UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
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, 2017
Date of reporting period: April 30, 2017
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
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.
LARGE CAP VALUE FUND
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 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, 2017 |
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Schedule of Investments: | ||||
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Financial Highlights: | ||||
34 |
Additional Fund Information | Back Cover |
![]() | Dear Shareholders,
In the weeks ahead of the U.S. presidential election on November 8, 2016, uncertainty about the outcome caused many investors to stay on the sidelines. Some investors questioned whether the election’s result would have negative consequences for their portfolios, although elections have rarely had a lasting effect on the market.
Following the election, the markets responded positively to aspects of the incoming administration’s proposed plans for economic growth; i.e., repatriating jobs from overseas, relaxing regulations, lowering taxes and increasing infrastructure spending. From Election Day 2016 to Inauguration Day 2017, the S&P 500 Index – a broad measure of the performance of large U.S. companies – climbed approximately 6%. During the administration’s first 100 days (Inauguration Day to April 30), the same market bellwether gained approximately 5%. |
Then on March 15, 2017, as economists had anticipated, the Federal Reserve increased the federal funds rate by 0.25% to a range of 0.75% to 1.00%. It was the third increase since 2008. The Federal Open Market Committee’s confidence in the improving U.S. economy was previously exhibited in December 2016 and December 2015. Economists anticipate two additional increases in 2017.
For the six months ended April 30, 2017:
• | American Beacon Large Cap Value Fund (Investor Class) returned 14.17%. |
For the same time period, benchmarks measuring the performance of large-cap domestic stocks underperformed the Fund’s Investor Class: The S&P 500 Index gained 13.32%, and the Russell 1000 Value Index returned 11.69%. However, the Dow Jones Industrial Average, which follows the performance of 30 significant stocks trading on the New York Stock Exchange and The NASDAQ Stock Market, gained 16.88%.
At American Beacon Advisors, we are proud to offer a broad range of domestic and global equity and fixed-income funds sub-advised by experienced asset managers who employ distinctive investment processes to manage assets through a variety of economic and market conditions. Together, we work diligently to help our shareholders meet their long-term financial goals.
Thank you for your continued interest in 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 FundSM
April 30, 2017 (Unaudited)
The Investor Class of the American Beacon Large Cap Value Fund (the “Fund”) returned 14.17% for the six months ended April 30, 2017, outperforming the Russell 1000® Value Index (the “Index”) return of 11.69% for the same period.
Total Returns for the Period ended 4/30/17 | |||||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||||||||||||||||||||||
Institutional Class (1,7) | AADEX | 14.34 | % | 18.10 | % | 6.53 | % | 12.23 | % | 5.44 | % | ||||||||||||||||||||||
Y Class (1,2,7) | ABLYX | 14.28 | % | 18.01 | % | 6.44 | % | 12.14 | % | 5.37 | % | ||||||||||||||||||||||
Investor Class (1,7) | AAGPX | 14.17 | % | 17.68 | % | 6.17 | % | 11.84 | % | 5.09 | % | ||||||||||||||||||||||
Advisor Class (1,7) | AVASX | 14.04 | % | 17.49 | % | 6.01 | % | 11.68 | % | �� | 4.92 | % | |||||||||||||||||||||
A Class with sales charge (1,3,7) | ALVAX | 7.52 | % | 10.89 | % | 4.05 | % | 10.41 | % | 4.40 | % | ||||||||||||||||||||||
A Class without sales charge (1,3,7) | ALVAX | 14.09 | % | 17.64 | % | 6.12 | % | 11.73 | % | 5.02 | % | ||||||||||||||||||||||
C Class with sales charge (1,4,7) | ALVCX | 12.70 | % | 15.72 | % | 5.31 | % | 10.88 | % | 4.48 | % | ||||||||||||||||||||||
C Class without sales charge (1,4,7) | ALVCX | 13.70 | % | 16.72 | % | 5.31 | % | 10.88 | % | 4.48 | % | ||||||||||||||||||||||
R6 Class (1,5,7) | AALRX | 14.30 | % | 18.06 | % | 6.52 | % | 12.23 | % | 5.44 | % | ||||||||||||||||||||||
Russell 1000 Value Index (6) | 11.69 | % | 16.55 | % | 8.26 | % | 13.32 | % | 5.53 | % |
* | 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 4/30/07 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 4/30/07. |
3. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/07 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 4/30/07. A Class shares have 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 4/30/07 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 4/30/07. A portion of the fees charged to the C Class were 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. C Class shares have a maximum contingent deferred sales charge of 1.00% for shares redeemed within one year of the date of purchase. |
5. | Fund performance for the 6 month, one-year, three-year, five-year and ten-year periods represent the returns achieved by the Institutional Class from 4/30/07 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the Institutional Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/30/07. A portion of the fees charged to the R6 Class of the Fund was waived since 2/28/17. Performance prior to waiving fees was lower than the actual returns shown. |
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 the Frank Russell Company. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data, and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. One cannot directly invest in an index. |
7. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C, and R6 Class shares was 0.60%, 0.67%, 0.93%, 1.08%, 0.98%, 1.74%, and 0.58%, 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 outperformed the Index as both stock selection and sector allocation added value relative to the Index for the six-month period.
2
American Beacon Large Cap Value FundSM
Performance Overview
April 30, 2017 (Unaudited)
The Fund’s investments in the Financials and Information Technology sectors contributed to most of the stock selection outperformance. In the Financials sector, Bank of America Corp. (up 44.6%) and Citigroup Inc. (up 21.4%) were the largest positive contributors. Positions in Micron Technology Inc. (up 62.1%), Ericsson (LM) Tel Sp. ADR (up 35.1%) and Corning Inc. (up 28.7%) helped the Fund’s returns in the Information Technology sector. The aforementioned good performance was somewhat offset by stock selection in the Consumer Discretionary sector. In this sector, Michael Kors Holdings Ltd. (down 28.0%) and Target Corp. (down 15.9%) hurt the Fund’s returns.
Sector allocation helped as a significant underweight to Real Estate – the second worst performing sector in the Index – and an underweight in Consumer Staples (up 4.2% and up 6.2%, respectively), added relative performance compared to the Index. The Fund’s overweight position in Consumer Discretionary (up 10.6%) somewhat muted relative outperformance 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.
Top Ten Holdings (% Net Assets) | ||||||||
Citigroup, Inc. | 3.8 | |||||||
JPMorgan Chase & Co. | 2.9 | |||||||
Bank of America Corp. | 2.8 | |||||||
Wells Fargo & Co. | 2.3 | |||||||
BP PLC | 2.2 | |||||||
American International Group, Inc. | 2.1 | |||||||
Oracle Corp. | 2.0 | |||||||
Microsoft Corp. | 1.9 | |||||||
Anthem, Inc. | 1.7 | |||||||
Medtronic PLC | 1.7 | |||||||
Total Fund Holdings | 205 | |||||||
Sector Allocation (% Equities) | ||||||||
Financials | 27.5 | |||||||
Industrials | 12.8 | |||||||
Information Technology | 12.3 | |||||||
Health Care | 12.3 | |||||||
Energy | 10.7 | |||||||
Consumer Discretionary | 9.3 | |||||||
Consumer Staples | 6.3 | |||||||
Materials | 4.7 | |||||||
Telecommunication Services | 2.1 | |||||||
Utilities | 1.9 | |||||||
Real Estate | 0.1 |
3
American Beacon Large Cap Value FundSM
April 30, 2017 (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, distribution (12b-1) fees, and other Fund expenses. The Examples 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, 2016 through April 30, 2017.
Actual Expenses
The “Actual” lines of the table 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 = $8.60), then multiply the result by the “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) 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 “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 Large Cap Value FundSM
Expense Examples
April 30, 2017 (Unaudited)
Beginning Account Value 11/1/2016 | Ending Account Value 4/30/2017 | Expenses Paid During Period 11/1/2016-4/30/2017* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,143.40 | $3.19 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.80 | $3.01 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,142.80 | $3.56 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.50 | $3.36 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,141.70 | $4.89 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.20 | $4.61 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,140.40 | $5.73 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.40 | $5.41 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,140.90 | $5.20 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.90 | $4.91 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,137.00 | $9.17 | ||||||||||||
Hypothetical** | $1,000.00 | $1,016.20 | $8.65 | ||||||||||||
R6 Class | |||||||||||||||
Actual | $1,000.00 | $1,143.00 | $1.15 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.70 | $3.16 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.60%, 0.67%, 0.92%, 1.08%, 0.98%, 1.73% and 0.63% for the Institutional, Y, Investor, Advisor, A, C and R6 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 (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
5
American Beacon Large Cap Value FundSM
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 96.36% | |||||||||||||||
Consumer Discretionary - 8.95% | |||||||||||||||
Auto Components - 1.64% | |||||||||||||||
Adient PLC | 179,598 | $ | 13,211,229 | ||||||||||||
Delphi Automotive PLC | 146,468 | 11,776,027 | |||||||||||||
Goodyear Tire & Rubber Co. | 1,361,209 | 49,316,602 | |||||||||||||
Magna International, Inc. | 1,193,441 | 49,850,031 | |||||||||||||
|
| ||||||||||||||
124,153,889 | |||||||||||||||
|
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Automobiles - 2.37% | |||||||||||||||
Ford Motor Co. | 1,626,452 | 18,655,404 | |||||||||||||
General Motors Co. | 3,170,105 | 109,812,437 | |||||||||||||
Harley-Davidson, Inc. | 204,486 | 11,616,850 | |||||||||||||
Honda Motor Co., Ltd., ADR | 340,272 | 9,901,915 | |||||||||||||
Toyota Motor Corp., ADR | 269,799 | 29,176,064 | |||||||||||||
|
| ||||||||||||||
179,162,670 | |||||||||||||||
|
| ||||||||||||||
Hotels, Restaurants & Leisure - 0.55% | |||||||||||||||
Carnival Corp. | 295,300 | 18,240,681 | |||||||||||||
Norwegian Cruise Line Holdings Ltd.A | 437,000 | 23,567,410 | |||||||||||||
|
| ||||||||||||||
41,808,091 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 0.32% | |||||||||||||||
DR Horton, Inc. | 681,900 | 22,427,691 | |||||||||||||
Newell Brands, Inc. | 41,727 | 1,992,047 | |||||||||||||
|
| ||||||||||||||
24,419,738 | |||||||||||||||
|
| ||||||||||||||
Media - 2.39% | |||||||||||||||
CBS Corp., Class B, NVR | 504,903 | 33,606,344 | |||||||||||||
Comcast Corp., Class A | 1,231,043 | 48,244,575 | |||||||||||||
Discovery Communications, Inc., Class AA B | 1,460,944 | 42,045,968 | |||||||||||||
Discovery Communications, Inc.A | 426,400 | 11,930,672 | |||||||||||||
Interpublic Group of Companies, Inc. | 251,456 | 5,926,818 | |||||||||||||
Omnicom Group, Inc. | 312,621 | 25,672,436 | |||||||||||||
Time Warner, Inc. | 104,042 | 10,328,249 | |||||||||||||
Walt Disney Co. | 26,341 | 3,045,020 | |||||||||||||
|
| ||||||||||||||
180,800,082 | |||||||||||||||
|
| ||||||||||||||
Multiline Retail - 0.49% | |||||||||||||||
Dollar General Corp. | 295,900 | 21,514,889 | |||||||||||||
Target Corp. | 285,865 | 15,965,560 | |||||||||||||
|
| ||||||||||||||
37,480,449 | |||||||||||||||
|
| ||||||||||||||
Specialty Retail - 0.62% | |||||||||||||||
Advance Auto Parts, Inc. | 22,423 | 3,187,205 | |||||||||||||
Bed Bath & Beyond, Inc. | 516,806 | 20,026,233 | |||||||||||||
Lowe’s Cos., Inc. | 278,700 | 23,656,056 | |||||||||||||
|
| ||||||||||||||
46,869,494 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 0.57% | |||||||||||||||
Hanesbrands, Inc.B | 1,106,744 | 24,138,087 | |||||||||||||
Michael Kors Holdings Ltd.A | 508,595 | 18,985,851 | |||||||||||||
|
| ||||||||||||||
43,123,938 | |||||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 677,818,351 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 6.08% | |||||||||||||||
Beverages - 0.26% | |||||||||||||||
Diageo PLC, ADR | 107,786 | 12,657,310 | |||||||||||||
PepsiCo, Inc. | 62,969 | 7,133,128 | |||||||||||||
|
| ||||||||||||||
19,790,438 | |||||||||||||||
|
|
See accompanying notes
6
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Consumer Staples - 6.08% (continued) | |||||||||||||||
Food & Staples Retailing - 1.62% | |||||||||||||||
CVS Health Corp. | 1,256,080 | $ | 103,551,235 | ||||||||||||
Wal-Mart Stores, Inc. | 251,782 | 18,928,971 | |||||||||||||
|
| ||||||||||||||
122,480,206 | |||||||||||||||
|
| ||||||||||||||
Food Products - 0.93% | |||||||||||||||
Archer-Daniels-Midland Co. | 103,782 | 4,748,027 | |||||||||||||
Bunge Ltd. | 132,114 | 10,440,969 | |||||||||||||
Danone S.A., ADRB | 369,106 | 5,197,012 | |||||||||||||
General Mills, Inc. | 176,878 | 10,172,254 | |||||||||||||
JM Smucker Co. | 42,079 | 5,332,251 | |||||||||||||
Kellogg Co. | 183,895 | 13,056,545 | |||||||||||||
Mead Johnson Nutrition Co. | 26,664 | 2,365,630 | |||||||||||||
Nestle S.A., ADR | 248,863 | 19,162,202 | |||||||||||||
|
| ||||||||||||||
70,474,890 | |||||||||||||||
|
| ||||||||||||||
Household Products - 0.06% | |||||||||||||||
Procter & Gamble Co. | 52,060 | 4,546,400 | |||||||||||||
|
| ||||||||||||||
Personal Products - 0.06% | |||||||||||||||
Coty, Inc., Class A | 263,113 | 4,696,567 | |||||||||||||
|
| ||||||||||||||
Tobacco - 3.15% | |||||||||||||||
Altria Group, Inc. | 974,860 | 69,975,451 | |||||||||||||
Imperial Brands PLC, ADRB | 1,111,614 | 55,271,671 | |||||||||||||
Philip Morris International, Inc. | 1,022,402 | 113,323,038 | |||||||||||||
|
| ||||||||||||||
238,570,160 | |||||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 460,558,661 | ||||||||||||||
|
| ||||||||||||||
Energy - 10.30% | |||||||||||||||
Energy Equipment & Services - 0.50% | |||||||||||||||
Helmerich & Payne, Inc. | 193,000 | 11,703,520 | |||||||||||||
Oceaneering International, Inc. | 452,900 | 11,952,031 | |||||||||||||
Schlumberger Ltd. | 199,053 | 14,449,257 | |||||||||||||
|
| ||||||||||||||
38,104,808 | |||||||||||||||
|
| ||||||||||||||
Oil, Gas & Consumable Fuels - 9.80% | |||||||||||||||
Anadarko Petroleum Corp. | 672,200 | 38,328,844 | |||||||||||||
Apache Corp. | 1,067,368 | 51,916,780 | |||||||||||||
BP PLC, ADR | 4,766,491 | 163,585,971 | |||||||||||||
Canadian Natural Resources Ltd. | 2,207,403 | 70,349,934 | |||||||||||||
Chevron Corp. | 657,383 | 70,142,766 | |||||||||||||
Cobalt International Energy, Inc.A | 3,450,365 | 1,349,438 | |||||||||||||
ConocoPhillips | 1,348,616 | 64,612,193 | |||||||||||||
Devon Energy Corp. | 860,766 | 33,991,649 | |||||||||||||
EOG Resources, Inc. | 118,089 | 10,923,232 | |||||||||||||
Exxon Mobil Corp. | 136,069 | 11,110,034 | |||||||||||||
Hess Corp. | 734,792 | 35,879,893 | |||||||||||||
Kosmos Energy Ltd.A B | 1,241,245 | 7,459,882 | |||||||||||||
Marathon Oil Corp. | 3,248,486 | 48,304,987 | |||||||||||||
Murphy Oil Corp. | 1,147,560 | 30,043,121 | |||||||||||||
Occidental Petroleum Corp. | 135,746 | 8,353,809 | |||||||||||||
Phillips 66 | 814,804 | 64,825,806 | |||||||||||||
Royal Dutch Shell PLC, Class A, ADR | 593,722 | 30,986,351 | |||||||||||||
|
| ||||||||||||||
742,164,690 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 780,269,498 | ||||||||||||||
|
|
See accompanying notes
7
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Financials - 26.53% | |||||||||||||||
Banks - 14.00% | |||||||||||||||
Bank of America Corp. | 9,107,598 | $ | 212,571,337 | ||||||||||||
BNP Paribas S.A., ADRB | 641,500 | 22,677,025 | |||||||||||||
CIT Group, Inc. | 234,100 | 10,841,171 | |||||||||||||
Citigroup, Inc. | 4,861,001 | 287,382,379 | |||||||||||||
Citizens Financial Group | 875,253 | 32,130,538 | |||||||||||||
JPMorgan Chase & Co. | 2,549,903 | 221,841,561 | |||||||||||||
PNC Financial Services Group, Inc. | 407,337 | 48,778,606 | |||||||||||||
Popular, Inc. | 633,600 | 26,554,176 | |||||||||||||
US Bancorp | 522,485 | 26,793,031 | |||||||||||||
Wells Fargo & Co. | 3,176,327 | 171,013,446 | |||||||||||||
|
| ||||||||||||||
1,060,583,270 | |||||||||||||||
|
| ||||||||||||||
Capital Markets - 4.43% | |||||||||||||||
Bank of New York Mellon Corp. | 494,686 | 23,279,923 | |||||||||||||
BlackRock, Inc. | 27,894 | 10,727,195 | |||||||||||||
Blackstone Group MLP | 1,989,048 | 61,342,240 | |||||||||||||
Franklin Resources, Inc. | 132,580 | 5,715,524 | |||||||||||||
Goldman Sachs Group, Inc. | 209,977 | 46,992,853 | |||||||||||||
KKR & Co. MLP | 4,585,408 | 87,031,044 | |||||||||||||
Moody’s Corp. | 59,491 | 7,038,975 | |||||||||||||
Morgan Stanley | 706,078 | 30,622,603 | |||||||||||||
Nasdaq, Inc. | 178,185 | 12,271,601 | |||||||||||||
S&P Global, Inc. | 19,926 | 2,673,870 | |||||||||||||
State Street Corp. | 539,463 | 45,260,946 | |||||||||||||
T Rowe Price Group, Inc. | 37,824 | 2,681,343 | |||||||||||||
|
| ||||||||||||||
335,638,117 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 2.42% | |||||||||||||||
American Express Co. | 141,247 | 11,193,825 | |||||||||||||
Capital One Financial Corp. | 783,764 | 62,998,950 | |||||||||||||
Navient Corp. | 1,473,601 | 22,398,735 | |||||||||||||
OneMain Holdings, Inc.A | 517,600 | 12,070,432 | |||||||||||||
Santander Consumer USA Holdings, Inc.A | 1,588,747 | 20,240,637 | |||||||||||||
SLM Corp.A | 2,669,830 | 33,479,668 | |||||||||||||
Synchrony Financial | 752,487 | 20,919,139 | |||||||||||||
|
| ||||||||||||||
183,301,386 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 0.71% | |||||||||||||||
Berkshire Hathaway, Inc., Class BA | 323,991 | 53,526,553 | |||||||||||||
|
| ||||||||||||||
Insurance - 4.69% | |||||||||||||||
Allstate Corp. | 125,547 | 10,205,716 | |||||||||||||
American International Group, Inc. | 2,667,483 | 162,476,389 | |||||||||||||
Aon PLC | 166,614 | 19,967,022 | |||||||||||||
Chubb Ltd. | 172,584 | 23,687,154 | |||||||||||||
MetLife, Inc. | 597,202 | 30,941,036 | |||||||||||||
Prudential Financial, Inc. | 85,272 | 9,126,662 | |||||||||||||
Travelers Companies, Inc. | 441,943 | 53,766,785 | |||||||||||||
XL Group Ltd. | 1,084,993 | 45,406,957 | |||||||||||||
|
| ||||||||||||||
355,577,721 | |||||||||||||||
|
| ||||||||||||||
Mortgage Real Estate Investment Trusts (REITs) - 0.28% | |||||||||||||||
Two Harbors Investment Corp. | 2,108,394 | 21,062,856 | |||||||||||||
|
| ||||||||||||||
Total Financials | 2,009,689,903 | ||||||||||||||
|
|
See accompanying notes
8
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Health Care - 11.85% | |||||||||||||||
Biotechnology - 1.01% | |||||||||||||||
AbbVie, Inc. | 287,484 | $ | 18,956,695 | ||||||||||||
Biogen, Inc.A | 63,700 | 17,276,077 | |||||||||||||
Celgene Corp.A | 148,500 | 18,421,425 | |||||||||||||
Gilead Sciences, Inc. | 319,600 | 21,908,580 | |||||||||||||
|
| ||||||||||||||
76,562,777 | |||||||||||||||
|
| ||||||||||||||
Health Care Equipment & Supplies - 2.22% | |||||||||||||||
Abbott Laboratories | 404,380 | 17,647,143 | |||||||||||||
Danaher Corp. | 157,084 | 13,089,810 | |||||||||||||
Medtronic PLC | 1,506,557 | 125,179,821 | |||||||||||||
Zimmer Biomet Holdings, Inc. | 102,167 | 12,224,282 | |||||||||||||
|
| ||||||||||||||
168,141,056 | |||||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 1.94% | |||||||||||||||
Anthem, Inc. | 703,731 | 125,186,707 | |||||||||||||
Cigna Corp. | 42,646 | 6,668,555 | |||||||||||||
Express Scripts Holding Co.A | 93,068 | 5,708,791 | |||||||||||||
McKesson Corp. | 53,452 | 7,391,877 | |||||||||||||
UnitedHealth Group, Inc. | 10,377 | 1,814,730 | |||||||||||||
|
| ||||||||||||||
146,770,660 | |||||||||||||||
|
| ||||||||||||||
Life Sciences Tools & Services - 0.19% | |||||||||||||||
Thermo Fisher Scientific, Inc. | 87,269 | 14,428,184 | |||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 6.49% | |||||||||||||||
GlaxoSmithKline PLC, ADR | 743,234 | 30,398,271 | |||||||||||||
Horizon Pharma PLCA | 1,467,292 | 22,566,951 | |||||||||||||
Jazz Pharmaceuticals PLCA | 97,668 | 15,556,559 | |||||||||||||
Johnson & Johnson | 846,816 | 104,556,372 | |||||||||||||
Mallinckrodt PLCA | 445,407 | 20,898,496 | |||||||||||||
Merck & Co., Inc. | 1,073,509 | 66,911,816 | |||||||||||||
Mylan N.V.A | 509,685 | 19,036,735 | |||||||||||||
Novartis AG, ADR | 34,778 | 2,678,949 | |||||||||||||
Pfizer, Inc. | 3,471,572 | 117,755,722 | |||||||||||||
Roche Holding AG, ADR | 79,517 | 2,600,047 | |||||||||||||
Sanofi, ADR | 1,878,045 | 88,831,528 | |||||||||||||
|
| ||||||||||||||
491,791,446 | |||||||||||||||
|
| ||||||||||||||
Total Health Care | 897,694,123 | ||||||||||||||
|
| ||||||||||||||
Industrials - 12.36% | |||||||||||||||
Aerospace & Defense - 2.77% | |||||||||||||||
Boeing Co. | 160,785 | 29,717,892 | |||||||||||||
Embraer S.A., ADR | 401,900 | 7,716,480 | |||||||||||||
General Dynamics Corp. | 114,436 | 22,176,552 | |||||||||||||
Lockheed Martin Corp. | 52,893 | 14,252,019 | |||||||||||||
Northrop Grumman Corp. | 51,816 | 12,744,663 | |||||||||||||
Raytheon Co. | 341,367 | 52,983,572 | |||||||||||||
Rockwell Collins, Inc. | 310,216 | 32,290,384 | |||||||||||||
United Technologies Corp. | 316,220 | 37,627,018 | |||||||||||||
|
| ||||||||||||||
209,508,580 | |||||||||||||||
|
| ||||||||||||||
Air Freight & Logistics - 0.23% | |||||||||||||||
United Parcel Service, Inc., Class B | 163,263 | 17,544,242 | |||||||||||||
|
| ||||||||||||||
Airlines - 1.60% | |||||||||||||||
American Airlines Group, Inc. | 1,308,200 | 55,755,484 | |||||||||||||
Delta Air Lines, Inc. | 1,444,900 | 65,656,256 | |||||||||||||
|
| ||||||||||||||
121,411,740 | |||||||||||||||
|
|
See accompanying notes
9
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Industrials - 12.36% (continued) | |||||||||||||||
Building Products - 1.56% | |||||||||||||||
Johnson Controls International PLC | 2,845,962 | $ | 118,306,640 | ||||||||||||
|
| ||||||||||||||
Construction & Engineering - 0.62% | |||||||||||||||
AECOMA | 538,064 | 18,407,169 | |||||||||||||
Chicago Bridge & Iron Co. N.V. | 594,619 | 17,886,140 | |||||||||||||
Fluor Corp. | 211,900 | 10,874,708 | |||||||||||||
|
| ||||||||||||||
47,168,017 | |||||||||||||||
|
| ||||||||||||||
Electrical Equipment - 0.61% | |||||||||||||||
Eaton Corp. PLC | 607,320 | 45,937,685 | |||||||||||||
|
| ||||||||||||||
Industrial Conglomerates - 2.14% | |||||||||||||||
3M Co. | 128,015 | 25,069,177 | |||||||||||||
Honeywell International, Inc. | 646,687 | 84,806,533 | |||||||||||||
Koninklijke Philips N.V. | 1,512,102 | 52,046,551 | |||||||||||||
|
| ||||||||||||||
161,922,261 | |||||||||||||||
|
| ||||||||||||||
Machinery - 1.75% | |||||||||||||||
CNH Industrial N.V. | 3,313,439 | 36,779,173 | |||||||||||||
Cummins, Inc. | 307,497 | 46,413,597 | |||||||||||||
Illinois Tool Works, Inc. | 74,281 | 10,257,463 | |||||||||||||
Ingersoll-Rand PLC | 81,505 | 7,233,569 | |||||||||||||
PACCAR, Inc. | 150,951 | 10,072,960 | |||||||||||||
Parker-Hannifin Corp. | 95,501 | 15,356,561 | |||||||||||||
Stanley Black & Decker, Inc. | 49,064 | 6,680,064 | |||||||||||||
|
| ||||||||||||||
132,793,387 | |||||||||||||||
|
| ||||||||||||||
Professional Services - 0.07% | |||||||||||||||
Equifax, Inc. | 40,049 | 5,419,030 | |||||||||||||
|
| ||||||||||||||
Road & Rail - 0.21% | |||||||||||||||
Canadian National Railway Co. | 89,963 | 6,503,425 | |||||||||||||
Union Pacific Corp. | 81,564 | 9,131,906 | |||||||||||||
|
| ||||||||||||||
15,635,331 | |||||||||||||||
|
| ||||||||||||||
Trading Companies & Distributors - 0.80% | |||||||||||||||
AerCap Holdings N.V.A | 1,315,300 | 60,516,953 | |||||||||||||
|
| ||||||||||||||
Total Industrials | 936,163,866 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 11.86% | |||||||||||||||
Communications Equipment - 1.50% | |||||||||||||||
Cisco Systems, Inc. | 1,774,370 | 60,452,786 | |||||||||||||
Telefonaktiebolaget LM Ericsson, Sponsored ADR | 8,217,720 | 53,333,003 | |||||||||||||
|
| ||||||||||||||
113,785,789 | |||||||||||||||
|
| ||||||||||||||
Electronic Equipment, Instruments & Components - 1.46% | |||||||||||||||
Corning, Inc. | 2,132,240 | 61,515,124 | |||||||||||||
IPG Photonics Corp.A | 216,100 | 27,297,752 | |||||||||||||
TE Connectivity Ltd. | 277,900 | 21,501,123 | |||||||||||||
|
| ||||||||||||||
110,313,999 | |||||||||||||||
|
| ||||||||||||||
IT Services - 1.28% | |||||||||||||||
Accenture PLC, Class A | 248,023 | 30,085,190 | |||||||||||||
Amdocs Ltd. | 47,842 | 2,929,844 | |||||||||||||
Cognizant Technology Solutions Corp., Class AA | 75,369 | 4,539,475 | |||||||||||||
DXC Technology Co.A | 34,976 | 2,635,092 | |||||||||||||
Fidelity National Information Services, Inc. | 138,513 | 11,661,409 |
See accompanying notes
10
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Information Technology - 11.86% (continued) | |||||||||||||||
IT Services - 1.28% (continued) | |||||||||||||||
First Data Corp., Class AA | 1,424,000 | $ | 22,242,880 | ||||||||||||
Fiserv, Inc.A | 47,868 | 5,702,994 | |||||||||||||
International Business Machines Corp. | 47,677 | 7,642,146 | |||||||||||||
Teradata Corp.A | 336,394 | 9,815,977 | |||||||||||||
|
| ||||||||||||||
97,255,007 | |||||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 1.87% | |||||||||||||||
Intel Corp. | 585,656 | 21,171,464 | |||||||||||||
Micron Technology, Inc.A | 2,368,979 | 65,549,649 | |||||||||||||
QUALCOMM, Inc. | 590,608 | 31,739,274 | |||||||||||||
Texas Instruments, Inc. | 206,394 | 16,342,277 | |||||||||||||
Versum Materials, Inc. | 201,946 | 6,466,311 | |||||||||||||
|
| ||||||||||||||
141,268,975 | |||||||||||||||
|
| ||||||||||||||
Software - 3.89% | |||||||||||||||
Microsoft Corp. | 2,111,735 | 144,569,378 | |||||||||||||
Oracle Corp. | 3,339,170 | 150,129,083 | |||||||||||||
|
| ||||||||||||||
294,698,461 | |||||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 1.86% | |||||||||||||||
Apple, Inc. | 257,800 | 37,032,970 | |||||||||||||
Hewlett Packard Enterprise Co. | 5,570,844 | 103,784,824 | |||||||||||||
|
| ||||||||||||||
140,817,794 | |||||||||||||||
|
| ||||||||||||||
Total Information Technology | 898,140,025 | ||||||||||||||
|
| ||||||||||||||
Materials - 4.53% | |||||||||||||||
Chemicals - 3.11% | |||||||||||||||
Air Products & Chemicals, Inc. | 454,392 | 63,842,076 | |||||||||||||
Dow Chemical Co. | 1,302,297 | 81,784,251 | |||||||||||||
Eastman Chemical Co. | 384,826 | 30,689,873 | |||||||||||||
EI du Pont de Nemours & Co. | 59,265 | 4,726,384 | |||||||||||||
LyondellBasell Industries N.V., Class A | 198,600 | 16,833,336 | |||||||||||||
Monsanto Co. | 40,565 | 4,730,285 | |||||||||||||
PPG Industries, Inc. | 217,502 | 23,890,420 | |||||||||||||
Sherwin-Williams Co. | 28,062 | 9,391,790 | |||||||||||||
|
| ||||||||||||||
235,888,415 | |||||||||||||||
|
| ||||||||||||||
Containers & Packaging - 0.76% | |||||||||||||||
Crown Holdings, Inc.A | 710,337 | 39,842,802 | |||||||||||||
International Paper Co. | 323,486 | 17,458,540 | |||||||||||||
|
| ||||||||||||||
57,301,342 | |||||||||||||||
|
| ||||||||||||||
Metals & Mining - 0.39% | |||||||||||||||
Reliance Steel & Aluminum Co. | 371,575 | 29,287,541 | |||||||||||||
|
| ||||||||||||||
Paper & Forest Products - 0.27% | |||||||||||||||
Louisiana-Pacific Corp.A | 803,677 | 20,686,646 | |||||||||||||
|
| ||||||||||||||
Total Materials | 343,163,944 | ||||||||||||||
|
| ||||||||||||||
Real Estate - 0.06% | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 0.06% | |||||||||||||||
Public Storage | 23,094 | 4,835,422 | |||||||||||||
|
|
See accompanying notes
11
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Telecommunication Services - 2.06% | |||||||||||||||
Diversified Telecommunication Services - 1.51% | |||||||||||||||
AT&T, Inc. | 1,564,226 | $ | 61,990,276 | ||||||||||||
Verizon Communications, Inc. | 1,144,678 | 52,552,167 | |||||||||||||
|
| ||||||||||||||
114,542,443 | |||||||||||||||
|
| ||||||||||||||
Wireless Telecommunication Services - 0.55% | |||||||||||||||
Vodafone Group PLC, Sponsored ADR | 1,584,150 | 41,488,889 | |||||||||||||
|
| ||||||||||||||
Total Telecommunication Services | 156,031,332 | ||||||||||||||
|
| ||||||||||||||
Utilities - 1.78% | |||||||||||||||
Electric Utilities - 0.76% | |||||||||||||||
Duke Energy Corp. | 155,116 | 12,797,070 | |||||||||||||
Entergy Corp. | 308,329 | 23,513,169 | |||||||||||||
PPL Corp. | 219,554 | 8,367,203 | |||||||||||||
Southern Co. | 185,399 | 9,232,870 | |||||||||||||
Xcel Energy, Inc. | 84,375 | 3,801,094 | |||||||||||||
|
| ||||||||||||||
57,711,406 | |||||||||||||||
|
| ||||||||||||||
Independent Power and Renewable Electricity Producers - 0.69% | |||||||||||||||
Calpine Corp.A | 5,118,778 | 52,211,536 | |||||||||||||
|
| ||||||||||||||
Multi-Utilities - 0.33% | |||||||||||||||
CenterPoint Energy, Inc. | 864,462 | 24,663,101 | |||||||||||||
|
| ||||||||||||||
Total Utilities | 134,586,043 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $5,840,873,819) | 7,298,951,168 | ||||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 3.61% (Cost $273,494,437) | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 0.69%C | 273,494,437 | 273,494,437 | |||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 0.17% (Cost $13,168,514) | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 0.69%C | 13,168,514 | 13,168,514 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 100.14% (Cost $6,127,536,770) | 7,585,614,119 | ||||||||||||||
OTHER LIABILITIES, NET OF ASSETS - (0.14%) | (10,644,978 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 7,574,969,141 | |||||||||||||
|
| ||||||||||||||
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, 2017.
C The Fund is affiliated by having the same investment advisor.
ADR - American Depositary Receipt.
MLP - Master Limited Partnership.
PLC - Public Limited Company.
REIT - Real Estate Investment Trust.
Futures Contracts Open on April 30, 2017: | ||||||||||||||||||||
Description | Type | Number of Contracts | Expiration Date | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||||||
S&P 500 E-Mini Index Futures | Long | 2,184 | June 2017 | $ | 259,950,600 | $ | 2,733,918 | |||||||||||||
|
|
|
| |||||||||||||||||
$ | 259,950,600 | $ | 2,733,918 | |||||||||||||||||
|
|
|
|
See accompanying notes
12
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2017, the investments were classified as described below:
Large Cap Value Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Common Stocks | $ | 7,298,951,168 | $ | - | $ | - | $ | 7,298,951,168 | ||||||||||||||||||||
Short-Term Investments - Money Market Funds | 273,494,437 | - | - | 273,494,437 | ||||||||||||||||||||||||
Securities Lending Collateral Invested in Money Market Funds | 13,168,514 | - | - | 13,168,514 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 7,585,614,119 | $ | - | $ | - | $ | 7,585,614,119 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||||||
Futures Contracts | $ | 2,733,918 | $ | - | $ | - | $ | 2,733,918 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 2,733,918 | $ | - | $ | - | $ | 2,733,918 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP also requires all transfers between any level 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 period ended April 30, 2017, there were no transfers between levels.
See accompanying notes
13
American Beacon Large Cap Value FundSM
Statement of Assets and Liabilities
April 30, 2017 (Unaudited)
Assets: | ||||
Investments in unaffiliated securities, at fair value† | $ | 7,298,951,168 | ||
Investments in affiliated securities, at fair value‡ | 286,662,951 | |||
Cash | 4,617 | |||
Deposit with brokers for futures contracts | 10,920,000 | |||
Dividends and interest receivable | 9,930,007 | |||
Receivable for investments sold | 12,367,860 | |||
Receivable for fund shares sold | 4,530,218 | |||
Receivable for tax reclaims | 646,461 | |||
Receivable for expense reimbursement (Note 2) | 178 | |||
Prepaid expenses | 134,318 | |||
|
| |||
Total assets | 7,624,147,778 | |||
|
| |||
Liabilities: | ||||
Payable for investments purchased | 13,655,608 | |||
Payable for fund shares redeemed | 13,971,815 | |||
Payable for variation margin from open futures contracts | 625,800 | |||
Payable upon return of securities loaned§ | 13,168,514 | |||
Management and investment advisory fees payable | 6,449,732 | |||
Administrative service and service fees payable | 463,375 | |||
Transfer agent fees payable | 127,646 | |||
Custody and fund accounting fees payable | 114,916 | |||
Professional fees payable | 95,718 | |||
Trustee fees payable | 101,874 | |||
Payable for prospectus and shareholder reports | 365,959 | |||
Other liabilities | 37,680 | |||
|
| |||
Total liabilities | 49,178,637 | |||
|
| |||
Net Assets | $ | 7,574,969,141 | ||
|
| |||
Analysis of Net Assets: | ||||
Paid-in-capital | $ | 5,857,041,581 | ||
Undistributed net investment income | 55,243,236 | |||
Accumulated net realized gain | 201,873,057 | |||
Unrealized appreciation of investments | 1,458,077,349 | |||
Unrealized appreciation of futures contracts | 2,733,918 | |||
|
| |||
Net assets | $ | 7,574,969,141 | ||
|
|
See accompanying notes
14
American Beacon Large Cap Value FundSM
Statement of Assets and Liabilities
April 30, 2017 (Unaudited)
Shares outstanding at no par value (unlimited shares authorized): | ||||
Institutional Class | 173,038,290 | |||
|
| |||
Y Class | 12,604,921 | |||
|
| |||
Investor Class | 78,923,587 | |||
|
| |||
Advisor Class | 3,619,082 | |||
|
| |||
A Class | 1,391,718 | |||
|
| |||
C Class | 326,967 | |||
|
| |||
R6 ClassA | 3,492 | |||
|
| |||
Net assets: | ||||
Institutional Class | $ | 4,959,523,619 | ||
|
| |||
Y Class | $ | 359,034,799 | ||
|
| |||
Investor Class | $ | 2,115,042,849 | ||
|
| |||
Advisor Class | $ | 95,773,614 | ||
|
| |||
A Class | $ | 36,896,960 | ||
|
| |||
C Class | $ | 8,597,249 | ||
|
| |||
R6 ClassA | $ | 100,051 | ||
|
| |||
Net asset value, offering and redemption price per share: | ||||
Institutional Class | $ | 28.66 | ||
|
| |||
Y Class | $ | 28.48 | ||
|
| |||
Investor Class | $ | 26.80 | ||
|
| |||
Advisor Class | $ | 26.46 | ||
|
| |||
A Class | $ | 26.51 | ||
|
| |||
A Class (offering price) | $ | 28.13 | ||
|
| |||
C Class | $ | 26.29 | ||
|
| |||
R6 ClassA | $ | 28.65 | ||
|
| |||
† Cost of investments in unaffiliated securities | $ | 5,840,873,819 | ||
‡ Cost of investments in affiliated securities | $ | 286,662,951 | ||
§ Fair value of securities on loan | $ | 12,745,002 | ||
A Class commenced operations February 28, 2017 (Note 1). |
See accompanying notes
15
American Beacon Large Cap Value FundSM
Statement of Operations
For the Period Ended April 30, 2017 (Unaudited)
Investment income: | ||||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 92,910,883 | ||
Dividend income from affiliated securities | 530,535 | |||
Income derived from securities lending | 13,057 | |||
|
| |||
Total investment income | 93,454,475 | |||
|
| |||
Expenses: | ||||
Management and investment advisory fees (Note 2) | 20,967,677 | |||
Transfer agent fees: | ||||
Institutional Class | 824,553 | |||
Y Class | 35,242 | |||
Investor Class | 50,682 | |||
Advisor Class | 3,837 | |||
A Class | 1,519 | |||
C Class | 436 | |||
R6 ClassA | 373 | |||
Custody and fund accounting fees | 404,490 | |||
Professional fees | 97,292 | |||
Registration fees and expenses | 79,600 | |||
Service fees (Note 2): | ||||
Y Class | 150,459 | |||
Investor Class | 3,842,305 | |||
Advisor Class | 131,589 | |||
A Class | 29,682 | |||
C Class | 6,764 | |||
Distribution fees (Note 2): | ||||
Advisor Class | 131,588 | |||
A Class | 49,471 | |||
C Class | 45,095 | |||
Prospectus and shareholder report expenses | 297,869 | |||
Trustee fees | 317,999 | |||
Other expenses | 210,317 | |||
|
| |||
Total expenses | 27,678,839 | |||
|
| |||
Net fees waived and expenses reimbursed / (recouped) by Manager (Note 2) | (363 | ) | ||
|
| |||
Net expenses | 27,678,476 | |||
|
| |||
Net investment income | 65,775,999 | |||
|
| |||
Realized and unrealized gain (loss) from investments: | ||||
Net realized gain (loss) from: | ||||
Investments | 332,816,102 | |||
Commission recapture (Note 1) | 80,349 | |||
Foreign currency transactions | (3,299 | ) | ||
Futures contracts | 26,724,654 | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investments | 646,561,804 | |||
Futures contracts | 4,067,183 | |||
|
| |||
Net gain from investments | 1,010,246,793 | |||
|
| |||
Net increase in net assets resulting from operations | $ | 1,076,022,792 | ||
|
| |||
† Foreign taxes | $ | 768,748 | ||
A Class commenced operations February 28, 2017 (Note 1). |
See accompanying notes
16
American Beacon Large Cap Value FundSM
Statement of Changes of Net Assets
For the Six Months Ended April 30, 2017 | For the Year Ended October 31, 2016 | |||||||||||
(unaudited) | ||||||||||||
Increase (Decrease) in Net Assets: | ||||||||||||
Operations: | ||||||||||||
Net investment income | $ | 65,775,999 | $ | 180,511,435 | ||||||||
Net realized gain from investments, commission recapture, foreign currency transactions, and futures contracts | 359,617,806 | 33,931,396 | ||||||||||
Change in net unrealized appreciation (depreciation) of investments, and futures contracts | 650,628,987 | (130,702,489 | ) | |||||||||
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 1,076,022,792 | 83,740,342 | ||||||||||
|
|
|
| |||||||||
Distributions to Shareholders: | ||||||||||||
Net investment income: | ||||||||||||
Institutional Class | (112,815,102 | ) | (112,844,075 | ) | ||||||||
Y Class | (7,905,543 | ) | (7,022,245 | ) | ||||||||
Investor Class | (44,594,218 | ) | (44,777,647 | ) | ||||||||
Advisor Class | (2,058,628 | ) | (2,064,915 | ) | ||||||||
A Class | (879,050 | ) | (682,320 | ) | ||||||||
C Class | (99,793 | ) | (109,038 | ) | ||||||||
Net realized gain from investments: | ||||||||||||
Institutional Class | (40,827,429 | ) | (517,703,342 | ) | ||||||||
Y Class | (2,953,376 | ) | (34,252,889 | ) | ||||||||
Investor Class | (18,906,905 | ) | (267,451,860 | ) | ||||||||
Advisor Class | (953,678 | ) | (13,186,133 | ) | ||||||||
A Class | (366,411 | ) | (3,722,088 | ) | ||||||||
C Class | (77,352 | ) | (1,104,967 | ) | ||||||||
|
|
|
| |||||||||
Net distributions to shareholders | (232,437,485 | ) | (1,004,921,519 | ) | ||||||||
|
|
|
| |||||||||
Capital Share Transactions: | ||||||||||||
Proceeds from sales of shares | 572,354,599 | 1,146,991,291 | ||||||||||
Reinvestment of dividends and distributions | 220,594,801 | 959,961,629 | ||||||||||
Cost of shares redeemed | (1,951,520,729 | ) | (3,312,409,718 | ) | ||||||||
|
|
|
| |||||||||
Net (decrease) in net assets from capital share transactions | (1,158,571,329 | ) | (1,205,456,798 | ) | ||||||||
|
|
|
| |||||||||
Net (decrease) in net assets | (314,986,022 | ) | (2,126,637,975 | ) | ||||||||
|
|
|
| |||||||||
Net Assets: | ||||||||||||
Beginning of period | 7,889,955,163 | 10,016,593,138 | ||||||||||
|
|
|
| |||||||||
End of Period * | $ | 7,574,969,141 | $ | 7,889,955,163 | ||||||||
|
|
|
| |||||||||
*Includes undistributed net investment income | $ | 55,243,236 | $ | 157,535,300 | ||||||||
|
|
|
|
See accompanying notes
17
American Beacon Large Cap Value FundSM
April 30, 2017 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940 (the “Act”), as a diversified, open-end management investment company. As of April 30, 2017, the Trust consists of thirty-two active series, one of which is presented in this filing: American Beacon Large Cap Value Fund (the “Fund”). The remaining thirty-one active series are reported in separate filings.
American Beacon Advisors, Inc. (the “Manager”) is a wholly-owned subsidiary of Resolute Investment Managers, 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.
New Accounting Pronouncements
In October 2016, the SEC adopted amendments to rules under the Investment Company Act of 1940 (“final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. The final rules amend Regulation S-X and require funds to provide standardized, enhanced derivative disclosure in fund financial statements in a format designed for individual investors. The amendments to Regulation S-X also update the disclosures for other investments and investments in, and advances to affiliates and amend the rules regarding the general form and content of fund financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the amendments and its impact, if any, on the Funds’ Financial Statements.
Class Disclosure
The inception date of the R6 Class was February 28, 2017.
The Fund has multiple classes of shares designed to meet the needs of different groups of investors. The following table sets forth the differences amongst the classes:
Class | Eligible Investors | Minimum Initial Investments | ||||
Institutional | Large Institutional Investors - sold directly or through intermediary channels. | $ | 250,000 | |||
Y Class | Large institutional retirement plan investors - sold directly or through intermediary channels. | $ | 100,000 | |||
Investor | All investors using intermediary organizations such as broker-dealers or retirement plan sponsors - sold directly through intermediary channels. | $ | 2,500 | |||
Advisor Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrators. | $ | 2,500 | |||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary such as a broker or employee directed benefit plans with applicable sales charges which may include CDSC. | $ | 1,000 | |||
R6 | Large institutional retirement plan investors- sold through retirement plan sponsors. | $ | 5,000,000 |
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
18
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
respective Fund. Class specific expenses, where applicable, currently include administration service fees, service fees, and distribution fees and vary amongst the classes as described more fully in Note 2.
The following is a summary of significant accounting policies, consistently followed by the Fund in preparation of the financial statements. The Fund is considered an investment company and accordingly, follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946, Financial Services - Investment Companies, which is part of the U.S. Generally Accepted Accounting Principles (“U.S. GAAP”).
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 Net Asset Value (“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. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Fund also designates earnings and profits distributed to shareholders on the redemption of shares.
Commission Recapture
The Fund has 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 Fund. This amount is reported with the net realized gains in the Fund’s Statement 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.
19
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Other
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities 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.
2. Transactions with Affiliates
Management Agreement
The Fund and the Manager are parties to a Management Agreement that obligates the Manager to provide investment advisory, fund management, and administrative services to the Fund. As compensation for performing the duties under the Management Agreement, the Manager receives from the Fund an annualized fee at the following annual rates as a percentage of average daily net assets: 0.35% of the first $15 billion, 0.325% of the next $15 billion, and 0.30% of the next $30 billion. The Fund pays the unaffiliated investment advisors hired to direct investment activities of the Fund an annualized investment advisory fee based on a percentage of the Fund’s average daily assets. Management fees paid by the Fund during the period ended April 30, 2017 were as follows:
Fund | Management Fee Rate | Management Fee | Amount Paid to Investment Advisors | Amount Paid to Manager | ||||||||||||
Large Cap Value | 0.53 | % | $ | 20,967,677 | $ | 7,198,536 | $ | 13,769,141 |
As compensation for services provided by the Manager in connection with securities lending activities conducted by the Fund, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee up to 10% 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 10% of such loan fees. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statement of Operations. During the period ended April 30, 2017, the Manager received securities lending fees of $1,783 for the securities lending activities 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 may be charged to the Fund for distribution purposes. However, the Plan authorizes the management and administrative services 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 of the Fund. As compensation for performing the
20
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
duties required under the Service Plans, the Manager receives an annualized fee up to 0.10% of the average daily net assets of the Y Class, up to 0.15% of the average net assets of the A and C Classes, up to 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. Effective April 1, 2017, the Fund terminated the Service Plan for the Y Class.
Sub-Transfer Agent Fees
The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the Institutional Class of the Fund and has agreed to compensate the intermediaries for providing these services. Effective April 1, 2017, the Fund agreed to compensate the intermediaries for providing services to the Y Class. Intermediaries transact with the Fund primarily through the use of omnibus accounts on behalf of its customers who hold positions in the Fund. Certain services would have been provided by the Fund’s transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Fund’s transfer agent. Accordingly, the Fund, pursuant to the Trust’s Board of Trustees (the “Board”) approval, has agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the period ended April 30, 2017, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:
Fund | Sub-Transfer Agent Fees | |||
Large Cap Value | $ | 763,648 |
As of April 30, 2017, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:
Fund | Reimbursement Sub-Transfer Agent Fees | |||
Large Cap Value | $ | 84,844 |
Investments 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 management fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the period ended April 30, 2017, the Manager earned fees totaling $109,832 on the Fund’s direct investments in the USG Select Fund and $6,165 from the Fund’s securities lending collateral invested in USG Select Fund.
Interfund Lending Program
Pursuant to an exemptive order 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, 2017, the Fund participated as a lender and loaned $6,287,586 for 1 day at an interest rate of 1.48% with interest charges earned of $255. This amount is included in “Interest income” on the Statement of Operations.
21
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Expense Reimbursement Plan
The Manager voluntarily agreed to reduce fees and/or reimburse expenses for the R6 Class of the Fund to the extent that total operating expenses exceed the expense cap. During the period ended April 30, 2017, the Manager waived and/or reimbursed expenses as follows:
Class | Expense Cap 2/28/2017 - 4/30/2017 | Reimbursed Expenses | Expiration of Reimbursed Expenses | |||||||||
R6 | 0.58 | % | $ | 363 | 2020 |
Of this amount, $178 was disclosed as a receivable from the Manager on the Statement of Assets and Liabilities at April 30, 2017. The Fund has adopted an Expense Reimbursement Plan whereby the Manage may seek repayment of such fee reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Fund for any contractual or voluntary fees reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years after the Manager’s own waiver or reimbursement and (b) does not cause the Fund’s annual operating expenses to exceed the lesser of the contractual percentage limit in effect at the time of the waiver/reimbursement or time of recoupment. The reimbursed expenses above will expire in 2020.
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 period ended April 30, 2017, Foreside collected $848 in sales commissions from the sale of Class A Shares of the Fund.
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 period ended April 30, 2017, CDSC fees of $625 were collected for the Class A Shares of 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 period ended April 30, 2017, CDSC fees of $498 were collected for Class C Shares of the Fund.
Trustee Fees and Expenses
As compensation for their service to the Trust, the American Beacon Select Funds and the American Beacon Institutional Funds Trust, each Trustee receives an annual retainer of $120,000, plus $5,000 for each Board of Trustee meeting attended in person or via teleconference, $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, and $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee, plus reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. The Board Chairman receives an additional annual retainer of $50,000 as well as a single $5,000 fee each quarter for his attendance at the committee meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chairman of the Nominating and Governance Committee receives an additional annual retainer of $10,000. These expenses are allocated on a prorated basis to each Fund of the Trust according to its respective net assets.
22
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
3. Security Valuation and Fair Value Measurements
Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally at 4:00 p.m. Eastern Time, 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 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 Board.
Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, the 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.
Other investments 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 Manager’s Valuation Committee, pursuant to procedures established by 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. Fixed-income securities are considered Level 2 as they are valued using observable inputs. | ||
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.
23
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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.
Common Stock
Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or over-the-counter (“OTC”). OTC stock may be less liquid than exchange-traded stock.
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 the 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.
Publicly Traded Partnerships; Master Limited Partnerships
A Fund may invest in publicly traded partnerships such as master limited partnerships (“MLPs”). MLPs issue units that are registered with the SEC and are freely tradable on a securities exchange or in the over-the-counter (“OTC”) market. An MLP may have one or more general partners, who conduct the business, and one or more limited partners, who contribute capital. (An MLP also may be an entity similar to a limited partnership, such as a
24
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
limited liability company, which has a manager or managing member and non-managing members (who are like limited partners)). The general partner or partners are jointly and severally responsible for the liabilities of the MLP. A Fund invests as a limited partner and normally would not be liable for the debts of an MLP beyond the amount the Fund has invested therein but it would not be shielded to the same extent that a shareholder of a corporation would be. In certain instances, creditors of an MLP would have the right to seek a return of capital that had been distributed to a limited partner. The right of an MLP’s creditors would continue even after a Fund had sold its investment in the partnership. MLPs typically invest in real estate and oil and gas equipment leasing assets, but they also finance entertainment, research and development, and other projects.
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.
5. Financial Derivative Instruments
The Fund may utilize derivative instruments to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs. When considering the Fund’s 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 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 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.
During the period ended April 30, 2017, the Fund entered into future contracts primarily for exposing cash to markets.
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 | Period Ended April 30, 2017 | |||
Large Cap Value | 1,797 |
25
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
The following is a summary of the Fund’s derivative financial instruments categorized by risk exposure(1):
Fair values of financial instruments on the Statements of Assets and Liabilities as of April 30, 2017: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Receivable for variation margin from open futures contracts(2) | $ | - | $ | - | $ | - | $ | - | $ | 2,733,918 | $ | 2,733,918 | |||||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statements of Operations for the period ended April 30, 2017: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized gain (loss) of derivatives | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Net realized gain (loss) from futures contracts | $ | - | $ | - | $ | - | $ | - | $ | 26,724,654 | $ | 26,724,654 | |||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized appreciation (depreciation) from futures contracts | $ | - | $ | - | $ | - | $ | - | $ | 4,067,183 | $ | 4,067,183 |
(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
Investing in the Fund may involve certain risks including, but not limited to, those described below.
Allocation Risk
The sub-advisor’s judgments about, and allocations among, asset classes and market exposures may adversely affect the Fund’s performance. This risk may be increased by the use of derivatives to increase allocations to various market exposures.
Cybersecurity and Operational Risk
The Fund and its service providers, and shareholders’ ability to transact with the Fund, may be negatively impacted due to operational risks arising from, among other problems, human errors, systems and technology disruptions or failures, or cybersecurity incidents. It is not possible for the Fund service providers to identify all of the operational risks that may affect the Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Cybersecurity incidents could also affect issuers of securities in which the Fund invests, leading to significant loss of value.
Equity Investments Risk
Equity securities are subject to investment and market risk. The Fund’s investments in equity securities may include common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Fund to additional risks.
26
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Common Stock - The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company.
Depositary Receipts - Depositary receipts and U.S. dollar-denominated foreign stocks traded on U.S. exchanges are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency exchange rate fluctuations, political and financial instability in the home country of a particular depositary receipt or foreign stock, less liquidity and more volatility, less government regulation and supervision and delays in transaction settlement.
REITs - Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values. REITs also are dependent upon the skills of their managers and are subject to heavy cash flow dependency or self-liquidation. Domestic REITs could be adversely affected by failure to qualify for tax-free “pass-through” of net income and gains under the Internal Revenue Code of 1986, as amended, or to maintain their exemption from registration under the Investment Company Act of 1940, as amended. REITs typically incur fees that are separate from those incurred by the Fund. Accordingly, the Fund’s investment in REITs will result in the layering of expenses such that shareholders will indirectly bear a proportionate share of the REITs’ operating expenses, in addition to paying Fund expenses. The value of REIT common stock may decline when interest rates rise.
Foreign Investing Risk
Non-U.S. investments carry potential risks not associated with U.S. investments. Such risks include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity and greater volatility, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, and (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets.
Futures Contracts Risk
Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. Futures contracts may experience potentially dramatic price changes (losses) and imperfect correlation between the price of the contract and the underlying security or index, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).
Investment Risk
An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.
Issuer Risk
The value of, and/or the return generated by, a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets.
27
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Market Risk
Since the financial crisis that started in 2008, the U.S. and many foreign economies continue to experience its after-effects, which have resulted, and may continue to result, in fixed income instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations.
In addition, political events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. Because the impact on the markets has been widespread, it may be difficult to identify both risks and opportunities using past models of the interplay of market forces, or to predict the duration of these market conditions. Interest rates have been unusually low in recent years in the U.S. and abroad. Because there is little precedent for this situation, it is difficult to predict the impact on various markets of a significant rate increase, whether brought about by U.S. policy makers or by dislocations in world markets. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely.
Other Investment Companies Risk
The Fund may invest in shares of other registered investment companies, including money market funds. To the extent that the Fund invests in shares of other registered investment companies, the Fund will indirectly bear the fees and expenses charged by those investment companies in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those funds. For example, money market funds are subject to interest rate risk, credit risk, and market risk.
Sector Risk
Sector Risk is the risk associated with the Fund holding a significant amount of investments in similar businesses, which would be affected by the same economic or market conditions.
Securities Lending Risk
To the extent the Fund lends its securities, it may be subject to the following risks; i) borrowers of the Fund’s securities typically provide collateral in the form of cash that is reinvested in securities, ii) the securities in which the collateral is invested may not perform sufficiently to cover the return collateral payments owed to borrowers, iii) delays may occur in the recovery of securities from borrowers, which could interfere with the Fund’s ability to vote proxies or to settle transactions, and iv) there is the risk of possible loss of rights in the collateral should the borrower fail financially.
Value Stocks Risk
Value stocks are subject to the risk that their intrinsic value may never be realized by the market or that their prices may decline. The Fund’s investments in value stocks seek to limit potential downside price risk over time, however, value stock prices may still decline substantially. In addition, the Fund may produce more modest gains as a trade-off for this potentially lower risk. The Funds investment in value stocks could cause the Fund to underperform funds that use a growth or non-value approach to investing or have a broader investment style.
28
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Offsetting Assets and Liabilities
The Fund is a party to enforceable master netting agreements between brokers and counterparties which provides 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 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, 2017.
Offsetting of Financial and Derivative Assets and Liabilities as of April 30, 2017: | ||||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts | $ | 2,733,918 | $ | - | ||||||||
|
|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 2,733,918 | $ | - | ||||||||
|
|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | (2,733,918 | ) | $ | - | |||||||
|
|
|
| |||||||||
Total derivative assets and liabilities subject to an MNA | $ | - | $ | - | ||||||||
|
|
|
|
Remaining Contractual Maturity of the Agreements As of April 30, 2017 | ||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||||||||||||||
Securities Lending Transactions | ||||||||||||||||||||||||||||||||
Common Stocks | $ | 12,745,002 | $ | - | $ | - | $ | - | $ | 12,745,002 | ||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Total Borrowings | $ | 12,745,002 | $ | - | $ | - | $ | - | $ | 12,745,002 | ||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 12,745,002 | ||||||||||||||||||||||||||||||
|
|
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 unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2016 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 (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.
29
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
The tax character of distributions paid were as follows:
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||
(unaudited) | ||||||||||||||||
Distributions paid from: | ||||||||||||||||
Ordinary income* | ||||||||||||||||
Institutional Class | $ | 112,815,101 | $ | 120,640,471 | ||||||||||||
Y Class | 7,905,543 | 7,538,079 | ||||||||||||||
Investors Class | 44,594,219 | 48,805,360 | ||||||||||||||
Advisor Class | 2,058,628 | 2,263,492 | ||||||||||||||
A Class | 879,050 | 738,373 | ||||||||||||||
C Class | 99,793 | 125,679 | ||||||||||||||
Long-term capital gains | ||||||||||||||||
Institutional Class | 40,827,429 | 509,906,946 | ||||||||||||||
Y Class | 2,953,376 | 33,737,055 | ||||||||||||||
Investors Class | 18,906,905 | 263,424,147 | ||||||||||||||
Advisor Class | 953,678 | 12,987,556 | ||||||||||||||
A Class | 366,411 | 3,666,035 | ||||||||||||||
C Class | 77,352 | 1,088,326 | ||||||||||||||
|
|
|
| |||||||||||||
Total distributions paid | $ | 232,437,485 | $ | 1,004,921,519 | ||||||||||||
|
|
|
|
*For tax purposes, short-term capital gains are considered ordinary income distributions.
As of April 30, 2017 the components of distributable earnings (deficits) on a tax basis were as follows:
Fund | Tax cost | Unrealized appreciation | Unrealized depreciation | Net unrealized appreciation (depreciation) | ||||||||||||||||||||||||
Large Cap Value | $ | 6,286,872,248 | $ | 1,710,360,800 | $ | (411,618,929 | ) | $ | 1,298,741,871 |
Fund | Net unrealized appreciation (depreciation) | Undistributed ordinary income | Undistributed long-term capital gains | Accumulated capital and other losses | Other temporary differences | Distributable earnings | ||||||||||||||||||||||||||||||||||||||
Large Cap Value | $ | 1,298,741,871 | $ | 115,523,940 | $ | 303,661,749 | $ | (2,733,918 | ) | $ | 2,733,918 | $ | 1,717,927,560 |
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 (depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains (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 re-classes, reclassifications of income from real estate investment securities and publicly traded partnerships and Section 732 basis adjustments as of April 30, 2017:
Fund | Paid-in-capital | Undistributed (overdistribution of) net investment income | Accumulated net realized gain (loss) | Net unrealized appreciation (depreciation) | ||||||||||||||||||||||||||||
Large Cap Value | $ | 1,099 | $ | 284,271 | $ | (285,370 | ) | $ | - |
30
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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.
For the period ended April 30, 2017, 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 period ended April 30, 2017 were $981,274,032 and $2,390,647,406, respectively.
A summary of the Fund’s transactions in the USG Select Fund for the period ended April 30, 2017 are as follows:
Type of Transaction | October 31, 2016 Share/Fair Value | Purchases | Sales | April 30, 2017 Share/Fair Value | Dividend Income | |||||||||||||||||||||||||||||||
Direct | $ | 213,056,490 | $ | 2,464,867,967 | $ | 2,404,430,020 | $ | 273,494,437 | $ | 530,535 | ||||||||||||||||||||||||||
Securities Lending | _ | 125,758,096 | 112,589,582 | 13,168,514 | 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 investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral
31
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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, 2017, the value of outstanding securities on loan and the value of collateral was as follows:
Market Value of Securities on Loan | Cash Collateral Received | Non-Cash Collateral Received | Total Collateral Received | |||||||||||||||||||||||
$ | 12,745,002 | $ | 13,168,514 | $ | – | $ | 13,168,514 |
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” on 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:
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 12,457,821 | $ | 351,085,313 | 29,011,141 | $ | 723,886,356 | ||||||||||||||||||||||
Reinvestment of dividends | 5,164,960 | 144,102,372 | 24,324,597 | 594,255,276 | ||||||||||||||||||||||||
Shares redeemed | (43,697,769 | ) | (1,224,565,891 | ) | (73,620,802 | ) | (1,858,257,006 | ) | ||||||||||||||||||||
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|
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|
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| |||||||||||||||||||||
Net (decrease) in shares outstanding | (26,074,988 | ) | $ | (729,378,206 | ) | (20,285,064 | ) | $ | (540,115,374 | ) | ||||||||||||||||||
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Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,859,367 | $ | 52,088,614 | 3,157,381 | $ | 76,912,328 | ||||||||||||||||||||||
Reinvestment of dividends | 382,065 | 10,598,482 | 1,654,777 | 40,194,522 | ||||||||||||||||||||||||
Shares redeemed | (3,269,528 | ) | (90,892,040 | ) | (6,036,346 | ) | (152,194,349 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net (decrease) in shares outstanding | (1,028,096 | ) | $ | (28,204,944 | ) | (1,224,188 | ) | $ | (35,087,499 | ) | ||||||||||||||||||
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Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 5,767,141 | $ | 152,086,934 | 12,986,515 | $ | 300,013,977 | ||||||||||||||||||||||
Reinvestment of dividends | 2,362,886 | 61,718,592 | 13,342,014 | 305,665,560 | ||||||||||||||||||||||||
Shares redeemed | (22,257,336 | ) | (582,558,790 | ) | (51,928,422 | ) | (1,209,650,645 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net (decrease) in shares outstanding | (14,127,309 | ) | $ | (368,753,264 | ) | (25,599,893 | ) | $ | (603,971,108 | ) | ||||||||||||||||||
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Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 266,777 | $ | 6,897,845 | 1,415,449 | $ | 30,873,647 | ||||||||||||||||||||||
Reinvestment of dividends | 108,296 | 2,795,115 | 640,459 | 14,483,364 | ||||||||||||||||||||||||
Shares redeemed | (1,507,481 | ) | (38,668,460 | ) | (3,029,002 | ) | (69,204,203 | ) | ||||||||||||||||||||
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|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (1,132,408 | ) | $ | (28,975,500 | ) | (973,094 | ) | $ | (23,847,192 | ) | ||||||||||||||||||
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32
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 361,843 | $ | 9,569,356 | 569,278 | $ | 13,371,912 | ||||||||||||||||||||||
Reinvestment of dividends | 47,258 | 1,221,618 | 189,233 | 4,295,607 | ||||||||||||||||||||||||
Shares redeemed | (485,054 | ) | (12,785,093 | ) | (776,999 | ) | (17,974,601 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net (decrease) in shares outstanding | (75,953 | ) | $ | (1,994,119 | ) | (18,488 | ) | $ | (307,082 | ) | ||||||||||||||||||
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| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 20,383 | $ | 526,537 | 82,706 | $ | 1,933,071 | ||||||||||||||||||||||
Reinvestment of dividends | 6,172 | 158,622 | 47,350 | 1,067,300 | ||||||||||||||||||||||||
Shares redeemed | (79,251 | ) | (2,050,455 | ) | (223,857 | ) | (5,128,914 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net (decrease) in shares outstanding | (52,696 | ) | $ | (1,365,296 | ) | (93,801 | ) | $ | (2,128,543 | ) | ||||||||||||||||||
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| |||||||||||||||||||||
R6 Class | ||||||||||||||||||||||||||||
February 28, 2017 to April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 3,492 | $ | 100,000 | – | $ | – | ||||||||||||||||||||||
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| |||||||||||||||||||||
Net increase in shares outstanding | 3,492 | $ | 100,000 | – | $ | – | ||||||||||||||||||||||
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11. Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.
33
American Beacon Large Cap Value FundSM
(For a share outstanding throughout the period)
Institutional ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | Year Ended October 31, 2015 | Year Ended October 31, 2014 | Year Ended October 31, 2013 | Year Ended October 31, 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | �� | |||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 25.80 | $ | 28.38 | $ | 31.21 | $ | 27.59 | $ | 21.58 | $ | 18.99 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.28 | 0.61 | 0.55 | 0.73 | 0.50 | 0.45 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.40 | (0.29 | ) | (0.70 | ) | 3.33 | 6.00 | 2.60 | ||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 3.68 | 0.32 | (0.15 | ) | 4.06 | 6.50 | 3.05 | |||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.60 | ) | (0.52 | ) | (0.67 | ) | (0.44 | ) | (0.49 | ) | (0.46 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.22 | ) | (2.38 | ) | (2.01 | ) | - | - | - | |||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total distributions | (0.82 | ) | (2.90 | ) | (2.68 | ) | (0.44 | ) | (0.49 | ) | (0.46 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 28.66 | $ | 25.80 | $ | 28.38 | $ | 31.21 | $ | 27.59 | $ | 21.58 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total returnB | 14.34 | %C | 1.69 | % | (0.76 | )% | 14.89 | % | 30.70 | % | 16.48 | % | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 4,959,523,619 | $ | 5,137,688,375 | $ | 6,198,883,300 | $ | 5,816,013,064 | $ | 5,428,755,279 | $ | 3,914,172,668 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.60 | %D | 0.60 | % | 0.58 | % | 0.58 | % | 0.58 | % | 0.59 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.60 | %D | 0.60 | % | 0.58 | % | 0.58 | % | 0.58 | % | 0.59 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.77 | %D | 2.16 | % | 1.88 | % | 2.35 | % | 1.99 | % | 2.23 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.77 | %D | 2.16 | % | 1.88 | % | 2.35 | % | 1.99 | % | 2.23 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %C | 25 | % | 32 | % | 29 | % | 34 | % | 30 | % |
A | On May 31, 2016, the AMR Class closed and the assets were merged into the Institutional Class. |
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. |
34
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | Year Ended October 31, 2015 | Year Ended October 31, 2014 | Year Ended October 31, 2013 | Year Ended October 31, 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 25.64 | $ | 28.21 | $ | 31.04 | $ | 27.46 | $ | 21.47 | $ | 18.92 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.23 | 0.59 | 0.56 | 0.64 | 0.40 | 0.53 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.41 | (0.29 | ) | (0.72 | ) | 3.37 | 6.05 | 2.50 | ||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 3.64 | 0.30 | (0.16 | ) | 4.01 | 6.45 | 3.03 | |||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.58 | ) | (0.49 | ) | (0.66 | ) | (0.43 | ) | (0.46 | ) | (0.48 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.22 | ) | (2.38 | ) | (2.01 | ) | – | – | – | |||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total distributions | (0.80 | ) | (2.87 | ) | (2.67 | ) | (0.43 | ) | (0.46 | ) | (0.48 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 28.48 | $ | 25.64 | $ | 28.21 | $ | 31.04 | $ | 27.46 | $ | 21.47 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total returnA | 14.28 | %B | 1.61 | % | (0.80 | )% | 14.78 | % | 30.59 | % | 16.43 | % | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 359,034,799 | $ | 349,542,346 | $ | 419,096,844 | $ | 434,880,702 | $ | 327,938,666 | $ | 88,508,971 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.67 | %C | 0.67 | % | 0.67 | % | 0.67 | % | 0.66 | % | 0.69 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.67 | %C | 0.67 | % | 0.67 | % | 0.67 | % | 0.66 | % | 0.69 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.69 | %C | 2.08 | % | 1.80 | % | 2.24 | % | 1.78 | % | 2.12 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.69 | %C | 2.08 | % | 1.80 | % | 2.24 | % | 1.78 | % | 2.12 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %B | 25 | % | 32 | % | 29 | % | 34 | % | 30 | % |
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. |
35
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | Year Ended October 31, 2015 | Year Ended October 31, 2014 | Year Ended October 31, 2013 | Year Ended October 31, 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 24.13 | $ | 26.70 | $ | 29.51 | $ | 26.11 | $ | 20.43 | $ | 17.99 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.19 | 0.46 | 0.45 | 0.57 | 0.39 | 0.36 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.21 | (0.25 | ) | (0.68 | ) | 3.18 | 5.69 | 2.47 | ||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 3.40 | 0.21 | (0.23 | ) | 3.75 | 6.08 | 2.83 | |||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.51 | ) | (0.40 | ) | (0.57 | ) | (0.35 | ) | (0.40 | ) | (0.39 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.22 | ) | (2.38 | ) | (2.01 | ) | – | – | – | |||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total distributions | (0.73 | ) | (2.78 | ) | (2.58 | ) | (0.35 | ) | (0.40 | ) | (0.39 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 26.80 | $ | 24.13 | $ | 26.70 | $ | 29.51 | $ | 26.11 | $ | 20.43 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total returnA | 14.17 | %B | 1.33 | % | (1.07 | )% | 14.50 | % | 30.26 | % | 16.05 | % | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 2,115,042,849 | $ | 2,245,534,741 | $ | 3,167,585,961 | $ | 4,158,361,296 | $ | 3,899,010,929 | $ | 3,635,332,581 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.92 | %C | 0.93 | % | 0.93 | % | 0.93 | % | 0.93 | % | 0.96 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.92 | %C | 0.93 | % | 0.93 | % | 0.93 | % | 0.93 | % | 0.96 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.46 | %C | 1.84 | % | 1.54 | % | 2.01 | % | 1.67 | % | 1.89 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.46 | %C | 1.84 | % | 1.54 | % | 2.01 | % | 1.67 | % | 1.89 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %B | 25 | % | 32 | % | 29 | % | 34 | % | 30 | % |
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. |
36
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | Year Ended October 31, 2015 | Year Ended October 31, 2014 | Year Ended October 31, 2013 | Year Ended October 31, 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.82 | $ | 26.40 | $ | 29.24 | $ | 25.89 | $ | 20.25 | $ | 17.83 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.21 | 0.40 | 0.40 | 0.47 | 0.35 | 0.31 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.12 | (0.22 | ) | (0.66 | ) | 3.20 | 5.65 | 2.48 | ||||||||||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 3.33 | 0.18 | (0.26 | ) | 3.67 | 6.00 | 2.79 | |||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.47 | ) | (0.38 | ) | (0.57 | ) | (0.32 | ) | (0.36 | ) | (0.37 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.22 | ) | (2.38 | ) | (2.01 | ) | - | - | - | |||||||||||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.69 | ) | (2.76 | ) | (2.58 | ) | (0.32 | ) | (0.36 | ) | (0.37 | ) | ||||||||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 26.46 | $ | 23.82 | $ | 26.40 | $ | 29.24 | $ | 25.89 | $ | 20.25 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total returnB | 14.04 | %C | 1.21 | % | (1.19 | )% | 14.31 | % | 30.05 | % | 15.96 | % | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 95,773,614 | $ | 113,168,437 | $ | 140,975,319 | $ | 149,422,940 | $ | 128,528,036 | $ | 103,628,855 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.08 | %D | 1.08 | % | 1.07 | % | 1.07 | % | 1.07 | % | 1.08 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.08 | %D | 1.08 | % | 1.07 | % | 1.07 | % | 1.07 | % | 1.08 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.31 | %D | 1.69 | % | 1.40 | % | 1.83 | % | 1.52 | % | 1.78 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.31 | %D | 1.69 | % | 1.40 | % | 1.83 | % | 1.52 | % | 1.78 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %C | 25 | % | 32 | % | 29 | % | 34 | % | 30 | % |
A | On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class. |
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. |
37
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | Year Ended October 31, 2015 | Year Ended October 31, 2014 | Year Ended October 31, 2013 | Year Ended October 31, 2012 | |||||||||||||||||||||||||||||||||||||||
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(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.90 | $ | 26.51 | $ | 29.38 | $ | 26.03 | $ | 20.41 | $ | 18.01 | ||||||||||||||||||||||||||||||||
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Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.09 | 0.42 | 0.47 | 0.54 | 0.38 | 0.36 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.26 | (0.21 | ) | (0.71 | ) | 3.16 | 5.65 | 2.44 | ||||||||||||||||||||||||||||||||||||
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Total income (loss) from investment operations | 3.35 | 0.21 | (0.24 | ) | 3.70 | 6.03 | 2.80 | |||||||||||||||||||||||||||||||||||||
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Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.52 | ) | (0.44 | ) | (0.62 | ) | (0.35 | ) | (0.41 | ) | (0.40 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.22 | ) | (2.38 | ) | (2.01 | ) | – | – | – | |||||||||||||||||||||||||||||||||||
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Total distributions | (0.74 | ) | (2.82 | ) | (2.63 | ) | (0.35 | ) | (0.41 | ) | (0.40 | ) | ||||||||||||||||||||||||||||||||
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Net asset value, end of period | $ | 26.51 | $ | 23.90 | $ | 26.51 | $ | 29.38 | $ | 26.03 | $ | 20.41 | ||||||||||||||||||||||||||||||||
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Total returnA | 14.09 | %B | 1.33 | % | (1.14 | )% | 14.37 | % | 30.03 | % | 15.91 | % | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 36,896,960 | $ | 35,071,001 | $ | 39,401,153 | $ | 22,781,918 | $ | 11,904,903 | $ | 6,222,523 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.98 | %C | 0.98 | % | 0.97 | % | 1.04 | % | 1.08 | % | 1.12 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.98 | %C | 0.98 | % | 0.97 | % | 1.04 | % | 1.08 | % | 1.12 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.38 | %C | 1.78 | % | 1.48 | % | 1.83 | % | 1.44 | % | 1.66 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.38 | %C | 1.78 | % | 1.48 | % | 1.83 | % | 1.44 | % | 1.66 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %B | 25 | % | 32 | % | 29 | % | 34 | % | 30 | % |
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. |
38
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | Year Ended October 31, 2015 | Year Ended October 31, 2014 | Year Ended October 31, 2013 | Year Ended October 31, 2012 | |||||||||||||||||||||||||||||||||||||||
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(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.57 | $ | 26.17 | $ | 29.03 | $ | 25.81 | $ | 20.29 | $ | 17.95 | ||||||||||||||||||||||||||||||||
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Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.04 | 0.20 | 0.27 | 0.35 | 0.23 | 0.22 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.18 | (0.19 | ) | (0.70 | ) | 3.11 | 5.58 | 2.42 | ||||||||||||||||||||||||||||||||||||
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Total income (loss) from investment operations | 3.22 | 0.01 | (0.43 | ) | 3.46 | 5.81 | 2.64 | |||||||||||||||||||||||||||||||||||||
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Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.28 | ) | (0.23 | ) | (0.42 | ) | (0.24 | ) | (0.29 | ) | (0.30 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.22 | ) | (2.38 | ) | (2.01 | ) | - | - | - | |||||||||||||||||||||||||||||||||||
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Total distributions | (0.50 | ) | (2.61 | ) | (2.43 | ) | (0.24 | ) | (0.29 | ) | (0.30 | ) | ||||||||||||||||||||||||||||||||
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Net asset value, end of period | $ | 26.29 | $ | 23.57 | $ | 26.17 | $ | 29.03 | $ | 25.81 | $ | 20.29 | ||||||||||||||||||||||||||||||||
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Total returnA | 13.70 | %B | 0.51 | % | (1.83 | )% | 13.48 | % | 29.00 | % | 14.97 | % | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 8,597,249 | $ | 8,950,263 | $ | 12,389,141 | $ | 9,964,292 | $ | 5,199,605 | $ | 2,468,569 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.73 | %C | 1.74 | % | 1.73 | % | 1.79 | % | 1.84 | % | 1.88 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.73 | %C | 1.74 | % | 1.73 | % | 1.81 | % | 1.92 | % | 1.87 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.65 | %C | 1.02 | % | 0.73 | % | 1.09 | % | 0.68 | % | 0.89 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.65 | %C | 1.02 | % | 0.73 | % | 1.07 | % | 0.60 | % | 0.89 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %B | 25 | % | 32 | % | 29 | % | 34 | % | 30 | % |
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. |
39
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
R6 Class | ||||
February 28, 2017A to April 30, 2017 | ||||
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(unaudited) | ||||
Net asset value, beginning of period | $ | 28.64 | ||
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Income from investment operations: | ||||
Net investment income | 0.07 | |||
Net gains (losses) on investments (both realized and unrealized) | (0.06 | ) | ||
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Total income (loss) from investment operations | 0.01 | |||
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Net asset value, end of period | $ | 28.65 | ||
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Total returnB | 14.30 | %C | ||
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Ratios and supplemental data: | ||||
Net assets, end of period | $ | 100,051 | ||
Ratios to average net assets: | ||||
Expenses, before reimbursements | 2.81 | %D | ||
Expenses, net of reimbursements | 0.58 | %D | ||
Net investment income (loss), before expense reimbursements | (0.81 | )%D | ||
Net investment income, net of reimbursements | 1.37 | %D | ||
Portfolio turnover rate | 13 | %C |
A | Commencement of operations. |
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. |
40
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: 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 | 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. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the American Beacon Large Cap Value Fund’s portfolio holdings is also available 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 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, TX | 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 Large Cap Value Fund are service marks of American Beacon Advisors, Inc.
SAR 4/17
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.
GARCIA HAMILTON QUALITY BOND FUND
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.
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, 2017 |
Contents
1 | ||||
2 | ||||
4 | ||||
6 | ||||
8 | ||||
11 | ||||
23 |
Back Cover |
![]() | Dear Shareholders,
In the weeks ahead of the U.S. presidential election on November 8, 2016, uncertainty about the outcome caused many investors to stay on the sidelines. Some investors questioned whether the election’s result would have negative consequences for their portfolios, although elections have rarely had a lasting effect on the market.
Following the election, the markets responded positively to aspects of the incoming administration’s proposed plans for economic growth; i.e., repatriating jobs from overseas, relaxing regulations, lowering taxes and increasing infrastructure spending. From Election Day 2016 to Inauguration Day 2017, the S&P 500 Index – a broad measure of the performance of large U.S. companies – climbed approximately 6%. During the administration’s first 100 days (Inauguration Day to April 30), the same market bellwether gained approximately 5%. |
Then on March 15, 2017, as economists had anticipated, the Federal Reserve increased the federal funds rate by 0.25% to a range of 0.75% to 1.00%. It was the third increase since 2008. The Federal Open Market Committee’s confidence in the improving U.S. economy was previously exhibited in December 2016 and December 2015. Economists anticipate two additional increases in 2017.
For the six months ended April 30, 2017:
• | The American Beacon Garcia Hamilton Quality Bond Fund (Investor Class) returned -0.55%. |
For the same time period, the Bloomberg Barclays Capital U.S. Aggregate Index, which is the performance benchmark for the Fund, returned -0.67%.
At American Beacon Advisors, we are proud to offer a broad range of domestic and global equity and fixed-income funds sub-advised by experienced asset managers who employ distinctive investment processes to manage assets through a variety of economic and market conditions. Together, we work diligently to help our shareholders meet their long-term financial goals.
Thank you for your continued interest in 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 Garcia Hamilton Quality Bond FundSM
Performance Overview
April 30, 2017 (Unaudited)
The Investor Class of the American Beacon Garcia Hamilton Quality Bond Fund (“the Fund”) returned -0.55% for the six months ended April 30, 2017, outperforming the Bloomberg Barclays U.S. Aggregate Index (the “Index”) return of -0.67% for the same period.
Total Returns for the Period ended April 30, 2017 | |||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | Since Inception (4/4/2016) | ||||||||||||||||||||
Institutional Class (1,3) | GHQIX | -0.26 | % | 0.61 | % | 0.08 | % | ||||||||||||||||
Y Class (1,3) | GHQYX | -0.41 | % | 0.43 | % | -0.12 | % | ||||||||||||||||
Investor Class (1,3) | GHQPX | -0.55 | % | 0.22 | % | -0.29 | % | ||||||||||||||||
Bloomberg Barclays Capital U.S. Aggregate Index (2) | -0.67 | % | 0.83 | % | 1.09 | % |
* | 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 Bloomberg 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. One cannot directly invest in an index. |
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 1.06%, 1.29%, and 1.19%, 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 outperformed the Index during the period due primarily to active duration management and an overweight position in the financial sector of corporate bonds.
In mid-2016, the Fund reduced its duration relative to the Index as treasury yields hovered near historic lows and as the Fed began discussing higher interest rates. Following the surprise presidential election of Trump in November 2016 and a Fed rate hike shortly thereafter, treasury yields increased meaningfully. The Fund then moved its duration to slightly long of the Index in early-2017 in anticipation of stable longer-term interest rates going forward. While additional rate hikes were still expected from the Fed, longer-term treasury yields were expected to remain range bound.
The Fund benefitted from an overweight position in corporate bonds, particularly in the finance sector, as credit spreads narrowed during the period. The Fund initiated its corporate overweight position in early-2016 when treasury yields were low, credit spreads were relatively wide and sentiment was shifting toward an improving economy. The finance sector also benefitted from the surprise election of Trump based on expectations of market-friendly regulatory reform.
Offsetting these benefits, the Fund maintained a barbell maturity position during the period which detracted from total return as it resulted in a lower yield than that of the Index. While the barbell position is expected to benefit the Fund over the full interest-rate cycle as the yield curve flattens, it reduced performance during the period when the treasury yield curve steepened and the Fund produced a slightly lower yield.
The Fund’s subadvisor continues to invest in a high-quality portfolio of fixed-income securities and seeks to outperform the Index through a combination of sector allocation, duration management and yield curve management.
2
American Beacon Garcia Hamilton Quality Bond FundSM
Performance Overview
April 30, 2017 (Unaudited)
Top Ten Holdings (% Net Assets) | ||||||||
U.S. Treasury Notes/Bonds, 2.875%, Due 8/15/2045 | 22.1 | |||||||
U.S. Treasury Notes/Bonds, 0.750%, Due 6/30/2017 | 7.7 | |||||||
Federal Farm Credit Banks, 1.081%, Due 5/25/2018 | 7.2 | |||||||
Federal National Mortgage Association, 1.102%, Due 3/21/2018 | 4.8 | |||||||
Federal Farm Credit Banks, 1.014%, Due 5/17/2018 | 4.6 | |||||||
Apple, Inc., 1.334%, Due 5/6/2019 | 4.0 | |||||||
Morgan Stanley, 2.553%, Due 10/24/2023 | 3.6 | |||||||
Merck & Co., Inc., 1.409%, Due 2/10/2020 | 3.5 | |||||||
JPMorgan Chase & Co., 2.383%, Due 10/24/2023 | 3.5 | |||||||
American Express Credit Corp., 1.702%, Due 3/18/2019 | 3.4 | |||||||
Total Fund Holdings | 27 | |||||||
Sector Allocation (% Investments) | ||||||||
U.S. Government Agency Obligations | 30.0 | |||||||
U.S. Treasury Obligations | 29.9 | |||||||
Financial | 18.9 | |||||||
U.S. Agency Mortgage-Backed Obligations | 8.2 | |||||||
Technology | 4.0 | |||||||
Consumer, Non-cyclical | 3.5 | |||||||
Energy | 3.0 | |||||||
Industrial | 1.2 | |||||||
Communications | 1.1 | |||||||
Investment Companies | 0.2 |
3
American Beacon Garcia Hamilton Quality Bond FundSM
Expense Examples
April 30, 2017 (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, distribution (12b-1) fees, and other Fund expenses. The Examples 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, 2016 through April 30, 2017.
Actual Expenses
The “Actual” lines of the table 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 = $8.60), then multiply the result by the “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) 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 “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 Garcia Hamilton Quality Bond FundSM
Expense Examples
April 30, 2017 (Unaudited)
Beginning Account Value 11/1/2016 | Ending Account Value 4/30/2017 | Expenses Paid During Period 11/1/2016-4/30/2017• | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $997.40 | $2.23 | ||||||||||||
Hypothetical** | $1,000.00 | $1,022.60 | $2.26 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $995.90 | $2.72 | ||||||||||||
Hypothetical** | $1,000.00 | $1,022.10 | $2.76 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $994.50 | $4.10 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.70 | $4.16 |
• | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.45%, 0.55% and 0.83% for the Institutional, Y and Investor 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 (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
5
American Beacon Garcia Hamilton Quality Bond FundSM
April 30, 2017 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 31.69% | |||||||||||||||
Energy - 3.00% | |||||||||||||||
Chevron Corp., 1.569%, Due 11/15/2021A | $ | 4,140,000 | $ | 4,158,411 | |||||||||||
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Finance - 18.86% | |||||||||||||||
American Express Credit Corp., 1.702%, Due 3/18/2019A | 4,684,000 | 4,708,268 | |||||||||||||
Citigroup, Inc., 4.45%, Due 9/29/2027 | 1,465,000 | 1,498,871 | |||||||||||||
Goldman Sachs Group, Inc., 2.516%, Due 4/23/2021A | 4,120,000 | 4,202,985 | |||||||||||||
JPMorgan Chase & Co., 2.383%, Due 10/24/2023A | 4,700,000 | 4,781,315 | |||||||||||||
Morgan Stanley, 2.553%, Due 10/24/2023A | 4,935,000 | 5,012,351 | |||||||||||||
US Bank NA, 1.652%, Due 10/28/2019A | 2,080,000 | 2,095,134 | |||||||||||||
Wells Fargo & Co., | |||||||||||||||
2.19%, Due 7/26/2021A | 2,315,000 | 2,349,910 | |||||||||||||
4.10%, Due 6/3/2026 | 1,430,000 | 1,482,159 | |||||||||||||
|
| ||||||||||||||
26,130,993 | |||||||||||||||
|
| ||||||||||||||
Health Care - 3.54% | |||||||||||||||
Merck & Co., Inc., 1.409%, Due 2/10/2020A | 4,860,000 | 4,904,581 | |||||||||||||
|
| ||||||||||||||
Industrials - 1.15% | |||||||||||||||
General Electric Co., 2.131%, Due 3/15/2023A | 1,550,000 | 1,592,268 | |||||||||||||
|
| ||||||||||||||
Manufacturing - 3.99% | |||||||||||||||
Apple, Inc., 1.334%, Due 5/6/2019A | 5,504,000 | 5,528,366 | |||||||||||||
|
| ||||||||||||||
Telecommunications - 1.15% | |||||||||||||||
Pacific Bell Telephone Co., 7.125%, Due 3/15/2026 | 1,300,000 | 1,587,248 | |||||||||||||
|
| ||||||||||||||
Total Corporate Obligations (Cost $43,801,343) | 43,901,867 | ||||||||||||||
|
| ||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS - 25.12% | |||||||||||||||
Federal Farm Credit Banks, | |||||||||||||||
1.014%, Due 5/17/2018A | 6,300,000 | 6,311,630 | |||||||||||||
1.081%, Due 5/25/2018A | 9,945,000 | 9,967,456 | |||||||||||||
1.11%, Due 11/13/2018A | 3,570,000 | 3,583,384 | |||||||||||||
1.158%, Due 1/22/2019A | 3,405,000 | 3,421,327 | |||||||||||||
Federal Home Loan Bank, | |||||||||||||||
0.96%, Due 10/26/2018A | 4,480,000 | 4,480,152 | |||||||||||||
1.056%, Due 12/7/2017A | 2,535,000 | 2,538,957 | |||||||||||||
1.053%, Due 12/5/2017A | 1,860,000 | 1,862,400 | |||||||||||||
0.991%, Due 9/14/2018A | 2,630,000 | 2,634,192 | |||||||||||||
|
| ||||||||||||||
Total U.S. Government Agency Obligations (Cost $34,746,863) | 34,799,498 | ||||||||||||||
|
| ||||||||||||||
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 12.92% | |||||||||||||||
Federal Home Loan Mortgage Corp., 4.500%, Due 12/1/2034 | 4,178,139 | 4,511,757 | |||||||||||||
Federal National Mortgage Association, | |||||||||||||||
1.10%, Due 3/21/2018A | 6,595,000 | 6,605,677 | |||||||||||||
5.50%, Due 1/1/2024 | 3,064,269 | 3,289,029 | |||||||||||||
5.00%, Due 7/1/2026 | 3,366,131 | 3,496,761 | |||||||||||||
|
| ||||||||||||||
Total U.S. Agency Mortgage-Backed Obligations (Cost $17,954,221) | 17,903,224 | ||||||||||||||
|
| ||||||||||||||
U.S. TREASURY OBLIGATIONS - 29.80% | |||||||||||||||
U.S. Treasury Notes/Bonds, | |||||||||||||||
0.75%, Due 6/30/2017 | 10,660,000 | 10,659,968 | |||||||||||||
2.875%, Due 8/15/2045 | 31,150,000 | 30,621,914 | |||||||||||||
|
| ||||||||||||||
Total U.S. Treasury Obligations (Cost $42,232,683) | 41,281,882 | ||||||||||||||
|
|
See accompanying notes
6
American Beacon Garcia Hamilton Quality Bond FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
SHORT-TERM INVESTMENTS - 0.20% (Cost $276,606) | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 0.69%B | 276,606 | $ | 276,606 | ||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 99.73% (Cost $139,011,716) | 138,163,077 | ||||||||||||||
OTHER ASSETS, NET OF LIABILITIES - 0.27% | 369,385 | ||||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 138,532,462 | |||||||||||||
|
| ||||||||||||||
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 The Fund is affiliated by having the same investment advisor.
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2017, the investments were classified as described below:
Garcia Hamilton Quality Bond Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Corporate Obligations | $ | - | $ | 43,901,867 | $ | - | $ | 43,901,867 | ||||||||||||||||||||
U.S. Government Agency Obligations | - | 34,799,498 | - | 34,799,498 | ||||||||||||||||||||||||
U.S. Agency Mortgage-Backed Obligations | - | 17,903,224 | - | 17,903,224 | ||||||||||||||||||||||||
U.S. Treasury Obligations | - | 41,281,882 | - | 41,281,882 | ||||||||||||||||||||||||
Short-Term Investments – Money Market Funds | 276,606 | - | - | 276,606 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 276,606 | $ | 137,886,471 | $ | - | $ | 138,163,077 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP also requires all transfers between any level 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 period ended April 30, 2017, there were no transfers between levels.
See accompanying notes
7
American Beacon Garcia Hamilton Quality Bond FundSM
Statement of Assets and Liabilities
April 30, 2017 (Unaudited)
Assets: | ||||
Investments in unaffiliated securities, at fair value† | $ | 137,886,471 | ||
Investments in affiliated securities, at fair value‡ | 276,606 | |||
Dividends and interest receivable | 396,210 | |||
Receivable for fund shares sold | 45,451 | |||
Receivable for expense reimbursement (Note 2) | 24,990 | |||
Prepaid expenses | 49,455 | |||
|
| |||
Total assets | 138,679,183 | |||
|
| |||
Liabilities: | ||||
Payable for fund shares redeemed | 26,008 | |||
Management and investment advisory fees payable | 61,671 | |||
Administrative service and service fees payable | 1,849 | |||
Transfer agent fees payable | 4,458 | |||
Custody and fund accounting fees payable | 1,494 | |||
Professional fees payable | 50,627 | |||
Payable for prospectus and shareholder reports | 614 | |||
|
| |||
Total liabilities | 146,721 | |||
|
| |||
Net Assets | $ | 138,532,462 | ||
|
| |||
Analysis of Net Assets: | ||||
Paid-in-capital | $ | 141,375,733 | ||
Overdistribution of net investment income | (2 | ) | ||
Accumulated net realized (loss) | (1,994,630 | ) | ||
Unrealized depreciation of investments | (848,639 | ) | ||
|
| |||
Net assets | $ | 138,532,462 | ||
|
| |||
Shares outstanding at no par value (unlimited shares authorized): | ||||
Institutional Class | 12,818,535 | |||
|
| |||
Y Class | 306,439 | |||
|
| |||
Investor Class | 917,206 | |||
|
| |||
Net assets: | ||||
Institutional Class | $ | 126,460,308 | ||
|
| |||
Y Class | $ | 3,021,719 | ||
|
| |||
Investor Class | $ | 9,050,435 | ||
|
| |||
Net asset value, offering and redemption price per share: | ||||
Institutional Class | $ | 9.87 | ||
|
| |||
Y Class | $ | 9.86 | ||
|
| |||
Investor Class | $ | 9.87 | ||
|
| |||
† Cost of investments in unaffiliated securities | $ | 138,735,110 | ||
‡ Cost of investments in affiliated securities | $ | 276,606 |
See accompanying notes
8
American Beacon Garcia Hamilton Quality Bond FundSM
Statement of Operations
For the Period Ended April 30, 2017 (Unaudited)
Investment income: | ||||
Dividend income from affiliated securities | $ | 3,596 | ||
Interest income | 1,264,005 | |||
|
| |||
Total investment income | 1,267,601 | |||
|
| |||
Expenses: | ||||
Management and investment advisory fees (Note 2) | 373,356 | |||
Transfer agent fees: | ||||
Institutional Class | 14,744 | |||
Y Class | 1,004 | |||
Investor Class | 1,025 | |||
Custody and fund accounting fees | 9,655 | |||
Professional fees | 29,604 | |||
Registration fees and expenses | 22,366 | |||
Service fees (Note 2): | ||||
Y Class | 1,256 | |||
Investor Class | 10,754 | |||
Prospectus and shareholder report expenses | 3,641 | |||
Trustee fees | 919 | |||
Other expenses | 1,927 | |||
|
| |||
Total expenses | 470,251 | |||
|
| |||
Net fees waived and expenses reimbursed / (recouped) by Manager (Note 2) | (146,928 | ) | ||
|
| |||
Net expenses | 323,323 | |||
|
| |||
Net investment income | 944,278 | |||
|
| |||
Realized and unrealized gain (loss) from investments: | ||||
Net realized gain (loss) from: | ||||
Investments | (1,892,657 | ) | ||
Change in net unrealized appreciation (depreciation) of: | ||||
Investments | 537,116 | |||
|
| |||
Net (loss) from investments | (1,355,541 | ) | ||
|
| |||
Net (decrease) in net assets resulting from operations | $ | (411,263 | ) | |
|
|
See accompanying notes
9
American Beacon Garcia Hamilton Quality Bond FundSM
Statements of Changes of Net Assets
For the Six Months Ended April 30, 2017 | From April 4, 2016A to October 31, 2016 | |||||||||||
(unaudited) | ||||||||||||
Increase (Decrease) in Net Assets: | ||||||||||||
Operations: | ||||||||||||
Net investment income | $ | 944,278 | $ | 361,205 | ||||||||
Net realized gain (loss) from investments | (1,892,657 | ) | 120,054 | |||||||||
Change in net unrealized appreciation (depreciation) of investments | 537,116 | (1,385,755 | ) | |||||||||
|
|
|
| |||||||||
Net (decrease) in net assets resulting from operations | (411,263 | ) | (904,496 | ) | ||||||||
|
|
|
| |||||||||
Distributions to Shareholders: | ||||||||||||
Net investment income: | ||||||||||||
Institutional Class | (973,522 | ) | (360,822 | ) | ||||||||
Y Class | (21,937 | ) | (7,732 | ) | ||||||||
Investor Class | (51,063 | ) | (14,275 | ) | ||||||||
Net realized gain from investments: | ||||||||||||
Institutional Class | (90,251 | ) | – | |||||||||
Y Class | (2,127 | ) | – | |||||||||
Investor Class | (6,000 | ) | – | |||||||||
|
|
|
| |||||||||
Net distributions to shareholders | (1,144,900 | ) | (382,829 | ) | ||||||||
|
|
|
| |||||||||
Capital Share Transactions: | ||||||||||||
Proceeds from sales of shares | 15,933,237 | 145,222,507 | ||||||||||
Reinvestment of dividends and distributions | 1,144,576 | 382,829 | ||||||||||
Cost of shares redeemed | (12,881,724 | ) | (8,425,475 | ) | ||||||||
|
|
|
| |||||||||
Net increase in net assets from capital share transactions | 4,196,089 | 137,179,861 | ||||||||||
|
|
|
| |||||||||
Net increase in net assets | 2,639,926 | 135,892,536 | ||||||||||
|
|
|
| |||||||||
Net Assets: | ||||||||||||
Beginning of period | 135,892,536 | – | ||||||||||
|
|
|
| |||||||||
End of Period* | $ | 138,532,462 | $ | 135,892,536 | ||||||||
|
|
|
| |||||||||
* Includes overdistribution of net investment income | $ | (2 | ) | $ | (1 | ) | ||||||
|
|
|
| |||||||||
A Commencement of operations. |
See accompanying notes
10
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940 (the “Act”), as a diversified, open-end management investment company. As of April 30, 2017, the Trust consists of thirty-two active series, one of which is presented in this filing: American Beacon Garcia Hamilton Quality Bond Fund (the “Fund”). The remaining thirty-one active series are reported in separate filings.
American Beacon Advisors, Inc. (the “Manager”) is a wholly-owned subsidiary of Resolute Investment Managers, 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.
New Accounting Pronouncements
In October 2016, the SEC adopted amendments to rules under the Investment Company Act of 1940 (“final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. The final rules amend Regulation S-X and require funds to provide standardized, enhanced derivative disclosure in fund financial statements in a format designed for individual investors. The amendments to Regulation S-X also update the disclosures for other investments and investments in, and advances to affiliates and amend the rules regarding the general form and content of fund financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the amendments and its impact, if any, on the Fund’s Financial Statements.
Class Disclosure
The Fund has multiple classes of shares designed to meet the needs of different groups of investors. The following table sets forth the differences amongst the classes:
Class | Eligible Investors | Minimum Initial Investments | ||||
Institutional | Large institutional investors - sold directly through intermediary channels. | $ | 250,000 | |||
Y Class | Large institutional retirement plan investors - sold directly or through intermediary channels. | $ | 100,000 | |||
Investor | All investors using intermediary organizations such as broker-dealers or retirement plan sponsors. | $ | 25,000 |
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 service fees, service fees, and distribution fees and vary amongst the classes as described more fully in Note 2.
The following is a summary of significant accounting policies, consistently followed by the Fund in preparation of the financial statements. The Fund is considered an investment company and accordingly, follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946, Financial Services – Investment Companies, which is part of the U.S. Generally Accepted Accounting Principles (“U.S. GAAP”).
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
11
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
commitment to purchase a security, the transaction is recorded, and the value of the security is reflected in the Net Asset Value (“NAV”). The value of the security may vary with market fluctuations.
Interest income is earned from settlement date, recorded on the accrual basis, and adjusted, in 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. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Fund also designates earnings and profits distributed to shareholders on the redemption of shares.
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 liabilities 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.
2. Transactions with Affiliates
Management Agreement
The Fund 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 administrative services to the Fund. As compensation for performing the duties required under the Management Agreement, the Manager receives from the Fund an annualized fee at the following annual rates as a percentage of the average daily net assets: 0.35% of the first $5 billion, 0.325% of the next $5 billion, 0.30% of the next $10 billion, and 0.275% over $20 billion. The Fund pays the unaffiliated investment advisor hired to direct investment activities of the Fund an annualized investment advisory fee based on a percentage of the Fund’s average daily assets. Management fees paid by the Fund during the period ended April 30, 2017 were as follows:
Fund | Management Fee Rate | Management Fee | Amount Paid to Investment Advisors | Amount Paid to Manager | ||||||||||||
Garcia Hamilton Quality Bond | 0.55 | % | $ | 373,356 | $ | 135,766 | $ | 237,590 |
12
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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 separate fees may be charged to the Fund for distribution purposes. However, the Plan 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 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 Y and Investor Classes of the Fund. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.10% of the average daily net assets of the Y Class and up to 0.375% of the average daily net assets of the Investor Class. Effective April 1, 2017, the Fund terminated the Service Plan for the Y Class.
Sub-Transfer Agent Fees
The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the Institutional Class of the Fund and has agreed to compensate the intermediaries for providing these services. Effective April 1, 2017, the Fund has agreed to compensate the intermediaries for providing services to the Y Class. Intermediaries transact with the Fund primarily through the use of omnibus accounts on behalf of its customers who hold positions in the Fund. Certain services would have been provided by the Fund’s transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Fund’s transfer agent. Accordingly, the Fund, pursuant to the Trust’s Board of Trustees (the “Board”) approval, has agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the period ended April 30, 2017, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:
Fund | Sub-Transfer Agent Fees | |||
Garcia Hamilton Quality Bond | $ | 13,995 |
As of April 30, 2017, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:
Fund | Reimbursement Sub- Transfer Agent Fees | |||
Garcia Hamilton Quality Bond | $ | 4,090 |
Investments 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 fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the period ended April 30, 2017, the Manager earned fees of $801 on the Fund’s direct investments in the USG Select Fund.
13
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Interfund Lending Program
Pursuant to an exemptive order 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, 2017, the Fund did not utilize the credit facility.
Expense Reimbursement Plan
The Manager contractually agreed to reimburse the Fund to the extent that total annual fund operating expenses exceeded the Fund’s expense cap. During the period ended April 30, 2017, the Manager reimbursed expenses as follows:
Expense Cap | ||||||||||||||||||
Fund | Class | 11/1/2016 - 4/30/2017 | Reimbursed Expenses | (Recovered) Expenses | Expiration of Reimbursed Expenses | |||||||||||||
Garcia Hamilton Quality Bond | Institutional | 0.45 | % | $ | 139,142 | $ | – | 2020 | ||||||||||
Garcia Hamilton Quality Bond | Y | 0.55 | % | 3,765 | – | 2020 | ||||||||||||
Garcia Hamilton Quality Bond | Investor | 0.83 | % | 4,021 | – | 2020 |
Of this amount, $24,990 was disclosed as a receivable from the Manager on the Statement of Assets and Liabilities at April 30, 2017. The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Fund for any contractual or voluntary fees reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years after the Manager’s own waiver or reimbursement and (b) does not cause the Fund’s annual operating expenses to exceed the previously agreed upon contractual or voluntary expense limit. The reimbursed expenses above will expire in 2020. The carryover of excess expenses potentially reimbursable to the manager, but not recorded as a liability are as follows:
Fund | Recovered Expenses | Excess Expense Carryover | Expired Expense Carryover | Expiration of Reimbursed Expenses | ||||||||||||
Garcia Hamilton Quality Bond | $ | - | $ | 248,291 | $ | - | 2019 |
Trustee Fees and Expenses
As compensation for their service to the Trust, the American Beacon Select Funds and the American Beacon Institutional Funds Trust, each Trustee receives an annual retainer of $120,000, plus $5,000 for each Board of Trustee meeting attended in person or via teleconference, $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, and $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee, plus reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. The Board Chairman receives an additional annual retainer of $50,000 as well as a single $5,000 fee each quarter for his attendance at the committee meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chairman of the Nominating and Governance Committee receives an additional annual retainer of $10,000. These expenses are allocated on a prorated basis to each Fund of the Trust according to its respective net assets.
3. Security Valuation and Fair Value Measurements
Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally at 4:00 p.m. Eastern Time, each day that the Exchange is open for business. Debt securities normally are valued on the
14
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
basis of prices provided by an independent pricing service and may take into account appropriate factors such as institution-size 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.
Investments in open-end mutual funds are valued at the closing 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 Board.
Other investments 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 Manager’s Valuation Committee, pursuant to procedures established by 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. Fixed-income securities are considered Level 2 as they are valued using observable inputs. | ||
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, and 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 and are categorized as Level 2 of the fair value hierarchy.
Mortgage-related and asset-backed securities are usually issued as separate tranches, or classes, or 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 incorporates 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.
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.
15
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
4. Securities and Other Investments
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.
Fixed-Income Investments
The Fund may hold debt, including government and corporate debt, and other fixed-income securities. Typically, the values of fixed-income securities change inversely with prevailing interest rates. Therefore, a fundamental risk of fixed-income securities is interest rate risk, which is the risk that their value will generally decline as prevailing interest rates rise, which may cause the Fund’s net asset value to likewise decrease, and vice versa. How specific fixed-income securities may react to changes in interest rates will depend on the specific characteristics of each security.
Mortgage-Backed Securities
The Fund may invest in mortgage-backed securities (“MBS”). 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, commercial 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 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.
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. 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.
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
16
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Fund may invest in investment company securities advised by the Manager or the 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.
U.S. Government Agency Securities
U.S. Government agency securities are issued or guaranteed by the U.S. Government or its agencies or instrumentalities. Some obligations issued by U.S. Government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the U.S. Treasury; others by discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality. U.S. Government securities bear fixed, floating or variable rates of interest. While the U.S. Government currently provides financial support to certain U.S. Government-sponsored agencies or instrumentalities, no assurance can be given that it will always do so, since it is not so obligated by law. U.S. Government securities include U.S. Treasury bills, notes and bonds, Federal Home Loan Bank obligations, Federal Intermediate Credit Bank obligations, U.S. Government agency obligations and repurchase agreements secured thereby. U.S. Government agency securities are subject to credit risk and interest rate risk.
U.S. Treasury Obligations
U.S. Treasury obligations include bills (initial maturities of one year or less), notes (initial maturities between two and ten years), and bonds (initial maturities over ten years) issued by the U.S. Treasury, Separately Traded Registered Interest and Principal component parts of such obligations known as STRIPS and inflation-indexed securities. The prices of these securities (like all debt securities) change between issuance and maturity in response to fluctuating market interest rates.
5. Principal Risks
Investing in the Fund may involve certain risks including, but not limited to, those described below.
Credit Risk
The Fund is subject to the risk that the issuer or guarantor of a debt security, or the counterparty to a futures contract or a loan will fail to make timely payment of interest or principal or otherwise honor its obligations or default completely.
Financial Services Sector Risk
To the extent the Fund invests in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition.
17
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Floating Rate Securities Risk
The interest rates payable on floating rate securities are not fixed and may fluctuate based upon changes in market rates. The interest rate on a floating rate security is a variable rate which is tied to another interest rate, such as a money-market index or Treasury bill rate. Floating rate securities are subject to interest rate risk and credit risk.
As short-term interest rates decline, interest payable on floating rate securities typically decreases. Alternatively, during periods of rising interest rates, interest payable on floating-rate securities typically increases. Changes in the interest rates of floating rate securities may lag behind changes in market rates or may have limits on the maximum increases in interest rates. The value of floating rate securities may decline if their interest rates do not rise as much, or as quickly, as interest rates in general. Conversely, floating rate securities will not generally increase in value if interest rates decline.
Interest Rate Risk
The Fund is subject to the risk that the market value of fixed-income securities it holds, particularly mortgage backed and other asset backed securities, will decline due to rising interest rates. Generally, the value of investments with interest rate risk, such as fixed-income securities, will move in the opposite direction as movements in interest rates. Interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in substantial losses to the Fund. The prices of fixed income securities are also affected by their duration. Fixed-income securities with longer duration generally have greater sensitivity to changes in interest rates. An increase in interest rates can impact markets broadly as well.
Investment Risk
An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of a Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.
Issuer Risk
The value of, and/or the return generated by, a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets.
Liquidity Risk
The Fund is susceptible to the risk that certain investments held by the Fund, such as certain fixed-income instruments, may have limited marketability or be subject to restrictions on sale, and may be difficult or impossible to purchase or sell at favorable times or prices. The Fund could lose money if it is unable to dispose of an investment at a time that is most beneficial to the Fund. The Fund may be required to dispose of investments at unfavorable times or prices to satisfy obligations, which may result in losses or may be costly to the Fund. For example, the Fund may be forced to sell certain investments at unfavorable prices to meet redemption requests or other cash needs. Judgment plays a greater role in pricing illiquid investments than in investments with more active markets.
Market Risk
Since the financial crisis that started in 2008, the U.S. and many foreign economies continue to experience its after-effects, which have resulted, and may continue to result, in fixed income instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of
18
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations.
In addition, political events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. Because the impact on the markets has been widespread, it may be difficult to identify both risks and opportunities using past models of the interplay of market forces, or to predict the duration of these market conditions. Interest rates have been unusually low in recent years in the U.S. and abroad. Because there is little precedent for this situation, it is difficult to predict the impact on various markets of a significant rate increase, whether brought about by U.S. policy makers or by dislocations in world markets. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely.
Mortgage-Backed and Mortgage Related Securities Risk
Investments in mortgage-backed and mortgage-related securities are subject to market risks for fixed-income securities which include, but are not limited to, credit risk, extension risk, interest rate risk and prepayment risk.
Other Investment Companies Risk
The Fund may invest in shares of other registered investment companies, including money market funds. To the extent that the Fund invests in shares of other registered investment companies, the Fund will indirectly bear the fees and expenses charged by those investment companies in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those funds.
Prepayment and Extension Risk
Prepayment risk is the risk that the principal amount of a bond may be repaid prior to the bond’s maturity date. Due to a decline in interest rates or excess cash flow, a debt security may be called or otherwise prepaid before maturity. If this occurs, no additional interest will be paid on the investment and a Fund may have to invest at a lower rate, may not benefit from an increase in value that may result from declining interest rates, and may lose any premium it paid to acquire the security. Variable and floating rate securities may be less sensitive to prepayment risk. Extension risk is the risk that a decrease in prepayments may, as a result of higher interest rates or other factors, result in the extension of a security’s effective maturity, heighten interest rate risk and increase the potential for a decline in price.
Redemption Risk
Due to a rise in interest rates or other market developments that may cause investors to move out of fixed income securities on a large scale, the Fund may experience periods of heavy redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is heightened during periods of declining or illiquid markets. Heavy redemptions could hurt the Fund’s performance.
19
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
U.S. Government Securities and Government-Sponsored Enterprises Risk
A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. Securities held by a Fund that are issued by government sponsored enterprises, such as the Federal National Mortgage Association (‘‘Fannie Mae’‘), Federal Home Loan Mortgage Corporation (‘‘Freddie Mac’‘), Federal Home Loan Bank (‘‘FHLB’‘), Federal Farm Credit Banks (“FFCB”), and the Tennessee Valley Authority are not guaranteed by the U.S. Treasury and are not backed by the full faith and credit of the U.S. Government and no assurance can be given that the U.S. Government will provide financial support if these organizations do not have the funds to meet future payment obligations. Government securities and securities of government sponsored entities are also subject to credit risk, interest rate risk and market risk.
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 unrecorded tax liabilities in the accompanying financial statements. The tax year ended October 31, 2016 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.
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:
Six Months Ended April 30, 2017 | From April 4, 2016 to October 31, 2016 | |||||||||||
(unaudited) | ||||||||||||
Distributions paid from: | ||||||||||||
Ordinary income* | ||||||||||||
Institutional Class | $ | 1,063,773 | $ | 360,822 | ||||||||
Y Class | 24,064 | 7,732 | ||||||||||
Investors Class | 57,063 | 14,275 | ||||||||||
|
|
|
| |||||||||
Total distributions paid | $ | 1,144,900 | $ | 382,829 | ||||||||
|
|
|
|
*For tax purposes, short-term capital gains are considered ordinary income distributions.
As of April 30, 2017 the components of distributable earnings (deficits) on a tax basis were as follows:
Fund | Tax cost | Unrealized appreciation | Unrealized depreciation | Net unrealized appreciation (depreciation) | ||||||||||||||||||||||||
Garcia Hamilton Quality Bond | $ | 139,311,045 | $ | 317,371 | $ | (1,465,339 | ) | $ | (1,147,968 | ) |
Fund | Net unrealized appreciation (depreciation) | Undistributed ordinary income | Undistributed long-term capital gains | Accumulated capital and other losses | Other temporary differences | Distributable earnings | ||||||||||||||||||||||||||||||||||||||
Garcia Hamilton Quality Bond | $ | (1,147,968 | ) | $ | – | $ | – | $ | (1,695,301 | ) | $ | (2 | ) | $ | (2,843,271 | ) |
20
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2017 (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 (depreciation) are attributable primarily to the tax deferral of losses from wash sales and paydown classes.
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 paydown reclasses as of April 30, 2017:
Fund | Paid-in-capital | Undistributed (overdistribution of) net investment income | Accumulated net realized gain (loss) | Net unrealized appreciation (depreciation) | ||||||||||||||||||||||||
Garcia Hamilton Quality Bond | $ | (217 | ) | $ | 102,243 | $ | (102,026 | ) | $ | – |
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.
For the period ended April 30, 2017, the Fund did not have capital loss carryforwards.
7. Investment Transactions
The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the period ended April 30, 2017 were as follows:
Fund | Purchases (non-U.S. Government Securities) | Purchases of U.S. Government Securities | Sales (non-U.S. Government Securities) | Sales of U.S. Government Securities | ||||||||||||||||||||||||
Garcia Hamilton Quality Bond | $ | 20,293,347 | $ | 34,646,552 | $ | (21,116,969 | ) | $ | (37,757,972 | ) |
A summary of the Fund’s transactions in the USG Select Fund for the period ended April 30, 2017 are as follows:
Fund | Type of Transaction | October 31, 2016 Shares/Fair Value | Purchases | Sales | April 30, 2017 Shares/Fair Value | Dividend Income | ||||||||||||||||||||||||||||||||||||||
Garcia Hamilton Quality Bond | Direct | $ | 1,262,143 | $ | 45,865,634 | $ | 46,851,171 | $ | 276,606 | $ | 3,596 |
21
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
8. Capital Share Transactions
The tables below summarize the activity in capital shares for each Class of the Fund:
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Period Ended October 31, 2016* | |||||||||||||||||||||||||||
American Beacon Garcia Hamilton Quality Bond Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,495,898 | $ | 14,643,977 | 13,189,537 | $ | 132,905,019 | ||||||||||||||||||||||
Reinvestment of dividends | 108,465 | 1,063,520 | 35,871 | 360,822 | ||||||||||||||||||||||||
Shares redeemed | (1,209,951 | ) | (11,858,313 | ) | (801,285 | ) | (8,079,148 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 394,412 | $ | 3,849,184 | 12,424,123 | $ | 125,186,693 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Period Ended October 31, 2016* | |||||||||||||||||||||||||||
American Beacon Garcia Hamilton Quality Bond Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 5,928 | $ | 58,070 | 326,810 | $ | 3,292,688 | ||||||||||||||||||||||
Reinvestment of dividends | 2,448 | 24,003 | 769 | 7,732 | ||||||||||||||||||||||||
Shares redeemed | (29,162 | ) | (284,406 | ) | (354 | ) | (3,564 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | (20,786 | ) | $ | (202,333 | ) | 327,225 | $ | 3,296,856 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Period Ended October 31, 2016* | |||||||||||||||||||||||||||
American Beacon Garcia Hamilton Quality Bond Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 125,865 | $ | 1,231,190 | 893,424 | $ | 9,024,800 | ||||||||||||||||||||||
Reinvestment of dividends | 5,817 | 57,053 | 1,419 | 14,275 | ||||||||||||||||||||||||
Shares redeemed | (75,194 | ) | (739,005 | ) | (34,125 | ) | (342,763 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 56,488 | $ | 549,238 | 860,718 | $ | 8,696,312 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
*For the period of April 4, 2016 through October 31, 2016.
9. Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.
22
American Beacon Garcia Hamilton Quality Bond FundSM
(For a share outstanding throughout the period)
Institutional Class | ||||||||||||
Six Months Ended April 30, 2017 | April 4, 2016A to October 31, 2016 | |||||||||||
(unaudited) | ||||||||||||
Net asset value, beginning of period | $ | 9.98 | $ | 10.00 | ||||||||
|
|
|
| |||||||||
Income from investment operations: | ||||||||||||
Net investment income (loss) | (0.01 | ) | 0.05 | |||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.01 | ) | (0.02 | ) | ||||||||
|
|
|
| |||||||||
Total income (loss) from investment operations | (0.02 | ) | 0.03 | |||||||||
|
|
|
| |||||||||
Less distributions: | ||||||||||||
Dividends from net investment income | (0.08 | ) | (0.05 | ) | ||||||||
Distributions from net realized gains | (0.01 | ) | – | |||||||||
|
|
|
| |||||||||
Total distributions | (0.09 | ) | (0.05 | ) | ||||||||
|
|
|
| |||||||||
Net asset value, end of period | $ | 9.87 | $ | 9.98 | ||||||||
|
|
|
| |||||||||
Total returnB | (0.26 | )%C | 0.34 | %C | ||||||||
|
|
|
| |||||||||
Ratios and supplemental data: | ||||||||||||
Net assets, end of period | $ | 126,460,308 | $ | 124,032,604 | ||||||||
Ratios to average net assets: | ||||||||||||
Expenses, before reimbursements | 0.67 | %D | 1.06 | %D | ||||||||
Expenses, net of reimbursements | 0.45 | %D | 0.45 | %D | ||||||||
Net investment income, before expense reimbursements | 1.20 | %D | 0.29 | %D | ||||||||
Net investment income, net of reimbursements | 1.42 | %D | 0.91 | %D | ||||||||
Portfolio turnover rate | 41 | %C | 40 | %E | ||||||||
Y Class | ||||||||||||
Six Months Ended April 30, 2017 | April 4, 2016A to October 31, 2016 | |||||||||||
(unaudited) | ||||||||||||
Net asset value, beginning of period | $ | 9.98 | $ | 10.00 | ||||||||
|
|
|
| |||||||||
Income from investment operations: | ||||||||||||
Net investment income (loss) | (0.01 | ) | 0.05 | |||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.03 | ) | (0.02 | ) | ||||||||
|
|
|
| |||||||||
Total income (loss) from investment operations | (0.04 | ) | 0.03 | |||||||||
|
|
|
| |||||||||
Less distributions: | ||||||||||||
Dividends from net investment income | (0.07 | ) | (0.05 | ) | ||||||||
Distributions from net realized gains | (0.01 | ) | - | |||||||||
|
|
|
| |||||||||
Total distributions | (0.08 | ) | (0.05 | ) | ||||||||
|
|
|
| |||||||||
Net asset value, end of period | $ | 9.86 | $ | 9.98 | ||||||||
|
|
|
| |||||||||
Total returnB | (0.41 | )%C | 0.29 | %C | ||||||||
|
|
|
| |||||||||
Ratios and supplemental data: | ||||||||||||
Net assets, end of period | $ | 3,021,719 | $ | 3,265,315 | ||||||||
Ratios to average net assets: | ||||||||||||
Expenses, before reimbursements | 0.80 | %D | 1.29 | %D | ||||||||
Expenses, net of reimbursements | 0.55 | %D | 0.55 | %D | ||||||||
Net investment income, before expense reimbursements | 1.06 | %D | 0.11 | %D | ||||||||
Net investment income, net of reimbursements | 1.31 | %D | 0.85 | %D | ||||||||
Portfolio turnover rate | 41 | %C | 40 | %E |
A | Commencement of operations. |
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 | Portfolio turnover rate is for the period from April 4, 2016 through October 31, 2016 and is not annualized. |
23
American Beacon Garcia Hamilton Quality Bond FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||
Six Months Ended April 30, 2017 | April 4, 2016A to October 31, 2016 | |||||||||||
(unaudited) | ||||||||||||
Net asset value, beginning of period | $ | 9.99 | $ | 10.00 | ||||||||
|
|
|
| |||||||||
Income from investment operations: | ||||||||||||
Net investment income (loss) | (0.01 | ) | 0.03 | |||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.04 | ) | (0.01 | ) | ||||||||
|
|
|
| |||||||||
Total income (loss) from investment operations | (0.05 | ) | 0.02 | |||||||||
|
|
|
| |||||||||
Less distributions: | ||||||||||||
Dividends from net investment income | (0.06 | ) | (0.03 | ) | ||||||||
Distributions from net realized gains | (0.01 | ) | – | |||||||||
|
|
|
| |||||||||
Total distributions | (0.07 | ) | (0.03 | ) | ||||||||
|
|
|
| |||||||||
Net asset value, end of period | $ | 9.87 | $ | 9.99 | ||||||||
|
|
|
| |||||||||
Total returnB | (0.55 | )%C | 0.24 | %C | ||||||||
|
|
|
| |||||||||
Ratios and supplemental data: | ||||||||||||
Net assets, end of period | $ | 9,050,435 | $ | 8,594,617 | ||||||||
Ratios to average net assets: | ||||||||||||
Expenses, before reimbursements | 0.92 | %D | 1.19 | %D | ||||||||
Expenses, net of reimbursements | 0.83 | %D | 0.83 | %D | ||||||||
Net investment income, before expense reimbursements | 0.95 | %D | 0.21 | %D | ||||||||
Net investment income, net of reimbursements | 1.04 | %D | 0.57 | %D | ||||||||
Portfolio turnover rate | 41 | %C | 40 | %E |
A | Commencement of operations. |
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 | Portfolio turnover rate is for the period from April 4, 2016 through October 31, 2016 and is not annualized. |
24
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: 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 | 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. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the American Beacon Garcia Hamilton Quality Bond Fund’s portfolio holdings is also available 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 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, TX | 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 Garcia Hamilton Quality Bond Fund are service marks of American Beacon Advisors, Inc.
SAR 4/17
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.
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, 2017 |
1 | ||||
2 | ||||
4 | ||||
Schedule of Investments: | ||||
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15 | ||||
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Financial Highlights: | ||||
40 |
Back Cover |
![]() | Dear Shareholders,
In the weeks ahead of the U.S. presidential election on November 8, 2016, uncertainty about the outcome caused many investors to stay on the sidelines. Some investors questioned whether the election’s result would have negative consequences for their portfolios, although elections have rarely had a lasting effect on the market.
Following the election, the markets responded positively to aspects of the incoming administration’s proposed plans for economic growth; i.e., repatriating jobs from overseas, relaxing regulations, lowering taxes and increasing infrastructure spending. From Election Day 2016 to Inauguration Day 2017, the S&P 500 Index (representing the market performance of large U.S. companies) climbed approximately 6% while the MSCI EAFE Index |
(representing developed markets) climbed 4%. Positive performance continued during the administration’s first 100 days (Inauguration Day to April 30) as the S&P 500 Index gained approximately 5% and the MSCI EAFE Index increased more than 6%.
Then on March 15, 2017, as economists had anticipated, the Federal Reserve increased the federal funds rate by 0.25% to a range of 0.75% to 1.00%. It was the third increase since 2008. The Federal Open Market Committee’s confidence in the improving U.S. economy was previously exhibited in December 2016 and December 2015. Economists anticipate two additional increases in 2017.
For the six months ended April 30, 2017:
• | American Beacon International Equity Fund (Investor Class) returned 11.30%. |
For the same time period, the Fund’s performance benchmark returned 11.47%.
At American Beacon Advisors, we are proud to offer a broad range of domestic and global equity and fixed-income funds sub-advised by experienced asset managers who employ distinctive investment processes to manage assets through a variety of economic and market conditions. Together, we work diligently to help our shareholders meet their long-term financial goals.
Thank you for your continued interest in 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 FundSM
April 30, 2017 (Unaudited)
The Investor Class of the American Beacon International Equity Fund (the “Fund”) returned 11.30% for the six months ended April 30, 2017. The Fund underperformed the MSCI EAFE Index (the “Index”) return of 11.47%.
Total Returns for the Period ended 4/30/2017 | ||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||||||||||||||
Institutional Class (1,7,8) | AAIEX | 11.52 | % | 10.51 | % | -0.15 | % | 6.86 | % | 1.29 | % | |||||||||||||||||||
Y Class (1,2,7,8) | ABEYX | 11.49 | % | 10.45 | % | -0.22 | % | 6.77 | % | 1.22 | % | |||||||||||||||||||
Investor Class (1,8) | AAIPX | 11.30 | % | 10.09 | % | -0.50 | % | 6.49 | % | 0.95 | % | |||||||||||||||||||
Advisor Class (1,3,7,8) | AAISX | 11.21 | % | 10.02 | % | -0.62 | % | 6.35 | % | 0.75 | % | |||||||||||||||||||
A Class with sales charge (1,4,7,8) | AIEAX | 4.88 | % | 3.74 | % | -2.48 | % | 5.13 | % | 0.28 | % | |||||||||||||||||||
A Class without sales charge (1,4,7,8) | AIEAX | 11.27 | % | 10.06 | % | -0.54 | % | 6.38 | % | 0.88 | % | |||||||||||||||||||
C Class with sales charge (1,5,7,8) | AILCX | 9.89 | % | 8.26 | % | -1.28 | % | 5.61 | % | 0.36 | % | |||||||||||||||||||
C Class without sales charge (1,5,7,8) | AILCX | 10.89 | % | 9.26 | % | -1.28 | % | 5.61 | % | 0.36 | % | |||||||||||||||||||
R6 Class (1,6,7,8) | AAERX | 11.52 | % | 10.51 | % | -0.15 | % | 6.86 | % | 1.29 | % | |||||||||||||||||||
MSCI EAFE Index (7) | 11.47 | % | 11.29 | % | 0.86 | % | 6.78 | % | 0.87 | % |
* | 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. A portion of the fees charged to the Institutional Class of the Fund was waived from 2013 through 2015. Performance prior to waiving fees was lower than actual returns shown from 2013 through 2015. |
2. | Fund performance for the ten-year period represents the total returns achieved by the Institutional Class from 4/30/07 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 4/30/07. |
3. | A portion of the fees charged to the Advisor Class of the Fund was 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 total returns achieved by the Investor Class from 4/30/07 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 4/30/07. A portion of the fees charged to the A Class of the Fund was waived from 2010 through 2012 and partially recovered in 2013. 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 total returns achieved by the Investor Class from 4/30/07 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 4/30/07. 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. | Fund performance for the 6 month, one-year, three-year, five-year and ten-year periods represent the returns achieved by the Institutional Class from 4/30/07 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the Institutional Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/30/07. A portion of the fees charged to the R6 Class of the Fund was waived since 2/28/17. Performance prior to waiving fees was lower than the actual returns shown. |
7. | 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. |
8. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C, and R6 Class shares was 0.70%, 0.78%, 1.07%, 1.20%, 1.08%, 1.86%, and 0.67%, 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 over the six-month period due to stock selection, while country allocation helped relative performance.
Stock selections within Japan and Israel negatively contributed to the Fund’s relative performance over the six-month period, despite value gained through selections in the United Kingdom. The Fund was hurt by investments in KDDI Corp. (down 13.1%) and Toshiba Corp. (down 54.4%) within Japan, and from its investment in
2
American Beacon International Equity FundSM
Performance Overview
April 30, 2017 (Unaudited)
Teva Pharmaceutical SP ADR (down 26.4%) within Israel. Better performing investments in the United Kingdom included Prudential PLC (up 38.9%) and Aviva PLC (up 29.7%).
Country allocation buoyed the Fund’s relative underperformance, particularly by underweighting Japan (up 4.2%) and having exposure to out-of-index Korea (up 15.6%). Underweighting Spain and overweighting out-of-index Canada (up 19.1% and up 4.5%, respectively) detracted 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) | ||||||||
British American Tobacco PLC | 2.2 | |||||||
Novartis AG | 2.2 | |||||||
Prudential PLC | 2.1 | |||||||
Akzo Nobel N.V. | 1.7 | |||||||
Royal Dutch Shell PLC | 1.7 | |||||||
Samsung Electronics Co., Ltd. | 1.7 | |||||||
SAP SE | 1.6 | |||||||
ABB Ltd. | 1.6 | |||||||
Volkswagen AG | 1.5 | |||||||
KDDI Corp. | 1.5 | |||||||
Total Fund Holdings | 167 | |||||||
Sector Allocation (% Equities) | ||||||||
Financials | 20.3 | |||||||
Industrials | 16.1 | |||||||
Consumer Discretionary | 11.4 | |||||||
Health Care | 10.5 | |||||||
Energy | 8.4 | |||||||
Materials | 8.2 | |||||||
Telecommunication Services | 7.5 | |||||||
Consumer Staples | 7.3 | |||||||
Information Technology | 6.3 | |||||||
Utilities | 2.1 | |||||||
Real Estate | 1.8 | |||||||
Industrial | 0.1 |
Country Allocation (% Equities) | ||||||||
United Kingdom | 25.7 | |||||||
Japan | 14.5 | |||||||
France | 10.9 | |||||||
Germany | 8.9 | |||||||
Switzerland | 8.7 | |||||||
Netherlands | 5.3 | |||||||
Republic of Korea | 3.9 | |||||||
Canada | 3.8 | |||||||
Sweden | 2.5 | |||||||
Hong Kong | 2.7 | |||||||
Italy | 2.0 | |||||||
Norway | 1.7 | |||||||
Singapore | 1.6 | |||||||
Belgium | 1.4 | |||||||
Ireland | 1.4 | |||||||
Spain | 1.4 | |||||||
Denmark | 0.9 | |||||||
Australia | 0.7 | |||||||
Luxembourg | 0.7 | |||||||
Finland | 0.5 | |||||||
Israel | 0.5 | |||||||
Portugal | 0.3 |
3
American Beacon International Equity FundSM
April 30, 2017 (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, distribution (12b-1) fees, and other Fund expenses. The Examples 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, 2016 through April 30, 2017.
Actual Expenses
The “Actual” lines of the table 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 = $8.60), then multiply the result by the “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) 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 “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 International Equity FundSM
Expense Examples
April 30, 2017 (Unaudited)
Beginning Account Value 11/1/2016 | Ending Account Value 4/30/2017 | Expenses Paid During Period 11/1/2016-4/30/2017* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,115.20 | $3.62 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.40 | $3.46 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,114.90 | $3.99 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.00 | $3.81 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,113.00 | $5.45 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.60 | $5.21 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,112.10 | $6.18 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.90 | $5.91 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,112.70 | $5.61 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.50 | $5.36 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,108.90 | $9.46 | ||||||||||||
Hypothetical** | $1,000.00 | $1,015.80 | $9.05 | ||||||||||||
R6 Class | |||||||||||||||
Actual | $1,000.00 | $1,115.20 | $1.28 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.30 | $3.56 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.69%, 0.76%, 1.04%, 1.18%, 1.07%, 1.81%, and 0.71% for the Institutional, Y, Investor, Advisor, A, C, and R6 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 (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
5
American Beacon International Equity FundSM
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Australia - 1.05% | |||||||||||||||
Common Stocks - (Cost $26,829,839) | |||||||||||||||
Caltex Australia Ltd. | 376,612 | $ | 8,423,552 | ||||||||||||
James Hardie Industries PLC, CDI | 614,226 | 10,426,669 | |||||||||||||
Westfield Corp. | 1,394,345 | 9,480,297 | |||||||||||||
|
| ||||||||||||||
Total Australia | 28,330,518 | ||||||||||||||
|
| ||||||||||||||
Belgium - 1.37% | |||||||||||||||
Common Stocks - (Cost $34,939,104) | |||||||||||||||
Anheuser-Busch InBev S.A. | 154,010 | 17,346,699 | |||||||||||||
KBC Group N.V. | 94,605 | 6,830,366 | |||||||||||||
UCB S.A.A | 166,830 | 13,004,446 | |||||||||||||
|
| ||||||||||||||
Total Belgium | 37,181,511 | ||||||||||||||
|
| ||||||||||||||
Canada - 3.67% | |||||||||||||||
Common Stocks - (Cost $96,357,607) | |||||||||||||||
Canadian National Railway Co. | 202,300 | 14,622,864 | |||||||||||||
Canadian Pacific Railway Ltd. | 98,223 | 15,050,235 | |||||||||||||
Encana Corp. | 1,473,186 | 15,767,369 | |||||||||||||
Gildan Activewear, Inc. | 381,233 | 10,688,097 | |||||||||||||
Manulife Financial Corp. | 510,000 | 8,944,288 | |||||||||||||
National Bank of Canada | 282,202 | 10,967,229 | |||||||||||||
Precision Drilling Corp.B | 838,526 | 3,335,553 | |||||||||||||
Silver Wheaton Corp. | 305,700 | 6,100,339 | |||||||||||||
Suncor Energy, Inc. | 303,795 | 9,520,787 | |||||||||||||
Tahoe Resources, Inc.A | 538,800 | 4,365,502 | |||||||||||||
|
| ||||||||||||||
Total Canada | 99,362,263 | ||||||||||||||
|
| ||||||||||||||
Denmark - 0.86% | |||||||||||||||
Common Stocks - (Cost $22,855,651) | |||||||||||||||
AP Moller - Maersk A/S, Class B | 3,853 | 6,664,069 | |||||||||||||
Carlsberg A/S, Class B | 144,356 | 14,407,588 | |||||||||||||
Novozymes A/S, Class B | 51,620 | 2,230,132 | |||||||||||||
|
| ||||||||||||||
Total Denmark | 23,301,789 | ||||||||||||||
|
| ||||||||||||||
Finland - 0.49% | |||||||||||||||
Common Stocks - (Cost $12,621,258) | |||||||||||||||
Sampo OYJ, Class AA | 274,928 | 13,174,081 | |||||||||||||
|
| ||||||||||||||
France - 10.43% | |||||||||||||||
Common Stocks - (Cost $233,467,636) | |||||||||||||||
Air Liquide S.A. | 134,497 | 16,203,734 | |||||||||||||
AXA S.A. | 396,247 | 10,579,294 | |||||||||||||
BNP Paribas S.A. | 415,458 | 29,316,725 | |||||||||||||
Cap Gemini S.A. | 211,600 | 21,182,565 | |||||||||||||
Cie de Saint-Gobain | 237,229 | �� | 12,804,388 | ||||||||||||
Cie Generale des Etablissements Michelin | 206,416 | 26,970,624 | |||||||||||||
Credit Agricole S.A. | 714,140 | 10,618,505 | |||||||||||||
ENGIE S.A. | 1,672,882 | 23,598,395 | |||||||||||||
Sanofi | 334,437 | 31,552,207 | |||||||||||||
Schneider Electric SE | 342,530 | 27,051,042 | |||||||||||||
Total S.A. | 305,380 | 15,691,117 | |||||||||||||
Valeo S.A. | 368,963 | 26,526,145 | |||||||||||||
Vinci S.A. | 252,059 | 21,443,745 | |||||||||||||
Zodiac Aerospace | 373,950 | 9,079,689 | |||||||||||||
|
| ||||||||||||||
Total France | 282,618,175 | ||||||||||||||
|
|
See accompanying notes
6
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Germany - 8.57% | |||||||||||||||
Common Stocks - (Cost $133,783,564) | |||||||||||||||
BASF SE | 233,216 | $ | 22,726,608 | ||||||||||||
Bayer AG | 115,131 | 14,246,822 | |||||||||||||
Deutsche Lufthansa AG | 665,610 | 11,484,773 | |||||||||||||
HeidelbergCement AG | 152,099 | 14,082,919 | |||||||||||||
Infineon Technologies AG | 692,450 | 14,331,426 | |||||||||||||
Innogy SE | 234,560 | 8,623,332 | |||||||||||||
Lanxess AG | 212,851 | 15,372,220 | |||||||||||||
Linde AG | 40,294 | 7,240,025 | |||||||||||||
Merck KGaA | 142,635 | 16,749,130 | |||||||||||||
SAP SE | 439,071 | 44,035,231 | |||||||||||||
Siemens AG | 106,960 | 15,332,913 | |||||||||||||
Thyssenkrupp AG | 278,560 | 6,631,579 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 190,856,978 | ||||||||||||||
|
| ||||||||||||||
Preferred Stocks - (Cost $45,444,769) | |||||||||||||||
Volkswagen AG | 260,096 | 41,237,589 | |||||||||||||
|
| ||||||||||||||
Total Germany | 232,094,567 | ||||||||||||||
|
| ||||||||||||||
Hong Kong - 2.63% | |||||||||||||||
Common Stocks - (Cost $66,994,904) | |||||||||||||||
AIA Group Ltd. | 1,461,062 | 10,115,023 | |||||||||||||
Cheung Kong Property Holdings Ltd. | 1,171,582 | 8,404,646 | |||||||||||||
China Merchants Port Holdings Co., Ltd. | 2,228,044 | 6,373,328 | |||||||||||||
China Mobile Ltd. | 2,154,276 | 22,973,663 | |||||||||||||
CK Hutchison Holdings Ltd. | 818,582 | 10,223,922 | |||||||||||||
CNOOC Ltd. | 11,330,635 | 13,212,167 | |||||||||||||
|
| ||||||||||||||
Total Hong Kong | 71,302,749 | ||||||||||||||
|
| ||||||||||||||
Ireland - 0.97% | |||||||||||||||
Common Stocks - (Cost $19,994,701) | |||||||||||||||
CRH PLC | 343,611 | 12,545,810 | |||||||||||||
Ryanair Holdings PLC, Sponsored ADRB | 150,683 | 13,852,288 | |||||||||||||
|
| ||||||||||||||
Total Ireland | 26,398,098 | ||||||||||||||
|
| ||||||||||||||
Israel - 0.49% | |||||||||||||||
Common Stocks - (Cost $17,915,776) | |||||||||||||||
Teva Pharmaceutical Industries Ltd., Sponsored ADR | 416,466 | 13,151,996 | |||||||||||||
|
| ||||||||||||||
Italy - 1.89% | |||||||||||||||
Common Stocks - (Cost $46,915,642) | |||||||||||||||
Eni SpAA | 972,797 | 15,121,455 | |||||||||||||
UniCredit SpAB | 2,222,701 | 36,172,542 | |||||||||||||
|
| ||||||||||||||
Total Italy | 51,293,997 | ||||||||||||||
|
| ||||||||||||||
Japan - 13.87% | |||||||||||||||
Common Stocks - (Cost $336,151,308) | |||||||||||||||
ABC-Mart, Inc. | 155,700 | 8,645,732 | |||||||||||||
Asahi Group Holdings Ltd. | 117,400 | 4,428,500 | |||||||||||||
Daiwa House Industry Co., Ltd. | 786,640 | 23,364,566 | |||||||||||||
Don Quijote Holdings Co., Ltd. | 625,500 | 22,809,217 | |||||||||||||
East Japan Railway Co. | 262,500 | 23,439,560 | |||||||||||||
Hitachi Ltd. | 3,421,000 | 18,876,493 | |||||||||||||
IHI Corp.B | 1,671,000 | 5,666,185 |
See accompanying notes
7
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Japan - 13.87% (continued) | |||||||||||||||
Common Stocks - (Cost $336,151,308) (continued) | |||||||||||||||
Inpex Corp. | 502,400 | $ | 4,815,559 | ||||||||||||
Isuzu Motors Ltd. | 1,130,500 | 15,333,626 | |||||||||||||
Japan Airlines Co., Ltd. | 585,000 | 18,472,303 | |||||||||||||
KDDI Corp. | 1,511,300 | 40,068,600 | |||||||||||||
Kirin Holdings Co., Ltd. | 696,500 | 13,533,250 | |||||||||||||
Komatsu Ltd. | 596,800 | 15,911,098 | |||||||||||||
Konica Minolta, Inc. | 1,480,200 | 13,079,139 | |||||||||||||
Mitsui Fudosan Co., Ltd. | 267,000 | 5,866,934 | |||||||||||||
Nikon Corp. | 454,900 | 6,488,370 | |||||||||||||
Nissan Motor Co., Ltd. | 683,600 | 6,491,057 | |||||||||||||
Omron Corp. | 145,300 | 6,080,507 | |||||||||||||
Panasonic Corp. | 631,200 | 7,533,632 | |||||||||||||
Ryohin Keikaku Co., Ltd. | 28,600 | 6,449,912 | |||||||||||||
Seven & I Holdings Co., Ltd. | 216,900 | 9,164,378 | |||||||||||||
SoftBank Group Corp. | 281,800 | 21,340,710 | |||||||||||||
Sony Corp. | 669,000 | 22,559,058 | |||||||||||||
Sumitomo Metal Mining Co., Ltd. | 805,000 | 10,915,071 | |||||||||||||
Sumitomo Mitsui Financial Group, Inc. | 632,900 | 23,414,035 | |||||||||||||
Sumitomo Rubber Industries Ltd. | 285,700 | 5,136,065 | |||||||||||||
Suntory Beverage & Food Ltd. | 215,300 | 9,627,903 | |||||||||||||
United Arrows Ltd. | 197,700 | 6,118,547 | |||||||||||||
|
| ||||||||||||||
Total Japan | 375,630,007 | ||||||||||||||
|
| ||||||||||||||
Luxembourg - 0.65% | |||||||||||||||
Common Stocks - (Cost $16,974,195) | |||||||||||||||
ArcelorMittalB | 747,635 | 5,898,689 | |||||||||||||
RTL Group S.A.B | 78,325 | 6,070,475 | |||||||||||||
SES S.A. | 127,386 | 2,785,638 | |||||||||||||
Tenaris S.A. | 187,618 | 2,938,873 | |||||||||||||
|
| ||||||||||||||
Total Luxembourg | 17,693,675 | ||||||||||||||
|
| ||||||||||||||
Netherlands - 5.06% | |||||||||||||||
Common Stocks - (Cost $112,272,505) | |||||||||||||||
Aegon N.V. | 2,080,660 | 10,604,777 | |||||||||||||
Airbus SE | 94,460 | 7,637,914 | |||||||||||||
Akzo Nobel N.V. | 521,600 | 45,613,388 | |||||||||||||
ING Groep N.V. | 1,490,252 | 24,260,683 | |||||||||||||
Koninklijke Ahold Delhaize N.V. | 465,402 | 9,642,422 | |||||||||||||
QIAGEN N.V.B | 274,583 | 8,210,382 | |||||||||||||
SBM Offshore N.V. | 565,280 | 9,313,360 | |||||||||||||
Wolters Kluwer N.V. | 510,454 | 21,679,898 | |||||||||||||
|
| ||||||||||||||
Total Netherlands | 136,962,824 | ||||||||||||||
|
| ||||||||||||||
Norway - 1.66% | |||||||||||||||
Common Stocks - (Cost $45,035,164) | |||||||||||||||
Statoil ASA | 579,047 | 9,556,366 | |||||||||||||
Telenor ASA | 1,721,681 | 27,832,440 | |||||||||||||
Yara International ASA | 201,410 | 7,487,779 | |||||||||||||
|
| ||||||||||||||
Total Norway | 44,876,585 | ||||||||||||||
|
| ||||||||||||||
Portugal - 0.27% | |||||||||||||||
Common Stocks - (Cost $7,245,134) | |||||||||||||||
Galp Energia SGPS S.A. | 468,403 | 7,281,000 | |||||||||||||
|
|
See accompanying notes
8
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Republic of Korea - 3.69% | |||||||||||||||
Common Stocks - (Cost $79,386,779) | |||||||||||||||
Hana Financial Group, Inc. | 472,142 | $ | 16,265,020 | ||||||||||||
Hyundai Mobis Co., Ltd. | 28,434 | 5,547,366 | |||||||||||||
Hyundai Motor Co. | 23,284 | 2,946,565 | |||||||||||||
KB Financial Group, Inc., ADR | 270,917 | 11,776,762 | |||||||||||||
Samsung Electronics Co., Ltd. | 23,198 | 45,482,677 | |||||||||||||
SK Telecom Co., Ltd. | 85,261 | 17,945,346 | |||||||||||||
|
| ||||||||||||||
Total Republic of Korea | 99,963,736 | ||||||||||||||
|
| ||||||||||||||
Singapore - 1.49% | |||||||||||||||
Common Stocks - (Cost $29,797,588) | |||||||||||||||
DBS Group Holdings Ltd. | 1,666,081 | 23,074,593 | |||||||||||||
Singapore Telecommunications Ltd. | 4,757,395 | 12,722,254 | |||||||||||||
United Overseas Bank Ltd. | 294,700 | 4,598,260 | |||||||||||||
|
| ||||||||||||||
Total Singapore | 40,395,107 | ||||||||||||||
|
| ||||||||||||||
Spain - 1.30% | |||||||||||||||
Common Stocks - (Cost $34,407,696) | |||||||||||||||
CaixaBank S.A. | 2,333,027 | 10,594,953 | |||||||||||||
Red Electrica Corp. S.A. | 460,828 | 8,985,438 | |||||||||||||
Telefonica S.A. | 1,418,349 | 15,689,548 | |||||||||||||
|
| ||||||||||||||
Total Spain | 35,269,939 | ||||||||||||||
|
| ||||||||||||||
Sweden - 2.38% | |||||||||||||||
Common Stocks - (Cost $59,815,027) | |||||||||||||||
Alfa Laval ABA | 492,640 | 10,106,092 | |||||||||||||
Assa Abloy AB, Class BA | 979,440 | 21,220,297 | |||||||||||||
Getinge AB, Class B | 422,698 | 8,260,872 | |||||||||||||
Nordea Bank AB | 1,373,474 | 16,902,292 | |||||||||||||
Swedbank AB, Class A | 331,542 | 7,856,871 | |||||||||||||
|
| ||||||||||||||
Total Sweden | 64,346,424 | ||||||||||||||
|
| ||||||||||||||
Switzerland - 8.34% | |||||||||||||||
Common Stocks - (Cost $212,111,455) | |||||||||||||||
ABB Ltd. | 1,735,815 | 42,496,938 | |||||||||||||
Aryzta AGA B | 318,414 | 10,339,655 | |||||||||||||
Cie Financiere Richemont S.A. | 259,653 | 21,698,640 | |||||||||||||
Julius Baer Group Ltd.B | 175,964 | 9,169,581 | |||||||||||||
Novartis AG | 766,032 | 58,934,422 | |||||||||||||
Roche Holding AG | 143,573 | 37,559,851 | |||||||||||||
Swiss Re AG | 103,871 | 9,040,431 | |||||||||||||
UBS Group AG | 1,134,880 | 19,389,909 | |||||||||||||
Zurich Insurance Group AG | 62,365 | 17,261,629 | |||||||||||||
|
| ||||||||||||||
Total Switzerland | 225,891,056 | ||||||||||||||
|
| ||||||||||||||
United Kingdom - 24.61% | |||||||||||||||
Common Stocks - (Cost $649,630,366) | |||||||||||||||
Aon PLC | 160,599 | 19,246,184 | |||||||||||||
AstraZeneca PLC | 333,239 | 20,015,955 | |||||||||||||
Aviva PLC | 3,304,718 | 22,450,006 | |||||||||||||
BAE Systems PLC | 1,570,260 | 12,751,923 | |||||||||||||
Balfour Beatty PLC | 2,655,985 | 10,038,007 | |||||||||||||
Barclays PLC | 10,974,502 | 30,169,568 | |||||||||||||
BHP Billiton PLC | 1,245,577 | 18,955,927 |
See accompanying notes
9
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
United Kingdom - 24.61% (continued) | |||||||||||||||
Common Stocks - (Cost $649,630,366) (continued) | |||||||||||||||
BP PLC | 4,622,103 | $ | 26,490,458 | ||||||||||||
British American Tobacco PLC | 900,510 | 60,824,623 | |||||||||||||
BT Group PLC | 2,006,909 | 7,921,510 | |||||||||||||
Carnival PLC | 289,901 | 17,895,355 | |||||||||||||
Cobham PLCA | 4,653,845 | 7,986,645 | |||||||||||||
ConvaTec Group PLCB | 777,610 | 3,092,988 | |||||||||||||
Diageo PLC | 777,435 | 22,620,754 | |||||||||||||
GlaxoSmithKline PLC | 1,037,109 | 20,820,573 | |||||||||||||
Howden Joinery Group PLC | 1,681,551 | 10,083,878 | |||||||||||||
HSBC Holdings PLC | 1,634,824 | 13,501,210 | |||||||||||||
Informa PLC | 1,458,541 | 12,128,029 | |||||||||||||
Johnson Matthey PLC | 144,790 | 5,586,575 | |||||||||||||
Kingfisher PLC | 1,683,093 | 7,440,138 | |||||||||||||
Lloyds Banking Group PLC | 18,326,279 | 16,425,438 | |||||||||||||
Petrofac Ltd. | 609,354 | 6,428,318 | |||||||||||||
Provident Financial PLC | 230,755 | 9,575,913 | |||||||||||||
Prudential PLC | 2,590,986 | 57,586,266 | |||||||||||||
RELX PLC | 940,421 | 19,074,390 | |||||||||||||
Rolls Royce Holdings PLC | 272,600 | 2,866,939 | |||||||||||||
Rolls Royce Holdings PLC, Class CB C | 17,828,100 | 23,091 | |||||||||||||
Royal Dutch Shell PLC, Class A | 988,063 | 25,626,762 | |||||||||||||
Royal Dutch Shell PLC, Class B | 1,711,013 | 45,485,508 | |||||||||||||
Shire PLC | 449,844 | 26,434,268 | |||||||||||||
Sky PLC | 516,837 | 6,640,516 | |||||||||||||
SSE PLC | 669,355 | 12,059,248 | |||||||||||||
Standard Chartered PLCB | 1,793,917 | 16,756,937 | |||||||||||||
Unilever PLC | 353,534 | 18,187,667 | |||||||||||||
Vodafone Group PLC | 10,964,303 | 28,267,004 | |||||||||||||
Wolseley PLC | 372,004 | 23,628,418 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 665,086,989 | ||||||||||||||
|
| ||||||||||||||
Rights - (Cost $1,180,374) | |||||||||||||||
Cobham PLCA B | 1,861,538 | 1,374,306 | |||||||||||||
|
| ||||||||||||||
Total United Kingdom | 666,461,295 | ||||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 2.78% (Cost $75,397,776) | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 0.69%D | 75,397,776 | 75,397,776 | |||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 2.50% (Cost $67,610,350) | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 0.69%D | 67,610,350 | 67,610,350 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 101.02% (Cost $2,485,136,168) | 2,735,989,518 | ||||||||||||||
OTHER LIABILITIES, NET OF ASSETS - (1.02%) | (27,671,827 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 2,708,317,691 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A All or a portion of this security is on loan at April 30, 2017.
B Non-income producing security.
C Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $23,091 or 0.00% of net assets.
D The Fund is affiliated by having the same investment advisor.
ADR - American Depositary Receipt.
CDI - Chess Depository Interest.
PLC - Public Limited Company.
See accompanying notes
10
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Futures Contracts Open on April 30, 2017: | ||||||||||||||||
Description | Type | Number of Contracts | Expiration Date | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
Amsterdam Index Futures | Long | 26 | May 2017 | $ | 2,926,485 | $ | 64,318 | |||||||||
ASX SPI 200 Index Futures | Long | 55 | June 2017 | 6,088,012 | 101,541 | |||||||||||
CAC 40 Index Futures | Long | 153 | May 2017 | 8,691,449 | 429,674 | |||||||||||
DAX Index Futures | Long | 23 | June 2017 | 7,808,969 | 167,550 | |||||||||||
FTSE 100 Index Futures | Long | 159 | June 2017 | 14,755,332 | (189,533 | ) | ||||||||||
FTSE/MIB Index Futures | Long | 16 | June 2017 | 1,768,235 | 43,407 | |||||||||||
Hang Seng Index Futures | Long | 18 | May 2017 | 2,841,843 | 52,039 | |||||||||||
IBEX 35 Index Futures | Long | 24 | May 2017 | 2,804,636 | 122,960 | |||||||||||
OMX 30 Index Futures | Long | 133 | May 2017 | 2,429,561 | 96,798 | |||||||||||
S&P/TSX 60 Index Futures | Long | 65 | June 2017 | 8,731,090 | 12,821 | |||||||||||
TOPIX Index Futures | Long | 139 | June 2017 | 19,077,780 | 130,417 | |||||||||||
|
|
|
| |||||||||||||
$ | 77,923,392 | $ | 1,031,992 | |||||||||||||
|
|
|
|
Forward Currency Contracts Open on April 30, 2017: | ||||||||||||||||||||||
Type | Currency | Principal Amount Covered by Contract | Settlement Date | Counterparty | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | |||||||||||||||
Buy | EUR | 16,371,740 | 6/8/2017 | BNP | $ | 429,181 | $ | - | $ | 429,181 | ||||||||||||
Buy | AUD | 633,109 | 6/8/2017 | BNP | - | (15,233 | ) | (15,233 | ) | |||||||||||||
Buy | EUR | 2,828,392 | 6/8/2017 | BOA | 76,841 | - | 76,841 | |||||||||||||||
Buy | GBP | 1,609,727 | 6/8/2017 | BOA | 71,967 | - | 71,967 | |||||||||||||||
Sell | EUR | 2,750,657 | 6/8/2017 | BOA | - | (64,954 | ) | (64,954 | ) | |||||||||||||
Buy | SEK | 1,659,315 | 6/8/2017 | BOM | 25,809 | - | 25,809 | |||||||||||||||
Buy | CAD | 1,040,076 | 6/8/2017 | BOM | - | (18,595 | ) | (18,595 | ) | |||||||||||||
Buy | CAD | 8,975,142 | 6/8/2017 | BOM | - | (213,283 | ) | (213,283 | ) | |||||||||||||
Buy | CHF | 1,519,883 | 6/8/2017 | BOM | - | (18,221 | ) | (18,221 | ) | |||||||||||||
Buy | CHF | 1,251,964 | 6/8/2017 | BOM | - | (5,626 | ) | (5,626 | ) | |||||||||||||
Buy | CAD | 1,244,573 | 6/8/2017 | BOM | - | (22,083 | ) | (22,083 | ) | |||||||||||||
Sell | GBP | 21,364,568 | 6/8/2017 | BOM | - | (705,669 | ) | (705,669 | ) | |||||||||||||
Sell | CAD | 2,574,453 | 6/8/2017 | BOM | 27,740 | - | 27,740 | |||||||||||||||
Buy | JPY | 22,746,009 | 6/8/2017 | BRC | - | (155,981 | ) | (155,981 | ) | |||||||||||||
Buy | SEK | 249,629 | 6/8/2017 | CBK | - | (1,618 | ) | (1,618 | ) | |||||||||||||
Buy | GBP | 17,628,134 | 6/8/2017 | CBK | 610,809 | - | 610,809 | |||||||||||||||
Buy | AUD | 981,027 | 6/8/2017 | CBK | - | (6,782 | ) | (6,782 | ) | |||||||||||||
Sell | GBP | 1,824,708 | 6/8/2017 | CBK | - | (110,361 | ) | (110,361 | ) | |||||||||||||
Sell | CHF | 2,380,168 | 6/8/2017 | CBK | - | (4,965 | ) | (4,965 | ) | |||||||||||||
Buy | CHF | 984,046 | 6/8/2017 | FBF | 14,729 | - | 14,729 | |||||||||||||||
Buy | CHF | 8,203,742 | 6/8/2017 | FBF | - | (48,789 | ) | (48,789 | ) | |||||||||||||
Buy | SEK | 457,515 | 6/8/2017 | FBF | - | (5,310 | ) | (5,310 | ) | |||||||||||||
Buy | JPY | 3,421,855 | 6/8/2017 | FBF | - | (16,307 | ) | (16,307 | ) | |||||||||||||
Buy | CAD | 5,904,123 | 6/8/2017 | GLM | - | (105,872 | ) | (105,872 | ) | |||||||||||||
Buy | CHF | 5,831,388 | 6/8/2017 | GLM | 82,229 | - | 82,229 | |||||||||||||||
Buy | GBP | 2,390,695 | 6/8/2017 | GLM | 87,604 | - | 87,604 | |||||||||||||||
Sell | JPY | 2,466,662 | 6/8/2017 | GLM | - | (63,992 | ) | (63,992 | ) | |||||||||||||
Sell | EUR | 32,401,017 | 6/8/2017 | GLM | - | (262,205 | ) | (262,205 | ) | |||||||||||||
Buy | SEK | 290,909 | 6/8/2017 | HUS | 3,920 | - | 3,920 | |||||||||||||||
Buy | JPY | 4,011,512 | 6/8/2017 | HUS | - | (38,524 | ) | (38,524 | ) | |||||||||||||
Buy | SEK | 415,779 | 6/8/2017 | HUS | - | (1,815 | ) | (1,815 | ) | |||||||||||||
Sell | AUD | 1,960,355 | 6/8/2017 | HUS | 12,600 | - | 12,600 | |||||||||||||||
Buy | GBP | 1,769,685 | 6/8/2017 | JPM | 100,580 | - | 100,580 | |||||||||||||||
Buy | AUD | 6,947,259 | 6/8/2017 | JPM | - | (173,105 | ) | (173,105 | ) | |||||||||||||
Buy | CAD | 1,400,694 | 6/8/2017 | JPM | - | (28,812 | ) | (28,812 | ) | |||||||||||||
Sell | CHF | 838,856 | 6/8/2017 | JPM | - | (9,893 | ) | (9,893 | ) | |||||||||||||
Buy | GBP | 11,214,132 | 6/8/2017 | MYC | 607,939 | - | 607,939 |
See accompanying notes
11
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Type | Currency | Principal Amount Covered by Contract | Settlement Date | Counterparty | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | |||||||||||||||||
Buy | CAD | 862,742 | 6/8/2017 | MYC | $ | - | $ | (21,331 | ) | $ | (21,331 | ) | ||||||||||||
Buy | GBP | 2,668,140 | 6/8/2017 | MYC | 101,763 | - | 101,763 | |||||||||||||||||
Buy | CHF | 1,171,388 | 6/8/2017 | MYC | 10,269 | - | 10,269 | |||||||||||||||||
Sell | EUR | 7,678,001 | 6/8/2017 | MYC | - | (131,364 | ) | (131,364 | ) | |||||||||||||||
Buy | JPY | 15,116,762 | 6/8/2017 | RBC | 303,550 | - | 303,550 | |||||||||||||||||
Buy | CAD | 1,525,298 | 6/8/2017 | RBC | - | (32,314 | ) | (32,314 | ) | |||||||||||||||
Buy | EUR | 4,173,842 | 6/8/2017 | RBC | 26,926 | - | 26,926 | |||||||||||||||||
Sell | CAD | 965,071 | 6/8/2017 | RBC | 12,365 | - | 12,365 | |||||||||||||||||
Sell | CAD | 11,082,413 | 6/8/2017 | RBC | 255,745 | - | 255,745 | |||||||||||||||||
Sell | GBP | 4,770,940 | 6/8/2017 | RBC | - | (55,178 | ) | (55,178 | ) | |||||||||||||||
Buy | JPY | 2,277,772 | 6/8/2017 | SCB | 44,919 | - | 44,919 | |||||||||||||||||
Buy | JPY | 2,191,368 | 6/8/2017 | SCB | 29,387 | - | 29,387 | |||||||||||||||||
Buy | AUD | 1,064,837 | 6/8/2017 | SCB | - | (20,229 | ) | (20,229 | ) | |||||||||||||||
Buy | JPY | 3,010,810 | 6/8/2017 | SCB | - | (21,379 | ) | (21,379 | ) | |||||||||||||||
Sell | CHF | 10,238,310 | 6/8/2017 | SCB | 42,347 | - | 42,347 | |||||||||||||||||
Buy | CHF | 765,665 | 6/8/2017 | SOG | - | (1,495 | ) | (1,495 | ) | |||||||||||||||
Buy | EUR | 27,071,594 | 6/8/2017 | SOG | 176,653 | - | 176,653 | |||||||||||||||||
Buy | GBP | 3,128,388 | 6/8/2017 | SOG | 89,986 | - | 89,986 | |||||||||||||||||
Buy | SEK | 343,730 | 6/8/2017 | SOG | 5,755 | - | 5,755 | |||||||||||||||||
Sell | SEK | 275,238 | 6/8/2017 | SOG | - | (2,666 | ) | (2,666 | ) | |||||||||||||||
Sell | JPY | 28,006,995 | 6/8/2017 | SOG | 209,336 | - | 209,336 | |||||||||||||||||
Sell | JPY | 6,147,138 | 6/8/2017 | SOG | 133,656 | - | 133,656 | |||||||||||||||||
Sell | JPY | 291,514 | 5/8/2017 | SSB | - | - | - | |||||||||||||||||
Buy | AUD | 4,584,564 | 6/8/2017 | TDB | - | (50,210 | ) | (50,210 | ) | |||||||||||||||
Buy | EUR | 2,454,357 | 6/8/2017 | UAG | 23,103 | - | 23,103 | |||||||||||||||||
Buy | SEK | 2,715,118 | 6/8/2017 | UAG | - | (26,024 | ) | (26,024 | ) | |||||||||||||||
Buy | EUR | 4,661,609 | 6/8/2017 | UAG | 3,706 | - | 3,706 | |||||||||||||||||
Sell | SEK | 3,361,634 | 6/8/2017 | UAG | 14,679 | - | 14,679 | |||||||||||||||||
Buy | AUD | 719,869 | 6/8/2017 | WBC | - | (8,921 | ) | (8,921 | ) | |||||||||||||||
Buy | AUD | 1,187,559 | 6/8/2017 | WBC | - | (21,155 | ) | (21,155 | ) | |||||||||||||||
Buy | EUR | 3,703,535 | 6/8/2017 | WBC | 80,962 | - | 80,962 | |||||||||||||||||
Sell | AUD | 741,990 | 6/8/2017 | WBC | 6,897 | - | 6,897 | |||||||||||||||||
Sell | AUD | 8,551,624 | 6/8/2017 | WBC | 152,512 | - | 152,512 | |||||||||||||||||
Sell | SEK | 773,063 | 6/8/2017 | WBC | - | (14,455 | ) | (14,455 | ) | |||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
$ | 3,876,464 | $ | (2,504,716 | ) | $ | 1,371,748 | ||||||||||||||||||
|
|
|
|
|
|
Glossary: | ||
Counterparty Abbreviations: | ||
BNP | BNP Paribas, N.A. | |
BOA | Bank of America, N.A. | |
BOM | Bank of Montreal | |
BRC | Barclays Bank PLC | |
CBK | Citibank, N.A. | |
FBF | Credit Suisse International | |
GLM | Goldman Sachs Bank USA | |
HUS | HSBC Bank (USA) | |
JPM | JPMorgan Chase Bank, N.A. | |
MYC | Morgan Stanley Capital Services | |
RBC | Royal Bank of Canada | |
SCB | Standard Chartered Bank | |
SOG | Societe Generale | |
SSB | State Street Bank & Trust Company | |
TDB | Toronto Dominion Bank | |
UAG | UBS AG | |
WBC | Westpac Banking Corporation |
See accompanying notes
12
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Currency Abbreviations: | ||
AUD | Australian Dollar | |
CAD | Canadian Dollar | |
CHF | Swiss Franc | |
EUR | Euro | |
GBP | Pound Sterling | |
JPY | Japanese Yen | |
SEK | Swedish Krona | |
USD | United States Dollar |
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2017, the investments were classified as described below:
International Equity Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Foreign Common Stocks | ||||||||||||||||||||||||||||
Australia | $ | 28,330,518 | $ | - | $ | - | $ | 28,330,518 | ||||||||||||||||||||
Belgium | 37,181,511 | - | - | 37,181,511 | ||||||||||||||||||||||||
Canada | 99,362,263 | - | - | 99,362,263 | ||||||||||||||||||||||||
Denmark | 23,301,789 | - | - | 23,301,789 | ||||||||||||||||||||||||
Finland | 13,174,081 | - | - | 13,174,081 | ||||||||||||||||||||||||
France | 282,618,175 | - | - | 282,618,175 | ||||||||||||||||||||||||
Germany | 190,856,978 | - | - | 190,856,978 | ||||||||||||||||||||||||
Hong Kong | 71,302,749 | - | - | 71,302,749 | ||||||||||||||||||||||||
Ireland | 26,398,098 | - | - | 26,398,098 | ||||||||||||||||||||||||
Israel | 13,151,996 | - | - | 13,151,996 | ||||||||||||||||||||||||
Italy | 51,293,997 | - | - | 51,293,997 | ||||||||||||||||||||||||
Japan | 375,630,007 | - | - | 375,630,007 | ||||||||||||||||||||||||
Luxembourg | 17,693,675 | - | - | 17,693,675 | ||||||||||||||||||||||||
Netherlands | 136,962,824 | - | - | 136,962,824 | ||||||||||||||||||||||||
Norway | 44,876,585 | - | - | 44,876,585 | ||||||||||||||||||||||||
Portugal | 7,281,000 | - | - | 7,281,000 | ||||||||||||||||||||||||
Republic of Korea | 99,963,736 | - | - | 99,963,736 | ||||||||||||||||||||||||
Singapore | 40,395,107 | - | - | 40,395,107 | ||||||||||||||||||||||||
Spain | 35,269,939 | - | - | 35,269,939 | ||||||||||||||||||||||||
Sweden | 64,346,424 | - | - | 64,346,424 | ||||||||||||||||||||||||
Switzerland | 225,891,056 | - | - | 225,891,056 | ||||||||||||||||||||||||
United Kingdom | 665,063,898 | - | 23,091 | 665,086,989 | ||||||||||||||||||||||||
Foreign Preferred Stocks | ||||||||||||||||||||||||||||
Germany | 41,237,589 | - | - | 41,237,589 | ||||||||||||||||||||||||
Foreign Rights | ||||||||||||||||||||||||||||
United Kingdom | 1,374,306 | - | - | 1,374,306 | ||||||||||||||||||||||||
Short-Term Investments - Money Market Funds | 75,397,776 | - | - | 75,397,776 | ||||||||||||||||||||||||
Securities Lending Collateral Invested in Money Market Funds | 67,610,350 | - | - | 67,610,350 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 2,735,966,427 | $ | - | $ | 23,091 | $ | 2,735,989,518 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||||||
Futures Contracts | $ | 1,221,525 | $ | - | $ | - | $ | 1,221,525 | ||||||||||||||||||||
Forward Currency Contracts | - | 3,876,464 | - | 3,876,464 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 1,221,525 | $ | 3,876,464 | $ | - | $ | 5,097,989 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||||||
Futures Contracts | $ | (189,533 | ) | $ | - | $ | - | $ | (189,533 | ) | ||||||||||||||||||
Forward Currency Contracts | - | (2,504,716 | ) | - | (2,504,716 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Liabilities | $ | (189,533 | ) | $ | (2,504,716 | ) | $ | - | $ | (2,694,249 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP also requires all transfers between any level 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 period ended April 30, 2017, there were no transfers between levels.
See accompanying notes
13
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
The following table is a reconciliation of Level 3 assets in the Fund for which significant unobservable inputs were used to determine fair value. Transfers in or out of Level 3 represent the ending value of any security or instrument where a change in the level has occurred from the beginning to the end of the period:
Security Type | Balance as of 10/31/2016 | Net Purchases | Net Sales | Accrued Discounts (Premiums) | Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Transfer into Level 3 | Transfer out of Level 3 | Balance as of 4/30/2017 | Change in Unrealized Appreciation (Depreciation) at Period end** | ||||||||||||||||||||||||||||||
Common Stocks | $ | - | $ | 22,919 | $ | - | $ | - | $ | - | $ | 172 | $ | - | $ | - | $ | 23,091 | $ | 172 |
** | Change in unrealized appreciation (depreciation) attributable to Level 3 securities held at period end. This balance is included in the change in unrealized appreciation (depreciation) on the Statement of Operations. |
The common stock classified as Level 3 was fair valued using the redemption value as of April 30, 2017. However, these securities are included in the Level 3 category due to limited market transparency and/or lack of corroboration to support the valuation.
See accompanying notes
14
American Beacon International Equity FundSM
Statement of Assets and Liabilities
April 30, 2017 (Unaudited)
Assets: | ||||||||
Investments in unaffiliated securities, at fair value† | $ | 2,592,981,392 | ||||||
Investments in affiliated securities, at fair value‡ | 143,008,126 | |||||||
Foreign currency, at fair value^ | 196,782 | |||||||
Foreign currency deposits with brokers for futures contracts, at fair value¤ | 4,213,799 | |||||||
Cash | 3,400,000 | |||||||
Dividends and interest receivable | 12,291,207 | |||||||
Receivable for investments sold | 14,302,486 | |||||||
Receivable for fund shares sold | 3,760,595 | |||||||
Receivable for tax reclaims | 3,057,601 | |||||||
Receivable for expense reimbursement (Note 2) | 178 | |||||||
Receivable for variation margin on open futures contracts | 2,918,938 | |||||||
Unrealized appreciation from forward currency contracts | 3,876,464 | |||||||
Prepaid expenses | 179,685 | |||||||
|
| |||||||
Total assets | 2,784,187,253 | |||||||
|
| |||||||
Liabilities: | ||||||||
Payable for investments purchased | 1,544,456 | |||||||
Payable for fund shares redeemed | 1,546,724 | |||||||
Payable upon return of securities loaned§ | 67,610,350 | |||||||
Management and investment advisory fees payable | 2,173,283 | |||||||
Administrative service and service fees payable | 118,035 | |||||||
Transfer agent fees payable | 128,559 | |||||||
Custody and fund accounting fees payable | 34,855 | |||||||
Professional fees payable | 52,914 | |||||||
Trustee fees payable | 5,699 | |||||||
Payable for prospectus and shareholder reports | 96,871 | |||||||
Unrealized depreciation from forward currency contracts | 2,504,716 | |||||||
Other liabilities | 53,100 | |||||||
|
| |||||||
Total liabilities | 75,869,562 | |||||||
|
| |||||||
Net Assets | $ | 2,708,317,691 | ||||||
|
| |||||||
Analysis of Net Assets: | ||||||||
Paid-in-capital | $ | 2,465,519,048 | ||||||
Undistributed net investment income | 9,391,131 | |||||||
Accumulated net realized (loss) | (20,019,593 | ) | ||||||
Unrealized appreciation of investments | 385,883,430 | |||||||
Unrealized depreciation of currency transactions | (133,488,317 | ) | ||||||
Unrealized appreciation of futures contracts | 1,031,992 | |||||||
|
| |||||||
Net assets | $ | 2,708,317,691 | ||||||
|
|
See accompanying notes
15
American Beacon International Equity FundSM
Statement of Assets and Liabilities
April 30, 2017 (Unaudited)
Shares outstanding at no par value (unlimited shares authorized): | ||||||||
Institutional Class | 75,941,277 | |||||||
|
| |||||||
Y Class | 45,258,788 | |||||||
|
| |||||||
Investor Class | 17,416,877 | |||||||
|
| |||||||
Advisor Class | 1,334,310 | |||||||
|
| |||||||
A Class | 1,163,795 | |||||||
|
| |||||||
C Class | 353,855 | |||||||
|
| |||||||
R6 ClassA | 5,618 | |||||||
|
| |||||||
Net assets: | ||||||||
Institutional Class | $ | 1,438,408,603 | ||||||
|
| |||||||
Y Class | $ | 888,820,069 | ||||||
|
| |||||||
Investor Class | $ | 327,080,913 | ||||||
|
| |||||||
Advisor Class | $ | 25,645,940 | ||||||
|
| |||||||
A Class | $ | 21,820,432 | ||||||
|
| |||||||
C Class | $ | 6,435,324 | ||||||
|
| |||||||
R6 ClassA | $ | 106,410 | ||||||
|
| |||||||
Net asset value, offering and redemption price per share: | ||||||||
Institutional Class | $ | 18.94 | ||||||
|
| |||||||
Y Class | $ | 19.64 | ||||||
|
| |||||||
Investor Class | $ | 18.78 | ||||||
|
| |||||||
Advisor Class | $ | 19.22 | ||||||
|
| |||||||
A Class | $ | 18.75 | ||||||
|
| |||||||
A Class (offering price) | $ | 19.89 | ||||||
|
| |||||||
C Class | $ | 18.19 | ||||||
|
| |||||||
R6 ClassA | $ | 18.94 | ||||||
|
| |||||||
† Cost of investments in unaffiliated securities | $ | 2,342,128,042 | ||||||
‡ Cost of investments in affiliated securities | $ | 143,008,126 | ||||||
§ Fair value of securities on loan | $ | 64,242,131 | ||||||
^ Cost of foreign currency | $ | 195,695 | ||||||
¤ Cost of foreign currency deposits with brokers | $ | 6,055,213 |
A Class commenced operations February 28, 2017 (Note 1).
See accompanying notes
16
American Beacon International Equity FundSM
Statement of Operations
For the Period Ended April 30, 2017 (Unaudited)
Investment income: | ||||||||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 34,942,344 | ||||||
Dividend income from affiliated securities | 190,551 | |||||||
Income derived from securities lending | 524,987 | |||||||
|
| |||||||
Total investment income | 35,657,882 | |||||||
|
| |||||||
Expenses: | ||||||||
Management and investment advisory fees (Note 2) | 7,847,769 | |||||||
Transfer agent fees: | ||||||||
Institutional Class | 221,261 | |||||||
Y Class | 83,436 | |||||||
Investor Class | 8,094 | |||||||
Advisor Class | 2,045 | |||||||
A Class | 1,644 | |||||||
C Class | 217 | |||||||
R6 ClassA | 373 | |||||||
Custody and fund accounting fees | 355,679 | |||||||
Professional fees | 62,671 | |||||||
Registration fees and expenses | 97,068 | |||||||
Service fees (Note 2): | ||||||||
Y Class | 347,126 | |||||||
Investor Class | 604,082 | |||||||
Advisor Class | 29,326 | |||||||
A Class | 15,644 | |||||||
C Class | 3,784 | |||||||
Distribution fees (Note 2): | ||||||||
Advisor Class | 29,326 | |||||||
A Class | 26,074 | |||||||
C Class | 25,225 | |||||||
Prospectus and shareholder report expenses | 117,716 | |||||||
Trustee fees | 78,922 | |||||||
Other expenses | 133,754 | |||||||
|
| |||||||
Total expenses | 10,091,236 | |||||||
|
| |||||||
Net fees waived and expenses reimbursed / (recouped) by Manager (Note 2) | (364 | ) | ||||||
|
| |||||||
Net expenses | 10,090,872 | |||||||
|
| |||||||
Net investment income | 25,567,010 | |||||||
|
| |||||||
Realized and unrealized gain (loss) from investments: | ||||||||
Net realized gain (loss) from: | ||||||||
Investments | 103,826,364 | |||||||
Commission recapture (Note 1) | 61,244 | |||||||
Foreign currency transactions | (52,909,929 | ) | ||||||
Futures contracts | 10,027,791 | |||||||
Change in net unrealized appreciation (depreciation) of: | ||||||||
Investments | 159,014,677 | |||||||
Foreign currency transactions | 45,869,488 | |||||||
Futures contracts | (1,191,269 | ) | ||||||
|
| |||||||
Net gain from investments | 264,698,366 | |||||||
|
| |||||||
Net increase in net assets resulting from operations | $ | 290,265,376 | ||||||
|
| |||||||
† Foreign taxes | $ | 3,658,125 |
A Class commenced operations February 28, 2017 (Note 1).
See accompanying notes
17
American Beacon International Equity FundSM
Statements of Changes of Net Assets
For the Six Months Ended April 30, 2017 | For the Year Ended October 31, 2016 | |||||||||||
(unaudited) | ||||||||||||
Increase (Decrease) in Net Assets: | ||||||||||||
Operations: | ||||||||||||
Net investment income | $ | 25,567,010 | $ | 53,490,297 | ||||||||
Net realized gain (loss) from investments, commission recapture, foreign currency transactions, and futures contracts | 61,005,470 | (69,713,130 | ) | |||||||||
Change in net unrealized appreciation (depreciation) of investments, foreign currency transactions, and futures contracts | 203,692,896 | (48,671,035 | ) | |||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 290,265,376 | (64,893,868 | ) | |||||||||
|
|
|
| |||||||||
Distributions to Shareholders: | ||||||||||||
Net investment income: | ||||||||||||
Institutional Class | (34,791,829 | ) | (16,686,558 | ) | ||||||||
Y Class | (18,973,818 | ) | (8,452,221 | ) | ||||||||
Investor Class | (7,051,311 | ) | (3,881,250 | ) | ||||||||
Advisor Class | (456,420 | ) | (277,450 | ) | ||||||||
A Class | (472,655 | ) | (124,783 | ) | ||||||||
C Class | (111,074 | ) | (21,084 | ) | ||||||||
Net realized gain from investments: | ||||||||||||
Institutional Class | – | (9,476,767 | ) | |||||||||
Y Class | – | (4,762,157 | ) | |||||||||
Investor Class | – | (2,928,681 | ) | |||||||||
Advisor Class | – | (209,279 | ) | |||||||||
A Class | – | (91,005 | ) | |||||||||
C Class | – | (32,829 | ) | |||||||||
|
|
|
| |||||||||
Net distributions to shareholders | (61,857,107 | ) | (46,944,064 | ) | ||||||||
|
|
|
| |||||||||
Capital Share Transactions: | ||||||||||||
Proceeds from sales of shares | 355,884,272 | 1,257,857,958 | ||||||||||
Reinvestment of dividends and distributions | 57,320,154 | 42,786,888 | ||||||||||
Cost of shares redeemed | (584,149,120 | ) | (638,592,286 | ) | ||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (170,944,694 | ) | 662,052,560 | |||||||||
|
|
|
| |||||||||
Net increase in net assets | 57,463,575 | 550,214,628 | ||||||||||
|
|
|
| |||||||||
Net Assets: | ||||||||||||
Beginning of period | 2,650,854,116 | 2,100,639,488 | ||||||||||
|
|
|
| |||||||||
End of Period* | $ | 2,708,317,691 | $ | 2,650,854,116 | ||||||||
|
|
|
| |||||||||
* Includes undistributed net investment income | $ | 9,391,131 | $ | 52,877,849 | ||||||||
|
|
|
|
See accompanying notes
18
American Beacon International Equity FundSM
April 30, 2017 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940 (the “Act”) as a diversified, open-end management investment company. As of April 30, 2017, the Trust consists of thirty-two active series, one of which is presented in this filing: American Beacon International Equity Fund (the “Fund”). The remaining thirty-one active series are reported in separate filings.
American Beacon Advisors, Inc. (the “Manager”) is a wholly-owned subsidiary of Resolute Investment Managers, 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.
New Accounting Pronouncements
In October 2016, the SEC adopted amendments to rules under the Investment Company Act of 1940 (“final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. The final rules amend Regulation S-X and require funds to provide standardized, enhanced derivative disclosure in fund financial statements in a format designed for individual investors. The amendments to Regulation S-X also update the disclosures for other investments and investments in, and advances to affiliates and amend the rules regarding the general form and content of fund financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the amendments and its impact, if any, on the Fund’s Financial Statements.
Class Disclosure
The inception date of the R6 Class was February 28, 2017.
The Fund has multiple classes of shares designed to meet the needs of different groups of investors. The following table sets forth the differences amongst the classes:
Class | Eligible Investors | Minimum Initial Investments | ||||
Institutional | Large institutional investors - sold directly or through intermediary channels. | $ | 250,000 | |||
Y Class | Large institutional retirement plan investors - sold directly or through intermediary channels. | $ | 100,000 | |||
Investor | All investors using intermediary organizations such as broker-dealers or retirement plan sponsors. | $ | 2,500 | |||
Advisor Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrators. | $ | 2,500 | |||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary such as a broker or employee directed benefit plans with applicable sales charges, which may include CDSC. | $ | 1,000 | |||
R6 Class | Large institutional retirement plan investors - sold through retirement plan sponsors. | $ | 5,000,000 |
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
19
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
respective Fund. Class specific expenses, where applicable, currently include administration service fees, service fees, and distribution fees and vary amongst the classes as described more fully in Note 2.
The following is a summary of significant accounting policies, consistently followed by the Fund in preparation of the financial statements. The Fund is considered an investment company and accordingly, follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946, Financial Services – Investment Companies, which is part of the U.S. Generally Accepted Accounting Principles (“U.S. GAAP”).
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 Net Asset Value (“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. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Fund also designates earnings and profits distributed to shareholders on the redemption of shares.
Commission Recapture
The Fund has 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 Fund. This amount is reported with the net realized gains in the Fund’s Statement 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.
20
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Other
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities 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.
2. Transactions with Affiliates
Management Agreement
The Fund and the Manager are parties to a Management Agreement that obligates the Manager to provide investment advisory, fund management, and administrative services to the Fund. As compensation for performing the duties under the Management Agreement, the Manager receives from the Fund an annualized fee at the following annual rates as a percentage of average daily net assets: 0.35% of the first $15 billion, 0.325% of the next $15 billion, and 0.30% of the next $30 billion. The Fund pays the unaffiliated investment advisors hired to direct investment activities of the Fund an annualized investment advisory fee based on a percentage of the Fund’s average daily assets. Management fees paid by the Fund during the period ended April 30, 2017 were as follows:
Fund | Management Fee Rate | Management Fee | Amount Paid to Investment Advisors | Amount Paid to Manager | ||||||||||||
International Equity | 0.62 | % | $ | 7,847,769 | $ | 3,168,585 | $ | 4,679,184 |
As compensation for services provided by the Manager in connection with securities lending activities conducted by the Fund, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee up to 10% 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 10% of such loan fees. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statement of Operations. During the period ended April 30, 2017, the Manager received securities lending fees of $64,885 for the securities lending activities 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 may be charged to the Fund for distribution purposes. However, the Plan 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 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.
21
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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 of the Fund. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.10% of the average daily net assets of the Y Class, up to 0.15% of the average net assets of the A and C Classes, up to 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. Effective April 1, 2017, the Fund terminated the service plan for the Y Class.
Sub-Transfer Agent Fees
The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the Institutional Class of the Fund and has agreed to compensate the intermediaries for providing these services. Effective April 1, 2017, the Fund has agreed to compensate the intermediaries for providing services to the Y Class. Intermediaries transact with the Fund primarily through the use of omnibus accounts on behalf of its customers who hold positions in the Fund. Certain services would have been provided by the Fund’s transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Fund’s transfer agent. Accordingly, the Fund, pursuant to the Trust’s Board of Trustees (the “Board”) approval, has agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the period ended April 30, 2017, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:
Fund | Sub-Transfer Agent Fees | |||
International Equity | $ | 273,791 |
As of April 30, 2017, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:
Fund | Reimbursement Sub-Transfer Agent Fees | |||
International Equity | $ | 123,197 |
Investments 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 management fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the period ended April 30, 2017, the Manager earned fees totaling $64,885 on the Fund’s direct investments in the USG Select Fund and $9,752 from the Fund’s securities lending collateral invested in USG Select Fund.
Interfund Lending Program
Pursuant to an exemptive order 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, 2017, the Fund did not utilize the credit facility.
22
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Expense Reimbursement Plan
The Manager voluntarily agreed to reduce fees and/or reimburse expenses for the R6 Class of the Fund to the extent that total operating expenses exceed the expense cap. During the period ended April 30, 2017, the Manager waived and/or reimbursed expenses as follows:
Expense Cap | Expiration of Reimbursed Expenses | |||||||||
Class | 2/28/2017 - 4/30/2017 | Reimbursed Expenses | ||||||||
R6 | 0.67% | $ | 364 | 2020 |
Of this amount, $178 was disclosed as a receivable from the Manager on the Statement of Assets and Liabilities at April 30, 2017. The Fund has adopted an Expense Reimbursement Plan whereby the Manage may seek repayment of such fee reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Fund for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years after the Manager’s own waiver or reimbursement and (b) does not cause the Fund’s annual operating expenses to exceed the lesser of the contractual percentage limit in effect at the time of the waiver/reimbursement or time of recoupment. The reimbursed expenses above will expire in 2020. The carryover of excess expenses potentially reimbursable to the manager, but not recorded as a liability are as follows:
Fund | Recovered Expenses | Excess Expense Carryover | Expired Expense Carryover | Expiration of Reimbursed Expenses | ||||||||||||
International Equity | $ | - | $ | 151,730 | $ | - | 2017 | |||||||||
International Equity | - | 105,014 | - | 2018 |
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 period ended April 30, 2017, Foreside collected $2,356 in sales commissions from the sale of Class A Shares of the Fund.
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 period ended April 30, 2017, CDSC fees of $625 were collected for the Class A Shares of 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 period ended April 30, 2017, CDSC fees of $44 were collected for Class C Shares of the Fund.
Trustee Fees and Expenses
As compensation for their service to the Trust, the American Beacon Select Funds and the American Beacon Institutional Funds Trust, each Trustee receives an annual retainer of $120,000, plus $5,000 for each Board of Trustee meeting attended in person or via teleconference, $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, and $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee, plus reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. The Board
23
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Chairman receives an additional annual retainer of $50,000 as well as a single $5,000 fee each quarter for his attendance at the committee meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chairman of the Nominating and Governance Committee receives an additional annual retainer of $10,000. These expenses are allocated on a prorated basis to each Fund of the Trust according to its respective net assets.
3. Security Valuation and Fair Value Measurements
Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally at 4:00 p.m. Eastern Time, 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.
For valuation purposes, the last quoted prices of non-U.S. equity securities may be adjusted under the circumstances described below. If the Manager 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 Manager 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 Manager 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 Fund’s pricing time of 4:00 p.m. Eastern 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 American Depository Receipts (ADRs) and futures contracts. The Valuation Committee, established by the Board, may also fair value securities in other situations, such as when a particular foreign market is closed but a Fund is open. The Fund uses outside pricing services to provide closing prices and information to evaluate and/or adjust those prices. As a means of evaluating its security valuation process, the Valuation Committee routinely compares closing prices, the next day’s opening prices in the same markets, and adjusted prices.
Investments in open-end mutual funds are valued at the closing 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 Board.
Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, the 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.
Other investments 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 Manager’s Valuation Committee, pursuant to procedures established by the Board.
24
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (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. Fixed-income securities are considered Level 2 as they are valued using observable inputs. | ||
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 generally categorized as Level 2 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.
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.
Level 3 trading assets and trading liabilities, at fair value
The valuation techniques and significant inputs used in determining the fair values of financial instruments classified as Level 3 of the fair value hierarchy are as follows:
Securities and other assets for which market quotes are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction and may be categorized as Level 3 of the fair value hierarchy.
Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information or broker quotes), including where events occur after the close of the relevant market, but prior to the Exchange close, that materially affect the values of the Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trade, do not open for trading for the entire day
25
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
and no other market prices are available. The Board has delegated to the Manager the responsibility for monitoring significant events that may materially affect the fair values of a Fund’s securities or assets and for determining whether the value of the applicable securities or assets should be re-evaluated in light of such significant events.
The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated the responsibility for applying the valuation methods to the Manager. For instances in which daily market quotes are not readily available, investments may be valued pursuant to guidelines established by the Board. In the event that the security or asset cannot be valued pursuant to one of the valuation methods established by the Board, the fair value of the security or asset will be determined in good faith by the Valuation Committee, generally based upon recommendations provided by the Manager.
When a Fund uses fair valuation methods applied by the Manager that use significant unobservable inputs to determine its NAV, the securities priced using this methodology are categorized as Level 3 of the fair value hierarchy. These methods may require subjective determinations about the value of a security. While the Trust’s policy is intended to result in a calculation of the Fund’s NAV that fairly reflects security values as of the time of pricing, the Trust cannot guarantee that values determined by the Board or persons acting at their direction would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing (of instance, in a forced or distressed sale). The price used by a Fund may differ from the value that would be realized if the securities were sold.
For fair valuations using significant unobservable inputs, U.S.GAAP requires a reconciliation of the beginning to ending balances for reported fair value that presents changes attributable to total realized and unrealized gains or losses, purchases and sales, and transfers in and out of the Level 3 category during the period. In accordance with the requirements of U.S. GAAP, a fair value hierarchy and Level 3 reconciliation, if any, has been included in the footnotes of the Schedule of Investments.
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.
CHESS Depository Instruments (“CDIs”)
CDIs are financial products through which a unit of beneficial ownership is obtained in 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
26
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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.
Common Stock
Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or over-the-counter (“OTC”). OTC stock may be less liquid than exchange-traded stock.
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 the 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.
Preferred Stock
A preferred stock blends the characteristics of a bond and common stock. It can offer the higher yield of a bond and has priority over common stock in equity ownership, but does not have the seniority of a bond and its participation in the issuer’s growth may be limited. Preferred stock generally has preference over common stock in the receipt of dividends and in any residual assets after payment to creditors should the issuer be dissolved. Although the dividend is set at a fixed or variable rate, in some circumstances it can be changed or omitted by the issuer.
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.
27
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Rights and Warrants
Rights are short-term warrants issued in conjunction with new stock or bond issues. Warrants are options to purchase an issuer’s securities at a stated price during a stated term. If the market price of the underlying common stock does not exceed the warrant’s exercise price during the life of the warrant, the warrant will expire worthless. Warrants usually have no voting rights, pay no dividends and have no rights with respect to the assets of the corporation issuing them. The percentage increase or decrease in the value of a warrant may be greater than the percentage increase or decrease in the value of the underlying common stock. Warrants may be purchased with values that vary depending on the change in value of one or more specified indices (“index warrants”). Index warrants are generally issued by banks or other financial institutions and give the holder the right, at any time during the term of the warrant, to receive upon exercise of the warrant a cash payment from the issuer based on the value of the underlying index at the time of the exercise. The market for warrants or rights may be very limited and it may be difficult to sell them promptly at an acceptable price. There is no specific limit on the percentage of assets the Fund may invest in rights and warrants.
5. Financial Derivative Instruments
The Fund may utilize derivative instruments to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs and to hedge currency exposures. When considering the Fund’s use of derivatives, it is important to note that the Fund does not use derivatives for the purpose of creating financial leverage.
Forward Currency Contracts
The Fund may enter into forward 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 currency contracts are valued at the forward exchange rate prevailing on the day of valuation. The Fund may also use forward currency contracts to increase exposure to a foreign currency or to shift exposure to foreign currency fluctuations from one country to another. The Funds 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.
During the period ended April 30, 2017, the Fund entered into forward currency exchange contracts primarily for hedging foreign currency fluctuations.
The Fund’s forward currency contract notional dollar values outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of forward currency contracts. For the purpose of this disclosure, volume is measured by the amounts bought and sold in USD.
Average Forward Currency Notional Amount Outstanding Period Ended April 30, 2017 | ||||||||
Fund | Purchased Contracts | Sold Contracts | ||||||
International Equity | $ | 190,356,233 | $ | 94,735,989 |
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.
28
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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 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.
During the period ended April 30, 2017, the Fund entered into future contracts primarily for exposing cash to markets.
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 | Period Ended April 30, 2017 | |||
International Equity | 1,244 |
The following is a summary of the Fund’s derivative financial instruments categorized by risk exposure(1):
Fair values of financial instruments on the Statement of Assets and Liabilities as of April 30, 2017: | ||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments |
| |||||||||||||||||||||||||||||||||||||||||||
Assets: | Credit contracts | Foreign exchange contracts | Commodity contracts |
| Interest rate contracts |
| Equity contracts |
| Total | |||||||||||||||||||||||||||||||||||
Unrealized appreciation of forward currency contracts | $ | – | $ | 3,876,464 | $ | – | $ | – | $ | – | $ | 3,876,464 | ||||||||||||||||||||||||||||||||
Receivable for variation margin from open futures contracts(2) | – | – | – | – | 1,221,525 | 1,221,525 | ||||||||||||||||||||||||||||||||||||||
Liabilities: | Credit contracts | Foreign exchange contracts | Commodity contracts |
| Interest rate contracts |
| Equity contracts |
| Total | |||||||||||||||||||||||||||||||||||
Unrealized depreciation of forward currency contracts | $ | – | $ | (2,504,716 | ) | $ | – | $ | – | $ | – | $ | (2,504,716 | ) | ||||||||||||||||||||||||||||||
Payable for variation margin from open futures contracts(2) | – | – | – | – | (189,533 | ) | (189,533 | ) |
29
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
The effect of financial derivative instruments on the Statement of Operations for the period ended April 30, 2017: | ||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments |
| |||||||||||||||||||||||||||||||||||||||||||
Realized gain (loss) of derivatives | Credit contracts | Foreign exchange contracts | Commodity contracts |
| Interest rate contracts |
| Equity contracts |
| Total | |||||||||||||||||||||||||||||||||||
Net realized gain (loss) from foreign currency transactions | $ | – | $ | (7,977,009 | ) | $ | – | $ | – | $ | - | $ | (7,977,009 | ) | ||||||||||||||||||||||||||||||
Net realized gain (loss) from futures contracts | – | – | – | – | 10,027,791 | 10,027,791 | ||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts |
| Interest rate contracts |
| Equity contracts |
| Total | |||||||||||||||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) from foreign currency transactions | $ | – | $ | 5,378,520 | $ | – | $ | – | $ | – | $ | 5,378,520 | ||||||||||||||||||||||||||||||||
Change in unrealized appreciation (depreciation) from futures contracts | – | – | – | – | (1,191,269 | ) | (1,191,269 | ) |
(1) See Note 3 in the Notes to Financial Statements for additional information.
(2) Includes cumulative appreciation (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.
Master Agreements
International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) with counterparties govern transactions in over-the-counter (“OTC”) 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 a 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.
6. Principal Risks
Investing in the Fund may involve certain risks including, but not limited to, those described below.
Allocation Risk
The sub-advisor’s judgments about, and allocations among, asset classes and market exposures may adversely affect the Fund’s performance. This risk may be increased by the use of derivatives to increase allocations to various market exposures.
Counterparty Risk
The Fund is subject to the risk that a party or participant to a transaction, such as a broker or derivative counterparty, will be unwilling or unable to satisfy its obligation to make timely principal, interest or settlement payments or to otherwise honor its obligations to the Fund.
30
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Currency Risk
The Fund may have exposure to foreign currencies by making direct investments in non-U.S. currencies or in securities denominated in non-U.S. currencies, purchasing or selling forward currency exchange contracts in non-U.S. currencies, and non-U.S. currency futures contracts. Foreign currencies will fluctuate, and may decline in value relative to the U.S. dollar and other currencies and thereby affect the Fund’s investments in foreign (non-U.S.) currencies or in securities that trade in, receive revenues in, or in derivatives that provide exposure to, foreign (non-US) currencies.
Cybersecurity and Operational Risk
The Fund and its service providers, and shareholders’ ability to transact with the Fund, may be negatively impacted due to operational risks arising from, among other problems, human errors, systems and technology disruptions or failures, or cybersecurity incidents. It is not possible for the Fund service providers to identify all of the operational risks that may affect the Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Cybersecurity incidents could also affect issuers of securities in which the Fund invests, leading to significant loss of value.
Equity Investments Risk
Equity securities are subject to investment and market risk. The Fund’s investments in equity securities may include common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Fund to additional risks.
Common Stock - The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company.
Depositary Receipts - Depositary receipts and U.S. dollar-denominated foreign stocks traded on U.S. exchanges are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency exchange rate fluctuations, political and financial instability in the home country of a particular depositary receipt or foreign stock, less liquidity and more volatility, less government regulation and supervision and delays in transaction settlement.
REITs - Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values. REITs also are dependent upon the skills of their managers and are subject to heavy cash flow dependency or self-liquidation. Domestic REITs could be adversely affected by failure to qualify for tax-free “pass-through” of net income and gains under the Internal Revenue Code of 1986, as amended, or to maintain their exemption from registration under the Investment Company Act of 1940, as amended. REITs typically incur fees that are separate from those incurred by the Fund. Accordingly, the Fund’s investment in REITs will result in the layering of expenses such that shareholders will indirectly bear a proportionate share of the REITs’ operating expenses, in addition to paying Fund expenses. The value of REIT common stock may decline when interest rates rise.
Foreign Investing Risk
Non-U.S. investments carry potential risks not associated with U.S. investments. Such risks include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity and greater volatility, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, and (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets.
31
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Futures Contracts Risk
Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. Futures contracts may experience potentially dramatic price changes (losses) and imperfect correlation between the price of the contract and the underlying security or index, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).
Investment Risk
An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.
Issuer Risk
The value of, and/or the return generated by, a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets.
Market Risks
Since the financial crisis that started in 2008, the U.S. and many foreign economies continue to experience its after-effects, which have resulted, and may continue to result, in fixed income instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations.
In addition, political events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. Because the impact on the markets has been widespread, it may be difficult to identify both risks and opportunities using past models of the interplay of market forces, or to predict the duration of these market conditions. Interest rates have been unusually low in recent years in the U.S. and abroad. Because there is little precedent for this situation, it is difficult to predict the impact on various markets of a significant rate increase, whether brought about by U.S. policy makers or by dislocations in world markets. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely.
Market Timing Risk
Because the Fund invests in foreign securities, it is particularly subject to the risk of market timing activities. Frequent trading by Fund shareholders poses risks to other shareholders in the Fund, including (i) the dilution of the Fund’s net asset value (“NAV”), (ii) an increase in the Fund’s expenses, and (iii) interference with
32
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
the portfolio manager’s ability to execute efficient investment strategies. Because of specific securities in which the Fund may invest, it could be subject to the risk of market timing activities by shareholders.
Other Investment Companies Risk
The Fund may invest in shares of other registered investment companies, including money market funds. To the extent that the Fund invests in shares of other registered investment companies, the Fund will indirectly bear the fees and expenses charged by those investment companies in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those funds. For example, money market funds are subject to interest rate risk, credit risk, and market risk.
Securities Lending Risk
To the extent the Fund lends its securities, it may be subject to the following risks; i) borrowers of the Fund’s securities typically provide collateral in the form of cash that is reinvested in securities, ii) the securities in which the collateral is invested may not perform sufficiently to cover the return collateral payments owed to borrowers, iii) delays may occur in the recovery of securities from borrowers, which could interfere with the Fund’s ability to vote proxies or to settle transactions, and iv) there is the risk of possible loss of rights in the collateral should the borrower fail financially.
Segregated Assets Risk
In connection with certain transactions that may give rise to future payment obligations, including the purchase and sale of futures contracts, the Fund may be required to maintain a segregated amount of, or otherwise earmark, cash or liquid securities to cover the obligation. Segregated assets cannot be sold while the position they are covering is outstanding, unless they are replaced with other assets of equal value. The need to maintain cash or other liquid securities in segregated accounts could limit the Fund’s ability to pursue other opportunities as they arise.
Valuation Risk
The Fund may value certain assets at a price different from the price at which they can be sold. This risk may be especially pronounced for investments, such as certain derivatives, which may be illiquid or which may become illiquid.
Value Stocks Risk
Value stocks are subject to the risk that their intrinsic value may never be realized by the market or that their prices may decline. While the Fund’s investments in value stocks may limit its downside risk over time, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Different investment styles could cause the Fund to underperform funds that use a growth or non-value approach to investing or have a broader investment style.
Offsetting Assets and Liabilities
The Fund is a party to enforceable master netting agreements between brokers and counterparties which provides 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 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
33
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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, 2017.
Offsetting of Financial and Derivative Assets and Liabilities as of April 30, 2017: | ||||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts | $ | 1,221,525 | $ | 189,533 | ||||||||
Forward Currency Contracts | 3,876,464 | 2,504,716 | ||||||||||
|
|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 5,097,989 | $ | 2,694,249 | ||||||||
|
|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | (1,221,525 | ) | (189,533 | ) | ||||||||
|
|
|
| |||||||||
Total derivative assets and liabilities subject to an MNA | $ | 3,876,464 | $ | 2,504,716 | ||||||||
|
|
|
|
Remaining Contractual Maturity of the Agreements As of April 30, 2017 | ||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||
Securities Lending Transactions | ||||||||||||||||||||
Common Stocks | $ | 63,599,918 | $ | - | $ | - | $ | - | $ | 63,599,918 | ||||||||||
Rights | 642,213 | - | - | - | 642,213 | |||||||||||||||
|
|
|
| |||||||||||||||||
Total Borrowings | $ | 64,242,131 | $ | - | $ | - | $ | - | $ | 64,242,131 | ||||||||||
|
|
|
| |||||||||||||||||
Gross amount of recognized liabilities for securities lending transactions |
| $ | 64,242,131 | |||||||||||||||||
|
|
Financial and Derivative Assets and Liabilities and Collateral Received/(Pledged) by Counterparty as of April 30, 2017: | ||||||||||||||||||||||||||||||||||||
Gross Amounts Not Offset in the Statement of Assets and Liabilities | ||||||||||||||||||||||||||||||||||||
Counterparty | Gross Amounts of Assets Presented in the Statement of Assets and Liabilities | Derivatives Available for Offset | Non-Cash Collateral Pledged |
| Cash Collateral Pledged |
| Net Amount of Assets | |||||||||||||||||||||||||||||
Bank of America N.A. | $ | 148,808 | $ | (64,954 | ) | $ | - | $ | - | $ | 83,854 | |||||||||||||||||||||||||
Bank of Montreal | 53,549 | (53,549 | ) | - | - | - | ||||||||||||||||||||||||||||||
BNP Paribas | 429,181 | (15,233 | ) | - | - | 413,948 | ||||||||||||||||||||||||||||||
Citibank N.A. | 610,809 | (123,726 | ) | - | - | 487,083 | ||||||||||||||||||||||||||||||
Credit Suisse International | 14,729 | (14,729 | ) | - | - | - | ||||||||||||||||||||||||||||||
Goldman Sachs Capital Markets L.P. | 169,833 | (169,833 | ) | - | - | - | ||||||||||||||||||||||||||||||
HSBC Bank (USA) | 16,520 | (16,520 | ) | - | - | - | ||||||||||||||||||||||||||||||
JPMorgan Chase Bank N.A. | 100,580 | (100,580 | ) | - | - | - | ||||||||||||||||||||||||||||||
Morgan Stanley Bank, N.A. | 719,971 | (152,695 | ) | - | - | 567,276 | ||||||||||||||||||||||||||||||
Royal Bank of Canada | 598,586 | (87,492 | ) | - | - | 511,094 | ||||||||||||||||||||||||||||||
Societe Generale | 615,386 | (4,161 | ) | - | - | 611,225 | ||||||||||||||||||||||||||||||
Standard and Chartered Bank | 116,653 | (41,608 | ) | - | - | 75,045 | ||||||||||||||||||||||||||||||
UBS AG | 41,488 | (26,024 | ) | - | - | 15,464 | ||||||||||||||||||||||||||||||
Westpac | 240,371 | (44,531 | ) | - | - | 195,840 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total | $ | 3,876,464 | $ | (915,635 | ) | $ | - | $ | - | $ | 2,960,829 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
34
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Gross Amounts Not Offset in the Statement of Assets and Liabilities | ||||||||||||||||||||||||||||||||||||
Counterparty | Gross Amounts of Liabilities Presented in the Statement of Assets and Liabilities | Derivatives Available for Offset | Non-Cash Collateral Received |
| Cash Collateral Received |
| Net Amount of Assets | |||||||||||||||||||||||||||||
Bank of America N.A. | $ | 64,954 | $ | (64,954 | ) | $ | - | $ | - | $ | - | |||||||||||||||||||||||||
Bank of Montreal | 983,477 | (53,549 | ) | - | - | 929,928 | ||||||||||||||||||||||||||||||
Barclays Bank PLC | 155,981 | - | - | - | 155,981 | |||||||||||||||||||||||||||||||
BNP Paribas | 15,233 | (15,233 | ) | - | - | - | ||||||||||||||||||||||||||||||
Citibank N.A. | 123,726 | (123,726 | ) | - | - | - | ||||||||||||||||||||||||||||||
Credit Suisse International | 70,406 | (14,729 | ) | - | - | 55,677 | ||||||||||||||||||||||||||||||
Goldman Sachs Capital Markets L.P. | 432,069 | (169,833 | ) | - | - | 262,236 | ||||||||||||||||||||||||||||||
HSBC Bank (USA) | 40,339 | (16,520 | ) | - | - | 23,819 | ||||||||||||||||||||||||||||||
JPMorgan Chase Bank N.A. | 211,810 | (100,580 | ) | - | - | 111,230 | ||||||||||||||||||||||||||||||
Morgan Stanley Bank, N.A. | 152,695 | (152,695 | ) | - | - | - | ||||||||||||||||||||||||||||||
Royal Bank of Canada | 87,492 | (87,492 | ) | - | - | - | ||||||||||||||||||||||||||||||
Societe Generale | 4,161 | (4,161 | ) | - | - | - | ||||||||||||||||||||||||||||||
Standard and Chartered Bank | 41,608 | (41,608 | ) | - | - | - | ||||||||||||||||||||||||||||||
Toronto Dominion Bank | 50,210 | - | - | - | 50,210 | |||||||||||||||||||||||||||||||
UBS AG | 26,024 | (26,024 | ) | - | - | - | ||||||||||||||||||||||||||||||
Westpac | 44,531 | (44,531 | ) | - | - | - | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total | $ | 2,504,716 | $ | (915,635 | ) | $ | - | $ | - | $ | 1,589,081 | |||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
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 unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2016 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 (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.
35
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
The tax character of distributions paid were as follows:
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||
(unaudited) | ||||||||||||
Distributions paid from: | ||||||||||||
Ordinary income* | ||||||||||||
Institutional Class | $ | 34,791,829 | $ | 16,689,014 | ||||||||
Y Class | 18,973,818 | 8,453,455 | ||||||||||
Investors Class | 7,051,311 | 3,882,009 | ||||||||||
Advisor Class | 456,420 | 277,504 | ||||||||||
A Class | 472,655 | 124,807 | ||||||||||
C Class | 111,074 | 21,093 | ||||||||||
Long-term capital gains | ||||||||||||
Institutional Class | – | 9,474,311 | ||||||||||
Y Class | – | 4,760,923 | ||||||||||
Investors Class | – | 2,927,922 | ||||||||||
Advisor Class | – | 209,225 | ||||||||||
A Class | – | 90,981 | ||||||||||
C Class | – | 32,820 | ||||||||||
|
|
|
| |||||||||
Total distributions paid | $ | 61,857,107 | $ | 46,944,064 | ||||||||
|
|
|
|
*For tax purposes, short-term capital gains are considered ordinary income distributions.
As of April 30, 2017 the components of distributable earnings (deficits) on a tax basis were as follows:
Fund | Tax cost | Unrealized appreciation | Unrealized depreciation | Net unrealized appreciation (depreciation) | ||||||||||||||||||||||||
International Equity | $ | 2,503,999,351 | $ | 339,490,751 | $ | (107,500,585 | ) | $ | 231,990,166 |
Fund | Net unrealized appreciation (depreciation) | Undistributed ordinary income | Undistributed long-term capital gains | Accumulated capital and other losses | Other temporary differences | Distributable earnings | ||||||||||||||||||||||||||||||||||||||
International Equity | $ | 231,990,166 | $ | 11,646,450 | $ | – | $ | (2,605,854 | ) | $ | 1,767,881 | $ | 242,798,643 |
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 (depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains (losses) on certain derivative instruments, the realization for tax purposes of unrealized gain (losses) 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 (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 re-classes, gains (losses) from sales of investments in passive foreign investment companies and Section 732 basis adjustments as of April 30, 2017:
Fund | Paid-in-capital | Undistributed (overdistribution of) net investment income | Accumulated net realized gain (loss) | Net unrealized appreciation (depreciation) | ||||||||||||||||||||||||
International Equity | $ | (2 | ) | $ | (7,196,621 | ) | $ | 7,196,623 | $ | – |
36
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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, 2017 the Fund had $1,992,610 short-term post RIC MOD capital loss carryforwards.
As of April 30, 2017, the Fund utilized $19,955,541 of short-term and $44,112,279 of long-term post RIC MOD capital loss carryforwards.
8. Investment Transactions
The aggregate cost of purchases and proceeds from sales of investments, other than short-term obligations, for the period ended April 30, 2017 were $362,413,339 and $571,008,913, respectively.
A summary of the Fund’s transactions in the USG Select Fund for the period ended April 30, 2017 are as follows:
Type of Transaction | October 31, 2016 Shares/Fair Value | Purchases | Sales | April 30, 2017 Shares/Fair Value | Dividend Income | |||||||||||||||||||||||||||||||
Direct | $ | 87,141,057 | $ | 704,903,176 | $ | 716,646,457 | $ | 75,397,776 | $ | 665,788 | ||||||||||||||||||||||||||
Securities Lending | 1,283,709 | 431,948,751 | (365,622,110 | ) | 67,610,350 | 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.
37
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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, 2017, the value of outstanding securities on loan and the value of collateral was as follows:
Market Value of Securities on Loan | Cash Collateral Received | Non-Cash Collateral Received | Total Collateral Received | |||||||||||
$ | 64,242,131 | $ | 67,610,350 | $ | – | $ | 67,610,350 |
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” on 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:
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 13,117,205 | $ | 234,424,977 | 39,315,483 | $ | 674,540,803 | ||||||||||||||||||||||
Reinvestment of dividends | 1,852,549 | 31,919,427 | 1,293,027 | 22,763,428 | ||||||||||||||||||||||||
Shares redeemed | (22,300,125 | ) | (400,493,402 | ) | (17,470,092 | ) | (305,075,450 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net (decrease) in shares outstanding | (7,330,371 | ) | $ | (134,148,998 | ) | 23,138,418 | $ | 392,228,781 | ||||||||||||||||||||
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| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 4,189,652 | $ | 77,326,526 | 27,158,767 | $ | 459,233,941 | ||||||||||||||||||||||
Reinvestment of dividends | 972,177 | 17,372,801 | 685,248 | 12,498,922 | ||||||||||||||||||||||||
Shares redeemed | (5,409,353 | ) | (100,092,146 | ) | (12,558,440 | ) | (226,108,345 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (247,524 | ) | $ | (5,392,819 | ) | 15,285,575 | $ | 245,624,518 | ||||||||||||||||||||
|
|
|
| �� |
|
|
|
| ||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,662,258 | $ | 29,357,354 | 5,700,250 | $ | 96,710,198 | ||||||||||||||||||||||
Reinvestment of dividends | 410,726 | 7,027,516 | 388,556 | 6,791,967 | ||||||||||||||||||||||||
Shares redeemed | (4,084,250 | ) | (72,056,196 | ) | (5,089,939 | ) | (87,258,245 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (2,011,266 | ) | $ | (35,671,326 | ) | 998,867 | $ | 16,243,920 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
38
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 173,688 | $ | 3,167,077 | 775,088 | $ | 13,279,031 | ||||||||||||||||||||||
Reinvestment of dividends | 26,039 | 456,207 | 27,102 | 486,499 | ||||||||||||||||||||||||
Shares redeemed | (210,320 | ) | (3,764,680 | ) | (787,201 | ) | (13,645,734 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (10,593 | ) | $ | (141,396 | ) | 14,989 | $ | 119,796 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 437,431 | $ | 7,611,077 | 798,761 | $ | 13,513,325 | ||||||||||||||||||||||
Reinvestment of dividends | 25,526 | 435,992 | 11,164 | 195,041 | ||||||||||||||||||||||||
Shares redeemed | (383,187 | ) | (6,761,604 | ) | (303,956 | ) | (5,233,453 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | 79,770 | $ | 1,285,465 | 505,969 | $ | 8,474,913 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 228,979 | $ | 3,897,261 | 34,805 | $ | 580,660 | ||||||||||||||||||||||
Reinvestment of dividends | 6,515 | 108,211 | 2,988 | 51,031 | ||||||||||||||||||||||||
Shares redeemed | (57,726 | ) | (981,092 | ) | (77,300 | ) | (1,271,059 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | 177,768 | $ | 3,024,380 | (39,507 | ) | $ | (639,368 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
R6 Class | ||||||||||||||||||||||||||||
February 28, 2017 to April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 5,618 | $ | 100,000 | – | $ | – | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | 5,618 | $ | 100,000 | – | $ | – | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
11. Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.
39
American Beacon International Equity FundSM
(For a share outstanding throughout the period)
Institutional ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012B | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.41 | $ | 18.79 | $ | 19.51 | $ | 20.07 | $ | 16.05 | $ | 15.27 | ||||||||||||||||||||||||||||||||
|
|
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|
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|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.20 | 0.29 | 0.35 | 0.54 | 0.36 | 0.41 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 1.76 | (1.24 | ) | (0.55 | ) | (0.77 | ) | 4.07 | 0.92 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.96 | (0.95 | ) | (0.20 | ) | (0.23 | ) | 4.43 | 1.33 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
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|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.43 | ) | (0.27 | ) | (0.52 | ) | (0.33 | ) | (0.41 | ) | (0.55 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.16 | ) | - | - | - | - | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.43 | ) | (0.43 | ) | (0.52 | ) | (0.33 | ) | (0.41 | ) | (0.55 | ) | ||||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
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|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | C | - | C | - | C | - | C | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 18.94 | $ | 17.41 | $ | 18.79 | $ | 19.51 | $ | 20.07 | $ | 16.05 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnD | 11.52 | %E | (5.07 | )% | (0.99 | )% | (1.18 | )% | 28.14 | % | 9.25 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 1,438,408,603 | $ | 1,450,052,040 | $ | 1,037,148,821 | $ | 956,960,452 | $ | 870,729,423 | $ | 608,256,240 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.69 | %F | 0.69 | % | 0.70 | % | 0.72 | % | 0.72 | % | 0.72 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.69 | %F | 0.69 | % | 0.69 | % | 0.70 | % | 0.71 | % | 0.72 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 2.00 | %F | 2.22 | % | 1.93 | % | 2.74 | % | 2.16 | % | 2.85 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 2.00 | %F | 2.22 | % | 1.94 | % | 2.76 | % | 2.17 | % | 2.85 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %E | 25 | % | 33 | % | 23 | % | 27 | % | 60 | % |
A | On May 31, 2016, the AMR Class closed and the assets were merged into the Institutional Class. |
B | The Boston Company Asset Management, LLC was terminated as an investment advisor to the International Equity Fund on December 31, 2011. |
C | Amount represents less than $0.01 per share. |
D | 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. |
E | Not annualized. |
F | Annualized. |
40
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012A | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.03 | $ | 19.46 | $ | 20.21 | $ | 20.81 | $ | 16.65 | $ | 15.82 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.19 | 0.41 | 0.35 | 0.50 | 0.62 | 0.41 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 1.84 | (1.40 | ) | (0.57 | ) | (0.77 | ) | 3.97 | 0.95 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 2.03 | (0.99 | ) | (0.22 | ) | (0.27 | ) | 4.59 | 1.36 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.42 | ) | (0.28 | ) | (0.53 | ) | (0.33 | ) | (0.43 | ) | (0.53 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.16 | ) | - | - | - | - | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.42 | ) | (0.44 | ) | (0.53 | ) | (0.33 | ) | (0.43 | ) | (0.53 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | B | - | B | - | B | - | B | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 19.64 | $ | 18.03 | $ | 19.46 | $ | 20.21 | $ | 20.81 | $ | 16.65 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 11.49 | %D | (5.14 | )% | (1.06 | )% | (1.31 | )% | 28.04 | % | 9.15 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 888,820,069 | $ | 820,596,038 | �� | $ | 587,949,806 | $ | 530,836,707 | $ | 441,945,876 | $ | 1,511,614 | |||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.76 | %E | 0.77 | % | 0.77 | % | 0.82 | % | 0.85 | % | 0.80 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.76 | %E | 0.77 | % | 0.77 | % | 0.82 | % | 0.85 | % | 0.80 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.97 | %E | 2.43 | % | 1.87 | % | 2.62 | % | 2.55 | % | 2.74 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.97 | %E | 2.43 | % | 1.87 | % | 2.62 | % | 2.55 | % | 2.74 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %D | 25 | % | 33 | % | 23 | % | 27 | % | 60 | % |
A | The Boston Company Asset Management, LLC was terminated as an investment advisor to the International Equity Fund on December 31, 2011. |
B | Amount represents less than $0.01 per share. |
C | 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. |
D | Not annualized. |
E | Annualized. |
41
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012A | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.24 | $ | 18.60 | $ | 19.32 | $ | 19.86 | $ | 15.88 | $ | 15.11 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.15 | 0.34 | 0.31 | 0.46 | 0.25 | 0.38 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 1.76 | (1.33 | ) | (0.57 | ) | (0.76 | ) | 4.09 | 0.87 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.91 | (0.99 | ) | (0.26 | ) | (0.30 | ) | 4.34 | 1.25 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.37 | ) | (0.21 | ) | (0.46 | ) | (0.24 | ) | (0.36 | ) | (0.48 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.16 | ) | - | - | - | - | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.37 | ) | (0.37 | ) | (0.46 | ) | (0.24 | ) | (0.36 | ) | (0.48 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | B | - | B | - | B | - | B | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 18.78 | $ | 17.24 | $ | 18.60 | $ | 19.32 | $ | 19.86 | $ | 15.88 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 11.30 | %D | (5.38 | )% | (1.35 | )% | (1.54 | )% | 27.81 | % | 8.77 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
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|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 327,080,913 | $ | 334,895,337 | $ | 342,720,411 | $ | 348,541,811 | $ | 337,424,064 | $ | 453,141,427 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.04 | %E | 1.06 | % | 1.03 | % | 1.05 | % | 1.04 | % | 1.09 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.04 | %E | 1.06 | % | 1.03 | % | 1.05 | % | 1.04 | % | 1.09 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.65 | %E | 1.95 | % | 1.60 | % | 2.36 | % | 1.67 | % | 2.50 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.65 | %E | 1.95 | % | 1.60 | % | 2.36 | % | 1.67 | % | 2.50 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %D | 25 | % | 33 | % | 23 | % | 27 | % | 60 | % |
A | The Boston Company Asset Management, LLC was terminated as an investment advisor to the International Equity Fund on December 31, 2011. |
B | Amount represents less than $0.01 per share. |
C | 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. |
D | Not annualized. |
E | Annualized. |
42
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor ClassB | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012A | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.62 | $ | 19.01 | $ | 19.76 | $ | 20.36 | $ | 16.36 | $ | 15.52 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | 0.23 | 0.35 | 0.38 | 0.44 | (0.41 | ) | 0.09 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 1.71 | (1.37 | ) | (0.68 | ) | (0.77 | ) | 4.83 | 1.18 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.94 | (1.02 | ) | (0.30 | ) | (0.33 | ) | 4.42 | 1.27 | |||||||||||||||||||||||||||||||||||
|
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|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.34 | ) | (0.21 | ) | (0.45 | ) | (0.27 | ) | (0.42 | ) | (0.43 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | – | (0.16 | ) | – | – | – | – | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.34 | ) | (0.37 | ) | (0.45 | ) | (0.27 | ) | (0.42 | ) | (0.43 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | – | – | – | C | – | C | – | C | – | C | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 19.22 | $ | 17.62 | $ | 19.01 | $ | 19.76 | $ | 20.36 | $ | 16.36 | ||||||||||||||||||||||||||||||||
|
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|
|
|
|
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|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnD | 11.21 | %E | (5.40 | )% | (1.51 | )% | (1.64 | )% | 27.51 | % | 8.59 | % | ||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 25,645,940 | $ | 23,692,313 | $ | 22,912,069 | $ | 7,677,201 | $ | 5,231,812 | $ | 1,396,948 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.18 | %F | 1.19 | % | 1.16 | % | 1.19 | % | 1.20 | % | 1.31 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.18 | %F | 1.19 | % | 1.16 | % | 1.19 | % | 1.20 | % | 1.31 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.55 | %F | 1.87 | % | 1.55 | % | 2.21 | % | 1.39 | % | 2.18 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.55 | %F | 1.87 | % | 1.55 | % | 2.21 | % | 1.39 | % | 2.18 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %E | 25 | % | 33 | % | 23 | % | 27 | % | 60 | % |
A | The Boston Company Asset Management, LLC was terminated as an investment advisor to the International Equity Fund on December 31, 2011. |
B | On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class. |
C | Amount represents less than $0.01 per share. |
D | 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. |
E | Not annualized. |
F | Annualized. |
43
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012A | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.23 | $ | 18.59 | $ | 19.32 | $ | 19.92 | $ | 16.02 | $ | 15.33 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.11 | 0.32 | 0.31 | 0.46 | 0.43 | 0.48 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 1.79 | (1.30 | ) | (0.59 | ) | (0.78 | ) | 3.89 | 0.76 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.90 | (0.98 | ) | (0.28 | ) | (0.32 | ) | 4.32 | 1.24 | |||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.38 | ) | (0.22 | ) | (0.45 | ) | (0.28 | ) | (0.42 | ) | (0.55 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.16 | ) | - | - | - | - | |||||||||||||||||||||||||||||||||||||
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|
|
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| |||||||||||||||||||||||||||||||||
Total distributions | (0.38 | ) | (0.38 | ) | (0.45 | ) | (0.28 | ) | (0.42 | ) | (0.55 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | B | - | B | - | B | - | B | ||||||||||||||||||||||||||||||||||
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|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 18.75 | $ | 17.23 | $ | 18.59 | $ | 19.32 | $ | 19.92 | $ | 16.02 | ||||||||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||||||||
Total returnC | 11.27 | %D | (5.34 | )% | (1.42 | )% | (1.65 | )% | 27.51 | % | 8.62 | % | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 21,820,432 | $ | 18,673,142 | $ | 10,747,749 | $ | 8,540,234 | $ | 4,113,299 | $ | 1,255,390 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.07 | %E | 1.07 | % | 1.08 | % | 1.15 | % | 1.21 | % | 1.29 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.07 | %E | 1.07 | % | 1.08 | % | 1.15 | % | 1.25 | % | 1.26 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.64 | %E | 1.94 | % | 1.55 | % | 2.31 | % | 1.73 | % | 2.03 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.64 | %E | 1.94 | % | 1.55 | % | 2.31 | % | 1.69 | % | 2.07 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %D | 25 | % | 33 | % | 23 | % | 27 | % | 60 | % |
A | The Boston Company Asset Management, LLC was terminated as an investment advisor to the International Equity Fund on December 31, 2011. |
B | Amount represents less than $0.01 per share. |
C | 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. |
D | Not annualized. |
E | Annualized. |
44
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012A | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 16.73 | $ | 18.09 | $ | 18.83 | $ | 19.47 | $ | 15.70 | $ | 15.21 | ||||||||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.08 | 0.18 | 0.16 | 0.30 | 0.52 | 0.40 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 1.71 | (1.28 | ) | (0.56 | ) | (0.75 | ) | 3.59 | 0.71 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.79 | (1.10 | ) | (0.40 | ) | (0.45 | ) | 4.11 | 1.11 | |||||||||||||||||||||||||||||||||||
|
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|
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|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.33 | ) | (0.10 | ) | (0.34 | ) | (0.19 | ) | (0.34 | ) | (0.62 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.16 | ) | - | - | - | - | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.33 | ) | (0.26 | ) | (0.34 | ) | (0.19 | ) | (0.34 | ) | (0.62 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | B | - | B | - | B | - | B | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 18.19 | $ | 16.73 | $ | 18.09 | $ | 18.83 | $ | 19.47 | $ | 15.70 | ||||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 10.89 | %D | (6.12 | )% | (2.12 | )% | (2.36 | )% | 26.56 | % | 7.89 | % | ||||||||||||||||||||||||||||||||
|
|
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|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 6,435,324 | $ | 2,945,246 | $ | 3,899,081 | $ | 3,028,934 | $ | 1,219,537 | $ | 114,972 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.81 | %E | 1.85 | % | 1.82 | % | 1.90 | % | 1.95 | % | 2.12 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.81 | %E | 1.85 | % | 1.83 | % | 1.90 | % | 1.99 | % | 1.98 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.14 | %E | 1.12 | % | 0.77 | % | 1.53 | % | 1.13 | % | 1.56 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.14 | %E | 1.12 | % | 0.77 | % | 1.53 | % | 1.09 | % | 1.70 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %D | 25 | % | 33 | % | 23 | % | 27 | % | 60 | % |
A | The Boston Company Asset Management, LLC was terminated as an investment advisor to the International Equity Fund on December 31, 2011. |
B | Amount represents less than $0.01 per share. |
C | 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. |
D | Not annualized. |
E | Annualized. |
45
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
R6 Class | ||||
February 28, 2017A to April 30, 2017 | ||||
|
| |||
(unaudited) | ||||
Net asset value, beginning of period | $ | 17.80 | ||
|
| |||
Income from investment operations: | ||||
Net investment income | 0.13 | |||
Net gains on investments (both realized and unrealized) | 1.01 | |||
|
| |||
Total income (loss) from investment operations | 1.14 | |||
|
| |||
Less distributions: | ||||
Dividends from net investment income | – | |||
|
| |||
Net asset value, end of period | $ | 18.94 | ||
|
| |||
Total returnB | 11.52 | %C | ||
|
| |||
Ratios and supplemental data: | ||||
Net assets, end of period | $ | 106,410 | ||
Ratios to average net assets: | ||||
Expenses, before reimbursements | 2.83 | %D | ||
Expenses, net of reimbursements | 0.67 | %D | ||
Net investment income, before expense reimbursements | 6.30 | %D | ||
Net investment income, net of reimbursements | 4.19 | %D | ||
Portfolio turnover rate | 14 | %C |
A | Commencement of operations. |
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. |
46
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48
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: 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 | 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. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the American Beacon International Equity Fund’s portfolio holdings is also available 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 State Street Bank and Trust Boston, Massachusetts | TRANSFER AGENT Boston Financial Data Services Kansas City, Missouri | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLC Dallas, TX | 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 4/17
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.
SMALL CAP VALUE FUND
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 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, 2017 |
1 | ||||
2 | ||||
4 | ||||
Schedule of Investments: | ||||
6 | ||||
22 | ||||
26 | ||||
Financial Highlights: | ||||
43 |
Additional Fund Information | Back Cover |
![]() | Dear Shareholders,
In the weeks ahead of the U.S. presidential election on November 8, 2016, uncertainty about the outcome caused many investors to stay on the sidelines. Some investors questioned whether the election’s result would have negative consequences for their portfolios, although elections have rarely had a lasting effect on the market.
Following the election, the markets responded positively to aspects of the incoming administration’s proposed plans for economic growth; i.e., repatriating jobs from overseas, relaxing regulations, lowering taxes and increasing infrastructure spending. From Election Day 2016 to Inauguration Day 2017, the S&P 500 Index – a broad measure of the performance of large U.S. companies – climbed approximately 6%. During the administration’s first 100 days (Inauguration Day to April 30), the same market bellwether gained approximately 5%. |
Then on March 15, 2017, as economists had anticipated, the Federal Reserve increased the federal funds rate by 0.25% to a range of 0.75% to 1.00%. It was the third increase since 2008. The Federal Open Market Committee’s confidence in the improving U.S. economy was previously exhibited in December 2016 and December 2015. Economists anticipate two additional increases in 2017.
For the six months ended April 30, 2017:
• | American Beacon Small Cap Value Fund (Investor Class) returned 18.01%. |
For the same time period, the Russell 2000 Value Index – which measures the performance of small-cap domestic stocks – returned 18.26%.
At American Beacon Advisors, we are proud to offer a broad range of domestic and global equity and fixed-income funds sub-advised by experienced asset managers who employ distinctive investment processes to manage assets through a variety of economic and market conditions. Together, we work diligently to help our shareholders meet their long-term financial goals.
Thank you for your continued interest in 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 FundSM
April 30, 2017 (Unaudited)
The Investor Class of the American Beacon Small Cap Value Fund (the “Fund”) returned 18.01% for the six months ended April 30, 2017, underperforming the Russell 2000® Value Index (the “Index”) return of 18.26% for the same period.
Total Returns for the Period Ended 4/30/2017 | |||||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||||||||||||||||||||||
Institutional Class (1,8) | AVFIX | 18.25 | % | 24.11 | % | 8.66 | % | 13.61 | % | 7.41 | % | ||||||||||||||||||||||
Y Class (1,2,8) | ABSYX | 18.15 | % | 23.98 | % | 8.57 | % | 13.51 | % | 7.31 | % | ||||||||||||||||||||||
Investor Class (1,8) | AVPAX | 18.01 | % | 23.69 | % | 8.30 | % | 13.21 | % | 7.05 | % | ||||||||||||||||||||||
Advisor Class (1,3,8) | AASSX | 17.98 | % | 23.51 | % | 8.13 | % | 13.05 | % | 6.88 | % | ||||||||||||||||||||||
A Class with sales charge (1,4,8) | ABSAX | 11.23 | % | 16.49 | % | 6.11 | % | 11.77 | % | 6.33 | % | ||||||||||||||||||||||
A Class without sales charge (1,4,8) | ABSAX | 18.01 | % | 23.62 | % | 8.23 | % | 13.11 | % | 6.96 | % | ||||||||||||||||||||||
C Class with sales charge (1,5,8) | ASVCX | 16.59 | % | 21.68 | % | 7.42 | % | 12.25 | % | 6.41 | % | ||||||||||||||||||||||
C Class without sales charge (1,5,8) | ASVCX | 17.59 | % | 22.68 | % | 7.42 | % | 12.25 | % | 6.41 | % | ||||||||||||||||||||||
R6 Class (1,6,8) | AASRX | 18.25 | % | 24.11 | % | 8.66 | % | 13.61 | % | 7.41 | % | ||||||||||||||||||||||
Russell 2000® Value Index (7) | 18.26 | % | 27.18 | % | 8.71 | % | 12.96 | % | 6.02 | % |
* | 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 4/30/07 up to 8/3/09, the inception date of the Y Class. 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 4/30/07. |
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 total returns achieved by the Investor Class from 4/30/07 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 4/30/07. A portion of the fees charged to the A Class of the Fund was waived in 2010, 2012, 2013, and 2014 and partially recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown in 2010, 2012, 2013, and 2014. The maximum sales charge for A Class is 5.75%. |
5. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/07 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 4/30/07. A portion of the fees charged to the C Class of the Fund was waived in 2010, 2012 and 2013 and partially recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown in 2010, 2012 and 2013. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase. |
6. | Fund performance for the 6 month, one-year, three-year, five-year and ten-year periods represent the returns achieved by the Institutional Class from 4/30/07 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the Institutional Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/30/07. A portion of the fees charged to the R6 Class of the Fund was waived since 2/28/17. Performance prior to waiving fees was lower than the actual returns shown. |
7. | 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. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data, and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. One cannot directly invest in an index. |
8. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C, and R6 Class shares was 0.84%, 0.91%, 1.15%, 1.32%, 1.22%, 1.97%, and 0.82%, 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 FundSM
Performance Overview
April 30, 2017 (Unaudited)
Prior to the deduction of expenses, the Fund outperformed the Index entirely due to sector allocation. Stock selection detracted value relative to the Index.
From a sector allocation perspective, the Fund’s underweight position in Real Estate, one of the poorer performing sectors, contributed to performance. Performance was also benefited by significant overweight positions in Industrials and Information Technology, two of the better performing sectors.
From a stock selection stand point, the Fund’s investments in the Information Technology, Energy and Consumer Staples sectors detracted relative value. The Fund’s absence from Advanced Micro Devices and MKS Instruments, which were up 84.0% and 56.0%, respectively, in the Index, negatively impacted performance in the Information Technology sector. The Fund’s allocation in ARRIS International (down 6.1%) also hurt performance. Investments in the Energy sector detracting from performance included Callon Petroleum (down 8.7%) and Range Resources (down 21.5%). Herbalife (down 19.3%) and Boston Beer Company (down 8.3%) were the largest detractors in the Consumer Staples sector. The aforementioned performance was somewhat offset by good stock selection in the Real Estate sector. The GEO Group (up 113.0%) was the largest contributor in the Real Estate sector. Not owning Kite Realty Group Trust or Acadia Realty Trust, which were down 16.1% and 11.8%, respectively, in the Index, also added relative value.
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) | ||||||||
Vishay Intertechnology, Inc. | 0.8 | |||||||
Brooks Automation, Inc. | 0.8 | |||||||
Associated Banc-Corp | 0.8 | |||||||
RH | 0.7 | |||||||
ARRIS International PLC | 0.7 | |||||||
Barnes Group, Inc. | 0.7 | |||||||
Hancock Holding Co. | 0.7 | |||||||
Portland General Electric Co. | 0.7 | |||||||
Office Depot, Inc. | 0.6 | |||||||
Prosperity Bancshares, Inc. | 0.6 | |||||||
Total Fund Holdings | 622 | |||||||
Sector Allocation (% Equities) | ||||||||
Financials | 25.2 | |||||||
Industrials | 20.9 | |||||||
Consumer Discretionary | 14.5 | |||||||
Information Technology | 14.4 | |||||||
Materials | 6.0 | |||||||
Energy | 5.4 | |||||||
Health Care | 4.5 | |||||||
Real Estate | 4.4 | |||||||
Utilities | 2.5 | |||||||
Consumer Staples | 2.1 | |||||||
Telecommunication Services | 0.1 |
3
American Beacon Small Cap Value FundSM
April 30, 2017 (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, distribution (12b-1) fees, and other Fund expenses. The Examples 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, 2016 through April 30, 2017.
Actual Expenses
The “Actual” lines of the table 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 = $8.60), then multiply the result by the “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) 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 “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 FundSM
Expense Examples
April 30, 2017 (Unaudited)
Beginning Account Value 11/1/2016 | Ending Account Value 4/30/2017 | Expenses Paid During Period 11/1/2016-4/30/2017* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,182.00 | $4.38 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.80 | $4.06 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,181.50 | $4.81 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.40 | $4.46 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,180.10 | $6.05 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.20 | $5.61 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,179.80 | $7.03 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.30 | $6.51 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,180.10 | $6.49 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.80 | $6.01 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,175.30 | $10.46 | ||||||||||||
Hypothetical** | $1,000.00 | $1,015.20 | $9.69 | ||||||||||||
R6 Class | |||||||||||||||
Actual | $1,000.00 | $1,182.50 | $1.61 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.50 | $4.36 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.81%, 0.89%, 1.12%, 1.30%, 1.20%, 1.94% and 3.05% for the Institutional, Y, Investor, Advisor, A, C, and R6 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 (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
5
American Beacon Small Cap Value FundSM
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 96.85% | |||||||||||||||
Consumer Discretionary - 14.07% | |||||||||||||||
Auto Components - 2.02% | |||||||||||||||
American Axle & Manufacturing Holdings, Inc.A | 2,303,749 | $ | 40,522,945 | ||||||||||||
Cooper Tire & Rubber Co. | 293,127 | 11,226,764 | |||||||||||||
Cooper-Standard Holdings, Inc.A | 58,631 | 6,629,407 | |||||||||||||
Dana, Inc. | 686,128 | 13,324,606 | |||||||||||||
Gentex Corp. | 934,100 | 19,289,165 | |||||||||||||
Gentherm, Inc.A | 390,525 | 14,508,004 | |||||||||||||
Standard Motor Products, Inc. | 81,931 | 4,164,552 | |||||||||||||
Superior Industries International, Inc. | 176,316 | 3,834,873 | |||||||||||||
Tenneco, Inc. | 442,962 | 27,919,895 | |||||||||||||
|
| ||||||||||||||
141,420,211 | |||||||||||||||
|
| ||||||||||||||
Automobiles - 0.30% | |||||||||||||||
Thor Industries, Inc. | 129,694 | 12,473,969 | |||||||||||||
Winnebago Industries, Inc. | 306,000 | 8,782,200 | |||||||||||||
|
| ||||||||||||||
21,256,169 | |||||||||||||||
|
| ||||||||||||||
Diversified Consumer Services - 0.73% | |||||||||||||||
American Public Education, Inc.A | 71,210 | 1,573,741 | |||||||||||||
Bridgepoint Education, Inc.A | 322,854 | 3,938,819 | |||||||||||||
Capella Education Co. | 43,203 | 4,117,246 | |||||||||||||
DeVry Education Group, Inc. | 424,381 | 16,062,821 | |||||||||||||
Graham Holdings Co., Class B | 8,700 | 5,234,790 | |||||||||||||
K12, Inc.A | 76,300 | 1,438,255 | |||||||||||||
Sotheby’sA | 101,674 | 4,815,281 | |||||||||||||
Strayer Education, Inc. | 97,186 | 8,426,998 | |||||||||||||
Weight Watchers International, Inc.A | 268,853 | 5,613,650 | |||||||||||||
|
| ||||||||||||||
51,221,601 | |||||||||||||||
|
| ||||||||||||||
Hotels, Restaurants & Leisure - 0.97% | |||||||||||||||
Belmond Ltd., Class AA | 1,043,048 | 12,933,795 | |||||||||||||
Bloomin’ Brands, Inc. | 455,644 | 9,882,919 | |||||||||||||
Brinker International, Inc. | 169,200 | 7,476,948 | |||||||||||||
Cheesecake Factory, Inc. | 292,380 | 18,759,101 | |||||||||||||
ILG, Inc. | 442,800 | 10,675,908 | |||||||||||||
International Speedway Corp., Class A | 90,820 | 3,369,422 | |||||||||||||
Ruby Tuesday, Inc.A | 989,057 | 2,522,095 | |||||||||||||
Speedway Motorsports, Inc. | 140,936 | 2,543,895 | |||||||||||||
|
| ||||||||||||||
68,164,083 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 2.63% | |||||||||||||||
CalAtlantic Group, Inc. | 349,068 | 12,643,243 | |||||||||||||
Cavco Industries, Inc.A | 67,752 | 8,045,550 | |||||||||||||
Ethan Allen Interiors, Inc. | 398,393 | 11,872,111 | |||||||||||||
Helen of Troy Ltd.A | 119,654 | 11,247,476 | |||||||||||||
KB Home | 739,244 | 15,228,426 | |||||||||||||
La-Z-Boy, Inc. | 130,757 | 3,648,120 | |||||||||||||
LGI Homes, Inc.A C | 62,000 | 1,973,460 | |||||||||||||
Lifetime Brands, Inc. | 39,020 | 749,184 | |||||||||||||
M/I Homes, Inc.A | 422,696 | 11,480,423 | |||||||||||||
MDC Holdings, Inc. | 175,057 | 5,428,518 | |||||||||||||
Meritage Homes Corp.A | 135,297 | 5,269,818 | |||||||||||||
Taylor Morrison Home Corp., Class AA | 196,260 | 4,533,606 | |||||||||||||
Toll Brothers, Inc. | 543,880 | 19,574,241 | |||||||||||||
TRI Pointe Group, Inc.A | 2,351,301 | 29,273,698 | |||||||||||||
Tupperware Brands Corp. | 166,675 | 11,968,932 | |||||||||||||
Whirlpool Corp. | 111,457 | 20,695,336 | |||||||||||||
William Lyon Homes, Class AA C | 472,566 | 10,396,452 | |||||||||||||
|
| ||||||||||||||
184,028,594 | |||||||||||||||
|
|
See accompanying notes
6
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Consumer Discretionary - 14.07% (continued) | |||||||||||||||
Internet & Direct Marketing Retail - 0.14% | |||||||||||||||
Shutterfly, Inc.A | 191,362 | $ | 9,931,688 | ||||||||||||
|
| ||||||||||||||
Leisure Products - 0.25% | |||||||||||||||
Brunswick Corp. | 297,400 | 16,877,450 | |||||||||||||
Johnson Outdoors, Inc., Class A | 10,025 | 364,108 | |||||||||||||
|
| ||||||||||||||
17,241,558 | |||||||||||||||
|
| ||||||||||||||
Media - 1.60% | |||||||||||||||
AMC Networks, Inc., Class AA | 105,600 | 6,302,208 | |||||||||||||
Entercom Communications Corp., Class A | 193,907 | 2,452,924 | |||||||||||||
EW Scripps Co., Class AA | 851,386 | 18,968,880 | |||||||||||||
Gray Television, Inc.A | 214,600 | 3,143,890 | |||||||||||||
John Wiley & Sons, Inc., Class A | 84,985 | 4,478,710 | |||||||||||||
MDC Partners, Inc., Class A | 983,600 | 8,803,220 | |||||||||||||
Meredith Corp. | 314,387 | 18,407,359 | |||||||||||||
MSG Networks, Inc., Class AA | 203,850 | 5,086,057 | |||||||||||||
New York Times Co., Class A | 947,118 | 13,685,855 | |||||||||||||
Scholastic Corp. | 423,028 | 18,287,500 | |||||||||||||
Sinclair Broadcast Group, Inc., Class A | 248,700 | 9,811,215 | |||||||||||||
TEGNA, Inc. | 96,900 | 2,469,012 | |||||||||||||
|
| ||||||||||||||
111,896,830 | |||||||||||||||
|
| ||||||||||||||
Multiline Retail - 0.44% | |||||||||||||||
Big Lots, Inc. | 351,792 | 17,761,978 | |||||||||||||
Dillard’s, Inc., Class AC | 217,019 | 12,016,342 | |||||||||||||
Fred’s, Inc., Class AC | 94,957 | 1,397,767 | |||||||||||||
|
| ||||||||||||||
31,176,087 | |||||||||||||||
|
| ||||||||||||||
Specialty Retail - 4.14% | |||||||||||||||
Aaron’s, Inc. | 708,360 | 25,458,458 | |||||||||||||
Abercrombie & Fitch Co., Class A | 64,702 | 775,777 | |||||||||||||
America’s Car-Mart, Inc.A | 28,840 | 1,075,732 | |||||||||||||
Asbury Automotive Group, Inc.A | 68,500 | 4,192,200 | |||||||||||||
Ascena Retail Group, Inc.A C | 743,869 | 2,908,528 | |||||||||||||
Big 5 Sporting Goods Corp.C | 119,779 | 1,844,597 | |||||||||||||
Buckle, Inc.C | 191,094 | 3,573,458 | |||||||||||||
Caleres, Inc. | 355,711 | 10,251,591 | |||||||||||||
Cato Corp., Class A | 57,357 | 1,293,974 | |||||||||||||
Chico’s FAS, Inc. | 437,704 | 6,049,069 | |||||||||||||
Children’s Place, Inc. | 105,453 | 12,106,004 | |||||||||||||
DSW, Inc., Class A | 121,092 | 2,496,917 | |||||||||||||
Express, Inc.A | 682,515 | 5,890,104 | |||||||||||||
Finish Line, Inc., Class A | 288,483 | 4,560,916 | |||||||||||||
Genesco, Inc.A | 66,770 | 3,558,841 | |||||||||||||
Group 1 Automotive, Inc. | 252,746 | 17,426,837 | |||||||||||||
Guess?, Inc.C | 309,942 | 3,458,953 | |||||||||||||
Hibbett Sports, Inc.A C | 153,742 | 3,997,292 | |||||||||||||
Kirkland’s, Inc.A | 138,189 | 1,625,103 | |||||||||||||
Lithia Motors, Inc., Class A | 77,400 | 7,395,570 | |||||||||||||
Office Depot, Inc. | 9,037,535 | 44,916,549 | |||||||||||||
Penske Automotive Group, Inc. | 325,625 | 15,535,569 | |||||||||||||
Pier 1 Imports, Inc. | 461,913 | 3,113,294 | |||||||||||||
Restoration Hardware Holdings, Inc.A C | 1,035,839 | 49,689,197 | |||||||||||||
Select Comfort Corp.A | 122,361 | 3,780,955 | |||||||||||||
Shoe Carnival, Inc. | 40,946 | 1,038,800 | |||||||||||||
Sonic Automotive, Inc., Class A | 1,237,051 | 24,246,199 | |||||||||||||
Urban Outfitters, Inc.A | 517,775 | 11,846,692 | |||||||||||||
Vitamin Shoppe, Inc.A | 617,993 | 11,927,265 |
See accompanying notes
7
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Consumer Discretionary - 14.07% (continued) | |||||||||||||||
Specialty Retail - 4.14% (continued) | |||||||||||||||
West Marine, Inc.A | 89,934 | $ | 985,677 | ||||||||||||
Zumiez, Inc.A | 166,331 | 2,985,641 | |||||||||||||
|
| ||||||||||||||
290,005,759 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 0.85% | |||||||||||||||
Deckers Outdoor Corp.A | 454,238 | 27,068,042 | |||||||||||||
Fossil Group, Inc.A C | 83,876 | 1,446,861 | |||||||||||||
Kate Spade & Co.A | 773,716 | 13,462,658 | |||||||||||||
Movado Group, Inc. | 95,882 | 2,243,639 | |||||||||||||
Oxford Industries, Inc. | 146,126 | 8,472,386 | |||||||||||||
Vera Bradley, Inc.A | 713,789 | 6,531,169 | |||||||||||||
|
| ||||||||||||||
59,224,755 | |||||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 985,567,335 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 2.05% | |||||||||||||||
Beverages - 0.27% | |||||||||||||||
Boston Beer Co., Inc., Class AA | 129,471 | 18,689,139 | |||||||||||||
|
| ||||||||||||||
Food & Staples Retailing - 1.07% | |||||||||||||||
Andersons, Inc. | 242,511 | 9,057,786 | |||||||||||||
Chefs’ Warehouse, Inc.A | 74,408 | 1,015,669 | |||||||||||||
Ingles Markets, Inc., Class A | 45,500 | 2,124,850 | |||||||||||||
SpartanNash Co. | 309,928 | 11,405,351 | |||||||||||||
Sprouts Farmers Market, Inc.A | 659,578 | 14,715,185 | |||||||||||||
United Natural Foods, Inc.A | 810,189 | 33,647,149 | |||||||||||||
Weis Markets, Inc. | 55,296 | 3,196,662 | |||||||||||||
|
| ||||||||||||||
75,162,652 | |||||||||||||||
|
| ||||||||||||||
Food Products - 0.52% | |||||||||||||||
Darling Ingredients, Inc.A | 316,530 | 4,789,099 | |||||||||||||
Dean Foods Co. | 132,700 | 2,619,498 | |||||||||||||
Fresh Del Monte Produce, Inc. | 171,700 | 10,525,210 | |||||||||||||
Hain Celestial Group, Inc.A | 348,713 | 12,898,894 | |||||||||||||
Sanderson Farms, Inc. | 50,116 | 5,802,430 | |||||||||||||
|
| ||||||||||||||
36,635,131 | |||||||||||||||
|
| ||||||||||||||
Personal Products - 0.02% | |||||||||||||||
Avon Products, Inc.A | 269,704 | 1,308,064 | |||||||||||||
|
| ||||||||||||||
Tobacco - 0.17% | |||||||||||||||
Universal Corp. | 159,769 | 11,735,033 | |||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 143,530,019 | ||||||||||||||
|
| ||||||||||||||
Energy - 5.25% | |||||||||||||||
Energy Equipment & Services - 1.91% | |||||||||||||||
Archrock, Inc. | 228,400 | 2,695,120 | |||||||||||||
C&J Energy Services, Inc.A | 298,700 | 8,725,027 | |||||||||||||
CARBO Ceramics, Inc.A C | 130,778 | 898,445 | |||||||||||||
Dril-Quip, Inc.A | 135,019 | 6,960,230 | |||||||||||||
Frank’s International N.V.C | 372,700 | 3,391,570 | |||||||||||||
Geospace Technologies Corp.A | 266,571 | 4,409,084 | |||||||||||||
Helix Energy Solutions Group, Inc.A | 326,720 | 1,999,526 | |||||||||||||
Key Energy Services, Inc.A C | 86,500 | 2,048,320 | |||||||||||||
McDermott International, Inc.A | 2,308,903 | 15,100,226 | |||||||||||||
Nabors Industries Ltd. | 939,800 | 9,717,532 | |||||||||||||
See accompanying notes
8
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Energy - 5.25% (continued) | |||||||||||||||
Energy Equipment & Services - 1.91% (continued) | |||||||||||||||
Natural Gas Services Group, Inc.A | 233,568 | $ | 6,399,763 | ||||||||||||
Newpark Resources, Inc.A | 685,899 | 5,247,127 | |||||||||||||
Oceaneering International, Inc. | 295,262 | 7,791,964 | |||||||||||||
Oil States International, Inc.A | 402,466 | 11,973,364 | |||||||||||||
Patterson-UTI Energy, Inc. | 447,760 | 9,691,765 | |||||||||||||
RPC, Inc.C | 753,640 | 13,693,639 | |||||||||||||
SEACOR Holdings, Inc.A | 57,538 | 3,777,945 | |||||||||||||
Transocean Ltd.A | 1,261,300 | 13,912,139 | |||||||||||||
Unit Corp.A | 233,427 | 5,016,346 | |||||||||||||
|
| ||||||||||||||
�� | 133,449,132 | ||||||||||||||
|
| ||||||||||||||
Oil, Gas & Consumable Fuels - 3.34% | |||||||||||||||
Aegean Marine Petroleum Network, Inc. | 149,121 | 1,662,699 | |||||||||||||
Alliance Resource Partners LP | 136,887 | 2,908,849 | |||||||||||||
Callon Petroleum Co.A | 3,530,540 | 41,801,593 | |||||||||||||
Cobalt International Energy, Inc.A | 2,342,799 | 916,269 | |||||||||||||
CONSOL Energy, Inc.A | 760,890 | 11,550,310 | |||||||||||||
Denbury Resources, Inc.A | 1,935,876 | 4,297,645 | |||||||||||||
Energy XXI Gulf Coast, Inc.A | 375,300 | 10,320,750 | |||||||||||||
Gran Tierra Energy, Inc.A | 1,106,330 | 2,787,951 | |||||||||||||
Green Plains, Inc. | 127,200 | 2,925,600 | |||||||||||||
HollyFrontier Corp. | 574,200 | 16,157,988 | |||||||||||||
Kosmos Energy Ltd.A | 2,436,067 | 14,640,763 | |||||||||||||
Murphy Oil Corp. | 561,430 | 14,698,237 | |||||||||||||
Oasis Petroleum, Inc.A | 1,679,021 | 20,047,511 | |||||||||||||
Par Pacific Holdings, Inc.A C | 110,540 | 1,809,540 | |||||||||||||
PBF Energy, Inc., Class A | 358,700 | 8,006,184 | |||||||||||||
PDC Energy, Inc.A | 208,694 | 11,526,170 | |||||||||||||
Range Resources Corp. | 518,625 | 13,738,376 | |||||||||||||
Renewable Energy Group, Inc.A | 111,328 | 1,163,378 | |||||||||||||
SemGroup Corp., Class A | 364,230 | 12,128,859 | |||||||||||||
SRC Energy, Inc.A | 2,312,885 | 17,439,153 | |||||||||||||
Whiting Petroleum Corp.A | 1,009,400 | 8,378,020 | |||||||||||||
WPX Energy, Inc.A | 1,283,000 | 15,306,190 | |||||||||||||
|
| ||||||||||||||
234,212,035 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 367,661,167 | ||||||||||||||
|
| ||||||||||||||
Financials - 24.43% | |||||||||||||||
Banks - 14.46% | |||||||||||||||
1st Source Corp. | 74,565 | 3,602,235 | |||||||||||||
Associated Banc-Corp | 2,198,101 | 54,732,715 | |||||||||||||
BancorpSouth, Inc. | 263,507 | 8,023,788 | |||||||||||||
Bank of NT Butterfield & Son Ltd. | 187,700 | 6,241,025 | |||||||||||||
Banner Corp. | 301,873 | 16,663,390 | |||||||||||||
Berkshire Hills Bancorp, Inc. | 94,336 | 3,537,600 | |||||||||||||
BOK Financial Corp. | 159,591 | 13,451,925 | |||||||||||||
Boston Private Financial Holdings, Inc. | 154,304 | 2,407,142 | |||||||||||||
Brookline Bancorp, Inc. | 801,924 | 11,667,994 | |||||||||||||
Bryn Mawr Bank Corp. | 180,176 | 7,729,550 | |||||||||||||
Capital Bank Financial Corp., Class A | 258,380 | 10,722,770 | |||||||||||||
Cathay General Bancorp | 389,703 | 14,828,199 | |||||||||||||
Central Pacific Financial Corp. | 345,772 | 10,815,748 | |||||||||||||
Chemical Financial Corp. | 225,514 | 10,700,639 | |||||||||||||
CoBiz Financial, Inc. | 316,135 | 5,194,098 | |||||||||||||
ConnectOne Bancorp, Inc. | 77,600 | 1,722,720 | |||||||||||||
Customers Bancorp, Inc.A | 424,379 | 13,126,043 | |||||||||||||
CVB Financial Corp. | 414,395 | 8,926,068 | |||||||||||||
FCB Financial Holdings, Inc., Class AA | 206,748 | 9,768,843 |
See accompanying notes
9
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Financials - 24.43% (continued) | |||||||||||||||
Banks - 14.46% (continued) | |||||||||||||||
First BanCorpA | 1,751,010 | $ | 10,295,939 | ||||||||||||
First Busey Corp. | 254,700 | 7,628,265 | |||||||||||||
First Citizens BancShares, Inc., Class A | 18,823 | 6,551,533 | |||||||||||||
First Commonwealth Financial Corp. | 316,569 | 4,086,906 | |||||||||||||
First Financial Corp. | 114,839 | 5,604,143 | |||||||||||||
First Hawaiian, Inc. | 522,400 | 15,551,848 | |||||||||||||
First Horizon National Corp. | 1,940,915 | 35,615,790 | |||||||||||||
First Interstate BancSystem, Inc., Class A | 218,902 | 8,263,551 | |||||||||||||
First Merchants Corp. | 102,786 | 4,253,285 | |||||||||||||
First Midwest Bancorp, Inc. | 1,167,553 | 26,515,129 | |||||||||||||
Flushing Financial Corp. | 41,424 | 1,221,180 | |||||||||||||
FNB Corp. | 1,184,711 | 16,870,285 | |||||||||||||
Fulton Financial Corp. | 2,189,072 | 40,388,378 | |||||||||||||
Great Western Bancorp, Inc. | 385,910 | 15,899,492 | |||||||||||||
Hancock Holding Co. | 1,001,232 | 46,757,534 | |||||||||||||
Hanmi Financial Corp. | 74,680 | 2,169,454 | |||||||||||||
Heartland Financial USA, Inc. | 69,150 | 3,319,200 | |||||||||||||
Hilltop Holdings, Inc. | 540,794 | 15,039,481 | |||||||||||||
Hope Bancorp, Inc. | 217,785 | 3,987,643 | |||||||||||||
Horizon Bancorp | 75,800 | 2,045,842 | |||||||||||||
IBERIABANK Corp. | 123,598 | 9,807,501 | |||||||||||||
International Bancshares Corp. | 481,875 | 18,022,125 | |||||||||||||
Investors Bancorp, Inc. | 1,188,701 | 16,463,509 | |||||||||||||
MainSource Financial Group, Inc. | 168,815 | 5,773,473 | |||||||||||||
MB Financial, Inc. | 184,237 | 7,831,915 | |||||||||||||
National Bank Holdings Corp., Class A | 79,843 | 2,520,644 | |||||||||||||
Old National Bancorp | 1,803,828 | 30,304,310 | |||||||||||||
People’s United Financial, Inc. | 814,794 | 14,234,451 | |||||||||||||
Popular, Inc. | 841,158 | 35,252,932 | |||||||||||||
Prosperity Bancshares, Inc. | 665,513 | 44,722,474 | |||||||||||||
Renasant Corp. | 83,327 | 3,533,065 | |||||||||||||
Republic Bancorp, Inc., Class A | 49,400 | 1,777,412 | |||||||||||||
S&T Bancorp, Inc. | 99,475 | 3,577,121 | |||||||||||||
Seacoast Banking Corp. of FloridaA | 674,032 | 16,311,574 | |||||||||||||
Simmons First National Corp., Class A | 232,636 | 12,713,557 | |||||||||||||
South State Corp. | 83,744 | 7,382,034 | |||||||||||||
Sterling Bancorp | 773,139 | 17,975,482 | |||||||||||||
Synovus Financial Corp. | 779,224 | 32,571,563 | |||||||||||||
TCF Financial Corp. | 885,110 | 14,613,166 | |||||||||||||
Texas Capital Bancshares, Inc.A | 495,936 | 37,740,730 | |||||||||||||
Trustmark Corp. | 383,380 | 12,735,884 | |||||||||||||
UMB Financial Corp. | 600,564 | 43,534,884 | |||||||||||||
Umpqua Holdings Corp. | 2,076,763 | 36,696,402 | |||||||||||||
Union Bankshares Corp. | 110,787 | 3,793,347 | |||||||||||||
United Bankshares, Inc.C | 132,774 | 5,297,683 | |||||||||||||
United Community Banks, Inc. | 536,841 | 14,682,601 | |||||||||||||
Valley National Bancorp | 1,282,131 | 15,077,861 | |||||||||||||
Webster Financial Corp. | 620,805 | 31,543,102 | |||||||||||||
WesBanco, Inc. | 238,698 | 9,502,567 | |||||||||||||
Wintrust Financial Corp. | 303,382 | 21,497,649 | |||||||||||||
|
| ||||||||||||||
1,013,418,388 | |||||||||||||||
|
| ||||||||||||||
Capital Markets - 0.98% | |||||||||||||||
Ashford, Inc.A | 1 | 55 | |||||||||||||
Cohen & Steers, Inc. | 277,217 | 11,060,958 | |||||||||||||
Donnelley Financial Solutions, Inc.A | 152,853 | 3,396,394 | |||||||||||||
Federated Investors, Inc., Class B | 350,362 | 9,396,709 | |||||||||||||
Greenhill & Co., Inc. | 71,800 | 1,816,540 |
See accompanying notes
10
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Financials - 24.43% (continued) | |||||||||||||||
Capital Markets - 0.98% (continued) | |||||||||||||||
INTL. FCStone, Inc.A | 48,900 | $ | 1,826,415 | ||||||||||||
Janus Capital Group, Inc. | 598,705 | 8,178,310 | |||||||||||||
Morningstar, Inc. | 132,323 | 9,676,781 | |||||||||||||
Oppenheimer Holdings, Inc., Class A | 266,597 | 4,612,128 | |||||||||||||
Piper Jaffray Companies | 40,080 | 2,509,008 | |||||||||||||
Stifel Financial Corp.A | 225,428 | 11,016,666 | |||||||||||||
Virtus Investment Partners, Inc. | 32,912 | 3,501,837 | |||||||||||||
Waddell & Reed Financial, Inc., Class AC | 90,714 | 1,631,945 | |||||||||||||
|
| ||||||||||||||
68,623,746 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 0.96% | |||||||||||||||
Credit Acceptance Corp.A C | 77,395 | 15,730,534 | |||||||||||||
Encore Capital Group, Inc.A | 62,200 | 2,074,370 | |||||||||||||
EZCORP, Inc., Class AA | 125,422 | 1,135,069 | |||||||||||||
Green Dot Corp., Class AA | 103,048 | 3,533,516 | |||||||||||||
Navient Corp. | 804,060 | 12,221,712 | |||||||||||||
Nelnet, Inc., Class A | 188,123 | 8,467,416 | |||||||||||||
PRA Group, Inc.A | 123,000 | 3,960,600 | |||||||||||||
Santander Consumer USA Holdings, Inc.A | 871,900 | 11,108,006 | |||||||||||||
SLM Corp.A | 699,800 | 8,775,492 | |||||||||||||
|
| ||||||||||||||
67,006,715 | |||||||||||||||
|
| ||||||||||||||
Insurance - 6.08% | |||||||||||||||
Allied World Assurance Co. Holdings AG | 150,938 | 8,013,298 | |||||||||||||
American Equity Investment Life Holding Co. | 499,853 | 11,856,513 | |||||||||||||
AMERISAFE, Inc. | 50,990 | 2,934,475 | |||||||||||||
Argo Group International Holdings Ltd. | 222,279 | 14,659,300 | |||||||||||||
Aspen Insurance Holdings Ltd. | 368,822 | 19,307,832 | |||||||||||||
Assurant, Inc. | 181,783 | 17,494,796 | |||||||||||||
Assured Guaranty Ltd. | 380,089 | 14,492,794 | |||||||||||||
Axis Capital Holdings Ltd. | 238,058 | 15,688,022 | |||||||||||||
CNO Financial Group, Inc. | 1,720,472 | 36,250,345 | |||||||||||||
Employers Holdings, Inc. | 85,144 | 3,405,760 | |||||||||||||
Enstar Group Ltd.A | 193,274 | 37,649,775 | |||||||||||||
FBL Financial Group, Inc., Class A | 50,383 | 3,350,470 | |||||||||||||
First American Financial Corp. | 254,039 | 11,027,833 | |||||||||||||
Genworth Financial, Inc., Class AA | 475,419 | 1,920,693 | |||||||||||||
Global Indemnity Ltd.A | 399,623 | 16,204,713 | |||||||||||||
Hanover Insurance Group, Inc. | 220,487 | 19,462,387 | |||||||||||||
Horace Mann Educators Corp. | 785,021 | 30,341,062 | |||||||||||||
Infinity Property & Casualty Corp. | 48,962 | 4,859,478 | |||||||||||||
Kemper Corp. | 170,896 | 6,724,758 | |||||||||||||
Maiden Holdings Ltd. | 228,538 | 2,822,444 | |||||||||||||
MBIA, Inc.A | 360,100 | 3,024,840 | |||||||||||||
National General Holdings Corp. | 338,300 | 7,692,942 | |||||||||||||
National Western Life Group, Inc., Class A | 5,590 | 1,711,882 | |||||||||||||
Navigators Group, Inc. | 88,630 | 4,790,451 | |||||||||||||
Old Republic International Corp. | 815,786 | 16,870,454 | |||||||||||||
OneBeacon Insurance Group Ltd., Class A | 60,000 | 957,000 | |||||||||||||
Primerica, Inc. | 157,496 | 13,198,165 | |||||||||||||
ProAssurance Corp. | 147,408 | 9,124,555 | |||||||||||||
RenaissanceRe Holdings Ltd. | 123,371 | 17,539,655 | |||||||||||||
Safety Insurance Group, Inc. | 129,486 | 9,374,786 | |||||||||||||
Selective Insurance Group, Inc. | 369,947 | 19,533,202 | |||||||||||||
State Auto Financial Corp. | 69,373 | 1,864,053 | |||||||||||||
Third Point Reinsurance Ltd.A | 258,584 | 3,128,866 | |||||||||||||
United Fire Group, Inc. | 72,441 | 3,187,404 | |||||||||||||
Universal Insurance Holdings, Inc. | 142,278 | 3,706,342 |
See accompanying notes
11
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Financials - 24.43% (continued) | |||||||||||||||
Insurance - 6.08% (continued) | |||||||||||||||
Validus Holdings Ltd. | 278,041 | $ | 15,370,106 | ||||||||||||
White Mountains Insurance Group Ltd. | 18,947 | 16,274,336 | |||||||||||||
|
| ||||||||||||||
425,815,787 | |||||||||||||||
|
| ||||||||||||||
Mortgage Real Estate Investment Trusts (REITs) - 0.14% | |||||||||||||||
Apollo Commercial Real Estate Finance, Inc. | 146,874 | 2,833,199 | |||||||||||||
Invesco Mortgage Capital, Inc. | 436,832 | 7,124,730 | |||||||||||||
|
| ||||||||||||||
9,957,929 | |||||||||||||||
|
| ||||||||||||||
Thrifts & Mortgage Finance - 1.81% | |||||||||||||||
Astoria Financial Corp. | 144,700 | 2,950,433 | |||||||||||||
Beneficial Bancorp, Inc. | 202,825 | 3,245,200 | |||||||||||||
BofI Holding, Inc.A C | 167,900 | 4,011,131 | |||||||||||||
Capitol Federal Financial, Inc. | 459,489 | 6,722,324 | |||||||||||||
Clifton Bancorp, Inc. | 119,936 | 2,002,931 | |||||||||||||
Dime Community Bancshares, Inc. | 96,338 | 1,873,774 | |||||||||||||
Essent Group Ltd.A | 246,990 | 9,141,100 | |||||||||||||
Flagstar Bancorp, Inc.A | 150,151 | 4,390,415 | |||||||||||||
HomeStreet, Inc.A | 338,400 | 8,798,400 | |||||||||||||
Kearny Financial Corp. | 234,800 | 3,428,080 | |||||||||||||
Meridian Bancorp, Inc. | 107,807 | 1,892,013 | |||||||||||||
MGIC Investment Corp.A | 903,800 | 9,526,052 | |||||||||||||
Nationstar Mortgage Holdings, Inc.A C | 258,348 | 4,161,986 | |||||||||||||
Northfield Bancorp, Inc. | 191,395 | 3,517,840 | |||||||||||||
Northwest Bancshares, Inc. | 344,560 | 5,561,198 | |||||||||||||
Oritani Financial Corp. | 124,896 | 2,116,987 | |||||||||||||
PHH Corp.A | 420,600 | 5,425,740 | |||||||||||||
Provident Financial Services, Inc. | 197,918 | 5,084,514 | |||||||||||||
Radian Group, Inc. | 522,200 | 8,814,736 | |||||||||||||
United Financial Bancorp, Inc. | 133,946 | 2,313,248 | |||||||||||||
Walker & Dunlop, Inc.A | 81,710 | 3,664,694 | |||||||||||||
Washington Federal, Inc. | 833,734 | 28,096,836 | |||||||||||||
|
| ||||||||||||||
126,739,632 | |||||||||||||||
|
| ||||||||||||||
Total Financials | 1,711,562,197 | ||||||||||||||
|
| ||||||||||||||
Health Care - 4.32% | |||||||||||||||
Biotechnology - 0.18% | |||||||||||||||
Spectrum Pharmaceuticals, Inc.A | 226,384 | 1,722,782 | |||||||||||||
United Therapeutics Corp.A | 84,400 | 10,609,080 | |||||||||||||
|
| ||||||||||||||
12,331,862 | |||||||||||||||
|
| ||||||||||||||
Health Care Equipment & Supplies - 0.83% | |||||||||||||||
Analogic Corp. | 98,800 | 7,098,780 | |||||||||||||
Anika Therapeutics, Inc.A | 48,192 | 2,223,097 | |||||||||||||
Globus Medical, Inc., Class AA | 592,549 | 17,972,011 | |||||||||||||
Hill-Rom Holdings, Inc. | 133,421 | 10,091,965 | |||||||||||||
Integra LifeSciences Holdings Corp.A | 40,557 | 1,864,405 | |||||||||||||
Invacare Corp. | 747,208 | 10,983,958 | |||||||||||||
Natus Medical, Inc.A | 224,950 | 7,873,250 | |||||||||||||
|
| ||||||||||||||
58,107,466 | |||||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 2.03% | |||||||||||||||
Aceto Corp. | 433,801 | 6,875,746 | |||||||||||||
Almost Family, Inc.A | 39,550 | 1,963,658 | |||||||||||||
Amedisys, Inc.A | 207,359 | 11,238,858 | |||||||||||||
AMN Healthcare Services, Inc.A | 657,851 | 26,873,213 | |||||||||||||
Community Health Systems, Inc.A | 427,717 | 3,682,643 |
See accompanying notes
12
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Health Care - 4.32% (continued) | |||||||||||||||
Health Care Providers & Services - 2.03% (continued) | |||||||||||||||
Hanger, Inc.A | 697,921 | $ | 9,135,786 | ||||||||||||
HealthSouth Corp. | 812,480 | 38,105,312 | |||||||||||||
LifePoint Health, Inc.A | 118,390 | 7,357,938 | |||||||||||||
Magellan Health, Inc.A | 85,550 | 5,885,840 | |||||||||||||
Owens & Minor, Inc. | 390,306 | 13,524,103 | |||||||||||||
Select Medical Holdings Corp.A | 563,059 | 7,742,061 | |||||||||||||
Tivity Health, Inc.A | 297,693 | 10,002,485 | |||||||||||||
|
| ||||||||||||||
142,387,643 | |||||||||||||||
|
| ||||||||||||||
Health Care Technology - 0.51% | |||||||||||||||
Allscripts Healthcare Solutions, Inc.A | 1,007,316 | 12,057,573 | |||||||||||||
HMS Holdings Corp.A | 87,165 | 1,784,268 | |||||||||||||
Omnicell, Inc.A | 361,881 | 14,981,873 | |||||||||||||
Quality Systems, Inc.A | 484,663 | 6,911,294 | |||||||||||||
|
| ||||||||||||||
35,735,008 | |||||||||||||||
|
| ||||||||||||||
Life Sciences Tools & Services - 0.51% | |||||||||||||||
Cambrex Corp.A | 371,024 | 22,020,274 | |||||||||||||
Charles River Laboratories International, Inc.A | 62,757 | 5,629,303 | |||||||||||||
INC Research Holdings, Inc., Class AA | 175,100 | 7,879,500 | |||||||||||||
|
| ||||||||||||||
35,529,077 | |||||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 0.26% | |||||||||||||||
Phibro Animal Health Corp., Class A | 135,500 | 4,031,125 | |||||||||||||
Supernus Pharmaceuticals, Inc.A | 437,747 | 14,270,552 | |||||||||||||
|
| ||||||||||||||
18,301,677 | |||||||||||||||
|
| ||||||||||||||
Total Health Care | 302,392,733 | ||||||||||||||
|
| ||||||||||||||
Industrials - 20.28% | |||||||||||||||
Aerospace & Defense - 1.86% | |||||||||||||||
AAR Corp. | 581,411 | 20,924,982 | |||||||||||||
Aerojet Rocketdyne Holdings, Inc.A | 212,191 | 4,755,200 | |||||||||||||
Aerovironment, Inc.A | 440,454 | 12,583,771 | |||||||||||||
Cubic Corp. | 126,706 | 6,576,041 | |||||||||||||
DigitalGlobe, Inc.A | 191,240 | 6,157,928 | |||||||||||||
Embraer S.A., ADR | 908,100 | 17,435,520 | |||||||||||||
Esterline Technologies Corp.A | 85,093 | 7,781,755 | |||||||||||||
KLX, Inc.A | 174,150 | 8,237,295 | |||||||||||||
Mercury Systems, Inc.A | 574,451 | 21,472,978 | |||||||||||||
Moog, Inc., Class AA | 112,946 | 7,753,743 | |||||||||||||
Teledyne Technologies, Inc.A | 62,437 | 8,418,381 | |||||||||||||
Triumph Group, Inc. | 144,969 | 3,798,188 | |||||||||||||
Wesco Aircraft Holdings, Inc.A | 337,796 | 4,104,221 | |||||||||||||
|
| ||||||||||||||
130,000,003 | |||||||||||||||
|
| ||||||||||||||
Air Freight & Logistics - 0.16% | |||||||||||||||
Atlas Air Worldwide Holdings, Inc.A | 82,880 | 4,807,040 | |||||||||||||
Hub Group, Inc., Class AA | 107,980 | 4,227,417 | |||||||||||||
Park-Ohio Holdings Corp. | 51,773 | 2,037,268 | |||||||||||||
|
| ||||||||||||||
11,071,725 | |||||||||||||||
|
| ||||||||||||||
Airlines - 0.53% | |||||||||||||||
Allegiant Travel Co. | 53,900 | 7,837,060 | |||||||||||||
Hawaiian Holdings, Inc.A | 177,200 | 9,621,960 | |||||||||||||
SkyWest, Inc. | 171,542 | 6,381,362 | |||||||||||||
Spirit Airlines, Inc.A | 229,900 | 13,166,373 | |||||||||||||
|
| ||||||||||||||
37,006,755 | |||||||||||||||
|
|
See accompanying notes
13
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Industrials - 20.28% (continued) | |||||||||||||||
Building Products - 2.22% | |||||||||||||||
Apogee Enterprises, Inc. | 167,540 | $ | 9,130,930 | ||||||||||||
Armstrong Flooring, Inc.A | 324,800 | 6,232,912 | |||||||||||||
Builders FirstSource, Inc.A | 369,900 | 5,922,099 | |||||||||||||
Gibraltar Industries, Inc.A | 469,721 | 18,436,549 | |||||||||||||
Masonite International Corp.A | 298,606 | 24,844,019 | |||||||||||||
Ply Gem Holdings, Inc.A | 619,499 | 11,925,356 | |||||||||||||
Simpson Manufacturing Co., Inc. | 584,953 | 24,398,390 | |||||||||||||
Trex Co., Inc.A | 357,472 | 26,163,376 | |||||||||||||
Universal Forest Products, Inc. | 147,766 | 14,080,622 | |||||||||||||
USG Corp.A | 484,430 | 14,678,229 | |||||||||||||
|
| ||||||||||||||
155,812,482 | |||||||||||||||
|
| ||||||||||||||
Commercial Services & Supplies - 2.44% | |||||||||||||||
ACCO Brands Corp.A | 744,192 | 10,604,736 | |||||||||||||
Brink’s Co. | 96,416 | 5,919,942 | |||||||||||||
Deluxe Corp. | 255,921 | 18,403,279 | |||||||||||||
Essendant, Inc. | 176,746 | 2,951,658 | |||||||||||||
Herman Miller, Inc. | 381,836 | 12,638,772 | |||||||||||||
HNI Corp. | 130,796 | 6,116,021 | |||||||||||||
Interface, Inc. | 511,083 | 10,170,552 | |||||||||||||
Knoll, Inc. | 1,029,209 | 24,659,848 | |||||||||||||
LSC Communications, Inc. | 1,024,730 | 26,509,765 | |||||||||||||
Matthews International Corp., Class A | 90,606 | 6,211,041 | |||||||||||||
McGrath RentCorp | 123,222 | 4,289,358 | |||||||||||||
Mobile Mini, Inc. | 568,269 | 16,309,320 | |||||||||||||
MSA Safety, Inc. | 86,797 | 6,757,146 | |||||||||||||
Quad/Graphics, Inc. | 123,000 | 3,229,980 | |||||||||||||
Steelcase, Inc., Class A | 283,400 | 4,831,970 | |||||||||||||
Team, Inc.A | 135,390 | 3,641,991 | |||||||||||||
West Corp. | 301,007 | 8,033,877 | |||||||||||||
|
| ||||||||||||||
171,279,256 | |||||||||||||||
|
| ||||||||||||||
Construction & Engineering - 2.72% | |||||||||||||||
AECOM Technology Corp.A | 410,545 | 14,044,744 | |||||||||||||
Aegion Corp.A | 266,117 | 6,072,790 | |||||||||||||
Argan, Inc. | 29,000 | 1,938,650 | |||||||||||||
Comfort Systems USA, Inc. | 760,858 | 27,923,488 | |||||||||||||
EMCOR Group, Inc. | 339,370 | 22,310,184 | |||||||||||||
Granite Construction, Inc. | 272,337 | 14,354,883 | |||||||||||||
KBR, Inc. | 1,606,095 | 22,565,635 | |||||||||||||
Primoris Services Corp. | 864,477 | 19,857,037 | |||||||||||||
Quanta Services, Inc.A | 315,872 | 11,194,504 | |||||||||||||
Tutor Perini Corp.A | 1,245,228 | 38,415,284 | |||||||||||||
Valmont Industries, Inc. | 77,697 | 11,837,138 | |||||||||||||
|
| ||||||||||||||
190,514,337 | |||||||||||||||
|
| ||||||||||||||
Electrical Equipment - 1.33% | |||||||||||||||
Atkore International Group, Inc.A | 225,103 | 5,911,205 | |||||||||||||
Encore Wire Corp. | 346,208 | 15,302,393 | |||||||||||||
EnerSys | 537,442 | 44,666,805 | |||||||||||||
Generac Holdings, Inc.A | 155,475 | 5,468,056 | |||||||||||||
Regal Beloit Corp. | 277,083 | 21,847,994 | |||||||||||||
|
| ||||||||||||||
93,196,453 | |||||||||||||||
|
| ||||||||||||||
Industrial Conglomerates - 0.02% | |||||||||||||||
Raven Industries, Inc. | 53,142 | 1,647,402 | |||||||||||||
|
|
See accompanying notes
14
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Industrials - 20.28% (continued) | |||||||||||||||
Machinery - 5.67% | |||||||||||||||
Actuant Corp., Class A | 174,472 | $ | 4,763,086 | ||||||||||||
AGCO Corp. | 251,482 | 16,092,333 | |||||||||||||
Altra Industrial Motion Corp. | 72,702 | 3,209,793 | |||||||||||||
American Railcar Industries, Inc.C | 27,700 | 1,162,015 | |||||||||||||
Astec Industries, Inc. | 143,051 | 9,062,281 | |||||||||||||
Barnes Group, Inc. | 865,747 | 47,590,113 | |||||||||||||
Briggs & Stratton Corp. | 421,100 | 10,523,289 | |||||||||||||
Chart Industries, Inc.A | 424,277 | 15,490,353 | |||||||||||||
Colfax Corp.A | 585,000 | 23,674,950 | |||||||||||||
Columbus McKinnon Corp. | 98,408 | 2,571,401 | |||||||||||||
Crane Co. | 331,663 | 26,503,190 | |||||||||||||
EnPro Industries, Inc. | 424,307 | 29,977,290 | |||||||||||||
Global Brass & Copper Holdings, Inc. | 467,245 | 16,657,284 | |||||||||||||
Greenbrier Companies, Inc.C | 94,000 | 4,084,300 | |||||||||||||
Hillenbrand, Inc. | 391,158 | 14,433,730 | |||||||||||||
Hyster-Yale Materials Handling, Inc. | 117,128 | 7,040,564 | |||||||||||||
ITT, Inc. | 242,758 | 10,227,395 | |||||||||||||
Kennametal, Inc. | 514,106 | 21,376,528 | |||||||||||||
Lindsay Corp. | 176,440 | 15,325,579 | |||||||||||||
Meritor, Inc.A | 1,333,953 | 23,757,703 | |||||||||||||
Miller Industries, Inc. | 226,733 | 5,759,018 | |||||||||||||
Navistar International Corp.A | 106,166 | 2,856,927 | |||||||||||||
Oshkosh Corp. | 326,305 | 22,642,304 | |||||||||||||
Sun Hydraulics Corp. | 118,300 | 4,594,772 | |||||||||||||
Tennant Co. | 56,360 | 4,128,370 | |||||||||||||
Terex Corp. | 969,439 | 33,910,976 | |||||||||||||
TriMas Corp.A | 200,199 | 4,594,567 | |||||||||||||
Trinity Industries, Inc. | 383,947 | 10,328,174 | |||||||||||||
Wabash National Corp. | 211,126 | 4,809,450 | |||||||||||||
Watts Water Technologies, Inc., Class A | 7,967 | 495,547 | |||||||||||||
|
| ||||||||||||||
397,643,282 | |||||||||||||||
|
| ||||||||||||||
Marine - 0.54% | |||||||||||||||
Kirby Corp.A | 315,807 | 22,295,974 | |||||||||||||
Matson, Inc. | 486,647 | 15,426,710 | |||||||||||||
|
| ||||||||||||||
37,722,684 | |||||||||||||||
|
| ||||||||||||||
Professional Services - 0.95% | |||||||||||||||
Advisory Board Co.A | 84,566 | 4,321,323 | |||||||||||||
Heidrick & Struggles International, Inc. | 159,718 | 3,433,937 | |||||||||||||
Hudson Global, Inc. | 623,926 | 876,616 | |||||||||||||
ICF International, Inc.A | 14,200 | 626,930 | |||||||||||||
Kelly Services, Inc., Class A | 413,867 | 9,237,511 | |||||||||||||
Korn/Ferry International | 1,116,857 | 36,186,167 | |||||||||||||
Navigant Consulting, Inc.A | 142,137 | 3,407,024 | |||||||||||||
Resources Connection, Inc. | 330,848 | 4,598,787 | |||||||||||||
TrueBlue, Inc.A | 136,600 | 3,736,010 | |||||||||||||
|
| ||||||||||||||
66,424,305 | |||||||||||||||
|
| ||||||||||||||
Road & Rail - 0.55% | |||||||||||||||
ArcBest Corp. | 37,600 | 994,520 | |||||||||||||
Marten Transport Ltd. | 393,746 | 9,764,901 | |||||||||||||
Ryder System, Inc. | 177,300 | 12,040,443 | |||||||||||||
Swift Transportation Co.A | 435,775 | 10,711,349 | |||||||||||||
Werner Enterprises, Inc. | 180,193 | 4,919,269 | |||||||||||||
|
| ||||||||||||||
38,430,482 | |||||||||||||||
|
|
See accompanying notes
15
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Industrials - 20.28% (continued) | |||||||||||||||
Trading Companies & Distributors - 1.29% | |||||||||||||||
Air Lease Corp. | 341,057 | $ | 13,007,914 | ||||||||||||
Aircastle Ltd. | 777,324 | 18,360,393 | |||||||||||||
Applied Industrial Technologies, Inc. | 109,206 | 6,989,184 | |||||||||||||
DXP Enterprises, Inc.A | 28,236 | 1,030,049 | |||||||||||||
GATX Corp.C | 143,549 | 8,598,585 | |||||||||||||
MRC Global, Inc.A | 77,147 | 1,406,390 | |||||||||||||
Rush Enterprises, Inc., Class AA | 730,197 | 27,564,937 | |||||||||||||
Textainer Group Holdings Ltd. | 81,695 | 1,221,340 | |||||||||||||
Veritiv Corp.A | 53,000 | 2,737,450 | |||||||||||||
WESCO International, Inc.A | 158,290 | 9,647,776 | |||||||||||||
|
| ||||||||||||||
90,564,018 | |||||||||||||||
|
| ||||||||||||||
Total Industrials | 1,421,313,184 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 13.92% | |||||||||||||||
Communications Equipment - 2.23% | |||||||||||||||
ADTRAN, Inc. | 249,154 | 4,983,080 | |||||||||||||
ARRIS International PLCA | 1,877,326 | 48,791,703 | |||||||||||||
Brocade Communications Systems, Inc. | 404,670 | 5,086,702 | |||||||||||||
CalAmp Corp.A | 428,812 | 7,692,887 | |||||||||||||
Ciena Corp.A | 508,498 | 11,649,689 | |||||||||||||
Comtech Telecommunications Corp. | 49,219 | 689,558 | |||||||||||||
Digi International, Inc.A | 82,188 | 1,019,131 | |||||||||||||
EchoStar Corp., Class AA | 153,868 | 8,856,642 | |||||||||||||
Finisar Corp.A | 220,940 | 5,046,270 | |||||||||||||
NETGEAR, Inc.A | 322,261 | 15,194,606 | |||||||||||||
NetScout Systems, Inc.A | 416,511 | 15,681,639 | |||||||||||||
Plantronics, Inc. | 471,535 | 25,745,811 | |||||||||||||
Viavi Solutions, Inc.A | 564,667 | 5,646,670 | |||||||||||||
|
| ||||||||||||||
156,084,388 | |||||||||||||||
|
| ||||||||||||||
Electronic Equipment, Instruments & Components - 5.25% | |||||||||||||||
Anixter International, Inc.A | 188,610 | 15,381,146 | |||||||||||||
Avnet, Inc. | 444,147 | 17,184,048 | |||||||||||||
AVX Corp. | 525,830 | 8,891,785 | |||||||||||||
Belden, Inc. | 118,300 | 8,245,510 | |||||||||||||
Benchmark Electronics, Inc.A | 200,466 | 6,354,772 | |||||||||||||
Celestica, Inc.A | 434,497 | 6,191,582 | |||||||||||||
ePlus, Inc.A | 20,800 | 1,482,000 | |||||||||||||
FabrinetA | 231,500 | 8,026,105 | |||||||||||||
FARO Technologies, Inc.A | 621,702 | 22,785,378 | |||||||||||||
II-VI, Inc.A | 1,178,025 | 39,051,529 | |||||||||||||
Insight Enterprises, Inc.A | 337,674 | 14,216,075 | |||||||||||||
InvenSense, Inc.A | 402,216 | 5,172,498 | |||||||||||||
Itron, Inc.A | 156,133 | 10,125,225 | |||||||||||||
Methode Electronics, Inc. | 179,089 | 7,978,415 | |||||||||||||
MTS Systems Corp. | 376,705 | 17,497,947 | |||||||||||||
PC Connection, Inc. | 36,260 | 1,042,112 | |||||||||||||
Plexus Corp.A | 571,745 | 29,725,023 | |||||||||||||
Sanmina Corp.A | 916,638 | 34,144,766 | |||||||||||||
ScanSource, Inc.A | 309,152 | 12,211,504 | |||||||||||||
SYNNEX Corp. | 74,900 | 8,121,407 | |||||||||||||
Tech Data Corp.A | 343,878 | 32,891,931 | |||||||||||||
TTM Technologies, Inc.A | 327,200 | 5,474,056 | |||||||||||||
Vishay Intertechnology, Inc. | 3,398,324 | 55,562,597 | |||||||||||||
|
| ||||||||||||||
367,757,411 | |||||||||||||||
|
|
See accompanying notes
16
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Information Technology - 13.92% (continued) | |||||||||||||||
Internet Software & Services - 0.42% | |||||||||||||||
LivePerson, Inc.A | 368,717 | $ | 2,599,455 | ||||||||||||
Shutterstock, Inc.A | 99,231 | 4,289,756 | |||||||||||||
Web.com Group, Inc.A | 442,445 | 8,539,189 | |||||||||||||
WebMD Health Corp.A | 257,305 | 13,953,650 | |||||||||||||
|
| ||||||||||||||
29,382,050 | |||||||||||||||
|
| ||||||||||||||
IT Services - 1.56% | |||||||||||||||
Acxiom Corp.A | 458,554 | 13,252,211 | |||||||||||||
CACI International, Inc., Class AA | 47,315 | 5,583,170 | |||||||||||||
Convergys Corp. | 160,024 | 3,602,140 | |||||||||||||
CSG Systems International, Inc. | 380,932 | 14,288,759 | |||||||||||||
DST Systems, Inc. | 147,970 | 18,216,587 | |||||||||||||
EVERTEC, Inc. | 242,900 | 3,849,965 | |||||||||||||
ManTech International Corp., Class A | 171,466 | 6,087,043 | |||||||||||||
Science Applications International Corp. | 78,823 | 5,753,291 | |||||||||||||
Sykes Enterprises, Inc.A | 83,829 | 2,498,943 | |||||||||||||
Teradata Corp.A | 836,943 | 24,421,997 | |||||||||||||
Travelport Worldwide Ltd. | 626,325 | 8,248,700 | |||||||||||||
Unisys Corp.A | 318,398 | 3,597,897 | |||||||||||||
|
| ||||||||||||||
109,400,703 | |||||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 3.17% | |||||||||||||||
Advanced Energy Industries, Inc.A | 118,600 | 8,752,680 | |||||||||||||
Amkor Technology, Inc.A | 424,257 | 4,997,747 | |||||||||||||
Brooks Automation, Inc. | 2,173,484 | 54,902,206 | |||||||||||||
ChipMOS TECHNOLOGIES, Inc., ADR | 102,886 | 1,794,332 | |||||||||||||
Cirrus Logic, Inc.A | 564,820 | 36,346,167 | |||||||||||||
Cree, Inc.A | 315,300 | 6,898,764 | |||||||||||||
Diodes, Inc.A | 1,696,813 | 39,688,456 | |||||||||||||
IXYS Corp. | 259,898 | 3,625,577 | |||||||||||||
Kulicke & Soffa Industries, Inc.A | 226,787 | 5,061,886 | |||||||||||||
Microsemi Corp.A | 66,981 | 3,144,088 | |||||||||||||
Nanometrics, Inc.A | 232,428 | 7,334,266 | |||||||||||||
Photronics, Inc.A | 2,815,049 | 32,373,063 | |||||||||||||
Veeco Instruments, Inc.A | 172,174 | 5,681,742 | |||||||||||||
Xcerra Corp.A | 1,194,440 | 11,705,512 | |||||||||||||
|
| ||||||||||||||
222,306,486 | |||||||||||||||
|
| ||||||||||||||
Software - 0.75% | |||||||||||||||
Bottomline Technologies de, Inc.A | 128,633 | 2,997,149 | |||||||||||||
CommVault Systems, Inc.A | 91,057 | 4,593,826 | |||||||||||||
MicroStrategy, Inc., Class AA | 66,036 | 12,558,066 | |||||||||||||
Qualys, Inc.A | 282,394 | 10,843,929 | |||||||||||||
Verint Systems, Inc.A | 540,216 | 21,230,489 | |||||||||||||
Zix Corp.A | 104,789 | 569,004 | |||||||||||||
|
| ||||||||||||||
52,792,463 | |||||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 0.54% | |||||||||||||||
Cray, Inc.A | 457,140 | 8,182,806 | |||||||||||||
Electronics For Imaging, Inc.A | 225,233 | 10,311,167 | |||||||||||||
NCR Corp.A | 447,785 | 18,471,131 | |||||||||||||
Stratasys Ltd.A | 39,846 | 986,587 | |||||||||||||
|
| ||||||||||||||
37,951,691 | |||||||||||||||
|
| ||||||||||||||
Total Information Technology | 975,675,192 | ||||||||||||||
|
|
See accompanying notes
17
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Materials - 5.77% | |||||||||||||||
Chemicals - 2.74% | |||||||||||||||
A Schulman, Inc. | 252,268 | $ | 7,984,282 | ||||||||||||
American Vanguard Corp. | 442,345 | 7,409,279 | |||||||||||||
Cabot Corp. | 255,553 | 15,381,735 | |||||||||||||
Calgon Carbon Corp. | 533,630 | 7,764,317 | |||||||||||||
Ferro Corp.A | 276,600 | 4,956,672 | |||||||||||||
Flotek Industries, Inc.A C | 846,542 | 10,166,969 | |||||||||||||
HB Fuller Co. | 118,173 | 6,243,080 | |||||||||||||
Huntsman Corp. | 789,760 | 19,562,355 | |||||||||||||
Innophos Holdings, Inc. | 47,155 | 2,260,611 | |||||||||||||
Innospec, Inc. | 82,719 | 5,459,454 | |||||||||||||
Koppers Holdings, Inc.A | 66,900 | 2,839,905 | |||||||||||||
Kraton Corp.A | 118,685 | 3,882,186 | |||||||||||||
Kronos Worldwide, Inc. | 312,998 | 5,483,725 | |||||||||||||
LSB Industries, Inc.A C | 123,064 | 1,356,165 | |||||||||||||
Minerals Technologies, Inc. | 110,730 | 8,714,451 | |||||||||||||
PolyOne Corp. | 721,880 | 28,304,915 | |||||||||||||
Scotts Miracle-Gro Co. | 246,052 | 23,768,623 | |||||||||||||
Stepan Co. | 244,844 | 20,762,771 | |||||||||||||
Trinseo S.A. | 148,100 | 9,833,840 | |||||||||||||
|
| ||||||||||||||
192,135,335 | |||||||||||||||
|
| ||||||||||||||
Containers & Packaging - 0.41% | |||||||||||||||
Greif, Inc., Class A | 100,821 | 5,910,127 | |||||||||||||
Owens-Illinois, Inc.A | 1,061,790 | 23,168,258 | |||||||||||||
|
| ||||||||||||||
29,078,385 | |||||||||||||||
|
| ||||||||||||||
Metals & Mining - 2.03% | |||||||||||||||
Allegheny Technologies, Inc.C | 1,617,300 | 29,677,455 | |||||||||||||
Carpenter Technology Corp. | 416,377 | 16,904,906 | |||||||||||||
Coeur Mining, Inc.A | 469,672 | 4,255,228 | |||||||||||||
Commercial Metals Co. | 552,151 | 10,292,095 | |||||||||||||
Ferroglobe PLC | 2,123,070 | 20,487,626 | |||||||||||||
Ferroglobe Representations & Warranty InsuranceD | 2,123,070 | - | |||||||||||||
Haynes International, Inc. | 133,381 | 5,640,682 | |||||||||||||
Hecla Mining Co. | 1,952,310 | 10,640,090 | |||||||||||||
Materion Corp. | 142,800 | 5,433,540 | |||||||||||||
Pan American Silver Corp. | 317,408 | 5,322,932 | |||||||||||||
Real Industry, Inc.A | 722,432 | 1,878,323 | |||||||||||||
Reliance Steel & Aluminum Co. | 217,915 | 17,176,060 | |||||||||||||
Schnitzer Steel Industries, Inc., Class A | 35,379 | 668,663 | |||||||||||||
Stillwater Mining Co.A | 256,053 | 4,603,833 | |||||||||||||
Worthington Industries, Inc. | 206,100 | 8,965,350 | |||||||||||||
|
| ||||||||||||||
141,946,783 | |||||||||||||||
|
| ||||||||||||||
Paper & Forest Products - 0.59% | |||||||||||||||
Boise Cascade Co.A | 37,962 | 1,157,841 | |||||||||||||
Domtar Corp. | 217,336 | 8,617,373 | |||||||||||||
Louisiana-Pacific Corp.A | 612,808 | 15,773,678 | |||||||||||||
Mercer International, Inc. | 207,717 | 2,534,147 | |||||||||||||
PH Glatfelter Co. | 410,572 | 8,831,404 | |||||||||||||
Schweitzer-Mauduit International, Inc. | 104,064 | 4,479,955 | |||||||||||||
|
| ||||||||||||||
41,394,398 | |||||||||||||||
|
| ||||||||||||||
Total Materials | 404,554,901 | ||||||||||||||
|
| ||||||||||||||
Real Estate - 4.25% | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 4.17% | |||||||||||||||
Agree Realty Corp. | 174,641 | 8,466,596 |
See accompanying notes
18
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Real Estate - 4.25% (continued) | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 4.17% (continued) | |||||||||||||||
Ashford Hospitality Prime, Inc. | 219,853 | $ | 2,328,243 | ||||||||||||
Ashford Hospitality Trust, Inc. | 705,185 | 4,407,406 | |||||||||||||
Brandywine Realty Trust | 671,433 | 11,394,218 | |||||||||||||
CareTrust REIT, Inc. | 365,425 | 6,219,534 | |||||||||||||
CyrusOne, Inc. | 267,678 | 14,625,926 | |||||||||||||
DuPont Fabros Technology, Inc. | 218,200 | 11,248,210 | |||||||||||||
GEO Group, Inc. | 917,387 | 30,567,318 | |||||||||||||
Granite Real Estate Investment Trust | 458,960 | 16,504,202 | |||||||||||||
Healthcare Trust of America, Inc., Class A | 224,678 | 7,164,981 | |||||||||||||
Hospitality Properties Trust | 108,731 | 3,460,908 | |||||||||||||
LaSalle Hotel Properties | 350,179 | 10,001,112 | |||||||||||||
Lexington Realty Trust | 1,438,816 | 14,632,759 | |||||||||||||
Mack-Cali Realty Corp. | 330,426 | 8,938,023 | |||||||||||||
Medical Properties Trust, Inc. | 346,656 | 4,530,794 | |||||||||||||
Outfront Media, Inc. | 256,603 | 6,712,735 | |||||||||||||
Parkway, Inc. | 458,266 | 9,234,060 | |||||||||||||
Pebblebrook Hotel TrustC | 714,724 | 21,270,186 | |||||||||||||
Potlatch Corp. | 53,644 | 2,416,662 | |||||||||||||
RAIT Financial Trust | 1,325,697 | 4,069,890 | |||||||||||||
Ramco-Gershenson Properties Trust | 422,455 | 5,631,325 | |||||||||||||
Retail Opportunity Investments Corp. | 226,295 | 4,661,677 | |||||||||||||
RLJ Lodging Trust | 284,472 | 6,113,303 | |||||||||||||
Ryman Hospitality Properties, Inc. | 125,994 | 8,035,897 | |||||||||||||
Select Income REIT | 361,921 | 9,069,740 | |||||||||||||
Seritage Growth PropertiesC | 544,300 | 22,588,450 | |||||||||||||
STAG Industrial, Inc. | 482,035 | 12,706,443 | |||||||||||||
STORE Capital Corp. | 286,190 | 6,865,698 | |||||||||||||
Tanger Factory Outlet Centers, Inc. | 226,378 | 7,060,730 | |||||||||||||
Washington Prime Group, Inc. | 1,272,280 | 11,196,064 | |||||||||||||
|
| ||||||||||||||
292,123,090 | |||||||||||||||
|
| ||||||||||||||
Real Estate Management & Development - 0.08% | |||||||||||||||
HFF, Inc., Class A | 66,800 | 2,097,520 | |||||||||||||
Marcus & Millichap, Inc.A | 124,700 | 3,217,260 | |||||||||||||
Tejon Ranch Co.A | 26,132 | 598,423 | |||||||||||||
|
| ||||||||||||||
5,913,203 | |||||||||||||||
|
| ||||||||||||||
Total Real Estate | 298,036,293 | ||||||||||||||
|
| ||||||||||||||
Telecommunication Services - 0.05% | |||||||||||||||
Diversified Telecommunication Services - 0.05% | |||||||||||||||
Iridium Communications, Inc.A C | 322,468 | 3,418,161 | |||||||||||||
|
| ||||||||||||||
Utilities - 2.46% | |||||||||||||||
Electric Utilities - 1.31% | |||||||||||||||
ALLETE, Inc. | 146,083 | 10,212,662 | |||||||||||||
Great Plains Energy, Inc. | 524,071 | 15,507,261 | |||||||||||||
Hawaiian Electric Industries, Inc. | 390,879 | 13,102,264 | |||||||||||||
IDACORP, Inc. | 72,805 | 6,153,479 | |||||||||||||
Portland General Electric Co. | 1,029,376 | 46,671,908 | |||||||||||||
|
| ||||||||||||||
91,647,574 | |||||||||||||||
|
| ||||||||||||||
Gas Utilities - 0.45% | |||||||||||||||
Chesapeake Utilities Corp. | 182,329 | 13,364,716 | |||||||||||||
WGL Holdings, Inc. | 220,997 | 18,223,412 | |||||||||||||
|
| ||||||||||||||
31,588,128 | |||||||||||||||
|
|
See accompanying notes
19
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Utilities - 2.46% (continued) | |||||||||||||||
Independent Power and Renewable Electricity Producers - 0.15% | |||||||||||||||
NRG Yield, Inc., Class A | 114,740 | $ | 1,989,592 | ||||||||||||
NRG Yield, Inc., Class C | 467,360 | 8,272,272 | |||||||||||||
|
| ||||||||||||||
10,261,864 | |||||||||||||||
|
| ||||||||||||||
Multi-Utilities - 0.44% | |||||||||||||||
Avista Corp. | 198,505 | 8,007,692 | |||||||||||||
Black Hills Corp. | 173,465 | 11,799,089 | |||||||||||||
Vectren Corp. | 192,939 | 11,464,435 | |||||||||||||
|
| ||||||||||||||
31,271,216 | |||||||||||||||
|
| ||||||||||||||
Water Utilities - 0.11% | |||||||||||||||
American States Water Co. | 178,745 | 7,957,728 | |||||||||||||
|
| ||||||||||||||
Total Utilities | 172,726,510 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $5,461,353,879) | 6,786,437,692 | ||||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 3.13% (Cost $219,135,847) | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 0.69%B | 219,135,847 | 219,135,847 | |||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 2.67% (Cost $187,329,869) | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 0.69%B | 187,329,869 | 187,329,869 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 102.65% (Cost $5,867,819,595) | 7,192,903,408 | ||||||||||||||
OTHER LIABILITIES, NET OF ASSETS - (2.65%) | (185,790,700 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 7,007,112,708 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Non-income producing security.
B The Fund is affiliated by having the same investment advisor.
C All or a portion of this security is on loan at April 30, 2017.
D Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $0 or 0.00% of net assets.
ADR - American Depositary Receipt.
LP - Limited Partnership.
PLC - Public Limited Company.
REIT - Real Estate Investment Trust.
Futures Contracts Open on April 30, 2017: | ||||||||||||||||
Description | Type | Number of Contracts | Expiration Date | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
Russell 2000 Mini Index Futures | Long | 2,802 | June 2017 | $ | 195,915,840 | $ | 4,219,705 | |||||||||
|
|
|
| |||||||||||||
$ | 195,915,840 | $ | 4,219,705 | |||||||||||||
|
|
|
|
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2017, the investments were classified as described below:
Small Cap Value Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Common Stocks | $ | 6,786,437,692 | $ | - | $ | 0 | (1) | $ | 6,786,437,692 | |||||||||||||||||||
Short-Term Investments – Money Market Funds | 219,135,847 | - | - | 219,135,847 | ||||||||||||||||||||||||
Securities Lending Collateral Invested in Money Market Funds | 187,329,869 | - | - | 187,329,869 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 7,192,903,408 | $ | - | $ | 0 | (1) | $ | 7,192,903,408 | |||||||||||||||||||
|
|
|
|
|
|
|
|
See accompanying notes
20
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Small Cap Value Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||||||
Futures Contracts | $ | 4,219,705 | $ | - | $ | - | $ | 4,219,705 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 4,219,705 | $ | - | $ | - | $ | 4,219,705 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(1) | Investment held in the Fund’s Portfolio with $0 fair value. |
U.S. GAAP also requires all transfers between any level 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 period ended April 30, 2017, there were no transfers between levels.
The following table reconciles the Level 3 assets in the Fund for which significant unobservable inputs were used to determine fair value. Transfers in or out of Level 3 represent the ending value of any security or instrument where a change in the level has occurred from the beginning to the end of the period:
Security Type | Balance as of 10/31/2016 | Net Purchases | Net Sales | Accrued Discounts (Premiums) | Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Transfer into Level 3 | Transfer out of Level 3 | Balance as of 4/30/2017 | Change in Unrealized Appreciation (Depreciation) at Period end** | ||||||||||||||||||||||||||||||
Common Stocks | $ | 0 | $ | 0 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 0 | $ | 0 |
** Change in unrealized appreciation (depreciation) attributable to Level 3 securities held at period end. This balance is included in the change in unrealized appreciation (depreciation) on the Statement of Operations.
The common stock, classified as Level 3, is beneficial interest units in a representation and warranty insurance trust. The shares have been fair valued at $0 due to limited market transparency.
See accompanying notes
21
American Beacon Small Cap Value FundSM
Statement of Assets and Liabilities
April 30, 2017 (Unaudited)
Assets: |
| |||||||||
Investments in unaffiliated securities, at fair value† | $ | 6,786,437,692 | ||||||||
Investments in affiliated securities, at fair value‡ | 406,465,716 | |||||||||
Cash | 41,475 | |||||||||
Deposit with brokers for futures contracts | 9,386,700 | |||||||||
Dividends and interest receivable | 1,665,558 | |||||||||
Receivable for investments sold | 20,952,383 | |||||||||
Receivable for fund shares sold | 14,037,411 | |||||||||
Receivable for expense reimbursement (Note 2) | 176 | |||||||||
Prepaid expenses | 196,757 | |||||||||
|
| |||||||||
Total assets | 7,239,183,868 | |||||||||
|
| |||||||||
Liabilities: |
| |||||||||
Payable for investments purchased | 27,062,229 | |||||||||
Payable for fund shares redeemed | 9,843,464 | |||||||||
Payable for variation margin from open futures contracts | 2,724,265 | |||||||||
Payable upon return of securities loaned§ | 187,329,869 | |||||||||
Management and investment advisory fees payable | 4,526,439 | |||||||||
Administrative service and service fees payable | 225,055 | |||||||||
Transfer agent fees payable | 94,957 | |||||||||
Custody and fund accounting fees payable | 22,555 | |||||||||
Professional fees payable | 50,906 | |||||||||
Trustee fees payable | 12,333 | |||||||||
Payable for prospectus and shareholder reports | 172,353 | |||||||||
Other liabilities | 6,735 | |||||||||
|
| |||||||||
Total liabilities | 232,071,160 | |||||||||
|
| |||||||||
Net Assets | $ | 7,007,112,708 | ||||||||
|
| |||||||||
Analysis of Net Assets: |
| |||||||||
Paid-in-capital | $ | 5,386,737,825 | ||||||||
Undistributed net investment income | 4,384,765 | |||||||||
Accumulated net realized gain | 286,687,025 | |||||||||
Unrealized appreciation of investments | 1,325,083,813 | |||||||||
Unrealized depreciation of foreign currency transactions | (425 | ) | ||||||||
Unrealized appreciation of futures contracts | 4,219,705 | |||||||||
|
| |||||||||
Net assets | $ | 7,007,112,708 | ||||||||
|
|
See accompanying notes
22
American Beacon Small Cap Value FundSM
Statement of Assets and Liabilities
April 30, 2017 (Unaudited)
Shares outstanding at no par value (unlimited shares authorized): |
| |||||||||
Institutional Class | 207,148,555 | |||||||||
|
| |||||||||
Y Class | 12,834,721 | |||||||||
|
| |||||||||
Investor Class | 25,017,090 | |||||||||
|
| |||||||||
Advisor Class | 3,943,517 | |||||||||
|
| |||||||||
A Class | 2,468,862 | |||||||||
|
| |||||||||
C Class | 648,602 | |||||||||
|
| |||||||||
R6 ClassA | 3,567 | |||||||||
|
| |||||||||
Net assets: |
| |||||||||
Institutional Class | $ | 5,790,008,385 | ||||||||
|
| |||||||||
Y Class | $ | 354,284,933 | ||||||||
|
| |||||||||
Investor Class | $ | 675,321,870 | ||||||||
|
| |||||||||
Advisor Class | $ | 105,154,609 | ||||||||
|
| |||||||||
A Class | $ | 65,572,772 | ||||||||
|
| |||||||||
C Class | $ | 16,670,440 | ||||||||
|
| |||||||||
R6 ClassA | $ | 99,698 | ||||||||
|
| |||||||||
Net asset value, offering and redemption price per share: |
| |||||||||
Institutional Class | $ | 27.95 | ||||||||
|
| |||||||||
Y Class | $ | 27.60 | ||||||||
|
| |||||||||
Investor Class | $ | 26.99 | ||||||||
|
| |||||||||
Advisor Class | $ | 26.67 | ||||||||
|
| |||||||||
A Class | $ | 26.56 | ||||||||
|
| |||||||||
A Class (offering price) | $ | 28.18 | ||||||||
|
| |||||||||
C Class | $ | 25.70 | ||||||||
|
| |||||||||
R6 ClassA | $ | 27.95 | ||||||||
|
| |||||||||
† Cost of investments in unaffiliated securities | $ | 5,461,353,879 | ||||||||
‡ Cost of investments in affiliated securities | $ | 406,465,716 | ||||||||
§ Fair value of securities on loan | $ | 179,969,109 | ||||||||
A Class commenced operations February 28, 2017 (Note 1). |
See accompanying notes
23
American Beacon Small Cap Value FundSM
Statement of Operations
For the Period Ended April 30, 2017 (Unaudited)
Investment income: |
| |||||||||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 45,799,460 | ||||||||
Dividend income from affiliated securities | 665,788 | |||||||||
Income derived from securities lending | 1,482,140 | |||||||||
|
| |||||||||
Total investment income | 47,947,388 | |||||||||
|
| |||||||||
Expenses: |
| |||||||||
Management and investment advisory fees (Note 2) | 25,690,917 | |||||||||
Transfer agent fees: | ||||||||||
Institutional Class | 774,829 | |||||||||
Y Class | 35,929 | |||||||||
Investor Class | 15,609 | |||||||||
Advisor Class | 4,911 | |||||||||
A Class | 3,548 | |||||||||
C Class | 729 | |||||||||
R6 ClassA | 373 | |||||||||
Custody and fund accounting fees | 332,230 | |||||||||
Professional fees | 72,607 | |||||||||
Registration fees and expenses | 82,133 | |||||||||
Service fees (Note 2): | ||||||||||
Y Class | 153,673 | |||||||||
Investor Class | 1,114,766 | |||||||||
Advisor Class | 142,323 | |||||||||
A Class | 48,641 | |||||||||
C Class | 11,433 | |||||||||
Distribution fees (Note 2): | ||||||||||
Advisor Class | 142,323 | |||||||||
A Class | 81,069 | |||||||||
C Class | 76,221 | |||||||||
Prospectus and shareholder report expenses | 186,426 | |||||||||
Trustee fees | 190,536 | |||||||||
Other expenses | 150,955 | |||||||||
|
| |||||||||
Total expenses | 29,312,181 | |||||||||
|
| |||||||||
Net fees waived and expenses reimbursed / (recouped) by Manager (Note 2) | (359 | ) | ||||||||
|
| |||||||||
Net expenses | 29,311,822 | |||||||||
|
| |||||||||
Net investment income | 18,635,566 | |||||||||
|
| |||||||||
Realized and unrealized gain (loss) from investments: |
| |||||||||
Net realized gain (loss) from: | ||||||||||
Investments | 309,010,346 | |||||||||
Commission recapture (Note 1) | 16,909 | |||||||||
Foreign currency transactions | (1,535 | ) | ||||||||
Futures contracts | 21,203,822 | |||||||||
Change in net unrealized appreciation (depreciation) of: | ||||||||||
Investments | 695,755,775 | |||||||||
Foreign currency transactions | (354 | ) | ||||||||
Futures contracts | 10,311,558 | |||||||||
|
| |||||||||
Net gain from investments | 1,036,296,521 | |||||||||
|
| |||||||||
Net increase in net assets resulting from operations | $ | 1,054,932,087 | ||||||||
|
| |||||||||
† Foreign taxes | $ | 132,130 | ||||||||
A Class commenced operations February 28, 2017 (Note 1). |
See accompanying notes
24
American Beacon Small Cap Value FundSM
Statements of Changes of Net Assets
For the Six Months Ended April 30, 2017 | For the Year Ended October 31, 2016 | |||||||||||
(unaudited) | ||||||||||||
Increase (Decrease) in Net Assets: | ||||||||||||
Operations: | ||||||||||||
Net investment income | $ | 18,635,566 | $ | 53,881,192 | ||||||||
Net realized gain from investments, commission recapture, foreign currency transactions, and futures contracts | 330,229,542 | 132,744,476 | ||||||||||
Change in net unrealized appreciation (depreciation) of investments, foreign currency transactions, and futures contracts | 706,066,979 | 95,192,574 | ||||||||||
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 1,054,932,087 | 281,818,242 | ||||||||||
|
|
|
| |||||||||
Distributions to Shareholders: |
| |||||||||||
Net investment income: | ||||||||||||
Institutional Class | (44,712,589 | ) | (35,441,317 | ) | ||||||||
Y Class | (2,820,317 | ) | (1,930,427 | ) | ||||||||
Investor Class | (3,777,116 | ) | (3,345,737 | ) | ||||||||
Advisor Class | (514,722 | ) | (382,344 | ) | ||||||||
A Class | (310,111 | ) | (300,302 | ) | ||||||||
Net realized gain from investments: | ||||||||||||
Institutional Class | (122,225,000 | ) | (202,232,279 | ) | ||||||||
Y Class | (8,295,210 | ) | (11,745,307 | ) | ||||||||
Investor Class | (15,742,672 | ) | (34,525,476 | ) | ||||||||
Advisor Class | (2,933,912 | ) | (5,445,704 | ) | ||||||||
A Class | (1,474,164 | ) | (2,612,559 | ) | ||||||||
C Class | (344,117 | ) | (617,973 | ) | ||||||||
|
|
|
| |||||||||
Net distributions to shareholders | (203,149,930 | ) | (298,579,425 | ) | ||||||||
|
|
|
| |||||||||
Capital Share Transactions: | ||||||||||||
Proceeds from sales of shares | 1,189,819,840 | 1,494,089,157 | ||||||||||
Reinvestment of dividends and distributions | 196,388,754 | 288,838,431 | ||||||||||
Cost of shares redeemed | (1,047,225,582 | ) | (1,428,769,445 | ) | ||||||||
|
|
|
| |||||||||
Net increase in net assets from capital share transactions | 338,983,012 | 354,158,143 | ||||||||||
|
|
|
| |||||||||
Net increase in net assets | 1,190,765,169 | 337,396,960 | ||||||||||
|
|
|
| |||||||||
Net Assets: | ||||||||||||
Beginning of period | 5,816,347,539 | 5,478,950,579 | ||||||||||
|
|
|
| |||||||||
End of Period * | $ | 7,007,112,708 | $ | 5,816,347,539 | ||||||||
|
|
|
| |||||||||
*Includes undistributed net investment income | $ | 4,384,765 | $ | 43,851,960 | ||||||||
|
|
|
|
See accompanying notes
25
American Beacon Small Cap Value FundSM
April 30, 2017 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940 (the “Act”) as a diversified, open-end management investment company. As of April 30, 2017, the Trust consists of thirty-two active series, one of which is presented in this filing: American Beacon Small Cap Value Fund (the “Fund”). The remaining thirty-one active series are reported in separate filings.
American Beacon Advisors, Inc. (the “Manager”) is a wholly-owned subsidiary of Resolute Investment Managers, 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.
New Accounting Pronouncements
In October 2016, the SEC adopted amendments to rules under the Investment Company Act of 1940 (“final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. The final rules amend Regulation S-X and require funds to provide standardized, enhanced derivative disclosure in fund financial statements in a format designed for individual investors. The amendments to Regulation S-X also update the disclosures for other investments and investments in, and advances to affiliates and amend the rules regarding the general form and content of fund financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the amendments and its impact, if any, on the Funds’ Financial Statements.
Class Disclosure
The inception date of the R6 Class was February 28, 2017.
The Fund has multiple classes of shares designed to meet the needs of different groups of investors. The following table sets forth the differences amongst the classes:
Class | Eligible Investors | Minimum Initial Investments | ||||
Institutional | Large institutional Investors - sold directly or through intermediary channels. | $ | 250,000 | |||
Y Class | Large institutional retirement plan investors - sold directly or through Retirement plan sponsors. | $ | 100,000 | |||
Investor | All investors using intermediary organizations such as broker-dealers or retirement plan sponsors - sold directly through intermediary channels. | $ | 2,500 | |||
Advisor Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrators. | $ | 2,500 | |||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary such as a broker or employee directed benefit plans with applicable sales charges which may include CDSC. | $ | 1,000 | |||
R6 | Large institutional retirement plan investors- sold through retirement plan sponsors. | $ | 5,000,000 |
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
26
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
respective Fund. Class specific expenses, where applicable, currently include administration service fees, service fees, and distribution fees and vary amongst the classes as described more fully in Note 2.
The following is a summary of significant accounting policies, consistently followed by the Fund in preparation of the financial statements. The Fund is considered an investment company and accordingly, follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946, Financial Services – Investment Companies, which is part of the U.S. Generally Accepted Accounting Principles (“U.S. GAAP”).
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 Net Asset Value (“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. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Fund also designates earnings and profits distributed to shareholders on the redemption of shares.
Commission Recapture
The Fund has 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 Fund. This amount is reported with the net realized gains in the Fund’s Statement 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.
27
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Other
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities 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.
2. Transactions with Affiliates
Management Agreement
The Fund and the Manager are parties to a Management Agreement that obligates the Manager to provide investment advisory, fund management, and administrative services to the Fund. As compensation for performing the duties under the Management Agreement, the Manager receives from the Fund an annualized fee at the following annual rates as a percentage of average daily net assets: 0.35% of the first $15 billion, 0.325% of the next $15 billion, and 0.30% of the next $30 billion. The Fund pays the unaffiliated investment advisors hired to direct investment activities of the Fund an annualized investment advisory fee based on a percentage of the Fund’s average daily assets. Management fees paid by the Fund during the period ended April 30, 2017 were as follows:
Fund | Management Fee Rate | Management Fee | Amount Paid to Investment Advisors | Amount Paid to Manager | ||||||||||||
Small Cap Value | 0.75 | % | $ | 25,690,917 | $ | 13,661,451 | $ | 12,029,466 |
As compensation for services provided by the Manager in connection with securities lending activities conducted by the Fund, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee up to 10% 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 10% of such loan fees. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statement of Operations. During the period ended April 30, 2017, the manager received securities lending fees of $196,455 for the securities lending activities 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 may be charged to the Fund for distribution purposes. However, the Plan authorizes the management and administrative services 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.
28
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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 of the Fund. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.10% of the average daily net assets of the Y Class, up to 0.15% of the average net assets of the A and C Classes, up to 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. Effective April 1, 2017, the Fund terminated the service plan for the Y Class.
Sub-Transfer Agent Fees
The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the Institutional Class of the Fund and has agreed to compensate the intermediaries for providing these services. Effective April 1, 2017, the Fund has agreed to compensate the intermediaries for providing services to the Y Class. Intermediaries transact with the Fund primarily through the use of omnibus accounts on behalf of its customers who hold positions in the Fund. Certain services would have been provided by the Fund’s transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Fund’s transfer agent. Accordingly, the Fund, pursuant to the Trust’s Board of Trustees (the “Board”) approval, has agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the period ended April 30, 2017, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:
Fund | Sub-Transfer Agent Fees | |||
Small Cap Value | $ | 732,196 |
As of April 30, 2017, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:
Fund | Reimbursement Sub-Transfer Agent Fees | |||
Small Cap Value | $ | 103,195 |
Brokerage Commissions
Affiliated entities of an investment advisor to the Fund received net commissions on purchases and sales of the Fund’s portfolio securities totaling $63,901 for the period ended April 30, 2017.
Investments 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 management fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the period ended April 30, 2017, the Manager earned fees totaling $38,958 on the Fund’s direct investments in the USG Select Fund and $86,094 from the Fund’s securities lending collateral invested in USG Select Fund.
29
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Interfund Lending Program
Pursuant to an exemptive order 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 Fund. During the period ended April 30, 2017, the Fund did not utilize the credit facility.
Expense Reimbursement Plan
The Manager voluntarily agreed to reduce fees and/or reimburse expenses for the R6 Class of the Fund to the extent that total operating expenses exceed the expense cap. During the period ended April 30, 2017, the Manager waived and/or reimbursed expenses as follows:
Class | Expense Cap 2/28/2017 - 4/30/2017 | Reimbursed Expenses | Expiration of Reimbursed Expenses | |||||||
R6 | 0.81% | $ | 359 | 2020 |
Of this amount, $176 was disclosed as a receivable from the Manager on the Statement of Assets and Liabilities at April 30, 2017. The Fund has adopted an Expense Reimbursement Plan whereby the Manage may seek repayment of such fee reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Fund for any contractual or voluntary fees reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years after the Manager’s own waiver or reimbursement and (b) does not cause the Fund’s annual operating expenses to exceed the lesser of the contractual percentage limit in effect at the time of the waiver/reimbursement or time of recoupment. The reimbursed expenses above will expire in 2020. The carryover of excess expenses potentially reimbursable to the manager, but not recorded as a liability is $324 expiring in 2017.
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 period ended April 30, 2017, Foreside collected $6,771 in sales commissions from the sale of Class A Shares of the Fund.
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 period ended April 30, 2017, CDSC fees of $250 were collected for the Class A Shares of 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 period ended April 30, 2017, CDSC fees of $645 were collected for Class C Shares of the Fund.
Trustee Fees and Expenses
As compensation for their service to the Trust, the American Beacon Select Funds and the American Beacon Institutional Funds Trust, each Trustee receives an annual retainer of $120,000, plus $5,000 for each Board of Trustee meeting attended in person or via teleconference, $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, and $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee, plus reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. The Trustees also
30
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
may be compensated for attendance at special Board and/or Committee meetings from time to time. The Board Chairman receives an additional annual retainer of $50,000 as well as a single $5,000 fee each quarter for his attendance at the committee meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chairman of the Nominating and Governance Committee receives an additional annual retainer of $10,000. These expenses are allocated on a prorated basis to each Fund of the Trust according to its respective net assets.
3. Security Valuation and Fair Value Measurements
Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally at 4:00 p.m. Eastern Time, 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 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 Board.
Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, the 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.
Other investments 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 Manager’s Valuation Committee, pursuant to procedures established by 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. Fixed-income securities are considered Level 2 as they are valued using observable inputs. | ||
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 or options 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.
31
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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.
Level 3 trading assets and trading liabilities, at fair value
The valuation techniques and significant inputs used in determining the fair values of financial instruments classified as Level 3 of the fair value hierarchy are as follows:
Securities and other assets for which market quotes are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction and may be categorized as Level 3 of the fair value hierarchy.
Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information or broker quotes), including where events occur after the close of the relevant market, but prior to the Exchange close, that materially affect the values of a Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trade, do not open for trading for the entire day and no other market prices are available. The Board has delegated to the Manager the responsibility for monitoring significant events that may materially affect the fair values of a Fund’s securities or assets and for determining whether the value of the applicable securities or assets should be re-evaluated in light of such significant events.
The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated the responsibility for applying the valuation methods to the Manager. For instances in which daily market quotes are not readily available, investments may be valued, pursuant to guidelines established by the Board. In the event that the security or asset cannot be valued pursuant to one of the valuation methods established by the Board, the fair value of the security or asset will be determined in good faith by the Valuation Committee, generally based upon recommendations provided by the Manager.
When the Fund uses fair valuation methods applied by the Manager that use significant unobservable inputs to determine its NAV, the securities priced using this methodology are categorized as Level 3 of the fair value hierarchy. These methods may require subjective determinations about the value of a security. While the Trust’s policy is intended to result in a calculation of a Fund’s NAV that fairly reflects security values as of the time of pricing, the Trust cannot guarantee that values determined by the Board or persons acting at their direction would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by the Fund may differ from the value that would be realized if the securities were sold.
For fair valuations using significant unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances for reported fair values that presents changes attributable to total realized and unrealized gains or losses, purchases and sales, and transfers in and out of the Level 3 category during the period. In accordance with the requirements of U.S. GAAP, a fair value hierarchy and Level 3 reconciliation, if any, have been included in the foonotes of the Schedule of Investments.
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,
32
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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.
Common Stock
Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or over-the-counter (“OTC”). OTC stock may be less liquid than exchange-traded stock.
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 the 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.
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.
5. Financial Derivative Instruments
The Fund may utilize derivative instruments to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs. When considering the Fund’s use of derivatives, it is important to note that the Fund does not use derivatives for the purpose of creating financial leverage.
33
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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 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.
During the period ended April 30, 2017, the Fund entered into future contracts primarily for exposing cash to markets.
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 | Period Ended April 30, 2017 | |||
Small Cap Value | 2,818 |
The following is a summary of the Fund’s derivative financial instruments categorized by risk exposure(1):
Fair values of financial instruments on the Statement of Assets and Liabilities as of April 30, 2017: | ||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
Assets: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | ||||||||||||||||||
Receivable for variation margin from open futures contracts(2) | $ | – | $ | – | $ | – | $ | – | $ | 4,219,705 | $ | 4,219,705 | ||||||||||||
The effect of financial derivative instruments on the Statement of Operations for the period ended April 30, 2017: | ||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
Realized gain (loss) of derivatives | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | ||||||||||||||||||
Net realized gain (loss) from futures contracts | $ | – | $ | – | $ | – | $ | – | $ | 21,203,822 | $ | 21,203,822 | ||||||||||||
Net change in unrealized appreciation (depreciation) of result from operations: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | ||||||||||||||||||
Change in unrealized appreciation (depreciation) from futures contracts | $ | – | $ | – | $ | – | $ | – | $ | 10,311,558 | $ | 10,311,558 |
(1) See Note 3 in the Notes to Financial Statements for additional information.
(2) Includes cumulative appreciation (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.
34
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
6. Principal Risks
Investing in the Fund may involve certain risks including, but not limited to, those described below.
Allocation Risk
The sub-advisor’s judgments about, and allocations among, asset classes and market exposures may adversely affect the Funds’ performance. This risk may be increased by the use of derivatives to increase allocations to various market exposures.
Cybersecurity and Operational Risk
The Fund and its service providers, and shareholders’ ability to transact with the Fund, may be negatively impacted due to operational risks arising from, among other problems, human errors, systems and technology disruptions or failures, or cybersecurity incidents. It is not possible for the Fund service providers to identify all of the operational risks that may affect the Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Cybersecurity incidents could also affect issuers of securities in which the Fund invests, leading to significant loss of value.
Equity Investments Risk
Equity securities are subject to investment and market risk. The Fund’s investments in equity securities may include common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Fund to additional risks.
Common Stock - The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company.
Depositary Receipts - Depositary receipts and U.S. dollar-denominated foreign stocks traded on U.S. exchanges are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency exchange rate fluctuations, political and financial instability in the home country of a particular depositary receipt or foreign stock, less liquidity and more volatility, less government regulation and supervision and delays in transaction settlement.
REITs - Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values. REITs also are dependent upon the skills of their managers and are subject to heavy cash flow dependency or self-liquidation. Domestic REITs could be adversely affected by failure to qualify for tax-free “pass-through” of net income and gains under the Internal Revenue Code of 1986, as amended, or to maintain their exemption from registration under the Investment Company Act of 1940, as amended. REITs typically incur fees that are separate from those incurred by the Fund. Accordingly, the Fund’s investment in REITs will result in the layering of expenses such that shareholders will indirectly bear a proportionate share of the REITs’ operating expenses, in addition to paying Fund expenses. The value of REIT common stock may decline when interest rates rise.
Financial Services Sector Risk
To the extent the Fund invests in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition.
35
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Foreign Investing Risk
The Fund may invest in securities issued by foreign companies through ADRs and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. The Fund may also invest in local currency investments. ADRs are subject to many of the risks inherent in currency fluctuations and political and financial instability in the home country of a particular ADR or foreign stock. Non-U.S. investments carry potential risks not associated with U.S. investments. Such risks include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity and greater volatility, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, and (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets.
Futures Contracts Risk
Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. Futures contracts may experience potentially dramatic price changes (losses) and imperfect correlation between the price of the contract and the underlying security or index, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).
Investment Risk
An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Funds, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.
Issuer Risk
The value of, and/or the return generated by, a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets.
Market Risk
Since the financial crisis that started in 2008, the U.S. and many foreign economies continue to experience its after-effects, which have resulted, and may continue to result, in fixed-income instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations.
In addition, political events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. Because the impact on the markets has been widespread, it may be difficult to identity both risks and opportunities using past models of the interplay of market forces, or to predict the duration of these market conditions. Interest rates have been unusually low in recent years in the U.S. and abroad. Because there is little
36
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
precedent for this situation, it is difficult to predict the impact on various markets of a significant rate increase, whether brought about by U.S. policy markets or by dislocations in world markets. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely.
Other Investment Companies Risk
The Fund may invest in shares of other registered investment companies, including money market funds. To the extent that the Fund invests in shares of other registered investment companies, the Fund will indirectly bear the fees and expenses charged by those investment companies in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those funds. For example, money market funds are subject to interest rate risk, credit risk, and market risk.
Securities Lending Risk
To the extent the Fund lends its securities, it may be subject to the following risks; i) borrowers of the Fund’s securities typically provide collateral in the form of cash that is reinvested in securities, ii) the securities in which the collateral is invested may not perform sufficiently to cover the return collateral payments owed to borrowers, iii) delays may occur in the recovery of securities from borrowers, which could interfere with the Fund’s ability to vote proxies or to settle transactions, and iv) there is the risk of possible loss of rights in the collateral should the borrower fail financially.
Segregated Assets Risk
In connection with certain transactions that may give rise to future payment obligations, including the purchase and sale of futures contracts, the Fund may be required to maintain a segregated amount of, or otherwise earmark, cash or liquid securities to cover the obligation. Segregated assets cannot be sold while the position they are covering is outstanding, unless they are replaced with other assets of equal value. The need to maintain cash or other liquid securities in segregated accounts could limit the Fund’s ability to pursue other opportunities as they arise.
Value Stocks Risk
Value stocks are subject to the risk that their intrinsic value may never be realized by the market or that their prices may decline. While the Fund’s investments in value stocks may limit its downside risk over time the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Different investment styles could cause the Fund to underperform funds that use a growth or non-value approach to investing or have a broader investment style.
Offsetting Assets and Liabilities
The Fund is a party to enforceable master netting agreements between brokers and counterparties which provides 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 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, 2017.
37
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Offsetting of Financial Assets and Derivative Assets as of April 30, 2017: | ||||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts | $ | 4,219,705 | $ | - | ||||||||
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|
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| |||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 4,219,705 | $ | - | ||||||||
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|
|
|
|
| |||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | (4,219,705 | ) | $ | - | |||||||
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|
| |||||||
Total derivative assets and liabilities subject to an MNA | $ | - | $ | - | ||||||||
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|
|
Remaining Contractual Maturity of the Agreements As of April 30, 2017 | ||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||
Securities Lending Transactions | ||||||||||||||||||||
Common Stocks | $ | 179,969,109 | $ | - | $ | - | $ | - | $ | 179,969,109 | ||||||||||
|
|
|
| |||||||||||||||||
Total Borrowings | $ | 179,969,109 | $ | - | $ | - | $ | - | $ | 179,969,109 | ||||||||||
|
|
|
| |||||||||||||||||
Gross amount of recognized liabilities for securities lending transactions |
| $ | 179,969,109 | |||||||||||||||||
|
|
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 unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2016 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 (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:
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||
(unaudited) | ||||||||||||
Distributions paid from: |
| |||||||||||
Ordinary income* |
| |||||||||||
Institutional Class | $ | 47,651,072 | $ | 35,450,206 | ||||||||
Y Class | 3,019,748 | 1,930,943 | ||||||||||
Investors Class | 4,155,595 | 3,347,255 | ||||||||||
Advisor Class | 585,257 | 382,583 | ||||||||||
A Class | 345,552 | 300,417 | ||||||||||
C Class | 8,273 | 27 |
38
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||
(unaudited) | ||||||||||||
Long-term capital gains |
| |||||||||||
Institutional Class | $ | 119,286,517 | $ | 202,223,390 | ||||||||
Y Class | 8,095,779 | 11,744,791 | ||||||||||
Investors Class | 15,364,193 | 34,523,958 | ||||||||||
Advisor Class | 2,863,377 | 5,445,465 | ||||||||||
A Class | 1,438,723 | 2,612,444 | ||||||||||
C Class | 335,844 | 617,946 | ||||||||||
|
|
|
| |||||||||
Total distributions paid | $ | 203,149,930 | $ | 298,579,425 | ||||||||
|
|
|
|
* For tax purposes, short-term capital gains are considered ordinary income distributions.
As of April 30, 2017 the components of distributable earnings (deficits) on a tax basis were as follows:
Fund | Tax cost | Unrealized appreciation | Unrealized depreciation | Net unrealized appreciation (depreciation) | ||||||||||||||||||||||||
Small Cap Value | $ | 5,919,111,084 | $ | 1,512,030,490 | $ | (238,238,166 | ) | $ | 1,273,792,324 |
Fund | Net unrealized appreciation (depreciation) | Undistributed ordinary income | Undistributed long-term capital gains | Accumulated capital and other losses | Other temporary differences | Distributable earnings | ||||||||||||||||||||||||||||||||||||||
Small Cap Value | $ | 1,273,792,324 | $ | 76,498,822 | $ | 270,084,162 | $ | (4,219,705 | ) | $ | 4,219,280 | $ | 1,620,374,883 |
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 (depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains (losses) on certain derivative instruments, and reclassifications of income from real estate investment securities and publicly traded partnership and the realization for tax purposes of unrealized gains (losses) on investments in passive foreign investment companies.
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 re-classes and reclassifications of income from real estate investment securities and publicly traded partnerships as of April 30, 2017:
Fund | Paid-in-capital | Undistributed (overdistribution of) net investment income | Accumulated net realized gain (loss) | Net unrealized appreciation (depreciation) | ||||||||||||||||||||||||
Small Cap Value | $ | 2 | $ | (5,967,906 | ) | $ | 5,967,904 | $ | – |
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.
For the period ended April 30, 2017, the Fund did not have capital loss carryforwards.
39
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
8. Investment Transactions
The aggregate cost of purchases and proceeds from sales of investments, other than short-term obligations, for the period ended April 30, 2017 were $1,662,645,776 and $1,450,033,555, respectively.
A summary of the Fund’s transactions in the USG Select Fund for the period ended April 30, 2017 are as follows:
Type of Transaction | October 31, 2016 Shares/Fair Value | Purchases | Sales | April 30, 2017 Shares/Fair Value | Dividend Income | |||||||||||||||||||||||||||||||
Direct | $ | 176,509,560 | $ | 1,207,895,605 | $ | 1,165,269,318 | $ | 219,135,847 | $ | 665,788 | ||||||||||||||||||||||||||
Securities Lending | 182,435,583 | 551,426,720 | 546,532,434 | 187,329,869 | 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 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.
40
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
As of April 30, 2017, the value of outstanding securities on loan and the value of collateral was as follows:
Market Value of Securities on Loan | Cash Collateral Received | Non-Cash Collateral Received | Total Collateral Received | |||||||||||||||||||||||
$ | 179,969,109 | $ | 187,329,869 | $ | - | $ | 187,329,869 |
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” on 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:
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 34,133,457 | $ | 950,179,018 | 50,066,083 | $ | 1,141,562,636 | ||||||||||||||||||||||
Reinvestment of dividends | 5,798,690 | 161,493,508 | 10,230,460 | 229,980,745 | ||||||||||||||||||||||||
Shares redeemed | (26,466,564 | ) | (731,261,317 | ) | (41,325,796 | ) | (964,710,175 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | 13,465,583 | $ | 380,411,209 | 18,970,747 | $ | 406,833,206 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 3,768,889 | $ | 101,957,954 | 6,190,151 | $ | 138,267,948 | ||||||||||||||||||||||
Reinvestment of dividends | 377,530 | 10,385,850 | 561,615 | 12,479,092 | ||||||||||||||||||||||||
Shares redeemed | (3,619,157 | ) | (98,319,118 | ) | (4,742,116 | ) | (108,967,301 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | 527,262 | $ | 14,024,686 | 2,009,650 | $ | 41,779,739 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 3,625,146 | $ | 97,509,980 | 5,975,063 | $ | 132,337,020 | ||||||||||||||||||||||
Reinvestment of dividends | 705,910 | 19,003,095 | 1,706,590 | 37,152,459 | ||||||||||||||||||||||||
Shares redeemed | (5,574,864 | ) | (147,717,113 | ) | (11,718,144 | ) | (259,411,145 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (1,243,808 | ) | $ | (31,204,038 | ) | (4,036,491 | ) | $ | (89,921,666 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 668,719 | $ | 17,666,062 | 2,143,395 | $ | 45,656,821 | ||||||||||||||||||||||
Reinvestment of dividends | 129,599 | 3,448,634 | 271,451 | 5,828,048 | ||||||||||||||||||||||||
Shares redeemed | (1,600,270 | ) | (42,399,867 | ) | (2,430,956 | ) | (52,219,934 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (801,952 | ) | $ | (21,285,171 | ) | (16,110 | ) | $ | (735,065 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 659,823 | $ | 17,406,763 | 1,532,151 | $ | 32,767,569 | ||||||||||||||||||||||
Reinvestment of dividends | 66,206 | 1,754,460 | 133,614 | 2,863,338 | ||||||||||||||||||||||||
Shares redeemed | (991,559 | ) | (25,207,069 | ) | (1,259,802 | ) | (27,791,679 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (265,530 | ) | $ | (6,045,846 | ) | 405,963 | $ | 7,839,228 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
41
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 194,732 | $ | 5,000,053 | 160,094 | $ | 3,424,578 | ||||||||||||||||||||||
Reinvestment of dividends | 11,793 | 303,207 | 25,623 | 534,749 | ||||||||||||||||||||||||
Shares redeemed | (91,235 | ) | (2,321,088 | ) | (165,427 | ) | (3,556,022 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | 115,290 | $ | 2,982,172 | 20,290 | $ | 403,305 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
AMR Class(1) | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | - | $ | - | 2,918 | $ | 72,585 | ||||||||||||||||||||||
Shares redeemed | - | - | (508,200 | ) | (12,113,189 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | - | $ | - | (505,582 | ) | $ | (12,040,604 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
R6 Class | ||||||||||||||||||||||||||||
February 28, 2017 to April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 3,568 | $ | 100,010 | - | $ | - | ||||||||||||||||||||||
Shares redeemed | - | (10 | ) | - | - | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | 3,568 | $ | 100,000 | - | $ | - | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
(1) The AMR Class closed on December 11, 2015.
11. Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.
42
American Beacon Small Cap Value FundSM
(For a share outstanding throughout the period)
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
2016B | 2015 | 2014A | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 24.36 | $ | 24.69 | $ | 27.80 | $ | 28.04 | $ | 21.04 | $ | 18.75 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.07 | 0.23 | 0.24 | 0.17 | 0.25 | 0.17 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 4.37 | 0.79 | 0.02 | 2.18 | 7.60 | 2.20 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 4.44 | 1.02 | 0.26 | 2.35 | 7.85 | 2.37 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.23 | ) | (0.20 | ) | (0.19 | ) | (0.14 | ) | (0.27 | ) | (0.08 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.58 | ) | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.85 | ) | (1.35 | ) | (3.37 | ) | (2.59 | ) | (0.85 | ) | (0.08 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 27.95 | $ | 24.36 | $ | 24.69 | $ | 27.80 | $ | 28.04 | $ | 21.04 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 18.20 | %D | 4.58 | % | 0.87 | % | 8.78 | % | 38.59 | % | 12.71 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 5,790,008,386 | $ | 4,717,291,753 | $ | 4,313,522,956 | $ | 4,002,884,144 | $ | 3,430,107,382 | $ | 2,189,761,186 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.81 | %E | 0.83 | % | 0.81 | % | 0.80 | % | 0.82 | % | 0.82 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.81 | %E | 0.83 | % | 0.81 | % | 0.80 | % | 0.82 | % | 0.82 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.60 | %E | 1.01 | % | 0.99 | % | 0.67 | % | 1.01 | % | 0.87 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.60 | %E | 1.01 | % | 0.99 | % | 0.67 | % | 1.01 | % | 0.87 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 22 | %D | 53 | % | 47 | % | 73 | % | 48 | % | 51 | % |
A | 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. |
B | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Asset Management. |
C | 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. |
D | Not annualized. |
E | Annualized. |
43
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
2016B | 2015 | 2014A | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 24.06 | $ | 24.41 | $ | 27.52 | $ | 27.81 | $ | 20.89 | $ | 18.66 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.06 | 0.23 | 0.23 | 0.18 | 0.22 | 0.15 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 4.31 | 0.76 | 0.01 | 2.12 | 7.55 | 2.19 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 4.37 | 0.99 | 0.24 | 2.30 | 7.77 | 2.34 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.21 | ) | (0.19 | ) | (0.17 | ) | (0.14 | ) | (0.27 | ) | (0.11 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.58 | ) | - | |||||||||||||||||||||||||||||||||
|
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|
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|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.83 | ) | (1.34 | ) | (3.35 | ) | (2.59 | ) | (0.85 | ) | (0.11 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 27.60 | $ | 24.06 | $ | 24.41 | $ | 27.52 | $ | 27.81 | $ | 20.89 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 18.15 | %D | 4.49 | % | 0.79 | % | 8.67 | % | 38.45 | % | 12.58 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 354,284,933 | $ | 296,082,333 | $ | 251,360,287 | $ | 190,416,114 | $ | 122,849,739 | $ | 38,982,081 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.89 | %E | 0.90 | % | 0.90 | % | 0.89 | % | 0.91 | % | 0.91 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.89 | %E | 0.90 | % | 0.90 | % | 0.89 | % | 0.91 | % | 0.91 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.52 | %E | 0.94 | % | 0.90 | % | 0.58 | % | 0.74 | % | 0.77 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.52 | %E | 0.94 | % | 0.90 | % | 0.58 | % | 0.74 | % | 0.77 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 22 | %D | 53 | % | 47 | % | 73 | % | 48 | % | 51 | % |
A | 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. |
B | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Asset Management. |
C | 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. |
D | Not annualized. |
E | Annualized. |
44
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
2016B | 2015 | 2014A | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.52 | $ | 23.86 | $ | 26.96 | $ | 27.27 | $ | 20.47 | $ | 18.23 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.05 | 0.19 | 0.18 | 0.10 | 0.18 | 0.11 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 4.19 | 0.73 | (0.02 | ) | 2.09 | 7.38 | 2.13 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 4.24 | 0.92 | 0.16 | 2.19 | 7.56 | 2.24 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.15 | ) | (0.11 | ) | (0.08 | ) | (0.05 | ) | (0.18 | ) | - | |||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.58 | ) | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.77 | ) | (1.26 | ) | (3.26 | ) | (2.50 | ) | (0.76 | ) | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 26.99 | $ | 23.52 | $ | 23.86 | $ | 26.96 | $ | 27.27 | $ | 20.47 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 18.01 | %D | 4.27 | % | 0.50 | % | 8.40 | % | 38.11 | % | 12.31 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 675,321,870 | $ | 617,552,712 | $ | 723,044,801 | $ | 851,731,763 | $ | 934,041,370 | $ | 748,550,056 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.12 | %E | 1.14 | % | 1.15 | % | 1.16 | % | 1.18 | % | 1.18 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.12 | %E | 1.14 | % | 1.15 | % | 1.16 | % | 1.18 | % | 1.18 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.30 | %E | 0.70 | % | 0.67 | % | 0.33 | % | 0.73 | % | 0.51 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.30 | %E | 0.70 | % | 0.67 | % | 0.33 | % | 0.73 | % | 0.51 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 22 | %D | 53 | % | 47 | % | 73 | % | 48 | % | 51 | % |
A | 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. |
B | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Asset Management. |
C | 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. |
D | Not annualized. |
E | Annualized. |
45
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor ClassC | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
2016B | 2015 | 2014A | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.22 | $ | 23.60 | $ | 26.69 | $ | 27.06 | $ | 20.35 | $ | 18.15 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.14 | 0.12 | 0.13 | 0.06 | 0.14 | 0.06 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 4.04 | 0.73 | 0.01 | 2.07 | 7.34 | 2.14 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 4.18 | 0.85 | 0.14 | 2.13 | 7.48 | 2.20 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.11 | ) | (0.08 | ) | (0.05 | ) | (0.05 | ) | (0.19 | ) | - | |||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.58 | ) | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.73 | ) | (1.23 | ) | (3.23 | ) | (2.50 | ) | (0.77 | ) | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 26.67 | $ | 23.22 | $ | 23.60 | $ | 26.69 | $ | 27.06 | $ | 20.35 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnD | 17.98 | %E | 4.01 | % | 0.41 | % | 8.22 | % | 37.93 | % | 12.12 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 105,154,609 | $ | 110,205,158 | $ | 98,224,328 | $ | 102,681,998 | $ | 88,032,906 | $ | 44,730,536 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.30 | %F | 1.31 | % | 1.31 | % | 1.29 | % | 1.31 | % | 1.32 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.30 | %F | 1.31 | % | 1.31 | % | 1.29 | % | 1.31 | % | 1.32 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.14 | %F | 0.53 | % | 0.51 | % | 0.18 | % | 0.46 | % | 0.35 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.14 | %F | 0.53 | % | 0.51 | % | 0.18 | % | 0.46 | % | 0.35 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 22 | %D | 53 | % | 47 | % | 73 | % | 48 | % | 51 | % |
A | 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. |
B | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Asset Management. |
C | On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class. |
D | 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. |
E | Not annualized. |
F | Annualized. |
46
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
2016B | 2015 | 2014A | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.14 | $ | 23.54 | $ | 26.63 | $ | 27.03 | $ | 20.35 | $ | 18.19 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.04 | 0.15 | 0.13 | 0.11 | 0.16 | 0.08 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 4.13 | 0.73 | 0.02 | 2.03 | 7.30 | 2.12 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 4.17 | 0.88 | 0.15 | 2.14 | 7.46 | 2.20 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.13 | ) | (0.13 | ) | (0.06 | ) | (0.09 | ) | (0.20 | ) | (0.04 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.58 | ) | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.75 | ) | (1.28 | ) | (3.24 | ) | (2.54 | ) | (0.78 | ) | (0.04 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 26.56 | $ | 23.14 | $ | 23.54 | $ | 26.63 | $ | 27.03 | $ | 20.35 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 18.01 | %D | 4.17 | % | 0.45 | % | 8.30 | % | 37.83 | % | 12.11 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 65,572,772 | $ | 63,277,387 | $ | 54,815,183 | $ | 29,569,753 | $ | 13,417,645 | $ | 4,064,204 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.20 | %E | 1.21 | % | 1.21 | % | 1.27 | % | 1.35 | % | 1.44 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.20 | %E | 1.21 | % | 1.22 | % | 1.27 | % | 1.32 | % | 1.34 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.22 | %E | 0.64 | % | 0.56 | % | 0.19 | % | 0.30 | % | 0.21 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.22 | %E | 0.64 | % | 0.54 | % | 0.20 | % | 0.34 | % | 0.32 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 22 | %D | 53 | % | 47 | % | 73 | % | 48 | % | 51 | % |
A | 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. |
B | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Asset Management. |
C | 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. |
D | Not annualized. |
E | Annualized. |
47
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
2016B | 2015 | 2014A | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 22.39 | $ | 22.84 | $ | 26.05 | $ | 26.60 | $ | 20.07 | $ | 18.04 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | (0.03 | ) | (0.02 | ) | 0.03 | (0.07 | ) | 0.03 | (0.03 | ) | ||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.96 | 0.72 | (0.06 | ) | 1.97 | 7.17 | 2.06 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 3.93 | 0.70 | (0.03 | ) | 1.90 | 7.20 | 2.03 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | - | - | - | - | (0.09 | ) | - | |||||||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.58 | ) | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.67 | ) | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 25.70 | $ | 22.39 | $ | 22.84 | $ | 26.05 | $ | 26.60 | $ | 20.07 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 17.53 | %D | 3.42 | % | (0.31 | )% | 7.46 | % | 36.88 | % | 11.25 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 16,670,440 | $ | 11,938,196 | $ | 11,718,580 | $ | 9,676,368 | $ | 6,396,419 | $ | 2,329,911 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.94 | %E | 1.96 | % | 1.97 | % | 2.03 | % | 2.09 | % | 2.21 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.94 | %E | 1.96 | % | 1.98 | % | 2.03 | % | 2.07 | % | 2.10 | % | ||||||||||||||||||||||||||||||||
Net investment (loss), before expense reimbursements | (0.56 | )%E | (0.12 | )% | (0.17 | )% | (0.56 | )% | (0.41 | )% | (0.54 | )% | ||||||||||||||||||||||||||||||||
Net investment (loss), net of reimbursements | (0.56 | )%E | (0.12 | )% | (0.17 | )% | (0.56 | )% | (0.39 | )% | (0.43 | )% | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 22 | %D | 53 | % | 47 | % | 73 | % | 48 | % | 51 | % |
A | 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. |
B | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Asset Management. |
C | 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. |
D | Not annualized. |
E | Annualized. |
48
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
R6 Class | ||||||||
February 28, 2017 A to | ||||||||
|
| |||||||
(unaudited) | ||||||||
Net asset value, beginning of period | $ | 28.03 | ||||||
|
| |||||||
Income from investment operations: | ||||||||
Net investment income | 0.02 | |||||||
Net gains (losses) on investments (both realized and unrealized) | (0.10 | ) | ||||||
|
| |||||||
Total income (loss) from investment operations | (0.08 | ) | ||||||
|
| |||||||
Net asset value, end of period | $ | 27.95 | ||||||
|
| |||||||
Total returnD | 18.25 | %C | ||||||
|
| |||||||
Ratios and supplemental data: | ||||||||
Net assets, end of period | $ | 99,698 | ||||||
Ratios to average net assets: | ||||||||
Expenses, before reimbursements | 3.05 | %B | ||||||
Expenses, net of reimbursements | 0.82 | %B | ||||||
Net investment income, before expense reimbursements | 2.68 | %B | ||||||
Net investment income, net of reimbursements | 0.50 | %B | ||||||
Portfolio turnover rate | 22 | %C |
A | Commencement of operations. |
B | Annualized. |
C | Not annualized. |
D | 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. |
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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: | On the Internet: | |
american_beacon.funds@ambeacon.com | 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 | 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. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the American Beacon Small Cap Value Fund’s portfolio holdings is also available 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 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, TX | 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 4/17
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.
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.
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.
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, 2017 |
Contents
1 | ||||
2 | ||||
7 | ||||
Schedules of Investments: | ||||
9 | ||||
24 | ||||
30 | ||||
34 | ||||
Financial Highlights: | ||||
58 | ||||
64 |
Additional Fund Information | Back Cover |
![]() | Dear Shareholders,
In the weeks ahead of the U.S. presidential election on November 8, 2016, uncertainty about the outcome caused many investors to stay on the sidelines. Some investors questioned whether the election’s result would have negative consequences for their portfolios, although elections have rarely had a lasting effect on the market.
Following the election, the markets responded positively to aspects of the incoming administration’s proposed plans for economic growth; i.e., repatriating jobs from overseas, relaxing regulations, lowering taxes and increasing infrastructure spending. From Election Day 2016 to Inauguration Day 2017, the S&P 500 Index – a broad measure of the performance of large U.S. companies – climbed approximately 6%. During the |
administration’s first 100 days (Inauguration Day to April 30), the same market bellwether gained approximately 5%.
Then on March 15, 2017, as economists had anticipated, the Federal Reserve increased the federal funds rate by 0.25% to a range of 0.75% to 1.00%. It was the third increase since 2008. The Federal Open Market Committee’s confidence in the improving U.S. economy was previously exhibited in December 2016 and December 2015. Economists anticipate two additional increases in 2017.
For the six months ended April 30, 2017:
• | American Beacon Balanced Fund (Investor Class) returned 9.08%. |
• | American Beacon Mid-Cap Value Fund (Investor Class) returned 16.07%. |
For the same time period, the Russell 1000 Value Index, which represents large-cap value stocks, returned 11.69%; the Bloomberg Barclays Capital U.S. Aggregate Index, which represents investment-grade, fixed-income securities, returned -0.67%; and the Russell Midcap Value Index, which measures the performance of domestic mid-cap value funds, returned 12.42%.
At American Beacon Advisors, we are proud to offer a broad range of domestic and global equity and fixed-income funds sub-advised by experienced asset managers who employ distinctive investment processes to manage assets through a variety of economic and market conditions. Together, we work diligently to help our shareholders meet their long-term financial goals.
Thank you for your continued interest in 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 Balanced FundSM
April 30, 2017 (Unaudited)
The Investor Class of the American Beacon Balanced Fund (the “Fund”) returned 9.08% for the six months ended April 30, 2017, outperforming the 60% Russell 1000® Value Index/40% Bloomberg Barclays Capital U.S. Aggregate Index return of 6.67% for the same period.
Total Returns for the Period ended 4/30/17 | |||||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||||||||||||||||||||||
Institutional Class (1,7) | AADBX | 9.29 | % | 12.50 | % | 5.41 | % | 8.98 | % | 5.41 | % | ||||||||||||||||||||||
Y Class (1,2,7) | ACBYX | 9.49 | % | 12.52 | % | 5.38 | % | 8.91 | % | 5.34 | % | ||||||||||||||||||||||
Investor Class (1,7) | AABPX | 9.08 | % | 12.01 | % | 5.04 | % | 8.59 | % | 5.06 | % | ||||||||||||||||||||||
Advisor Class (1,7) | ABLSX | 8.99 | % | 11.80 | % | 4.85 | % | 8.41 | % | 4.88 | % | ||||||||||||||||||||||
A Class with sales charge (1,3,7) | ABFAX | 2.74 | % | 5.50 | % | 2.92 | % | 7.20 | % | 4.37 | % | ||||||||||||||||||||||
A Class without sales charge (1,3,7) | ABFAX | 9.05 | % | 11.93 | % | 4.97 | % | 8.48 | % | 4.99 | % | ||||||||||||||||||||||
C Class with sales charge (1,4,7) | ABCCX | 7.63 | % | 10.06 | % | 4.18 | % | 7.67 | % | 4.45 | % | ||||||||||||||||||||||
C Class without sales charge (1,4,7) | ABCCX | 8.63 | % | 11.06 | % | 4.18 | % | 7.67 | % | 4.45 | % | ||||||||||||||||||||||
Balanced Composite Index (5,6) | 6.67 | % | 10.10 | % | 6.15 | % | 8.94 | % | 5.38 | % | |||||||||||||||||||||||
Russell 1000® Value Index (5,6) | 11.69 | % | 16.55 | % | 8.26 | % | 13.32 | % | 5.53 | % | |||||||||||||||||||||||
Bloomberg Barclays Capital U.S. Aggregate Index (5,6) | (0.67 | )% | 0.83 | % | 2.66 | % | 2.27 | % | 4.30 | % |
* | 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 4/30/07 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 4/30/07. 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 4/30/07 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 4/30/07. A portion of the fees charged to the A Class of the Fund was waived in 2011 and 2012, partially recovered in 2013 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 4/30/07 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 4/30/07. 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 Bloomberg Barclays Capital U.S. 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 values. Russell 1000 Value Index and Russell 1000 Index are registered trademarks of Frank Russell Company. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data, and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. The Bloomberg Barclays Capital U.S. 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 ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, and C Class shares was 0.63%, 0.73%, 0.96%, 1.13%, 1.03%, and 1.78%, 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 Balanced FundSM
Performance Overview
April 30, 2017 (Unaudited)
During the six-month period, the Fund’s assets on average were invested 67% in equities (including equitized cash) and 33% in fixed-income securities, ending the period with approximately the same allocation.
The equity portion of the Fund (excluding equitized cash) returned 13.9% for the period, outperforming the Russell 1000 Value Index (the “Index”) return of 11.7%. The Fund outperformed the Index as both stock selection and sector allocation added value relative to the Index.
Stock selections in the Information Technology, Health Care, and Financials sectors contributed the majority of the outperformance during the six-month period. In the Information Technology sector, Micron Technology Inc. (up 60.5%) was the largest contributor, followed closely by off-benchmark Ericsson (LM) Tel Sp. ADR (up 32.6%). In Health Care, positions in Anthem (up 45.8%) and off-benchmark Sanofi ADR (up 20.9%) both had a positive impact on performance. In the Financials sector, the Fund’s position in Bank of America Corp. (up 42.0%) and off-benchmark Blackstone Group Lp. (up 30.7%) contributed to the outperformance. The above well-performing sectors outweighed negative contribution from an investment in off-benchmark Michael Kors Holdings Ltd. (down 28.5%) within the Consumer Discretionary sector.
The Fund’s underweight to Real Estate (up 4.2%), the second worst performing sector in the Index, and underweight to Consumer Staples (up 6.2%) helped performance the most through sector allocation. On the other hand, being overweight in Consumer Discretionary weighed on the Fund’s relative value.
The fixed-income portion of the Fund returned -0.3% for the six-month period, outperforming the Bloomberg Barclays Capital U.S. Aggregate Index (the “Barclays Index”) return of -0.7%. 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 within U.S. Treasuries (down 0.3%) added relative value. Good selection and an overweight allocation to the Manufacturing sector also benefited the Fund, as did an overweight to the Finance sector. From a duration perspective, the portfolio was helped most by overweighting the 0 to 1 year range, as well as good selections in the 5 to 7 year range.
The sub-advisors continue to focus on the disciplined selection of attractive securities that should allow the Fund to benefit long-term.
Top Ten Holdings (% Net Assets) | ||||||||
U.S. Treasury Notes/Bonds, 1.00%, Due 7/31/2018 | 5.1 | |||||||
Citigroup, Inc. | 2.8 | |||||||
Bank of America Corp. | 2.3 | |||||||
American International Group, Inc. | 1.6 | |||||||
JPMorgan Chase & Co. | 1.6 | |||||||
BP PLC | 1.5 | |||||||
Microsoft Corp. | 1.4 | |||||||
Oracle Corp. | 1.3 | |||||||
Wells Fargo & Co. | 1.2 | |||||||
Anthem, Inc. | 1.2 | |||||||
Total Fund Holdings | 491 | |||||||
Sector Allocation (% Equities) | ||||||||
Financials | 27.7 | |||||||
Information Technology | 14.0 | |||||||
Industrials | 12.1 | |||||||
Energy | 11.4 | |||||||
Health Care | 11.0 | |||||||
Consumer Discretionary | 10.9 | |||||||
Materials | 4.7 | |||||||
Consumer Staples | 4.1 | |||||||
Telecommunication Services | 2.2 | |||||||
Utilities | 1.9 |
3
American Beacon Balanced FundSM
Performance Overview
April 30, 2017 (Unaudited)
Sector Allocation (% Fixed Income) | ||||||||
U.S. Treasury Obligations | 45.8 | |||||||
U.S. Agency Mortgage-Backed Obligations | 15.7 | |||||||
Financial | 10.8 | |||||||
Consumer, Non-cyclical | 4.2 | |||||||
Technology | 3.6 | |||||||
Consumer, Cyclical | 3.3 | |||||||
Communications | 3.2 | |||||||
Commercial Mortgage-Backed Obligations | 2.9 | |||||||
Industrial | 2.7 | |||||||
Utilities | 2.0 | |||||||
Asset-Backed Obligations | 1.9 | |||||||
Energy | 1.8 | |||||||
Basic Materials | 0.9 | |||||||
Municipal Obligations | 0.8 | |||||||
Foreign Sovereign | 0.2 | |||||||
Foreign Government Obligations | 0.2 |
4
American Beacon Mid-Cap Value FundSM
Performance Overview
April 30, 2017 (Unaudited)
The Investor Class of the American Beacon Mid-Cap Value Fund (the “Fund”) returned 16.07% for the six months ended April 30, 2017. The Fund outperformed the Russell Midcap® Value Index (the “Index”) return of 12.42% for the same period.
Total Returns for the Period ended 4/30/17 | |||||||||||||||||||||||||||||||||
Ticker | 6 Months | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||||||||||||||||||||||
Institutional Class (1,3,9) | AACIX | 16.18 | % | 19.76 | % | 8.05 | % | 13.51 | % | 7.41 | % | ||||||||||||||||||||||
Y Class (1,4,9) | ACMYX | 16.15 | % | 19.68 | % | 8.00 | % | 13.43 | % | 7.37 | % | ||||||||||||||||||||||
Investor Class (1,2,9) | AMPAX | 16.07 | % | 19.45 | % | 7.81 | % | 13.24 | % | 7.22 | % | ||||||||||||||||||||||
Advisor Class (1,5,9) | AMCSX | 15.92 | % | 19.14 | % | 7.49 | % | 12.92 | % | 6.93 | % | ||||||||||||||||||||||
A Class with sales charge (1,6,9) | ABMAX | 9.23 | % | 12.40 | % | 5.55 | % | 11.69 | % | 6.35 | % | ||||||||||||||||||||||
A Class without sales charge (1,6,9) | ABMAX | 15.93 | % | 19.23 | % | 7.64 | % | 13.03 | % | 6.98 | % | ||||||||||||||||||||||
C Class with sales charge (1,7,9) | AMCCX | 14.54 | % | 17.40 | % | 6.82 | % | 12.18 | % | 6.45 | % | ||||||||||||||||||||||
C Class without sales charge (1,7,9) | AMCCX | 15.54 | % | 18.40 | % | 6.82 | % | 12.18 | % | 6.45 | % | ||||||||||||||||||||||
Russell Midcap® Value Index (8) | 12.42 | % | 17.52 | % | 8.86 | % | 14.26 | % | 7.16 | % |
* | 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 was waived from 2006 through 2013 and fully 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 was waived from 2007 through 2013 and fully 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 4/30/07 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 4/30/07. A portion of the fees charged to the Y Class of the Fund was waived from 2010 through 2013. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2013. |
5. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/07 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 4/30/07. A portion of the fees charged to the Advisor Class of the Fund was waived from 2007 through 2013 and fully 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 4/30/07 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 4/30/07. A portion of the fees charged to the A Class of the Fund was waived from 2010 through 2012 and fully recovered in 2013. Performance prior to waiving fees was lower than the actual returns shown 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 4/30/07 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 4/30/07. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2013 and fully 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. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data, and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. One cannot directly invest in an index. |
5
American Beacon Mid-Cap Value FundSM
Performance Overview
April 30, 2017 (Unaudited)
9. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, and C Class shares was 0.90%, 0.97%, 1.13%, 1.41%, 1.27%, and 2.05%, 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 outperformed the Index as both stock selection and sector allocation added relative value.
The Fund’s performance related to security selection was mostly attributed to investments in the Consumer Discretionary and Real Estate sectors. Holdings in the Consumer Discretionary sector contributing to performance included Wyndham Worldwide (up 48.4%), Royal Caribbean Cruises (up 40.7%) and Dana (up 28.9%). In the Real Estate sector The GEO Group (up 123.3%) was the largest contributor. Not owning Kimco Realty, which was down 22.0% in the Index, also added relative value. The aforementioned performance was somewhat offset by the Fund’s absence from Micron Technology, up 61.3% in the Index, which detracted from performance in the Information Technology sector.
From a sector allocation perspective, the Fund’s significant underweight positions in the Real Estate and Utilities sectors added value relative to the Index. An overweight in Financials, the second best performing sector, also contributed to performance.
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.
Top Ten Holdings (% Net Assets) | ||||||||
Dover Corp. | 1.9 | |||||||
Lamar Advertising Co. | 1.8 | |||||||
Murphy Oil Corp. | 1.7 | |||||||
Pinnacle West Capital Corp. | 1.7 | |||||||
Royal Caribbean Cruises Ltd. | 1.7 | |||||||
FNF Group | 1.6 | |||||||
Cardinal Health, Inc. | 1.6 | |||||||
Willis Towers Watson PLC | 1.5 | |||||||
KeyCorp | 1.4 | |||||||
TransDigm Group, Inc. | 1.4 | |||||||
Total Fund Holdings | 124 | |||||||
Sector Allocation (% Equities) | ||||||||
Financials | 24.6 | |||||||
Consumer Discretionary | 15.0 | |||||||
Industrials | 15.0 | |||||||
Information Technology | 11.1 | |||||||
Energy | 9.3 | |||||||
Health Care | 7.6 | |||||||
Utilities | 5.7 | |||||||
Materials | 5.5 | |||||||
Real Estate | 4.5 | |||||||
Consumer Staples | 1.7 |
6
American Beacon FundsSM
April 30, 2017 (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, distribution (12b-1) fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Funds 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, 2016 through April 30, 2017.
Actual Expenses
The “Actual” lines of the 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 = $8.60), then multiply the result by the “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 tables 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 Funds 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 Funds 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 Funds, 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 “Hypothetical” lines of the 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.
7
American Beacon FundsSM
Expense Examples
April 30, 2017 (Unaudited)
American Beacon Balanced Fund | |||||||||||||||
Beginning Account Value 11/1/2016 | Ending Account Value 4/30/2017 | Expenses Paid During Period 11/1/2016-4/30/2017* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,092.90 | $2.91 | ||||||||||||
Hypothetical** | $1,000.00 | $1,022.00 | $2.81 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,094.90 | $3.48 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.50 | $3.36 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,090.80 | $4.56 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.40 | $4.41 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,089.90 | $5.54 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.50 | $5.36 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,090.50 | $5.03 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.00 | $4.86 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,086.30 | $8.90 | ||||||||||||
Hypothetical** | $1,000.00 | $1,016.30 | $8.60 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.56%, 0.67%, 0.88%, 1.07%, 0.97%, and 1.72% 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 (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
American Beacon Mid-Cap Value Fund | |||||||||||||||
Beginning Account Value 11/1/2016 | Ending Account Value 4/30/2017 | Expenses Paid During Period 11/1/2016-4/30/2017* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,161.80 | $4.72 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.40 | $4.41 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,161.50 | $5.14 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.00 | $4.81 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,160.70 | $5.84 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.40 | $5.46 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,159.20 | $7.44 | ||||||||||||
Hypothetical** | $1,000.00 | $1,017.90 | $6.95 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,159.30 | $6.80 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.50 | $6.36 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,155.40 | $10.85 | ||||||||||||
Hypothetical** | $1,000.00 | $1,014.70 | $10.14 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.88%, 0.96%, 1.09%, 1.39%, 1.27%, and 2.03% 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 (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
8
American Beacon Balanced FundSM
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 61.64% | |||||||||||||||
Consumer Discretionary - 6.75% | |||||||||||||||
Auto Components - 1.22% | |||||||||||||||
Adient PLC | 7,832 | $ | 576,122 | ||||||||||||
Goodyear Tire & Rubber Co. | 59,108 | 2,141,483 | |||||||||||||
Magna International, Inc. | 45,527 | 1,901,662 | |||||||||||||
|
| ||||||||||||||
4,619,267 | |||||||||||||||
|
| ||||||||||||||
Automobiles - 1.85% | |||||||||||||||
Ford Motor Co. | 51,017 | 585,165 | |||||||||||||
General Motors Co. | 121,532 | 4,209,869 | |||||||||||||
Harley-Davidson, Inc. | 6,441 | 365,913 | |||||||||||||
Honda Motor Co., Ltd., ADR | 13,493 | 392,646 | |||||||||||||
Toyota Motor Corp., ADR | 13,541 | 1,464,324 | |||||||||||||
|
| ||||||||||||||
7,017,917 | |||||||||||||||
|
| ||||||||||||||
Hotels, Restaurants & Leisure - 0.40% | |||||||||||||||
Carnival Corp. | 10,842 | 669,710 | |||||||||||||
Norwegian Cruise Line Holdings Ltd.A | 15,565 | 839,421 | |||||||||||||
|
| ||||||||||||||
1,509,131 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 0.35% | |||||||||||||||
DR Horton, Inc. | 27,611 | 908,126 | |||||||||||||
Tupperware Brands Corp. | 5,813 | 417,431 | |||||||||||||
|
| ||||||||||||||
1,325,557 | |||||||||||||||
|
| ||||||||||||||
Media - 1.54% | |||||||||||||||
CBS Corp., Class B, NVRB | 30,067 | 2,001,260 | |||||||||||||
Comcast Corp., Class A | 33,460 | 1,311,297 | |||||||||||||
Discovery Communications, Inc., Class AA | 59,600 | 1,715,288 | |||||||||||||
Discovery Communications, Inc.A | 17,299 | 484,026 | |||||||||||||
Omnicom Group, Inc. | 4,186 | 343,754 | |||||||||||||
|
| ||||||||||||||
5,855,625 | |||||||||||||||
|
| ||||||||||||||
Multiline Retail - 0.49% | |||||||||||||||
Dollar General Corp. | 19,489 | 1,417,045 | |||||||||||||
Target Corp. | 7,728 | 431,609 | |||||||||||||
|
| ||||||||||||||
1,848,654 | |||||||||||||||
|
| ||||||||||||||
Specialty Retail - 0.72% | |||||||||||||||
Bed Bath & Beyond, Inc. | 19,424 | 752,680 | |||||||||||||
Lowe’s Cos., Inc. | 23,226 | 1,971,423 | |||||||||||||
|
| ||||||||||||||
2,724,103 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 0.18% | |||||||||||||||
Michael Kors Holdings Ltd.A | 18,703 | 698,183 | |||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 25,598,437 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 2.51% | |||||||||||||||
Food & Staples Retailing - 0.95% | |||||||||||||||
CVS Health Corp. | 34,804 | 2,869,242 | |||||||||||||
Wal-Mart Stores, Inc. | 9,640 | 724,735 | |||||||||||||
|
| ||||||||||||||
3,593,977 | |||||||||||||||
|
| ||||||||||||||
Food Products - 0.24% | |||||||||||||||
Bunge Ltd. | 5,770 | 456,003 | |||||||||||||
Kellogg Co. | 6,292 | 446,732 | |||||||||||||
|
| ||||||||||||||
902,735 | |||||||||||||||
|
|
See accompanying notes
9
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Consumer Staples - 2.51% (continued) | |||||||||||||||
Tobacco - 1.32% | |||||||||||||||
Altria Group, Inc. | 21,820 | $ | 1,566,240 | ||||||||||||
Imperial Brands PLC, ADR | 31,107 | 1,546,702 | |||||||||||||
Philip Morris International, Inc. | 17,033 | 1,887,938 | |||||||||||||
|
| ||||||||||||||
5,000,880 | |||||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 9,497,592 | ||||||||||||||
|
| ||||||||||||||
Energy - 7.05% | |||||||||||||||
Energy Equipment & Services - 0.25% | |||||||||||||||
Helmerich & Payne, Inc. | 8,100 | 491,184 | |||||||||||||
Oceaneering International, Inc. | 17,155 | 452,721 | |||||||||||||
|
| ||||||||||||||
943,905 | |||||||||||||||
|
| ||||||||||||||
Oil, Gas & Consumable Fuels - 6.80% | |||||||||||||||
Anadarko Petroleum Corp. | 27,997 | 1,596,389 | |||||||||||||
Apache Corp. | 44,067 | 2,143,419 | |||||||||||||
BP PLC, ADR | 166,162 | 5,702,680 | |||||||||||||
Canadian Natural Resources Ltd. | 87,865 | 2,800,257 | |||||||||||||
Chevron Corp. | 17,781 | 1,897,233 | |||||||||||||
Cobalt International Energy, Inc.A | 178,043 | 69,633 | |||||||||||||
ConocoPhillips | 40,735 | 1,951,614 | |||||||||||||
Devon Energy Corp. | 36,807 | 1,453,508 | |||||||||||||
Hess Corp. | 31,032 | 1,515,292 | |||||||||||||
Kosmos Energy Ltd.A | 67,069 | 403,085 | |||||||||||||
Marathon Oil Corp. | 122,231 | 1,817,575 | |||||||||||||
Murphy Oil Corp. | 45,275 | 1,185,299 | |||||||||||||
Phillips 66 | 26,379 | 2,098,713 | |||||||||||||
Royal Dutch Shell PLC, Class A, ADR | 22,235 | 1,160,445 | |||||||||||||
|
| ||||||||||||||
25,795,142 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 26,739,047 | ||||||||||||||
|
| ||||||||||||||
Financials - 17.07% | |||||||||||||||
Banks - 9.02% | |||||||||||||||
Bank of America Corp. | 367,972 | 8,588,466 | |||||||||||||
BNP Paribas S.A., ADRC | 26,000 | 919,100 | |||||||||||||
CIT Group, Inc. | 6,650 | 307,962 | |||||||||||||
Citigroup, Inc. | 178,373 | 10,545,412 | |||||||||||||
Citizens Financial Group | 33,968 | 1,246,965 | |||||||||||||
JPMorgan Chase & Co. | 68,314 | 5,943,318 | |||||||||||||
PNC Financial Services Group, Inc. | 8,703 | 1,042,184 | |||||||||||||
Popular, Inc. | 25,298 | 1,060,239 | |||||||||||||
Wells Fargo & Co. | 84,913 | 4,571,716 | |||||||||||||
|
| ||||||||||||||
34,225,362 | |||||||||||||||
|
| ||||||||||||||
Capital Markets - 2.56% | |||||||||||||||
Bank of New York Mellon Corp. | 8,915 | 419,540 | |||||||||||||
Blackstone Group MLP | 75,730 | 2,335,513 | |||||||||||||
Goldman Sachs Group, Inc. | 3,897 | 872,149 | |||||||||||||
KKR & Co. MLP | 182,284 | 3,459,750 | |||||||||||||
Morgan Stanley | 27,437 | 1,189,943 | |||||||||||||
State Street Corp. | 17,306 | 1,451,973 | |||||||||||||
|
| ||||||||||||||
9,728,868 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 1.66% | |||||||||||||||
Capital One Financial Corp. | 30,023 | 2,413,249 | |||||||||||||
Navient Corp. | 45,230 | 687,496 | |||||||||||||
OneMain Holdings, Inc.A | 20,865 | 486,572 |
See accompanying notes
10
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Financials - 17.07% (continued) | |||||||||||||||
Consumer Finance - 1.66% (continued) | |||||||||||||||
Santander Consumer USA Holdings, Inc.A | 75,579 | $ | 962,876 | ||||||||||||
SLM Corp.A | 74,156 | 929,916 | |||||||||||||
Synchrony Financial | 29,506 | 820,267 | |||||||||||||
|
| ||||||||||||||
6,300,376 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 0.54% | |||||||||||||||
Berkshire Hathaway, Inc., Class BA | 12,342 | 2,039,022 | |||||||||||||
|
| ||||||||||||||
Insurance - 3.02% | |||||||||||||||
Allstate Corp. | 5,262 | 427,748 | |||||||||||||
American International Group, Inc. | 100,621 | 6,128,825 | |||||||||||||
MetLife, Inc. | 27,726 | 1,436,484 | |||||||||||||
Travelers Companies, Inc. | 10,457 | 1,272,199 | |||||||||||||
XL Group Ltd. | 51,937 | 2,173,563 | |||||||||||||
|
| ||||||||||||||
11,438,819 | |||||||||||||||
|
| ||||||||||||||
Mortgage Real Estate Investment Trusts (REITs) - 0.12% | |||||||||||||||
Two Harbors Investment Corp. | 44,757 | 447,123 | |||||||||||||
|
| ||||||||||||||
Thrifts & Mortgage Finance - 0.15% | |||||||||||||||
Radian Group, Inc. | 34,261 | 578,326 | |||||||||||||
|
| ||||||||||||||
Total Financials | 64,757,896 | ||||||||||||||
|
| ||||||||||||||
Health Care - 6.75% | |||||||||||||||
Biotechnology - 0.75% | |||||||||||||||
AbbVie, Inc. | 12,085 | 796,885 | |||||||||||||
Biogen, Inc.A | 2,072 | 561,947 | |||||||||||||
Celgene Corp.A | 5,686 | 705,348 | |||||||||||||
Gilead Sciences, Inc. | 11,420 | 782,841 | |||||||||||||
|
| ||||||||||||||
2,847,021 | |||||||||||||||
|
| ||||||||||||||
Health Care Equipment & Supplies - 1.05% | |||||||||||||||
Medtronic PLC | 42,126 | 3,500,249 | |||||||||||||
Zimmer Biomet Holdings, Inc. | 4,132 | 494,394 | |||||||||||||
|
| ||||||||||||||
3,994,643 | |||||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 1.18% | |||||||||||||||
Anthem, Inc. | 25,233 | 4,488,698 | |||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 3.77% | |||||||||||||||
GlaxoSmithKline PLC, ADR | 31,043 | 1,269,659 | |||||||||||||
Horizon Pharma PLCA | 38,412 | 590,777 | |||||||||||||
Jazz Pharmaceuticals PLCA | 3,393 | 540,437 | |||||||||||||
Johnson & Johnson | 15,986 | 1,973,792 | |||||||||||||
Mallinckrodt PLCA | 17,712 | 831,047 | |||||||||||||
Merck & Co., Inc. | 33,331 | 2,077,521 | |||||||||||||
Mylan N.V.A | 18,744 | 700,088 | |||||||||||||
Pfizer, Inc. | 89,863 | 3,048,153 | |||||||||||||
Sanofi, ADR | 68,671 | 3,248,138 | |||||||||||||
|
| ||||||||||||||
14,279,612 | |||||||||||||||
|
| ||||||||||||||
Total Health Care | 25,609,974 | ||||||||||||||
|
| ||||||||||||||
Industrials - 7.43% | |||||||||||||||
Aerospace & Defense - 1.62% | |||||||||||||||
Boeing Co. | 7,205 | 1,331,700 | |||||||||||||
Embraer S.A., ADR | 16,724 | 321,101 | |||||||||||||
General Dynamics Corp. | 3,611 | 699,776 |
See accompanying notes
11
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Industrials - 7.43% (continued) | |||||||||||||||
Aerospace & Defense - 1.62% (continued) | |||||||||||||||
Raytheon Co. | 11,054 | $ | 1,715,691 | ||||||||||||
Rockwell Collins, Inc. | 13,064 | 1,359,832 | |||||||||||||
United Technologies Corp. | 6,147 | 731,431 | |||||||||||||
|
| ||||||||||||||
6,159,531 | |||||||||||||||
|
| ||||||||||||||
Airlines - 1.21% | |||||||||||||||
American Airlines Group, Inc. | 49,344 | 2,103,041 | |||||||||||||
Delta Air Lines, Inc. | 54,645 | 2,483,069 | |||||||||||||
|
| ||||||||||||||
4,586,110 | |||||||||||||||
|
| ||||||||||||||
Building Products - 0.86% | |||||||||||||||
Johnson Controls International PLC | 78,429 | 3,260,294 | |||||||||||||
|
| ||||||||||||||
Construction & Engineering - 0.51% | |||||||||||||||
AECOMA | 21,981 | 751,970 | |||||||||||||
Chicago Bridge & Iron Co. N.V. | 21,477 | 646,028 | |||||||||||||
Fluor Corp. | 10,746 | 551,485 | |||||||||||||
|
| ||||||||||||||
1,949,483 | |||||||||||||||
|
| ||||||||||||||
Electrical Equipment - 0.40% | |||||||||||||||
Eaton Corp. PLC | 20,206 | 1,528,382 | |||||||||||||
|
| ||||||||||||||
Industrial Conglomerates - 1.03% | |||||||||||||||
Honeywell International, Inc. | 13,267 | 1,739,834 | |||||||||||||
Koninklijke Philips N.V. | 62,326 | 2,145,261 | |||||||||||||
|
| ||||||||||||||
3,885,095 | |||||||||||||||
|
| ||||||||||||||
Machinery - 1.22% | |||||||||||||||
CNH Industrial N.V. | 147,280 | 1,634,808 | |||||||||||||
Cummins, Inc. | 12,672 | 1,912,712 | |||||||||||||
PACCAR, Inc. | 6,139 | 409,655 | |||||||||||||
Parker-Hannifin Corp. | 4,099 | 659,119 | |||||||||||||
|
| ||||||||||||||
4,616,294 | |||||||||||||||
|
| ||||||||||||||
Trading Companies & Distributors - 0.58% | |||||||||||||||
AerCap Holdings N.V.A | 48,091 | 2,212,667 | |||||||||||||
|
| ||||||||||||||
Total Industrials | 28,197,856 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 8.61% | |||||||||||||||
Communications Equipment - 1.25% | |||||||||||||||
Cisco Systems, Inc. | 74,171 | 2,527,006 | |||||||||||||
Telefonaktiebolaget LM Ericsson, Sponsored ADR | 340,520 | 2,209,975 | |||||||||||||
|
| ||||||||||||||
4,736,981 | |||||||||||||||
|
| ||||||||||||||
Electronic Equipment, Instruments & Components - 1.23% | |||||||||||||||
Corning, Inc. | 87,495 | 2,524,231 | |||||||||||||
IPG Photonics Corp.A | 9,734 | 1,229,599 | |||||||||||||
TE Connectivity Ltd. | 11,758 | 909,716 | |||||||||||||
|
| ||||||||||||||
4,663,546 | |||||||||||||||
|
| ||||||||||||||
IT Services - 0.33% | |||||||||||||||
First Data Corp., Class AA | 55,800 | 871,596 | |||||||||||||
Teradata Corp.A | 13,418 | 391,537 | |||||||||||||
|
| ||||||||||||||
1,263,133 | |||||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 1.48% | |||||||||||||||
Intel Corp. | 21,079 | 762,006 |
See accompanying notes
12
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Information Technology - 8.61% (continued) | |||||||||||||||
Semiconductors & Semiconductor Equipment - 1.48% (continued) | |||||||||||||||
Micron Technology, Inc.A | 112,235 | $ | 3,105,542 | ||||||||||||
QUALCOMM, Inc. | 28,684 | 1,541,478 | |||||||||||||
Versum Materials, Inc. | 5,944 | 190,327 | |||||||||||||
|
| ||||||||||||||
5,599,353 | |||||||||||||||
|
| ||||||||||||||
Software - 2.74% | |||||||||||||||
Microsoft Corp. | 77,455 | 5,302,569 | |||||||||||||
Oracle Corp. | 113,465 | 5,101,387 | |||||||||||||
|
| ||||||||||||||
10,403,956 | |||||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 1.58% | |||||||||||||||
Apple, Inc. | 11,758 | 1,689,037 | |||||||||||||
Hewlett Packard Enterprise Co. | 231,408 | 4,311,131 | |||||||||||||
|
| ||||||||||||||
6,000,168 | |||||||||||||||
|
| ||||||||||||||
Total Information Technology | 32,667,137 | ||||||||||||||
|
| ||||||||||||||
Materials - 2.92% | |||||||||||||||
Chemicals - 1.79% | |||||||||||||||
Air Products & Chemicals, Inc. | 14,732 | 2,069,846 | |||||||||||||
Dow Chemical Co. | 43,811 | 2,751,331 | |||||||||||||
Eastman Chemical Co. | 16,485 | 1,314,679 | |||||||||||||
LyondellBasell Industries N.V., Class A | 7,517 | 637,141 | |||||||||||||
|
| ||||||||||||||
6,772,997 | |||||||||||||||
|
| ||||||||||||||
Containers & Packaging - 0.53% | |||||||||||||||
Crown Holdings, Inc.A | 24,335 | 1,364,950 | |||||||||||||
International Paper Co. | 12,225 | 659,783 | |||||||||||||
|
| ||||||||||||||
2,024,733 | |||||||||||||||
|
| ||||||||||||||
Metals & Mining - 0.33% | |||||||||||||||
Reliance Steel & Aluminum Co. | 15,987 | 1,260,095 | |||||||||||||
|
| ||||||||||||||
Paper & Forest Products - 0.27% | |||||||||||||||
Louisiana-Pacific Corp.A | 39,909 | 1,027,258 | |||||||||||||
|
| ||||||||||||||
Total Materials | 11,085,083 | ||||||||||||||
|
| ||||||||||||||
Telecommunication Services - 1.35% | |||||||||||||||
Diversified Telecommunication Services - 0.91% | |||||||||||||||
AT&T, Inc. | 52,340 | 2,074,234 | |||||||||||||
Verizon Communications, Inc. | 29,438 | 1,351,499 | |||||||||||||
|
| ||||||||||||||
3,425,733 | |||||||||||||||
|
| ||||||||||||||
Wireless Telecommunication Services - 0.44% | |||||||||||||||
Vodafone Group PLC, Sponsored ADR | 64,032 | 1,676,998 | |||||||||||||
|
| ||||||||||||||
Total Telecommunication Services | 5,102,731 | ||||||||||||||
|
| ||||||||||||||
Utilities - 1.20% | |||||||||||||||
Electric Utilities - 0.48% | |||||||||||||||
Entergy Corp. | 15,413 | 1,175,395 | |||||||||||||
PPL Corp. | 8,347 | 318,104 | |||||||||||||
Southern Co. | 6,143 | 305,922 | |||||||||||||
|
| ||||||||||||||
1,799,421 | |||||||||||||||
|
| ||||||||||||||
Independent Power and Renewable Electricity Producers - 0.52% | |||||||||||||||
Calpine Corp.A | 194,868 | 1,987,654 | |||||||||||||
|
|
See accompanying notes
13
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Utilities - 1.20% (continued) | |||||||||||||||
Multi-Utilities - 0.20% | |||||||||||||||
CenterPoint Energy, Inc. | 26,782 | $ | 764,090 | ||||||||||||
|
| ||||||||||||||
Total Utilities | 4,551,165 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $183,700,651) | 233,806,918 | ||||||||||||||
|
| ||||||||||||||
Principal Amount | |||||||||||||||
CORPORATE OBLIGATIONS - 9.37% | |||||||||||||||
Basic Materials - 0.23% | |||||||||||||||
Dow Chemical Co., | |||||||||||||||
4.13%, Due 11/15/2021 | $ | 145,000 | 154,030 | ||||||||||||
3.50%, Due 10/1/2024 | 299,000 | 306,791 | |||||||||||||
EI du Pont de Nemours & Co., 2.20%, Due 5/1/2020 | 70,000 | 70,109 | |||||||||||||
Monsanto Co., 1.15%, Due 6/30/2017 | 171,000 | 170,929 | |||||||||||||
Nucor Corp., | |||||||||||||||
4.13%, Due 9/15/2022 | 77,000 | 82,452 | |||||||||||||
4.00%, Due 8/1/2023 | 80,000 | 84,719 | |||||||||||||
|
| ||||||||||||||
869,030 | |||||||||||||||
|
| ||||||||||||||
Communications - 0.60% | |||||||||||||||
AT&T, Inc., | |||||||||||||||
4.45%, Due 4/1/2024 | 80,000 | 84,203 | |||||||||||||
3.40%, Due 5/15/2025 | 169,000 | 164,577 | |||||||||||||
4.50%, Due 5/15/2035 | 106,000 | 100,392 | |||||||||||||
6.35%, Due 3/15/2040 | 58,000 | 66,339 | |||||||||||||
CBS Corp., 3.38%, Due 3/1/2022 | 337,000 | 346,431 | |||||||||||||
Comcast Corp., | |||||||||||||||
5.88%, Due 2/15/2018 | 198,000 | 204,767 | |||||||||||||
3.15%, Due 3/1/2026 | 84,000 | 83,480 | |||||||||||||
6.55%, Due 7/1/2039 | 217,000 | 285,758 | |||||||||||||
Time Warner, Inc., | |||||||||||||||
4.88%, Due 3/15/2020 | 217,000 | 232,735 | |||||||||||||
4.75%, Due 3/29/2021 | 157,000 | 169,505 | |||||||||||||
Verizon Communications, Inc., | |||||||||||||||
4.60%, Due 4/1/2021 | 173,000 | 186,382 | |||||||||||||
4.13%, Due 3/16/2027 | 176,000 | 179,968 | |||||||||||||
Viacom, Inc., 4.50%, Due 2/27/2042 | 217,000 | 189,341 | |||||||||||||
|
| ||||||||||||||
2,293,878 | |||||||||||||||
|
| ||||||||||||||
Consumer, Cyclical - 1.10% | |||||||||||||||
American Honda Finance Corp., | |||||||||||||||
1.70%, Due 2/22/2019 | 140,000 | 140,062 | |||||||||||||
3.88%, Due 9/21/2020E | 250,000 | 263,899 | |||||||||||||
CVS Health Corp., 2.13%, Due 6/1/2021 | 104,000 | 102,623 | |||||||||||||
Daimler Finance North America LLC, | |||||||||||||||
2.25%, Due 9/3/2019E | 169,000 | 169,614 | |||||||||||||
2.45%, Due 5/18/2020E | 313,000 | 314,734 | |||||||||||||
Delphi Corp., 4.15%, Due 3/15/2024 | 152,000 | 160,202 | |||||||||||||
Ford Motor Credit Co. LLC, | |||||||||||||||
2.03%, Due 6/15/2018D | 472,000 | 474,449 | |||||||||||||
2.16%, Due 1/9/2020D | 222,000 | 223,842 | |||||||||||||
5.88%, Due 8/2/2021 | 200,000 | 222,509 | |||||||||||||
3.81%, Due 1/9/2024 | 92,000 | 92,926 | |||||||||||||
Home Depot, Inc., | |||||||||||||||
2.70%, Due 4/1/2023 | 72,000 | 73,353 | |||||||||||||
3.35%, Due 9/15/2025 | 65,000 | 67,272 | |||||||||||||
McDonald’s Corp., 3.70%, Due 1/30/2026 | 183,000 | 188,707 |
See accompanying notes
14
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
Corporate Obligations - 9.37% (continued) | |||||||||||||||
Consumer, cyclical - 1.30% (continued) | |||||||||||||||
Newell Brands, Inc., 5.50%, Due 4/1/2046 | $ | 82,000 | $ | 95,350 | |||||||||||
Nissan Motor Acceptance Corp., 2.35%, Due 3/4/2019E | 289,000 | 290,799 | |||||||||||||
PACCAR Financial Corp., | |||||||||||||||
1.30%, Due 5/10/2019 | 58,000 | 57,500 | |||||||||||||
2.20%, Due 9/15/2019 | 92,000 | 92,644 | |||||||||||||
Toyota Motor Credit Corp., 2.13%, Due 7/18/2019 | 318,000 | 320,293 | |||||||||||||
Volkswagen Group of America Finance LLC, 2.45%, Due 11/20/2019E | 313,000 | 313,935 | |||||||||||||
Wal-Mart Stores, Inc., 7.55%, Due 2/15/2030 | 169,000 | 247,688 | |||||||||||||
Walgreens Boots Alliance, Inc., | |||||||||||||||
2.60%, Due 6/1/2021 | 116,000 | 116,671 | |||||||||||||
3.80%, Due 11/18/2024 | 145,000 | 148,982 | |||||||||||||
|
| ||||||||||||||
4,178,054 | |||||||||||||||
|
| ||||||||||||||
Consumer, Non-cyclical - 1.30% | |||||||||||||||
Abbott Laboratories, | |||||||||||||||
2.35%, Due 11/22/2019 | 87,000 | 87,471 | |||||||||||||
4.90%, Due 11/30/2046 | 87,000 | 91,022 | |||||||||||||
AbbVie, Inc., | |||||||||||||||
2.90%, Due 11/6/2022 | 82,000 | 82,347 | |||||||||||||
4.30%, Due 5/14/2036 | 87,000 | 85,167 | |||||||||||||
Altria Group, Inc., 4.75%, Due 5/5/2021 | 145,000 | 157,892 | |||||||||||||
Amgen, Inc., 4.40%, Due 5/1/2045 | 92,000 | 90,787 | |||||||||||||
Anheuser-Busch InBev Finance, Inc., | |||||||||||||||
1.90%, Due 2/1/2019 | 1,060,000 | 1,062,217 | |||||||||||||
2.65%, Due 2/1/2021 | 164,000 | 166,013 | |||||||||||||
3.65%, Due 2/1/2026 | 164,000 | 167,121 | |||||||||||||
Baxalta, Inc., 4.00%, Due 6/23/2025 | 67,000 | 68,913 | |||||||||||||
Bayer US Finance LLC, 2.38%, Due 10/8/2019E | 300,000 | 302,020 | |||||||||||||
Becton Dickinson and Co., 3.13%, Due 11/8/2021 | 94,000 | 94,530 | |||||||||||||
Cardinal Health, Inc., 3.20%, Due 3/15/2023 | 113,000 | 115,041 | |||||||||||||
Celgene Corp., 5.25%, Due 8/15/2043 | 70,000 | 75,660 | |||||||||||||
Express Scripts Holding Co., 4.50%, Due 2/25/2026 | 646,000 | 671,375 | |||||||||||||
General Mills, Inc., 2.20%, Due 10/21/2019 | 289,000 | 290,229 | |||||||||||||
Genzyme Corp., 5.00%, Due 6/15/2020 | 39,000 | 42,398 | |||||||||||||
Humana, Inc., 3.15%, Due 12/1/2022 | 145,000 | 146,606 | |||||||||||||
Kaiser Foundation Hospitals, 4.15%, Due 5/1/2047 | 45,000 | 45,174 | |||||||||||||
Kraft Heinz Foods Co., | |||||||||||||||
3.50%, Due 7/15/2022 | 65,000 | 67,057 | |||||||||||||
5.00%, Due 7/15/2035 | 63,000 | 66,425 | |||||||||||||
Medtronic, Inc., 3.50%, Due 3/15/2025 | 313,000 | 323,182 | |||||||||||||
Molson Coors Brewing Co., 3.00%, Due 7/15/2026 | 133,000 | 127,684 | |||||||||||||
Philip Morris International, Inc., 2.63%, Due 3/6/2023 | 85,000 | 84,245 | |||||||||||||
Reynolds American, Inc., 5.85%, Due 8/15/2045 | 63,000 | 74,441 | |||||||||||||
UnitedHealth Group, Inc., | |||||||||||||||
1.63%, Due 3/15/2019 | 120,000 | 119,645 | |||||||||||||
3.95%, Due 10/15/2042 | 80,000 | 79,481 | |||||||||||||
Zimmer Biomet Holdings, Inc., 3.55%, Due 4/1/2025 | 135,000 | 134,538 | |||||||||||||
|
| ||||||||||||||
4,918,681 | |||||||||||||||
|
| ||||||||||||||
Energy - 0.28% | |||||||||||||||
Buckeye Partners LP, 4.88%, Due 2/1/2021 | 80,000 | 85,018 | |||||||||||||
Chevron Corp., 1.79%, Due 11/16/2018 | 94,000 | 94,471 | |||||||||||||
Columbia Pipeline Group, Inc., 4.50%, Due 6/1/2025 | 101,000 | 106,935 | |||||||||||||
Energy Transfer Partners LP, 5.30%, Due 4/15/2047 | 53,000 | 52,308 | |||||||||||||
Enterprise Products Operating LLC, 6.13%, Due 10/15/2039 | 63,000 | 74,356 | |||||||||||||
Magellan Midstream Partners LP, 5.00%, Due 3/1/2026 | 48,000 | 53,426 | |||||||||||||
Marathon Petroleum Corp., 3.63%, Due 9/15/2024 | 80,000 | 79,709 |
See accompanying notes
15
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
Corporate Obligations - 9.37% (continued) | |||||||||||||||
Energy - 0.28% (continued) | |||||||||||||||
MPLX LP, | |||||||||||||||
4.88%, Due 12/1/2024 | $ | 87,000 | $ | 93,030 | |||||||||||
5.20%, Due 3/1/2047 | 46,000 | 47,100 | |||||||||||||
Phillips 66, | |||||||||||||||
2.95%, Due 5/1/2017 | 108,000 | 108,000 | |||||||||||||
4.30%, Due 4/1/2022 | 82,000 | 88,406 | |||||||||||||
Phillips 66 Partners LP, 3.55%, Due 10/1/2026 | 53,000 | 51,454 | |||||||||||||
Spectra Energy Partners LP, 3.38%, Due 10/15/2026 | 63,000 | 61,264 | |||||||||||||
Sunoco Logistics Partners Operations LP, 4.25%, Due 4/1/2024 | 48,000 | 49,308 | |||||||||||||
|
| ||||||||||||||
1,044,785 | |||||||||||||||
|
| ||||||||||||||
Financial - 3.30% | |||||||||||||||
American Express Co., 4.05%, Due 12/3/2042 | 104,000 | 103,306 | |||||||||||||
American Express Credit Corp., 2.13%, Due 3/18/2019 | 178,000 | 178,979 | |||||||||||||
American International Group, Inc., | |||||||||||||||
4.88%, Due 6/1/2022 | 289,000 | 315,441 | |||||||||||||
4.50%, Due 7/16/2044 | 53,000 | 51,854 | |||||||||||||
Bank of America Corp., | |||||||||||||||
2.25%, Due 4/21/2020, Series L | 279,000 | 278,904 | |||||||||||||
4.13%, Due 1/22/2024 | 193,000 | 202,834 | |||||||||||||
6.11%, Due 1/29/2037 | 176,000 | 206,121 | |||||||||||||
5.00%, Due 1/21/2044 | 239,000 | 262,213 | |||||||||||||
Bank of New York Mellon Corp., | |||||||||||||||
1.30%, Due 1/25/2018 | 188,000 | 187,849 | |||||||||||||
2.20%, Due 3/4/2019 | 176,000 | 177,529 | |||||||||||||
BB&T Corp., | |||||||||||||||
1.45%, Due 1/12/2018 | 166,000 | 166,108 | |||||||||||||
2.75%, Due 4/1/2022 | 205,000 | 207,684 | |||||||||||||
Bear Stearns Companies LLC, 7.25%, Due 2/1/2018 | 306,000 | 318,659 | |||||||||||||
Boston Properties LP, 3.65%, Due 2/1/2026 | 173,000 | 173,746 | |||||||||||||
Capital One Financial Corp., 2.45%, Due 4/24/2019 | 133,000 | 133,786 | |||||||||||||
CBOE Holdings, Inc., 3.65%, Due 1/12/2027 | 123,000 | 124,186 | |||||||||||||
Chubb INA Holdings, Inc., 3.35%, Due 5/3/2026 | 67,000 | 68,520 | |||||||||||||
Citigroup, Inc., | |||||||||||||||
1.86%, Due 4/27/2018D | 1,012,000 | 1,015,953 | |||||||||||||
3.70%, Due 1/12/2026 | 178,000 | 179,889 | |||||||||||||
3.89%, Due 1/10/2028D | 175,000 | 177,570 | |||||||||||||
5.88%, Due 1/30/2042 | 145,000 | 177,230 | |||||||||||||
CNA Financial Corp., 7.35%, Due 11/15/2019 | 142,000 | 159,633 | |||||||||||||
Crown Castle International Corp., 3.40%, Due 2/15/2021 | 84,000 | 85,733 | |||||||||||||
ERP Operating LP, 3.00%, Due 4/15/2023 | 77,000 | 76,721 | |||||||||||||
Goldman Sachs Group, Inc., | |||||||||||||||
5.95%, Due 1/18/2018 | 217,000 | 223,534 | |||||||||||||
2.88%, Due 2/25/2021 | 130,000 | 131,513 | |||||||||||||
5.75%, Due 1/24/2022 | 385,000 | 434,364 | |||||||||||||
3.50%, Due 1/23/2025 | 92,000 | 92,407 | |||||||||||||
Intercontinental Exchange, Inc., 2.75%, Due 12/1/2020 | 92,000 | 93,554 | |||||||||||||
JPMorgan Chase & Co., | |||||||||||||||
3.63%, Due 5/13/2024 | 434,000 | 448,243 | |||||||||||||
3.78%, Due 2/1/2028D | 157,000 | 159,674 | |||||||||||||
5.50%, Due 10/15/2040 | 313,000 | 370,077 | |||||||||||||
JPMorgan Chase Bank NA, 1.60%, Due 9/21/2018D | 217,000 | 217,657 | |||||||||||||
KeyCorp, 5.10%, Due 3/24/2021 | 58,000 | 63,511 | |||||||||||||
Liberty Mutual Group, Inc., 4.25%, Due 6/15/2023E | 113,000 | 120,280 | |||||||||||||
Mastercard, Inc., 3.38%, Due 4/1/2024 | 120,000 | 125,123 | |||||||||||||
MetLife, Inc., | |||||||||||||||
6.38%, Due 6/15/2034 | 169,000 | 216,877 | |||||||||||||
4.72%, Due 12/15/2044 | 193,000 | 209,584 |
See accompanying notes
16
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
Corporate Obligations - 9.37% (continued) | |||||||||||||||
Financial - 3.30% (continued) | |||||||||||||||
Morgan Stanley, | |||||||||||||||
7.30%, Due 5/13/2019 | $ | 361,000 | $ | 398,073 | |||||||||||
5.63%, Due 9/23/2019 | 169,000 | 182,495 | |||||||||||||
3.70%, Due 10/23/2024 | 231,000 | 236,613 | |||||||||||||
3.13%, Due 7/27/2026 | 159,000 | 153,417 | |||||||||||||
National Rural Utilities Cooperative Finance Corp., | |||||||||||||||
1.65%, Due 2/8/2019 | 92,000 | 91,831 | |||||||||||||
2.95%, Due 2/7/2024 | 87,000 | 87,723 | |||||||||||||
PNC Financial Services Group, Inc., 3.30%, Due 3/8/2022 | 157,000 | 163,144 | |||||||||||||
Prudential Financial, Inc., 4.60%, Due 5/15/2044 | 313,000 | 333,491 | |||||||||||||
Raymond James Financial, Inc., 3.63%, Due 9/15/2026 | 125,000 | 124,716 | |||||||||||||
Simon Property Group LP, | |||||||||||||||
2.20%, Due 2/1/2019 | 234,000 | 235,587 | |||||||||||||
3.38%, Due 10/1/2024 | 313,000 | 317,029 | |||||||||||||
State Street Corp., 2.55%, Due 8/18/2020 | 65,000 | 65,967 | |||||||||||||
US Bancorp, 1.95%, Due 11/15/2018 | 253,000 | 254,403 | |||||||||||||
Ventas Realty LP, 5.70%, Due 9/30/2043 | 65,000 | 74,015 | |||||||||||||
Visa, Inc., | |||||||||||||||
1.20%, Due 12/14/2017 | 193,000 | 193,002 | |||||||||||||
2.80%, Due 12/14/2022 | 92,000 | 93,679 | |||||||||||||
3.15%, Due 12/14/2025 | 128,000 | 130,120 | |||||||||||||
Wells Fargo & Co., | |||||||||||||||
2.15%, Due 1/30/2020, Series N | 67,000 | 67,212 | |||||||||||||
2.55%, Due 12/7/2020 | 106,000 | 107,014 | |||||||||||||
2.19%, Due 7/26/2021D | 1,087,000 | 1,103,392 | |||||||||||||
3.00%, Due 10/23/2026 | 65,000 | 62,676 | |||||||||||||
4.75%, Due 12/7/2046 | 87,000 | 89,692 | |||||||||||||
|
| ||||||||||||||
12,502,137 | |||||||||||||||
|
| ||||||||||||||
Industrial - 0.73% | |||||||||||||||
BAE Systems Holdings, Inc., 3.80%, Due 10/7/2024E | 313,000 | 322,950 | |||||||||||||
Burlington Northern Santa Fe LLC, | |||||||||||||||
3.65%, Due 9/1/2025 | 65,000 | 68,143 | |||||||||||||
5.75%, Due 5/1/2040 | 202,000 | 247,574 | |||||||||||||
Caterpillar Financial Services Corp., 1.35%, Due 5/18/2019 | 123,000 | 121,968 | |||||||||||||
CSX Corp., 5.50%, Due 4/15/2041 | 157,000 | 183,394 | |||||||||||||
Eaton Corp., | |||||||||||||||
5.60%, Due 5/15/2018 | 77,000 | 80,072 | |||||||||||||
2.75%, Due 11/2/2022 | 75,000 | 75,391 | |||||||||||||
General Electric Co., | |||||||||||||||
5.25%, Due 12/6/2017 | 104,000 | 106,416 | |||||||||||||
5.63%, Due 5/1/2018 | 181,000 | 188,455 | |||||||||||||
6.00%, Due 8/7/2019 | 169,000 | 185,056 | |||||||||||||
5.50%, Due 1/8/2020 | 120,000 | 131,585 | |||||||||||||
Hexcel Corp., 3.95%, Due 2/15/2027 | 92,000 | 93,668 | |||||||||||||
Norfolk Southern Corp., 5.75%, Due 4/1/2018 | 205,000 | 212,690 | |||||||||||||
Northrop Grumman Corp., | |||||||||||||||
5.05%, Due 8/1/2019 | 72,000 | 76,971 | |||||||||||||
3.85%, Due 4/15/2045 | 149,000 | 144,955 | |||||||||||||
Stanley Black & Decker, Inc., 2.45%, Due 11/17/2018 | 181,000 | 182,878 | |||||||||||||
Union Pacific Corp., 3.38%, Due 2/1/2035 | 72,000 | 70,120 | |||||||||||||
United Technologies Corp., 6.13%, Due 7/15/2038 | 217,000 | 281,033 | |||||||||||||
|
| ||||||||||||||
2,773,319 | |||||||||||||||
|
| ||||||||||||||
Technology - 1.18% | |||||||||||||||
Analog Devices, Inc., 3.90%, Due 12/15/2025 | 92,000 | 95,174 |
See accompanying notes
17
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
Corporate Obligations - 9.37% (continued) | |||||||||||||||
Technology - 1.18% (continued) | |||||||||||||||
Apple, Inc., | |||||||||||||||
2.40%, Due 5/3/2023 | $ | 214,000 | $ | 212,709 | |||||||||||
4.50%, Due 2/23/2036 | 246,000 | 269,946 | |||||||||||||
4.65%, Due 2/23/2046 | 634,000 | 690,812 | |||||||||||||
Broadcom Corp. / Broadcom Cayman Finance Ltd., | |||||||||||||||
2.38%, Due 1/15/2020E | 41,000 | 41,026 | |||||||||||||
3.63%, Due 1/15/2024E | 222,000 | 225,228 | |||||||||||||
Broadridge Financial Solutions, Inc., 3.40%, Due 6/27/2026 | 84,000 | 82,865 | |||||||||||||
Diamond 1 Finance Corp. / Diamond 2 Finance Corp., | |||||||||||||||
3.48%, Due 6/1/2019E | 104,000 | 106,371 | |||||||||||||
4.42%, Due 6/15/2021E | 96,000 | 100,781 | |||||||||||||
Hewlett Packard Enterprise Co., 6.35%, Due 10/15/2045 | 1,178,000 | 1,223,894 | |||||||||||||
HP, Inc., 4.05%, Due 9/15/2022 | 145,000 | 152,520 | |||||||||||||
Intel Corp., 3.30%, Due 10/1/2021 | 116,000 | 121,768 | |||||||||||||
Microsoft Corp., 4.45%, Due 11/3/2045 | 761,000 | 812,628 | |||||||||||||
Oracle Corp., | |||||||||||||||
2.50%, Due 5/15/2022 | 113,000 | 113,612 | |||||||||||||
4.30%, Due 7/8/2034 | 157,000 | 165,430 | |||||||||||||
QUALCOMM, Inc., 3.00%, Due 5/20/2022 | 65,000 | 66,303 | |||||||||||||
|
| ||||||||||||||
4,481,067 | |||||||||||||||
|
| ||||||||||||||
Utilities - 0.65% | |||||||||||||||
Berkshire Hathaway Energy Co., 6.13%, Due 4/1/2036 | 294,000 | 368,116 | |||||||||||||
Consolidated Edison Co. of New York, Inc., | |||||||||||||||
5.50%, Due 12/1/2039, Series 09-C | 169,000 | 203,282 | |||||||||||||
4.63%, Due 12/1/2054 | 55,000 | 58,971 | |||||||||||||
Delmarva Power & Light Co., 3.50%, Due 11/15/2023 | 106,000 | 110,432 | |||||||||||||
Duke Energy Corp., 3.55%, Due 9/15/2021 | 178,000 | 185,261 | |||||||||||||
Duke Energy Progress LLC, 4.15%, Due 12/1/2044 | 125,000 | 128,738 | |||||||||||||
Edison International, 2.95%, Due 3/15/2023 | 82,000 | 82,707 | |||||||||||||
Georgia Power Co., 1.95%, Due 12/1/2018 | 72,000 | 72,225 | |||||||||||||
MidAmerican Energy Co., 3.10%, Due 5/1/2027 | 123,000 | 123,687 | |||||||||||||
Pacific Gas & Electric Co., 4.25%, Due 3/15/2046 | 135,000 | 139,595 | |||||||||||||
Southern Co., | |||||||||||||||
2.15%, Due 9/1/2019 | 92,000 | 91,925 | |||||||||||||
2.75%, Due 6/15/2020 | 241,000 | 243,116 | |||||||||||||
Southern Power Co., | |||||||||||||||
4.15%, Due 12/1/2025 | 84,000 | 87,747 | |||||||||||||
4.95%, Due 12/15/2046, Series F | 87,000 | 87,618 | |||||||||||||
Southwestern Electric Power Co., 3.55%, Due 2/15/2022 | 289,000 | 298,507 | |||||||||||||
Union Electric Co., 6.70%, Due 2/1/2019 | 96,000 | 103,739 | |||||||||||||
WEC Energy Group, Inc., 3.55%, Due 6/15/2025 | 94,000 | 97,010 | |||||||||||||
|
| ||||||||||||||
2,482,676 | |||||||||||||||
|
| ||||||||||||||
Total Corporate Obligations (Cost $33,905,210) | 35,543,627 | ||||||||||||||
|
| ||||||||||||||
Foreign Corporate Obligations - 1.37% | |||||||||||||||
Basic Materials - 0.08% | |||||||||||||||
LYB International Finance B.V., 4.00%, Due 7/15/2023 | 147,000 | 154,651 | |||||||||||||
Potash Corp. of Saskatchewan, Inc., 4.00%, Due 12/15/2026 | 94,000 | 96,320 | |||||||||||||
Rio Tinto Finance USA Ltd., 3.75%, Due 6/15/2025 | 63,000 | 65,620 | |||||||||||||
|
| ||||||||||||||
316,591 | |||||||||||||||
|
| ||||||||||||||
Communications - 0.45% | |||||||||||||||
Alibaba Group Holding Ltd., 3.60%, Due 11/28/2024 | 313,000 | 317,890 | |||||||||||||
America Movil SAB de CV, 6.38%, Due 3/1/2035 | 169,000 | 201,486 | |||||||||||||
Deutsche Telekom International Finance B.V., 4.88%, Due 3/6/2042E | 150,000 | 160,152 |
See accompanying notes
18
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
Foreign Corporate Obligations - 1.37% (continued) | |||||||||||||||
Communications - 0.45% (continued) | |||||||||||||||
Rogers Communications, Inc., 2.90%, Due 11/15/2026 | $ | 125,000 | $ | 119,469 | |||||||||||
TELUS Corp., 2.80%, Due 2/16/2027 | 99,000 | 92,565 | |||||||||||||
Thomson Reuters Corp., | |||||||||||||||
4.30%, Due 11/23/2023 | 145,000 | 154,230 | |||||||||||||
3.85%, Due 9/29/2024 | 193,000 | 198,684 | |||||||||||||
Vodafone Group PLC, 6.15%, Due 2/27/2037 | 393,000 | 456,514 | |||||||||||||
|
| ||||||||||||||
1,700,990 | |||||||||||||||
|
| ||||||||||||||
Consumer, Non-Cyclical - 0.09% | |||||||||||||||
Sanofi, | |||||||||||||||
1.25%, Due 4/10/2018 | 51,000 | 50,962 | |||||||||||||
4.00%, Due 3/29/2021 | 101,000 | 107,569 | |||||||||||||
Shire Acquisitions Investments Ireland DAC, 2.88%, Due 9/23/2023 | 101,000 | 99,028 | |||||||||||||
Teva Pharmaceutical Finance Netherlands III B.V., 3.15%, Due 10/1/2026 | 111,000 | 103,352 | |||||||||||||
|
| ||||||||||||||
360,911 | |||||||||||||||
|
| ||||||||||||||
Energy - 0.34% | |||||||||||||||
BP Capital Markets PLC, 3.12%, Due 5/4/2026 | 337,000 | 333,740 | |||||||||||||
Canadian Natural Resources Ltd., | |||||||||||||||
3.90%, Due 2/1/2025 | 84,000 | 84,973 | |||||||||||||
6.25%, Due 3/15/2038 | 176,000 | 199,790 | |||||||||||||
Husky Energy, Inc., 3.95%, Due 4/15/2022 | 135,000 | 141,060 | |||||||||||||
Shell International Finance B.V., | |||||||||||||||
1.63%, Due 11/10/2018 | 181,000 | 181,514 | |||||||||||||
4.00%, Due 5/10/2046 | 84,000 | 81,588 | |||||||||||||
TransCanada PipeLines Ltd., | |||||||||||||||
3.75%, Due 10/16/2023 | 145,000 | 151,780 | |||||||||||||
6.10%, Due 6/1/2040 | 82,000 | 102,043 | |||||||||||||
|
| ||||||||||||||
1,276,488 | |||||||||||||||
|
| ||||||||||||||
Financial - 0.26% | |||||||||||||||
ABN AMRO Bank N.V., 1.80%, Due 6/4/2018E | 289,000 | 288,198 | |||||||||||||
HSBC Holdings PLC, 3.26%, Due 3/13/2023D | 123,000 | 124,463 | |||||||||||||
Nordea Bank AB, 4.88%, Due 1/27/2020E | 120,000 | 128,533 | |||||||||||||
Royal Bank of Canada, 2.13%, Due 3/2/2020 | 173,000 | 173,494 | |||||||||||||
Toronto-Dominion Bank, 2.63%, Due 9/10/2018 | 181,000 | 183,394 | |||||||||||||
Trinity Acquisition PLC, 4.40%, Due 3/15/2026 | 87,000 | 90,070 | |||||||||||||
|
| ||||||||||||||
988,152 | |||||||||||||||
|
| ||||||||||||||
Industrial - 0.15% | |||||||||||||||
Canadian National Railway Co., 5.55%, Due 5/15/2018 | 169,000 | 176,171 | |||||||||||||
Ingersoll-Rand Luxembourg Finance S.A., 2.63%, Due 5/1/2020 | 145,000 | 146,867 | |||||||||||||
Johnson Controls International PLC, | |||||||||||||||
5.00%, Due 3/30/2020 | 145,000 | 155,605 | |||||||||||||
4.50%, Due 2/15/2047 | 84,000 | 85,918 | |||||||||||||
|
| ||||||||||||||
564,561 | |||||||||||||||
|
| ||||||||||||||
Total Foreign Corporate Obligations (Cost $5,003,240) | 5,207,693 | ||||||||||||||
|
| ||||||||||||||
FOREIGN GOVERNMENT OBLIGATIONS - 0.15% | |||||||||||||||
European Investment Bank, 2.38%, Due 6/15/2022 | 140,000 | 141,968 | |||||||||||||
Kreditanstalt fuer Wiederaufbau, 2.13%, Due 6/15/2022 | 140,000 | 140,483 | |||||||||||||
Province of Ontario Canada, 2.50%, Due 4/27/2026 | 166,000 | 163,512 | |||||||||||||
Province of Quebec Canada, 2.38%, Due 1/31/2022 | 123,000 | 124,237 | |||||||||||||
|
| ||||||||||||||
Total Foreign Government Obligations (Cost $567,913) | 570,200 | ||||||||||||||
|
|
See accompanying notes
19
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 5.20% | |||||||||||||||
Federal Home Loan Mortgage Corporation, | |||||||||||||||
4.50%, Due 3/1/2019 | $ | 24,025 | $ | 24,670 | |||||||||||
5.00%, Due 10/1/2020 | 14,937 | 15,509 | |||||||||||||
3.50%, Due 8/1/2026 | 46,146 | 48,496 | |||||||||||||
3.50%, Due 9/1/2028 | 290,463 | 305,336 | |||||||||||||
5.00%, Due 8/1/2033 | 62,344 | 68,723 | |||||||||||||
5.50%, Due 2/1/2034 | 59,852 | 67,318 | |||||||||||||
3.50%, Due 9/1/2035 | 364,920 | 380,830 | |||||||||||||
4.00%, Due 1/1/2041 | 206,447 | 218,225 | |||||||||||||
4.50%, Due 2/1/2041 | 153,488 | 165,860 | |||||||||||||
3.50%, Due 6/1/2042 | 653,449 | 674,915 | |||||||||||||
3.50%, Due 7/1/2042 | 181,606 | 187,571 | |||||||||||||
|
| ||||||||||||||
2,157,453 | |||||||||||||||
|
| ||||||||||||||
Federal National Mortgage Association, | |||||||||||||||
5.00%, Due 12/1/2017 | 6,694 | 6,876 | |||||||||||||
4.50%, Due 9/1/2018 | 11,365 | 11,665 | |||||||||||||
4.00%, Due 8/1/2020 | 29,555 | 30,659 | |||||||||||||
4.00%, Due 5/1/2026 | 212,622 | 224,890 | |||||||||||||
4.00%, Due 6/1/2026 | 278,190 | 294,487 | |||||||||||||
3.50%, Due 1/1/2028 | 146,605 | 153,395 | |||||||||||||
3.00%, Due 7/1/2029 | 265,477 | 273,423 | |||||||||||||
5.00%, Due 3/1/2034 | 69,575 | 76,488 | |||||||||||||
4.50%, Due 4/1/2034 | 111,953 | 121,089 | |||||||||||||
5.50%, Due 6/1/2038 | 12,967 | 14,494 | |||||||||||||
4.50%, Due 1/1/2040 | 169,365 | 182,895 | |||||||||||||
5.00%, Due 5/1/2040 | 277,709 | 304,858 | |||||||||||||
5.00%, Due 6/1/2040 | 210,725 | 232,003 | |||||||||||||
4.00%, Due 9/1/2040 | 142,875 | 150,964 | |||||||||||||
4.00%, Due 1/1/2041 | 272,275 | 287,765 | |||||||||||||
4.00%, Due 1/1/2041 | 166,533 | 175,981 | |||||||||||||
4.50%, Due 4/1/2041 | 334,778 | 361,525 | |||||||||||||
4.50%, Due 10/1/2041 | 179,749 | 194,846 | |||||||||||||
3.00%, Due 5/1/2043 | 442,195 | 444,177 | |||||||||||||
3.00%, Due 6/1/2043 | 1,027,830 | 1,032,280 | |||||||||||||
3.00%, Due 6/1/2043 | 379,307 | 380,969 | |||||||||||||
3.50%, Due 6/1/2043 | 177,454 | 183,187 | |||||||||||||
3.50%, Due 7/1/2043 | 185,454 | 191,717 | |||||||||||||
3.00%, Due 8/1/2043 | 894,452 | 898,278 | |||||||||||||
3.50%, Due 4/1/2045 | 411,709 | 423,728 | |||||||||||||
4.00%, Due 7/1/2045 | 418,810 | 443,003 | |||||||||||||
4.00%, Due 7/1/2045 | 523,774 | 552,017 | |||||||||||||
3.50%, Due 8/1/2045 | 168,119 | 173,042 | |||||||||||||
3.50%, Due 11/1/2045 | 421,513 | 433,818 | |||||||||||||
3.50%, Due 11/1/2045 | 1,874,589 | 1,929,312 | |||||||||||||
4.00%, Due 3/1/2046 | 254,628 | 269,424 | |||||||||||||
3.00%, Due 4/1/2046 | 210,600 | 210,500 | |||||||||||||
3.00%, Due 4/1/2046 | 106,531 | 106,481 | |||||||||||||
3.50%, Due 5/1/2046 | 245,512 | 252,679 | |||||||||||||
3.50%, Due 5/1/2046 | 379,702 | 390,786 | |||||||||||||
3.00%, Due 6/1/2046 | 316,270 | 316,120 | |||||||||||||
4.00%, Due 7/1/2046 | 417,999 | 440,849 | |||||||||||||
4.00%, Due 7/1/2046 | 377,288 | 397,633 | |||||||||||||
3.00%, Due 11/1/2046 | 397,757 | 398,355 | |||||||||||||
3.50%, Due 11/1/2046 | 641,463 | 660,978 | |||||||||||||
4.50%, Due 12/1/2046 | 182,257 | 196,211 | |||||||||||||
|
| ||||||||||||||
13,823,847 | |||||||||||||||
|
|
See accompanying notes
20
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
U.S. Agency Mortgage-Backed Obligations - 5.20% (continued) | |||||||||||||||
Government National Mortgage Association, | |||||||||||||||
6.50%, Due 8/15/2027 | $ | 58,607 | $ | 66,604 | |||||||||||
6.50%, Due 11/15/2027 | 64,300 | 73,189 | |||||||||||||
7.50%, Due 12/15/2028 | 59,876 | 70,508 | |||||||||||||
5.50%, Due 7/15/2033 | 62,415 | 70,384 | |||||||||||||
6.00%, Due 12/15/2033 | 77,497 | 89,804 | |||||||||||||
5.50%, Due 2/20/2034 | 88,901 | 99,584 | |||||||||||||
4.50%, Due 5/15/2039 | 146,577 | 157,176 | |||||||||||||
5.00%, Due 10/15/2039 | 126,601 | 141,744 | |||||||||||||
4.50%, Due 6/15/2040 | 135,922 | 148,009 | |||||||||||||
3.50%, Due 9/15/2041 | 362,631 | 376,888 | |||||||||||||
3.50%, Due 3/15/2043 | 253,984 | 265,094 | |||||||||||||
3.50%, Due 3/20/2045 | 242,529 | 253,030 | |||||||||||||
3.00%, Due 6/20/2046 | 336,122 | 341,033 | |||||||||||||
4.00%, Due 10/20/2046 | 218,370 | 231,212 | |||||||||||||
4.00%, Due 12/15/2046 | 123,282 | 130,555 | |||||||||||||
4.00%, Due 1/20/2047 | 143,733 | 152,186 | |||||||||||||
4.00%, Due 2/20/2047 | 457,959 | 484,890 | |||||||||||||
4.50%, Due 2/20/2047 | 181,794 | 194,307 | |||||||||||||
4.00%, Due 3/20/2047 | 394,243 | 417,427 | |||||||||||||
|
| ||||||||||||||
3,763,624 | |||||||||||||||
|
| ||||||||||||||
Total U.S. Agency Mortgage-Backed Obligations (Cost $19,718,043) | 19,744,924 | ||||||||||||||
|
| ||||||||||||||
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS - 0.95% | |||||||||||||||
Ginnie Mae REMIC Trust, | |||||||||||||||
1.15%, Due 12/16/2038, 2013-139 A | 552,506 | 545,152 | |||||||||||||
1.62%, Due 7/16/2039, 2013-78 AB | 689,260 | 678,160 | |||||||||||||
2.59%, Due 9/16/2039, 2014-31 AB | 95,813 | 95,948 | |||||||||||||
1.37%, Due 11/16/2041, 2013-125 AB | 725,384 | 710,606 | |||||||||||||
3.20%, Due 11/16/2044, 2011-92 B | 339,270 | 342,345 | |||||||||||||
GS Mortgage Securities Trust, | |||||||||||||||
3.68%, Due 8/10/2043, 2010-C1 A1E | 35,104 | 35,949 | |||||||||||||
3.03%, Due 11/10/2046, 2013-GC16 A2 | 449,677 | 457,087 | |||||||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, 4.39%, Due 2/15/2046, 2011-C3 A3E | 166,720 | 170,019 | |||||||||||||
JPMBB Commercial Mortgage Securities Trust, 3.16%, Due 7/15/2045, 2013-C12 ASB | 320,000 | 330,045 | |||||||||||||
WFRBS Commercial Mortgage Trust, 3.66%, Due 3/15/2047, 2014-C19 A3 | 219,000 | 228,387 | |||||||||||||
|
| ||||||||||||||
Total Commercial Mortgage-Backed Obligations (Cost $3,617,974) | 3,593,698 | ||||||||||||||
|
| ||||||||||||||
ASSET-BACKED OBLIGATIONS - 0.62% | |||||||||||||||
Ally Master Owner Trust, 1.54%, Due 9/15/2019, 2012 5 A | 287,000 | 287,174 | |||||||||||||
Americredit Automobile Receivables Trust, 1.53%, Due 7/8/2021, 2016 4 A3 | 118,000 | 117,582 | |||||||||||||
Capital One Multi-Asset Execution Trust, 1.34%, Due 4/15/2022, 2016 A3 A3 | 318,000 | 315,640 | |||||||||||||
Chase Issuance Trust, 1.37%, Due 6/15/2021, 2016 A2 A | 265,000 | 263,419 | |||||||||||||
Ford Credit Auto Owner Trust, 2.03%, Due 8/15/2020, 2015 A B | 292,000 | 293,897 | |||||||||||||
GM Financial Automobile Leasing Trust, | |||||||||||||||
1.68%, Due 12/20/2018, 2015 2 A3 | 482,000 | 482,754 | |||||||||||||
2.06%, Due 5/20/2020, 2017 1 A3 | 284,000 | 285,355 | |||||||||||||
Honda Auto Receivables Owner Trust, 1.39%, Due 4/15/2020, 2016 2 A3 | 205,000 | 204,710 | |||||||||||||
Volkswagen Auto Lease Trust, 1.25%, Due 12/20/2017, 2015 A A3 | 95,304 | 95,293 | |||||||||||||
|
| ||||||||||||||
Total Asset-Backed Obligations (Cost $2,346,580) | 2,345,824 | ||||||||||||||
|
| ||||||||||||||
MUNICIPAL OBLIGATIONS - 0.26% (Cost $859,533) | |||||||||||||||
Municipal Electric Authority of Georgia, 6.66%, Due 4/1/2057 | 848,000 | 989,633 | |||||||||||||
|
|
See accompanying notes
21
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
U.S. TREASURY OBLIGATIONS - 15.14% | |||||||||||||||
U.S. Treasury Notes/Bonds, | |||||||||||||||
0.75%, Due 2/28/2018 | $ | 880,000 | $ | 877,387 | |||||||||||
1.00%, Due 7/31/2018D | 19,335,000 | 19,375,797 | |||||||||||||
0.99%, Due 10/31/2018D | 2,891,000 | 2,897,846 | |||||||||||||
0.96%, Due 1/31/2019D | 2,496,000 | 2,500,508 | |||||||||||||
1.13%, Due 5/31/2019 | 723,000 | 720,600 | |||||||||||||
0.75%, Due 7/15/2019 | 1,061,000 | 1,047,986 | |||||||||||||
0.88%, Due 7/31/2019 | 482,000 | 477,368 | |||||||||||||
1.00%, Due 8/31/2019 | 964,000 | 956,732 | |||||||||||||
0.88%, Due 9/15/2019 | 1,205,000 | 1,192,056 | |||||||||||||
1.25%, Due 2/29/2020 | 964,000 | 959,255 | |||||||||||||
1.75%, Due 10/31/2020 | 964,000 | 969,310 | |||||||||||||
1.25%, Due 3/31/2021 | 964,000 | 948,561 | |||||||||||||
1.38%, Due 4/30/2021 | 964,000 | 952,365 | |||||||||||||
2.00%, Due 5/31/2021 | 1,446,000 | 1,463,510 | |||||||||||||
2.00%, Due 11/15/2021 | 2,224,000 | 2,246,413 | |||||||||||||
2.00%, Due 2/15/2022 | 2,691,000 | 2,717,490 | |||||||||||||
1.63%, Due 11/15/2022 | 964,000 | 949,050 | |||||||||||||
2.50%, Due 8/15/2023 | 964,000 | 991,037 | |||||||||||||
2.38%, Due 8/15/2024 | 2,530,000 | 2,572,102 | |||||||||||||
6.88%, Due 8/15/2025 | 279,000 | 378,808 | |||||||||||||
2.00%, Due 11/15/2026 | 825,000 | 804,955 | |||||||||||||
5.25%, Due 11/15/2028 | 217,000 | 279,828 | |||||||||||||
4.75%, Due 2/15/2037 | 304,000 | 401,565 | |||||||||||||
4.50%, Due 8/15/2039 | 241,000 | 308,075 | |||||||||||||
3.13%, Due 11/15/2041 | 2,291,000 | 2,375,481 | |||||||||||||
3.00%, Due 11/15/2045 | 4,156,000 | 4,185,873 | |||||||||||||
2.50%, Due 5/15/2046 | 1,238,000 | 1,124,355 | |||||||||||||
2.88%, Due 11/15/2046 | 2,809,000 | 2,760,941 | |||||||||||||
|
| ||||||||||||||
57,435,254 | |||||||||||||||
|
| ||||||||||||||
Total U.S. Treasury Obligations (Cost $57,383,648) | 57,435,254 | ||||||||||||||
|
| ||||||||||||||
Shares | |||||||||||||||
SHORT-TERM INVESTMENTS - 5.02% (Cost $19,029,536) | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 0.69%F | 19,029,536 | 19,029,536 | |||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 0.24% (Cost $895,375) | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 0.69%F | 895,375 | 895,375 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 99.96% (Cost $327,027,703) | 379,162,682 | ||||||||||||||
OTHER ASSETS, NET OF LIABILITIES - 0.04% | 165,644 | ||||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 379,328,326 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Non-income producing security.
B Non-voting participating shares.
C All or a portion of this security is on loan at April 30, 2017.
D 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.
E 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 $3,354,488 or 0.88% of net assets. The Fund has no right to demand registration of these securities.
F The Fund is affiliated by having the same investment advisor.
ADR - American Depositary Receipt.
LLC - Limited Liability Company.
LP - Limited Partnership.
See accompanying notes
22
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
MLP - Master Limited Partnership.
PLC - Public Limited Company.
Futures Contracts Open on April 30, 2017: | ||||||||||||||||
Description | Type | Number of Contracts | Expiration Date | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
S&P 500 E-Mini Index Futures | Long | 116 | June 2017 | $ | 13,806,900 | $ | 119,652 | |||||||||
|
|
|
| |||||||||||||
$ | 13,806,900 | $ | 119,652 | |||||||||||||
|
|
|
|
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2017, the investments were classified as described below:
Balanced Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Common Stocks | $ | 233,806,918 | $ | - | $ | - | $ | 233,806,918 | ||||||||||||||||||||
Corporate Obligations | - | 35,543,627 | - | 35,543,627 | ||||||||||||||||||||||||
Foreign Corporate Obligations | - | 5,207,693 | - | 5,207,693 | ||||||||||||||||||||||||
Foreign Government Obligations | - | 570,200 | - | 570,200 | ||||||||||||||||||||||||
U.S. Agency Mortgage-Backed Obligations | - | 19,744,924 | - | 19,744,924 | ||||||||||||||||||||||||
Commercial Mortgage-Backed Obligations | - | 3,593,698 | - | 3,593,698 | ||||||||||||||||||||||||
Asset-Backed Obligations | - | 2,345,824 | - | 2,345,824 | ||||||||||||||||||||||||
Municipal Obligations | - | 989,633 | - | 989,633 | ||||||||||||||||||||||||
U.S. Treasury Obligations | - | 57,435,254 | - | 57,435,254 | ||||||||||||||||||||||||
Short-Term Investments – Money Market Funds | 19,029,536 | - | - | 19,029,536 | ||||||||||||||||||||||||
Securities Lending Collateral Invested in Money Market Funds | 895,375 | - | - | 895,375 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 253,731,829 | $ | 125,430,853 | $ | - | $ | 379,162,682 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||||||
Futures Contracts | $ | 119,652 | $ | - | $ | - | $ | 119,652 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 119,652 | $ | - | $ | - | $ | 119,652 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP also requires all transfers between any level 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 period ended April 30, 2017, there were no transfers between levels.
See accompanying notes
23
American Beacon Mid-Cap Value FundSM
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 94.93% | |||||||||||||||
Consumer Discretionary - 14.29% | |||||||||||||||
Auto Components - 1.83% | |||||||||||||||
Dana, Inc. | 358,358 | $ | 6,959,312 | ||||||||||||
Delphi Automotive PLC | 54,981 | 4,420,473 | |||||||||||||
|
| ||||||||||||||
11,379,785 | |||||||||||||||
|
| ||||||||||||||
Hotels, Restaurants & Leisure - 4.91% | |||||||||||||||
Hilton Worldwide Holdings, Inc. | 65,836 | 3,882,349 | |||||||||||||
Norwegian Cruise Line Holdings Ltd.A | 135,925 | 7,330,435 | |||||||||||||
Royal Caribbean Cruises Ltd. | 98,141 | 10,461,831 | |||||||||||||
SeaWorld Entertainment, Inc. | 160,392 | 2,811,672 | |||||||||||||
Wyndham Worldwide Corp. | 63,121 | 6,016,062 | |||||||||||||
|
| ||||||||||||||
30,502,349 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 1.68% | |||||||||||||||
DR Horton, Inc. | 127,329 | 4,187,851 | |||||||||||||
Whirlpool Corp. | 33,532 | 6,226,222 | |||||||||||||
|
| ||||||||||||||
10,414,073 | |||||||||||||||
|
| ||||||||||||||
Leisure Products - 0.54% | |||||||||||||||
Brunswick Corp. | 59,666 | 3,386,045 | |||||||||||||
|
| ||||||||||||||
Media - 2.81% | |||||||||||||||
Interpublic Group of Companies, Inc. | 195,981 | 4,619,272 | |||||||||||||
Meredith Corp. | �� | 48,455 | 2,837,040 | ||||||||||||
News Corp., Class A | 333,122 | 4,237,312 | |||||||||||||
Omnicom Group, Inc. | 69,831 | 5,734,522 | |||||||||||||
|
| ||||||||||||||
17,428,146 | |||||||||||||||
|
| ||||||||||||||
Multiline Retail - 0.50% | |||||||||||||||
Dollar General Corp. | 42,800 | 3,111,988 | |||||||||||||
|
| ||||||||||||||
Specialty Retail - 1.31% | |||||||||||||||
L Brands, Inc. | 81,511 | 4,304,596 | |||||||||||||
Staples, Inc. | 390,071 | 3,810,994 | |||||||||||||
|
| ||||||||||||||
8,115,590 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 0.71% | |||||||||||||||
Hanesbrands, Inc. | 203,015 | 4,427,757 | |||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 88,765,733 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 1.60% | |||||||||||||||
Beverages - 0.67% | |||||||||||||||
Coca-Cola European Partners PLC | 106,900 | 4,128,478 | |||||||||||||
|
| ||||||||||||||
Tobacco - 0.93% | |||||||||||||||
Reynolds American, Inc. | 89,970 | 5,803,065 | |||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 9,931,543 | ||||||||||||||
|
| ||||||||||||||
Energy - 8.88% | |||||||||||||||
Energy Equipment & Services - 2.04% | |||||||||||||||
Superior Energy Services, Inc.A | 128,528 | 1,552,618 | |||||||||||||
TechnipFMC PLCA | 209,639 | 6,316,423 | |||||||||||||
Weatherford International PLCA B | 833,212 | 4,807,633 | |||||||||||||
|
| ||||||||||||||
12,676,674 | |||||||||||||||
|
|
See accompanying notes
24
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Energy - 8.88% (continued) | |||||||||||||||
Oil, Gas & Consumable Fuels - 6.84% | |||||||||||||||
Cenovus Energy, Inc. | 466,725 | $ | 4,657,916 | ||||||||||||
Chesapeake Energy Corp. A B | 347,100 | 1,825,746 | |||||||||||||
Devon Energy Corp. | 129,900 | 5,129,751 | |||||||||||||
EQT Corp. | 136,800 | 7,953,552 | |||||||||||||
Golar LNG Ltd. | 184,089 | 4,696,110 | |||||||||||||
Murphy Oil Corp. | 408,325 | 10,689,949 | |||||||||||||
PBF Energy, Inc., Class A | 155,864 | 3,478,884 | |||||||||||||
Vermilion Energy, Inc. | 114,300 | 4,023,360 | |||||||||||||
|
| ||||||||||||||
42,455,268 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 55,131,942 | ||||||||||||||
|
| ||||||||||||||
Financials - 23.32% | |||||||||||||||
Banks - 6.45% | |||||||||||||||
CIT Group, Inc. | 71,114 | 3,293,289 | |||||||||||||
Comerica, Inc. | 71,041 | 5,022,599 | |||||||||||||
Cullen/Frost Bankers, Inc. | 41,414 | 3,909,067 | |||||||||||||
Fifth Third Bancorp | 266,320 | 6,506,198 | |||||||||||||
KeyCorp | 465,569 | 8,491,979 | |||||||||||||
M&T Bank Corp. | 15,803 | 2,455,944 | |||||||||||||
Regions Financial Corp. | 408,968 | 5,623,310 | |||||||||||||
TCF Financial Corp. | 104,392 | 1,723,512 | |||||||||||||
Valley National Bancorp | 176,652 | 2,077,427 | |||||||||||||
Webster Financial Corp. | 18,633 | 946,743 | |||||||||||||
|
| ||||||||||||||
40,050,068 | |||||||||||||||
|
| ||||||||||||||
Capital Markets - 3.87% | |||||||||||||||
Ameriprise Financial, Inc. | 15,689 | 2,005,839 | |||||||||||||
Apollo Global Management LLC, Class A | 190,325 | 5,095,000 | |||||||||||||
Franklin Resources, Inc. | 124,088 | 5,349,434 | |||||||||||||
Invesco Ltd. | 145,536 | 4,793,956 | |||||||||||||
KKR & Co. MLP | 358,068 | 6,796,130 | |||||||||||||
|
| ||||||||||||||
24,040,359 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 3.76% | |||||||||||||||
Ally Financial, Inc. | 354,500 | 7,019,100 | |||||||||||||
Capital One Financial Corp. | 20,842 | 1,675,280 | |||||||||||||
Discover Financial Services | 90,261 | 5,649,436 | |||||||||||||
Navient Corp. | 279,362 | 4,246,303 | |||||||||||||
SLM Corp.A | 378,195 | 4,742,565 | |||||||||||||
|
| ||||||||||||||
23,332,684 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 1.17% | |||||||||||||||
Voya Financial, Inc. | 194,493 | 7,270,148 | |||||||||||||
|
| ||||||||||||||
Insurance - 6.89% | |||||||||||||||
Allstate Corp. | 76,756 | 6,239,495 | |||||||||||||
Assurant, Inc. | 30,200 | 2,906,448 | |||||||||||||
Axis Capital Holdings Ltd. | 94,167 | 6,205,605 | |||||||||||||
FNF Group | 246,066 | 10,076,403 | |||||||||||||
Torchmark Corp. | 26,492 | 2,032,201 | |||||||||||||
Validus Holdings Ltd. | 70,673 | 3,906,804 | |||||||||||||
Willis Towers Watson PLC | 70,881 | 9,400,238 | |||||||||||||
XL Group Ltd. | 49,300 | 2,063,205 | |||||||||||||
|
| ||||||||||||||
42,830,399 | |||||||||||||||
|
| ||||||||||||||
Mortgage Real Estate Investment Trusts (REITs) - 0.45% | |||||||||||||||
MFA Financial, Inc. | 340,512 | 2,829,655 | |||||||||||||
|
|
See accompanying notes
25
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Financials - 23.32% (continued) | |||||||||||||||
Thrifts & Mortgage Finance - 0.73% | |||||||||||||||
New York Community Bancorp, Inc. | 339,275 | $ | 4,508,965 | ||||||||||||
|
| ||||||||||||||
Total Financials | 144,862,278 | ||||||||||||||
|
| ||||||||||||||
Health Care - 7.25% | |||||||||||||||
Health Care Equipment & Supplies - 1.24% | |||||||||||||||
Zimmer Biomet Holdings, Inc. | 64,355 | 7,700,076 | |||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 5.23% | |||||||||||||||
Cardinal Health, Inc. | 137,790 | 10,002,176 | |||||||||||||
Cigna Corp. | 42,198 | 6,598,501 | |||||||||||||
MEDNAX, Inc.A | 96,800 | 5,842,848 | |||||||||||||
Patterson Companies, Inc. | 72,200 | 3,212,178 | |||||||||||||
Universal Health Services, Inc., Class B | 56,475 | 6,819,921 | |||||||||||||
|
| ||||||||||||||
32,475,624 | |||||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 0.78% | |||||||||||||||
Mylan N.V.A | 130,334 | 4,867,975 | |||||||||||||
|
| ||||||||||||||
Total Health Care | 45,043,675 | ||||||||||||||
|
| ||||||||||||||
Industrials - 14.21% | |||||||||||||||
Aerospace & Defense - 2.74% | |||||||||||||||
Orbital ATK, Inc. | 34,600 | 3,425,400 | |||||||||||||
Spirit AeroSystems Holdings, Inc., Class A | 89,215 | 5,099,529 | |||||||||||||
TransDigm Group, Inc. | 34,349 | 8,474,929 | |||||||||||||
|
| ||||||||||||||
16,999,858 | |||||||||||||||
|
| ||||||||||||||
Building Products - 2.82% | |||||||||||||||
JELD-WEN Holding, Inc.A | 161,334 | 5,328,862 | |||||||||||||
Johnson Controls International PLC | 115,561 | 4,803,871 | |||||||||||||
Owens Corning | 121,489 | 7,392,606 | |||||||||||||
|
| ||||||||||||||
17,525,339 | |||||||||||||||
|
| ||||||||||||||
Commercial Services & Supplies - 0.88% | |||||||||||||||
Republic Services, Inc. | 80,415 | 5,065,341 | |||||||||||||
Steelcase, Inc., Class A | 22,357 | 381,187 | |||||||||||||
|
| ||||||||||||||
5,446,528 | |||||||||||||||
|
| ||||||||||||||
Construction & Engineering - 1.35% | |||||||||||||||
AECOMA | 104,714 | 3,582,266 | |||||||||||||
KBR, Inc. | 340,442 | 4,783,210 | |||||||||||||
|
| ||||||||||||||
8,365,476 | |||||||||||||||
|
| ||||||||||||||
Machinery - 4.75% | |||||||||||||||
CNH Industrial N.V. | 243,809 | 2,706,280 | |||||||||||||
Dover Corp. | 147,681 | 11,649,077 | |||||||||||||
Parker-Hannifin Corp. | 13,557 | 2,179,965 | |||||||||||||
Stanley Black & Decker, Inc. | 43,698 | 5,949,483 | |||||||||||||
Terex Corp. | 200,962 | 7,029,651 | |||||||||||||
|
| ||||||||||||||
29,514,456 | |||||||||||||||
|
| ||||||||||||||
Professional Services - 0.46% | |||||||||||||||
Nielsen Holdings PLC | 68,800 | 2,829,744 | |||||||||||||
|
| ||||||||||||||
Road & Rail - 0.49% | |||||||||||||||
Ryder System, Inc. | 33,350 | 2,264,798 |
See accompanying notes
26
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Industrials - 14.21% (continued) | |||||||||||||||
Road & Rail - 0.49% (continued) | |||||||||||||||
Werner Enterprises, Inc. | 28,583 | $ | 780,316 | ||||||||||||
|
| ||||||||||||||
3,045,114 | |||||||||||||||
|
| ||||||||||||||
Trading Companies & Distributors - 0.72% | |||||||||||||||
AerCap Holdings N.V.A | 97,698 | 4,495,085 | |||||||||||||
|
| ||||||||||||||
Total Industrials | 88,221,600 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 10.54% | |||||||||||||||
Electronic Equipment, Instruments & Components - 2.45% | |||||||||||||||
Avnet, Inc. | 170,136 | 6,582,562 | |||||||||||||
Flex Ltd.A | 312,676 | 4,833,971 | |||||||||||||
Keysight Technologies, Inc.A | 101,130 | 3,785,296 | |||||||||||||
|
| ||||||||||||||
15,201,829 | |||||||||||||||
|
| ||||||||||||||
IT Services - 2.88% | |||||||||||||||
Alliance Data Systems Corp. | 14,231 | 3,552,485 | |||||||||||||
Convergys Corp. | 66,430 | 1,495,339 | |||||||||||||
CSRA, Inc. | 68,568 | 1,993,957 | |||||||||||||
DXC Technology Co.A | 47,437 | 3,573,904 | |||||||||||||
Genpact Ltd. | 165,393 | 4,038,897 | |||||||||||||
Total System Services, Inc. | 56,686 | 3,248,675 | |||||||||||||
|
| ||||||||||||||
17,903,257 | |||||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 3.41% | |||||||||||||||
Marvell Technology Group Ltd. | 337,324 | 5,066,607 | |||||||||||||
Microchip Technology, Inc. | 106,435 | 8,044,357 | |||||||||||||
ON Semiconductor Corp.A | 387,368 | 5,492,878 | |||||||||||||
Versum Materials, Inc. | 80,000 | 2,561,600 | |||||||||||||
|
| ||||||||||||||
21,165,442 | |||||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 1.80% | |||||||||||||||
Hewlett Packard Enterprise Co. | 244,558 | 4,556,115 | |||||||||||||
HP, Inc. | 249,096 | 4,687,987 | |||||||||||||
Seagate Technology PLC | 45,625 | 1,922,181 | |||||||||||||
|
| ||||||||||||||
11,166,283 | |||||||||||||||
|
| ||||||||||||||
Total Information Technology | 65,436,811 | ||||||||||||||
|
| ||||||||||||||
Materials - 5.20% | |||||||||||||||
Chemicals - 3.16% | |||||||||||||||
Ashland Global Holdings, Inc. | 45,953 | 5,675,195 | |||||||||||||
Axalta Coating Systems Ltd.A | 150,000 | 4,705,500 | |||||||||||||
Celanese Corp., Series A | 27,000 | 2,350,080 | |||||||||||||
Eastman Chemical Co. | 46,302 | 3,692,585 | |||||||||||||
FMC Corp. | 43,906 | 3,215,236 | |||||||||||||
|
| ||||||||||||||
19,638,596 | |||||||||||||||
|
| ||||||||||||||
Construction Materials - 0.53% | |||||||||||||||
CRH PLC, ADR | 90,198 | 3,275,991 | |||||||||||||
|
| ||||||||||||||
Containers & Packaging - 1.51% | |||||||||||||||
Owens-Illinois, Inc.A | 190,967 | 4,166,900 | |||||||||||||
Packaging Corp. of America | 52,496 | 5,185,555 | |||||||||||||
|
| ||||||||||||||
9,352,455 | |||||||||||||||
|
| ||||||||||||||
Total Materials | 32,267,042 | ||||||||||||||
|
|
See accompanying notes
27
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
Shares | Fair Value | ||||||||||||||
Real Estate - 4.24% | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 4.24% | |||||||||||||||
AvalonBay Communities, Inc. | 22,148 | $ | 4,204,576 | ||||||||||||
CBL & Associates Properties, Inc. B | 194,003 | 1,794,528 | |||||||||||||
EPR Properties | 53,764 | 3,909,180 | |||||||||||||
GEO Group, Inc. | 97,950 | 3,263,694 | |||||||||||||
Lamar Advertising Co., Class A | 152,780 | 11,010,855 | |||||||||||||
MGM Growth Properties LLC, Class A | 75,800 | 2,169,396 | |||||||||||||
|
| ||||||||||||||
26,352,229 | |||||||||||||||
|
| ||||||||||||||
Total Real Estate | 26,352,229 | ||||||||||||||
|
| ||||||||||||||
Utilities - 5.40% | |||||||||||||||
Electric Utilities - 4.48% | |||||||||||||||
Edison International | 77,630 | 6,208,071 | |||||||||||||
Great Plains Energy, Inc. | 238,047 | 7,043,811 | |||||||||||||
Pinnacle West Capital Corp. | 123,456 | 10,504,871 | |||||||||||||
Xcel Energy, Inc. | 90,778 | 4,089,549 | |||||||||||||
|
| ||||||||||||||
27,846,302 | |||||||||||||||
|
| ||||||||||||||
Gas Utilities - 0.65% | |||||||||||||||
UGI Corp. | 80,832 | 4,054,533 | |||||||||||||
|
| ||||||||||||||
Multi-Utilities - 0.27% | |||||||||||||||
CenterPoint Energy, Inc. | 57,849 | 1,650,432 | |||||||||||||
|
| ||||||||||||||
Total Utilities | 33,551,267 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $500,869,875) | 589,564,120 | ||||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 5.45% (Cost $33,865,578) | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 0.69%C | 33,865,578 | 33,865,578 | |||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 1.09% (Cost $6,768,529) | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 0.69%C | 6,768,529 | 6,768,529 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 101.47% (Cost $541,503,982) | 630,198,227 | ||||||||||||||
OTHER LIABILITIES, NET OF ASSETS - (1.47%) | (9,104,865 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 621,093,362 | |||||||||||||
|
| ||||||||||||||
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, 2017.
C The Fund is affiliated by having the same investment advisor.
ADR - American Depositary Receipt.
LLC - Limited Liability Company.
MLP - Master Limited Partnership.
PLC - Public Limited Company.
REIT - Real Estate Investment Trust.
Futures Contracts Open on April 30, 2017: | ||||||||||||||||
Description | Type | Number of Contracts | Expiration Date | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
S&P MidCap 400 E-Mini Index Futures | Long | 186 | June 2017 | $ | 32,178,000 | $ | 324,066 | |||||||||
|
|
|
| |||||||||||||
$ | 32,178,000 | $ | 324,066 | |||||||||||||
|
|
|
|
See accompanying notes
28
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2017 (Unaudited)
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2017, the investments were classified as described below:
Mid-Cap Value Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Common Stocks | $ | 589,564,120 | $ | - | $ | - | $ | 589,564,120 | ||||||||||||||||||||
Short-Term Investments – Money Market Funds | 33,865,578 | - | - | 33,865,578 | ||||||||||||||||||||||||
Securities Lending Collateral Invested in Money Market Funds | 6,768,529 | - | - | 6,768,529 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 630,198,227 | $ | - | $ | - | $ | 630,198,227 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||||||
Futures Contracts | $ | 324,066 | $ | - | $ | - | $ | 324,066 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 324,066 | $ | - | $ | - | $ | 324,066 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP also requires all transfers between any level 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 period ended April 30, 2017, there were no transfers between levels.
See accompanying notes
29
American Beacon FundsSM
Statements of Assets and Liabilities
April 30, 2017 (Unaudited)
Balanced Fund | Mid-Cap Value Fund | |||||||||||
Assets: | ||||||||||||
Investments in unaffiliated securities, at fair value† | $ | 359,237,771 | $ | 596,332,649 | ||||||||
Investments in affiliated securities, at fair value‡ | 19,924,911 | 33,865,578 | ||||||||||
Cash | 2,065 | – | ||||||||||
Deposit with brokers for futures contracts | 580,000 | 1,302,000 | ||||||||||
Dividends and interest receivable | 1,043,344 | 295,946 | ||||||||||
Receivable for investments sold | 975,469 | 4,542,269 | ||||||||||
Receivable for fund shares sold | 759,547 | 354,520 | ||||||||||
Receivable for tax reclaims | 1,787 | – | ||||||||||
Prepaid expenses | 73,475 | 63,345 | ||||||||||
|
|
|
| |||||||||
Total assets | 382,598,369 | 636,756,307 | ||||||||||
|
|
|
| |||||||||
Liabilities: | ||||||||||||
Payable for investments purchased | 1,688,165 | 6,184,770 | ||||||||||
Payable for fund shares redeemed | 329,261 | 1,916,831 | ||||||||||
Payable for variation margin from open futures contracts | 37,210 | 297,746 | ||||||||||
Payable upon return of securities loaned§ | 895,375 | 6,768,529 | ||||||||||
Management and investment advisory fees payable | 162,433 | 368,294 | ||||||||||
Administrative service and service fees payable | 72,600 | 63,583 | ||||||||||
Transfer agent fees payable | 8,353 | 11,609 | ||||||||||
Custody and fund accounting fees payable | 8,436 | 3,887 | ||||||||||
Professional fees payable | 32,969 | 19,556 | ||||||||||
Trustee fees payable | 8,610 | 6,206 | ||||||||||
Payable for prospectus and shareholder reports | 17,309 | 20,498 | ||||||||||
Other liabilities | 9,322 | 1,436 | ||||||||||
|
|
|
| |||||||||
Total liabilities | 3,270,043 | 15,662,945 | ||||||||||
|
|
|
| |||||||||
Net Assets | $ | 379,328,326 | $ | 621,093,362 | ||||||||
|
|
|
| |||||||||
Analysis of Net Assets: | ||||||||||||
Paid-in-capital | $ | 287,218,879 | $ | 539,806,670 | ||||||||
Undistributed net investment income | 5,197,620 | 1,502,689 | ||||||||||
Accumulated net realized gain (loss) | 34,657,196 | (9,234,133 | ) | |||||||||
Unrealized appreciation of investments | 52,134,979 | 88,694,245 | ||||||||||
Unrealized appreciation (depreciation) of foreign currency transactions | – | (175 | ) | |||||||||
Unrealized appreciation of futures contracts | 119,652 | 324,066 | ||||||||||
|
|
|
| |||||||||
Net assets | $ | 379,328,326 | $ | 621,093,362 | ||||||||
|
|
|
|
See accompanying notes
30
American Beacon FundsSM
Statements of Assets and Liabilities
April 30, 2017 (Unaudited)
Balanced Fund | Mid-Cap Value Fund | |||||||||||
Shares outstanding at no par value (unlimited shares authorized): | ||||||||||||
Institutional Class | 5,327,843 | 14,395,941 | ||||||||||
|
|
|
| |||||||||
Y Class | 4,274,794 | 5,236,636 | ||||||||||
|
|
|
| |||||||||
Investor Class | 9,514,706 | 16,802,543 | ||||||||||
|
|
|
| |||||||||
Advisor Class | 707,432 | 396,817 | ||||||||||
|
|
|
| |||||||||
A Class | 1,720,134 | 1,308,023 | ||||||||||
|
|
|
| |||||||||
C Class | 2,950,576 | 451,888 | ||||||||||
|
|
|
| |||||||||
Net assets: | ||||||||||||
Institutional Class | $ | 87,670,844 | $ | 231,332,655 | ||||||||
|
|
|
| |||||||||
Y Class | $ | 70,746,028 | $ | 83,498,634 | ||||||||
|
|
|
| |||||||||
Investor Class | $ | 140,550,448 | $ | 272,581,324 | ||||||||
|
|
|
| |||||||||
Advisor Class | $ | 11,032,043 | $ | 6,238,772 | ||||||||
|
|
|
| |||||||||
A Class | $ | 25,367,602 | $ | 20,552,613 | ||||||||
|
|
|
| |||||||||
C Class | $ | 43,961,361 | $ | 6,889,364 | ||||||||
|
|
|
| |||||||||
Net asset value, offering and redemption price per share: | ||||||||||||
Institutional Class | $ | 16.46 | $ | 16.07 | ||||||||
|
|
|
| |||||||||
Y Class | $ | 16.55 | $ | 15.95 | ||||||||
|
|
|
| |||||||||
Investor Class | $ | 14.77 | $ | 16.22 | ||||||||
|
|
|
| |||||||||
Advisor Class | $ | 15.59 | $ | 15.72 | ||||||||
|
|
|
| |||||||||
A Class | $ | 14.75 | $ | 15.71 | ||||||||
|
|
|
| |||||||||
A Class (offering price) | $ | 15.65 | $ | 16.67 | ||||||||
|
|
|
| |||||||||
C Class | $ | 14.90 | $ | 15.25 | ||||||||
|
|
|
| |||||||||
† Cost of investments in unaffiliated securities | $ | 307,102,792 | $ | 507,638,404 | ||||||||
‡ Cost of investments in affiliated securities | $ | 19,924,911 | $ | 33,865,578 | ||||||||
§ Fair value of securities on loan | $ | 873,145 | $ | 6,561,988 |
See accompanying notes
31
American Beacon FundsSM
Statements of Operations
For the Period Ended April 30, 2017 (Unaudited)
Balanced Fund | Mid-Cap Value Fund | |||||||||||
Investment income: | ||||||||||||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 5,063,799 | $ | 5,897,828 | ||||||||
Dividend income from affiliated securities | 85,299 | 72,329 | ||||||||||
Interest income | 2,774,632 | – | ||||||||||
Income derived from securities lending | 170 | 9,832 | ||||||||||
|
|
|
| |||||||||
Total investment income | 7,923,900 | 5,979,989 | ||||||||||
|
|
|
| |||||||||
Expenses: | ||||||||||||
Management and investment advisory fees (Note 2) | 1,722,743 | 2,393,508 | ||||||||||
Transfer agent fees: | ||||||||||||
Institutional Class | 11,401 | 24,520 | ||||||||||
Y Class | 6,334 | 8,551 | ||||||||||
Investor Class | 5,819 | 6,907 | ||||||||||
Advisor Class | 284 | 1,231 | ||||||||||
A Class | 1,195 | 1,090 | ||||||||||
C Class | 1,442 | 786 | ||||||||||
Custody and fund accounting fees | 53,232 | 38,155 | ||||||||||
Professional fees | 29,950 | 24,965 | ||||||||||
Registration fees and expenses | 48,379 | 42,615 | ||||||||||
Service fees (Note 2): | ||||||||||||
Y Class | 21,650 | 32,652 | ||||||||||
Investor Class | 210,630 | 304,650 | ||||||||||
Advisor Class | 13,570 | 8,145 | ||||||||||
A Class | 18,933 | 15,438 | ||||||||||
C Class | 31,825 | 4,970 | ||||||||||
Distribution fees (Note 2): | ||||||||||||
Advisor Class | 13,571 | 8,145 | ||||||||||
A Class | 31,554 | 25,730 | ||||||||||
C Class | 212,167 | 33,130 | ||||||||||
Prospectus and shareholder report expenses | 20,465 | 23,924 | ||||||||||
Trustee fees | 24,788 | 21,796 | ||||||||||
Other expenses | 32,374 | 17,074 | ||||||||||
|
|
|
| |||||||||
Total expenses | 2,512,306 | 3,037,982 | ||||||||||
|
|
|
| |||||||||
Net investment income | 5,411,594 | 2,942,007 | ||||||||||
|
|
|
| |||||||||
Realized and unrealized gain (loss) from investments: | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments | 44,384,588 | 11,071,591 | ||||||||||
Commission recapture (Note 1) | 413 | 9,951 | ||||||||||
Foreign currency transactions | (195 | ) | 30 | |||||||||
Futures contracts | 3,215,798 | 3,029,776 | ||||||||||
Change in net unrealized appreciation (depreciation) of: | ||||||||||||
Investments | 7,094,217 | 68,479,012 | ||||||||||
Foreign currency transactions | – | 20 | ||||||||||
Futures contracts | 390,877 | 805,149 | ||||||||||
|
|
|
| |||||||||
Net gain from investments | 55,085,698 | 83,395,529 | ||||||||||
|
|
|
| |||||||||
Net increase in net assets resulting from operations | $ | 60,497,292 | $ | 86,337,536 | ||||||||
|
|
|
| |||||||||
† Foreign taxes | $ | 44,251 | $ | 20,154 |
See accompanying notes
32
American Beacon FundsSM
Statements of Changes of Net Assets
Balanced Fund | Mid-Cap Value Fund | |||||||||||||||||||||||||||
For the Six Months Ended April 30, 2017 | For the Year Ended October 31, 2016 | For the Six Months Ended April 30, 2017 | For the Year Ended October 31, 2016 | |||||||||||||||||||||||||
(unaudited | ) | (unaudited | ) | |||||||||||||||||||||||||
Increase (Decrease) in Net Assets: | ||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||
Net investment income | $ | 5,411,594 | $ | 13,596,214 | $ | 2,942,007 | $ | 9,145,985 | ||||||||||||||||||||
Net realized gain (loss) from investments, commission recapture, foreign currency transactions, and futures contracts | 47,600,604 | (2,124,832 | ) | 14,111,348 | (20,935,169 | ) | ||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) of investments, foreign currency transactions, and futures contracts | 7,485,094 | 8,639,376 | 69,284,181 | 23,752,522 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in net assets resulting from operations | 60,497,292 | 20,110,758 | 86,337,536 | 11,963,338 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||
Net investment income: | ||||||||||||||||||||||||||||
Institutional Class | (3,140,967 | ) | (8,111,530 | ) | (3,184,300 | ) | (3,042,980 | ) | ||||||||||||||||||||
Y Class | (739,019 | ) | (394,207 | ) | (1,054,082 | ) | (804,213 | ) | ||||||||||||||||||||
Investor Class | (1,734,032 | ) | (1,913,613 | ) | (3,122,003 | ) | (2,883,653 | ) | ||||||||||||||||||||
Advisor Class | (119,462 | ) | (128,760 | ) | (63,730 | ) | (40,603 | ) | ||||||||||||||||||||
A Class | (309,665 | ) | (367,530 | ) | (224,784 | ) | (117,192 | ) | ||||||||||||||||||||
C Class | (354,843 | ) | (318,121 | ) | (30,824 | ) | (11,670 | ) | ||||||||||||||||||||
Net realized gain from investments: | ||||||||||||||||||||||||||||
Institutional Class | - | (21,528,686 | ) | - | (12,422,126 | ) | ||||||||||||||||||||||
Y Class | - | (1,587,112 | ) | - | (3,405,226 | ) | ||||||||||||||||||||||
Investor Class | - | (7,811,741 | ) | - | (14,625,725 | ) | ||||||||||||||||||||||
Advisor Class | - | (610,329 | ) | - | (345,718 | ) | ||||||||||||||||||||||
A Class | - | (1,380,563 | ) | - | (800,587 | ) | ||||||||||||||||||||||
C Class | - | (2,350,891 | ) | - | (322,638 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net distributions to shareholders | (6,397,988 | ) | (46,503,083 | ) | (7,679,723 | ) | (38,822,331 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||||
Proceeds from sales of shares | 85,773,332 | 461,674,934 | 88,999,266 | 152,464,371 | ||||||||||||||||||||||||
Reinvestment of dividends and distributions | 6,160,422 | 45,872,150 | 7,582,763 | 38,345,842 | ||||||||||||||||||||||||
Cost of shares redeemed | (484,337,171 | ) | (481,741,305 | ) | (94,173,322 | ) | (287,829,842 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | (392,403,417 | ) | 25,805,779 | 2,408,707 | (97,019,629 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets | (338,304,113 | ) | (586,546 | ) | 81,066,520 | (123,878,622 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||||
Beginning of period | 717,632,439 | 718,218,985 | 540,026,842 | 663,905,464 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
End of Period * | $ | 379,328,326 | $ | 717,632,439 | $ | 621,093,362 | $ | 540,026,842 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
*Includes undistributed net investment income | $ | 5,197,620 | $ | 5,642,174 | $ | 1,502,689 | $ | 6,383,795 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
See accompanying notes
33
American Beacon FundsSM
April 30, 2017 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Funds, each a series within the Trust, are registered under the Investment Company Act of 1940 (the “Act”), as amended, as a diversified, open-end management investment company. As of April 30, 2017, the Trust consists of thirty-two active series, two of which are presented in this filing: American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund (collectively, the “Funds” and each individually a “Fund”). The remaining thirty active series are reported in separate filings.
American Beacon Advisors, Inc. (the “Manager”) is a wholly-owned subsidiary of Resolute Investment Managers, 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.
New Accounting Pronouncements
In October 2016, the SEC adopted amendments to rules under the Investment Company Act of 1940 (“final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. The final rules amend Regulation S-X and require funds to provide standardized, enhanced derivative disclosure in fund financial statements in a format designed for individual investors. The amendments to Regulation S-X also update the disclosures for other investments and investments in, and advances to affiliates and amend the rules regarding the general form and content of fund financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the amendments and its impact, if any, on the Funds’ Financial Statements.
Class Disclosure
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 amongst the classes:
Class | Eligible Investors | Minimum Initial Investments | ||||
Institutional | Large institutional investors - sold directly or through intermediary channels. | $ | 250,000 | |||
Y Class | Large institutional retirement plan investors. | $ | 100,000 | |||
Investor | All investors using intermediary organizations such as broker-dealers or retirement plan sponsors. | $ | 2,500 | |||
Advisor Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrators. | $ | 2,500 | |||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary such as a broker or employee directed benefit plans with applicable sales charges which may include CDSC. | $ | 1,000 |
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 service fees, service fees, and distribution fees and vary amongst the classes as described more fully in Note 2.
The following is a summary of significant accounting policies, consistently followed by the Funds in preparation of the financial statements. The Funds are considered investment companies and accordingly, follow
34
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946, Financial Services – Investment Companies, which is part of the U.S. Generally Accepted Accounting Principles (“U.S. GAAP”).
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 Net Asset Value (“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 will normally be declared and paid quarterly. Dividends from net investment income of the Mid-Cap Value Fund will normally be declared and be 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. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Funds may 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 gains in the Fund’s Statement 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 liabilities 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.
35
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Concentration of Ownership
From time to time, the Funds may have a concentration of one or more accounts constituting a significant percentage of shares outstanding. Investment activities by holders of accounts that represent a controlling ownership of more than 5% of a Fund’s outstanding shares could have a material impact on a Fund. As of April 30, 2017, based on management’s evaluation of the shareholder account base, two accounts have been identified as representing a non-affiliated controlling ownership of approximately 12% of the Balanced Fund’s outstanding shares and one account has been identified as representing a non-affiliated controlling ownership of approximately 21% of the Mid-Cap Value Fund’s outstanding shares.
2. Transactions with Affiliates
Management Agreement
The Funds and the Manager are parties to a Management Agreement that obligates the Manager to provide investment advisory, fund management, and administrative services to the Funds. As compensation for performing the duties under the Management Agreement, the Manager receives from the Funds an annualized fee at the following annual rates as a percentage of average daily net assets: 0.35% of the first $15 billion, 0.325% of the next $15 billion, and 0.30% of the next $30 billion. The Manager is one of the investment advisors of the Balanced Fund and receives an annualized fee of 0.15% on the portion of average daily net assets managed by the Manager. The Funds pay the unaffiliated investment advisors hired to direct investment activities of the Funds an annualized investment advisory fee based on a percentage of the Funds’ average daily assets. Management fees paid by the Funds during the period ended April 30, 2017 were as follows:
Fund | Management Fee Rate | Management Fee | Amount Paid to Investment Advisors | Amount Paid to Manager | ||||||||||||
Balanced | 0.50 | % | $ | 1,722,743 | $ | 516,817 | $ | 1,205,926 | ||||||||
Mid-Cap Value | 0.80 | % | 2,393,508 | 1,345,734 | 1,047,774 |
As compensation for services provided by the Manager in connection with securities lending activities conducted by the Funds, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee of 10% 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 10% of such loan fees. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statements of Operations. During the period ended April 30, 2017, the Manager received securities lending fees of $211 and $988 for the securities lending activities of the Balanced Fund and Mid-Cap Value Fund, respectively.
Distribution Plans
The Funds, except for the Advisor, A, and C Classes of the Funds, have 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 Funds for distribution purposes. However, the Plan 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 Funds do 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 Funds. 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, 0.50% of the average daily net assets of the Retirement Class, 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.
36
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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 of the Funds. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.10% of the average daily net assets of the Y Class, up to 0.15% of the average net assets of the A and C Classes, up to 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. Effective April 1, 2017, the Funds terminated the Service Plan for the Y Class.
Sub-Transfer Agent Fees
The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the Institutional Class of the Funds and has agreed to compensate the intermediaries for providing these services. Effective April 1, 2017, the Funds agreed to compensate the intermediaries for providing services to the Y Class. Intermediaries transact with the Funds primarily through the use of omnibus accounts on behalf of their customers who hold positions in the Funds. Certain services would have been provided by the Funds’ transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Funds’ transfer agent. Accordingly, the Funds, pursuant to the Trust’s Board of Trustees (the “Board”) approval, have agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the period ended April 30, 2017, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:
Fund | Sub-Transfer Agent Fees | |||
Balanced | $ | 13,733 | ||
Mid-Cap Value | 23,715 |
As of April 30, 2017, the Funds owed the Manager the following reimbursement of sub-transfer agent fees, as reflected on “Transfer agent fees payable” on the Statement of Assets and Liabilities:
Fund | Reimbursement Sub-Transfer Agent Fees | |||
Balanced | $ | 8,711 | ||
Mid-Cap Value | 8,372 |
Investments in Affiliated Funds
The Funds may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). Cash collateral received by the Funds in connection with securities lending may also be invested in 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 fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the period ended April 30, 2017, the Manager earned fees on the Funds’ direct and securities lending collateral investments in the USG Select Fund as shown below:
Fund | Direct Investments in USG Select Fund | Securities Lending Collateral in USG Select Fund | Total | |||||||||
Balanced | $ | 18,267 | $ | 95 | $ | 18,362 | ||||||
Mid-Cap Value | 14,915 | 2,356 | 17,271 |
37
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Interfund Lending Program
Pursuant to an exemptive order 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 period ended April 30, 2017, the Balanced Fund loaned on average $1,988,051 for 15 days at an average interest rate of 1.23% with interest charges earned of $988. This amount is included in “Interest income” on the Statements of Operations. During the period ended April 30, 2017, the Mid-Cap Value Fund did not utilize the credit facility.
Expense Reimbursement Plan
The Funds have 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 Classes’ 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 period ended April 30, 2017, there were no waived fees, expenses reimbursed, or recovered expenses.
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 period ended April 30, 2017, Foreside collected $12,538 and $524 in sales commissions for the Balanced Fund and Mid-Cap Value Fund, respectively, from the sale of Class A Shares of the Fund.
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 period ended April 30, 2017, CDSC fees of $625 were collected for Class A Shares of the Mid-Cap Value 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 period ended April 30, 2017, CDSC fees of $5,658 were collected for Class C Shares of the Balanced Fund.
Trustee Fees and Expenses
As compensation for their service to the Trust, the American Beacon Select Funds and the American Beacon Select Funds Institutional Trust, each Trustee receives an annual retainer of $120,000, plus $5,000 for each Board of Trustee meeting attended in person or via teleconference, $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, and $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee, plus reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. The Board Chairman receives an additional annual retainer of $50,000 as well as a single $5,000 fee each quarter for his attendance at the committee meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chairman of the Nominating and Governance Committee receives an additional annual retainer of $10,000. These expenses are allocated on a prorated basis to each Fund of the Trust according to its respective net assets.
38
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
3. Security Valuation and Fair Value Measurements
Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally at 4:00 p.m. Eastern Time, 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 normally are valued on the basis of prices provided by an independent pricing service and may take into account appropriate factors such as institution-size 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 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 Board.
Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, the Funds are 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 Funds. 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 Manager’s Valuation Committee, pursuant to procedures established by the 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. Fixed-income securities are considered Level 2 as they are valued using observable inputs. | ||
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.
39
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Fixed-income securities including corporate, convertible and municipal bonds and notes, U.S. government agencies, and 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 and are categorized as Level 2 of the fair value hierarchy.
Mortgage-related and asset-backed securities are usually issued as separate tranches, or classes, or 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 incorporates 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.
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.
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 Funds’ 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 Funds 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 Funds to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.
Common Stock
Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or over-the-counter (“OTC”). OTC stock may be less liquid than exchange-traded stock.
40
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Fixed-Income Investments
The Balanced Fund may hold debt, including government and corporate debt, and other fixed-income securities. Typically, the values of fixed-income securities change inversely with prevailing interest rates. Therefore, a fundamental risk of fixed-income securities is interest rate risk, which is the risk that their value will generally decline as prevailing interest rates rise, which may cause the Fund’s net asset value to likewise decrease, and vice versa. How specific fixed-income securities may react to changes in interest rates will depend on the specific characteristics of each security.
Foreign Securities
The Funds may invest in U.S. dollar-denominated equity and debt securities of foreign issuers and foreign branches of U.S. banks, including negotiable CDs, bankers’ acceptances, and commercial paper. Foreign issuers are issuers organized and doing business principally outside the United States and include corporations, banks, non-U.S. governments, and quasi-governmental organizations.
Illiquid and 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 (the “Securities Act”). Illiquid securities have included securities that have not been registered under the Securities Act, securities that are otherwise not readily marketable, and repurchase agreements having a remaining maturity of longer than seven calendar days. Disposal of both illiquid and restricted securities may involve time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Restricted securities outstanding as of April 30, 2017 are disclosed in the Notes to the Schedules of Investments.
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.
41
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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, size, purpose and borrower characteristics. Privately issued pools more frequently include second mortgages,
42
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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.
43
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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 the 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 Funds’ 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 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.
Publicly Traded Partnerships; Master Limited Partnerships
The Funds may invest in publicly traded partnerships such as master limited partnerships (“MLPs”). MLPs issue units that are registered with the SEC and are freely tradable on a securities exchange or in the over-the-counter (“OTC”) market. An MLP may have one or more general partners, who conduct the business, and one or more limited partners, who contribute capital. (An MLP also may be an entity similar to a limited partnership, such as a limited liability company, which has a manager or managing member and non-managing members (who are like limited partners)). The general partner or partners are jointly and severally responsible for the liabilities of the MLP. A Fund invests as a limited partner and normally would not be liable for the debts of an MLP beyond the amount the Fund has invested therein but it would not be shielded to the same extent that a shareholder of a corporation would be. In certain instances, creditors of an MLP would have the right to seek a return of capital that had been distributed to a limited partner. The right of an MLP’s creditors would continue even after a Fund had sold its investment in the partnership. MLPs typically invest in real estate and oil and gas equipment leasing assets, but they also finance entertainment, research and development, and other projects.
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-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.
U.S. Government Agency Securities
U.S. Government agency securities are issued or guaranteed by the U.S. Government or its agencies or instrumentalities. Some obligations issued by U.S. Government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the U.S. Treasury; others by discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality. U.S. Government securities bear fixed, floating or variable rates of interest. While the U.S. Government currently provides financial support to certain U.S. Government-sponsored agencies or instrumentalities, no assurance can be given that it will always do so, since it is not so obligated by law. U.S. Government securities include U.S. Treasury bills, notes and bonds, Federal Home Loan Bank obligations, Federal Intermediate Credit Bank obligations, U.S. Government agency obligations and repurchase agreements secured thereby. U.S. Government agency securities are subject to credit risk and interest rate risk.
44
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
U.S. Treasury Obligations
U.S. Treasury obligations include bills (initial maturities of one year or less), notes (initial maturities between two and ten years), and bonds (initial maturities over ten years) issued by the U.S. Treasury, Separately Traded Registered Interest and Principal component parts of such obligations known as STRIPS and inflation-indexed securities. The prices of these securities (like all debt securities) change between issuance and maturity in response to fluctuating market interest rates.
5. Financial Derivative Instruments
The Funds may utilize derivative instruments to market exposure on cash balances or reduce market exposure in anticipation of liquidity needs. When considering the Funds’ use of derivatives, it is important to note that the Funds do 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. The Funds 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.
During the period ended April 30, 2017, 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 | Period Ended April 30, 2017 | |||
Balanced | 250 | |||
Mid-Cap Value | 149 |
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
The following is a summary of the Funds’ derivative financial instruments categorized by risk exposure(1):
Fair values of financial instruments on the Statements of Assets and Liabilities as of April 30, 2017: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balanced Fund |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Receivable for variation margin from open futures contracts(2) | - | - | - | - | $ | 119,652 | $ | 119,652 | |||||||||||||||||||||||||||||||||||||||||||||||
Mid-Cap Value Fund |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Receivable for variation margin from open futures contracts(2) | - | - | - | - | $ | 324,066 | $ | 324,066 | |||||||||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statements of Operations for the period ended April 30, 2017: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balanced Fund |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized gain (loss) of | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Net realized gain (loss) from futures contracts | - | - | - | - | $ | 3,215,798 | $ | 3,215,798 | |||||||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized appreciation (depreciation) from futures contracts | - | - | - | - | $ | 390,877 | $ | 390,877 | |||||||||||||||||||||||||||||||||||||||||||||||
Mid-Cap Value Fund |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized gain (loss) of | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Net realized gain (loss) from futures contracts | - | - | - | - | $ | 3,029,776 | $ | 3,029,776 | |||||||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized appreciation (depreciation) from futures contracts | - | - | - | - | $ | 805,149 | $ | 805,149 |
(1) See Note 3 in the Notes to Financial Statements for additional information.
(2) Includes cumulative appreciation (depreciation) of futures contracts as reported in the Schedules of Investments footnotes. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
6. Principal Risks
Investing in the Funds may involve certain risks including, but not limited to, those described below.
Allocation Risk
The sub-advisor’s judgments about, and allocations among, asset classes and market exposures may adversely affect the Funds’ performance. This risk may be increased by the use of derivatives to increase allocations to various market exposures.
Asset-Backed and Mortgage Related Securities Risk
Investments in asset-backed and mortgage related securities are subject to market risks for fixed-income securities which include, but are not limited to, credit risk, extension risk, interest rate risk and prepayment risk. A decline in the credit quality of the issuers of asset-backed and mortgage related securities or instability in the markets for such securities may affect the value and liquidity of such securities, which could result in losses to a Fund.
Credit Risk
The Funds are subject to the risk that the issuer or guarantor of a debt security, or the counterparty to a futures contract or a loan will fail to make timely payment of interest or principal or otherwise honor its obligations or default completely.
Cybersecurity and Operational Risk
The Funds and its service providers, and shareholders’ ability to transact with the Funds, may be negatively impacted due to operational risks arising from, among other problems, human errors, systems and technology disruptions or failures, or cybersecurity incidents. It is not possible for the Fund’s service providers to identify all of the operational risks that may affect the Funds or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Cybersecurity incidents could also affect issuers of securities in which the Funds invest, leading to significant loss of value.
Equity Investments Risk
Equity securities are subject to investment and market risk. The Funds’ investments in equity securities may include common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Fund to additional risks.
Common Stock - The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company.
Depositary Receipts - Depositary receipts and U.S. dollar-denominated foreign stocks traded on U.S. exchanges are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency exchange rate fluctuations, political and financial instability in the home country of a particular depositary receipt or foreign stock, less liquidity and more volatility, less government regulation and supervision and delays in transaction settlement.
REITs - Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values. REITs also are dependent upon the skills of their managers and are subject to heavy cash flow dependency or self-liquidation. Domestic REITs could be adversely affected by failure to qualify for tax-free “pass-through” of net income and gains under the
47
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Internal Revenue Code of 1986, as amended, or to maintain their exemption from registration under the Investment Company Act of 1940, as amended. REITs typically incur fees that are separate from those incurred by the Fund. Accordingly, the Fund’s investment in REITs will result in the layering of expenses such that shareholders will indirectly bear a proportionate share of the REITs’ operating expenses, in addition to paying Fund expenses. The value of REIT common stock may decline when interest rates rise.
Foreign Investing Risk
Non-U.S. investments carry potential risks not associated with U.S. investments. Such risks include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity and greater volatility, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, and (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets.
Futures Contracts Risk
Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose a Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. Futures contracts may experience potentially dramatic price changes (losses) and imperfect correlation between the price of the contract and the underlying security or index, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).
Interest Rate Risk
The Balanced Fund is subject to the risk that the market value of fixed-income securities it holds, particularly mortgage backed and other asset backed securities, will decline due to rising interest rates. Generally, the value of investments with interest rate risk, such as fixed-income securities, will move in the opposite direction as movements in interest rates. Interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in substantial losses to the Fund. The prices of fixed income securities are also affected by their duration. Fixed-income securities with longer duration generally have greater sensitivity to changes in interest rates. An increase in interest rates can impact markets broadly as well.
Investment Risk
An investment in the Funds is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of a Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Funds.
Issuer Risk
The value of, and/or the return generated by, a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets.
Liquidity Risk
The Balanced Fund is susceptible to the risk that certain investments held by the Fund, such as certain fixed-income instruments, may have limited marketability or be subject to restrictions on sale, and may be difficult or impossible to purchase or sell at favorable times or prices. The Fund could lose money if it is unable to
48
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
dispose of an investment at a time that is most beneficial to the Fund. The Fund may be required to dispose of investments at unfavorable times or prices to satisfy obligations, which may result in losses or may be costly to the Fund. For example, the Fund may be forced to sell certain investments at unfavorable prices to meet redemption requests or other cash needs. Judgment plays a greater role in pricing illiquid investments than in investments with more active markets.
Market Risk
Since the financial crisis that started in 2008, the U.S. and many foreign economies continue to experience its after-effects, which have resulted, and may continue to result, in fixed income instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations.
In addition, political events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. Because the impact on the markets has been widespread, it may be difficult to identify both risks and opportunities using past models of the interplay of market forces, or to predict the duration of these market conditions. Interest rates have been unusually low in recent years in the U.S. and abroad. Because there is little precedent for this situation, it is difficult to predict the impact on various markets of a significant rate increase, whether brought about by U.S. policy makers or by dislocations in world markets. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely.
Other Investment Companies Risk
The Funds may invest in shares of other registered investment companies, including money market funds. To the extent that the Funds invests in shares of other registered investment companies, the Funds will indirectly bear the fees and expenses charged by those investment companies in addition to the Funds’ direct fees and expenses and will be subject to the risks associated with investments in those funds.
Prepayment and Extension Risk
Prepayment risk is the risk that the principal amount of a bond may be repaid prior to the bond’s maturity date. Due to a decline in interest rates or excess cash flow, a debt security may be called or otherwise prepaid before maturity. If this occurs, no additional interest will be paid on the investment and a Fund may have to invest at a lower rate, may not benefit from an increase in value that may result from declining interest rates, and may lose any premium it paid to acquire the security. Variable and floating rate securities may be less sensitive to prepayment risk. Extension risk is the risk that a decrease in prepayments may, as a result of higher interest rates or other factors, result in the extension of a security’s effective maturity, heighten interest rate risk and increase the potential for a decline in price.
Securities Lending Risk
To the extent the Funds lend its securities, it may be subject to the following risks; i) borrowers of the Funds’ securities typically provide collateral in the form of cash that is reinvested in securities, ii) the securities in
49
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
which the collateral is invested may not perform sufficiently to cover the return collateral payments owed to borrowers, iii) delays may occur in the recovery of securities from borrowers, which could interfere with the Funds’ ability to vote proxies or to settle transactions, and iv) there is the risk of possible loss of rights in the collateral should the borrower fail financially.
U.S. Government Securities and Government-Sponsored Enterprises Risk
A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. Securities held by a Fund that are issued by government sponsored enterprises, such as the Federal National Mortgage Association (‘‘Fannie Mae’‘), Federal Home Loan Mortgage Corporation (‘‘Freddie Mac’‘), Federal Home Loan Bank (‘‘FHLB’‘), Federal Farm Credit Banks (“FFCB”), and the Tennessee Valley Authority are not guaranteed by the U.S. Treasury and are not backed by the full faith and credit of the U.S. Government and no assurance can be given that the U.S. Government will provide financial support if these organizations do not have the funds to meet future payment obligations. Government securities and securities of government sponsored entities are also subject to credit risk, interest rate risk and market risk.
Value Stocks Risk
Value stocks are subject to the risk that their intrinsic value may never be realized by the market or that their prices may decline. The Funds’ investments in value stocks seek to limit potential downside price risk over time, however, value stock prices may still decline substantially. In addition, the Fund may produce more modest gains as a trade-off for this potentially lower risk. A Funds investment in value stocks could cause the Fund to underperform funds that use a growth or non-value approach to investing or have a broader investment style.
Offsetting Assets and Liabilities
The Funds are parties to enforceable master netting agreements between brokers and counterparties which provides 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, 2017.
Balanced Fund
Offsetting of Financial and Derivative Assets and Liabilities as of April 30, 2017: | ||||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts | $ | 119,652 | $ | - | ||||||||
|
|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 119,652 | $ | - | ||||||||
|
|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | (119,652 | ) | $ | - | |||||||
|
|
|
| |||||||||
Total derivative assets and liabilities subject to an MNA | $ | - | $ | - | ||||||||
|
|
|
|
50
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Remaining Contractual Maturity of the Agreements As of April 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||||||||||||||||||||||||||||||
Securities Lending Transactions | |||||||||||||||||||||||||||||||||||||||||||||
Common Stocks | $ | 873,145 | $ | - | $ | - | $ | - | $ | 873,145 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
Total Borrowings | $ | 873,145 | $ | - | $ | - | $ | - | $ | 873,145 | |||||||||||||||||||||||||||||||||||
|
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|
|
|
|
|
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|
| ||||||||||||||||||||||||||||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 873,145 | |||||||||||||||||||||||||||||||||||||||||||
|
|
Mid-Cap Value Fund
Offsetting of Financial and Derivative Assets and Liabilities as of April 30, 2017: | ||||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts | $ | 324,066 | $ | - | ||||||||
|
|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 324,066 | $ | - | ||||||||
|
|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | (324,066 | ) | $ | - | |||||||
|
|
|
| |||||||||
Total derivative assets and liabilities subject to an MNA | $ | - | $ | - | ||||||||
|
|
|
|
Remaining Contractual Maturity of the Agreements As of April 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | |||||||||||||||||||||||||||||||||||||||||
Securities Lending Transactions | |||||||||||||||||||||||||||||||||||||||||||||
Common Stocks | $ | 6,561,988 | $ | - | $ | - | $ | - | $ | 6,561,988 | |||||||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
Total Borrowings | $ | 6,561,988 | $ | - | $ | - | $ | - | $ | 6,561,988 | |||||||||||||||||||||||||||||||||||
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|
|
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|
|
| ||||||||||||||||||||||||||||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 6,561,988 | |||||||||||||||||||||||||||||||||||||||||||
|
|
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 unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2016, 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.
The Funds 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 (depreciation), as applicable, as the income is earned or capital gains are recorded.
51
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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:
Balanced Fund | Mid-Cap Value Fund | |||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||||||
Distributions paid from: | ||||||||||||||||||||||||||||
Ordinary income* | ||||||||||||||||||||||||||||
Institutional Class | $ | 3,140,967 | $ | 8,264,594 | $ | 3,184,300 | $ | 5,546,242 | ||||||||||||||||||||
Y Class | 739,019 | 405,490 | 1,054,082 | 1,490,422 | ||||||||||||||||||||||||
Investors Class | 1,734,032 | 1,969,152 | 3,122,003 | 5,830,974 | ||||||||||||||||||||||||
Advisor Class | 119,462 | 133,099 | 63,730 | 110,271 | ||||||||||||||||||||||||
A Class | 309,665 | 377,279 | 224,784 | 278,524 | ||||||||||||||||||||||||
C Class | 354,843 | 334,834 | 30,824 | 76,687 | ||||||||||||||||||||||||
Long-term capital gains | ||||||||||||||||||||||||||||
Institutional Class | - | 21,375,622 | - | 9,918,865 | ||||||||||||||||||||||||
Y Class | - | 1,575,829 | - | 2,719,017 | ||||||||||||||||||||||||
Investors Class | - | 7,756,202 | - | 11,678,403 | ||||||||||||||||||||||||
Advisor Class | - | 605,990 | - | 276,050 | ||||||||||||||||||||||||
A Class | - | 1,370,814 | - | 639,255 | ||||||||||||||||||||||||
C Class | - | 2,334,178 | - | 257,621 | ||||||||||||||||||||||||
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|
|
|
|
|
|
| |||||||||||||||||||||
Total distributions paid | $ | 6,397,988 | $ | 46,503,083 | $ | 7,679,723 | $ | 38,822,331 | ||||||||||||||||||||
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|
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|
|
*For tax purposes, short-term capital gains are considered ordinary income distributions.
As of April 30, 2017 the components of distributable earnings (deficits) on a tax basis were as follows:
Fund | Tax cost | Unrealized appreciation | Unrealized depreciation | Net unrealized appreciation (depreciation) | ||||||||||||||||||||||||
Balanced | $ | 332,712,014 | $ | 56,826,266 | $ | (10,375,598 | ) | $ | 46,450,668 | |||||||||||||||||||
Mid-Cap Value | 546,265,541 | 106,224,782 | (22,292,096 | ) | 83,932,686 |
Fund | Net unrealized appreciation (depreciation) | Undistributed ordinary income | Undistributed long-term capital gains | Accumulated capital and other losses | Other temporary differences | Distributable earnings | ||||||||||||||||||||||||||||||||||||||
Balanced | $ | 46,450,668 | $ | 7,864,884 | $ | 37,793,895 | $ | (119,652 | ) | $ | 119,652 | $ | 92,109,447 | |||||||||||||||||||||||||||||||
Mid-Cap Value | 83,932,686 | 1,321,472 | - | (4,291,357 | ) | 323,891 | 81,286,692 |
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 (depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains (losses) on certain derivative instruments, reclassifications of income from real estate investment securities and publicly traded partnerships, 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.
52
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Accordingly, the following amounts represent current year permanent differences derived from book amortization of premium, foreign currency reclasses, paydown reclasses, Section 732 basis adjustments, reclassifications of income from real estate investment securities and publicly traded partnerships, and reclassifications of dividends as of April 30, 2017:
Fund | Paid-in-capital | Undistributed (overdistribution of) net investment income | Accumulated net realized gain (loss) | Net unrealized appreciation (depreciation) | ||||||||||||||||||||||||
Balanced | $ | 228 | $ | 541,840 | $ | (542,066 | ) | $ | (2 | ) | ||||||||||||||||||
Mid-Cap Value | 3,470 | (143,390 | ) | 139,920 | - |
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. During the period ended April 30, 2017, Mid-Cap Value Fund had $3,967,291 short-term post RIC MOD capital loss carryforwards.
During the period ended April 30, 2017 the Funds utilized the following post RIC MOD capital loss carryforwards:
Fund | Short-Term Capital Loss Carryforwards | Long-Term Capital Loss Carryforwards | ||||||||||
Balanced | $ | 2,065,884 | $ | 4,189,544 | ||||||||
Mid-Cap Value | 4,037,982 | 11,290,330 |
8. Investment Transactions
The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the period ended April 30, 2017 were as follows:
Fund | Purchases (non-U.S. Government Securities) | Purchases of U.S. Government Securities | Sales (non-U.S. Government Securities) | Sales of U.S. Government Securities | ||||||||||||||||||||||||
Balanced | $ | 82,410,736 | $ | 17,727,205 | $ | (90,322,389 | ) | $ | (10,041,513 | ) | ||||||||||||||||||
Mid-Cap Value | 79,265,893 | - | (83,507,386 | ) | - |
A summary of the Funds’ transactions in the USG Select Fund for the period ended April 30, 2017 are as follows:
Fund | Type of Transaction | October 31, 2016 Shares/Fair Value | Purchases | Sales | April 30, 2017 Shares/Fair Value | Dividend Income | ||||||||||||||||||||||||||||||||||||||
Balanced | Direct | 32,057,781 | $ | 123,677,544 | $ | 136,705,789 | $ | 19,029,536 | $ | 85,299 | ||||||||||||||||||||||||||||||||||
Balanced | Securities Lending | - | 4,240,721 | 3,345,346 | 895,375 | n/a | ||||||||||||||||||||||||||||||||||||||
Mid-Cap Value | Direct | 25,957,274 | 105,165,208 | 97,256,904 | 33,865,578 | 72,329 | ||||||||||||||||||||||||||||||||||||||
Mid-Cap Value | Securities Lending | 4,103,281 | 63,525,623 | 60,860,375 | 6,768,529 | n/a |
9. Securities Lending
The Funds may lend their 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
53
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
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 Funds’ 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 Funds, the Agent, and the Manager retained 80%, 10%, and 10%, respectively, of the income generated from securities lending.
While securities are on loan, the Funds continue 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 Funds would be subject to on the dividend.
Securities lending transactions pose certain risks to the Funds, 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 Funds could also experience delays and costs in gaining access to the collateral. The Funds bear 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, 2017, the value of outstanding securities on loan and the value of collateral was as follows:
Fund | Market Value of Securities on Loan | Cash Collateral Received | Non-Cash Collateral Received | Total Collateral Received | ||||||||||||||||||||||||
Balanced | $ | 873,145 | $ | 895,375 | $ | - | $ | 895,375 | ||||||||||||||||||||
Mid-Cap Value | 6,561,988 | 6,768,529 | - | 6,768,529 |
Cash collateral is listed on the Funds’ Schedules of Investments and is shown on the Statements of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statements 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 Funds’ Schedules of Investments or Statements of Assets and Liabilities.
54
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
10. Capital Share Transactions
The tables below summarize the activity in capital shares for each Class of the Funds:
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 576,037 | $ | 9,376,977 | 27,615,173 | $ | 413,275,370 | ||||||||||||||||||||||
Reinvestment of dividends | 192,728 | 3,131,751 | 2,110,281 | 29,609,682 | ||||||||||||||||||||||||
Shares redeemed | (27,235,230 | ) | (445,428,685 | ) | (26,882,903 | ) | (378,720,594 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net (decrease) in shares outstanding | (26,466,465 | ) | $ | (432,919,957 | ) | 2,842,551 | $ | 64,164,458 | ||||||||||||||||||||
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Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 2,876,820 | $ | 46,789,023 | 1,011,636 | $ | 15,071,547 | ||||||||||||||||||||||
Reinvestment of dividends | 36,660 | 601,238 | 126,508 | 1,861,848 | ||||||||||||||||||||||||
Shares redeemed | (523,311 | ) | (8,545,098 | ) | (1,725,794 | ) | (25,396,659 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net (decrease) in shares outstanding | 2,390,169 | $ | 38,845,163 | (587,650 | ) | $ | (8,463,264 | ) | ||||||||||||||||||||
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Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,352,404 | $ | 19,732,547 | 1,350,859 | $ | 18,123,424 | ||||||||||||||||||||||
Reinvestment of dividends | 115,889 | 1,695,912 | 720,937 | 9,524,234 | ||||||||||||||||||||||||
Shares redeemed | (1,234,475 | ) | (17,979,791 | ) | (3,685,502 | ) | (49,146,541 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | 233,818 | $ | 3,448,668 | (1,613,706 | ) | $ | (21,498,883 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 65,669 | $ | 1,012,638 | 133,774 | $ | 1,850,033 | ||||||||||||||||||||||
Reinvestment of dividends | 7,734 | 119,462 | 53,093 | 739,089 | ||||||||||||||||||||||||
Shares redeemed | (99,098 | ) | (1,526,852 | ) | (352,921 | ) | (4,929,490 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (25,695 | ) | $ | (394,752 | ) | (166,054 | ) | $ | (2,340,368 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 268,192 | $ | 3,919,416 | 482,815 | $ | 6,411,237 | ||||||||||||||||||||||
Reinvestment of dividends | 19,332 | 282,448 | 125,899 | 1,660,888 | ||||||||||||||||||||||||
Shares redeemed | (386,041 | ) | (5,587,943 | ) | (826,982 | ) | (11,295,620 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (98,517 | ) | $ | (1,386,079 | ) | (218,268 | ) | $ | (3,223,495 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 334,547 | $ | 4,942,731 | 513,284 | $ | 6,943,323 | ||||||||||||||||||||||
Reinvestment of dividends | 22,306 | 329,611 | 186,044 | 2,476,409 | ||||||||||||||||||||||||
Shares redeemed | (359,038 | ) | (5,268,802 | ) | (909,921 | ) | (12,252,401 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (2,185 | ) | $ | 3,540 | (210,593 | ) | $ | (2,832,669 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
55
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 2,938,782 | $ | 45,893,175 | 4,825,944 | $ | 64,259,175 | ||||||||||||||||||||||
Reinvestment of dividends | 200,907 | 3,102,004 | 1,149,977 | 15,064,696 | ||||||||||||||||||||||||
Shares redeemed | (2,679,014 | ) | (41,725,820 | ) | (9,719,197 | ) | (132,906,070 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | 460,675 | $ | 7,269,359 | (3,743,276 | ) | $ | (53,582,199 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 735,498 | $ | 11,409,498 | 1,694,856 | $ | 21,909,728 | ||||||||||||||||||||||
Reinvestment of dividends | 68,733 | 1,052,987 | 323,352 | 4,203,575 | ||||||||||||||||||||||||
Shares redeemed | (525,544 | ) | (8,168,915 | ) | (1,882,894 | ) | (24,911,078 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | 278,687 | $ | 4,293,570 | 135,314 | $ | 1,202,225 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,737,381 | $ | 27,472,072 | 3,990,292 | $ | 53,655,559 | ||||||||||||||||||||||
Reinvestment of dividends | 199,673 | 3,114,890 | 1,320,670 | 17,472,465 | ||||||||||||||||||||||||
Shares redeemed | (2,346,930 | ) | (36,742,771 | ) | (8,788,846 | ) | (117,484,842 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (409,876 | ) | $ | (6,155,809 | ) | (3,477,884 | ) | $ | (46,356,818 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 32,441 | $ | 502,713 | 152,769 | $ | 1,990,312 | ||||||||||||||||||||||
Reinvestment of dividends | 4,212 | 63,730 | 30,087 | 386,321 | ||||||||||||||||||||||||
Shares redeemed | (123,439 | ) | (1,837,210 | ) | (167,622 | ) | (2,196,069 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (86,786 | ) | $ | (1,270,767 | ) | 15,234 | $ | 180,564 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 206,812 | $ | 3,207,098 | 798,185 | $ | 9,613,064 | ||||||||||||||||||||||
Reinvestment of dividends | 14,503 | 219,286 | 69,638 | 893,451 | ||||||||||||||||||||||||
Shares redeemed | (335,991 | ) | (5,123,318 | ) | (595,507 | ) | (7,792,695 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (114,676 | ) | $ | (1,696,934 | ) | 272,316 | $ | 2,713,820 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 34,390 | $ | 514,710 | 78,375 | $ | 1,022,759 | ||||||||||||||||||||||
Reinvestment of dividends | 2,030 | 29,866 | 26,027 | 325,334 | ||||||||||||||||||||||||
Shares redeemed | (39,379 | ) | (575,288 | ) | (99,482 | ) | (1,268,556 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (2,959 | ) | $ | (30,712 | ) | 4,920 | $ | 79,537 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
AMR Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2017 | Year Ended October 31, 2016 | |||||||||||||||||||||||||||
American Beacon Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | - | $ | - | 936 | $ | 13,774 | ||||||||||||||||||||||
Shares redeemed | - | - | (85,963 | ) | (1,270,532 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | - | $ | - | (85,027 | ) | $ | (1,256,758 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
56
American Beacon FundsSM
Notes to Financial Statements
April 30, 2017 (Unaudited)
11. Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.
57
American Beacon Balanced FundSM
(For a share outstanding throughout the period)
Institutional ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 15.26 | $ | 15.79 | $ | 16.79 | $ | 16.31 | $ | 14.27 | $ | 12.89 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.20 | 0.27 | 0.32 | 0.38 | 0.30 | 0.32 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 1.21 | 0.20 | (0.32 | ) | 1.35 | 2.35 | 1.38 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.41 | 0.47 | - | 1.73 | 2.65 | 1.70 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.20 | ) | (0.25 | ) | (0.22 | ) | (0.42 | ) | (0.30 | ) | (0.32 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.75 | ) | (0.78 | ) | (0.83 | ) | (0.31 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.20 | ) | (1.00 | ) | (1.00 | ) | (1.25 | ) | (0.61 | ) | (0.32 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.47 | $ | 15.26 | $ | 15.79 | $ | 16.79 | $ | 16.31 | $ | 14.27 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnD | 9.29 | %B | 3.30 | % | (0.07 | )% | 11.15 | % | 19.04 | % | 13.23 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 87,670,844 | $ | 485,231,068 | $ | 99,173,943 | $ | 74,422,347 | $ | 60,916,035 | $ | 40,938,021 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.56 | %C | 0.62 | % | 0.58 | % | 0.58 | % | 0.60 | % | 0.59 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.56 | %C | 0.62 | % | 0.58 | % | 0.58 | % | 0.60 | % | 0.59 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.77 | %C | 1.90 | % | 1.83 | % | 2.24 | % | 1.86 | % | 2.27 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.77 | %C | 1.90 | % | 1.83 | % | 2.24 | % | 1.86 | % | 2.27 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 18 | %B | 16 | % | 62 | % | 34 | % | 56 | % | 58 | % |
A | On May 31, 2016, the AMR Class closed and the assets were merged into the Institutional Class. |
B | Not annualized. |
C | Annualized. |
D | 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 Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 15.30 | $ | 15.84 | $ | 16.83 | $ | 16.37 | $ | 14.32 | $ | 12.93 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.09 | 0.30 | 0.30 | 0.40 | 0.39 | 0.17 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 1.36 | 0.13 | (0.30 | ) | 1.31 | 2.26 | 1.51 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.45 | 0.43 | - | 1.71 | 2.65 | 1.68 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.20 | ) | (0.22 | ) | (0.21 | ) | (0.42 | ) | (0.29 | ) | (0.29 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.75 | ) | (0.78 | ) | (0.83 | ) | (0.31 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.20 | ) | (0.97 | ) | (0.99 | ) | (1.25 | ) | (0.60 | ) | (0.29 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.55 | $ | 15.30 | $ | 15.84 | $ | 16.83 | $ | 16.37 | $ | 14.32 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 9.49 | %B | 3.06 | % | (0.07 | )% | 10.98 | % | 18.97 | % | 13.04 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 70,746,028 | $ | 28,843,268 | $ | 39,151,318 | $ | 36,113,608 | $ | 7,262,894 | $ | 2,482,039 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.67 | %C | 0.72 | % | 0.66 | % | 0.67 | % | 0.68 | % | 0.69 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.67 | %C | 0.72 | % | 0.66 | % | 0.68 | % | 0.70 | % | 0.69 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.53 | %C | 1.95 | % | 1.75 | % | 2.01 | % | 1.71 | % | 2.08 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.53 | %C | 1.95 | % | 1.75 | % | 2.01 | % | 1.69 | % | 2.08 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 18 | %B | 16 | % | 62 | % | 34 | % | 56 | % | 58 | % |
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. |
59
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.71 | $ | 14.30 | $ | 15.31 | $ | 14.98 | $ | 13.16 | $ | 11.93 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.11 | 0.18 | 0.22 | 0.42 | 0.26 | 0.23 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 1.13 | 0.18 | (0.26 | ) | 1.11 | 2.13 | 1.30 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.24 | 0.36 | (0.04 | ) | 1.53 | 2.39 | 1.53 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.18 | ) | (0.20 | ) | (0.19 | ) | (0.37 | ) | (0.26 | ) | (0.30 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.75 | ) | (0.78 | ) | (0.83 | ) | (0.31 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.18 | ) | (0.95 | ) | (0.97 | ) | (1.20 | ) | (0.57 | ) | (0.30 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 14.77 | $ | 13.71 | $ | 14.30 | $ | 15.31 | $ | 14.98 | $ | 13.16 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 9.08 | %B | 2.85 | % | (0.35 | )% | 10.75 | % | 18.65 | % | 12.86 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 140,550,448 | $ | 127,235,433 | $ | 155,757,561 | $ | 165,808,020 | $ | 109,336,889 | $ | 89,271,812 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.88 | %C | 0.95 | % | 0.91 | % | 0.92 | % | 0.92 | % | 0.92 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.88 | %C | 0.95 | % | 0.91 | % | 0.92 | % | 0.92 | % | 0.92 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.38 | %C | 1.72 | % | 1.51 | % | 1.84 | % | 1.62 | % | 1.95 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.38 | %C | 1.72 | % | 1.51 | % | 1.84 | % | 1.62 | % | 1.95 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 18 | %B | 16 | % | 62 | % | 34 | % | 56 | % | 58 | % |
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. |
60
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.46 | $ | 15.02 | $ | 16.04 | $ | 15.65 | $ | 13.73 | $ | 12.36 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | 0.13 | 0.24 | 0.22 | 0.18 | (0.12 | ) | 0.42 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 1.17 | 0.12 | (0.29 | ) | 1.39 | 2.60 | 1.14 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.30 | 0.36 | (0.07 | ) | 1.57 | 2.48 | 1.56 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.17 | ) | (0.17 | ) | (0.17 | ) | (0.35 | ) | (0.25 | ) | (0.19 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.75 | ) | (0.78 | ) | (0.83 | ) | (0.31 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.17 | ) | (0.92 | ) | (0.95 | ) | (1.18 | ) | (0.56 | ) | (0.19 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 15.59 | $ | 14.46 | $ | 15.02 | $ | 16.04 | $ | 15.65 | $ | 13.73 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 8.99 | %B | 2.71 | % | (0.58 | )% | 10.58 | % | 18.52 | % | 12.62 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 11,032,043 | $ | 10,603,004 | $ | 13,510,138 | $ | 14,705,747 | $ | 6,352,890 | $ | 2,506,831 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.07 | %C | 1.12 | % | 1.06 | % | 1.07 | % | 1.07 | % | 1.09 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.07 | %C | 1.12 | % | 1.06 | % | 1.07 | % | 1.07 | % | 1.09 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.20 | %C | 1.55 | % | 1.35 | % | 1.75 | % | 1.32 | % | 1.82 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.20 | %C | 1.55 | % | 1.35 | % | 1.75 | % | 1.32 | % | 1.82 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 18 | %B | 16 | % | 62 | % | 34 | % | 56 | % | 58 | % |
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. |
61
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.69 | $ | 14.27 | $ | 15.29 | $ | 14.97 | $ | 13.16 | $ | 12.06 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.09 | 0.21 | 0.23 | 0.33 | 0.22 | 0.33 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 1.15 | 0.15 | (0.29 | ) | 1.18 | 2.14 | 1.17 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.24 | 0.36 | (0.06 | ) | 1.51 | 2.36 | 1.50 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.18 | ) | (0.19 | ) | (0.18 | ) | (0.36 | ) | (0.24 | ) | (0.40 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.75 | ) | (0.78 | ) | (0.83 | ) | (0.31 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
| �� |
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.18 | ) | (0.94 | ) | (0.96 | ) | (1.19 | ) | (0.55 | ) | (0.40 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 14.75 | $ | 13.69 | $ | 14.27 | $ | 15.29 | $ | 14.97 | $ | 13.16 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 9.05 | %B | 2.84 | % | (0.48 | )% | 10.67 | % | 18.45 | % | 12.65 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 25,367,602 | $ | 24,892,096 | $ | 29,074,120 | $ | 25,578,944 | $ | 6,284,539 | $ | 3,126,922 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.97 | %C | 1.02 | % | 0.97 | % | 1.02 | % | 1.10 | % | 1.13 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.97 | %C | 1.02 | % | 0.97 | % | 1.04 | % | 1.10 | % | 1.09 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.30 | %C | 1.64 | % | 1.44 | % | 1.68 | % | 1.31 | % | 1.62 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.30 | %C | 1.64 | % | 1.44 | % | 1.67 | % | 1.30 | % | 1.66 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 18 | %B | 16 | % | 62 | % | 34 | % | 56 | % | 58 | % |
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. |
62
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.83 | $ | 14.43 | $ | 15.47 | $ | 15.13 | $ | 13.33 | $ | 12.13 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.04 | 0.12 | 0.14 | 0.21 | 0.17 | 0.15 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 1.15 | 0.13 | (0.29 | ) | 1.20 | 2.11 | 1.29 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 1.19 | 0.25 | (0.15 | ) | 1.41 | 2.28 | 1.44 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.12 | ) | (0.10 | ) | (0.11 | ) | (0.24 | ) | (0.17 | ) | (0.24 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.75 | ) | (0.78 | ) | (0.83 | ) | (0.31 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.12 | ) | (0.85 | ) | (0.89 | ) | (1.07 | ) | (0.48 | ) | (0.24 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 14.90 | $ | 13.83 | $ | 14.43 | $ | 15.47 | $ | 15.13 | $ | 13.33 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 8.63 | %B | 2.03 | % | (1.14 | )% | 9.80 | % | 17.50 | % | 11.86 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 43,961,361 | $ | 40,827,570 | $ | 45,641,648 | $ | 32,045,404 | $ | 11,573,900 | $ | 3,578,962 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.72 | %C | 1.77 | % | 1.72 | % | 1.78 | % | 1.84 | % | 1.85 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.72 | %C | 1.77 | % | 1.72 | % | 1.79 | % | 1.85 | % | 1.83 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.55 | %C | 0.89 | % | 0.69 | % | 0.94 | % | 0.51 | % | 0.88 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.55 | %C | 0.89 | % | 0.69 | % | 0.93 | % | 0.50 | % | 0.90 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 18 | %B | 16 | % | 62 | % | 34 | % | 56 | % | 58 | % |
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. |
63
American Beacon Mid-Cap Value FundSM
(For a share outstanding throughout the period)
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015D | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.03 | $ | 14.62 | $ | 14.76 | $ | 14.33 | $ | 10.95 | $ | 9.73 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.08 | 0.26 | 0.16 | 0.12 | 0.13 | 0.14 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 2.18 | 0.03 | 0.25 | 1.27 | 3.93 | 1.21 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 2.26 | 0.29 | 0.41 | 1.39 | 4.06 | 1.35 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.22 | ) | (0.17 | ) | (0.10 | ) | (0.11 | ) | (0.20 | ) | (0.13 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.71 | ) | (0.45 | ) | (0.85 | ) | (0.48 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.22 | ) | (0.88 | ) | (0.55 | ) | (0.96 | ) | (0.68 | ) | (0.13 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | E | - | E | - | E | - | E | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.07 | $ | 14.03 | $ | 14.62 | $ | 14.76 | $ | 14.33 | $ | 10.95 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 16.18 | %B | 2.39 | % | 2.73 | % | 10.20 | % | 39.18 | % | 14.07 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 231,332,655 | $ | 195,472,135 | $ | 258,503,278 | $ | 193,634,639 | $ | 72,206,907 | $ | 34,207,844 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.88 | %C | 0.89 | % | 0.85 | % | 0.89 | % | 0.99 | % | 1.06 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.88 | %C | 0.89 | % | 0.85 | % | 0.93 | % | 0.98 | % | 0.98 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.12 | %C | 1.65 | % | 1.10 | % | 0.92 | % | 1.05 | % | 1.17 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.12 | %C | 1.65 | % | 1.10 | % | 0.88 | % | 1.06 | % | 1.25 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %B | 27 | % | 79 | % | 24 | % | 48 | % | 87 | % |
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 | Amount represents less than $0.01 per share. |
64
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015D | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.92 | $ | 14.52 | $ | 14.66 | $ | 14.25 | $ | 10.92 | $ | 9.72 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.08 | 0.23 | 0.15 | 0.18 | 0.17 | 0.13 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 2.16 | 0.05 | 0.26 | 1.19 | 3.86 | 1.21 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 2.24 | 0.28 | 0.41 | 1.37 | 4.03 | 1.34 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.21 | ) | (0.17 | ) | (0.10 | ) | (0.11 | ) | (0.22 | ) | (0.14 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.71 | ) | (0.45 | ) | (0.85 | ) | (0.48 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.21 | ) | (0.88 | ) | (0.55 | ) | (0.96 | ) | (0.70 | ) | (0.14 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | – | E | – | E | – | E | – | E | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 15.95 | $ | 13.92 | $ | 14.52 | $ | 14.66 | $ | 14.25 | $ | 10.92 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 16.15 | %B | 2.29 | % | 2.76 | % | 10.15 | % | 38.99 | % | 13.97 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 83,498,634 | $ | 68,994,531 | $ | 70,009,288 | $ | 31,074,584 | $ | 2,813,712 | $ | 516,032 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.96 | %C | 0.96 | % | 0.94 | % | 0.98 | % | 1.11 | % | 1.28 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.96 | %C | 0.96 | % | 0.94 | % | 0.98 | % | 1.08 | % | 1.06 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.03 | %C | 1.59 | % | 1.02 | % | 0.80 | % | 0.79 | % | 0.82 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.03 | %C | 1.59 | % | 1.02 | % | 0.80 | % | 0.82 | % | 1.03 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %B | 27 | % | 79 | % | 24 | % | 48 | % | 87 | % |
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 | Amount represents less than $0.01 per share. |
65
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015D | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.14 | $ | 14.73 | $ | 14.89 | $ | 14.47 | $ | 10.98 | $ | 9.71 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.07 | 0.21 | 0.13 | 0.16 | 0.23 | 0.34 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 2.20 | 0.05 | 0.25 | 1.21 | 3.83 | 1.00 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 2.27 | 0.26 | 0.38 | 1.37 | 4.06 | 1.34 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.19 | ) | (0.14 | ) | (0.09 | ) | (0.10 | ) | (0.09 | ) | (0.07 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.71 | ) | (0.45 | ) | (0.85 | ) | (0.48 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.19 | ) | (0.85 | ) | (0.54 | ) | (0.95 | ) | (0.57 | ) | (0.07 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | E | - | E | - | E | - | E | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.22 | $ | 14.14 | $ | 14.73 | $ | 14.89 | $ | 14.47 | $ | 10.98 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 16.07 | %B | 2.12 | % | 2.52 | % | 9.99 | % | 38.69 | % | 13.84 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 272,581,324 | $ | 243,421,035 | $ | 304,799,582 | $ | 246,404,670 | $ | 17,871,568 | $ | 4,156,858 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.09 | %C | 1.12 | % | 1.09 | % | 1.13 | % | 1.25 | % | 1.44 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.09 | %C | 1.12 | % | 1.09 | % | 1.14 | % | 1.23 | % | 1.23 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.91 | %C | 1.44 | % | 0.87 | % | 0.61 | % | 0.68 | % | 0.75 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.91 | %C | 1.44 | % | 0.87 | % | 0.60 | % | 0.70 | % | 0.96 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %B | 27 | % | 79 | % | 24 | % | 48 | % | 87 | % |
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 | Amount represents less than $0.01 per share. |
66
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015D | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.69 | $ | 14.27 | $ | 14.46 | $ | 14.07 | $ | 10.81 | $ | 9.56 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.13 | 0.16 | 0.08 | 0.11 | 0.11 | 0.05 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 2.04 | 0.05 | 0.25 | 1.17 | 3.83 | 1.23 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 2.17 | 0.21 | 0.33 | 1.28 | 3.94 | 1.28 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.14 | ) | (0.08 | ) | (0.07 | ) | (0.04 | ) | (0.20 | ) | (0.03 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.71 | ) | (0.45 | ) | (0.85 | ) | (0.48 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.14 | ) | (0.79 | ) | (0.52 | ) | (0.89 | ) | (0.68 | ) | (0.03 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | E | - | E | - | E | - | E | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 15.72 | $ | 13.69 | $ | 14.27 | $ | 14.46 | $ | 14.07 | $ | 10.81 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 15.92 | %B | 1.82 | % | 2.25 | % | 9.58 | % | 38.43 | % | 13.44 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 6,238,772 | $ | 6,622,356 | $ | 6,684,131 | $ | 7,149,083 | $ | 727,587 | $ | 464,851 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.39 | %C | 1.40 | % | 1.37 | % | 1.40 | % | 1.61 | % | 1.99 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.39 | %C | 1.40 | % | 1.37 | % | 1.46 | % | 1.49 | % | 1.48 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.61 | %C | 1.16 | % | 0.58 | % | 0.35 | % | 0.46 | % | 0.10 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.61 | %C | 1.16 | % | 0.58 | % | 0.30 | % | 0.58 | % | 0.61 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %B | 27 | % | 79 | % | 24 | % | 48 | % | 87 | % |
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 | Amount represents less than $0.01 per share. |
67
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015D | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.70 | $ | 14.28 | $ | 14.43 | $ | 14.09 | $ | 10.82 | $ | 9.61 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.06 | 0.18 | 0.11 | 0.13 | 0.14 | 0.09 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 2.12 | 0.05 | 0.25 | 1.16 | 3.80 | 1.20 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 2.18 | 0.23 | 0.36 | 1.29 | 3.94 | 1.29 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.17 | ) | (0.10 | ) | (0.06 | ) | (0.10 | ) | (0.19 | ) | (0.08 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.71 | ) | (0.45 | ) | (0.85 | ) | (0.48 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.17 | ) | (0.81 | ) | (0.51 | ) | (0.95 | ) | (0.67 | ) | (0.08 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | E | - | E | - | E | - | E | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 15.71 | $ | 13.70 | $ | 14.28 | $ | 14.43 | $ | 14.09 | $ | 10.82 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 15.93 | %B | 1.98 | % | 2.35 | % | 9.68 | % | 38.39 | % | 13.56 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 20,552,613 | $ | 19,486,655 | $ | 16,422,504 | $ | 18,345,497 | $ | 1,666,696 | $ | 263,939 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.27 | %C | 1.26 | % | 1.25 | % | 1.33 | % | 1.48 | % | 1.61 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.27 | %C | 1.26 | % | 1.25 | % | 1.33 | % | 1.49 | % | 1.49 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.74 | %C | 1.30 | % | 0.71 | % | 0.42 | % | 0.44 | % | 0.56 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.74 | %C | 1.30 | % | 0.71 | % | 0.42 | % | 0.43 | % | 0.68 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %B | 27 | % | 79 | % | 24 | % | 48 | % | 87 | % |
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 | Amount represents less than $0.01 per share. |
68
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015D | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.26 | $ | 13.87 | $ | 14.08 | $ | 13.81 | $ | 10.70 | $ | 9.56 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | - | 0.07 | 0.01 | 0.08 | 0.11 | 0.06 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 2.06 | 0.06 | 0.23 | 1.09 | 3.67 | 1.15 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 2.06 | 0.13 | 0.24 | 1.17 | 3.78 | 1.21 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.07 | ) | (0.03 | ) | - | (0.05 | ) | (0.19 | ) | (0.07 | ) | |||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.71 | ) | (0.45 | ) | (0.85 | ) | (0.48 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.07 | ) | (0.74 | ) | (0.45 | ) | (0.90 | ) | (0.67 | ) | (0.07 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | E | - | E | - | E | - | E | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 15.25 | $ | 13.26 | $ | 13.87 | $ | 14.08 | $ | 13.81 | $ | 10.70 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 15.54 | %B | 1.19 | % | 1.57 | % | 8.88 | % | 37.32 | % | 12.75 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 6,889,364 | $ | 6,030,130 | $ | 6,238,827 | $ | 5,104,394 | $ | 904,692 | $ | 253,849 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 2.03 | %C | 2.04 | % | 2.01 | % | 2.12 | % | 2.25 | % | 2.46 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 2.03 | %C | 2.04 | % | 2.01 | % | 2.13 | % | 2.24 | % | 2.22 | % | ||||||||||||||||||||||||||||||||
Net investment income (loss), before expense reimbursements | (0.03 | )%C | 0.53 | % | (0.05 | )% | (0.33 | )% | (0.27 | )% | (0.40 | )% | ||||||||||||||||||||||||||||||||
Net investment income (loss), net of reimbursements | (0.03 | )%C | 0.53 | % | (0.05 | )% | (0.34 | )% | (0.26 | )% | (0.15 | )% | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %B | 27 | % | 79 | % | 24 | % | 48 | % | 87 | % |
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 | Amount represents less than $0.01 per share. |
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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:
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By E-mail: | On the Internet: | |
american_beacon.funds@ambeacon.com | 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 | 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. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the American Beacon Balanced Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month. A complete schedule of the American Beacon Mid-Cap Value Fund’s portfolio holdings is also available on the website 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 State Street Bank and Trust Boston, Massachusetts | TRANSFER AGENT Boston Financial Data Services Kansas City, Missouri | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLC Dallas, TX | 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 4/17
ITEM 2. CODE OF ETHICS.
The Trust adopted a code of ethics that applies to its principal executive and financial officers (the “Code”). The Trust amended its code March 24, 2017 to disclose the addition of the Institutional Funds Trust, disclose a change in the Principal Financial Officer and disclosure of conflicts due to Principal Officers serving in positions with affiliates, which also serve as sub-advisors. The Trust did not grant any waivers to the provisions of the Code during the period covered by the shareholder reports presented in Item 1. The Code is filed herewith as Exhibit 99.CODE ETH.
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) Filed herewith as EX-99.CODE ETH.
(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 10, 2017
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 10, 2017
By | /s/ Melinda G. Heika | |
Melinda G. Heika | ||
Treasurer | ||
American Beacon Funds |
Date: July 10, 2017