad range of mutual funds helps investors navigate the economic storms and market downturns in the U.S. and abroad. Our years of experience evaluating sub-advisors have led us to identify and partner with several asset managers who have adhered to their disciplined processes for many years and through a variety of economic and market conditions.

Thank you for your continued investment in the American Beacon Funds. For additional information about the Funds or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

American Beacon International Equity Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

The Investor Class of the International Equity Fund (the “Fund”) returned -4.34% for the six months ended April 30, 2016. The Fund underperformed the MSCI EAFE Index (the “Index”) return of -3.07%.

Total Returns for the Period ended 4/30/2016

	Ticker		6 Months*			1 Year			5 Years			10 Years
Institutional Class (1,7)		AAIEX		-4.20	%		-11.02	%		1.69	%		1.96	%
Y Class (1,2,7)		ABEYX		-4.24	%		-11.10	%		1.59	%		1.90	%
Investor Class (1,7)		AAIPX		-4.34	%		-11.30	%		1.34	%		1.63	%
Advisor Class (1,3,7)		AAISX		-4.38	%		-11.42	%		1.17	%		1.41	%
A Class with sales charge (1,4,7)		AIEAX		-9.78	%		-16.40	%		0.04	%		0.96	%
A Class without sales charge (1,4,7)		AIEAX		-4.30	%		-11.31	%		1.23	%		1.56	%
C Class with sales charge (1,5,7)		AAIAX		-5.72	%		-13.02	%		0.47	%		1.12	%
C Class without sales charge (1,5,7)		AAIAX		-4.72	%		-12.02	%		0.47	%		1.12	%
AMR Class (1,7)				—	%		-0.11	%		0.02	%		0.02	%
MSCI EAFE Index (6)				1.61	%		-0.81	%		22.78	%		17.32	%

* Not annualized

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please call 1-800-967-9009 or visit www.americanbeaconfunds.com. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. A portion of the fees charged to the Institutional Class of the Fund has been waived from 2013 through 2015. Performance prior to waiving fees was lower than actual returns from 2013 through 2015.

2. Fund performance for the ten-year period represents the returns achieved by the Institutional Class from 4/30/06 up to 8/3/09, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/06.

3. A portion of the fees charged to the Advisor Class of the Fund were waived in 2006, 2007 and 2009. Performance prior to waiving fees was lower than the actual returns shown for those periods.

4. Fund performance for the ten-year period represents the returns achieved by the Investor Class from 4/30/06 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 4/30/06. A portion of the fees charged to the A Class of the Fund was waived from 2010 through 2012 and partially recovered in 2013 and 2015. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2012. The maximum sales charge for A Class is 5.75%.

5. Fund performance for the ten-year period represents the returns achieved by the Investor Class from 4/30/06 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 4/30/06. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2012 and partially recovered in 2013 and 2015. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2012. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

6. The MSCI EAFE Index is a market capitalization weighted index of international stock performance composed of equities from developed markets excluding the U.S. and Canada. One cannot directly invest in an index.

7. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C, and AMR Class shares was 0.74%, 0.81%, 1.07%, 1.20%, 1.12%, 1.87%, and 0.42%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

2

American Beacon International Equity Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

The Fund underperformed the Index over the six-month period due to both country allocation and stock selection.

Stock selections within Switzerland and Japan negatively contributed to the Fund’s relative performance over the six-month period, despite value gained through selections in France. The Fund was hurt by investments in Credit Suisse Group AG Reg. (down 35.8%) and Novartis AG Reg. (down 13.0%) within Switzerland, and from investments in Sumitomo Mitsui Financial GR (down 22.0%) and Hitachi Ltd. (down 20.1%) within Japan. Better performing investments in France included Total SA (up 7.8%) and Technip SA (up 13.3%).

Country allocation also led to the Fund’s relative underperformance, particularly underweighting Australia (up 9.4%) - the second-best performing country in the Index - and overweighting the United Kingdom (down 6.6%). Overweighting out-of-index Korea and Canada (down 0.9% and up 8.1%, respectively) added value to the Fund’s relative performance during the period.

Although economic and market conditions vary from period to period, the Fund’s primary strategy of investing in undervalued companies with above-average earnings growth expectations remains consistent.

Top Ten Holdings (% Net Assets)
Novartis AG		2.5
British American Tobacco PLC		2.2
Royal Dutch Shell PLC		2.0
KDDI Corp.		2.0
Total S.A.		2.0
Lloyds Banking Group PLC		1.8
Akzo Nobel		1.6
Bayer AG Reg		1.8
Samsung Electronics Co. Ltd.		1.4
Teva Pharmaceutical Industries Ltd. Sponsored		1.3
Total Fund Holdings	162
Sector Allocation (% Equities)
Financials		24.4
Consumer Discretionary		12.3
Health Care		11.9
Consumer Staples		9.5
Industrials		9.5
Telecommunication Services		9.0
Energy		9.0
Materials		7.0
Information Technology		5.2
Utilities		2.2

3

American Beacon International Equity Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

Country Allocation (% Equities)
United Kingdom	26.5
Japan	14.1
France	11.9
Switzerland	8.6
Germany	8.3
Netherlands	6.7
South Korea	4.5
Hong Kong/China	2.8
Belgium	1.9
Sweden	1.8
Italy	1.6
Spain	1.6
Canada	1.5
Israel	1.4
Australia	1.3
Singapore	1.2
Norway	1.1
Ireland	1.1
Finland	0.8
Denmark	0.6
Luxembourg	0.5
Portugal	0.3
Austria	0.1

4

American Beacon International Equity Fund^SM

Fund Expenses

April 30, 2016 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees if applicable, and (2) ongoing costs, including management fees, administrative service fees, and other Fund expenses. The examples below are intended to help you understand the ongoing cost (in dollars) of investing in a particular Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from November 1, 2015 through April 30, 2016.

Actual Expenses

The following tables provide information about actual account values and actual expenses. You may use the information on this page, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the “Expenses Paid During Period” for the applicable Fund to estimate the expenses you paid on your account during this period. Shareholders of the Investor and Institutional Classes that invest in a Fund through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

Hypothetical Example for Comparison Purposes

The following tables provide information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed 5% per year rate of return before expenses (not the Fund’s actual return). You may compare the ongoing costs of investing in a particular Fund with other funds by contrasting this 5% hypothetical example and the 5% hypothetical examples that appear in the shareholder reports of the other funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. Shareholders of the Investor and Institutional Classes that invest in a Fund through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by a Fund, such as sales charges (loads) or redemption fees as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the following tables are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.

5

American Beacon International Equity Fund^SM

Fund Expenses

April 30, 2016 (Unaudited)

	Beginning Account Value 11/1/15		Ending Account Value 4/30/16		Expenses Paid During Period* 11/1/15 - 4/30/16
Institutional Class
Actual	$	1,000.00	$	958.00	$	3.40
Hypothetical**	$	1,000.00	$	1,021.39	$	3.51
Y Class
Actual	$	1,000.00	$	957.60	$	3.75
Hypothetical**	$	1,000.00	$	1,021.04	$	3.87
Investor Class
Actual	$	1,000.00	$	956.60	$	5.08
Hypothetical**	$	1,000.00	$	1,019.67	$	5.24
Advisor Class
Actual	$	1,000.00	$	956.20	$	5.70
Hypothetical**	$	1,000.00	$	1,019.03	$	5.89
A Class
Actual	$	1,000.00	$	957.00	$	5.27
Hypothetical**	$	1,000.00	$	1,019.47	$	5.44
C Class
Actual	$	1,000.00	$	952.80	$	8.88
Hypothetical**	$	1,000.00	$	1,015.77	$	9.16
AMR Class
Actual	$	1,000.00	$	959.70	$	2.09
Hypothetical**	$	1,000.00	$	1,022.73	$	2.16

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.70%, 0.77%, 1.04%, 1.17%, 1.08%, 1.83% and 0.43% for the Institutional, Y, Investor, Advisor, A, C and AMR Classes respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (182) by days in the year (366) to reflect the half-year period.

** 5% return before expenses.

6

American Beacon International Equity Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Australia - 1.20%
Common Stocks - (Cost $26,733)
Caltex Australia Ltd.A		569,697	$	14,002
James Hardie Industries PLC, CDIA B C		570,096		8,022
Westfield Corp.A D		1,005,014		7,686
Total Australia				29,710
Austria - 0.13%
Common Stocks - (Cost $4,574)
Uniqa Insurance Group AG A		461,951		3,342
Belgium - 1.73%
Common Stocks - (Cost $33,439)
Anheuser-Busch InBev S.A.A E		232,489		28,841
KBC Groep N.V.A		250,812		14,131
Total Belgium				42,972
Canada - 1.40%
Common Stocks - (Cost $35,806)
MDA Corp.E		115,789		8,112
National Bank of Canada		332,702		11,889
Precision Drilling Corp.E		893,626		4,637
Suncor Energy, Inc.		341,995		10,039
Total Canada				34,677
Denmark - 0.53%
Common Stocks - (Cost $12,779)
Carlsberg A.S. Class BA		134,020		13,070
Finland - 0.72%
Common Stocks - (Cost $14,908)
Sampo OYJ Class AA		409,928		17,912
France - 11.10%
Common Stocks - (Cost $253,687)
AXA S.A.A E		387,967		9,789
BNP ParibasA		509,239		26,987
Cap Gemini S.A.A		196,450		18,352
Cie de Saint-GobainA		232,269		10,650
Cie Generale des Etablissements MichelinA		96,184		10,045
Crédit Agricole S.A.A		859,370		9,515
ENGIE SAA E		1,066,632		17,600
Iliad S.A.A		33,707		7,354
Legrand S.A.A		219,826		12,528
Orange S.A.A		84,951		1,411
SanofiA E		339,359		28,036
Schneider Electric S.A.A		270,641		17,630
Societe Generale S.A.A		200,200		7,861
Technip S.A.A E		151,409		8,914
Total S.A.A		969,167		49,008
Valeo S.A.A		113,584		17,973
Vinci S.A.A		227,819		17,041
Zodiac AerospaceA		204,050		4,776
Total France				275,470

See accompanying notes

7

American Beacon International Equity Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Germany - 7.70%
Common Stocks - (Cost $136,649)
Bayer AG Reg.A		391,366	$	45,161
Commerzbank AGA		572,077		5,341
Deutsche Boerse AGA		87,865		7,208
HeidelbergCement AGA		148,929		13,241
Infineon Technologies AGA		677,990		9,640
Lanxess AGA		208,401		10,889
Linde AGA		94,625		14,460
Merck KGaAA		106,505		10,001
METRO AGA		240,892		7,661
Muenchener Rueckversicherungs AG, RegA		32,621		6,051
SAP AGA		219,425		17,164
Siemens AG, Reg.A		104,730		10,931
Thyssenkrupp AGA		199,360		4,637
Total Common Stocks				162,385
Preferred Stocks - (Cost $37,208)
Volkswagen AGA		199,293		28,829
Total Germany				191,214
Hong Kong/China - 2.65%
Common Stocks - (Cost $60,876)
AIA Group Ltd.A		1,556,862		9,294
Cheung Kong Property Holdings Ltd.A		681,082		4,652
China Merchants Holdings Intl.A		1,800,044		5,347
China Mobile Ltd.A		1,897,776		21,586
CK Hutchison Holdings Ltd.A		546,082		6,527
CNOOC Ltd.A		13,104,635		16,245
GCL-Poly Energy Holdings Ltd.A		15,050,317		2,222
Total Hong Kong/China				65,873
Ireland - 0.99%
Common Stocks - (Cost $19,359)
CRH PLCA C		557,971		16,257
Ryanair Holdings PLCA		101,600		8,225
Total Ireland				24,482
Israel - 1.31%
Common Stocks - (Cost $29,656)
Teva Pharmaceutical Industries Ltd., Sponsored ADR F		598,753		32,602
Italy - 1.45%
Common Stocks - (Cost $38,218)
Azimut Holding SpAA		386,447		9,751
ENI SpAA		606,519		9,915
Intesa Sanpaolo SpAA		1,453,732		4,042
UniCredit SpAA		3,171,331		12,228
Total Italy				35,936
Japan - 13.18%
Common Stocks - (Cost $320,026)
Canon, Inc.A		252,000		7,063
Daiwa House Industry Co., Ltd.A		854,200		22,567
Don Quijote Co., Ltd.A		580,600		20,694
East Japan Railway Co.A		231,500		20,485
Hitachi Ltd.A		4,282,000		19,382
Isuzu Motors Ltd.A		916,700		9,758

See accompanying notes

8

American Beacon International Equity Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Japan Airlines Co., Ltd.A		359,200	$	12,995
Japan Tobacco, Inc.A		336,500		13,784
KDDI Corp.A		1,740,800		49,516
Kirin Holdings Co., Ltd.A		681,900		9,905
Konica Minolta, Inc.A		850,500		7,375
Nikon Corp.A E		476,700		7,019
Nissan Motor Co., Ltd.A		1,102,900		9,818
Seven & I Holdings Co., Ltd.A		385,600		15,794
Softbank Corp.A		563,400		29,634
Sony Corp.A		502,900		12,226
Sumitomo Mitsui Financial Group, Inc.A		1,002,300		30,129
Suntory Beverage & Food Ltd.A		210,800		9,413
Toshiba Corp.A E		2,668,000		5,578
Toyota Motor Corp.A		132,500		6,684
United Arrows Ltd.A		183,400		7,370
Total Japan				327,189
Luxembourg - 0.42%
Common Stocks - (Cost $10,769)
RTL Group S.A.A G		75,664		6,328
Tenaris S.A.A		302,502		4,095
Total Luxembourg				10,423
Netherlands - 6.28%
Common Stocks - (Cost $146,004)
Aegon N.V.A		1,865,960		10,716
Akzo NobelA		554,392		39,342
ING Groep N.V. CVAA H		1,624,305		19,920
Koninklijke Philips Electronics N.V.A		209,276		5,754
PostNL N.V.A G		1,414,605		6,191
QIAGEN N.V.A G		303,816		6,818
RELX N.V.A		1,326,742		22,274
Royal Dutch Shell PLC, Class AA C		712,982		18,657
SBM Offshore N.V.A E		602,300		8,109
Wolters Kluwer N.V.A E		473,781		18,045
Total Netherlands				155,826
Norway - 1.06%
Common Stocks - (Cost $24,746)		1,529,506		26,207
Telenor ASA A
Portugal - 0.25%
Common Stocks - (Cost $7,058)
Galp Energia SGPS S.A. A		458,623		6,325
Singapore - 1.09%
Common Stocks - (Cost $22,971)
DBS Group Holdings Ltd.A		1,005,681		11,380
Noble Group Ltd.A		10,756,996		3,648
Singapore Telecommunications Ltd.A		4,232,795		12,088
Total Singapore				27,116
South Korea - 4.16%
Common Stocks - (Cost $113,728)
Hana Financial Group, Inc.A		462,277		10,318
Hyundai Mobis Co., Ltd.A		36,196		8,239
Hyundai Motor Co.A		83,486		10,492
KB Financial Group, Inc. ADRF		214,467		6,522

See accompanying notes

9

American Beacon International Equity Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
KT&G Corp.A		101,962	$	11,002
POSCOA		19,429		4,074
Samsung Electronics Co., Ltd.A		30,992		33,701
SK Telecom Co., Ltd.A		104,534		18,946
Total South Korea				103,294
Spain - 1.53%
Common Stocks - (Cost $42,506)
CaixaBank S.A.A		3,510,880		10,546
Red Electrica Corporation S.A.A		106,958		9,559
Repsol S.A.A		194,499		2,567
Tecnicas Reunidas S.A.A		68,500		2,311
Telefonica S.A.A		1,192,273		13,056
Total Spain				38,039
Sweden - 1.63%
Common Stocks - (Cost $39,222)
Assa Abloy ABA		909,312		19,055
Getinge AB, Class BA		450,388		9,518
Swedbank AB, Class AA		555,021		11,963
Total Sweden				40,536
Switzerland - 7.97%
Common Stocks - (Cost $200,059)
ABB Ltd.A		570,851		12,077
Aryzta AGA		268,116		10,419
Cie Financiere Richemont S.A. Reg.A		151,156		10,065
Clariant AG Reg.A		361,997		6,855
Credit Suisse Group AG RegA		1,257,003		19,045
Givaudan S.A. Reg		1,263		2,490
Novartis AGA		797,312		60,880
Roche Holding AG GenusscheinA		121,243		30,668
Swiss Re AGA		101,701		9,029
UBS Group AGA		1,233,756		21,304
Zurich Insurance Group AGA		67,158		15,047
Total Switzerland				197,879
United Kingdom - 24.73%
Common Stocks - (Cost $616,844)
Aon PLCC		149,199		15,684
Aviva PLCA C		4,583,988		29,072
BAE Systems PLCA C		1,360,490		9,506
Balfour Beatty PLCA C G		2,122,904		7,418
Barclays PLCA C		12,164,568		30,622
BHP Billiton PLCA C		1,036,309		14,146
BP PLCA C		2,655,453		14,647
British American Tobacco PLCA C		892,227		54,450
Carnival PLCA C		307,159		15,292
Diageo PLCA C		551,428		14,899
Direct Line Insurance Group PLCA C		1,301,440		6,899
GlaxoSmithKline PLCA C		1,293,731		27,545
Glencore Xstrata PLCA C		3,609,380		8,683
Howden Joinery Group PLCA C		1,283,086		9,279
HSBC Holdings PLCA C		2,544,536		16,894
Informa PLCA C		1,083,002		10,364
J Sainsbury PLCA C		2,594,668		10,964
Johnson Matthey PLCA C		94,430		3,994
Kingfisher PLCA C		1,647,943		8,779
Lloyds Banking Group PLCA C		44,264,369		43,549
Marks & Spencer Group PLCA C		1,528,577		9,478

See accompanying notes

10

American Beacon International Equity Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Michael Page International PLCA C		807,287	$	4,809
Petrofac Ltd.A		649,264		8,054
Provident Financial Holdings PLCA C		236,688		10,104
Prudential PLCA C		1,452,697		28,738
RELX PLCA C		873,083		15,467
Rexam PLCA C		1,587,453		14,507
Royal Dutch Shell PLC, Class BA C		1,218,932		32,006
Shire PLCA C		383,712		23,956
Sky PLCA C		780,787		10,731
SSE PLCA C		1,033,455		22,846
Standard Chartered PLCA C		1,756,427		14,252
Tesco PLCA C G		3,116,011		7,827
Unilever PLCA C		255,673		11,465
Vodafone Group PLCA C		8,471,483		27,396
Wolseley PLCA C		345,368		19,338
Total United Kingdom				613,660
SHORT-TERM INVESTMENTS - 5.47% (Cost $135,730)
American Beacon U.S. Government Money Market Select Fund, Select Class I		135,729,526		135,730
SECURITIES LENDING COLLATERAL - 3.97% (Cost $98,444)
American Beacon U.S. Government Money Market Select Fund, Select ClassI		66,293,170		66,293
DWS Government and Agency Securities Portfolio, Institutional Class		32,150,829		32,151
Total Securities Lending Collateral				98,444
TOTAL INVESTMENTS - 102.65% (Cost $2,481,999)				2,547,928
LIABILITIES, NET OF OTHER ASSETS - (2.65)%				(65,811	)
TOTAL NET ASSETS - 100.00%			$	2,482,117

Percentages are stated as a percent of net assets.

^A  Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $2,197,387 or 88.53% of net assets.

^B PDR - Chess Depository Interest.

^C PLC - Public Limited Company.

^D REIT - Real Estate Investment Trust.

^E All or a portion of this security is on loan at April 30, 2016.

^F ADR - American Depositary Receipt.

^G Non-income producing security.

^H CVA - Dutch Certificate.

^I The Fund is affiliated by having the same investment advisor.

Futures Contracts Open on April 30, 2016:

Description	Type	Number of Contracts	Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
AEX Index May Futures	Long	39	May 2016	$	3,899,893	$	36,757
ASX SPI 200 Index June Futures	Long	94	June 2016		9,346,868		272,469
CAC 40 Index May Futures	Long	258	May 2016		12,926,234		294,788
DAX Index June Futures	Long	41	June 2016		11,837,116		93,829
FTSE 100 Index Futures	Long	280	June 2016		25,414,676		350,534
FTSE/MIB Index June Futures	Long	27	June 2016		2,820,964		53,434
Hang Seng Index May Futures	Long	32	May 2016		4,301,512		(68,263	)
IBEX 35 Index May Futures	Long	41	May 2016		4,227,584		212,106
OMX 30 Index May Futures	Long	224	May 2016		3,769,154		23,760
S&P/TSX 60 Index June Futures	Long	111	June 2016		14,397,180		391,303
TOPIX Index June Futures	Long	247	June 2016		30,793,748		(193,083	)
				$	123,734,929	$	1,467,635

See accompanying notes

11

American Beacon International Equity Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

Foreign Currency Contracts Open on April 30, 2016:

Type	Currency	Principal Amount Covered by Contract		Settlement Date	Counterparty	Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation/ (Depreciation)
BUY	EUR		8,555,679	6/8/2016	BNP	$	36,083	$	—		$	36,083
BUY	CAD		726,873	6/8/2016	BNP		15,051		—			15,051
BUY	GBP		6,055,514	6/8/2016	BOA		156,281		—			156,281
BUY	AUD		596,750	6/8/2016	BOA		—		(4,066	)		(4,066	)
BUY	SEK		4,139,263	6/8/2016	BOM		209,977		—			209,977
BUY	CAD		2,943,356	6/8/2016	BOM		105,425		—			105,425
BUY	EUR		2,114,848	6/8/2016	BOM		28,245		—			28,245
BUY	CAD		2,147,941	6/8/2016	BOM		—		(1,388	)		(1,388	)
BUY	SEK		654,464	6/8/2016	BRC		—		(172	)		(172	)
BUY	AUD		1,318,012	6/8/2016	CBK		—		(3,570	)		(3,570	)
BUY	CHF		13,347,467	6/8/2016	CBK		411,443		—			411,443
BUY	EUR		36,207,909	6/8/2016	CBK		1,336,619		—			1,336,619
BUY	GBP		26,134,524	6/8/2016	CBK		680,563		—			680,563
BUY	CHF		2,841,782	6/8/2016	CBK		—		(6,821	)		(6,821	)
BUY	SEK		216,201	6/8/2016	CBK		2,652		—			2,652
BUY	SEK		924,529	6/8/2016	FBF		10,484		—			10,484
BUY	EUR		4,724,881	6/8/2016	GLM		58,447		—			58,447
BUY	CAD		12,628,112	6/8/2016	GLM		744,273		—			744,273
BUY	EUR		6,182,923	6/8/2016	HUS		—		(2,895	)		(2,895	)
BUY	GBP		4,472,956	6/8/2016	HUS		131		—			131
BUY	JPY		7,433,554	6/8/2016	JPM		340,835		—			340,835
BUY	GBP		1,208,472	6/8/2016	MYC		18,163		—			18,163
BUY	JPY		5,527,758	6/8/2016	MYC		16,108		—			16,108
BUY	CHF		312,157	6/8/2016	RBS		1,828		—			1,828
BUY	GBP		1,540,181	6/8/2016	SOG		41,937		—			41,937
BUY	JPY		35,269,525	6/8/2016	SOG		2,266,149		—			2,266,149
BUY	AUD		9,512,883	6/8/2016	TDB		234,913		—			234,913
BUY	CAD		1,217,034	6/8/2016	TDB		47,152		—			47,152
BUY	SEK		430,158	6/8/2016	UAG		8,129		—			8,129
BUY	CHF		764,212	6/8/2016	UAG		4,625		—			4,625
BUY	CHF		2,203,895	6/8/2016	UAG		196		—			196
BUY	JPY		6,089,424	6/8/2016	WBC		336,806		—			336,806
BUY	AUD		2,193,397	6/8/2016	WBC		—		(20,085	)		(20,085	)
BUY	JPY		1,837,698	6/8/2016	WBC		46,329		—			46,329
BUY	AUD		1,628,534	6/8/2016	WBC		93		—			93
SELL	SEK		574,438	6/8/2016	BNP		—		(23,301	)		(23,301	)
SELL	GBP		1,186,382	6/8/2016	BNP		—		(31,657	)		(31,657	)
SELL	AUD		1,154,779	6/8/2016	BNP		21,427		—			21,427
SELL	EUR		7,254,675	6/8/2016	BOA		—		(46,805	)		(46,805	)
SELL	CHF		205,114	6/8/2016	BOA		—		(7,309	)		(7,309	)
SELL	CAD		2,515,362	6/8/2016	BOM		—		(114,425	)		(114,425	)
SELL	EUR		4,544,917	6/8/2016	BOM		—		(52,330	)		(52,330	)
SELL	EUR		6,307,872	6/8/2016	BRC		—		(235,470	)		(235,470	)
SELL	GBP		3,203,110	6/8/2016	CBK		—		(72,478	)		(72,478	)
SELL	CHF		1,760,215	6/8/2016	CBK		—		(42,800	)		(42,800	)
SELL	GBP		5,294,191	6/8/2016	CBK		—		(200,724	)		(200,724	)
SELL	SEK		502,350	6/8/2016	FBF		—		(5,255	)		(5,255	)
SELL	SEK		808,573	6/8/2016	GLM		—		(13,160	)		(13,160	)
SELL	JPY		7,597,504	6/8/2016	GLM		—		(456,101	)		(456,101	)
SELL	JPY		4,222,252	6/8/2016	GLM		—		(248,483	)		(248,483	)
SELL	JPY		3,592,250	6/8/2016	GLM		—		(76,116	)		(76,116	)
SELL	SEK		784,929	6/8/2016	HUS		—		(36,996	)		(36,996	)
SELL	SEK		402,603	6/8/2016	HUS		—		(5,266	)		(5,266	)
SELL	JPY		6,053,851	6/8/2016	JPM		—		(110,250	)		(110,250	)
SELL	AUD		947,511	6/8/2016	MYC		7,315		—			7,315
SELL	CHF		1,161,978	6/8/2016	SCB		—		(5,611	)		(5,611	)
SELL	CHF		1,218,354	6/8/2016	SCB		—		(4,643	)		(4,643	)
SELL	GBP		3,768,486	6/8/2016	SCB		—		(85,080	)		(85,080	)

See accompanying notes

12

American Beacon International Equity Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

Type	Currency	Principal Amount Covered by Contract		Settlement Date		Counterparty	Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation/ (Depreciation)
SELL	GBP		2,599,604		6/8/2016	SOG	$	—	$	(40,406	)	$	(40,406	)
SELL	EUR		5,275,804		6/8/2016	SOG		—		(118,560	)		(118,560	)
SELL	CAD		1,488,017		6/8/2016	TDB		—		(30,095	)		(30,095	)
SELL	CAD		1,297,532		6/8/2016	TDB		—		(41,032	)		(41,032	)
SELL	CAD		898,014		6/8/2016	TDB		—		(47,736	)		(47,736	)
SELL	CAD		1,843,855		6/8/2016	TDB		—		(110,726	)		(110,726	)
SELL	EUR		3,779,217		6/8/2016	UAG		—		(33,555	)		(33,555	)
SELL	AUD		1,159,319		6/8/2016	UAG		—		(21,117	)		(21,117	)
SELL	CHF		2,490,996		6/8/2016	UAG		10,251		—			10,251
SELL	JPY		3,716,603		6/8/2016	WBC		—		(195,895	)		(195,895	)
SELL	AUD		1,866,931		6/8/2016	WBC		—		(26,320	)		(26,320	)
SELL	AUD		1,372,445		6/8/2016	WBC		—		(31,568	)		(31,568	)
							$	7,197,930	$	(2,610,267	)	$	4,587,663

Glossary:

Counterparty Abbreviations:
BNP	BNP Paribas S.A.	JPM	JPMorgan Chase Bank N.A.
BOA	Bank of America, N.A.	MYC	Morgan Stanley Bank, N.A.
BOM	Bank of Montreal	RBS	Royal Bank of Scotland PLC
BRC	Barclays Bank PLC Wholesale	SCB	Standard Chartered Bank
CBK	Citibank, N.A.	SOG	Societe Generale
FBF	Credit Suisse International	TBD	Toronto Dominion Bank
GLM	Goldman Sacks Bank USA	UAG	UBS AG London
HUS	HSBC Bank USA	WBC	Westpac Banking Corporation
Currency Abbreviations:
AUD	Australian Dollar	GBP	Great Britain Pound
CAD	Canadian Dollar	JPY	Japanese Yen
CHF	Swiss Franc	SEK	Swedish Krona
EUR	Euro

See accompanying notes

13

American Beacon Funds^SM

Statement of Assets and Liabilities

April 30, 2016 (Unaudited) (in thousands except share and per share amounts)

	International Equity Fund
Assets:
Investments in unaffiliated securities, at fair value A D	$	2,345,905
Investments in affiliated securities, at fair value B		202,023
Foreign currency, at fair value C		24
Foreign currency deposits with broker, at fair value		13,645
Dividends and interest receivable		13,706
Receivable for investments sold		1,657
Receivable for fund shares sold		2,973
Receivable for tax reclaims		2,570
Receivable for variation margin on open futures contracts		1,733
Unrealized appreciation from foreign currency contracts		7,198
Prepaid expenses		57
Total assets	$	2,591,491
Liabilities:
Payable for investments purchased		3,182
Payable for fund shares redeemed		1,749
Payable for variation margin from open futures contracts		262
Payable upon return of securities loaned		98,444
Management and investment advisory fees payable		1,790
Administrative service and service fees payable		765
Transfer agent fees payable		105
Custody and fund accounting fees payable		90
Professional fees payable		45
Trustee fees payable		55
Payable for prospectus and shareholder reports		226
Unrealized depreciation from foreign currency contracts		2,610
Other liabilities		51
Total liabilities		109,374
Net Assets	$	2,482,117
Analysis of Net Assets:
Paid-in-capital		2,452,440
Undistributed (or overdistribution of) net investment income		19,873
Accumulated net realized (loss)		(63,079	)
Unrealized appreciation of investments		138,039
Unrealized (depreciation) of currency transactions		(66,624	)
Unrealized appreciation of futures contracts		1,468
Net assets	$	2,482,117

See accompanying notes

14

American Beacon Funds^SM

Statement of Assets and Liabilities

April 30, 2016 (Unaudited) (in thousands except share and per share amounts)

Shares outstanding at no par value (unlimited shares authorized):
Institutioanl Class		62,066,605
Y Class		49,973,944
Investor Class		20,018,575
Advisor Class		1,472,212
A Class		836,597
C Class		199,476
AMR Class		5,011,384
Net assets (not in thousands):
Institutional Class	$	1,090,786,563
Y Class	$	909,825,458
Investor Class	$	348,923,683
Advisor ClassF	$	26,221,053
A Class	$	14,571,142
C Class	$	3,387,377
AMR Class	$	88,401,320
Net asset value, offering and redemption price per share:
Institutional Class	$	17.57
Y Class	$	18.21
Investor Class	$	17.43
Advisor ClassF	$	17.81
A Class	$	17.42
A Class (offering price)	$	18.48
C Class	$	16.98
AMR Class	$	17.64
A       Cost of investments in unaffiliated securities	$	2,279,976
B       Cost of investments in affiliated securities	$	202,023
C       Cost of foreign currency	$	183
D       Fair value of securities on loan	$	93,680
E       Cost of foreign currency deposits with brokers	$	12,961
F       Includes Retirement Class (Note 1).

See accompanying notes

15

American Beacon Funds^SM

Statements of Operations

For the Six Months ended April 30, 2016 (Unaudited) (in thousands)

	International Equity Fund
Investment income:
Dividend income from unaffiliated securities (net of foreign taxes) A	$	31,998
Dividend income from affiliated securities		41
Interest income		2
Income derived from securities lending		410
Total investment income		32,448
Expenses:
Management and investment advisory fees (Note 2)		3,110
Administrative service fees (Note 2):
Institutional Class		1,479
Y Class		1,011
Investor Class		486
Advisor ClassB		37
A Class		17
C Class		5
AMR Class		22
Transfer agent fees:
Institutional Class		163
Y Class		27
Investor Class		8
Advisor Class		1
A Class		1
AMR Class		5
Custody and fund accounting fees		291
Professional fees		61
Registration fees and expenses		68
Service fees (Note 2):
Y Class		337
Investor Class		606
Advisor ClassB		30
A Class		8
C Class		3
Distribution fees (Note 2):
Advisor ClassB		32
A Class		14
C Class		17
Prospectus and shareholder report expenses		123
Trustee fees		71
Other expenses		124
Total expenses		8,157
Net investment income		24,291
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments		(21,123	)
Commission recapture (Note 3)		44
Foreign currency transactions		(26,615	)
Futures contracts		(778	)
Change in net unrealized appreciation or (depreciation) of:
Investments		(110,016	)
Foreign currency transactions		87,832
Futures contracts		(3,339	)
Net (loss) from investments		(73,991	)
Net (decrease) in net assets resulting from operations	$	(49,700	)
A       Foreign taxes		2,826
B       Includes Retirement class (Note 1).

See accompanying notes

16

American Beacon Funds^SM

Statement of Changes in Net Assets (in thousands)

	International Equity Fund
	Six Months Ended April 30, 2016			Year Ended October 31, 2015
	(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	24,291		$	46,026
Net realized gain (loss) from investments, commission recapture, foreign currency transactions, and futures contracts		(48,469	)		104,763
Change in net unrealized appreciation (depreciation) from investments, foreign currency transactions, and futures contracts		(25,522	)		(173,959	)
Net (decrease) in net assets resulting from operations		(49,700	)		(23,170	)
Distributions to Shareholders:
Net investment income:
Institutional Class		(15,273	)		(25,911	)
Y Class		(8,452	)		(14,300	)
Investor Class		(3,881	)		(8,329	)
Advisor ClassA		(277	)		(183	)
Retirement Class		—			(23	)
A Class		(125	)		(202	)
C Class		(21	)		(56	)
AMR Class		(1,414	)		(12,918	)
Net realized gain from investments:
Institutional Class		(8,721	)		—
Y Class		(4,762	)		—
Investor Class		(2,929	)		—
Advisor Class A		(188	)		—
A Class		(91	)		—
C Class		(33	)		—
AMR Class		(756	)		—
Net distributions to shareholders		(46,944	)		(61,922	)
Capital Share Transactions:
Proceeds from sales of shares		635,224			614,047
Reinvestment of dividends and distributions		42,787			56,546
Cost of shares redeemed		(199,890	)		(779,610	)
Redemption fees		—			11
Net increase (decrease) in net assets from capital share transactions		478,121			(109,006	)
Net increase (decrease) in net assets		381,477			(194,098	)
Net Assets:
Beginning of period		2,100,640			2,294,738
End of Period *	$	2,482,117		$	2,100,640
*       Includes undistributed (or overdistribution of) net investment income	$	19,873		$	25,245

^A  Includes Retirement Class (Note 1).

See accompanying notes

17

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

1. Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”), is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, (the “Act”) as a diversified, open-end management investment company. As of April 30, 2016, the Trust consists of twenty-four active series, one of which is presented in this filing (the “Fund”): American Beacon International Equity Fund. The remaining twenty-three active series are reported in separate filings.

American Beacon Advisors, Inc. (the “Manager”) is a wholly-owned subsidiary of Astro AB Borrower, Inc., which is indirectly owned by investment funds affiliated with Kelso & Company, L.P. and Estancia Capital Management, LLC, and was organized in 1986 to provide business management, advisory, administrative and asset management consulting services to the Trust and other investors.

Class Disclosure

On September 21, 2015, the Board of Trustees (the “Board”) approved the liquidation of the AMR Class shares to be closed on or about May 31, 2016. The Board also approved the reclassification of the Retirement Class shares to the Advisor Class shares due to small asset size. The Retirement Class closed on January 15, 2016, and merged into the Advisor Class.

Each Fund has multiple classes of shares designed to meet the needs of different groups of investors; however, not all Funds offer all classes. The following table sets forth the differences among the classes:

Class:	Offered to:
Institutional Class	Investors making an initial investment of $250,000
Y Class	Investors making an initial investment of $100,000
Investor Class	General public and investors investing through an intermediary
Advisor Class	Investors investing through an intermediary
A Class	General public and investors investing through an intermediary with applicable sales charges, which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”)
C Class	General public and investors investing through an intermediary with applicable sales charges, which may include a CDSC
AMR Class	Investors in the tax-exempt retirement and benefit plans of the Manager, AMR Corporation, and its affiliates

Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include administration fees, service fees, and distribution fees and vary among the classes as described more fully in Note 2.

2. Transactions with Affiliates

Management Agreement

The Trust and the Manager are parties to a Management Agreement that obligates the Manager to provide or oversee the provision of all investment advisory, fund management, and securities lending services. Investment assets of the Fund are managed by multiple investment advisors which have entered into separate investment advisory agreements with the Manager and the Trust. As compensation for performing the duties required under the Management Agreement, the Manager receives from the Fund an annualized fee equal to 0.05% of the average daily net assets. The Fund pays the unaffiliated investment advisors hired by the

18

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Manager to direct investment activities of the Fund. Management fees paid during the six months ended April 30, 2016 were as follows (in thousands):

Fund	Management Fee Rate			Management Fee		Amounts paid to Investment Advisors		Amounts Paid to Manager
International Equity		0.30	%	$	3,061	$	2,533	$	528

As compensation for services provided by the Manager in connection with securities lending activities, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee up to 25% of the net monthly interest income (the gross interest income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee up to 25% of such loan fees. Currently the Manager receives 0.10% of such income from the lending Fund. This fee is included in income derived from securities lending and Management and investment advisory fees on the Statements of Operations. During the six months ended April 30, 2016 securities lending fees paid to the Manager on behalf of the International Equity Fund were $40,802.

Administration Agreement

The Manager and the Trust entered into an Administration Agreement which obligates the Manager to provide or oversee administrative services to the Fund. As compensation for performing the duties required under the Administration Agreement, the Manager receives an annualized fee of 0.30% of the average daily net assets of the Institutional, Y, Investor, Advisor, A, and C Classes of the Fund and 0.05% of the average daily net assets of the AMR Class of the Fund.

Distribution Plans

The Fund, except for the Advisor, A and C Classes of the Funds, has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees will be charged to the Fund for distribution purposes. However, the Plan authorizes the management and administrative service fees received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Fund does not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.

Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, A, and C Classes of the Fund. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y, Investor, Advisor, A, and C Classes. As compensation for performing the duties required under the Service Plans, the Manager receives 0.10% of the average daily net assets of the Y Class, 0.15% of the average daily net assets of the A and C Classes, 0.25% of the average daily net assets of the Advisor Class and up to 0.375% of the average daily net assets of the Investor Class of the Fund.

Investment in Affiliated Funds

The Fund may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). Cash collateral received by the Fund in connection with securities lending may also be invested in the USG Select Fund. The Fund and the USG Select Fund have the same investment advisor and therefore,

19

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives annualized management and administrative fees of 0.10% of the average daily net assets of the USG Select Fund. During the six months ended April 30, 2016, the Manager earned fees from the USG Select Fund as follows:

Fund	Direct Investments in USG Select Fund		Securities Lending Collateral Invested in USG Select Fund		Total
International Equity	$	16,328	$	17,345	$	33,673

Interfund Lending Program

Pursuant to an exemptive order issued by the Securities and Exchange Commission (the “SEC”), the Fund, along with other registered investment companies having management contracts with the Manager, may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating Fund. The Fund did not utilize the credit facility during the period.

Expense Reimbursement Plan

The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of fees waived or expenses reimbursed for a period of up to three years. However, reimbursement will occur only if the Class’ average net assets have grown or expenses have declined sufficiently to allow reimbursement without causing its expense ratio to exceed the previously agreed upon contractual expense limit. The carryover of excess expenses potentially reimbursable to the Manager are as follows:

Fund	Recovered Expenses		Excess Expense Carryover		Expiration of Reimbursed Expenses
International Equity		—	$	88,916	2016
International Equity		—		151,730	2017

Sales Commissions

The Funds’ distributor, Foreside Fund Services, LLC (“Foreside”), may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. For the six months ended April 30, 2016, Foreside collected $876 for International Equity Fund from the sale of Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the six months ended April 30, 2016, there were no CDSC fees collected for Class A Shares.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the six months ended April 30, 2016, $451 in CDSC fees were collected for the International Equity Fund.

3. Security Valuation and Fair Value Measurements

Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally 4 p.m. ET, each day that the Exchange is open for business. Equity securities, including exchange-traded funds (“ETFs”), for which market quotations are available are valued at the last sale price or official closing price

20

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

(closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade.

Investments in open-end mutual funds are valued at the closing net asset value (“NAV”) per share of the mutual fund on the day of valuation.

Securities for which the market prices are not readily available or are not reflective of the fair value of the security, as determined by the Manager, will be priced at fair value following procedures approved by the Trust’s Board of Trustees (the “Board”).

Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, a Fund is required to deposit with its futures broker, an amount of cash or U.S. Government and Agency Obligations in accordance with the initial margin requirements of the broker or exchange. Futures contracts are marked to market daily and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by the Fund. Gains or losses are recognized, but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statement of Assets and Liabilities.

For valuation purposes, the last quoted prices of non-U.S. equity securities may be adjusted under the circumstances described below. If the Fund determines that developments between the close of a foreign market and the close of the Exchange will, in its judgment, materially affect the value of some or all of its portfolio securities, the Fund will adjust the previous closing prices to reflect what it believes to be the fair value of the securities as of the close of the Exchange. In deciding whether it is necessary to adjust closing prices to reflect fair value, the Fund reviews a variety of factors, including developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Funds’ pricing time of 4:00 p.m. Eastern Standard Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. These securities are fair valued using a pricing service and are categorized as Level 2 in the fair value hierarchy. The pricing service, using methods approved by the Board, considers the correlation of the trading patterns of the foreign security to intraday trading in the U.S. markets, based on indices of domestic securities and other appropriate indicators such as prices of relevant ADRs and futures contracts.

Valuation Inputs

Various inputs may be used to determine the fair value of the Funds’ investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1 -	Quoted prices in active markets for identical securities.
Level 2 -	Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. Level 2 securities are fixed-income securities that are valued using observable inputs as stated above.
Level 3 -	Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment.

21

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Level 1 and Level 2 trading assets and trading liabilities, at fair value

Common stocks and financial derivative instruments, such as futures contracts that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Valuation adjustments may be applied to certain securities that are solely traded on a foreign exchange to account for the market movement between the close of the foreign market and the close of the Exchange. These securities are valued using pricing service providers that consider the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments. Securities using these valuation adjustments are categorized as Level 2 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are also categorized as Level 2 of the fair value hierarchy.

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.

Over-the-counter (“OTC”) financial derivative instruments, such as foreign currency contracts, derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors. These contracts are normally valued on the basis of broker dealer quotations or pricing service providers. Depending on the product and the terms of the transaction, the fair value of the financial derivative contracts can be estimated by a pricing service provider using a series of techniques, including simulation pricing models. The pricing models use inputs that are observed from actively quoted markets such as issuer details, indices, spreads, interest rates, curves, dividends, and exchange rates. Financial derivatives that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2016, the Fund’s investments were classified as described below (in thousands):

International Equity Fund*	Level 1			Level 2			Level 3		Total
Foreign Common Stocks	$	116,367		$	2,168,558		$	—	$	2,284,925
Foreign Preferred Stocks		—			28,829			—		28,829
Short-Term Investments - Money Market Funds		135,730			—			—		135,730
Securities Lending Collateral Invested In Money Market Funds		98,444			—			—		98,444
Total Investments in Securities	$	350,541		$	2,197,387		$	—	$	2,547,928
Financial Derivative Instruments - Assets	Level 1			Level 2			Level 3		Total
Futures Contracts	$	1,729		$	—		$	—	$	1,729
Forward Currency Contracts		—			7,198			—		7,198
Total Financial Derivative Instruments - Assets	$	1,729		$	7,198		$	—	$	8,927
Financial Derivative Instruments - Liabilities	Level 1			Level 2			Level 3		Total
Futures Contracts	$	(261	)	$	—		$	—	$	(261	)
Forward Currency Contracts		—			(2,610	)		—		(2,610	)
Total Financial Derivative Instruments - Liabilities	$	(261	)	$	(2,610	)	$	—	$	(2,871	)

* Refer to the Schedule of Investments for country information.

U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) also requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of each Fund’s assets and liabilities. During the period ended April 30, 2016, there were no transfers between levels.

22

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Security Transactions and Investment Income

Security transactions are recorded on the trade date of the security purchase or sale. The Fund may purchase securities with delivery or payment to occur at a later date. At the time the Funds enter into a commitment to purchase a security, the transaction is recorded, and the value of the security is reflected in the NAV. The value of the security may vary with market fluctuations.

Dividend income, net of foreign taxes, is recorded on the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Fund. Interest income is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. For financial and tax reporting purposes, realized gains and losses are determined on the basis of specific lot identification.

Currency Translation

All assets and liabilities initially expressed in foreign currency values are converted into U.S. dollar values at the mean of the bid and ask prices of such currencies against U.S. dollars as last quoted by a recognized dealer. Income, expenses, and purchases and sales of investments are translated into U.S. dollars at the rate of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in fair values of securities held and is reported with all other foreign currency gains and losses in the Funds’ Statement of Operations.

Dividends to Shareholders

Dividends from net investment income of the Fund normally will be declared and paid at least annually. Distributions, if any, of net realized capital gains are generally paid at least annually and recorded on the ex-dividend date.

Commission Recapture

The Fund has established brokerage commission recapture arrangements with certain brokers or dealers. If the Fund’s investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. This amount is reported with the net realized gain in the Fund’s Statements of Operations.

Allocation of Income, Expenses, Gains, and Losses

Income, expenses (other than those attributable to a specific class), gains, and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.

Redemption Fees

The Fund imposes a 2% redemption fee on the AMR class for shares held for less than 90 days. The fee is deducted from the redemption proceeds and is intended to offset the trading costs, market impact, and

23

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

other costs associated with short-term trading activity in the Fund. The “first-in, first-out” method is used to determine the holding period. The fee is allocated to all classes of the Funds pro-rata based on their respective net assets.

Other

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.

4. Securities and Other Investments

American Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”), and Non-Voting Depositary Receipts (“NVDRs”)

ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. GDRs are in bearer form and traded in both the U.S. and European securities markets. NVDRs represent financial interests in an issuer but the holder is not entitled to any voting rights. Depositary receipts may not be denominated in the same currency as the securities into which they may be converted. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities. There is generally less publicly available information about foreign companies and there may be less governmental regulation and supervision of foreign stock exchanges, brokers and listed companies. In addition, such companies may use different accounting and financial standards (and certain currencies may become unavailable for transfer from a foreign currency), resulting in the Fund’s possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. In addition, the Fund may invest in unsponsored depositary receipts, the issuers of which are not obligated to disclose material information about the underlying securities to investors in the United States. Ownership of unsponsored depositary receipts may not entitle the Fund to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.

Chess Depository Instruments (“CDIs”)

CDIs are financial products in which a unit of beneficial ownership is the underlying financial interests of the issuer. The financial interests of the issuer can be foreign equities, debt or other securities through one or more nominee companies, known as depository nominees. These underlying financial interests are quoted on the Australian Stock Exchange (“ASX”) market. With the exception of voting arrangements and some corporate actions of foreign issuers domiciled in certain jurisdictions, the CDI holder has the same rights as holders of financial interests of the issuer that are legally registered in the holder’s name. All of the economic benefits such as dividends, bonus issues, rights issues, interest payments, and maturity payments or similar corporate actions flow through to the CDI holder as if you were the legal owner of the corresponding financial product. The difference between holding CDIs and holding the foreign shares of the issuer is that the holder has beneficial ownership of the equivalent number of foreign shares of the issuer instead of legal title. Legal title to the foreign shares of the issuer is held by a nominee company on behalf of CDI holders.

Restricted Securities

The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities may be sold privately, but are required to be registered or exempted from such registration before being sold to the public. Private placement securities are generally considered to be restricted except for

24

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933. Reg S securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. Disposal of restricted securities may involve time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Restricted securities outstanding at the six months ended April 30, 2016 are disclosed in the Notes to the Schedules of Investments.

Real Estate Investment Trusts

The Fund may own shares of real estate investment trusts (“REITs”) which report information on the source of their distributions annually. The Funds re-characterize distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-characterization will be estimated based on available information which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year. These re-characterizations are not recorded for financial statement purposes, but as an adjustment to the calculation of taxable income.

Master Agreements

The Fund is a party to International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) with counterparties that govern transactions in over-the-counter derivative and foreign exchange contracts entered into by the Fund and those counterparties. The ISDA Master Agreements contain provisions for general obligations, representations, agreements, collateral and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to terminate early could be material to the financial statements. Since different types of forward and OTC financial derivative transactions have different mechanics and are sometimes traded out of different legal entities of particular counterparty organization, each type of transaction may be covered by a different Master Agreement, resulting in the need for multiple agreements with a single counterparty. As the Master Agreements are specific to unique operations of different asset types, they allow a Fund to net its total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single agreement with a counterparty.

Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern the considerations and factors surrounding the settlement of certain forward settling transactions, such as delayed delivery or sale-buyback financing transactions by and between a Fund and select counterparties. The Master Forward Agreements maintain provisions for, among other things, initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral.

Other Investment Company Securities and Other Exchange Traded Products

The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, unit investment trusts, and other investment companies of the Trust. The Fund may invest in investment company securities advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Fund becomes a shareholder of that investment company. As a result, the Fund’s shareholders indirectly will bear a Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Fund’s shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses

25

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

5. Financial Derivative Instruments

Forward Foreign Currency Contracts

The Fund may enter into forward foreign currency contracts to hedge the exchange rate risk on investment transactions or to hedge the value of the Fund’s securities denominated in foreign currencies. Forward foreign currency contracts are valued at the forward exchange rate prevailing on the day of valuation. The Fund bears the market risk that arises from changes in foreign exchange rates, and accordingly, the unrealized gain (loss) on these contracts is reflected in the accompanying financial statements. The Fund also bears the credit risk if the counterparty fails to perform under the contract.

For the six months ended April 30, 2016, the Fund entered into foreign currency exchange contracts primarily for hedging.

The Fund’s foreign currency contract notional dollar values outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following tables illustrate the quarterly volume of foreign currency contracts. For the purpose of this disclosure, volume is measured by the amounts bought and sold in USD (in thousands).

	Average Forward Foreign Currency Notional Amount Outstanding at April 30, 2016
Fund	Purchased Contracts		Sold Contracts
International Equity	$	132,089	$	36,312

Futures Contracts

Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Funds may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.

Upon entering into a futures contract, the Fund is required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. A Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as Cash deposited with broker on the Statements of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.

For the six months ended April 30, 2016, the Fund entered into future contracts primarily for exposing cash to markets.

26

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

The Fund’s average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.

Average Futures Contracts Outstanding
Fund	Six Months ended April 30, 2016
International Equity		1,260

The following is a summary of the Fund’s derivative financial instruments categorized by risk exposure (in thousands) ^(1) (2):

Fair Values of financial derivative instruments on the Statement of Assets and Liabilities not accounted for as hedging instruments as of April 30, 2016:

Assets	Derivative	International Equity Fund
Unrealized appreciation of foreign currency contracts	Foreign Exchange Contract	$	7,198
Receivable for variation margin from open futures contracts	Equity Contract		1,468
		$	8,666
Liabilities	Derivative	International Equity Fund
Unrealized depreciation of foreign currency contracts	Foreign Exchange Contract	$	(2,610	)
Payable for variation margin from open futures contracts	Equity Contract		—
		$	(2,610	)

The effect of financial derivative instruments not accounted for as hedging instruments on the Statement of Operations for the six months ended April 30, 2016:

Statements of Operations:	Derivative	International Equity Fund
Net realized gain (loss) from foreign currency contracts	Foreign Exchange Contract	$	(71	)
Net realized gain (loss) from futures contracts	Equity Contract		(775	)
		$	(846	)
Statements of Operations:	Derivative	International Equity
Change in net unrealized appreciation or (depreciation) of foreign currency contracts	Foreign Exchange Contract	$	4,593
Change in net unrealized appreciation or (depreciation) of futures contracts	Equity Contract		(3,339	)
		$	1,254

(1) See Note 3 in the Notes to Financial Statements for additional information.

(2) Includes cumulative appreciation or (depreciation) of futures contracts as reported in the Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

6. Principal Risks

In the normal course of business the Fund trades financial instruments and enters into financial transactions where risk of potential loss exists. Security values fluctuate (market risk) and may decline due to factors affecting securities markets in general, particular industries represented in the securities markets or conditions specifically related to a particular company. Failure of the other party to a transaction to perform (credit and counterparty risk), for example by not making principal and interest payments when due, reduces the value of the issuer’s debt and could reduce the Fund’s income. Similar to credit risk, the Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which the Fund has unsettled or open transactions will fail to make required payments or otherwise comply with the terms of the

27

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

instrument, transaction or contract. The potential loss could exceed the value of the financial assets recorded in the financial statements. Some of the Fund’s investments may be illiquid and the Fund may not be able to vary the portfolio investments in response to changes in economic and other conditions. If a Fund is required to liquidate all or a portion of its investments quickly, the Fund may realize significantly less than the value at which it previously recorded those investments.

Market Risks

The Fund’s investments in financial derivatives and other financial instruments expose the Fund to various risks such as, but not limited to, interest rate, foreign currency and equity risks.

Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by the Fund is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is useful primarily as a measure of the sensitivity of a fixed income’s market price to interest rate (i.e. yield) movements.

If a Fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in financial derivatives that provide exposure to foreign currencies, they will be subject to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, the Fund’s investments in foreign currency denominated securities may reduce the returns of the Fund.

The fair values of equities, such as common stocks and preferred securities or equity related investments such as futures, may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.

Counterparty Credit Risk

A derivative contract may suffer a mark to market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

With exchange traded futures, there is less counterparty credit risk to the Fund since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, the credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally, credit risk exists in exchange traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of

28

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.

Cash collateral that has been pledged to cover obligations of the Fund and cash collateral received from the counterparty, if any, is reported separately on the Statements of Assets and Liabilities as Deposits with brokers for futures contracts and Payable to brokers for futures contracts, respectively. Non-cash collateral pledged by the Funds, if any, is noted in the Schedules of Investments. Generally, the amount of collateral due from or to a party is determined at the close of business of the Fund and additional required collateral is delivered to/pledged by the Funds on the next business day. To the extent amounts due to the Funds from its counterparties are not fully collateralized, contractually or otherwise, the Funds bear the risk of loss from counterparty non-performance. The Funds’ investment advisors attempt to mitigate counterparty risk by only entering into agreements with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

Offsetting Assets and Liabilities

The Fund is party to enforceable master netting agreements between brokers and counterparties, such as International Swaps and Derivatives Association (“ISDA”) agreements which provide for the right to offset under certain circumstances. The Funds employ multiple investment advisors and counterparties and have elected not to offset qualifying financial and derivative instruments on the Statements of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, April 30, 2016 (in thousands).

International Equity Fund

Offsetting of Financial Assets and Derivative Assets as of April 30, 2016:

Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Assets and Liabilities		Net Amounts of Assets Presented in the Statements of Assets and Liabilities
Futures Contracts2	$	1,729	$	—	$	1,729
Foreign Currency Contracts		7,198		—		7,198
Securities Lending1		93,680		—		93,680
	$	102,607	$	—	$	102,607

Offsetting of Financial Liabilities and Derivative Liabilities as of April 30, 2016:

Description	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Statements of Assets and Liabilities		Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities
Futures Contracts2	$	(261	)	$	—	$	(261	)
Foreign Currency Contracts		(2,610	)		—		(2,610	)
	$	(2,871	)	$	—	$	(2,871	)

29

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Financial Assets, Derivative Assets, and Collateral Pledged by Counterparty as of April 30, 2016:

	Net amount Presented in the Statements of Assets and Liabilities			Gross Amounts Not Offset in the Statements of Assets and Liabilities
Counterparty				Financial Instruments		Cash Collateral Received1			Net Amount
Bank of America, N.A.	$	98		$	—	$	—		$	98
Bank of Montreal		176			—		—			176
Barclays Bank PLC Wholesale		(236	)		—		—			(236	)
Barclays Capital		62,438			—		(62,438	)		—
BNP Paribas SA		18			—		—			18
CitiBank, N.A		2,105			—		—			2,105
Credit Suisse London Branch		5			—		—			5
Goldman Sachs Bank USA		1,477			—		—			1,477
Goldman Sachs & Co.2		13,281			—		(13,281	)		—
HSBC Bank USA		(45	)		—		—			(45	)
JPMorgan Chase Bank N.A.		230			—		—			230
Morgan Stanley Bank, N.A.		42			—		—			42
Morgan Stanley & Co. LLC		12,244			—		(12,244	)		—
Royal Bank of Canada		2			—		—			2
Societe Generale		2,149			—		—			2,149
Standard Chartered Bank		(95	)		—		—			(95	)
Toronto Dominion Bank		52			—		—			52
UBS AG		(31	)		—		—			(31	)
UBS Securities LLC		5,717			—		(5,717	)		—
Westpac Banking Corporation		109			—		—			109
	$	99,736		$	—	$	(93,680	)	$	6,056

¹  Excess of collateral received from the individual counterparty is not shown for financial reporting purposes. Collateral with a value of $98,444 has been received in connection with securities lending transactions.

²  The securities represented herein are not subject to Master Netting Agreement. As such, this is disclosured for informational purposes only.

7. Federal Income and Excise Taxes

It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distribution of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, the Fund is treaded as a single entity for the purpose of determining such qualification.

The Fund did not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2015 remains subject to examination by the Internal Revenue Service. If applicable, the Funds recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statement of Operations.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation or depreciation, as applicable, as the income is earned or capital gains are recorded.

Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

30

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

The tax character of distributions paid were as follows (in thousands):

	International Equity Fund
	Six months ended April 30, 2016		Year Ended October 31, 2015
	(unaudited)
Distributions paid from:
Ordinary income*
Institutional Class	$	15,273	$	25,911
Y Class		8,452		14,300
Investor Class		3,881		8,329
Advisor Class		227		183
Retirement Class		—		23
A Class		125		202
C Class		21		56
AMR Class		1,414		12,918
Long-Term Capital Gain
Institutional Class		8,721		—
Y Class		4,762		—
Investor Class		2,929		—
Advisor Class		209		—
Retirement Class		—		—
A Class		91		—
C Class		33		—
AMR Class		756		—
Total distributions paid	$	46,988	$	61,922

* For tax purposes, short-term capital gains are considered ordinary income distributions.

As of April 30, 2016, the components of distributable earnings or (deficits) on a tax basis were as follows (in thousands):

	International Equity Fund
Cost basis of investments for federal income tax purposes	$	2,501,076
Unrealized appreciation		244,957
Unrealized depreciation		(198,105	)
Net unrealized appreciation (depreciation)		46,852
Undistributed ordinary income		25,534
Undistributed long-term capital gains		—
Accumulated capital and other losses		(45,925	)
Other temporary differences		3,216
Distributable earnings or (deficits)	$	29,677

Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The temporary differences between financial reporting and tax-basis reporting of unrealized appreciation or (depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gain or (loss) on certain derivative instruments, the realization for tax purposes of unrealized gain or (loss) on investments in passive foreign investment companies, and Section 732 basis adjustments.

Due to inherent differences in the recognition of income, expenses and realized gains or (losses) under U.S. GAAP and federal income tax regulations, permanent differences between book and tax reporting have been identified and appropriately reclassified on the Statement of Assets and Liabilities. Accordingly, the following amounts represent current year permanent differences derived from foreign currency, gains/(losses)

31

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

from sales of investments in passive foreign investment companies and Section 732 basis adjustments that have been reclassified as of April 30, 2016 (in thousands):

	International Equity Fund
Paid-in-capital	$	60
Undistributed net investment income		(220	)
Accumulated net realized gain (loss)		160
Unrealized appreciation (depreciation) of investments, futures contracts and foreign currency		—

Under the Regulated Investment Company Modernization Act of 2010 (the “RIC MOD”), net capital losses recognized by the Funds in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses.

For the six months ended April 30, 2016, the International Equity Fund has $17,808 and $27,265 long-term capital loss carryforwards (in thousands).

8. Investment Transactions

The aggregate cost of purchases and proceeds from sales of investments, other than short-term obligations, for the six months ended April 30, 2016 were (in thousands):

	International Equity Fund
Purchases	$	590,606
Sales and maturities		187,732

A summary of the International Equity Fund’s transactions in the USG Select Fund for the six months ended April 30, 2016 is set forth below (in thousands):

Type of Transaction	October 31, 2015 Shares/Fair Value		Purchases		Sales		April 30, 2016 Shares/Fair Value		Dividend Income
Direct	$	10,000	$	295,066	$	169,336	$	135,730	$	41
Securities Lending		11,032		346,085		290,824		66,293		N/A

9. Securities Lending

The International Equity Fund may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked to market daily. Daily mark to market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark to market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.

To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the “Agent”) in money market mutual funds, and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Fund’s Schedule of Investments and the collateral is shown on the Statements of Assets and Liabilities as a payable.

Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral,

32

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retained 80%, 10% and 10%, respectively, of the income generated from securities lending.

While securities are on loan, the Fund continues to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Fund would be subject to on the dividend.

Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.

At April 30, 2016, the value of outstanding securities on loan and the value of collateral was as follows (in thousands):

Fair Value of Securities on Loan		Non-Cash Collateral		Cash Collateral Posted by Borrower
$	93,680	$	—	$	98,444

Cash collateral is listed in the Fund’s Schedule of Investments and is shown on Statement of Assets and Liabilities. Income earned on these investments is included in Income derived from securities lending in the Statement of Operations.

Non-cash collateral received by the Funds may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund’s Schedule of Investments or Statement of Assets and Liabilities.

10. Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Fund (dollars and shares in thousands):

For the Six Months ended April 30, 2016

	Institutional Class						Y Class						Investor Class						Advisor Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		10,880		$	185,916			22,228		$	370,684			3,647		$	61,768			481		$	8,143
Reinvestment of dividends		1,170			20,594			685			12,499			389			6,792			27			487
Shares redeemed		(5,194	)		(90,159	)		(3,160	)		(56,082	)		(2,447	)		(41,693	)		(366	)		(6,297	)
Net increase in shares outstanding		6,856		$	116,351			19,753		$	327,101			1,589		$	26,867			142		$	2,333

33

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

	A Class						C Class						AMR Class
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		334		$	5,519			17		$	290			171		$	2,904
Reinvestment of dividends		11			195			3			51			123			2,169
Shares redeemed		(86	)		(1,484	)		(36	)		(595	)		(205	)		(3,580	)
Net increase (decrease) in shares outstanding		259		$	4,230			(16	)	$	(254	)		89		$	1,493

For the Year Ended October 31, 2015

	Institutional Class						Y Class						Investor Class						Advisor Class
International Equity Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		14,554		$	277,407			7,834		$	156,417			5,498		$	103,983			998		$	19,928
Redemption fees		—			5			—			2			—			2			—			—
Reinvestment of dividends		1,147			21,401			699			13,514			448			8,294			10			183
Shares redeemed		(9,539	)		(185,188	)		(4,577	)		(91,292	)		(5,559	)		(105,616	)		(191	)		(3,717	)
Net increase in shares outstanding		6,162		$	113,625			3,956		$	78,641			387		$	6,663			817		$	16,394

	Retirement Class						A Class						C Class						AMR Class
International Equity Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		85		$	1,757			347		$	6,623			102		$	1,903			2,403		$	46,029
Redemption fees		—			—			—			—			—			—			—			2
Reinvestment of dividends		1			23			9			175			2			38			692			12,918
Shares redeemed		(20	)		(405	)		(221	)		(4,163	)		(49	)		(913	)		(20,544	)		(388,316	)
Net increase (decrease) in shares outstanding		66		$	1,375			135		$	2,635			55		$	1,028			(17,449	)	$	(329,367	)

11. Subsequent Events

On September 21, 2015, the Manager announced the Board’s approval of a plan to liquidate and terminate the AMR Class of the Fund on or about May 31, 2016.

34

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Six Months			Year Ended October 31,
	Ended April 30, 2016			2015			2014			2013			2012D			2011
	(unaudited)
Net asset value, beginning of period	$	18.79		$	19.51		$	20.07		$	16.05		$	15.27		$	16.67
Income from investment operations:
Net investment income		0.17			0.35			0.54			0.36			0.41			0.46
Net gains (losses) on investments (both realized and unrealized)		(0.96	)		(0.55	)		(0.77	)		4.07			0.92			(1.41	)
Total income (loss) from investment operations		(0.79	)		(0.20	)		(0.23	)		4.43			1.33			(0.95	)
Less distributions:
Dividends from net investment income		(0.27	)		(0.52	)		(0.33	)		(0.41	)		(0.55	)		(0.45	)
Distributions from net realized gains		(0.16	)		—			—			—			—			—
Total distributions		(0.43	)		(0.52	)		(0.33	)		(0.41	)		(0.55	)		(0.45	)
Redemption fees added to beneficial interests		—			—			—			0.00	E		0.00	E		—
Net asset value, end of period	$	17.57		$	18.79		$	19.51		$	20.07		$	16.05		$	15.27
Total return A		(4.20	)%B		(0.99	)%		(1.18	)%		28.14	%		9.25	%		(5.89	)%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	1,090,787		$	1,037,149		$	956,960		$	870,729		$	608,256		$	512,093
Ratios to average net assets:
Expenses, before reimbursements		0.70	%C		0.70	%		0.72	%		0.72	%		0.72	%		0.70	%
Expenses, net of reimbursements		0.70	%C		0.69	%		0.70	%		0.71	%		0.72	%		0.70	%
Net investment income, before expense reimbursements		2.25	%C		1.93	%		2.74	%		2.16	%		2.85	%		2.90	%
Net investment income, net of reimbursements		2.25	%C		1.94	%		2.76	%		2.17	%		2.85	%		2.90	%
Portfolio turnover rate		9	%B		33	%		23	%		27	%		60	%		33	%
	Y Class
	Six Months			Year Ended October 31,
	Ended April 30, 2016			2015			2014			2013			2012D			2011
	(unaudited)
Net asset value, beginning of period	$	19.46		$	20.21		$	20.81		$	16.65		$	15.82		$	17.17
Income from investment operations:
Net investment income		0.17			0.35			0.50			0.62			0.41			0.49
Net gains (losses) on investments (both realized and unrealized)		(0.98	)		(0.57	)		(0.77	)		3.97			0.95			(1.50	)
Total income (loss) from investment operations		(0.81	)		(0.22	)		(0.27	)		4.59			1.36			(1.01	)
Less distributions:
Dividends from net investment income		(0.28	)		(0.53	)		(0.33	)		(0.43	)		(0.53	)		(0.34	)
Distributions from net realized gains		(0.16	)		—			—			—			—			—
Total distributions		(0.44	)		(0.53	)		(0.33	)		(0.43	)		(0.53	)		(0.34	)
Redemption fees added to beneficial interests		—			—			—			0.00	E		0.00	E		—
Net asset value, end of period	$	18.21		$	19.46		$	20.21		$	20.81		$	16.65		$	15.82
Total return A		(4.19	)%B		(1.06	)%		(1.31	)%		28.04	%		9.15	%		(6.00	)%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	909,826		$	587,950		$	530,837		$	441,946		$	1,512		$	720
Ratios to average net assets:
Expenses, before reimbursements		0.77	%C		0.77	%		0.82	%		0.85	%		0.80	%		0.81	%
Expenses, net of reimbursements		0.77	%C		0.77	%		0.82	%		0.85	%		0.80	%		0.81	%
Net investment income, before expense reimbursements		2.57	%C		1.87	%		2.62	%		2.55	%		2.74	%		3.00	%
Net investment income, net of reimbursements		2.57	%C		1.87	%		2.62	%		2.55	%		2.74	%		3.00	%
Portfolio turnover rate		9	%B		33	%		23	%		27	%		60	%		33	%

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B  Not annualized.

^C  Annualized.

^D The Boston Company Asset Management, LLC was terminated as an investment advisor to the International equity Fund on December 31, 2011.

^E Amount represents less than $0.01 per share.

35

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Six Months			Year Ended October 31,
	Ended April 30, 2016			2015			2014			2013			2012D			2011
	(unaudited)
Net asset value, beginning of period	$	18.60		$	19.32		$	19.86		$	15.88		$	15.11		$	16.42
Income from investment operations:
Net investment income		0.15			0.31			0.46			0.25			0.38			0.44
Net gains (losses) on investments (both realized and unrealized)		(0.95	)		(0.57	)		(0.76	)		4.09			0.87			(1.44	)
Total income (loss) from investment operations		(0.80	)		(0.26	)		(0.30	)		4.34			1.25			(1.00	)
Less distributions:
Dividends from net investment income		(0.21	)		(0.46	)		(0.24	)		(0.36	)		(0.48	)		(0.31	)
Distributions from net realized gains		(0.16	)		—			—			—			—			—
Total distributions		(0.37	)		(0.46	)		(0.24	)		(0.36	)		(0.48	)		(0.31	)
Redemption fees added to beneficial interests		—			—			—			0.00	E		0.00	E		—
Net asset value, end of period	$	17.43		$	18.60		$	19.32		$	19.86		$	15.88		$	15.11
Total return A		(4.34	)%B		(1.35	)%		(1.54	)%		27.81	%		8.77	%		(6.21	)%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	348,924		$	342,720		$	348,542		$	337,424		$	453,142		$	386,560
Ratios to average net assets:
Expenses, before reimbursements		1.04	%C		1.03	%		1.05	%		1.04	%		1.09	%		1.07	%
Expenses, net of reimbursements		1.04	%C		1.03	%		1.05	%		1.04	%		1.09	%		1.07	%
Net investment income, before expense reimbursements		1.89	%C		1.60	%		2.36	%		1.67	%		2.50	%		2.55	%
Net investment income, net of reimbursements		1.89	%C		1.60	%		2.36	%		1.67	%		2.50	%		2.55	%
Portfolio turnover rate		9	%B		33	%		23	%		27	%		60	%		33	%
	Advisor ClassF
	Six Months			Year Ended October 31,
	Ended April 30, 2016			2015			2014			2013			2012D			2011
	(unaudited)
Net asset value, beginning of period	$	19.01		$	19.76		$	20.36		$	16.36		$	15.52		$	16.74
Income from investment operations:
Net investment income (loss)		0.17			0.38			0.44			(0.41	)		0.09			0.07
Net gains (losses) on investments (both realized and unrealized)		(1.00	)		(0.68	)		(0.77	)		4.83			1.18			(1.12	)
Total income (loss) from investment operations		(0.83	)		(0.30	)		(0.33	)		4.42			1.27			(1.05	)
Less distributions:
Dividends from net investment income		(0.21	)		(0.45	)		(0.27	)		(0.42	)		(0.43	)		(0.17	)
Distributions from net realized gains		(0.16	)		—			—			—			—			—
Total distributions		(0.37	)		(0.45	)		(0.27	)		(0.42	)		(0.43	)		(0.17	)
Redemption fees added to beneficial interests		—			—			—			0.00	E		0.00	E		—
Net asset value, end of period	$	17.81		$	19.01		$	19.76		$	20.36		$	16.36		$	15.52
Total return A		(4.38	)%B		(1.51	)%		(1.64	)%		27.51	%		8.59	%		(6.35	)%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	26,221		$	22,912		$	7,677		$	5,232		$	1,397		$	1,015
Ratios to average net assets:
Expenses, before reimbursements		1.17	%C		1.16	%		1.19	%		1.20	%		1.31	%		1.24	%
Expenses, net of reimbursements		1.17	%C		1.16	%		1.19	%		1.20	%		1.31	%		1.24	%
Net investment income, before expense reimbursements		1.87	%C		1.55	%		2.21	%		1.39	%		2.18	%		2.52	%
Net investment income, net of reimbursements		1.87	%C		1.55	%		2.21	%		1.39	%		2.18	%		2.52	%
Portfolio turnover rate		9	%B		33	%		23	%		27	%		60	%		33	%

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B  Not annualized.

^C  Annualized.

^D The Boston Company Asset Management, LLC was terminated as an investment advisor to the International equity Fund on December 31, 2011.

^E Amount represents less than $0.01 per share.

^F On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class.

36

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Six Months			Year Ended October 31,
	Ended April 30, 2016			2015			2014			2013			2012D			2011
	(unaudited)
Net asset value, beginning of period	$	18.59		$	19.32		$	19.92		$	16.02		$	15.33		$	16.40
Income from investment operations:
Net investment income		0.18			0.31			0.46			0.43			0.48			0.12
Net gains (losses) on investments (both realized and unrealized)		(0.97	)		(0.59	)		(0.78	)		3.89			0.76			(1.14	)
Total income (loss) from investment operations		(0.79	)		(0.28	)		(0.32	)		4.32			1.24			(1.02	)
Less distributions:
Dividends from net investment income		(0.22	)		(0.45	)		(0.28	)		(0.42	)		(0.55	)		(0.05	)
Distributions from net realized gains		(0.16	)		—			—			—			—			—
Total distributions		(0.38	)		(0.45	)		(0.28	)		(0.42	)		(0.55	)		(0.05	)
Redemption fees added to beneficial interests		—			—			—			0.00	E		0.00	E		—
Net asset value, end of period	$	17.42		$	18.59		$	19.32		$	19.92		$	16.02		$	15.33
Total return A		(4.30	)%B		(1.42	)%		(1.65	)%		27.51	%		8.62	%		(6.26	)%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	14,571		$	10,748		$	8,540		$	4,113		$	1,255		$	461
Ratios to average net assets:
Expenses, before reimbursements		1.08	%C		1.08	%		1.15	%		1.21	%		1.29	%		2.24	%
Expenses, net of reimbursements		1.08	%C		1.08	%		1.15	%		1.25	%		1.26	%		1.22	%
Net investment income, before expense reimbursements		2.08	%C		1.55	%		2.31	%		1.73	%		2.03	%		1.03	%
Net investment income, net of reimbursements		2.08	%C		1.55	%		2.31	%		1.69	%		2.07	%		2.05	%
Portfolio turnover rate		9	%B		33	%		23	%		27	%		60	%		33	%
	C Class
	Six Months			Year Ended October 31,
	Ended April 30, 2016			2015			2014			2013			2012D			2011
	(unaudited)
Net asset value, beginning of period	$	18.09		$	18.83		$	19.47		$	15.70		$	15.21		$	16.39
Income from investment operations:
Net investment income		0.08			0.16			0.30			0.52			0.40			0.07
Net gains (losses) on investments (both realized and unrealized)		(0.93	)		(0.56	)		(0.75	)		3.59			0.71			(1.25	)
Total income (loss) from investment operations		(0.85	)		(0.40	)		(0.45	)		4.11			1.11			(1.18	)
Less distributions:
Dividends from net investment income		(0.10	)		(0.34	)		(0.19	)		(0.34	)		(0.62	)		—
Distributions from net realized gains		(0.16	)		—			—			—			—			—
Total distributions		(0.26	)		(0.34	)		(0.19	)		(0.34	)		(0.62	)		—
Redemption fees added to beneficial interests		—			—			—			0.00	E		0.00	E		—
Net asset value, end of period	$	16.98		$	18.09		$	18.83		$	19.47		$	15.70		$	15.21
Total return A		(4.72	)%B		(2.12	)%		(2.36	)%		26.56	%		7.89	%		(7.20	)%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	3,387		$	3,899		$	3,029		$	1,220		$	115		$	76
Ratios to average net assets:
Expenses, before reimbursements		1.83	%C		1.82	%		1.90	%		1.95	%		2.12	%		7.39	%
Expenses, net of reimbursements		1.83	%C		1.83	%		1.90	%		1.99	%		1.98	%		1.95	%
Net investment income (loss), before expense reimbursements		1.01	%C		0.77	%		1.53	%		1.13	%		1.56	%		(4.32	)%
Net investment income, net of reimbursements		1.01	%C		0.77	%		1.53	%		1.09	%		1.70	%		1.11	%
Portfolio turnover rate		9	%B		33	%		23	%		27	%		60	%		33	%

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B  Not annualized.

^C  Annualized.

^D The Boston Company Asset Management, LLC was terminated as an investment advisor to the International equity Fund on December 31, 2011.

^E Amount represents less than $0.01 per share.

37

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	AMR Class
	Six Months			Year Ended October 31,
	Ended April 30, 2016			2015			2014			2013			2012D			2011
	(unaudited)
Net asset value, beginning of period	$	18.85		$	19.58		$	20.12		$	16.08		$	15.31		$	16.78
Income from investment operations:
Net investment income		0.21			0.97			0.60			0.46			0.49			0.53
Net gains (losses) on investments (both realized and unrealized)		(0.97	)		(1.12	)		(0.77	)		4.04			0.87			(1.44	)
Total income (loss) from investment operations		(0.76	)		(0.15	)		(0.17	)		4.50			1.36			(0.91	)
Less distributions:
Dividends from net investment income		(0.29	)		(0.58	)		(0.37	)		(0.46	)		(0.59	)		(0.56	)
Distributions from net realized gains		(0.16	)		—			—			—			—			—
Total distributions		(0.45	)		(0.58	)		(0.37	)		(0.46	)		(0.59	)		(0.56	)
Redemption fees added to beneficial interests		—			—			—			0.00	E		0.00	E		—
Net asset value, end of period	$	17.64		$	18.85		$	19.58		$	20.12		$	16.08		$	15.31
Total return A		(4.03	)%B		(0.75	)%		(0.88	)%		28.56	%		9.47	%		(5.62	)%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	88,401		$	92,775		$	437,941		$	467,156		$	387,197		$	388,185
Ratios to average net assets:
Expenses, before reimbursements		0.43	%C		0.41	%		0.42	%		0.43	%		0.45	%		0.45	%
Expenses, net of reimbursements		0.43	%C		0.41	%		0.42	%		0.43	%		0.45	%		0.45	%
Net investment income, before expense reimbursements		2.47	%C		2.22	%		2.99	%		2.47	%		3.16	%		3.15	%
Net investment income, net of reimbursements		2.47	%C		2.22	%		2.99	%		2.47	%		3.16	%		3.15	%
Portfolio turnover rate		9	%B		33	%		23	%		27	%		60	%		33	%

^A  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B  Not annualized.

^C  Annualized.

^D  The Boston Company Asset Management, LLC was terminated as an investment advisor to the International equity Fund on December 31, 2011.

^E  Amount represents less than $0.01 per share.

38

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

Disclosure Regarding Approval of Investment Advisory Agreement with Causeway

At its November 9-10, 2015 meetings, the Board of Trustees (“Board”) considered the approval of an amendment to the investment advisory agreement among American Beacon Advisors, Inc. (“Manager”), Causeway Capital Management, LLC (“Causeway”), and the American Beacon Funds (“Trust”), on behalf of the American Beacon International Equity Fund (“International Equity Fund”), a series of the Trust (“Amendment”) that would increase the contractual investment advisory fee rates payable by the Fund to Causeway for investment advisory services. Prior to the meeting, the Board reviewed information provided by Causeway in response to requests from the Board and/or the Manager in connection with the Board’s consideration of the Amendment. The Board considered, among other materials, responses by Causeway to inquiries relating to:

• the proposed advisory fee;

• a comparison of the investment performance of the portion of the International Equity Fund’s assets for which Causeway had provided investment advisory services (“Sleeve”) with the performance of: (1) the MSCI EAFE Index (“Index”), the benchmark index for the International Equity Fund, (2) the International Equity Fund’s Morningstar, Inc. category (“Morningstar Category”), and (3) Causeway’s international value composite (“Composite”);

• a description of any material changes to the information provided by Causeway in June 2015 for purposes of the annual review of the investment advisory agreement among the Manager, Causeway and the Trust, on behalf of the International Equity Fund; and

• any other information that Causeway believed would be material to the Board’s consideration of the Amendment.

Provided below is an overview of the primary factors the Board considered at its November 9-10, 2015 meetings at which the Board considered the approval of the Amendment. In determining whether to approve the Amendment, the Board considered, among other things, the following factors: (1) the nature and quality of the services to be provided; (2) the investment performance of Causeway; (3) the potential materiality of the costs to be incurred by Causeway in rendering its services and the resulting profits or losses; (4) the extent to which economies of scale, if any, have been taken into account in setting the fee schedule; (5) whether fee levels reflect these economies of scale, if any, for the benefit of investors; (6) comparisons of services and fees with contracts entered into by Causeway with other clients; and (7) any other benefits anticipated to be derived by Causeway from its relationship with the International Equity Fund.

The Board did not identify any particular information that was most relevant to its consideration of the Amendment, and each Trustee may have afforded different weight to the various factors. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the approval of the Amendment. The memorandum explained the regulatory requirements surrounding the Trustees’ process for evaluating investment advisors and the terms of investment advisory contracts. Based on its evaluation, the Board unanimously concluded that the terms of the Amendment were reasonable and fair and that the approval of the Amendment was in the best interests of the International Equity Fund.

Comparisons of the amounts to be paid under the Amendment with those under contracts between Causeway and its other clients. In evaluating the Amendment, the Board reviewed the proposed advisory fee rates for services to be performed by Causeway on behalf of the International Equity Fund. The Board considered Causeway’s representation that the current fee paid by the International Equity Fund to Causeway is the lowest charged to any subadvisory client managed by Causeway in the same strategy as the International Equity Fund. The Board also considered that, in calculating the amount of assets under management for determining the applicable fee rates under the Amendment, the assets of the International Equity Fund would be aggregated with all other assets managed by Causeway on behalf of American Airlines Group, Inc. and the

39

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

American Beacon Advisors Collective Investment Trust. The Board considered Causeway’s representation that all other accounts managed in the same strategy as the International Equity Fund for which Causeway serves as adviser or sub-adviser either: (i) have higher effective fee rates than the effective fee rate that would be charged to the International Equity Fund under the Amendment based on current assets under management, or (ii) have higher advisory fee rate schedules than the proposed advisory fee rate schedule for the International Equity Fund under the Amendment. The Board considered that Causeway’s investment advisory fee rates under the Amendment would be paid to Causeway by the International Equity Fund. The Board also considered Causeway’s representation that it has closed its strategy to new investments from the International Equity Fund, but would add increased capacity with respect to International Equity Fund assets if the fee rates charged to the International Equity Fund were increased to better align with the investment advisory services provided by Causeway and the capacity limitations of the strategy. After evaluating this information, the Board concluded that Causeway’s advisory fee rates under the Amendment were reasonable in light of the services to be provided to the International Equity Fund.

Performance of Causeway. The Board evaluated the information provided by Causeway regarding the performance of the Sleeve relative to the performance of the Index, the Morningstar Category and the Composite for various periods ended September 30, 2015 and calendar years 2005 to 2014. The Board considered Causeway’s representation that the Sleeve outperformed the Index and the Morningstar Category for the three-, five-, seven-, ten-year and since-inception periods and variously outperformed and underperformed the Index and the Morningstar Category for the calendar years. The Board considered Causeway’s representation that the Sleeve underperformed the Index for the one-year and year-to-date periods as well as for the quarter and month ended September 30, 2015, and underperformed the Morningstar Category for the one-year and year-to-date periods and the month ended September 30, 2015. The Board also considered that the Sleeve outperformed and underperformed the Composite for the various periods, but that any underperformance was generally attributable to the Sleeve’s restriction on investments in the airline industry. Based on the foregoing information, the Board concluded that the historical investment performance record of Causeway supported approval of the Amendment.

Costs of the services to be provided and profits to be realized by Causeway and its affiliates from its relationship with the International Equity Fund. The Board did not consider the costs of the services to be provided and profits to be realized by Causeway from its relationship with the International Equity Fund, noting instead the arm’s-length nature of the relationship between the Manager and Causeway with respect to the negotiation of the advisory fee rate on behalf of the International Equity Fund.

Economies of Scale. The Board considered that breakpoints were included in the proposed advisory fee rate, and that these breakpoints reflected potential economies of scale for the benefit of the International Equity Fund’s investors

Board’s Conclusion. Based on the various considerations described above, as well as conclusions reached by the Board in connection with its June 2015 review of the investment advisory agreement among the Manager, Causeway and the Trust, on behalf of the International Equity Fund, the Board, including a majority of Trustees who are not “interested persons” of the International Equity Fund, the Manager or Causeway, as that term is defined in the 1940 Act, concluded that the proposed investment advisory fee rate is fair and reasonable and that the approval of the Amendment is in the best interests of the International Equity Fund and approved the Amendment.

Disclosure Regarding Approval of Management Agreement

At its March 3-4, 2016 meetings, the Board considered the approval of a new Management Agreement (“New Agreement”) between the Manager and the Trust on behalf of the existing series of the Trust, including the series of the Trust covered in this shareholder report (each, a “Fund”). The New Agreement combines the

40

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

terms of each Fund’s prior management agreement and administration agreement and establishes separate standardized fee schedules for four categories of Funds, which include fee schedule breakpoints. The Board considered that, with respect to each Fund, the single management fee rate under the New Agreement does not exceed the former combined investment management and administrative services fee rates, and there is no change to the investment management or administrative services provided or the aggregate fees charged to the Fund.

The Board reviewed information provided by the Manager in response to requests from the Board in connection with the Board’s consideration of the New Agreement. The Board also considered information that had been provided by the Manager to the Board at its November 9-10, 2015 meetings when the Board had met with various management personnel of the Manager regarding certain key aspects of the materials submitted in support of the New Agreement. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the approval of the Management Agreement. The memorandum explained the regulatory requirements surrounding the Trustees’ process for evaluating investment advisors and the terms of investment advisory contracts.

The Board determined that it did not need to consider certain factors that it typically considers during its review of the Funds’ management agreements because the Board had reviewed, among other matters, the nature, extent and quality of services being provided to the Funds by the Manager at in-person meetings held on June 2-3, 2015, when it reviewed the prior management agreement or, in connection with the initial approval of that agreement. The Board noted that it previously had considered and approved the prior management agreement at an in-person meeting held on November 12, 2014, at telephonic meetings held on November 26, 2014 and December 6, 2014 and at an in-person meeting held on December 10, 2014.

In connection with the Board’s review of the New Agreement, the Board considered, among other things, information provided by the Manager regarding the terms of the New Agreement and the relevant differences between the New Agreement and the prior management agreement and administration agreement. The Board considered the Manager’s representations that the New Agreement would not reduce or modify in any way the nature or level of the advisory or administration services provided to the Funds. The Board also considered that the fee rate payable by a Fund under the New Agreement would not exceed the aggregate fee rate payable by the Fund under the prior management agreement and administration agreement. Additionally, the Board considered the Manager’s representation that there would be no change in the professional personnel who primarily perform management and administrative services for the Funds and the Manager’s representations regarding disclosure of the New Agreement to new and existing shareholders. The Board also considered that an independent consultant retained to assist the Board in evaluating the Manager’s proposal to combine the prior management agreement and administration agreement had concluded that the proposal was reasonable and in the best interest of shareholders.

Based on the various considerations described above, the Board, including a majority of Trustees who are not “interested persons” of the Funds or the Manager, as that term is defined in the 1940 Act: (1) concluded that the proposed management fee is fair and reasonable with respect to each Fund; (2) determined that each Fund and its shareholders would benefit from the Manager’s continued management of the Fund; and (3) approved the New Agreement on behalf of each Fund.

41

Delivery of Documents

eDelivery is NOW AVAILABLE- Stop traditional mail delivery and receive your

shareholder reports and summary prospectus on-line. Sign up at

www.americanbeaconfunds.com

If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.

To obtain more information about the Fund:

By E-mail: american_beacon.funds@ambeacon.com	On the Internet: Visit our website at www.americanbeaconfunds.com

By Telephone: Institutional, Y, Investor, and Advisor Classes Call (800) 658-5811 AMR ClassSM Call (800) 345-2345	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643

Availability of Quarterly Portfolio Schedules   In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month. Availability of Proxy Voting Policy and Records   A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN State Street Bank and Trust Boston, Massachusetts TRANSFER AGENT Boston Financial Data Services Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas DISTRIBUTOR Foreside Fund Services, LLC Portland, Maine

This report is prepared for shareholders of the American Beacon Funds and may be distributed to others only if preceded or accompanied by a current Prospectus or Summary Prospectus.

American Beacon Funds and American Beacon International Equity Fund are service marks of American Beacon Advisors, Inc.

SAR 4/16    

About American Beacon Advisors

Since 1986, American Beacon Advisors has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management.

Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company.

Contents

President’s Message	1
Performance Overviews	2
Schedules of Investments:
Balanced Fund	10
Mid-Cap Value Fund	24
Financial Statements	29
Notes to the Financial Statements	34
Financial Highlights	53
Additional Information	Back Cover

BALANCED FUND The use of fixed-income securities entails interest rate and credit risks. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The use of futures contracts for cash management may subject the Fund to losing more money than invested. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

MID-CAP VALUE FUND Investing in medium-capitalization stocks may involve greater volatility and lower liquidity than larger company stocks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund may participate in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and each Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.

American Beacon Funds April 30, 2016

Dear Shareholders,   During the six-month period ended April 30, 2016, disparate central bank policies, uneven economic growth and volatile oil prices set the stage for mixed returns around the globe. Early in the period, uncertainty over the timing of the U.S. Federal Reserve’s first interest rate increase since emergency lending rates were established during the 2008 financial crisis weighed heavily on investors’ minds. On December 16, 2015, following months of speculation, the Federal Open Market Committee (“FOMC”) increased its benchmark lending rates from a range of 0% to 0.25% to a range of 0.25% to 0.5%; it was the first interest rate hike in nearly a decade. On April 27, 2016, the FOMC decided to maintain short-term interest rates in the range of 0.25% to 0.5%. If the U.S. economy continues to expand, the FOMC plans to increase short-term interest rates.

During the six-month period ended April 30, 2016, disparate central bank policies, uneven economic growth and volatile oil prices set the stage for mixed returns around the globe. Early in the period, uncertainty over the timing of the U.S. Federal Reserve’s first interest rate increase since emergency lending rates were established during the 2008 financial crisis weighed heavily on investors’ minds. On December 16, 2015, following months of speculation, the Federal Open Market Committee (“FOMC”) increased its benchmark lending rates from a range of 0% to 0.25% to a range of 0.25% to 0.5%; it was the first interest rate hike in nearly a decade. On April 27, 2016, the FOMC decided to maintain short-term interest rates in the range of 0.25% to 0.5%. If the U.S. economy continues to expand, the FOMC plans to increase short-term interest rates.

Conversely, during first quarter 2016, many central banks around the world decided to continue or expand their economic stimulation policies. The Bank of Japan pushed its rates into negative territory and the European Central Bank cut a key rate to zero in March 2016. China’s slowing growth also escalated concerns for markets and companies around the globe. In this environment, international stocks fluctuated from one extreme to another; domestic stocks made modest gains thanks to a rally in oil prices and positive economic reports; and emerging-market stocks rebounded and outpaced developed-market stocks. Bonds outperformed stocks thanks to declining interest rates.

For the six months ended April 30, 2016:

• American Beacon Balanced Fund (Investor Class) returned 0.15%. The Fund is designed to provide income and capital appreciation primarily through investments in U.S. stocks and bonds.

• American Beacon Mid-Cap Value Fund (Investor Class) returned -0.77%. The Fund is designed to provide long-term capital appreciation and current income primarily through investments in mid-market capitalization U.S. stocks.

For the period under review, the Russell 1000 Value Index, which represents large-cap value stocks, returned 1.93%; the Barclays Capital U.S. Aggregate Bond Index, which represents investment-grade, fixed-income securities, returned 2.82%; and the Russell Midcap Value Index, which measures the performance of domestic mid-cap value funds, returned 3.16%.

American Beacon Advisors identifies and partners with experienced asset managers from across all asset classes to help protect our shareholders’ portfolios over the long term. We are proud to offer a variety of funds that allow investors to invest in the asset classes best aligned with their long-term goals.

Thank you for your continued investment in the American Beacon Funds. For additional information about our Funds or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President, American Beacon Funds

1

American Beacon Balanced Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

The Investor Class of the Balanced Fund (the “Fund”) returned 0.15% for the six months ended April 30, 2016, underperforming the 60% Russell 1000^® Value Index/40% Barclays Capital U.S. Aggregate Index return of 2.39% for the same period.

Total Returns for the Period ended 4/30/16

	Ticker		6 Months*			1 Year			5 Years			10 Years
Institutional Class (1,8)		AADBX		0.35	%		(3.52	)%		7.52	%		5.56	%
Y Class (1,2,8)		ACBYX		0.28	%		(3.63	)%		7.42	%		5.49	%
Investor Class (1,8)		AABPX		0.15	%		(3.83	)%		7.16	%		5.23	%
Advisor Class (1,8)		ABLSX		0.12	%		(4.00	)%		6.99	%		5.04	%
A Class with sales charge (1,3,8)		ABFAX		(5.57	)%		(9.42	)%		5.77	%		4.54	%
A Class without sales charge (1,3,8)		ABFAX		0.19	%		(3.87	)%		7.03	%		5.16	%
C Class with sales charge (1,4,8)		ABCCX		(1.20	)%		(5.61	)%		6.25	%		4.71	%
C Class without sales charge (1,4,8)		ABCCX		(0.20	)%		(4.61	)%		6.25	%		4.71	%
AMR Class (1,8)		AABNX		0.45	%		(3.27	)%		7.80	%		5.84	%
Balanced Composite Index (5)				2.39	%		1.07	%		7.70	%		5.73	%
Russell 1000 Value Index (6)				1.93	%		(0.40	)%		10.13	%		5.67	%
Barclays Capital Aggregate Index (6)				2.82	%		2.72	%		3.60	%		4.95	%

* Not annualized

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.

2. Fund performance for the ten-year period represents the total returns achieved by the Institutional Class from 4/30/06 up to 3/1/10, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. Therefore, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/06. A portion of the fees charged to the Y Class of the Fund was waived in 2011, partially recovered in 2013, and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown in 2011.

3. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/06 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. Therefore, total returns shown may be higher than they would have been had the A Class been in existence since 4/30/06. A portion of the fees charged to the A Class of the Fund was waived in 2011 and 2012 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown in 2011 and 2012. A Class has a maximum sales charge of 5.75%.

4. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/06 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. Therefore, total returns shown may be higher than they would have been had the C Class been in existence since 4/30/06. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2012, partially recovered in 2013, and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2012. The maximum contingent deferred sales charge for C Class is 1% for shares redeemed within one year of the date of purchase.

5. To reflect the Fund’s allocation of its assets between investment grade fixed-income securities and equity securities, the returns of the Russell 1000 Value Index and the Barclays Capital Aggregate Index have been combined in a 60%/40% proportion.

6. The Russell 1000 Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 1000 Value Index and Russell 1000 Index are registered trademarks of Frank Russell Company. The Barclays Capital Aggregate Index is a market value weighted index of government, corporate, mortgage-backed and asset-backed fixed-rate debt securities of all maturities. One cannot directly invest in an index.

7. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C, and AMR Class shares was 0.59%, 0.67%, 0.92%, 1.07%, 0.98%, 1.73%, and 0.32%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

During the six-month period, the Fund’s assets on average were invested 63% in equities (including equitized cash) and 37% in fixed-income securities, ending the period with approximately the same allocation.

The equity portion of the Fund (excluding equitized cash) returned -2.0% for the period, underperforming the Russell 1000 Value Index (the “Index”) return of 1.9%. The Fund underperformed the Index as both stock selection and sector allocation detracted value relative to the Index.

2

American Beacon Balanced Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

Stock selections in the Financials, Health Care, and Industrials sectors contributed the majority of the underperformance during the six-month period. In the Financials sector, Citigroup Inc. (down 11.6%) was the largest detractor, followed closely by Metlife, which dropped 16.1%. In Health Care, positions in Valeant Pharmaceuticals International (down 58.9%), Sanofi ADR (down 18.7%), and Endo International Plc. (down 55.0%) all had a negative impact on performance. In the Industrials sector, the Fund’s out-of-index position in American Airlines Group Inc. (down 25.1%) and Delta Air Lines Inc. (down 17.8%) contributed to the underperformance. The above negatively performing sectors outweighed positive contribution from an investment in Philip Morris International (up 13.5%) within the Consumer Staples sector.

The Fund’s overweight in Consumer Discretionary, the worst performing sector in the Index (down 3.0%), and underweight in Utilities (up 13.1%), damaged performance through sector allocation. On the other hand, being underweight in Financials, one of the poorer performing sectors in the Index, added relative value.

The fixed-income portion of the Fund returned 4.5% for the six-month period, outperforming the Barclays Capital U.S. Aggregate Index (the “Barclays Index”) return of 2.8%. The Fund’s fixed income excess performance relative to the Barclays Index was due to both positive sector allocation and security selection. The Fund’s selections in U.S. Treasuries (up 6.2%) added relative value. Good selection and an overweight allocation to the Manufacturing sector also benefited the Fund, but not nearly as much as an underweight to the Energy sector. From a duration perspective, the portfolio was helped by overweighting the 10 to 30 year range, as well as selections in the 7 to 10 year range.

The sub-advisors continue to focus on the disciplined selection of attractive securities that should allow the Fund to benefit long-term.

3

American Beacon Balanced Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

Top Ten Holdings (% Net Assets)
Bank of America Corp.		2.5
Citigroup, Inc.		2.3
JPMorgan Chase & Co.		1.8
Microsoft Corp.		1.3
BP PLC, Sponsored ADR		1.5
Oracle Corp.		1.2
General Motors Co.		1.2
Johnson Controls, Inc.		1.0
Anthem, Inc.		0.9
American Financial Group, Inc.		0.9
Total Fund Holdings	494

Sector Allocation (% Equities)
Financials	26.5
Energy	13.4
Consumer Discretionary	12.9
Industrials	12.6
Health Care	11.7
Information Technology	9.9
Telecommunication Services	3.7
Consumer Staples	3.5
Utilities	3.2
Materials	2.6

Sector Allocation (% Fixed Income)
U.S. Treasury Notes/Bonds	31.4
U.S. Mortgage-Backed Obligations	20.4
Finance	12.4
Manufacturing	9.5
Commercial Mortgage Backed Obligations	5.3
Service	5.1
Energy	4.4
Asset-Backed Obligations	3.3
Utilities	2.6
Telecommunications	2.0
Consumer	1.5
Transportation	1.0
Municipal Obligations	0.9
Foreign Government Obligations	0.1
Foreign Sovereign	0.1

4

American Beacon Mid-Cap Value Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

The Investor Class of the Mid-Cap Value Fund (the “Fund”) returned -0.77% for the six months ended April 30, 2016. The Fund underperformed the Russell Midcap^® Value Index (the “Index”) return of 3.16% for the same period.

Total Returns for the Period ended 4/30/16
	Ticker		6 Months*			1 Year			5 Years			10 Years
Institutional Class (1,3,9)		AACIX		-0.67	%		-3.51	%		9.73	%		7.27	%
Y Class (1,4,9)		ACMYX		-0.72	%		-3.57	%		9.64	%		7.23	%
Investor Class (1,2,9)		AMPAX		-0.77	%		-3.71	%		9.47	%		7.06	%
Advisor Class (1,5,9)		AMCSX		-0.93	%		-4.02	%		9.16	%		6.81	%
A Class with sales charge (1,6,9)		ABMAX		-6.48	%		-9.41	%		7.94	%		6.21	%
A Class without sales charge (1,6,9)		ABMAX		-0.78	%		-3.88	%		9.23	%		6.84	%
C Class with sales charge (1,7,9)		AMCCX		-2.18	%		-5.62	%		8.42	%		6.39	%
C Class without sales charge (1,7,9)		AMCCX		-1.18	%		-4.62	%		8.42	%		6.39	%
Russell Midcap Value Index (8)				3.16	%		-0.18	%		10.45	%		7.35	%
* Not Annualized

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.

2. A portion of the fees charged to the Investor Class of the Fund has been waived from 2006 through 2013 and recovered in 2014. Performance prior to waiving fees was lower than actual returns shown from 2006 through 2013.

3. A portion of the fees charged to the Institutional Class of the Fund has been waived from 2007 through 2013 and recovered in 2014. Performance prior to waiving fees was lower than actual returns shown from 2007 through 2013.

4. Fund performance for the ten-year period represents the total returns achieved by the Institutional Class from 4/30/06 up to 3/1/10, the inception date of the Y Class and the returns of the Y Class since its inception. Expenses of the Institutional Class are lower than those of the Y Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/06. A portion of the fees charged to the Fund has been waived from 2010 through 2013 and recovered in 2014. Performance prior to waiving fees was lower than the actual returns from 2010 through 2013.

5. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/06 to 6/29/07, the inception date of the Advisor Class, and the returns of the Advisor Class since its inception. Expenses of the Investor Class are lower than those of the Advisor Class. As a result, total returns shown may be higher than they would have been had the Advisor Class been in existence since 4/30/06. A portion of the fees charged to the Advisor Class of the Fund has been waived from 2007 through 2013 and recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown from 2007 through 2013.

6. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/06 to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the Investor Class are lower than those of the A Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 4/30/06. A portion of the fees charged to the A Class of the Fund was waived from 2010 through 2012 and recovered in 2013 and 2014. Performance prior to waiving fees was lower than the actual returns from 2010 through 2012. A Class shares have a maximum sales charge of 5.75%.

7. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/06 to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the Investor Class are lower than those of the C Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 4/30/06. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2013 and recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2013. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

8. The Russell Midcap Value Index is an unmanaged index of those stocks in the Russell Midcap Index with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index. Russell Midcap Value Index, Russell Midcap Index and Russell 1000 Index are registered trademarks of Frank Russell Company. One cannot directly invest in an index.

9. The total annual Fund operating expense ratio set forth and in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, and C Class shares was 0.86%, 0.95%, 1.10%, 1.38%, 1.26%, and 2.02%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

5

American Beacon Mid-Cap Value Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

The Fund trailed the Index primarily due to stock selection, and to a lesser extent, through sector allocation.

The Fund’s investments in the Consumer Discretionary sector detracted approximately 145 basis points (1.45%) from performance. In the Consumer Discretionary sector, Dana Holdings (down 22.3%), Royal Caribbean Cruises (down 20.0%) and Norwegian Cruise Line (down 22.8%) were the largest detractors. The Fund’s Financials and Materials sector companies also detracted value relative to the Index. Legg Mason (down 41.9%), CIT Group (down 18.4%) and Lincoln National (down 19.1%) negatively impacted performance in the Financials sector. In the Materials sector, not owning Newmont Mining, which was up 80.1% in the Index, detracted from the Fund’s returns. The Fund’s allocation in Owen’s Illinois (down 13.8%) also detracted from performance.

The Fund’s significant overweight position in Consumer Discretionary, the worst performing sector in the Index, detracted more than 50 basis points (0.50%) from performance through sector allocation. An underweight in Utilities, the second best performing sector, also detracted from the Fund’s returns.

The sub-advisors’ philosophy of investing in undervalued companies that exhibit improving profitability and earnings growth potential should allow the Fund to benefit longer term.

6

American Beacon Mid-Cap Value Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

Top Ten Holdings (% Net Assets)
Murphy Oil Corp.			2.1
Pinnacle West Capital Corp.		��	1.9
Allstate Corp.			1.9
Royal Caribbean Cruises Ltd.			1.8
Lamar Advertising Co.			1.8
Dover Corp.			1.8
Willis Towers Watson PLC			1.6
Fifth Third Bancorp			1.4
KBR, Inc.			1.4
Reynolds American, Inc.			1.3
Total Fund Holdings	114

Sector Allocation (% Equities)
Financials	32.0
Consumer Discretionary	16.2
Industrials	15.3
Information Technology	9.9
Energy	7.6
Utilities	6.8
Health Care	5.5
Materials	5.3
Consumer Staples	1.4

7

American Beacon Funds^SM

Fund Expenses

April 30, 2016 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees if applicable, and (2) ongoing costs, including management fees, administrative service fees, and other Fund expenses. The examples below are intended to help you understand the ongoing cost (in dollars) of investing in a particular Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from November 1, 2015 through April 30, 2016.

Actual Expenses

The following tables provide information about actual account values and actual expenses. You may use the information on this page, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the “Expenses Paid During Period” for the applicable Fund to estimate the expenses you paid on your account during this period. Shareholders of the Investor and Institutional Classes that invest in a Fund through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

Hypothetical Example for Comparison Purposes

The following tables provide information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed 5% per year rate of return before expenses (not the Fund’s actual return). You may compare the ongoing costs of investing in a particular Fund with other funds by contrasting this 5% hypothetical example and the 5% hypothetical examples that appear in the shareholder reports of the other funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. Shareholders of the Investor and Institutional Classes that invest in a Fund through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by a Fund, such as sales charges (loads) or redemption fees as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the following tables are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.

8

American Beacon Funds^SM

Fund Expenses

April 30, 2016 (Unaudited)

Balanced Fund
	Beginning Account Value 11/1/15		Ending Account Value 4/30/16		Expenses Paid During Period* 11/1/15 - 4/30/16
Institutional Class
Actual	$	1,000.00	$	1,003.50	$	2.92
Hypothetical **	$	1,000.00	$	1,021.95	$	2.95
Y Class
Actual	$	1,000.00	$	1,002.80	$	3.36
Hypothetical **	$	1,000.00	$	1,021.52	$	3.38
Investor Class
Actual	$	1,000.00	$	1,001.50	$	4.49
Hypothetical **	$	1,000.00	$	1,020.38	$	4.53
Advisor Class
Actual	$	1,000.00	$	1,001.20	$	5.35
Hypothetical **	$	1,000.00	$	1,019.52	$	5.40
A Class
Actual	$	1,000.00	$	1,001.90	$	4.88
Hypothetical **	$	1,000.00	$	1,019.99	$	4.92
C Class
Actual	$	1,000.00	$	998.00	$	8.58
Hypothetical **	$	1,000.00	$	1,016.28	$	8.66
AMR Class
Actual	$	1,000.00	$	1,004.50	$	1.61
Hypothetical **	$	1,000.00	$	1,023.26	$	1.63

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.59%, 0.67%, 0.90%, 1.07%, 0.98%, 1.73% and 0.32% for the Institutional, Y, Investor, Advisor, A, C and AMR Classes respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (182) by days in the year (366) to reflect the half-year period.

** 5% return before expenses.

Mid-Cap Value Fund
	Beginning Account Value 11/1/15		Ending Account Value 4/30/16		Expenses Paid During Period* 11/1/15 - 4/30/16
Institutional Class
Actual	$	1,000.00	$	993.30	$	4.43
Hypothetical **	$	1,000.00	$	1,020.42	$	4.49
Y Class
Actual	$	1,000.00	$	992.80	$	4.85
Hypothetical **	$	1,000.00	$	1,020.00	$	4.92
Investor Class
Actual	$	1,000.00	$	992.30	$	5.59
Hypothetical **	$	1,000.00	$	1,019.25	$	5.67
Advisor Class
Actual	$	1,000.00	$	990.70	$	6.99
Hypothetical **	$	1,000.00	$	1,017.84	$	7.09
A Class
Actual	$	1,000.00	$	992.20	$	6.36
Hypothetical **	$	1,000.00	$	1,018.48	$	6.44
C Class
Actual	$	1,000.00	$	988.20	$	10.14
Hypothetical **	$	1,000.00	$	1,014.66	$	10.28

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.89%, 0.98%, 1.13%, 1.41%, 1.28%, and 2.05% for the Institutional, Y, Investor, Advisor, A, and C Classes respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (182) by days in the year (366) to reflect the half-year period.

** 5% return before expenses.

9

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
COMMON STOCK - 60.00%
CONSUMER DISCRETIONARY - 7.76%
Auto Components - 1.51%
Goodyear Tire & Rubber Co.		60,162	$	1,743
Johnson Controls, Inc.		157,585		6,524
Magna International, Inc., Class A		40,674		1,709
				9,976
Automobiles - 2.54%
Ford Motor Co.		243,571		3,303
General Motors Co.		246,726		7,846
Harley-Davidson, Inc.		21,467		1,027
Honda Motor Co., Ltd., Sponsored ADRA		68,102		1,836
Toyota Motor Corp., Sponsored ADRA		26,500		2,695
				16,707
Household Durables - 0.46%
Koninklijke Philips Electronics N.V.		62,388		1,716
Tupperware Brands Corp.		22,864		1,328
				3,044
Media - 0.80%
CBS Corp., Class BB		16,296		911
Comcast Corp., Class A		31,219		1,896
Discovery Communications, Inc., Class AC		65,784		1,797
Omnicom Group, Inc.		8,287		688
				5,292
Multiline Retail - 2.17%
Dillard’s, Inc., Class A		18,830		1,327
Kohl’s Corp.		36,326		1,609
Macy’s, Inc.		57,900		2,292
Michael Kors Holdings Ltd.C		83,818		4,330
Nordstrom, Inc.		19,285		986
Target Corp.		47,382		3,767
				14,311
Specialty Retail - 0.28%
Bed Bath & Beyond, Inc.		39,310		1,856
Total Consumer Discretionary				51,186
CONSUMER STAPLES - 2.09%
Food & Drug Retailing - 0.20%
Wal-Mart Stores, Inc.		20,006		1,338
Food Products - 0.23%
Bunge Ltd.		8,775		548
Kellogg Co.		12,358		950
				1,498
Tobacco - 1.66%
Altria Group, Inc.		45,281		2,840
Imperial Brands PLC, Sponsored ADRA D		32,277		3,505
Philip Morris International, Inc.		46,848		4,596
				10,941
Total Consumer Staples				13,777
ENERGY - 8.06%
Energy Equipment & Services - 0.37%
Cobalt International Energy, Inc.C		369,480		1,193
Helmerich & Payne, Inc.		19,000		1,257
				2,450
Oil & Gas - 7.69%
Apache Corp.		40,052		2,179
BP PLC, Sponsored ADRA D		288,627		9,691
California Resources Corp.C		3,165		7
Canadian Natural Resources Ltd.		125,839		3,778

See accompanying notes

10

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Cimarex Energy Co.		21,023	$	2,289
ConocoPhillips		80,534		3,849
Devon Energy Corp.		137,582		4,770
Hess Corp.		79,798		4,758
Kosmos Energy Ltd.C		116,884		757
Marathon Oil Corp.		281,020		3,960
Marathon Petroleum Corp.		42,016		1,642
Murphy Oil Corp.		55,557		1,986
Occidental Petroleum Corp.		62,306		4,775
Phillips 66		42,842		3,518
Royal Dutch Shell PLC, Class A, ADRA D		46,143		2,441
Seadrill Ltd.C		75,350		360
				50,760
Total Energy				53,210
FINANCIALS - 15.81%
Banks - 1.71%
Citizens Financial Group		120,392		2,751
PNC Financial Services Group, Inc.		65,861		5,782
Popular, Inc.		49,300		1,465
SunTrust Banks, Inc.		30,341		1,266
				11,264
Diversified Financials - 11.26%
American Express Co.		32,177		2,105
Bank of America Corp.		1,142,869		16,640
Blackstone Group, LPE		136,557		3,747
Capital One Financial Corp.		66,639		4,824
Citigroup, Inc.		326,665		15,118
Goldman Sachs Group, Inc.		8,450		1,387
JPMorgan Chase & Co.		188,672		11,924
KKR & Co., LPE		338,881		4,609
Morgan Stanley		93,639		2,534
Nomura Holdings, Inc., ADRA		377,078		1,587
Santander Consumer USA Holdings, Inc.		147,243		1,939
SLM Corp.C		134,591		911
State Street Corp.		28,014		1,745
Synchrony FinancialC		57,532		1,759
Wells Fargo & Co.		70,005		3,499
				74,328
Insurance - 2.52%
Allstate Corp.		19,720		1,283
American International Group, Inc.		109,812		6,130
Berkshire Hathaway, Inc., Class BC		29,914		4,352
MetLife, Inc.		62,338		2,811
Unum Group		60,636		2,074
				16,650
Real Estate - 0.32%
Hatteras Financial Corp.F		88,892		1,412
Two Harbors Investment Corp.F		87,182		683
				2,095
Total Financials				104,337
HEALTH CARE - 7.04%
Health Care Equipment & Supplies - 1.07%
Medtronic PLCD		71,516		5,660
Zimmer Biomet Holdings, Inc.		12,274		1,421
				7,081
Health Care Providers & Services - 1.31%
Anthem, Inc.		42,047		5,919
Express Scripts Holding Co.C		19,086		1,407
Humana, Inc.		7,308		1,294
				8,620

See accompanying notes

11

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Pharmaceuticals - 4.66%
AbbVie, Inc.		39,704	$	2,422
Endo International PLCC D		16,240		438
GlaxoSmithKline PLC, Sponsored ADRA D		61,821		2,653
Horizon Pharma PLCC D		74,813		1,150
Jazz Pharmaceuticals PLCC D		5,342		805
Johnson & Johnson		33,174		3,718
Mallinckrodt PLCC D		21,856		1,366
Merck & Co., Inc.		69,169		3,793
Mylan N.V.C		31,598		1,318
Pfizer, Inc.		165,487		5,414
Sanofi, ADRA		131,608		5,410
Valeant Pharmaceuticals International, Inc.		68,200		2,275
				30,762
Total Health Care				46,463
INDUSTRIALS - 7.57%
Aerospace & Defense - 2.65%
AerCap Holdings N.V.C		90,500		3,622
B/E Aerospace, Inc.		31,000		1,508
Boeing Co.		9,053		1,220
Embraer S.A., Sponsored ADRA		23,700		547
General Dynamics Corp.		16,494		2,318
Raytheon Co.		25,939		3,277
Rockwell Collins, Inc.		15,511		1,368
United Technologies Corp.		34,456		3,596
				17,456
Airlines - 1.08%
American Airlines Group, Inc.		100,000		3,469
Delta Air Lines, Inc.		87,800		3,659
				7,128
Construction & Engineering - 0.44%
AECOM Technology Corp.C		35,638		1,158
Chicago Bridge & Iron Co., N.V.		44,019		1,772
				2,930
Diversified Manufacturing - 0.45%
Eaton Corp., PLCD		47,232		2,988
Industrial Conglomerates - 0.48%
Honeywell International, Inc.		27,533		3,146
Machinery - 2.47%
Caterpillar, Inc.		28,064		2,181
CNH Industrial N.V.		271,340		2,100
Cummins, Inc.		35,897		4,201
PACCAR, Inc.		21,039		1,239
Parker Hannifin Corp.		14,507		1,683
Reliance Steel & Aluminum Co.		28,977		2,143
Terex Corp.		50,670		1,211
Xylem, Inc.		36,849		1,540
				16,298
Total Industrials				49,946
INFORMATION TECHNOLOGY - 5.97%
Communications Equipment - 1.21%
Cisco Systems, Inc.		101,922		2,802
Corning, Inc.		276,972		5,171
				7,973
Computers & Peripherals - 0.57%
Hewlett Packard Enterprise Co.		129,193		2,152
HP, Inc.		76,293		936

See accompanying notes

12

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Teradata Corp.C		27,846	$	705
				3,793
Semiconductor Equipment & Products - 1.60%
Applied Materials, Inc.		80,551		1,649
Intel Corp.		43,743		1,325
Lam Research Corp.		18,728		1,431
Micron Technology, Inc.C		289,914		3,116
Qualcomm, Inc.		59,525		3,007
				10,528
Software - 2.59%
Microsoft Corp.		167,226		8,340
Navient Corp.		66,063		903
Oracle Corp.		196,865		7,847
				17,090
Total Information Technology				39,384
MATERIALS - 1.57%
Chemicals - 0.99%
Air Products & Chemicals, Inc.		24,672		3,599
Dow Chemical Co.		34,118		1,795
Eastman Chemical Co.		14,711		1,124
				6,518
Containers & Packaging - 0.10%
Packaging Corp. of America		9,986		648
Paper & Forest Products - 0.48%
International Paper Co.		26,869		1,163
Louisiana-Pacific Corp.C		119,520		2,031
				3,194
Total Materials				10,360
TELECOMMUNICATION SERVICES - 2.22%
Diversified Telecommunication Services - 1.20%
AT&T, Inc.		37,118		1,441
Telefonaktiebolaget LM Ericsson, Sponsored ADRA		292,657		2,368
Verizon Communications, Inc.		80,598		4,106
				7,915
Wireless Telecommunication Services - 1.02%
China Mobile Ltd., Sponsored ADRA		68,497		3,940
Vodafone Group PLC, Sponsored ADRA D		84,681		2,772
				6,712
Total Telecommunication Services				14,627
UTILITIES - 1.91%
Electric - 1.91%
Calpine Corp.C		294,496		4,646
CenterPoint Energy, Inc.		101,702		2,182
Entergy Corp.		33,886		2,548
NRG Energy, Inc.		133,266		2,012
PPL Corp.		15,822		596
Southern Co.		12,748		639
Total Utilities				12,623
Total Common Stock (Cost $372,842)				395,913
PREFERRED STOCK - 0.19% (Cost $1,288)
FINANCIALS - 0.19%
Insurance - 0.19%
Allstate Corp., 1.00%, Due 1/15/2053		48,648		1,267

See accompanying notes

13

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Par Amount		Fair Value
	(000’s)		(000’s)
CORPORATE OBLIGATIONS 14.12%
MANUFACTURING- 3.49%
American Honda Finance Corp.,
1.70%, Due 2/22/2019	$	290	$	293
3.875%, Due 9/21/2020G		250		271
Analog Devices, Inc.,
3.90%, Due 12/15/2025		190		206
Apple, Inc.,
2.40%, Due 5/3/2023		445		447
4.50%, Due 2/23/2036		510		556
4.65%, Due 2/23/2046		1,315		1,444
Applied Materials, Inc.,
5.10%, Due 10/1/2035		1,935		2,128
BAE Systems Holdings, Inc.,
3.80%, Due 10/7/2024G		650		673
Cummins, Inc.,
3.65%, Due 10/1/2023		165		176
Daimler Finance North America LLC,
2.25%, Due 9/3/2019G H		350		356
2.45%, Due 5/18/2020G H		650		654
Delphi Corp.,
4.15%, Due 3/15/2024		315		331
Dow Chemical Co.,
4.125%, Due 11/15/2021		300		329
3.50%, Due 10/1/2024		620		646
Eaton Corp., PLC,
5.60%, Due 5/15/2018D		160		173
2.75%, Due 11/2/2022D		155		157
Eaton Electric Holdings LLC,
3.875%, Due 12/15/2020H		235		249
Ford Motor Credit Co., LLC,
4.25%, Due 2/3/2017H		300		306
1.260%, Due 3/27/2017H I		400		399
1.534%, Due 6/15/2018H I		980		974
5.875%, Due 8/2/2021H		400		462
General Electric Co.,
5.25%, Due 12/6/2017		215		230
Hewlett Packard Enterprise Co.,
6.35%, Due 10/15/2045G		2,415		2,409
HP, Inc.,
4.05%, Due 9/15/2022		300		311
Ingersoll-Rand Luxembourg Finance S.A.,
2.625%, Due 5/1/2020		300		300
Intel Corp.,
3.30%, Due 10/1/2021		240		257
Johnson Controls, Inc.,
5.00%, Due 3/30/2020		300		326
Koninklijke Philips Electronics N.V.,
5.75%, Due 3/11/2018		205		220
LYB International Finance BV,
4.00%, Due 7/15/2023		305		325
Microsoft Corp.,
4.45%, Due 11/3/2045		1,580		1,753
Monsanto Co.,
1.15%, Due 6/30/2017		355		355
4.40%, Due 7/15/2044		165		159
Nissan Motor Acceptance Corp.,
2.35%, Due 3/4/2019G		600		610
Northrop Grumman Corp.,
5.05%, Due 8/1/2019		150		166
3.85%, Due 4/15/2045		310		314
Nucor Corp.,
4.125%, Due 9/15/2022		160		168
4.00%, Due 8/1/2023		165		173

See accompanying notes

14

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Par Amount		Fair Value
	(000’s)		(000’s)
Oracle Corp.,
2.25%, Due 10/8/2019	$	235	$	242
4.30%, Due 7/8/2034		325		347
PACCAR Financial Corp.,
2.20%, Due 9/15/2019		190		194
Pentair Finance S.A.,
3.15%, Due 9/15/2022		200		192
Qualcomm, Inc.,
3.00%, Due 5/20/2022		135		141
Rio Tinto Finance USA Ltd.,
3.75%, Due 6/15/2025		130		133
Stanley Black & Decker, Inc.,
2.451%, Due 11/17/2018		375		382
Toyota Motor Credit Corp.,
2.125%, Due 7/18/2019		660		676
United Technologies Corp.,
6.125%, Due 7/15/2038		450		590
Volkswagen Group of America Finance LLC,
2.45%, Due 11/20/2019G H		650		651
Xerox Corp.,
2.95%, Due 3/15/2017		150		151
				23,005
FINANCE- 4.53%
ABN AMRO Bank N.V.,
1.80%, Due 6/4/2018G		600		599
ACE INA Holdings, Inc.,
3.35%, Due 5/3/2026		140		148
American Express Co.,
4.05%, Due 12/3/2042		215		218
American Express Credit Corp.,
2.125%, Due 3/18/2019		370		375
American International Group, Inc.,
4.875%, Due 6/1/2022		600		659
4.50%, Due 7/16/2044		210		203
Bank of America Corp.,
7.80%, Due 9/15/2016		700		716
2.60%, Due 1/15/2019		580		590
4.125%, Due 1/22/2024		400		424
6.11%, Due 1/29/2037		365		424
5.00%, Due 1/21/2044		495		552
Bank of New York Mellon Corp.,
1.30%, Due 1/25/2018		390		391
2.20%, Due 3/4/2019		365		374
BB&T Corp.,
1.45%, Due 1/12/2018		345		345
Bear Stearns Cos., LLC,
7.25%, Due 2/1/2018H		635		696
Berkshire Hathaway, Inc.,
3.125%, Due 3/15/2026		235		245
Boston Properties LP,
3.65%, Due 2/1/2026J		360		377
Capital One Financial Corp.,
2.45%, Due 4/24/2019		275		278
Citigroup, Inc.,
1.175%, Due 3/10/2017I		135		135
4.40%, Due 6/10/2025		730		753
5.875%, Due 1/30/2042		300		372
CNA Financial Corp.,
7.35%, Due 11/15/2019		295		340
Crown Castle International Corp.,
3.40%, Due 2/15/2021		175		181
Deutsche Bank AG/London,
1.227%, Due 2/13/2017I		1,110		1,107

See accompanying notes

15

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Par Amount		Fair Value
	(000’s)		(000’s
ERP Operating LP,
3.00%, Due 4/15/2023J	$	160	$	163
General Electric Capital Corp.,
5.625%, Due 5/1/2018		375		409
6.00%, Due 8/7/2019		350		402
5.50%, Due 1/8/2020		250		286
Goldman Sachs Group, Inc.,
6.25%, Due 9/1/2017		650		690
5.95%, Due 1/18/2018		450		481
5.75%, Due 1/24/2022		800		921
3.50%, Due 1/23/2025		190		192
Humana, Inc.,
3.15%, Due 12/1/2022		300		308
ING Bank N.V.,
3.75%, Due 3/7/2017G		400		408
Intercontinental Exchange, Inc.,
2.75%, Due 12/1/2020		190		196
JPMorgan Chase & Co.,
0.962%, Due 6/13/2016I		415		415
3.625%, Due 5/13/2024		900		942
3.875%, Due 9/10/2024		330		341
5.50%, Due 10/15/2040		650		798
KeyCorp,
5.10%, Due 3/24/2021		120		134
Liberty Mutual Group, Inc.,
4.25%, Due 6/15/2023G		235		246
Liberty Mutual Insurance Co.,
7.875%, Due 10/15/2026G		1,215		1,487
Macquarie Bank Ltd.,
1.266%, Due 10/27/2017G I		820		818
Manulife Financial Corp.,
4.15%, Due 3/4/2026		170		177
MetLife, Inc.,
6.375%, Due 6/15/2034		350		439
4.721%, Due 12/15/2044		400		425
4.60%, Due 5/13/2046		85		89
Morgan Stanley,
7.30%, Due 5/13/2019		750		864
5.625%, Due 9/23/2019		350		390
3.70%, Due 10/23/2024		480		495
4.35%, Due 9/8/2026		330		341
National Rural Utilities Cooperative Finance Corp.,
1.65%, Due 2/8/2019		190		191
Nordea Bank AB,
4.875%, Due 1/27/2020G		250		275
PNC Funding Corp.,
3.30%, Due 3/8/2022		325		343
Prudential Financial, Inc.,
4.60%, Due 5/15/2044		650		666
Simon Property Group LP,
2.20%, Due 2/1/2019J		485		495
3.375%, Due 10/1/2024J		650		690
State Street Corp.,
2.55%, Due 8/18/2020		135		139
The Goldman Sachs Group, Inc.,
2.875%, Due 2/25/2021		270		274
Toronto Dominion Bank,
2.625%, Due 9/10/2018		375		385
Trinity Acquisition PLC Co.,
4.40%, Due 3/15/2026D		180		184
UnitedHealth Group, Inc.,
1.625%, Due 3/15/2019		250		252
3.95%, Due 10/15/2042		165		170

See accompanying notes

16

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Par Amount		Fair Value
	(000’s)		(000’s)
US Bancorp,
1.95%, Due 11/15/2018	$	525	$	534
Ventas Realty LP,
5.70%, Due 9/30/2043J		135		151
Visa, Inc.,
1.20%, Due 12/14/2017		400		402
2.80%, Due 12/14/2022		190		198
3.15%, Due 12/14/2025		265		278
Wachovia Corp.,
0.998%, Due 10/15/2016I		400		400
Wells Fargo & Co.,
2.15%, Due 1/30/2020		140		142
2.55%, Due 12/7/2020		220		225
4.30%, Due 7/22/2027		135		144
				29,897
CONSUMER- 0.55%
Altria Group, Inc.,
4.75%, Due 5/5/2021		300		340
Anheuser-Busch InBev Finance, Inc.,
2.65%, Due 2/1/2021		340		349
3.65%, Due 2/1/2026		340		358
4.90%, Due 2/1/2046		1,000		1,134
General Mills, Inc.,
2.20%, Due 10/21/2019		600		614
Kraft Heinz Foods Co.,
3.50%, Due 7/15/2022G		135		142
5.00%, Due 7/15/2035G		130		145
Newell Rubbermaid, Inc.,
5.50%, Due 4/1/2046		170		189
Philip Morris International, Inc.,
2.75%, Due 2/25/2026		185		187
Reynolds American, Inc.,
5.85%, Due 8/15/2045		130		160
				3,618
SERVICE- 1.87%
21st Century Fox America, Co.,
4.95%, Due 10/15/2045		610		678
AbbVie, Inc.,
1.75%, Due 11/6/2017		230		231
2.90%, Due 11/6/2022		170		174
Actavis Funding SCS,
4.55%, Due 3/15/2035		55		55
Alibaba Group Holding Ltd.,
3.60%, Due 11/28/2024		650		658
Baxalta, Inc.,
4.00%, Due 6/23/2025G		140		145
Bayer US Finance LLC,
2.375%, Due 10/8/2019G H		300		309
Becton Dickinson and Co.,
3.125%, Due 11/8/2021		195		202
3.875%, Due 5/15/2024		235		251
Cardinal Health, Inc.,
3.20%, Due 3/15/2023		235		243
CBS Corp.,
3.375%, Due 3/1/2022		700		732
Celgene Corp.,
5.25%, Due 8/15/2043		145		161
Comcast Corp.,
5.875%, Due 2/15/2018		410		445
3.15%, Due 3/1/2026		175		183
6.55%, Due 7/1/2039		450		619
CVS Health Corp.,
1.90%, Due 7/20/2018		205		208

See accompanying notes

17

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Par Amount		Fair Value
	(000’s)		(000’s)
Express Scripts Holding Co.,
4.50%, Due 2/25/2026	$	1,340	$	1,436
Genzyme Corp.,
5.00%, Due 6/15/2020		80		90
Home Depot, Inc.,
2.70%, Due 4/1/2023		150		155
3.35%, Due 9/15/2025		135		146
MasterCard, Inc.,
3.375%, Due 4/1/2024		250		268
McDonald’s Corp.,
3.70%, Due 1/30/2026		380		407
Medtronic, Inc.,
3.50%, Due 3/15/2025		650		696
4.375%, Due 3/15/2035		174		194
Sanofi,
1.25%, Due 4/10/2018		105		105
4.00%, Due 3/29/2021		210		230
Thomson Reuters Corp.,
4.30%, Due 11/23/2023		300		322
3.85%, Due 9/29/2024		400		414
Time Warner, Inc.,
4.875%, Due 3/15/2020		450		497
4.75%, Due 3/29/2021		325		363
Viacom, Inc.,
4.50%, Due 2/27/2042		450		369
Walgreens Boots Alliance, Inc.,
2.70%, Due 11/18/2019		240		248
3.80%, Due 11/18/2024		300		313
Wal-Mart Stores, Inc.,
7.55%, Due 2/15/2030		350		520
Zimmer Biomet Holdings, Inc.,
3.55%, Due 4/1/2025		280		288
				12,355
UTILITIES- 0.95%
Consolidated Edison Co., of New York, Inc.,
5.50%, Due 12/1/2039		350		423
4.625%, Due 12/1/2054		115		127
Delmarva Power & Light Co.,
3.50%, Due 11/15/2023		220		235
Dominion Resources, Inc.,
4.70%, Due 12/1/2044		650		691
Duke Energy Corp.,
3.55%, Due 9/15/2021		370		389
Duke Energy Progress LLC,
4.15%, Due 12/1/2044H		260		282
Edison International,
2.95%, Due 3/15/2023		170		171
Georgia Power Co.,
1.95%, Due 12/1/2018		150		152
MidAmerican Energy Holdings Co.,
6.125%, Due 4/1/2036		500		647
Pacific Gas & Electric Co.,
4.25%, Due 3/15/2046		280		307
Progress Energy, Inc.,
4.875%, Due 12/1/2019		350		384
Sierra Pacific Power Co.,
3.375%, Due 8/15/2023		160		169
Southern Co.,
2.15%, Due 9/1/2019		190		192
2.75%, Due 6/15/2020		500		513
Southern Power Co.,
4.15%, Due 12/1/2025		175		183
Southwestern Electric Power Co.,

See accompanying notes

18

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Par Amount		Fair Value
	(000’s)		(000’s)
3.55%, Due 2/15/2022	$	600	$	633
Union Electric Co.,
6.70%, Due 2/1/2019		200		227
WEC Energy Group, Inc.,
3.55%, Due 6/15/2025		195		206
Xcel Energy, Inc.,
5.613%, Due 4/1/2017		329		342
				6,273
ENERGY- 1.59%
BP Capital Markets PLC,
3.506%, Due 3/17/2025D		1,340		1,405
3.119%, Due 5/4/2026D		700		704
Buckeye Partners LP,
4.875%, Due 2/1/2021J		165		171
Canadian Natural Resources Ltd.,
3.45%, Due 11/15/2021		190		184
6.25%, Due 3/15/2038		365		368
Chevron Corp.,
1.79%, Due 11/16/2018		195		197
Columbia Pipeline Group, Inc.,
4.50%, Due 6/1/2025G		155		160
ConocoPhillips,
6.50%, Due 2/1/2039		725		900
Devon Energy Corp.,
4.75%, Due 5/15/2042		300		251
Enterprise Products Operating LLC,
6.125%, Due 10/15/2039H		130		141
Exxon Mobil Corp.,
4.114%, Due 3/1/2046		1,950		2,078
Halliburton Co.,
3.375%, Due 11/15/2022		400		407
Husky Energy, Inc.,
3.95%, Due 4/15/2022		280		281
Magellan Midstream Partners LP,
5.00%, Due 3/1/2026J		100		110
Marathon Petroleum Corp.,
3.625%, Due 9/15/2024		165		158
Occidental Petroleum Corp.,
3.40%, Due 4/15/2026		175		181
Phillips 66,
2.95%, Due 5/1/2017		225		229
4.30%, Due 4/1/2022		170		185
Schlumberger Holdings Corp.,
4.00%, Due 12/21/2025G		1,340		1,431
Shell International Finance BV,
1.625%, Due 11/10/2018		375		378
Sunoco Logistics Partners Operations LP,
4.25%, Due 4/1/2024J		100		97
TransCanada PipeLines Ltd.,
3.75%, Due 10/16/2023		300		308
6.10%, Due 6/1/2040		170		198
				10,522
FOREIGN SOVEREIGN- 0.05%
Province of Ontario Canada,
0%, Due 4/27/2026		345		344
TRANSPORTATION- 0.36%
Burlington Northern Santa Fe LLC,
3.65%, Due 9/1/2025H		135		147
7.95%, Due 8/15/2030H		225		328
5.75%, Due 5/1/2040H		420		532
Canadian National Railway Co.,
5.55%, Due 5/15/2018		350		378

See accompanying notes

19

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Par Amount		Fair Value
	(000’s)		(000’s)
CSX Corp.,
5.50%, Due 4/15/2041	$	325	$	390
Norfolk Southern Corp.,
5.75%, Due 4/1/2018		425		459
Union Pacific Corp.,
3.375%, Due 2/1/2035		150		146
				2,380
TELECOMMUNICATIONS- 0.73%
America Movil S.A.B. de C.V.,
6.375%, Due 3/1/2035		350		426
AT&T, Inc.,
4.45%, Due 4/1/2024		165		180
3.40%, Due 5/15/2025		350		356
4.50%, Due 5/15/2035		220		221
6.35%, Due 3/15/2040		120		142
4.35%, Due 6/15/2045		841		788
Deutsche Telekom International Finance BV,
4.875%, Due 3/6/2042G		300		342
Rogers Communications, Inc.,
5.45%, Due 10/1/2043		245		285
Verizon Communications, Inc.,
4.60%, Due 4/1/2021		360		403
6.40%, Due 9/15/2033		570		715
Vodafone Group PLC,
6.15%, Due 2/27/2037D		815		958
				4,816
Total Corporate Obligations (Cost $87,782)				93,210
FOREIGN GOVERNMENT OBLIGATION - 0.03% (Cost $199)
Oil & Gas - 0.03%
Petroleos Mexicanos,
0%, Due 3/5/2020		200		213
ASSET-BACKED OBLIGATIONS - 1.20%
Ally Auto Receivables Trust,
0%, Due 9/16/2019, 2015 1 A3		605		607
Ally Master Owner Trust,
0%, Due 9/15/2019, 2012 5 A		595		596
AmeriCredit Automobile Receivables Trust,
0%, Due 6/10/2019, 2014 3 A3		455		455
BMW Vehicle Lease Trust 2016-1,
0%, Due 1/22/2019, 2016 1 A3		405		404
Capital Auto Receivables Asset Trust,
0%, Due 3/20/2018, 2013-4 A3		325		325
Capital One Multi-Asset Execution Trust,
0%, Due 7/15/2020, 2014 A5 A		530		533
Ford Credit Auto Owner Trust,
0%, Due 8/15/2020, 2015 A B		605		612
Ford Credit Floorplan Master Owner Trust,
1.50%, Due 9/15/2018, 2013-5 A1		1,100		1,102
1.40%, Due 8/15/2019, 2014 4 A1		780		780
GM Financial Automobile Leasing Trust,
0%, Due 12/20/2018, 2015 2 A3		1,000		1,004
Hyundai Auto Receivables Trust,
0%, Due 7/16/2018, 2014 A A3		184		184
Mercedes Benz Auto Lease Trust,
0%, Due 12/16/2019, 2014 A A4		808		808
Volkswagen Auto Lease Trust,
0%, Due 12/20/2017, 2015 A A3		525		524
Total Asset-Backed Obligations (Cost $7,917)				7,934

See accompanying notes

20

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Par Amount		Fair Value
	(000’s)		(000’s)
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS - 1.94%
Bear Stearns Commercial Mortgage Securities,
5.201%, Due 12/11/2038, 2006-PW14 A4	$	623	$	629
5.54%, Due 9/11/2041, 2006-PW13 A4		233		234
Ginnie Mae REMIC Trust,
1.147%, Due 12/16/2038, 2013-139 A		1,664		1,645
1.624%, Due 7/16/2039, 2013-78 AB		1,530		1,511
2.586%, Due 9/16/2039, 2014-31 AB		502		507
1.367%, Due 11/16/2041, 2013 125 AB		1,726		1,704
3.20%, Due 11/16/2044, 2011-92 B		1,713		1,742
GS Mortgage Securities Trust,
3.679%, Due 8/10/2043, 2010-C1 A1G		112		116
3.033%, Due 11/10/2046, 2013 GC16 A2		935		964
JP Morgan Chase Commercial Mortgage Securities Corp.,
4.388%, Due 2/15/2046, 2011-C3 A3G		400		417
5.889%, Due 2/12/2049, 2007-CB19 A4		534		548
JPMBB Commercial Mortgage Securities Trust,
0%, Due 7/15/2045, 2013 C12 ASB		665		692
LB-UBS Commercial Mortgage Trust,
0%, Due 2/15/2040, 2007-C1 A4		469		477
Wells Fargo Commercial Mortgage Trust,
0%, Due 9/15/2058, 2015 C30 ASB		1,095		1,154
WF-RBS Commercial Mortgage Trust,
0%, Due 3/15/2047, 2014 C19 A3		455		483
Total Commercial Mortgage-Backed Obligations (Cost $12,700)				12,823
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 7.48%
Federal Home Loan Mortgage Corporation
4.50%, Due 3/1/2019		48		49
5.00%, Due 10/1/2020		24		26
3.50%, Due 8/1/2026		124		132
3.50%, Due 9/1/2028		700		747
5.00%, Due 8/1/2033		168		188
5.50%, Due 2/1/2034		155		175
5.00%, Due 3/1/2034		122		135
6.00%, Due 6/1/2034		123		142
6.00%, Due 8/1/2034		100		115
5.00%, Due 8/1/2035		94		104
5.00%, Due 9/1/2035		63		70
5.50%, Due 4/1/2037		98		110
5.50%, Due 5/1/2038		48		54
4.00%, Due 1/1/2041		555		594
4.50%, Due 2/1/2041		425		464
3.50%, Due 3/1/2042		346		364
3.50%, Due 6/1/2042		1,688		1,773
3.50%, Due 7/1/2042		452		474
3.00%, Due 8/1/2042		724		742
3.50%, Due 2/1/2043		937		983
				7,441
Federal National Mortgage Association
5.00%, Due 12/1/2017		27		28
4.50%, Due 9/1/2018		27		28
4.00%, Due 8/1/2020		51		54
3.50%, Due 1/1/2026		108		115
4.00%, Due 5/1/2026		594		634
4.00%, Due 6/1/2026		728		777
3.50%, Due 1/1/2028		368		390
3.00%, Due 7/1/2029		671		704
5.00%, Due 3/1/2034		188		209
4.50%, Due 4/1/2034		280		306
3.50%, Due 10/1/2034		233		247
5.50%, Due 4/1/2036		86		97
5.50%, Due 6/1/2038		33		37

See accompanying notes

21

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Par Amount		Fair Value
	(000’s)		(000’s)
4.50%, Due 1/1/2040	$	458	$	500
5.00%, Due 5/1/2040		706		785
5.00%, Due 6/1/2040		613		683
4.00%, Due 9/1/2040		391		418
4.00%, Due 1/1/2041		1,187		1,269
4.00%, Due 2/1/2041		581		626
5.00%, Due 3/1/2041		522		578
4.50%, Due 4/1/2041		865		943
4.50%, Due 6/1/2041		674		735
4.50%, Due 8/1/2041		365		398
4.50%, Due 10/1/2041		469		514
4.50%, Due 1/1/2043		671		733
3.00%, Due 5/1/2043		1,058		1,088
3.00%, Due 6/1/2043		3,361		3,454
3.50%, Due 6/1/2043		437		459
3.50%, Due 7/1/2043		425		447
3.00%, Due 8/1/2043		2,100		2,157
3.50%, Due 8/1/2044		1,129		1,185
4.50%, Due 8/1/2044		1,091		1,192
4.00%, Due 3/1/2045		1,007		1,078
3.50%, Due 4/1/2045		1,047		1,098
4.00%, Due 7/1/2045		2,267		2,425
3.50%, Due 11/1/2045		5,869		6,155
4.00%, Due 3/1/2046		598		641
3.00%, Due 4/1/2046		255		261
				33,448
Government National Mortgage Association
7.00%, Due 12/15/2025		74		87
6.50%, Due 8/15/2027		74		86
6.50%, Due 11/15/2027		77		89
7.50%, Due 12/15/2028		70		84
5.50%, Due 7/15/2033		160		183
6.00%, Due 12/15/2033		189		218
5.50%, Due 2/20/2034		228		257
4.50%, Due 5/15/2039		427		468
5.00%, Due 10/15/2039		312		352
5.50%, Due 2/15/2040		331		371
4.50%, Due 6/15/2040		354		394
3.50%, Due 9/15/2041		969		1,023
3.50%, Due 3/15/2043		598		634
5.00%, Due 3/20/2045		544		591
3.50%, Due 6/20/2045		1,528		1,614
4.00%, Due 7/20/2045		631		674
4.00%, Due 9/20/2045		940		1,004
4.00%, Due 3/20/2046		329		352
				8,481
Total U.S. Agency Mortgage-Backed Obligations (Cost $48,165)				49,370
U.S. TREASURY OBLIGATIONS - 11.49%
U.S. Treasury Floating Rate Note
0.327%, Due 7/31/2017I		32,925		32,916
U.S. Treasury Notes/Bonds
0.75%, Due 2/28/2018		1,380		1,380
1.125%, Due 5/31/2019		1,500		1,508
1.25%, Due 2/29/2020		2,000		2,010
1.75%, Due 10/31/2020		2,000		2,044
1.25%, Due 3/31/2021		2,000		1,997
2.00%, Due 11/15/2021		2,155		2,224
2.00%, Due 2/15/2022		4,355		4,494
1.625%, Due 11/15/2022		2,000		2,010
2.50%, Due 8/15/2023		2,000		2,123
2.375%, Due 8/15/2024		4,975		5,225
6.875%, Due 8/15/2025		580		835

See accompanying notes

22

American Beacon Balanced Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Par Amount		Fair Value
	(000’s)		(000’s)
5.25%, Due 11/15/2028	$	450	$	612
4.75%, Due 2/15/2037		630		884
4.50%, Due 8/15/2039		500		680
3.125%, Due 11/15/2041		4,735		5,223
2.50%, Due 2/15/2045		10,015		9,674
				42,923
Total U.S. Treasury Obligations (Cost $74,175)				75,839
MUNICIPAL OBLIGATIONS - 0.33% (Cost $1,815)
Municipal Electric Authority of Georgia,
6.655%, Due 4/1/2057		1,760		2,165
	Shares
SHORT-TERM INVESTMENTS - 3.22% (Cost $21,283)
American Beacon U.S. Government Money Market Select Fund, Select ClassK		21,282,971		21,283
TOTAL INVESTMENTS - 100.00% (Cost $628,166)				660,017
LIABILITIES, NET OF OTHER ASSETS – (0.00%)				(18	)
TOTAL NET ASSETS - 100.00%			$	659,999

^A  ADR - American Depositary Receipt.

^B  Non-voting participating shares.

^C  Non-income producing security.

^D  PLC - Public Limited Company.

^E  MLP - Master Limited Partnership.

^F  REIT - Real Estate Investment Trust.

^G  Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $12,664 or 1.92% of net assets. The Fund has no right to demand registration of these securities.

^H  LLC - Limited Liability Company.

^I  The coupon rate shown on floating or adjustable rate securities represents the rate at period end. The due date on these types of securities reflects the final maturity date.

^J  LP - Limited Partnership.

^K  The Fund is affiliated by having the same investment advisor.

Futures Contracts Open on April 30, 2016:
Description	Type	Number of Contracts	Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
S&P 500 E-Mini Index June Futures	Long	159	June 2016	$	16,369,845	$	90,339
				$	16,369,845	$	90,339

See accompanying notes

23

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
COMMON STOCK - 95.48%
CONSUMER DISCRETIONARY - 15.50%
Auto Components - 1.92%
Dana Holding Corp.		631,983	$	8,171
Delphi Automotive PLCA		50,481		3,717
				11,888
Home Builders - 0.69%
D.R. Horton, Inc.		143,029		4,299
Hotels, Restaurants & Leisure - 4.58%
Norwegian Cruise Line Holdings Ltd.B		116,925		5,716
Royal Caribbean Cruises Ltd.		145,141		11,235
SeaWorld Entertainment, Inc.C		188,192		3,751
Wyndham Worldwide Corp.		106,421		7,551
				28,253
Household Durables - 2.08%
Stanley Black & Decker, Inc.		59,298		6,637
Whirlpool Corp.		35,932		6,257
				12,894
Leisure Equipment & Products - 0.62%
Brunswick Corp.		80,466		3,865
Media - 2.90%
Interpublic Group of Cos., Inc.		216,131		4,958
Meredith Corp.		15,355		788
News Corp., Class A		481,722		5,983
Omnicom Group, Inc.		74,681		6,196
				17,925
Specialty Retail - 2.71%
Hanesbrands, Inc.		238,015		6,909
L Brands, Inc.		65,311		5,113
Staples, Inc.		466,721		4,761
				16,783
Total Consumer Discretionary				95,907
CONSUMER STAPLES - 1.34%
Tobacco - 1.34%
Reynolds American, Inc.		167,270		8,297
ENERGY - 7.29%
Energy Equipment & Services - 2.54%
FMC Technologies, Inc.B		222,343		6,779
SEACOR Holdings, Inc.		28,607		1,681
Superior Energy Services, Inc.		216,756		3,655
Weatherford International PLCA B		439,612		3,574
				15,689
Oil & Gas - 4.75%
Cenovus Energy, Inc.		415,528		6,582
Devon Energy Corp.		82,400		2,858
Murphy Oil Corp.		370,283		13,234
PBF Energy, Inc., Class A		187,064		6,020
Vermilion Energy, Inc.		20,700		712
				29,406
Total Energy				45,095
FINANCIALS - 30.58%
Banks - 10.16%
CIT Group, Inc.		196,614		6,797
Comerica, Inc.		150,777		6,694
Cullen/Frost Bankers, Inc.		72,414		4,634
Fifth Third Bancorp		489,820		8,968
First Niagara Financial Group, Inc.		130,648		1,380

See accompanying notes

24

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
KeyCorp		581,448	$	7,146
M&T Bank Corp.		47,703		5,644
New York Community Bancorp, Inc.		327,575		4,923
People’s United Financial, Inc.		279,545		4,333
Regions Financial Corp.		817,114		7,665
TCF Financial Corp.		119,192		1,626
Valley National Bancorp		207,352		1,962
Webster Financial Corp.		30,008		1,099
				62,871
Diversified Financials - 5.68%
Ameriprise Financial, Inc.		45,489		4,362
Apollo Global Management LLC, Class AD E		222,850		3,768
Capital One Financial Corp.		28,842		2,088
Discover Financial Services		106,161		5,974
Franklin Resources, Inc.		134,838		5,035
Invesco Ltd.		159,211		4,937
KKR & Co., LPE		440,718		5,994
SLM Corp.B		444,195		3,007
				35,165
Insurance - 9.54%
Allstate Corp.		180,626		11,750
Axis Capital Holdings Ltd.		120,767		6,433
Endurance Specialty Holdings Ltd.		69,452		4,444
FNF Group		149,320		4,763
Lincoln National Corp.		92,081		4,001
Torchmark Corp.		96,167		5,567
Validus Holdings Ltd.		83,623		3,854
Voya Financial, Inc.		248,262		8,061
Willis Towers Watson PLCA		81,356		10,161
				59,034
Real Estate - 5.20%
AvalonBay Communities, Inc.F		21,148		3,739
CBL & Associates Properties, Inc.F		277,203		3,238
Corporate Office Properties TrustF		76,544		1,966
EPR PropertiesF		53,015		3,493
Host Hotels & Resorts, Inc.F		349,328		5,526
Lamar Advertising Co., Class AF		179,126		11,112
MFA Financial, Inc.F		449,712		3,108
				32,182
Total Financials				189,252
HEALTH CARE - 5.23%
Health Care Equipment & Supplies - 1.67%
St. Jude Medical, Inc.		51,891		3,954
Zimmer Biomet Holdings, Inc.		55,055		6,374
				10,328
Health Care Providers & Services - 3.56%
Cardinal Health, Inc.		75,265		5,905
Cigna Corp.		49,598		6,871
Mednax, Inc.B		27,256		1,943
Universal Health Services, Inc., Class B		54,660		7,307
				22,026
Total Health Care				32,354
INDUSTRIALS - 14.56%
Aerospace & Defense - 2.01%
Spirit Aerosystems Holdings, Inc., Class AB		104,815		4,942
TransDigm Group, Inc.		32,972		7,513
				12,455
Building Products - 1.24%
Owens Corning		166,364		7,664

See accompanying notes

25

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Commercial Services & Supplies - 1.91%
Convergys Corp.		72,830	$	1,930
Genpact Ltd.		143,821		4,011
Republic Services, Inc.		73,915		3,479
Steelcase, Inc., Class A		156,457		2,388
				11,808
Construction & Engineering - 1.07%
AECOM Technology Corp.B		202,974		6,595
Diversified Manufacturing - 0.50%
Eaton Corp., PLCA		49,008		3,101
Electrical Equipment - 1.16%
Tyco International PLCA		186,407		7,180
Engineering & Construction - 1.44%
KBR, Inc.		574,475		8,939
Machinery - 3.88%
CNH Industrial N.V.C		583,809		4,519
Dover Corp.		166,396		10,931
Parker Hannifin Corp.		28,147		3,266
Terex Corp.		222,625		5,319
				24,035
Marine - 0.43%
Golar LNG Ltd.C		161,189		2,673
Road & Rail - 0.92%
Ryder System, Inc.		39,350		2,712
Werner Enterprises, Inc.		116,782		2,959
				5,671
Total Industrials				90,121
INFORMATION TECHNOLOGY - 9.45%
Computers & Peripherals - 2.21%
Hewlett Packard Enterprise Co.		317,896		5,296
HP, Inc.		317,896		3,901
Seagate Technology PLCA C		206,250		4,490
				13,687
Electronic Equipment & Instruments - 2.47%
Avnet, Inc.		138,711		5,704
Flextronics International Ltd.B		518,193		6,296
Keysight Technologies, Inc.B		127,041		3,313
				15,313
IT Consulting & Services - 1.21%
Computer Sciences Corp.		59,168		1,960
CSRA, Inc.		59,168		1,536
Total System Services, Inc.		78,486		4,014
				7,510
Semiconductor Equipment & Products - 2.84%
Marvell Technology Group Ltd.		568,324		5,672
Microchip Technology, Inc.		125,035		6,075
ON Semiconductor Corp.B		608,067		5,758
				17,505
Software - 0.72%
Navient Corp.		327,562		4,478
Total Information Technology				58,493
MATERIALS - 5.06%
Chemicals - 2.45%
Ashland, Inc.		54,553		6,088

See accompanying notes

26

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Shares		Fair Value
			(000’s)
Eastman Chemical Co.		56,402	$	4,308
FMC Corp.		109,706		4,746
				15,142
Construction Materials - 1.04%
CRH PLC, ADRA G		220,998		6,433
Containers & Packaging - 1.57%
Owens-Illinois, Inc.B		232,467		4,291
Packaging Corp. of America		83,696		5,431
				9,722
Total Materials				31,297
UTILITIES - 6.47%
Electric - 5.11%
CenterPoint Energy, Inc.		68,486		1,469
Edison International		88,282		6,242
Great Plains Energy, Inc.		190,747		5,957
PG&E Corp.		103,404		6,018
Pinnacle West Capital Corp.		164,556		11,956
				31,642
Gas - 0.67%
UGI Corp.		103,332		4,158
Multi-Utilities - 0.69%
Xcel Energy, Inc.		106,678		4,270
Total Utilities				40,070
Total Common Stock (Cost $589,748)				590,886
SHORT-TERM INVESTMENTS - 4.24% (Cost $26,248)
American Beacon U.S. Government Money Market Select Fund, Select ClassH		26,247,853		26,248
SECURITIES LENDING COLLATERAL - 2.07%
DWS Government and Agency Securities Portfolio, Institutional Class		6,419,710		6,492
American Beacon U.S. Government Money Market Select Fund, Select ClassH		6,329,965		6,330
Total Securities Lending Collateral (Cost $12,822)				12,822
TOTAL INVESTMENTS - 101.79% (Cost $628,818)				629,956
LIABILITIES, NET OF OTHER ASSETS - (1.79%)				(11,093	)
TOTAL NET ASSETS - 100.00%			$	618,863

Percentages are stated as a percent of net assets.

^A  PLC - Public Limited Company.

^B  Non-income producing security.

^C  All or a portion of this security is on loan at April 30, 2016.

^D  LLC - Limited Liability Company.

^E  MLP - Master Limited Partnership.

^F  REIT - Real Estate Investment Trust.

^G  ADR - American Depositary Receipt.

^H The Fund is affiliated by having the same investment advisor.

See accompanying notes

27

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

Futures Contracts Open on April 30, 2016:

Description	Type		Number of Contracts		Expiration Date		Contract Value		Unrealized Appreciation (Depreciation)
S&P E-Mini Index June Futures		Long		171		June 2016	$	24,936,930	$	(366,002	)
							$	24,936,930	$	(366,002	)

See accompanying notes

28

American Beacon Funds^SM

Statements of Assets and Liabilities

April 30, 2016 (Unaudited) (in thousands except share and per share amounts)

	Balanced Fund			Mid-Cap Value Fund
Assets:
Investments in unaffiliated securities, at fair value A C	$	638,734		$	597,378
Investments in affiliated securities, at fair value B		21,283			32,578
Deposit with brokers for futures contracts		552			1,310
Dividends and interest receivable		1,789			502
Receivable for investments sold		663			9,181
Receivable for fund shares sold		241			436
Receivable for tax reclaims		2			—
Receivable for variation margin on open futures contracts		91			—
Prepaid expenses		35			46
Total assets		663,390			641,431
Liabilities:
Payable for investments purchased		2,477			8,202
Payable for fund shares redeemed		363			578
Payable for variation margin from open futures contracts		—			366
Payable upon return of securities loaned		—			12,822
Management and investment advisory fees payable		196			251
Administrative service and service fees payable		168			227
Transfer agent fees payable		21			15
Custody and fund accounting fees payable		9			5
Professional fees payable		30			40
Trustee fees payable		28			10
Payable for prospectus and shareholder reports		79			47
Other liabilities		20			5
Total liabilities		3,391			22,568
Net Assets	$	659,999		$	618,863
Analysis of Net Assets:
Paid-in-capital		635,873			633,936
Undistributed (or overdistribution of) net investment income		4,863			2,282
Accumulated net realized (loss)		(12,679	)		(18,127	)
Unrealized appreciation of investments		31,851			1,138
Unrealized appreciation or (depreciation) of futures contracts		91			(366	)
Net assets	$	659,999		$	618,863

See accompanying notes

29

American Beacon Funds^SM

Statements of Assets and Liabilities

April 30, 2016 (Unaudited) (in thousands except share and per share amounts)

	Balanced Fund		Mid-Cap Value Fund
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		6,113,147		18,273,422
Y Class		1,924,387		5,462,333
Investor Class		9,649,683		19,019,926
Advisor Class		758,577		521,123
A Class		2,021,323		1,649,489
C Class		3,112,875		469,954
AMR Class		23,540,515		—
Net assets (not in thousands):
Institutional Class	$	91,525,774	$	248,760,226
Y Class	$	28,906,661	$	73,787,807
Investor Class	$	129,996,341	$	261,328,415
Advisor Class	$	10,774,090	$	6,942,215
A Class	$	27,183,826	$	21,963,612
C Class	$	42,289,068	$	6,080,554
AMR Class	$	329,323,585	$	—
Net asset value, offering and redemption price per share:
Institutional Class	$	14.97	$	13.61
Y Class	$	15.02	$	13.51
Investor Class	$	13.47	$	13.74
Advisor Class	$	14.20	$	13.32
A Class	$	13.45	$	13.32
A Class (Offering Price)	$	14.27	$	14.13
C Class	$	13.59	$	12.94
AMR Class	$	13.99	$	—
A        Cost of investments in unaffiliated securities	$	606,883	$	596,240
B        Cost of investments in affiliated securities	$	21,283	$	32,578
C        Fair value securities on loan	$	—	$	12,565

See accompanying notes

30

American Beacon Funds^SM

Statements of Operations

For the Six Months ended April 30, 2016 (Unaudited) (in thousands)

	Balanced Fund		Mid-Cap Value Fund
Investment income:
Dividend income from unaffiliated securities (net of foreign taxes) A	$	5,295	$	7,873
Dividend income from affiliated securities		15		8
Interest income		3,701		—
Income derived from securities lending		—		30
Total investment income		9,011		7,911
Expenses:
Management and investment advisory fees (Note 2)		658		1,575
Administrative service fees (Note 2):
Institutional Class		138		367
Y Class		43		104
Investor Class		205		416
Advisor Class		17		10
A Class		39		26
C Class		63		9
AMR Class		81		—
Transfer agent fees:
Institutional Class		8		23
Y Class		1		2
Investor Class		6		5
Advisor Class		—		1
A Class		1		1
C Class		2		1
AMR Class		8		—
Custody and fund accounting fees		49		40
Professional fees		32		41
Registration fees and expenses		50		46
Service fees (Note 2):
Y Class		14		35
Investor Class		222		347
Advisor Class		14		8
A Class		20		13
C Class		32		4
Distribution fees (Note 2):
Advisor Class		14		8
A Class		33		22
C Class		212		29
Prospectus and shareholder report expenses		31		39

See accompanying notes

31

American Beacon Funds^SM

Statements of Operations

For the Six Months ended April 30, 2016 (Unaudited) (in thousands)

	Balanced Fund			Mid-Cap Value Fund
Trustee fees		30			23
Other expenses		32			24
Total expenses		2,055			3,219
Net fees and expenses recouped by Manager (Note 2)		—			—
Net expenses		2,055			3,219
Net investment income		6,956			4,692
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments		(3,395	)		(15,766	)
Commission recapture (Note 3)		3			18
Futures contracts		281			524
Change in net unrealized appreciation (depreciation) of:
Investments		(4,215	)		5,583
Futures contracts		27			(793	)
Net (loss) from investments		(7,299	)		(10,434	)
Net (decrease) in net assets resulting from operations	$	(343	)	$	5,742	)
A         Foreign taxes	$	53		$	2

See accompanying notes

32

American Beacon Funds^SM

Statements of Changes in Net Assets (in thousands)

	Balanced Fund						Mid-Cap Value Fund
	Six Months Ended April 30, 2016			Year Ended October 31, 2015			Six Months Ended April 30, 2016			Year Ended October 31, 2015
	(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	6,956		$	20,253		$	4,692		$	7,505
Net realized gain (loss) from investments, commission recapture, and futures contracts		(3,111	)		100,308			(15,224	)		52,954
Change in net unrealized appreciation (depreciation) from investments and futures contracts		(4,188	)		(122,052	)		4,790			(47,750	)
Net increase (decrease) in net assets resulting from operations		(343	)		(1,491	)		(5,742	)		12,709
Distributions to Shareholders:
Net investment income:
Institutional Class		(617	)		(1,222	)		(3,043	)		(1,280	)
Y Class		(141	)		(577	)		(804	)		(221	)
Investor Class		(779	)		(2,181	)		(2,884	)		(1,552	)
Advisor Class		(50	)		(160	)		(40	)		(46	)
A Class		(146	)		(392	)		(117	)		(72	)
C Class		(126	)		(320	)		(12	)		—
AMR Class		(2,806	)		(11,500	)		—			(1,014	)
Net realized gain from investments:
Institutional Class		(4,629	)		(3,535	)		(12,422	)		(5,870	)
Y Class		(1,587	)		(1,914	)		(3,405	)		(997	)
Investor Class		(7,812	)		(8,247	)		(14,626	)		(7,616	)
Advisor Class		(610	)		(699	)		(346	)		(281	)
A Class		(1,381	)		(1,316	)		(800	)		(577	)
C Class		(2,351	)		(1,788	)		(323	)		(165	)
AMR Class		(16,899	)		(33,411	)		—			(3,583	)
Net distributions to shareholders		(39,934	)		(67,262	)		(38,822	)		(23,274	)
Capital Share Transactions:
Proceeds from sales of shares		35,574			236,623			101,380			315,121
Reinvestment of dividends and distributions		39,386			66,464			38,346			23,009
Cost of shares redeemed		(92,903	)		(546,316	)		(140,204	)		(287,702	)
Redemption fees		—			—			—			37
Net increase (decrease) in net assets from capital share transactions		(17,943	)		(243,229	)		(478	)		50,465
Net increase (decrease) in net assets		(58,220	)		(311,982	)		(45,042	)		39,900
Net Assets:
Beginning of period		718,219			1,030,201			663,905			624,005
End of Period *	$	659,999		$	718,219		$	618,863		$	663,905
*Includes undistributed (or overdistribution of) net investment income	$	5,211		$	2,572		$	2,201		$	4,491

See accompanying notes

33

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

1. Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”), is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, (the “Act”) as a diversified, open-end management investment company. As of April 30, 2016, the Trust consists of twenty-four active series, two of which are presented in this filing (collectively, the “Funds” and each individually a “Fund”): American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund. The remaining twenty-two active series are reported in separate filings.

American Beacon Advisors, Inc. (the “Manager”) is a wholly-owned subsidiary of Astro AB Borrower, Inc., which is indirectly owned by investment funds affiliated with Kelso & Company, L.P. and Estancia Capital Management, LLC, and was organized in 1986 to provide business management, advisory, administrative and asset management consulting services to the Trust and other investors.

Class Disclosure

On September 21, 2015, the Board of Trustees (the “Board”) approved the liquidation of the AMR Class shares of the Balanced and Mid-Cap Value Funds. The Class closed on December 11, 2015 for the Mid-Cap Value Fund and is expected to close on or about May 31, 2016 for the Balanced Fund.

Each Fund has multiple classes of shares designed to meet the needs of different groups of investors. The following table sets forth the differences among the classes:

Class:	Offered to:
Institutional Class	Investors making an initial investment of $250,000
Y Class	Investors making an initial investment of $100,000
Investor Class	General public and investors investing through an intermediary
Advisor Class	Investors investing through an intermediary
A Class	General public and investors investing through an intermediary with applicable sales charges, which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”)
C Class	General public and investors investing through an intermediary with applicable sales charges, which may include a CDSC
AMR Class	Investors in the tax-exempt retirement and benefit plans of the Manager, AMR Corporation and its affiliates

Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include administration fees, service fees, and distribution fees and vary among the classes as described more fully in Note 2.

2. Transactions with Affiliates

Management Agreement

The Trust and the Manager are parties to a Management Agreement that obligates the Manager to provide or oversee the provision of all investment advisory, fund management, and securities lending services. Investment assets of the Funds are managed by multiple investment advisors which have entered into separate investment advisory agreements with the Manager and the Trust. As compensation for performing the duties required under the Management Agreement, the Manager receives from the Funds an annualized fee equal to 0.05% of the average daily net assets. The Funds pay the unaffiliated investment advisors hired to direct investment activities of the Funds. Management fees paid by the Funds during the six months ended April 30, 2016 were as follows (in thousands):

34

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Fund	Management Fee Rate			Management Fee		Amounts paid to Investment Advisors		Amounts paid to Manager
Balanced		0.20	%	$	658	$	493	$	165
Mid-Cap Value		0.47	%		1,478		1,319		159

As compensation for services provided by the Manager in connection with securities lending activities conducted by the Mid-Cap Value Fund, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee up to 25% of the net monthly interest income (the gross income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee up to 25% of such loan fees. Currently, the Manager receives 10% of such income for the lending Funds. This fee is included in Income derived from securities lending and management and investment advisory fees on the Statements of Operations. During the six months ended April 30, 2016, securities lending fees paid to the Manager were $3,001.

Administration Agreement

The Manager and the Trust entered into an Administration Agreement which obligates the Manager to provide or oversee administrative services to the Funds. As compensation for performing the duties required under the Administration Agreement, the Manager receives an annualized fee of 0.30% of the average daily net assets of the Institutional, Y, Investor, Advisor, A, and C Classes and 0.05% of the average daily net assets of the AMR Class of each of the Funds.

Distribution Plans

The Funds, except for the Advisor, A, and C Classes, have adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no fees may be charged to the Funds for distribution purposes. However, the Plan authorizes the management and administrative fees received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Funds do not intend to separately compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.

Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, A, and C Classes of the Funds. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annualized fee of 0.25% of the average daily net assets of the Advisor and A Classes, and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y, Investor, Advisor, A, and C Classes. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee of 0.10% of the average daily net assets of the Y Class, 0.15% of the average daily net assets of the A and C Classes, 0.25% of the average daily net assets of the Advisor Class, and up to 0.375% of the average daily net assets of the Investor Class of the Funds.

Investment in Affiliated Funds

The Funds may invest in the U.S. Government Money Market Select Fund (the “USG Select Fund”). The Funds and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the six months

35

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

ended April 30, 2016, the Manager earned fees totaling $2,998 from the Mid-Cap Value Fund’s direct investment in the USG Select Fund and $5,024 from the securities lending collateral invested in the USG Select Fund.

Interfund Lending Program

Pursuant to an exemptive order issued by the Securities and Exchange Commission (“SEC”), the Funds, along with other registered investment companies having management contracts with the Manager, may participate in an interfund lending program. This program provides an alternative credit facility allowing the Funds to borrow from other participating Funds. During the six months ended April 30, 2016, the Balanced Fund loaned on average $1,690,601 for 79 days at a rate of 0.94% with interest earned of $3,387. During the six months ended April 30, 2016, the Mid-Cap Value Fund did not utilize the credit facility.

Sales Commissions

The Funds’ distributor, Foreside Fund Services, LLC (“Foreside”), may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. During the six months ended April 30, 2016, Foreside collected $9,756 and $904 for the Balanced and Mid-Cap Value Funds, respectively, from the sale of Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the six months ended April 30, 2016, CDSC fees of $47 were collected for The Balanced Fund.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the six months ended April 30, 2016, CDSC fees of $9,933 and $151 were collected for the Balanced and Mid-Cap Value Funds, respectively.

3. Security Valuation and Fair Value Measurements

Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally 4 p.m. ET, each day that the Exchange is open for business. Equity securities, including exchange-traded funds (“ETFs”) for which market quotations are available, are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade.

Debt securities are normally are valued on the basis of prices provided by an independent pricing service and may take into account appropriate factors such as trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data. Prices of debt securities may be determined using quotes obtained from brokers.

Investments in open-end mutual funds are valued at the closing net asset value (“NAV”) per share of the mutual fund on the day of valuation.

Securities for which the market prices are not readily available or are not reflective of the fair value of the security, as determined by the Manager, will be priced at fair value following procedures approved by the Trust’s Board of Trustees (the “Board”).

36

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, a Fund is required to deposit with its futures broker, an amount of cash or U.S. Government and Agency Obligations in accordance with the initial margin requirements of the broker or exchange. Futures contracts are marked to market daily and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by the Fund. Gains or losses are recognized but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statements of Assets and Liabilities.

Other investments, including restricted securities, and those financial instruments for which the above valuation procedures are inappropriate or are deemed not to reflect fair value are stated at fair value as determined in good faith by the Valuation Committee, established by the Fund’s Board.

Valuation Inputs

Various inputs may be used to determine the fair value of the Funds’ investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1 -	Quoted prices in active markets for identical securities.
Level 2 -	Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. Level 2 securities are fixed-income securities that are valued using observable inputs as stated above.
Level 3 -	Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment.

Level 1 and Level 2 trading assets and trading liabilities, at fair value

Fixed income securities including corporate, convertible and municipal bonds and notes, U.S. government agencies, U.S. Treasury obligations, sovereign issues, bank loans, convertible preferred securities, and non-U.S. bonds are normally valued by pricing service providers that use broker dealer quotations, reported trades or valuation estimates from their internal pricing models. The service providers’ internal models use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates, and quoted prices for similar assets. Securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

Fixed income securities purchased on a delayed-delivery basis are marked to market daily until settlement at the forward settlement date are categorized as Level 2 of the fair value hierarchy.

Mortgage-related and asset-backed securities are usually issued as separate tranches, or classes, of securities within each deal. These securities are also normally valued by pricing service providers that use broker dealer quotations or valuation estimates from their internal pricing models. The pricing models for these securities usually consider tranche-level attributes, current market data, estimated cash flows, and market-based yield spreads for each tranche, and incorporate deal collateral performance, as available. Mortgage-related and asset-backed securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

Common stocks and financial derivative instruments, such as futures contracts that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Securities using these valuation adjustments are categorized

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as Level 2 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are categorized as Level 2 of the fair value hierarchy.

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.

As of April 30, 2016, the Funds’ investments were classified as described below (in thousands):

Balanced Fund(1)	Level 1			Level 2		Level 3		Total
Common Stock	$	395,913		$	—	$	—	$	395,913
Preferred Stock		1,267			—		—		1,267
Corporate Obligations		—			93,210		—		93,210
Foreign Government Obligations		—			213		—		213
Asset-Backed Obligations		—			7,934		—		7,934
Commercial Mortgage-Backed Obligations		—			12,823		—		12,823
U.S. Agency Mortgage-Backed Obligations		—			49,370		—		49,370
U.S. Treasury Obligations		—			75,839		—		75,839
Municipal Obligations		—			2,165		—		2,165
Short-Term Investments – Money Market Funds		21,283			—		—		21,283
Total Investments in Securities	$	418,463		$	241,554	$	—	$	660,017
Financial Derivative Instruments - Assets
Futures Contracts	$	90		$	—	$	—	$	90
Mid-Cap Value Fund(1)	Level 1			Level 2		Level 3		Total
Common Stock	$	590,886		$	—	$	—	$	590,886
Short-Term Investments – Money Market Funds		26,248			—		—		26,248
Securities Lending Collateral invested in Money Market Funds		12,822			—		—		12,822
Total Investments in Securities	$	629,956		$	—	$	—	$	629,956
Financial Derivative Instruments - Liabilities
Futures Contracts	$	(366	)	$	—	$	—	$	(366	)

⁽¹⁾ Refer to the Schedules of Investments for industry information.

The Funds’ investments are summarized by level based on the inputs used to determine their values. U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) also requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of each Fund’s assets and liabilities. During the six months ended April 30, 2016, there were no transfers between levels.

Security Transactions and Investment Income

Security transactions are recorded on the trade date of the security purchase or sale. The Funds may purchase securities with delivery or payment to occur at a later date. At the time the Funds enter into a commitment to purchase a security, the transaction is recorded, and the value of the security is reflected in the NAV. The value of the security may vary with market fluctuations.

Dividend income, net of foreign taxes, is recorded on the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Funds. Interest income is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. For financial and tax reporting purposes, realized gains and losses are determined on the basis of specific lot identification.

Dividends to Shareholders

Dividends from net investment income of the Balanced Fund normally will be declared and paid quarterly. Dividends from net investment income of the Mid-Cap Value Fund normally will be declared and paid at least annually. Distributions, if any, of net realized capital gains are generally paid at least annually and

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recorded on the ex-dividend date. To the extent necessary to fully distribute capital gains, the Funds also designate earnings and profits distributed to shareholders on the redemption of shares.

Commission Recapture

The Funds have established brokerage commission recapture arrangements with certain brokers or dealers. If a Fund’s investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Funds. This amount is reported with the net realized gain in the Funds’ Statements of Operations, if applicable.

Allocation of Income, Expenses, Gains, and Losses

Income, expenses (other than those attributable to a specific class), gains, and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.

Other

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.

4. Securities and Other Investments

American Depositary Receipts (“ADRs”)

ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Depositary receipts may not be denominated in the same currency as the securities into which they may be converted. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities. There is generally less publicly available information about foreign companies and there may be less governmental regulation and supervision of foreign stock exchanges, brokers and listed companies. In addition, such companies may use different accounting and financial standards (and certain currencies may become unavailable for transfer from a foreign currency), resulting in the Fund’s possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. In addition, the Fund may invest in unsponsored depositary receipts, the issuers of which are not obligated to disclose material information about the underlying securities to investors in the United States. Ownership of unsponsored depositary receipts may not entitle the Fund to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.

Real Estate Investment Trusts

The Funds may own shares of real estate investment trusts (“REITs”) which report information on the source of their distributions annually. The Funds re-characterize distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-

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American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

characterization will be estimated based on available information, which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year. These re-characterizations are not recorded for financial statement purposes, but as an adjustment to the calculation of taxable income.

Restricted Securities

The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities may be sold privately, but are required to be registered or exempted from such registration before being sold to the public. Private placement securities are generally considered to be restricted except for those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933. Disposal of restricted securities may involve time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Restricted securities outstanding at the six months ended April 30, 2016 are disclosed in the Notes to the Schedule of Investments.

Other Investment Company Securities and Other Exchange Traded Products

The Funds may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, unit investment trusts, and other investment companies of the Trust. The Funds may invest in investment company securities advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Funds become a shareholder of that investment company. As a result, the Funds’ shareholders indirectly will bear a Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Funds’ shareholders directly bear in connection with the Funds’ own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

Mortgage-Related and Other Asset-Backed Securities

The Balanced Fund may invest in mortgage or other asset-backed securities (“ABS”). These securities may include mortgage instruments issued by U.S. government agencies (“agency mortgages”) or those issued by private entities (“non-agency mortgages”). Specific types of instruments may include mortgage pass-through securities, collateralized mortgage obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage-backed securities and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property. The value of the Fund’s mortgage-backed securities (“MBS”) may be affected by, among other things, changes or perceived changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgage, or the quality of the underlying assets. The mortgages underlying the securities may default or decline in quality or value. Through its investments in MBS, a Fund has exposure to subprime loans, Alt-A loans and non-conforming loans as well as to the mortgage and credit markets generally. Underlying collateral related to subprime, Alt-A and non-conforming mortgage loans has become increasingly susceptible to defaults and declines in quality or value, especially in a declining residential real estate market. In addition, regulatory or tax changes may adversely affect the mortgage securities markets as a whole.

Mortgage-Backed Securities

MBS often have stated maturities of up to thirty years when they are issued, depending upon the length of the mortgages underlying the securities. In practice however, unscheduled or early payments of principal and interest on the underlying mortgages may make the securities’ effective maturity shorter than this, and the prevailing interest rates may be higher or lower than the current yield of the Fund’s portfolio at the time resulting in reinvestment risk.

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American Beacon Funds^SM

Notes to Financial Statements

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Rising or high interest rates may result in slower than expected principal payments which may tend to extend the duration of MBS, making them more volatile and more sensitive to changes in interest rates. This is known as extension risk.

MBS may have less potential for capital appreciation than comparable fixed income securities due to the likelihood of increased prepayments of mortgages resulting from foreclosures or declining interest rates. These foreclosed or refinanced mortgages are paid off at face value (par) or less, causing a loss, particularly for any investor who may have purchased the security at a premium or a price above par. In such an environment, this risk limits the potential price appreciation of these securities.

Agency Mortgage-Backed Securities

Certain MBS may be issued or guaranteed by the U.S. government or a government sponsored entity, such as Fannie Mae (the Federal National Mortgage Association) or Freddie Mac (the Federal Home Loan Mortgage Corporation). Although these instruments may be guaranteed by the U.S. government or a government sponsored entity, many such MBS are not backed by the full faith and credit of the United States and are still exposed to the risk of non-payment.

Privately Issued Mortgage-Backed Securities

MBS held by a Fund may be issued by private issuers including commercial banks, savings associations, mortgage companies, investment banking firms, finance companies and special purpose finance entities (called special purpose vehicles or SPVs) and other entities that acquire and package mortgage loans for resale as MBS. These privately issued non-agency MBS may offer higher yields than those issued by government agencies, but also may be subject to greater price changes than governmental issues. Subprime loans refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments on their loans. Alt-A loans refer to loans extended to borrowers who have incomplete documentation of income, assets, or other variables that are important to the credit underwriting processes. Non-conforming mortgages are loans that do not meet the standards that allow purchase by government-sponsored enterprises. MBS with exposure to subprime loans, Alt-A loans or non-conforming loans have had in many cases higher default rates than those loans that meet government underwriting requirements. The risk of non-payment is greater for MBS that are backed by mortgage pools that contain subprime, Alt-A and non-conforming loans, but a level of risk exists for all loans.

Unlike agency MBS issued or guaranteed by the U.S. government or a government-sponsored entity (e.g., Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation), MBS issued by private issuers do not have a government or government-sponsored entity guarantee, but may have credit enhancements provided by external entities such as banks or financial institutions or achieved through the structuring of the transaction itself. Examples of such credit support arising out of the structure of the transaction include the issue of senior and subordinated securities (e.g., the issuance of securities by an SPV in multiple classes or “tranches,” with one or more classes being senior to other subordinated classes as to the payment of principal and interest, with the result that defaults on the underlying mortgage loans are borne first by the holders of the subordinated class); creation of “reserve funds” (in which case cash or investments, sometimes funded from a portion of the payments on the underlying mortgage loans, are held in reserve against future losses); and “overcollateralization” (in which case the scheduled payments on, or the principal amount of, the underlying mortgage loans exceeds that required to make payment on the securities and pay any servicing or other fees). However, there can be no guarantee that credit enhancements, if any, will be sufficient to prevent losses in the event of defaults on the underlying mortgage loans. In addition, MBS that are issued by private issuers are not subject to the underwriting requirements for the underlying mortgages that are applicable to those MBS that have a government or government-sponsored entity guarantee. As a result, the mortgage loans underlying private MBS may, and frequently do, have less favorable collateral, credit risk or other underwriting characteristics than government or government-sponsored MBS and have wider variances in a number of terms including interest rate, term,

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American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

size, purpose and borrower characteristics. Privately issued pools more frequently include second mortgages, high loan-to-value mortgages and manufactured housing loans. The coupon rates and maturities of the underlying mortgage loans in a private-label MBS pool may vary to a greater extent than those included in a government guaranteed pool, and the pool may include subprime mortgage loans.

Privately issued MBS are not traded on an exchange and there may be a limited market for the securities, especially when there is a perceived weakness in the mortgage and real estate market sectors. Without an active trading market, MBS held in the Fund’s portfolio may be particularly difficult to value because of the complexities involved in assessing the value of the underlying mortgage loans.

Asset-Backed Securities

ABS may include MBS, loans, receivables or other assets. The value of the Fund’s ABS may be affected by, among other things, actual or perceived changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the receivables, the market’s assessment of the quality of underlying assets or actual or perceived changes in the credit worthiness of the individual borrowers, the originator, the servicing agent or the financial institution providing the credit support.

Payment of principal and interest may be largely dependent upon the cash flows generated by the assets backing the securities.

Rising or high interest rates tend to extend the duration of ABS, making them more volatile and more sensitive to changes in interest rates. The underlying assets are sometimes subject to prepayments which can shorten the security’s weighted average life and may lower its return. Defaults on loans underlying ABS have become an increasing risk for ABS that are secured by home equity loans related to sub-prime, Alt-A or non-conforming mortgage loans, especially in a declining residential real estate market.

ABS (other than MBS) present certain risks that are not presented by MBS. Primarily, these securities may not have the benefit of any security interest in the related assets. Credit card receivables are generally unsecured and the debtors are entitled to the protection of a number of state and federal consumer credit laws, many of which give such debtors the right to set off certain amounts owed on the credit cards, thereby reducing the balance due. There is the possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on these securities. ABS are often backed by a pool of assets representing the obligations of a number of different parties. To lessen the effect of failures by obligors on underlying assets to make payments, the securities may contain elements of credit support which fall into two categories: (i) liquidity protection, and (ii) protection against losses resulting from ultimate default by an obligor on the underlying assets. Liquidity protection refers to the provision of advances, generally by the entity administering the pool of assets, to ensure that the receipt of payments on the underlying pool occurs in a timely fashion. Protection against losses results from payment of the insurance obligations on at least a portion of the assets in the pool. This protection may be provided through guarantees, policies or letters of credit obtained by the issuer or sponsor from third parties, through various means of structuring the transaction or through a combination of such approaches. The Fund will not pay any additional or separate fees for credit support. The degree of credit support provided for each issue is generally based on historical information respecting the level of credit risk associated with the underlying assets.

Delinquency or loss in excess of that anticipated or failure of the credit support could adversely affect the return on an investment in such a security. The availability of ABS may be affected by legislative or regulatory developments. It is possible that such developments may require the Fund to dispose of any then existing holdings of such securities.

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American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

5. Financial Derivative Instruments

The Balanced and Mid-Cap Value Funds may utilize derivative instruments to enhance return, hedge risk, gain efficient exposure to an asset class or to manage liquidity. When considering the Funds’ use of derivatives, it is important to note that the Fund does not use derivatives for the purpose of creating financial leverage.

Futures Contracts

Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Funds may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.

Upon entering into a futures contract, the Funds are required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. A Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as cash deposited with broker on the Statement of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation or depreciation until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.

For the six months ended April 30, 2016, the Funds entered into future contracts primarily for exposing cash to markets.

The Funds’ average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.

Average Futures Contracts Outstanding
Fund	Six Months ended April 30, 2016
Balanced		239
Mid-Cap Value		209

The following is a summary of the Funds’ derivative financial instruments categorized by risk exposure (in thousands) ^(1) (2):

Fair Values of financial derivative instruments not accounted for as hedging instruments as of April 30, 2016:

Statements of Assets and Liabilities	Derivative		Balanced		Mid-Cap Value
Receivable for variation margin from open futures contracts(2)		Equity Contracts	$	90	$	—
Payable for variation margin from open futures contracts(2)		Equity Contracts		—		(366	)

The effect of financial derivative instruments not accounted for as hedging instruments during the six months ended April 30, 2016:

Statements of Operations		Balanced		Mid-Cap Value
Net realized gain (loss) from futures contracts	Equity Contracts	$	281	$	524
Change in net unrealized appreciation or (depreciation) of futures contracts	Equity Contracts		27		(793	)

⁽¹⁾ See Note 3 in the Notes to Financial Statements for additional information.

⁽²⁾ Includes cumulative appreciation or (depreciation) of futures contracts as reported in the Schedules of Investment footnotes. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

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American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

6. Principal Risks

In the normal course of business, the Funds trade financial instruments and enter into financial transactions where risk of potential loss exists. Security values fluctuate (market risk) and may decline due to factors affecting securities markets in general, particular industries represented in the securities markets or conditions specifically related to a particular company. Failure of the other party to a transaction to perform (credit and counterparty risk), for example by not making principal and interest payments when due, reduces the value of the issuer’s debt and could reduce the Funds’ income. Similar to credit risk, the Funds may be exposed to counterparty risk, or the risk that an institution or other entity with which the Funds have unsettled or open transactions will fail to make required payments or otherwise comply with the terms of the instrument, transaction or contract. The potential loss could exceed the value of the financial assets recorded in the financial statements. Some of the Funds’ investments may be illiquid and the Funds may not be able to vary the portfolio investments in response to changes in economic and other conditions. If a Fund is required to liquidate all or a portion of its investments quickly, the Fund may realize significantly less than the value at which it previously recorded those investments.

Market Risks

The Funds’ investments in financial derivatives and other financial instruments expose the Funds to various risks such as, but not limited to, interest rate, foreign currency and equity risks.

Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by the Funds is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is useful primarily as a measure of the sensitivity of a fixed income’s market price to interest rate (i.e. yield) movements.

If the Funds invest directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in financial derivatives that provide exposure to foreign currencies, they will be subject to the risk that those currencies will decline in value relative to the base currency of the Funds, or, in the case of hedging positions, that the Funds’ base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, the Funds’ investments in foreign currency denominated securities may reduce the returns of the Fund.

The fair values of equities, such as common stocks and preferred securities or equity related investments such as futures, may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.

Credit and Counterparty Risk

The Balanced Fund will be exposed to credit risk with respect to issuers of fixed-income portfolio securities. The Fund minimizes concentrations of credit risk by undertaking transactions with a large number of issuers. The Fund could lose money if the issuer or guarantor of a fixed income security is unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations. Securities are subject to varying degrees of credit risk, which are often reflected in credit ratings.

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Notes to Financial Statements

April 30, 2016 (Unaudited)

Similar to credit risk, the Funds may be exposed to counterparty risk, or the risk that an institution or other entity with which a Fund has unsettled or open transactions will default. Financial assets, which potentially expose a Fund to counterparty risk, consist principally of cash due from counterparties and investments. All transactions in listed securities are settled/paid for upon delivery using approved counterparties. The risk of default is considered minimal, as delivery of securities sold is only made once the Fund has received payment. Payment is made on a purchase once the securities have been delivered by the counterparty. The trade will fail if either party fails to meet its obligation.

A derivative contract may suffer a mark to market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

With exchange traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, the credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally, credit risk exists in exchange traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.

Cash collateral that has been pledged to cover obligations of the Funds and cash collateral received from the counterparty, if any, is reported separately on the Statements of Assets and Liabilities as “Deposits with brokers for futures contracts” and “Payable to brokers for futures contracts”, respectively. Non-cash collateral pledged by the Funds, if any, is noted in the Schedules of Investments. Generally, the amount of collateral due from or to a party is determined at the close of business of the Funds and additional required collateral is delivered to/pledged by the Funds on the next business day. To the extent amounts due to the Funds from their counterparties are not fully collateralized, contractually or otherwise, the Funds bear the risk of loss from counterparty non-performance. The Funds attempt to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

Offsetting Assets and Liabilities

The Funds are parties to enforceable master netting agreements between brokers and counterparties, which provide for the right to offset under certain circumstances. The Funds employ multiple money managers and counterparties and have elected not to offset qualifying financial and derivative instruments on the Statements of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, April 30, 2016 (in thousands).

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American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Balanced Fund

Offsetting of Financial Assets and Derivative Assets as of April 30, 2016:

Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Assets and Liabilities		Net Amounts of Assets Presented in the Statements of Assets and Liabilities
Futures Contracts (1)	$	90	$	—	$	90

Financial Assets, Derivative Assets, and Collateral Pledged by Counterparty as of April 30, 2016:

	Net amount of Assets Presented in the Statements of Assets and Liabilities		Gross Amounts Not Offset in the Statements of Assets and Liabilities
Counterparty			Financial Instruments		Cash Collateral Received		Net Amount
Goldman Sachs & Co.(1)	$	90	$	—	$	—	$	90

Mid-Cap Value Fund

Offsetting of Financial Assets and Derivative Assets as of April 30, 2016:

Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Assets and Liabilities		Net Amounts of Assets Presented in the Statements of Assets and Liabilities
Securities on Loan	$	12,565	$	—	$	12,565

Offsetting of Financial Liabilities and Derivative Liabilities as of April 30, 2016:

Description	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Statements of Assets and Liabilities		Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities
Futures Contracts (1)	$	(366	)	$	—	$	(366	)

Financial Assets, Derivative Assets, and Collateral Pledged by Counterparty as of April 30, 2016:

	Net amount of Assets Presented in the Statements of Assets and Liabilities			Gross Amounts Not Offset in the Statements of Assets and Liabilities
Counterparty				Financial Instruments		Cash Collateral Received(2)			Net Amount
Goldman Sachs & Co. (1)	$	(366	)	$	—	$	—		$	(366	)
MS Securities Services Inc.		5,537			—		(5,537	)		—
National Financial Services Corp.		1,911			—		(1,911	)		—
UBS Securities, LLC		5,117			—		(5,117	)		—
	$	12,199		$	—	$	(12,565	)	$	(366	)

⁽¹⁾  The securities presented here within are not subject to Master Netting Agreements. As such, this is disclosed for informational purposes only.

⁽²⁾  Excess of collateral received from the individual counterparty is not shown for financial reporting purposes. Collateral with a value of $12,822 has been received in connection with securities lending transactions.

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American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

7. Federal Income and Excise Taxes

It is the policy of each Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distribution of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, each Fund is treated as a single entity for the purpose of determining such qualification.

The Funds do not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2015 remains subject to examination by the Internal Revenue Service. If applicable, the Funds recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statements of Operations.

Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

The tax character of distributions paid were as follows (in thousands):

	Balanced Fund				Mid-Cap Value Fund
	Six months ended April 30, 2016		Year Ended October 31, 2015		Six months ended April 30, 2016		Year Ended October 31, 2015
	(unaudited)				(unaudited)
Distributions paid from:
Ordinary income*
Institutional Class	$	650	$	1,579	$	3,043	$	2,270
Y Class		152		770		804		389
Investor Class		834		3,014		2,884		2,836
Advisor Class		54		231		40		93
A Class		156		525		117		169
C Class		143		501		12		28
AMR Class		2,925		14,875		—		1,618
Long-Term Capital Gain
Institutional Class		4,596		3,178		12,422		4,880
Y Class		1,576		1,721		3,405		829
Investor Class		7,757		7,414		14,626		6,332
Advisor Class		606		628		346		234
A Class		1,371		1,183		800		479
C Class		2,334		1,607		323		137
AMR Class		16,780		30,036		—		2,979
Total distributions	$	39,934	$	67,262	$	38,822	$	23,273

* For tax purposes, short-term capital gains are considered ordinary income distributions.

As of April 30, 2016, the components of distributable earnings or (deficits) on a tax basis were as follows (in thousands):

	Balanced Fund			Mid-Cap Value Fund
Cost basis of investments for federal income tax purposes	$	635,660		$	631,646
Unrealized appreciation		63,128			45,151
Unrealized depreciation		(38,771	)		(46,841	)
Net unrealized appreciation		24,357			(1,690	)
Undistributed ordinary income		5,677			2,062
Accumulated long-term capital gain		—			—
Accumulated capital and other losses		(5,999	)		(15,078	)
Other temporary differences		91			(367	)
Distributable earnings or (deficits)	$	24,126		$	(15,073	)

47

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The temporary differences between financial reporting and tax-basis reporting of unrealized appreciation or depreciation are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains or losses on certain derivative instruments, reclassifications of income from real estate investment securities and book amortization of premiums.

Due to inherent differences in the recognition of income, expenses and realized gains (losses) under U.S. GAAP and federal income tax regulations, permanent differences between book and tax reporting have been identified and appropriately reclassified on the Statements of Assets and Liabilities.

Accordingly, the following amounts represent current year permanent differences derived from book amortization of premium, pay down reclasses, Section 732 basis adjustments, reclassifications of income from real estate investment securities and dividends that have been reclassified as of April 30, 2016 (in thousands):

	Balanced Fund			Mid-Cap Value Fund
Paid-in-capital	$	—		$	—
Undistributed net investment income		348			(82	)
Accumulated net realized gain (loss)		(348	)		81
Unrealized appreciation or depreciation of investments and futures contracts		—			1

Under the Regulated Investment Company Modernization Act of 2010 (the “RIC MOD”), net capital losses recognized by the Funds in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses. Balanced Fund had $2,261 short-term and $3,647 long term capital loss carryforwards, and Mid-Cap Value Fund had $9,179 short-term and $6,265 long-term capital loss carryforwards as of April 30, 2016 (in thousands).

8. Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of long-term investments during the six months ended April 30, 2016 were as follows (in thousands):

	Balanced Fund		Mid-Cap Value Fund
Purchases (excluding U.S. government securities)	$	103,246	$	95,207
Sales and maturities (excluding U.S. government securities)		180,323		132,942
Purchases of U.S. government securities		6,194		—
Sales and maturities of U.S. government securities		56,117		—

A summary of the Funds’ direct transactions and security lending collateral transactions in the USG Select Fund for the six months ended April 30, 2016 is set forth below (in thousands):

	Type of Transaction		October 31, 2015 Shares/Fair Value		Purchases		Sales		April 30, 2016 Shares/Fair Value		Dividend Income
Balanced		Direct	$	—	$	42,633	$	21,350	$	21,283	$	15
Mid-Cap Value		Direct		—		78,621		52,373		26,248		8
Mid-Cap Value		Securities Lending		10,588		77,438		81,695		6,330		N/A

9. Securities Lending

The Mid-Cap Value Fund may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least

48

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked to market daily. Daily mark to market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark to market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.

To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the “Agent”) in money market mutual funds, and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Fund’s Schedule of Investments and the collateral is shown on the Statements of Assets and Liabilities as a payable.

Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retain 80%, 10%, and 10%, respectively, of the income generated from securities lending.

While securities are on loan, the Fund continues to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Fund would be subject to on the dividend.

Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.

As of April 30, 2016, the value of outstanding securities on loan and the value of collateral was as follows (in thousands):

Fair Value of Securities on Loan		Non-Cash Collateral		Cash Collateral Posted by Borrower
$	12,565	$	—	$	12,822

Cash collateral is listed on the Mid-Cap Value Fund’s Schedule of Investments and is shown on the Statements of Assets and Liabilities. Income earned on these investments, grossed up by the securities lending fees paid to the Manager, is included in Income derived from securities lending on the Statements of Operations.

Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund’s Schedule of Investments or Statements of Assets and Liabilities.

49

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

10. Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Funds (shares and dollars in thousands):

For the Six Months Ended April 30, 2016

	Institutional Class						Y Class						Investor Class						Advisor Class
Balanced Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		509		$	7,563			657		$	9,668			619		$	8,173			90		$	1,214
Reinvestment of dividends		357			5,223			111			1,626			639			8,416			47			660
Shares redeemed		(1,033	)		(15,140	)		(1,316	)		(19,179	)		(2,503	)		(33,069	)		(278	)		(3,842	)
Net (decrease) in shares outstanding		(167	)	$	(2,354	)		(548	)	$	(7,885	)		(1,245	)	$	(16,480	)		(141	)	$	(1,968	)

	A Class						C Class						AMR Class
Balanced Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		329		$	4,334			280		$	3,750			65		$	872
Reinvestment of dividends		111			1,457			173			2,299			1,443			19,705
Shares redeemed		(456	)		(6,212	)		(503	)		(6,676	)		(639	)		(8,786	)
Net increase (decrease) in shares outstanding		(16	)	$	(421	)		(50	)	$	(627	)		869		$	11,791

	Institutional Class						Y Class						Investor Class						Advisor Class
Mid-Cap Value Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		3,096		$	40,445			1,408		$	17,995			2,480		$	32,807			114		$	1,466
Reinvestment of dividends		1,150			15,065			323			4,204			1,321			17,472			30			386
Shares redeemed		(3,651	)		(48,616	)		(1,091	)		(14,059	)		(5,471	)		(71,254	)		(91	)		(1,165	)
Net increase (decrease) in shares outstanding		595		$	6,894			640		$	8,140			(1,670	)	$	(20,975	)		53		$	687

	A Class						C Class						AMR Class(1)
Mid-Cap Value Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		694		$	8,207			35		$	446			1		$	14
Reinvestment of dividends		70			893			26			325			—			—
Shares redeemed		(265	)		(3,333	)		(41	)		(506	)		(86	)		(1,271	)
Net increase (decrease) in shares outstanding		499		$	5,767			20		$	265			(85	)	$	(1,257	)

⁽¹⁾  Class closed on 12/11/2015

For the Year Ended October 31, 2015

	Institutional Class						Y Class						Investor Class						Advisor Class
Balanced Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		2,987		$	48,746			1,308		$	21,588			4,196		$	62,493			232		$	3,610
Reinvestment of dividends		292			4,725			146			2,375			690			10,149			55			859
Shares redeemed		(1,432	)		(23,117	)		(1,127	)		(18,306	)		(4,822	)		(71,369	)		(305	)		(4,682	)
Net increase (decrease) in shares outstanding		1,847		$	30,354			327		$	5,657			64		$	1,273			(18	)	$	(213	)

	A Class						C Class						AMR Class
Balanced Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		1,137		$	16,867			1,432		$	21,546			4,030		$	61,773
Reinvestment of dividends		109			1,592			125			1,853			2,952			44,911
Shares redeemed		(882	)		(12,823	)		(465	)		(6,892	)		(27,433	)		(409,127	)
Net increase (decrease) in shares outstanding		364		$	5,636			1,092		$	16,507			(20,451	)	$	(302,443	)

50

American Beacon Funds^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

	Institutional Class						Y Class						Investor Class						Advisor Class
Mid-Cap Value Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		8,220		$	122,878			3,400		$	50,233			7,288		$	109,453			278		$	3,989
Redemption Fees		—			12			—			2			—			15			—			1
Reinvestment of dividends		476			6,981			82			1,190			619			9,156			23			327
Shares redeemed		(4,139	)		(61,221	)		(778	)		(11,517	)		(3,765	)		(56,035	)		(327	)		(4,786	)
Net increase (decrease) in shares outstanding		4,557		$	68,650			2,704		$	39,908			4,142		$	62,589			(26	)	$	(469	)

	A Class						C Class						AMR Class
Mid-Cap Value Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		425		$	6,179			140		$	1,987			1,370		$	20,402
Redemption Fees		—			1			—			—			—			6
Reinvestment of dividends		42			607			11			151			313			4,597
Shares redeemed		(588	)		(8,411	)		(64	)		(884	)		(9,863	)		(144,848	)
Net increase (decrease) in shares outstanding		(121	)	$	(1,624	)		87		$	1,254			(8,180	)	$	(119,843	)

11. Subsequent Events

On September 21, 2015, the Manager announced the Board’s approval of a plan to liquidate and terminate the AMR Class of the Fund on or about May 31, 2016.

51

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52

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014			2013			2012			2011
	(unaudited)
Net asset value, beginning of period	$	15.79		$	16.79		$	16.31		$	14.27		$	12.89		$	12.62
Income from investment operations:
Net investment income		0.16			0.32			0.38			0.30			0.32			0.32
Net gains (losses) from investments (both realized and unrealized)		(0.13	)		(0.32	)		1.35			2.35			1.38			0.29
Total income from investment operations		0.03			0.00			1.73			2.65			1.70			0.61
Less distributions:
Dividends from net investment income		(0.10	)		(0.22	)		(0.42	)		(0.30	)		(0.32	)		(0.34	)
Distributions from net realized gains		(0.75	)		(0.78	)		(0.83	)		(0.31	)		—			—
Total distributions		(0.85	)		(1.00	)		(1.25	)		(0.61	)		(0.32	)		(0.34	)
Net asset value, end of period	$	14.97		$	15.79		$	16.79		$	16.31		$	14.27		$	12.89
Total return A		0.35	%B		(0.07	)%		11.15	%		19.04	%		13.23	%		4.87	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	91,526		$	99,174		$	74,422		$	60,916		$	40,938		$	30,962
Ratios to average net assets:
Expenses, before reimbursements		0.59	%C		0.58	%		0.58	%		0.60	%		0.59	%		0.58	%
Expenses, net of reimbursements		0.59	%C		0.58	%		0.58	%		0.60	%		0.59	%		0.58	%
Net investment income, before reimbursements		2.15	%C		1.83	%		2.24	%		1.86	%		2.27	%		2.49	%
Net investment income, net of reimbursements		2.15	%C		1.83	%		2.24	%		1.86	%		2.27	%		2.49	%
Portfolio turnover rate		16	%B		62	%		34	%		56	%		58	%		47	%
	Y Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014			2013			2012			2011
	(unaudited)
Net asset value, beginning of period	$	15.84		$	16.83		$	16.37		$	14.32		$	12.93		$	12.78
Income from investment operations:
Net investment income		0.16			0.30			0.40			0.39			0.17			0.36
Net gains (losses) from investments (both realized and unrealized)		(0.14	)		(0.30	)		1.31			2.26			1.51			0.24
Total income from investment operations		0.02			0.00			1.71			2.65			1.68			0.60
Less distributions:
Dividends from net investment income		(0.09	)		(0.21	)		(0.42	)		(0.29	)		(0.29	)		(0.45	)
Distributions from net realized gains		(0.75	)		(0.78	)		(0.83	)		(0.31	)		—			—
Total distributions		(0.84	)		(0.99	)		(1.25	)		(0.60	)		(0.29	)		(0.45	)
Net asset value, end of period	$	15.02		$	15.84		$	16.83		$	16.37		$	14.32		$	12.93
Total return A		0.28	%B		(0.07	)%		10.98	%		18.97	%		13.04	%		4.73	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	28,907		$	39,151		$	36,114		$	7,263		$	2,482		$	401
Ratios to average net assets:
Expenses, before reimbursements		0.67	%C		0.66	%		0.67	%		0.68	%		0.69	%		1.48	%
Expenses, net of reimbursements		0.67	%C		0.66	%		0.68	%		0.70	%		0.69	%		0.70	%
Net investment income, before reimbursements		2.07	%C		1.75	%		2.01	%		1.71	%		2.08	%		1.55	%
Net investment income, net of reimbursements		2.07	%C		1.75	%		2.01	%		1.69	%		2.08	%		2.34	%
Portfolio turnover rate		16	%B		62	%		34	%		56	%		58	%		47	%

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B Not annualized.

^C Annualized.

53

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014			2013			2012			2011
	(unaudited)
Net asset value, beginning of period	$	14.30		$	15.31		$	14.98		$	13.16		$	11.93		$	11.66
Income from investment operations:
Net investment income		0.08			0.22			0.42			0.26			0.23			0.25
Net gains (losses) from investments (both realized and unrealized)		(0.08	)		(0.26	)		1.11			2.13			1.30			0.28
Total income (loss) from investment operations		0.00			(0.04	)		1.53			2.39			1.53			0.53
Less distributions:
Dividends from net investment income		(0.08	)		(0.19	)		(0.37	)		(0.26	)		(0.30	)		(0.26	)
Distributions from net realized gains		(0.75	)		(0.78	)		(0.83	)		(0.31	)		—			—
Total distributions		(0.83	)		(0.97	)		(1.20	)		(0.57	)		(0.30	)		(0.26	)
Net asset value, end of period	$	13.47		$	14.30		$	15.31		$	14.98		$	13.16		$	11.93
Total return A		0.15	%B		(0.35	)%		10.75	%		18.65	%		12.86	%		4.52	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	129,996		$	155,758		$	165,808		$	109,337		$	89,272		$	83,657
Ratios to average net assets:
Expenses, before reimbursements		0.90	%C		0.91	%		0.92	%		0.92	%		0.92	%		0.92	%
Expenses, net of reimbursements		0.90	%C		0.91	%		0.92	%		0.92	%		0.92	%		0.92	%
Net investment income, before reimbursements		1.85	%C		1.51	%		1.84	%		1.62	%		1.95	%		2.16	%
Net investment income, net of reimbursements		1.85	%C		1.51	%		1.84	%		1.62	%		1.95	%		2.16	%
Portfolio turnover rate		16	%B		62	%		34	%		56	%		58	%		47	%
	Advisor Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014			2013			2012			2011
	(unaudited)
Net asset value, beginning of period	$	15.02		$	16.04		$	15.65		$	13.73		$	12.36		$	12.11
Income from investment operations:
Net investment income (loss)		0.13			0.22			0.18			(0.12	)		0.42			0.41
Net gains (losses) from investments (both realized and unrealized)		(0.14	)		(0.29	)		1.39			2.60			1.14			0.11
Total income (loss) from investment operations		(0.01	)		(0.07	)		1.57			2.48			1.56			0.52
Less distributions:
Dividends from net investment income		(0.06	)		(0.17	)		(0.35	)		(0.25	)		(0.19	)		(0.27	)
Distributions from net realized gains		(0.75	)		(0.78	)		(0.83	)		(0.31	)		—			—
Total distributions		(0.81	)		(0.95	)		(1.18	)		(0.56	)		(0.19	)		(0.27	)
Net asset value, end of period	$	14.20		$	15.02		$	16.04		$	15.65		$	13.73		$	12.36
Total return A		0.12	%B		(0.58	)%		10.58	%		18.52	%		12.62	%		4.33	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	10,774		$	13,510		$	14,706		$	6,353		$	2,507		$	3,536
Ratios to average net assets:
Expenses, before reimbursements		1.07	%C		1.06	%		1.07	%		1.07	%		1.09	%		1.09	%
Expenses, net of reimbursements		1.07	%C		1.06	%		1.07	%		1.07	%		1.09	%		1.09	%
Net investment income, before reimbursements		1.68	%C		1.35	%		1.75	%		1.32	%		1.82	%		2.01	%
Net investment income, net of reimbursements		1.68	%C		1.35	%		1.75	%		1.32	%		1.82	%		2.01	%
Portfolio turnover rate		16	%B		62	%		34	%		56	%		58	%		47	%

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B Not annualized.

^C Annualized.

54

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014			2013			2012			2011
	(unaudited)
Net asset value, beginning of period	$	14.27		$	15.29		$	14.97		$	13.16		$	12.06		$	11.94
Income from investment operations:
Net investment income		0.12			0.23			0.33			0.22			0.33			0.38
Net gains (losses) from investments (both realized and unrealized)		(0.12	)		(0.29	)		1.18			2.14			1.17			0.14
Total income (loss) from investment operations		0.00			(0.06	)		1.51			2.36			1.50			0.52
Less distributions:
Dividends from net investment income		(0.07	)		(0.18	)		(0.36	)		(0.24	)		(0.40	)		(0.40	)
Distributions from net realized gains		(0.75	)		(0.78	)		(0.83	)		(0.31	)		—			—
Total distributions		(0.82	)		(0.96	)		(1.19	)		(0.55	)		(0.40	)		(0.40	)
Net asset value, end of period	$	13.45		$	14.27		$	15.29		$	14.97		$	13.16		$	12.06
Total return A		0.19	%B		(0.48	)%		10.67	%		18.45	%		12.65	%		4.37	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	27,184		$	29,074		$	25,579		$	6,284		$	3,127		$	588
Ratios to average net assets:
Expenses, before reimbursements		0.98	%C		0.97	%		1.02	%		1.10	%		1.13	%		1.59	%
Expenses, net of reimbursements		0.98	%C		0.97	%		1.04	%		1.10	%		1.09	%		1.10	%
Net investment income, before reimbursements		1.76	%C		1.44	%		1.68	%		1.31	%		1.62	%		1.47	%
Net investment income, net of reimbursements		1.76	%C		1.44	%		1.67	%		1.30	%		1.66	%		1.95	%
Portfolio turnover rate		16	%B		62	%		34	%		56	%		58	%		47	%
	C Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014			2013			2012			2011
	(unaudited)
Net asset value, beginning of period	$	14.43		$	15.47		$	15.13		$	13.33		$	12.13		$	11.92
Income from investment operations:
Net investment income		0.07			0.14			0.21			0.17			0.15			0.20
Net gains (losses) from investments (both realized and unrealized)		(0.12	)		(0.29	)		1.20			2.11			1.29			0.22
Total income (loss) from investment operations		(0.05	)		(0.15	)		1.41			2.28			1.44			0.42
Less distributions:
Dividends from net investment income		(0.04	)		(0.11	)		(0.24	)		(0.17	)		(0.24	)		(0.21	)
Distributions from net realized gains		(0.75	)		(0.78	)		(0.83	)		(0.31	)		—			—
Total distributions		(0.79	)		(0.89	)		(1.07	)		(0.48	)		(0.24	)		(0.21	)
Net asset value, end of period	$	13.59		$	14.43		$	15.47		$	15.13		$	13.33		$	12.13
Total return A		(0.20	)%B		(1.14	)%		9.80	%		17.50	%		11.86	%		3.56	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	42,289		$	45,642		$	32,045		$	11,574		$	3,579		$	922
Ratios to average net assets:
Expenses, before reimbursements		1.73	%C		1.72	%		1.78	%		1.84	%		1.85	%		2.34	%
Expenses, net of reimbursements		1.73	%C		1.72	%		1.79	%		1.85	%		1.83	%		1.82	%
Net investment income, before reimbursements		1.01	%C		0.69	%		0.94	%		0.51	%		0.88	%		0.66	%
Net investment income, net of reimbursements		1.01	%C		0.69	%		0.93	%		0.50	%		0.90	%		1.18	%
Portfolio turnover rate		16	%B		62	%		34	%		56	%		58	%		47	%

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B Not annualized.

^C Annualized.

55

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	AMR Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015			2014			2013			2012			2011
	(unaudited)
Net asset value, beginning of period	$	14.82		$	15.80		$	15.44		$	13.54		$	12.27		$	12.02
Income from investment operations:
Net investment income		0.19			0.01			0.39			0.27			0.31			0.34
Net gains (losses) from investments (both realized and unrealized)		(0.15	)		0.05			1.28			2.27			1.34			0.27
Total income from investment operations		0.04			0.06			1.67			2.54			1.65			0.61
Less distributions:
Dividends from net investment income		(0.12	)		(0.26	)		(0.48	)		(0.33	)		(0.38	)		(0.36	)
Distributions from net realized gains		(0.75	)		(0.78	)		(0.83	)		(0.31	)		–			–
Total distributions		(0.87	)		(1.04	)		(1.31	)		(0.64	)		(0.38	)		(0.36	)
Net asset value, end of period	$	13.99		$	14.82		$	15.80		$	15.44		$	13.54		$	12.27
Total return A		0.45	%B		0.28	%		11.40	%		19.32	%		13.55	%		5.09	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	329,323		$	335,910		$	681,527		$	640,579		$	710,816		$	734,927
Ratios to average net assets:
Expenses, before reimbursements		0.32	%C		0.31	%		0.32	%		0.33	%		0.32	%		0.33	%
Expenses, net of reimbursements		0.32	%C		0.31	%		0.32	%		0.33	%		0.32	%		0.33	%
Net investment income, before reimbursements		2.41	%C		2.11	%		2.45	%		2.29	%		2.57	%		2.75	%
Net investment income, net of reimbursements		2.41	%C		2.11	%		2.45	%		2.29	%		2.57	%		2.75	%
Portfolio turnover rate		16	%B		62	%		34	%		56	%		58	%		47	%

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B Not annualized.

^C Annualized.

56

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015D			2014			2013			2012			2011E
	(unaudited)
Net asset value, beginning of period	$	14.62		$	14.76		$	14.33		$	10.95		$	9.73		$	9.27
Income from investment operations:
Net investment income		0.11			0.16			0.12			0.13			0.14			0.09
Net gains (losses) from investments (both realized and unrealized)		(0.24	)		0.25			1.27			3.93			1.21			0.48
Total income (loss) from investment operations		(0.13	)		0.41			1.39			4.06			1.35			0.57
Less distributions:
Dividends from net investment income		(0.17	)		(0.10	)		(0.11	)		(0.20	)		(0.13	)		(0.11	)
Distributions from net realized gains		(0.71	)		(0.45	)		(0.85	)		(0.48	)		—			—
Total distributions		(0.88	)		(0.55	)		(0.96	)		(0.68	)		(0.13	)		(0.11	)
Redemption fees added to beneficial interestsF		—			—			—			—			—			—
Net asset value, end of period	$	13.61		$	14.62		$	14.76		$	14.33		$	10.95		$	9.73
Total return A		(0.67	)%B		2.73	%		10.20	%		39.18	%		14.07	%		6.08	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	248,760		$	258,503		$	193,635		$	72,207		$	34,208		$	33,441
Ratios to average net assets:
Expenses, before reimbursements		0.86	%C		0.85	%		0.89	%		0.99	%		1.06	%		1.10	%
Expenses, net of reimbursements		0.89	%C		0.85	%		0.93	%		0.98	%		0.98	%		0.97	%
Net investment income, before reimbursements		1.67	%C		1.10	%		0.92	%		1.05	%		1.17	%		0.91	%
Net investment income, net of reimbursements		1.64	%C		1.10	%		0.88	%		1.06	%		1.25	%		1.04	%
Portfolio turnover rate		16	%B		79	%		24	%		48	%		87	%		107	%
	Y Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015D			2014			2013			2012			2011E
	(unaudited)
Net asset value, beginning of period	$	14.52		$	14.66		$	14.25		$	10.92		$	9.72		$	9.27
Income from investment operations:
Net investment income		0.11			0.15			0.18			0.17			0.13			0.08
Net gains (losses) from investments (both realized and unrealized)		(0.24	)		0.26			1.19			3.86			1.21			0.48
Total income (loss) from investment operations		(0.13	)		0.41			1.37			4.03			1.34			0.56
Less distributions:
Dividends from net investment income		(0.17	)		(0.10	)		(0.11	)		(0.22	)		(0.14	)		(0.11	)
Distributions from net realized gains		(0.71	)		(0.45	)		(0.85	)		(0.48	)		–			–
Total distributions		(0.88	)		(0.55	)		(0.96	)		(0.70	)		(0.14	)		(0.11	)
Redemption fees added to beneficial interestsF		—			—			—			—			—			—
Net asset value, end of period	$	13.51		$	14.52		$	14.66		$	14.25		$	10.92		$	9.72
Total return A		(0.72	)%B		2.76	%		10.15	%		38.99	%		13.97	%		5.98	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	73,788		$	70,009		$	31,075		$	2,814		$	516		$	52
Ratios to average net assets:
Expenses, before reimbursements		0.95	%C		0.94	%		0.98	%		1.11	%		1.28	%		11.62	%
Expenses, net of reimbursements		0.98	%C		0.94	%		0.98	%		1.08	%		1.06	%		1.06	%
Net investment income (loss), before reimbursements		1.59	%C		1.02	%		0.80	%		0.79	%		0.82	%		(9.44	)%
Net investment income, net of reimbursements		1.56	%C		1.02	%		0.80	%		0.82	%		1.03	%		1.12	%
Portfolio turnover rate		16	%B		79	%		24	%		48	%		87	%		107	%

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B Not annualized.^C Annualized.

^C Annualized.

^D WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015.

^E LMCG Investments (formerly known as Lee Munder Capital Group, LLC) was added as an investment manager to the Mid-Cap Value Fund on July 1, 2011 and terminated on April 30, 2015.

^F Amounts represent less than $0.01 per share.

57

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015D			2014			2013			2012			2011E
	(unaudited)
Net asset value, beginning of period	$	14.73		$	14.89		$	14.47		$	10.98		$	9.71		$	9.20
Income from investment operations:
Net investment income (loss)		0.10			0.13			0.16			0.23			0.34			(0.03	)G
Net gains (losses) from investments (both realized and unrealized)		(0.24	)		0.25			1.21			3.83			1.00			0.63
Total income (loss) from investment operations		(0.14	)		0.38			1.37			4.06			1.34			0.60
Less distributions:
Dividends from net investment income		(0.14	)		(0.09	)		(0.10	)		(0.09	)		(0.07	)		(0.09	)
Distributions from net realized gains		(0.71	)		(0.45	)		(0.85	)		(0.48	)		—			—
Total distributions		(0.85	)		(0.54	)		(0.95	)		(0.57	)		(0.07	)		(0.09	)
Redemption fees added to beneficial interestsF		—			—			—			—			—			—
Net asset value, end of period	$	13.74		$	14.73		$	14.89		$	14.47		$	10.98		$	9.71
Total return A		(0.77	)%B		2.52	%		9.99	%		38.69	%		13.84	%		6.49	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	261,328		$	304,800		$	246,405		$	17,871		$	4,157		$	1,812
Ratios to average net assets:
Expenses, before reimbursements		1.10	%C		1.09	%		1.13	%		1.25	%		1.44	%		1.32	%
Expenses, net of reimbursements		1.13	%C		1.09	%		1.14	%		1.23	%		1.23	%		1.23	%
Net investment income, before reimbursements		1.45	%C		0.87	%		0.61	%		0.68	%		0.75	%		1.33	%
Net investment income, net of reimbursements		1.42	%C		0.87	%		0.60	%		0.70	%		0.96	%		1.42	%
Portfolio turnover rate		16	%B		79	%		24	%		48	%		87	%		107	%
	Advisor Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015D			2014			2013			2012			2011E
	(unaudited)
Net asset value, beginning of period	$	14.27		$	14.46		$	14.07		$	10.81		$	9.56		$	9.12
Income from investment operations:
Net investment income		0.08			0.08			0.11			0.11			0.05			0.07
Net gains (losses) from investments (both realized and unrealized)		(0.24	)		0.25			1.17			3.83			1.23			0.45
Total income (loss) from investment operations		(0.16	)		0.33			1.28			3.94			1.28			0.52
Less distributions:
Dividends from net investment income		(0.08	)		(0.07	)		(0.04	)		(0.20	)		(0.03	)		(0.08	)
Distributions from net realized gains		(0.71	)		(0.45	)		(0.85	)		(0.48	)		—			—
Total distributions		(0.79	)		(0.52	)		(0.89	)		(0.68	)		(0.03	)		(0.08	)
Redemption fees added to beneficial interestsF		—			—			—			—			—			—
Net asset value, end of period	$	13.32		$	14.27		$	14.46		$	14.07		$	10.81		$	9.56
Total return A		(0.93	)%B		2.25	%		9.58	%		38.43	%		13.44	%		5.65	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	6,942		$	6,684		$	7,149		$	728		$	465		$	37
Ratios to average net assets:
Expenses, before reimbursements		1.38	%C		1.37	%		1.40	%		1.61	%		1.99	%		1.98	%
Expenses, net of reimbursements		1.41	%C		1.37	%		1.46	%		1.49	%		1.48	%		1.49	%
Net investment income, before reimbursements		1.17	%C		0.58	%		0.35	%		0.46	%		0.10	%		0.21	%
Net investment income, net of reimbursements		1.13	%C		0.58	%		0.30	%		0.58	%		0.61	%		0.69	%
Portfolio turnover rate		16	%B		79	%		24	%		48	%		87	%		107	%

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B Not annualized.

^C Annualized.

^D WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015.

^E LMCG Investments (formerly known as Lee Munder Capital Group, LLC) was added as an investment manager to the Mid-Cap Value Fund on July 1, 2011 and terminated on April 30, 2015.

^F Amounts represent less than $0.01 per share.

^G Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

58

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015D			2014			2013			2012			2011E
	(unaudited)
Net asset value, beginning of period	$	14.28		$	14.43		$	14.09		$	10.82		$	9.61		$	9.18
Income from investment operations:
Net investment income		0.08			0.11			0.13			0.14			0.09			0.11
Net gains (losses) from investments (both realized and unrealized)		(0.23	)		0.25			1.16			3.80			1.20			0.40
Total income (loss) from investment operations		(0.15	)		0.36			1.29			3.94			1.29			0.51
Less distributions:
Dividends from net investment income		(0.10	)		(0.06	)		(0.10	)		(0.19	)		(0.08	)		(0.08	)
Distributions from net realized gains		(0.71	)		(0.45	)		(0.85	)		(0.48	)		–			–
Total distributions		(0.81	)		(0.51	)		(0.95	)		(0.67	)		(0.08	)		(0.08	)
Redemption fees added to beneficial interestsF		—			—			—			—			—			—
Net asset value, end of period	$	13.32		$	14.28		$	14.43		$	14.09		$	10.82		$	9.61
Total return A		(0.85	)%B		2.43	%		9.68	%		38.39	%		13.56	%		5.49	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	21,964		$	16,422		$	18,345		$	1,667		$	264		$	101
Ratios to average net assets:
Expenses, before reimbursements		1.25	%C		1.25	%		1.33	%		1.48	%		1.61	%		3.44	%
Expenses, net of reimbursements		1.28	%C		1.25	%		1.33	%		1.49	%		1.49	%		1.48	%
Net investment income (loss), before reimbursements		1.30	%C		0.71	%		0.42	%		0.44	%		0.56	%		(1.36	)%
Net investment income, net of reimbursements		1.27	%C		0.71	%		0.42	%		0.43	%		0.68	%		0.60	%
Portfolio turnover rate		16	%B		79	%		24	%		48	%		87	%		107	%

	C Class
	Six Months Ended April 30, 2016			Year Ended October 31,
				2015D			2014			2013			2012			2011E
	(unaudited)
Net asset value, beginning of period	$	13.87		$	14.08		$	13.81		$	10.70		$	9.56		$	9.18
Income from investment operations:
Net investment income		0.03			0.01			0.08			0.11			0.06			0.05
Net gains (losses) from investments (both realized and unrealized)		(0.22	)		0.23			1.09			3.67			1.15			0.38
Total income (loss) from investment operations		(0.19	)		0.24			1.17			3.78			1.21			0.43
Less distributions:
Dividends from net investment income		(0.03	)		—			(0.05	)		(0.19	)		(0.07	)		(0.05	)
Distributions from net realized gains		(0.71	)		(0.45	)		(0.85	)		(0.48	)		—			—
Total distributions		(0.74	)		(0.45	)		(0.90	)		(0.67	)		(0.07	)		(0.05	)
Redemption fees added to beneficial interestsF		—			—			—			—			—			—
Net asset value, end of period	$	12.94		$	13.87		$	14.08		$	13.81		$	10.70		$	9.56
Total return A		(1.25	)%B		1.64	%		8.88	%		37.32	%		12.75	%		4.64	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	6,081		$	6,239		$	5,104		$	905		$	254		$	22
Ratios to average net assets:
Expenses, before reimbursements		2.02	%C		2.01	%		2.12	%		2.25	%		2.46	%		19.14	%
Expenses, net of reimbursements		2.05	%C		2.01	%		2.13	%		2.24	%		2.22	%		2.24	%
Net investment income (loss), before reimbursements		0.52	%C		(0.05	)%		(0.33	)%		(0.27	)%		(0.40	)%		(16.96	)%
Net investment income (loss), net of reimbursements		0.49	%C		(0.05	)%		(0.34	)%		(0.26	)%		(0.15	)%		(0.06	)%
Portfolio turnover rate		16	%B		79	%		24	%		48	%		87	%		107	%

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B Not annualized.

^C Annualized.

^D WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015.

^E LMCG Investments (formerly known as Lee Munder Capital Group, LLC) was added as an investment manager to the Mid-Cap Value Fund on July 1, 2011 and terminated on April 30, 2015.

^F Amounts represent less than $0.01 per share.

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Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement of the Funds

(Unaudited)

At its March 3–4, 2016 meetings, the Boards of Trustees (“Board”) considered the approval of a new Management Agreement (“New Agreement”) between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (the “Trust”) on behalf of the existing series of the Trust, including the series of the Trust covered in this shareholder report (each, a “Fund”). The New Agreement combines the terms of each Fund’s prior management agreement and administration agreement and establishes separate standardized fee schedules for four categories of Funds, which include fee schedule breakpoints. The Board considered that, with respect to each Fund, the single management fee rate under the New Agreement does not exceed the former combined investment management and administrative services fee rates, and there is no change to the investment management or administrative services provided or the aggregate fees charged to the Fund.

The Board reviewed information provided by the Manager in response to requests from the Board in connection with the Board’s consideration of the New Agreement. The Board also considered information that had been provided by the Manager to the Board at its November 9-10, 2015 meetings when the Board had met with various management personnel of the Manager regarding certain key aspects of the materials submitted in support of the New Agreement. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the approval of the Management Agreement. The memorandum explained the regulatory requirements surrounding the Trustees’ process for evaluating investment advisors and the terms of investment advisory contracts.

The Board determined that it did not need to consider certain factors that it typically considers during its review of the Funds’ management agreements because the Board had reviewed, among other matters, the nature, extent and quality of services being provided to the Funds by the Manager at in-person meetings held on June 2–3, 2015, when it reviewed the prior management agreement or, in connection with the initial approval of that agreement. The Board noted that it previously had considered and approved the prior management agreement at an in-person meeting held on November 12, 2014, at telephonic meetings held on November 26, 2014 and December 6, 2014 and at an in-person meeting held on December 10, 2014.

In connection with the Board’s review of the New Agreement, the Board considered, among other things, information provided by the Manager regarding the terms of the New Agreement and the relevant differences between the New Agreement and the prior management agreement and administration agreement. The Board considered the Manager’s representations that the New Agreement would not reduce or modify in any way the nature or level of the advisory or administration services provided to the Funds. The Board also considered that the fee rate payable by a Fund under the New Agreement would not exceed the aggregate fee rate payable by the Fund under the prior management agreement and administration agreement. Additionally, the Board considered the Manager’s representation that there would be no change in the professional personnel who primarily perform management and administrative services for the Funds and the Manager’s representations regarding disclosure of the New Agreement to new and existing shareholders. The Board also considered that an independent consultant retained to assist the Board in evaluating the Manager’s proposal to combine the prior management agreement and administration agreement had concluded that the proposal was reasonable and in the best interest of shareholders.

Based on the various considerations described above, the Board, including a majority of Trustees who are not “interested persons” of the Funds or the Manager, as that term is defined in the 1940 Act: (1) concluded that the proposed management fee is fair and reasonable with respect to each Fund; (2) determined that each Fund and its shareholders would benefit from the Manager’s continued management of the Fund; and (3) approved the Management Agreement on behalf of each Fund.

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65

Delivery of Documents

eDelivery is NOW AVAILABLE- Stop traditional mail delivery and receive your

shareholder reports and summary prospectus on-line. Sign up at

www.americanbeaconfunds.com

If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.

To obtain more information about the Fund:

By E-mail: american_beacon.funds@ambeacon.com	On the Internet: Visit our website at www.americanbeaconfunds.com
By Telephone: Institutional, Y, Investor, and Advisor Classes Call (800) 658-5811 AMR ClassSM Call (800) 345-2345	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	Availability of Proxy Voting Policy and Records A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN State Street Bank and Trust Boston, Massachusetts TRANSFER AGENT Boston Financial Data Services Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas DISTRIBUTOR Foreside Fund Services, LLC Portland, Maine

This report is prepared for shareholders of the American Beacon Funds and may be distributed to others only if preceded or accompanied by a current Prospectus or Summary Prospectus.

American Beacon Funds, American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund are service marks of American Beacon Advisors, Inc.

SAR 4/16

American Beacon
FUNDS
2016 SEMI-ANNUAL REPORT
APRIL 30, 2016
GARCIA HAMILTON QUALITY BOND FUND

About American Beacon Advisors

Since 1986, American Beacon Advisors has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management.

Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company.

Contents

President’s Message	1
Performance Overview	2
Schedule of Investments:
Garcia Hamilton Quality Bond Fund	6
Financial Statements	7
Notes to the Financial Statements	10
Financial Highlights	18
Additional Information	Back Cover

The use of fixed-income securities entails interest rate and credit risks. Credit risk is the risk that the issuer of a bond will fail to make timely payment of interest or principal; and the decline in an issuer’s credit rating can cause the price of its bonds to go down. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

This may contain information obtained from third parties, including ratings from credit rating agencies such as Standard & Poor’s. Reproduction and distribution of third-party content in any form is prohibited except with the prior written permission of the related third party. Third-party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD-PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD-PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS. Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes and should not be relied on as investment advice.

Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and each Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.

American Beacon Funds April 30, 2016

Dear Shareholders, During the six-month period ended April 30, 2016, disparate central bank policies, uneven economic growth and volatile oil prices set the stage for mixed returns around the globe. Early in the period, uncertainty over the timing of the U.S. Federal Reserve’s (“the Fed”) first interest rate increase since emergency lending rates were established during the 2008 financial crisis weighed heavily on investors’ minds. On December 16, 2015, following months of speculation, the Federal Open Market Committee (“FOMC”) increased its benchmark lending rates from a range of 0% to 0.25% to a range of 0.25% to 0.5%; it was the first interest rate hike in nearly a decade. Conversely, during first quarter 2016, many central banks around the world decided to continue or expand their economic stimulation policies. The Bank of Japan (“BOJ”) pushed its rates into negative territory and the European Central Bank (“ECB”) cut a key rate to zero in March 2016. China’s slowing growth also escalated concerns for markets and companies around the globe. In this environment, international stocks fluctuated from one extreme to another; domestic stocks made modest gains thanks to a rally in oil prices and positive economic reports; and emerging-market stocks

rebounded and outpaced developed-market stocks. Bonds outperformed stocks thanks to declining interest rates.

During the month of April 2016, the BOJ and the ECB left their interest rate policies unchanged. On April 27, 2016, the FOMC decided to maintain its short-term interest rates in the range of 0.25% to 0.5%. If the U.S. economy continues to expand, the FOMC plans to increase short-term interest rates. Crude oil also rallied from $38 to $46 per barrel.

• From its inception on April 4, 2016, through April 30, 2016, the American Beacon Garcia Hamilton Quality Bond Fund (Investor Class) returned -0.53%. The Fund is designed to provide income, quality and liquidity consistent with the preservation of capital.

For the period since the Fund’s inception, the Barclays Capital U.S. Aggregate Index – a benchmark for investment-grade bonds invested in the U.S. - returned 0.34%.

We are proud to offer a broad range of funds to help investors navigate the economic storms and market downturns in the U.S. and abroad. Our years of experience evaluating sub-advisors have led us to identify and partner with several asset managers who have adhered to their disciplined processes for many years and through a variety of economic and market conditions.    

Thank you for your continued investment in the American Beacon Funds. For additional information about our Funds or to access your account information, please visit www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President,

American Beacon Funds

1

American Beacon Garcia Hamilton Quality Bond Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

The inception date for the Garcia Hamilton Quality Bond Fund (“the Fund”) was April 4, 2016, and the returns below reflect performance from inception through April 30, 2016. The Investor Class of the Fund returned -0.53%, which underperformed the Barclays U.S. Aggregate Index (“the Index”) return of 0.34%.

Total Returns for the Period ended 4/30/16

	Ticker	Since Inception 4/4/16*
Institutional Class (1,3)	GHQIX		(0.53	%)
Y Class (1,3)	GHQYX		(0.55	%)
Investor Class (1,3)	GHQPX		(0.53	%)
Barclays Capital U.S. Aggregate Index (2)			0.34	%

* Not annualized

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of the date indicated and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1.800.967.9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. A portion of the fees charged to each Class of the Fund has been waived since inception. Performance prior to waiving fees was lower than the actual returns shown since inception.

2. The Barclays Capital U.S. Aggregate Index is a market value weighted performance benchmark for government, corporate, mortgage-backed and asset-backed fixed-rate debt securities of all maturities.

3. The total annual Fund operating expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, and Investor Class shares was 0.70%, 0.80%, and 1.07%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

During its initial stage of investment, the Fund’s duration was neutral to that of the Index, but the sector allocations differed. The Fund was underweight Corporates and Agency Mortgages, which were the best-performing sectors in the Index, and it was overweight Agency notes, which were among the worst-performing sectors. Additionally, the initial investment of the Fund’s assets reflected a greater impact from trading costs as compared to the Index.

Within Corporates, lower-rated issuers outperformed during the period as the U.S. economy advanced, commodity prices stabilized, and the Federal Reserve Board remained optimistic. The Fund invests only in higher-quality Corporate issuers and did not benefit from the outperformance in lower-rated issuers.

While the first month of operation provided its challenges, the Fund was designed to offer high-quality exposure to the U.S. bond market and seeks to perform well when equity markets become volatile. Despite recent optimism in the U.S., uncertainty persists in the global environment. Given the potential for increased volatility in Europe and Asia, the Fund plays an important role in investment allocation.

2

American Beacon Garcia Hamilton Quality Bond Fund^SM

Performance Overview

April 30, 2016 (Unaudited)

Top Ten Holdings (% Net Assets)

Federal Farm Credit Bank, 0.481%, Due 4/9/2018		9.2
Fannie Mae Notes, 1.75%, Due 8/17/2018		6.5
Federal Farm Credit Bank, 0.443%, Due 11/27/2017		5.4
Federal Home Loan Bank, 0.609%, Due 8/25/2017		5.4
Fannie Mae Notes, 1.75%, Due 6/8/2018		4.9
Fannie Mae Notes, 1.75%, Due 8/24/2018		3.4
Federal Home Loan Bank, 0.568%, Due 10/25/2017		1.4
Citigroup, Inc., 4.40%, Due 6/10/2025		0.9
Goldman Sachs Group Inc., 3.85%, Due 7/8/2024		0.9
Berkshire Hathaway, Inc., 3.125%, Due 3/15/2026		0.9
Total Fund Holdings	20

Sector Weightings (% Investments)

U.S. Treasury		22.9
Agency (non-mortgage)		55.5
Corporate		13.4
Finance	9.4
Manufacturing	1.9
Service	1.1
Electric	1.0
Cash Equivalent		8.2

May not equal 100% due to rounding.

3

American Beacon Garcia Hamilton Quality Bond Fund^SM

Fund Expenses

April 30, 2016 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, and redemption fees if applicable, and (2) ongoing costs, including management fees, administrative service fees, and other Fund expenses. The examples below are intended to help you understand the ongoing cost (in dollars) of investing in a particular Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the period from April 4, 2016 through April 30, 2016.

Actual Expenses

The following tables provide information about actual account values and actual expenses. You may use the information on this page, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the “Expenses Paid During Period” for the applicable Fund to estimate the expenses you paid on your account during this period. Shareholders that invest in a Fund through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

Hypothetical Example for Comparison Purposes

The following tables provide information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed 5% per year rate of return before expenses (not the Fund’s actual return). You may compare the ongoing costs of investing in a particular Fund with other funds by contrasting this 5% hypothetical example and the 5% hypothetical examples that appear in the shareholder reports of the other funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. Shareholders that invest in a Fund through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by a Fund, such as redemption fees as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the following tables are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.

4

American Beacon Garcia Hamilton Quality Bond Fund^SM

Fund Expenses

April 30, 2016 (Unaudited)

	Beginning Account Value 4/4/16		Ending Account Value 4/30/16		Expenses Paid During Period* 4/4/16 - 4/30/16
Institutional Class
Actual	$	1,000.00	$	991.00	$	0.33
Hypothetical **	$	1,000.00	$	1,003.22	$	0.33
Y Class
Actual	$	1,000.00	$	994.20	$	0.40
Hypothetical **	$	1,000.00	$	1,003.15	$	0.41
Investor Class
Actual	$	1,000.00	$	994.50	$	0.61
Hypothetical **	$	1,000.00	$	1,002.94	$	0.61

* Expenses are equal to the Fund’s annualized expense ratios for the since inception period of 0.70%, 0.80% and 1.07% for the Institutional, Y and Investor Classes respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days since Fund inception (26) by days in the year (366) to reflect the period.

** 5% return before expenses.

5

American Beacon Garcia Hamilton Quality Bond Fund^SM

Schedule of Investments

April 30, 2016 (Unaudited)

	Par Amount		Fair Value
	(000’s)		(000’s)
CORPORATE OBLIGATIONS - 8.73%
Finance - 6.12%
Aflac, Inc., 3.625%, Due 11/15/2024	$	55	$	58
Berkshire Hathaway, Inc., 3.125%, Due 3/15/2026		80		84
Citigroup, Inc., 4.40%, Due 6/10/2025		80		82
Goldman Sachs Group Inc., 3.85%, Due 7/8/2024		80		84
JP Morgan Chase & Co., 3.875%, Due 2/1/2024		55		59
MetLife Inc., 4.368%, Due 9/15/2023		55		60
Morgan Stanley, 3.875%, Due 4/29/2024		75		79
Wells Fargo & Co, 3.45%, Due 2/13/2023		60		61
				567
Manufacturing - 1.28%
Apple Inc., 3.45%, Due 5/6/2024		55		59
IBM Corp., 3.625%, Due 2/12/2024		55		59
				118
Service - 0.69%
Wyeth Co., LLC, 6.45%, Due 2/1/2024B		50		63
Utilities - 0.63%
Florida Power & Light Co., 1st Mortgage, 3.25%, Due 6/1/2024		55		58
Total Corporate Obligations (Cost $808)				806
U.S. GOVERNMENT AGENCY OBLIGATIONS - 36.19%
Fannie Mae Notes,
1.75%, Due 6/8/2018		450		451
1.75%, Due 8/17/2018		600		602
1.75%, Due 8/24/2018		315		316
Federal Farm Credit Bank
0.443%, Due 11/27/2017 A		500		499
0.481%, Due 4/9/2018 A		850		849
Federal Home Loan Bank
0.609%, Due 8/25/2017 A		500		500
0.568%, Due 10/25/2017		130		130
Total U.S. Government Agency Obligations (Cost $3,349)				3,347
U.S. TREASURY OBLIGATIONS - 14.95% (Cost $1,409)
2.875%, Due 8/15/2045		1,325		1,383
	Shares
SHORT-TERM INVESTMENTS - 5.34% (Cost $494)
American Beacon U.S. Government Money Market Select Fund, Select ClassC		494,255		494
TOTAL INVESTMENTS - 65.21% (Cost $6,060)				6,030
OTHER ASSETS, NET OF LIABILITIES - 34.79%				3,219
TOTAL NET ASSETS - 100.00%			$	9,249

Percentages are stated as a percent of net assets.

^A  The coupon rate shown on floating or adjustable rate securities represents the rate at period end. The due date on these types of securities reflects the final maturity date.

^B  LLC – Limited Liability Company.

^C  The Fund is affiliated by having the same investment advisor.

See accompanying notes

6

American Beacon Garcia Hamilton Quality Bond Fund^SM

Statements of Assets and Liabilities

April 30, 2016 (Unaudited) (in thousands except share and per share amounts)

	Garcia Hamilton Quality Bond Fund
Assets:
Investments in unaffiliated securities, at fair value A	$	5,536
Investments in affiliated securities, at fair valueB		494
Dividends and interest receivable		23
Receivable for fund shares sold		3,566
Receivable for expense reimbursement (Note 2)		12
Total assets		9,631
Liabilities:
Payable for investments purchased		368
Management and investment advisory fees payable		2
Transfer agent fees payable		1
Professional fees payable		6
Payable for prospectus and shareholder reports		1
Registration expense payable		3
Other liabilities		1
Total liabilities		382
Net Assets	$	9,249
Analysis of Net Assets:
Paid-in-capital		9,279
Unrealized (depreciation) of investments		(30	)
Net assets	$	9,249
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		910,122
Y Class		10,005
Investor Class		10,513
Net assets (not in thousands):
Institutional Class	$	9,045,243
Y Class	$	99,447
Investor Class	$	104,463
Net asset value, offering and redemption price per share:
Institutional Class	$	9.94
Y Class	$	9.94
Investor Class	$	9.94
A Cost of investments in unaffiliated securities	$	5,566
B Cost of investments in affiliated securities	$	494

See accompanying notes

7

American Beacon Garcia Hamilton Quality Bond Fund^SM

Statements of Operations

For the Period Ended April 30, 2016 (Unaudited) (in thousands)

	Garcia Hamilton Quality Bond Fund
Investment income:
Interest income	$	6
Total investment income		6
Expenses:
Management and investment advisory fees (Note 2)		2
Custody and fund accounting fees		1
Professional fees		6
Registration fees and expenses		3
Prospectus and shareholder report expenses		1
Other expenses		1
Total expenses		14
Net fees waived and expenses reimbursed (Note 2)		(12	)
Net expenses		2
Net investment income		4
Realized and unrealized gain (loss) from investments:
Change in net unrealized (depreciation) of:
Investments		(30	)
Net (loss) from investments		(30	)
Net (decrease) in net assets resulting from operations	$	(26	)

See accompanying notes

8

American Beacon Garcia Hamilton Quality Bond Fund^SM

Statements of Changes in Net Assets (in thousands)

	Garcia Hamilton Quality Bond Fund
	From April 4 to April 30, 2016
	(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	4
Change in net unrealized (depreciation) from investments		(30	)
Net (decrease) in net assets resulting from operations		(26	)
Distributions to Shareholders:
Net investment income:
Institutional Class		(4	)
Net distributions to shareholders		(4	)
Capital Share Transactions:
Proceeds from sales of shares		4,275
Reinvestment of dividends and distributions		4
Net increase in net assets from capital share transactions		4,279
Net increase in net assets:		4,249
Net Assets:
Beginning of Period		5,000
End of Period	$	9,249
* Includes undistributed (or overdistribution of) net investment income	$	—

See accompanying notes

9

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

1. Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, (the “Act”) as a diversified, open-end management investment company. As of April 30, 2016, the Trust consists of twenty-four active series, one of which is presented in this filing (individually a “Fund”): American Beacon Garcia Hamilton Quality Bond Fund. The remaining twenty-three active series are reported in separate filings.

American Beacon Advisors, Inc. (the “Manager”) is a wholly-owned subsidiary of Astro AB Borrower, Inc., which is indirectly owned by investment funds affiliated with Kelso & Company, L.P. and Estancia Capital Management, LLC, and was organized in 1986 to provide business management, advisory, administrative and asset management consulting services to the Trust and other investors.

Class Disclosure

The inception date for all classes of the American Beacon Garcia Hamilton Quality Bond Fund is April 4, 2016.

The Fund has multiple classes of shares designed to meet the needs of different groups of investors. The following table sets forth the differences among the classes:

Class:	Offered to:
Institutional Class	Investors making an initial investment of $250,000
Y Class	Investors making an initial investment of $100,000
Investor Class	General public and investors investing through an intermediary

Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the Fund. Class specific expenses, where applicable, currently include administration fees, service fees, and distribution fees and vary among the classes as described more fully in Note 2.

2. Transactions with Affiliates

Management Agreement

The Trust and the Manager are parties to a Management Agreement that obligates the Manager to provide or oversee the provision of all investment advisory and administrative services. As compensation for performing the duties required under the Management Agreement, the Manager receives from the Fund an annualized fee equal to the sum of 0.35% of the first $5 billion of the Fund’s average daily net assets, 0.325% of the next $5 billion of the Fund’s average daily net assets, 0.30% of the next $10 billion of the Fund’s average daily net assets, and 0.275% of the Fund’s average daily net assets exceeding $20 billion. The Fund pays the unaffiliated investment advisors hired to direct investment activities of the Fund. Management fees paid by the Fund during the period ended April 30, 2016 were as follows:

Fund	Management Fee Rate			Management Fee		Amounts paid to Investment Advisors		Amounts paid to Manager
Garcia Hamilton Quality Bond		0.55	%	$	2,125	$	773	$	1,352

Distribution Plans

The Fund has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no fees may be charged to the Fund for distribution purposes. However, the Plan

10

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

authorizes the management fees received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Fund does not intend to separately compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor Class. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee of up to 0.375% of the average daily net assets of the Investor Class of the Fund.

Investment in Affiliated Funds

The Fund may invest in the U.S. Government Money Market Select Fund (the “USG Select Fund”). The USG Select Fund and the Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees totaling 0.10% of the average daily net assets of the Select Fund. During the six-months ended April 30, 2016, the Manager earned $37 in fees from the direct investment in the USG Select Fund.

Interfund Lending Program

Pursuant to an exemptive order issued by the Securities and Exchange Commission (“SEC”), the Fund, along with other registered investment companies having management contracts with the Manager, may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating Funds. During the period ended April 30, 2016, the Fund did not utilize the credit facility.

Expense Reimbursement Plan

The Manager contractually agreed to reimburse classes of the Fund to the extent that total operating expenses exceeded the Fund’s expense cap. For the period ended April 30, 2016, the Manager reimbursed expenses as follows:

	Expense Caps
Fund	Class	4/4/16 to 4/30/16			Reimbursed or Recovered Expenses		Expiration of Reimbursements
Garcia Hamilton Quality Bond	Institutional		0.45	%	$	11,310		2019
Garcia Hamilton Quality Bond	Y		0.55	%		425		2019
Garcia Hamilton Quality Bond	Investor		0.83	%		417		2019

Of these amounts, $12,152 was receivable from the Manager for the period ended April 30, 2016 for the Garcia Hamilton Quality Bond Fund. The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of fees waived or expenses reimbursed for a period of up to three years. However, reimbursement will occur only if the Class’ average net assets have grown or expenses have declined sufficiently to allow reimbursement without causing its expense ratio to exceed the previously agreed upon contractual expense limit. The reimbursed expenses listed above will expire in 2019.

3. Security Valuation and Fair Value Measurements

Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally 4 p.m. ET, each day that the Exchange is open for business. Debt securities are normally valued on the basis of prices provided by an independent pricing service and may take into account appropriate factors such as trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data. The prices of debt securities may be determined using quotes obtained from brokers.

11

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Investments in open-end mutual funds are valued at the closing net asset value (“NAV”) per share of the mutual fund on the day of valuation.

Securities for which the market prices are not readily available or are not reflective of the fair value of the security, as determined by the Manager, will be priced at fair value following procedures approved by the Trust’s Board of Trustees (the “Board”).

Valuation Inputs

Various inputs may be used to determine the fair value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1 - Quoted prices in active markets for identical securities.

Level 2 - Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. Level 2 securities are fixed-income securities that are valued using observable inputs as stated above.

Level 3 - Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment.

Level 1 and Level 2 trading assets and trading liabilities, at fair value

Fixed income securities including corporate, convertible and municipal bonds and notes, U.S. government agencies, U.S. Treasury obligations, sovereign issues, bank loans, convertible preferred securities, and non-U.S. bonds are normally valued by pricing service providers that use broker dealer quotations, reported trades or valuation estimates from their internal pricing models. The service providers’ internal models use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar assets. Securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.

U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) also requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of each Fund’s assets and liabilities. During the period ended April 30, 2016, there were no transfers between levels.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2016, the investments were classified as described below (in thousands):

Garcia Hamilton Quality Bond Fund*	Level 1		Level 2		Level 3		Total
Corporate Obligations	$	—	$	806	$	—	$	806
U.S. Government Agency Obligations		—		3,347		—		3,347
U.S. Treasury Obligations		—		1,383		—		1,383
Short-Term Investments - Money Market Funds		494		—		—		494
Total Investments in Securities	$	494	$	5,536	$	—	$	6,030

* Refer to the Schedule of Investments for Sector and Industry information.

12

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

Security Transactions and Investment Income

Security transactions are recorded on the trade date of the security purchase or sale. The Fund may purchase securities with delivery or payment to occur at a later date. At the time the Fund enters into a commitment to purchase a security, the transaction is recorded, and the value of the security is reflected in the NAV. The value of the security may vary with market fluctuations.

Dividend income, net of foreign taxes, is recorded on the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Fund. Interest income is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. For financial and tax reporting purposes, realized gains and losses are determined on the basis of specific lot identification.

Dividends to Shareholders

Dividends from net investment income of the Fund generally will be declared daily and paid monthly. Distributions, if any, of net realized capital gains are generally paid at least annually and recorded on the ex-dividend date.

Commission Recapture

The Fund has established brokerage commission recapture arrangements with certain brokers or dealers. If the Fund’s investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. This amount is reported with the net realized gain in the Fund’s Statements of Operations, if applicable.

Allocation of Income, Expenses, Gains, and Losses

Income, expenses (other than those attributable to a specific class), gains, and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.

Other

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.

13

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

4. Securities and Other Investments

Other Investment Company Securities and Other Exchange Traded Products

The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, unit investment trusts, and other investment companies of the Trust. The Fund may invest in investment company securities advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Fund becomes a shareholder of that investment company. As a result, the Fund’s shareholders indirectly will bear a proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Fund’s shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

5. Principal Risks

In the normal course of business the Fund trades financial instruments and enters into financial transactions where risk of potential loss exists. Security values fluctuate (market risk) and may decline due to factors affecting securities markets in general, particular industries represented in the securities markets or conditions specifically related to a particular country or company. Failure of the other party to a transaction to perform (credit and counterparty risk), for example by not making principal and interest payments when due, reduces the value of the issuer’s debt and could reduce the Fund’s income. Similar to credit risk, the Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which the Fund has unsettled or open transactions will fail to make required payments or otherwise comply with the terms of the instrument, transaction or contract. The potential loss could exceed the value of the financial assets recorded in the financial statements. Some of the Fund’s investments may be illiquid and the Fund may not be able to vary the portfolio investments in response to changes in economic and other conditions. If the Fund is required to liquidate all or a portion of its investments quickly, the Fund may realize significantly less than the value at which it previously recorded those investments.

Market Risks

The Fund’s investments in financial derivatives and other financial instrument exposes the Fund to various risks such as, but not limited to, interest rate, foreign currency and equity risks.

Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by the Fund is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is useful primarily as a measure of the sensitivity of a fixed income’s market price to interest rate (i.e. yield) movements.

If the Fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in financial derivatives that provide exposure to foreign currencies, it will be subject to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, the Fund’s investments in foreign currency denominated securities may reduce the returns of the Fund. These risks

14

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

are heightened when a Fund invests in emerging and frontier market countries, which have less developed capital markets and legal, regulatory, and political systems.

Credit and Counterparty Risks

The Fund will be exposed to credit risk with respect to issuers of portfolio securities. The Fund minimizes concentrations of credit risk by undertaking transactions with a large number of issuers. The Fund could lose money if the issuer or guarantor of a fixed income security is unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations. Securities are subject to varying degrees of credit risk, which are often reflected in credit ratings.

Similar to credit risk, the Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which a Fund has unsettled or open transactions will default. Financial assets, which potentially expose a Fund to counterparty risk, consist principally of cash due from counterparties and investments. All transactions in listed securities are settled/paid for upon delivery using approved counterparties. The risk of default is considered minimal, as delivery of securities sold is only made once the Fund has received payment. Payment is made on a purchase once the securities have been delivered by the counterparty. The trade will fail if either party fails to meet its obligation.

6. Federal Income and Excise Taxes

It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distribution of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, the Fund is treated as a single entity for the purpose of determining such qualification.

The Fund does not have any unrecognized tax benefits in the accompanying financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statements of Operations.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation or depreciation, as applicable, as the income is earned or capital gains are recorded.

Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

The tax character of distributions paid were as follows (in thousands):

	Garcia Hamilton Quality Bond Fund From April 4(1) to April  30, 2016
Distributions paid from:
Ordinary income(2)
Institutional Class	$	4
Y Class		—
Investor Class		—
Total distributions paid	$	4

⁽¹⁾  Commencement of Operations.

⁽²⁾  For tax purposes, short-term capital gains are considered ordinary income distributions.

15

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

As of April 30, 2016, the components of distributable earnings (deficits) on a tax basis were as follows (in thousands):

	Garcia Hamilton Quality Bond Fund
Cost basis of investments for federal income tax purposes	$	6,060
Unrealized appreciation		1
Unrealized depreciation		(31	)
Net unrealized appreciation (depreciation)		(30	)
Undistributed ordinary income		—
Undistributed long-term capital gains		—
Accumulated capital and other losses		—
Other temporary differences		—
Distributable earnings (deficits)	$	(30	)

Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. There were no temporary differences for the period ended April 30, 2016.

Due to inherent differences in the recognition of income, expenses and realized gains (losses) under U.S. GAAP and federal income tax regulations, permanent differences between book and tax reporting have been identified and appropriately reclassified on the Statements of Assets and Liabilities.

Accordingly, the following amounts represent current year permanent differences derived from foreign currency and dividends that have been reclassed as of April 30, 2016 (in thousands):

	Garcia Hamilton
Paid-in-capital	$	—
Undistributed net investment income		—
Accumulated net realized gain (loss)		—
Unrealized appreciation (depreciation) of investments and futures contracts		—

Under the Regulated Investment Company Modernization Act of 2010 (the “RIC MOD”), net capital losses recognized by the Fund are carried forward indefinitely and retain their character as short-term and/or long-term losses.

As of April 30, 2016, the Fund does not have any capital loss carryforwards.

7. Investment Transactions

The aggregate cost of purchases and proceeds from sales of investments, other than short-term obligations, for the period ended April 30, 2016 were $5,566 and $1, respectively.

A summary of the Fund’s transactions in the Select Fund for the period ended April 30, 2016 is set forth below (in thousands):

Affiliate	October 31, 2015 Shares/ Fair Value		Purchases		Sales		April 30, 2016 Shares/ Fair Value		Dividend Income
USG Select Fund	$	—	$	5,754	$	5,260	$	494	$	—	*

* Amount is less than $500.

16

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

April 30, 2016 (Unaudited)

8. Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Fund (shares and dollars in thousands):

For the Period Ended April 30, 2016
	Institutional Class				Y Class				Investor Class
Garcia Hamilton Quality Bond Fund	Shares		Amount		Shares		Amount		Shares		Amount
Shares sold		430	$	4,270		—	$	—		1	$	5
Reinvestment of dividends		—		4		—		—		—		—
Shares redeemed		—		—		—		—		—		—
Net increase in shares outstanding		430	$	4,274		—	$	—		1	$	5

17

American Beacon Garcia Hamilton Quality Bond Fund^SM

Financial Highlights

April 30, 2016 (Unaudited)

	Institutional Class			Y Class			Investor Class
	April 4			April 4			April 4
	to			to			to
	April 30, 2016			April 30, 2016			April 30, 2016
	(unaudited)			(unaudited)			(unaudited)
Net asset value, beginning of period	$	10.00		$	10.00		$	10.00
Income from investment operations:
Net investment income		0.01			0.01			0.00
Net gains from investments (both realized and unrealized)		(0.06	)		(0.07	)		(0.05	)
Total income from investment operations		(0.05	)		(0.06	)		(0.05	)
Less distributions:
Dividends from net investment income		(0.01	)		0.00			(0.01	)
Distributions from net realized gains		—			—			—
Total distributions		(0.01	)		0.00			(0.01	)
Net asset value, end of period	$	9.94		$	9.94		$	9.94
Total return A		(0.53	%)B		(0.55	%)B		(0.53	%)B
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	9,045		$	99		$	105
Ratios to average net assets:
Expenses, before reimbursements		3.49	%C		6.57	%C		6.69	%C
Expenses, net of reimbursements		0.45	%C		0.55	%C		0.83	%C
Net investment (loss), before reimbursements		(2.09	)%C		(5.09	)%C		(5.21	)%C
Net investment income, net of reimbursements		0.95	%C		0.93	%C		0.65	%C
Portfolio turnover rate		0.00	%B		0.00	%B		0.00	%B

^A  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B  Not annualized.

^C  Annualized.

18

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19

Disclosure Regarding the Board of Trustees’ Approval of Management Agreement and Investment Advisory Agreement of the Fund

(Unaudited)

At its March 3–4, 2016 meetings, the Board of Trustees (“Board”) considered: (1) the approval of the Management Agreement among American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Trust”), on behalf of the American Beacon Garcia Hamilton Quality Bond Fund (“Fund”), a new series of the Trust and (2) the approval of a new investment advisory agreement among the Manager, Garcia Hamilton & Associates, L.P. (“Garcia Hamilton”), and the Trust, on behalf of the Fund (the “Garcia Hamilton Agreement”).

Approval of American Beacon Advisors, Inc.

Prior to the meeting, the Board reviewed information provided by the Manager in response to requests from the Board and/or the Manager in connection with the Board’s consideration of the Management Agreement for the Fund, and the Investment Committee of the Board met with representatives of the Manager. The Board also considered information that had been provided by the Manager to the Board at its May 14, 2015 and June 2-3, 2015 meetings in connection with the review of the current Management Agreement and Administration Services Agreement between the Manager and the Trust as they related to the existing series of the Trust (“Existing Funds”).

Provided below is an overview of the primary factors the Board considered at its March 3–4, 2016 meetings at which the Board considered the approval of the Management Agreement with respect to the Fund. In determining whether to approve the Management Agreement, the Board considered, among other things, the following factors with respect to the Fund: (1) the nature and quality of the services to be provided; (2) the potential materiality of the estimated costs to be incurred by the Manager in rendering its services and the resulting profits or losses; (3) the extent to which economies of scale, if any, have been taken into account in setting the fee schedule; (4) whether fee levels reflect economies of scale, if any, for the benefit of investors; (5) comparisons of services and fees with contracts entered into by the Manager with the Existing Funds; and (6) any other benefits derived or anticipated to be derived by the Manager from its relationship with the Fund.

The Board did not identify any particular information that was most relevant to its consideration of the Management Agreement, and each Trustee may have afforded different weight to the various factors. Members of the Board’s Investment Committee posed questions to various management personnel of the Manager regarding certain key aspects of the materials submitted in support of the approval. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the approval of the Management Agreement. The memorandum explained the regulatory requirements surrounding the Trustees’ process for evaluating investment advisors and the terms of investment advisory contracts. Based on its evaluation, the Board unanimously concluded that the terms of the Management Agreement were reasonable and fair and that the approval of the Management Agreement was in the best interests of the Fund.

Nature, Extent and Quality of Services. The Board considered that it had reviewed the current Management Agreement between the Manager and the Trust as it relates to the Existing Funds at its May 14, 2015 and June 2-3, 2015 meetings and the current Administrative Services Agreement at its June 2-3, 2015 meetings. At those meetings, the Board received detailed information regarding the Manager, including information with respect to the scope of management and administration services provided by the Manager to the Existing Funds and the background and experience of the Manager’s key investment personnel. At its May 14, 2015 and June 2-3, 2015 meetings, the Board also considered the Manager’s disciplined investment approach and goal to provide consistent above average long-term performance at a low cost on behalf of the Existing Funds and the Manager’s culture of compliance and support for compliance operations that reduces risks to the Existing Funds. The Board considered the Manager’s representation that the advisory, administrative and related services proposed to be provided to the Fund will be consistent with the services provided to the Existing Funds, except that the Fund is a single-manager fund and, therefore, the Manager will not allocate assets among multiple investment advisors, which it does for many of the Existing Funds. The Board also considered the background and experience of key investment personnel who will have primary responsibility for the day-to-day oversight of the Fund. Based on the foregoing information, the Board concluded that the nature, extent and quality of the services to be provided by the Manager were appropriate for the Fund.

Investment Performance. The Board considered that the Fund is new and, therefore, had no historical performance for the Board to review with respect to the Manager. The Board also considered that it would review the performance of Garcia Hamilton in connection with its consideration of the Garcia Hamilton Agreement.

Costs of the Services Provided to the Fund and the Profits or Losses to be Realized by the Manager from its Relationship with the Fund. In analyzing the cost of services and profitability of the Manager, the Board considered the estimated revenues to be earned and the expenses to be incurred by the Manager with respect to the Fund. The Board also considered that the Manager will receive any fees payable by the Fund pursuant to any future securities lending arrangement. The Board considered the Manager’s representation that its accounting system does not provide for cost allocation. Accordingly, the Manager created an allocation of expenses based upon the estimated percentage of time spent by its employees on non-distribution related business. The Board then considered that, at assumed asset levels, the Manager was projected to incur a pre-tax profit with respect to the Fund before distribution revenues and expenses. The Board noted that the Manager was projected to incur a pre-tax loss after distribution revenues and expenses from its first year of rendering services to the Fund.

Comparisons of the amounts to be paid to the Manager under the Management Agreement and other funds in the relevant Morningstar category. In evaluating the Management Agreement, the Board reviewed the Manager’s proposed management fee schedule. The Board considered a comparison of the management fee rate to be charged by the Manager under the Management Agreement versus the fee rates charged by comparable funds. The Board considered that the Manager provides comparable services to the Existing Funds at the same rate as proposed for the Fund. The Board also considered that, the management fee rates proposed by the Manager for the Fund, both on a stand-alone basis and combined with the proposed advisory fee rates to be paid to Garcia Hamilton, is higher than the average advisory fee rates paid by peer group funds in the Morningstar, Inc. (“Morningstar”) category for the Fund. In addition, the Board

20

Disclosure Regarding the Board of Trustees’ Approval of Management Agreement and Investment Advisory Agreement of the Fund

(Unaudited)

considered that the Manager has agreed to limit the expenses of the Fund at competitive market levels through February 28, 2018, which for most share classes of the Fund, are lower than the average expense ratio paid by the peer group funds in the Fund’s Morningstar category. This information assisted the Board in concluding that the management fee rate appeared to be within a reasonable range for the services to be provided to the Fund, in light of all the factors considered.

Economies of Scale. The Board considered the Manager’s representation that the proposed management fee rates for the Fund contain breakpoints, which the Manager believes properly reflect economies of scale for the benefit of the Fund’s shareholders.

Benefits Derived from the Relationship with the Fund. The Board considered the Manager’s representation that it does not anticipate any material “fall-out” benefits resulting from its proposed relationship with the Fund, except that AmBeacon’s overall relationship with the Trust has been and will continue to be a factor in helping AmBeacon attract separate account business. Based on the foregoing information, the Board concluded that the potential benefits accruing to the Manager by virtue of its relationship with the Fund appear to be fair and reasonable.

Board’s Conclusion. Based on the various considerations described above, the Board, including a majority of Trustees who are not “interested persons” of the Fund or the Manager, as that term is defined in the 1940 Act: (1) concluded that the proposed management fee is fair and reasonable with respect to the Fund; (2) determined that the Fund and its shareholders would benefit from the Manager’s management of the Fund; and (3) approved the Management Agreement on behalf of the Fund.

Approval of Garcia Hamilton & Associates, L.P.

Prior to the meeting, the Board reviewed information provided by Garcia Hamilton in response to requests from the Board and/or the Manager in connection with the Board’s consideration of the Garcia Hamilton Agreement, and the Investment Committee of the Board met with representatives of Garcia Hamilton.

Provided below is an overview of the primary factors the Board considered at its March 3–4, 2016 meetings at which the Board considered the approval of the Garcia Hamilton Agreement. In determining whether to approve the Garcia Hamilton Agreement, the Board considered, among other things, the following factors: (1) the nature and quality of the services to be provided; (2) the investment performance of Garcia Hamilton; (3) the potential materiality of the costs to be incurred by Garcia Hamilton in rendering its services and the resulting profits or losses; (4) the extent to which economies of scale, if any, have been taken into account in setting the fee schedule; (5) whether fee levels reflect these economies of scale, if any, for the benefit of investors; (6) comparisons of services and fees with contracts entered into by Garcia Hamilton with other clients; and (7) any other benefits anticipated to be derived by Garcia Hamilton from its relationship with the Fund.

The Board did not identify any particular information that was most relevant to its consideration of the Garcia Hamilton Agreement, and each Trustee may have afforded different weight to the various factors. Members of the Board’s Investment Committee posed questions to various management personnel of Garcia Hamilton regarding certain key aspects of the materials submitted in support of the approval. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the approval of the Garcia Hamilton Agreement. The memorandum explained the regulatory requirements surrounding the Trustees’ process for evaluating investment advisors and the terms of investment advisory contracts. Based on its evaluation, the Board unanimously concluded that the terms of the Garcia Hamilton Agreement were reasonable and fair and that the approval of the Garcia Hamilton Agreement was in the best interests of the Fund.

Nature, extent and quality of the services to be provided by Garcia Hamilton. The Board considered information regarding Garcia Hamilton’s principal business activities, its reputation, financial condition and overall capabilities to perform the services under the Garcia Hamilton Agreement. In addition, the Board considered the background and experience of the personnel who will be assigned responsibility for managing the Fund. The Board also considered Garcia Hamilton’s investment resources, infrastructure and the adequacy of its compliance program. In addition, the Board took into consideration the Manager’s recommendation of Garcia Hamilton. The Board considered Garcia Hamilton’s representation regarding the strength of its financial condition and that its current staffing levels were adequate to service the Fund. Based on this information, the Board concluded that the nature, extent and quality of the advisory services to be provided by Garcia Hamilton were appropriate for the Fund in light of its investment objective, and, thus, supported a decision to approve the Garcia Hamilton Agreement.

Performance of Garcia Hamilton. The Board evaluated the information provided by Garcia Hamilton regarding the performance of Garcia Hamilton’s Fixed Income Aggregate Composite (“Composite”) relative to the performance of the Barclays U.S. Aggregate Bond Index (“Barclays Index”) and the Morningstar Core Bond Peer Group (“Peer Group”). The Board considered Garcia Hamilton’s representation that, for the periods ended December 31, 2015, the Composite outperformed the Barclays Index for the one-, three- and five-year and since-inception periods, and the Peer Group for the one-, three- and five year periods. The Board noted that since-inception performance was not available for the Peer Group. Based on the foregoing information, the Board concluded that the historical investment performance record of Garcia Hamilton supported approval of the Garcia Hamilton Agreement.

Comparisons of the amounts to be paid under the Garcia Hamilton Agreement with those under contracts between Garcia Hamilton and its other clients. In evaluating the Garcia Hamilton Agreement, the Board reviewed the proposed advisory fee rate for services to be performed by Garcia Hamilton on behalf of the Fund. The Board considered that Garcia Hamilton’s investment advisory fee rate under the Garcia Hamilton Agreement would be paid to Garcia Hamilton by the Fund. The Board considered the favorable nature of the advisory fee rate proposed for the Fund relative to the fee rates charged to other comparable clients of Garcia Hamilton. The Board also considered the Manager’s representation that, although the combined management and advisory fee rate to be paid to the Manager and Garcia Hamilton was higher than the average advisory fee rate paid by peer group funds in the Fund’s Morningstar category, the Manager had agreed to cap

21

Disclosure Regarding the Board of Trustees’ Approval of Management Agreement and Investment Advisory Agreement of the Fund

(Unaudited)

the Fund’s expenses at competitive market levels through February 28, 2018. After evaluating this information, the Board concluded that Garcia Hamilton’s advisory fee rate under the Garcia Hamilton Agreement was reasonable in light of the services to be provided to the Fund.

Costs of the services to be provided and profits to be realized by Garcia Hamilton and its affiliates from its relationship with the Fund. The Board did not consider the costs of the services to be provided and profits to be realized by Garcia Hamilton from its relationship with the Fund, noting instead the arm’s-length nature of the relationship between the Manager and Garcia Hamilton with respect to the negotiation of the advisory fee rate on behalf of the Fund.

Economies of Scale. The Board considered Garcia Hamilton’s representation that the fee schedule proposed for the Fund, which includes a breakpoint, reflects economies of scale related to increased assets under management.

Benefits to be derived by Garcia Hamilton from the relationship with the Fund. The Board considered Garcia Hamilton’s representation that it is not aware of any “fall-out” benefits that would accrue to Garcia Hamilton from its relationship with the Fund. The Board also considered Garcia Hamilton’s representation that Garcia Hamilton does not have any affiliates and does not use soft dollars. Based on the foregoing information, the Board concluded that the potential benefits accruing to Garcia Hamilton by virtue of its relationship with the Fund appear to be fair and reasonable.

Board’s Conclusion. Based on the various considerations described above, the Board, including a majority of Trustees who are not “interested persons” of the Fund, the Manager or Garcia Hamilton, as that term is defined in the 1940 Act, concluded that the proposed investment advisory fee rate is fair and reasonable and that the approval of the Garcia Hamilton Agreement is in the best interests of the Fund and approved the Garcia Hamilton Agreement.

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Delivery of Documents

eDelivery is NOW AVAILABLE- Stop traditional mail delivery and receive your

shareholder reports and summary prospectus on-line. Sign up at

www.americanbeaconfunds.com

If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.

To obtain more information about the Fund:

By E-mail: american_beacon.funds@ambeacon.com	On the Internet: Visit our website at www.americanbeaconfunds.com
By Telephone: Institutional, Y and Investor Classes Call (800) 658-5811	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available on www.americanbeaconfunds.com approximately twenty days after the end of each month.	Availability of Proxy Voting Policy and Records A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN State Street Bank and Trust Boston, Massachusetts TRANSFER AGENT Boston Financial Data Services Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas DISTRIBUTOR Foreside Fund Services Portland, Maine

This report is prepared for shareholders of the American Beacon Funds and may be distributed to others only if preceded or accompanied by a current Prospectus or Summary Prospectus.

American Beacon Funds and American Beacon Garcia Hamilton Quality Bond Fund are service marks of American Beacon Advisors, Inc.

SAR 4/16    

ITEM 2. CODE OF ETHICS.

The Trust did not amend the code of ethics that applies to its principal executive and financial officers (the “Code”) nor did it grant any waivers to the provisions of the Code during the period covered by the shareholder reports presented in Item 1.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not Applicable.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not Applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

The schedules of investments for each series of the Trust are included in the shareholder reports presented in Item 1.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The Trust has made no material changes to the procedures by which shareholders may recommend nominees to the Trust’s Board of Trustees since the Trust last disclosed such procedures in Schedule 14A.

ITEM 11. CONTROLS AND PROCEDURES.

(a) Based upon an evaluation within 90 days of the filing date of this report, the principal executive and financial officers concluded that the disclosure controls and procedures of the Trust are effective.

(b) There were no changes in the Trust’s internal control over financial reporting during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

ITEM 12. EXHIBITS.

(a)(1) Not applicable.

(a)(2) A separate certification for each principal executive officer and principal financial officer of the Trust as required by Rule 30a-2(a) under the Investment Company Act of 1940 is attached hereto as EX-99.CERT.

(a)(3) Not applicable.

(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940 are attached hereto as EX-99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant): American Beacon Funds

By /s/ Gene L. Needles, Jr.

Gene L. Needles, Jr.

President

American Beacon Funds

Date: July 8, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By /s/ Gene L. Needles, Jr.

Gene L. Needles, Jr.

President

American Beacon Funds

Date: July 8, 2016

By /s/ Melinda G. Heika

Melinda G. Heika

Treasurer

American Beacon Funds

Date: July 8, 2016