American Beacon Balanced Fund (AABPX) N-CSR/A Certified annual shareholder report (management investment company) (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR/A

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: January 31, 2018

Date of reporting period: January 31, 2018

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.

ACADIAN EMERGING MARKETS MANAGED VOLATILITY FUND

Investing in foreign and emerging market securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in lower volatility securities may produce more modest gains than other stock funds as a trade-off for the potentially lower downside risk. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates 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.

SGA GLOBAL GROWTH FUND

Investing in foreign and emerging market securities may involve heightened risk due to currency fluctuations and economic and political risks. Growth stocks typically are more volatile than value stocks; however, value stocks have a lower expected growth rate in earnings and sales. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates 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 January 31, 2018

Contents

President’s Message	1
Market and Performance Overviews	2
Expense Examples	9
Report of Independent Registered Public Accounting Firm	11
Schedules of Investments:
American Beacon Acadian Emerging Markets Managed Volatility Fund	12
American Beacon SGA Global Growth Fund	20
Financial Statements	23
Notes to Financial Statements	26
Financial Highlights:
American Beacon Acadian Emerging Markets Managed Volatility Fund	47
American Beacon SGA Global Growth Fund	52
Federal Tax Information	57
Trustees and Officers of the American Beacon Funds	58
Privacy Policy	63

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   At American Beacon, we are proud to offer a broad range of equity, fixed- income and alternative mutual fund products for institutions and individuals. Our mutual funds – which span the domestic, international, global, frontier and emerging markets – are sub-advised by experienced portfolio managers who employ distinctive investment processes to manage assets through a variety of economic and market conditions. Together, we work diligently to help our clients and shareholders meet their long-term financial goals.   Institutional wisdom, enduring value. Since our inception as a pension fiduciary in 1986, American Beacon has focused on identifying and overseeing institutional investment managers and portfolio risk management. In 1987, we leveraged our size and experience to launch a series of sub-advised, multi-

manager mutual funds providing individual investors access to many of the same institutional managers as our pension clients. Following the financial crisis in 2008, we saw that investors were looking for unique solutions from managers who were not necessarily mainstream. In 2010, we began offering mutual funds from single managers with distinctive investment styles or asset classes. As we continue to expand our family of funds, our solutions- based approach provides innovative investments.

Guiding principles. Our “manager of managers” philosophy is built on a long-standing history of innovative thinking, discipline and consistency in applying our solutions-based approach. As a manager of managers, our goal is to engage the most effective money managers for each asset class, investment style or market strategy – whether through a single sub-advisor or a combination of sub-advisors. Because we take our fiduciary responsibilities very seriously, our thorough manager evaluation and selection process is rigorous and ongoing. Our guiding principles – predictability, style consistency, competitive pricing and long-term relationships – provide a strong foundation for our due-diligence process. Our broad range of mutual funds helps investors navigate the economic storms and market downturns in the U.S. and abroad. Our years of experience evaluating sub-advisors have led us to identify and partner with asset managers who have adhered to their disciplined processes for many years and through multiple market cycles.

Focus on asset protection and risk mitigation. We strive to provide innovative, long-term products without gimmicks. From offering some of the first multi-manager funds, one of the first retirement-income funds and the first open-end mutual fund in the U.S. to focus primarily on frontier-market debt, our robust history includes applying a disciplined, solutions-based approach to our product development process to help protect assets and mitigate risk.

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

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Global Equity and Emerging Markets Overview

January 31, 2018 (Unaudited)

Global equity markets produced very strong returns for the 12-month period ended January 31, 2018, evidenced by the 27.5% return of the MSCI All Country World Index. Market conditions characterized by low volatility, central-bank accommodation, low inflation and strong corporate results provided a healthy backdrop for equity markets.

Domestic small-cap stocks, represented by the Russell 2000 Index, returned 17.2%. Small caps underperformed large-cap stocks, represented by the S&P 500 Index, which returned 26.4%. Remarkably, the S&P 500 Index only had one instance during the period where it was down more than 0.5% on consecutive trading days. From a sector perspective within the S&P 500 Index, all sectors produced positive returns for the year. The top performers were Information Technology up 43.1% and Financials up 29.8%. On the other hand, lagging sectors included Telecommunications Services up 1.8%, Energy up 6.6% and Real Estate up 8.8%. From a style standpoint, investors favored growth stocks, which easily outperformed value as demonstrated by the Russell 3000 Growth Index return of 34.1% compared to the Russell 3000 Value Index return of 16.7%.

International, developed markets provided strong returns over the period as the MSCI EAFE Index was up 27.6%. In Europe, the high returns were broad-based – represented by the MSCI Italy Index up 47.2%, the MSCI France Index up 37.0%, the MSCI Germany Index up 31.2% and the MSCI United Kingdom Index up 24.4% – as investors bid up shares in an improving European economy. In Japan, the MSCI Japan Index returned an impressive 25.0% as Prime Minister Shinzo Abe’s market-friendly reform efforts continued to take hold.

In the developing world, emerging markets (“EMs”) had an extraordinary year as rising commodity prices and positive investor sentiment lifted stocks. The MSCI Emerging Markets Index returned 41.0%. China, the largest country classified as an EM, led the way during the period with the MSCI China Index up an astonishing 62.3%. Other notable EM markets included the MSCI Poland Index up 52.4%, the MSCI India Index up 37.6% and the MSCI Brazil Index up 31.0%. The MSCI Mexico Index was up 22.4%, weak relative to other EMs, as investors worried about the outcome of ongoing NAFTA negotiations and a presidential election in the summer of 2018.

2

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

The Investor Class of the American Beacon Acadian Emerging Markets Managed Volatility Fund (the “Fund”) returned 29.78% for the twelve months ended January 31, 2018. The Fund underperformed the MSCI Emerging Markets Index (the “Index”) return of 41.01% for the period.

Comparison of Changes in Value of a $10,000 Investment for the period 9/27/2013 Through 1/31/2018

Total Returns for the Period ended January 31, 2018
	Ticker	1 Year			3 Years			Since Inception 9/27/2013			Value of $10,000 9/27/2013- 1/31/2018
Institutional Class (1,3)	ACDIX		30.24	%		6.45	%		5.28	%		$	12,505
Y Class (1,3)	ACDYX		30.12	%		6.36	%		5.17	%		$	12,450
Investor Class (1,3)	ACDPX		29.78	%		6.06	%		4.89	%		$	12,306
A without Sales Charge (1,3)	ACDAX		29.83	%		6.03	%		4.85	%		$	12,286
A with Sales Charge (1,3)	ACDAX		22.37	%		3.96	%		3.43	%		$	11,579
C without Sales Charge (1,3)	ACDCX		28.71	%		5.24	%		4.04	%		$	11,878
C with Sales Charge (1,3)	ACDCX		27.71	%		5.24	%		4.04	%		$	11,878
MSCI Emerging Markets Index (2)			41.01	%		11.83	%		7.76	%		$	13,841

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. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only, and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. 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. A Class shares have a maximum sales charge of 5.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future.

2. The MSCI Emerging Markets Index is a market capitalization weighted index composed of companies that are representative of the market structure of developing countries in Latin America, Asia, Eastern Europe, the Middle East and Africa. One cannot directly invest in an index.

3

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

3. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A, and C Class shares were 1.48%, 1.56%, 1.78%, 1.91% and 2.68%, 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 one-year period due to stock selection and country allocation.

Stock selections in Hong Kong and China detracted from relative performance during the period. This was partially offset by strong selections in Egypt and Malaysia. The primary detractors in Hong Kong (which was up 73.77%) included NVC Lighting Holdings Ltd. down 19.34%, Citic Ltd. up 9.83%, and Qinqin Foodstuffs Group down 18.37%. In China, another strong returning market for the year, up 55.30%, portfolio holdings in China Telecom Corp., Ltd. up 7.54%, PetroChina Co., Ltd. up 2.33%, and Bank of Communications Co. up 22.67% hurt relative performance. In Egypt, a position in Eastern Tobacco up 163.70% contributed positively to performance. In Malaysia, a position in Nestle (Malaysia) Bhd. up 74.76% added value to relative performance.

Relative contribution from country allocation was negative for the twelve month period. Underweighting Hong Kong up 73.77%, and overweighting Egypt up 7.58% were the largest detractors. On the other hand, underweighting Mexico up 22.44% contributed positively to relative performance during the period.

The Fund’s basic philosophy remains focused on investing in a well-diversified portfolio of low volatility stocks that aims to maximize risk-adjusted returns.

Top Ten Holdings (% Net Assets)
Public Bank Bhd		1.5
Industrial & Commercial Bank of China Ltd., Class H		1.5
CEZ A/S		1.5
Tata Consultancy Services Ltd.		1.5
China Construction Bank Corp., Class H		1.5
Tencent Holdings Ltd.		1.5
Bank of China Ltd., Class H		1.5
Agricultural Bank of China Ltd., Class H		1.5
Hindustan Unilever Ltd.		1.4
Manila Electric Co.		1.4
Total Fund Holdings	211
Sector Allocation (% Equities)
Financials		21.7
Consumer Staples		18.3
Telecommunication Services		13.8
Information Technology		12.8
Utilities		8.4
Consumer Discretionary		6.5
Industrials		6.2
Energy		5.0
Health Care		3.9
Materials		3.0
Real Estate		0.4

4

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

Country Allocation (% Equities)
China	24.1
India	11.7
Republic of Korea	11.0
Taiwan	9.6
Malaysia	5.3
Thailand	4.9
Brazil	4.2
Indonesia	4.1
South Africa	4.0
Philippines	3.3
Chile	3.0
Egypt	2.6
Greece	2.5
Hungary	2.4
Czech Republic	2.3
Hong Kong	1.4
Peru	1.3
Russia	1.1
Mexico	0.9
Poland	0.3

5

American Beacon SGA Global Growth Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

The Investor Class of the American Beacon SGA Global Growth Fund (the “Fund”) returned 37.16% for the twelve months ended January 31, 2018. The Fund outperformed the MSCI All Country World Index (the “Index”) return of 27.48% for the period.

Comparison of Change in Value of a $10,000 Investment for the period from 12/31/2010 through 1/31/2018

Total Returns for the Period ended January 31, 2018
	Ticker	1 Year			3 Years			5 Years			Since Inception (12/31/2010)			Value of $10,000 12/31/2010- 1/31/2018
Institutional Class (1,7)	SGAGX		37.64	%		17.71	%		12.89	%		12.75	%		$	23,406
Y Class (1,2,7)	SGAYX		37.52	%		17.59	%		12.78	%		12.68	%		$	23,298
Investor Class (1,3,7)	SGAPX		37.16	%		17.26	%		12.51	%		12.49	%		$	23,019
A without Sales Charge (1,4,7)	SGAAX		37.05	%		17.23	%		12.48	%		12.47	%		$	22,986
A with Sales Charge (1,4,7)	SGAAX		29.16	%		14.95	%		11.15	%		11.53	%		$	21,665
C without Sales Charge (1,5,7)	SGACX		36.04	%		16.37	%		11.75	%		11.95	%		$	22,254
C with Sales Charge (1,5,7)	SGACX		35.04	%		16.37	%		11.75	%		11.95	%		$	22,254
MSCI All Country World Index (6)			27.48	%		11.90	%		11.02	%		9.46	%		$	18,983
MSCI All Country World Growth Index (6)			33.27	%		13.42	%		12.65	%		10.56	%		$	20,376

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. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only, and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of the fees charged to each Class of the Fund has been waived since Fund inception. Performance prior to waiving fees was lower than the actual returns shown since inception. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future.

6

American Beacon SGA Global Growth Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

2. Fund performance for the five-year and since inception periods represent the total returns achieved by the Institutional Class from 12/31/10 up to 10/4/13, 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 12/31/10.

3. Fund performance for the five-year and since inception periods represent the total returns achieved by the Institutional Class from 12/31/10 up to 10/4/13, the inception date of the Investor Class, and the returns of the Investor Class since its inception. Expenses of the Investor 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 Investor Class been in existence since 12/31/10.

4. Fund performance for the five-year and since inception periods represent the total returns achieved by the Institutional Class from 12/31/10 up to 10/4/13, 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 Institutional Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 12/31/10. The maximum sales charge for A Class is 5.75%.

5. Fund performance for the five-year and since inception periods represent the total returns achieved by the Institutional Class from 12/31/10 up to 10/4/13, 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 Institutional Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 12/31/10. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

6. The MSCI All Country World Index (“ACWI”) is a free float-adjusted, market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI All Country World Growth Index is designed to measure equity market performance of companies with higher growth values in developed and emerging markets. 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, A and C Class shares were 2.04%, 1.89%, 2.06%, 2.34% and 3.09%, 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.

From a Fund perspective, stock selection and country allocation both added to performance relative to the Index over the one-year period.

Stock selections in the United States were the top contributor to the Fund’s relative performance during the period, including Mercadolibre Inc. (listed on NASDAQ, but headquartered in Argentina, up 127.3%), Whole Foods Market Inc. up 40.6% and Red Hat Inc. up 73.1%. Also adding to relative performance were stock selections in Hong Kong, led by Tencent Holdings Ltd. up 129.4% and AIA Group Ltd. up 40.6%. Stock selections in the Netherlands, including Core Laboratories N.V. which was flat for the year detracted from Fund performance.

From a country allocation perspective, overweighting Hong Kong up 54.6% and South Africa up 42.7% aided relative performance, overcoming value lost through null weighting Italy up 41.9%.

The Fund’s basic philosophy remains focused on investing in low-risk companies that offer predictable earnings and cash flow growth over the long term.

Top Ten Holdings (% Net Assets)
AIA Group Ltd.		3.9
SAP SE, Sponsored ADR		3.9
Visa, Inc., Class A		3.9
Novo Nordisk A/S, Class B		3.3
Equinix, Inc., REIT		3.0
Amazon.com, Inc.		3.0
Tencent Holdings Ltd.		3.0
NIKE, Inc., Class B		2.9
salesforce.com, Inc.		2.9
FleetCor Technologies, Inc.		2.9
Total Fund Holdings	35

7

American Beacon SGA Global Growth Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

Sector Allocation (% Equities)
Information Technology	33.8
Consumer Discretionary	24.2
Consumer Staples	13.1
Financials	8.9
Health Care	6.6
Industrials	5.2
Energy	5.0
Real Estate	3.2
Country Allocation (% Equities)
United States	55.4
China	7.8
India	5.6
South Africa	5.1
Hong Kong	4.2
Germany	4.1
Denmark	3.5
France	3.1
Japan	3.0
Republic of Korea	2.1
Australia	2.1
Argentina	2.1
Mexico	1.9

8

American Beacon Funds^SM

Expense Examples

January 31, 2018 (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, distribution (12b-1) fees, sub-transfer agent 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 August 1, 2017 through January 31, 2018.

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 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 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 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 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.

9

American Beacon Funds^SM

Expense Examples

January 31, 2018 (Unaudited)

Acadian Emerging Markets Managed Volatility Fund
	Beginning Account Value 8/1/2017		Ending Account Value 1/31/2018		Expenses Paid During Period 8/1/2017-1/31/2018*
Institutional Class
Actual		$1,000.00		$1,153.50		$7.27
Hypothetical**		$1,000.00		$1,018.50		$6.82
Y Class
Actual		$1,000.00		$1,152.10		$7.87
Hypothetical**		$1,000.00		$1,017.90		$7.38
Investor Class
Actual		$1,000.00		$1,150.80		$9.38
Hypothetical**		$1,000.00		$1,016.50		$8.79
A Class
Actual		$1,000.00		$1,151.50		$9.49
Hypothetical**		$1,000.00		$1,016.40		$8.89
C Class
Actual		$1,000.00		$1,145.80		$13.52
Hypothetical**		$1,000.00		$1,012.60		$12.68

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 1.34%, 1.45%, 1.73%, 1.75%, and 2.50% for the Institutional, Y, Investor, 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

SGA Global Growth Fund
	Beginning Account Value 8/1/2017		Ending Account Value 1/31/2018		Expenses Paid During Period 8/1/2017-1/31/2018*
Institutional Class
Actual		$1,000.00		$1,162.50		$5.34
Hypothetical**		$1,000.00		$1,020.30		$4.99
Y Class
Actual		$1,000.00		$1,161.50		$5.88
Hypothetical**		$1,000.00		$1,019.80		$5.50
Investor Class
Actual		$1,000.00		$1,160.50		$7.41
Hypothetical**		$1,000.00		$1,018.30		$6.92
A Class
Actual		$1,000.00		$1,160.10		$7.51
Hypothetical**		$1,000.00		$1,018.20		$7.02
C Class
Actual		$1,000.00		$1,155.60		$11.57
Hypothetical**		$1,000.00		$1,014.50		$10.82

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.98%, 1.08%, 1.36%, 1.38%, and 2.13% for the Institutional, Y, Investor, 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

10

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of American Beacon Funds and Shareholders of American Beacon Acadian Emerging Markets Managed Volatility Fund and American Beacon SGA Global Growth Fund

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of American Beacon Acadian Emerging Markets Managed Volatility Fund and American Beacon SGA Global Growth Fund (two of the series constituting American Beacon Funds, referred to hereafter as the “Funds”) as of January 31, 2018, the related statements of operations for the year ended January 31, 2018, the statements of changes in net assets for each of the two years in the period ended January 31, 2018, including the related notes, and the financial highlights for each of the two years in the period ended January 31, 2018 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of January 31, 2018, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended January 31, 2018 and each of the financial highlights for each of the two years in the period ended January 31, 2018 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinions

These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of January 31, 2018 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.

The financial statements of each of the Funds as of and for the year ended January 31, 2016 and the financial highlights for each of the periods ended on or prior to January 31, 2016 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated March 31, 2016 expressed an unqualified opinion on those financial statements and financial highlights.

PricewaterhouseCoopers LLP

Boston, MA

March 27, 2018

We have served as the auditor of one or more American Beacon investment companies since 2016.

11

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
Brazil - 4.09%
Common Stocks - 3.50%
Ambev S.A.		33,800		$	232,866
Construtora Tenda S.A.A		4,900			34,374
CPFL Energia S.A.		20,300			136,671
Engie Brasil Energia S.A.		1,600			18,049
Fleury S.A.		3,700			34,840
Grendene S.A.		9,400			86,299
Hypermarcas S.A.		46,800			533,808
IRB Brasil Resseguros S/A		19,700			232,183
SLC Agricola S.A.		1,700			16,749
Total Common Stocks					1,325,839
Preferred Stocks - 0.59%
Centrais Eletricas Santa CatarinaA B		900			7,627
Telefonica Brasil S.A.B		12,800			216,347
Total Preferred Stocks					223,974
Total Brazil (Cost $1,234,851)					1,549,813
Chile - 2.85%
Common Stocks - 2.85%
AntarChile S.A.		2,356			46,160
Banco de Chile		4,633			792
Blumar S.A.		29,423			8,497
Cia Cervecerias Unidas S.A., Sponsored ADR		5,217			153,223
Embotelladora Andina S.A., Class B, ADR		4,740			137,697
Enel Chile S.A., ADR		9,077			57,185
Enel Chile S.A.		2,043,335			257,607
Inversiones Aguas Metropolitanas S.A.		6,607			13,042
Sigdo Koppers S.A.		24,802			52,375
SMU S.A.A		281,595			92,018
Sociedad Punta del Cobre S.A., Class A		1,894			12,890
Vina Concha y Toro S.A.		111,423			247,677
Total Common Stocks					1,079,163
Total Chile (Cost $802,458)					1,079,163
China - 23.39%
Common Stocks - 23.39%
Agricultural Bank of China Ltd., Class H		900,000			552,242
Bank of China Ltd., Class H		919,000			553,328
Bank of Communications Co., Ltd., Class H		613,000			531,296
Beijing Jingkelong Co., Ltd., Class H		69,000			18,523
Changshouhua Food Co., Ltd.		19,000			9,424
China Construction Bank Corp., Class H		487,000			561,541
China Merchants Bank Co., Ltd., Class H		78,000			382,390
China Mobile Ltd.		42,500			448,761
China Petroleum & Chemical Corp., Class H		482,000			416,524
China Shenhua Energy Co., Ltd., Class H		97,000			301,937
China Shineway Pharmaceutical Group Ltd.		73,000			89,959
China Telecom Corp. Ltd., Class H		970,000			479,876
China Unicom Hong Kong Ltd.A		156,000			233,721
CITIC Ltd.		330,000			520,565
CNOOC Ltd.		235,000			365,899
COSCO SHIPPING International Hong Kong Co., Ltd.		64,000			26,835
Dongyue Group Ltd.		220,000			192,927

See accompanying notes

12

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
China - 23.39% (continued)
Common Stocks - 23.39% (continued)
Fuguiniao Co., Ltd., Class HA C		28,000		$	358
Hengan International Group Co., Ltd.		20,500			196,545
Huishang Bank Corp. Ltd., Class H		361,000			199,359
Industrial & Commercial Bank of China Ltd., Class H		601,000			568,528
Jiangsu Expressway Co., Ltd., Class H		134,000			206,585
Lanzhou Zhuangyuan Pasture Co., Ltd., Class H		10,000			11,748
NVC Lighting Holding Ltd.		1,961,000			188,012
PetroChina Co., Ltd., Class H		650,000			515,171
Ping An Insurance Group Co. of China Ltd., Class H		41,500			491,518
Shanghai Pharmaceuticals Holding Co., Ltd., Class H		29,200			76,521
Tencent Holdings Ltd.		9,400			557,080
Tsingtao Brewery Co., Ltd., Class H		16,000			89,177
Yuexiu Transport Infrastructure Ltd.		104,000			76,445
Total Common Stocks					8,862,795
Total China (Cost $6,742,128)					8,862,795
Czech Republic - 2.25%
Common Stocks - 2.25%
CEZ A/S		22,189			568,415
Komercni banka A/S		3,272			150,279
Philip Morris CR A/S		163			135,316
Total Common Stocks					854,010
Total Czech Republic (Cost $591,138)					854,010
Egypt - 2.52%
Common Stocks - 2.52%
Commercial International Bank Egypt SAE		56,599			250,048
Credit Agricole Egypt SAE		8,236			20,753
Eastern Tobacco		14,398			379,109
ElSewedy Electric Co.		3,695			32,431
Faisal Islamic Bank of Egypt		40,070			38,119
Global Telecom Holding SAEA		19,187			7,410
MM Group for Industry & International Trade SAEA		57			52
Telecom Egypt Co.		303,809			228,803
Total Common Stocks					956,725
Total Egypt (Cost $677,384)					956,725
Greece - 2.43%
Common Stocks - 2.43%
Aegean Airlines S.A.		14,980			170,548
Hellenic Telecommunications Organization S.A.		32,907			516,824
Holding Co. ADMIE IPTO S.A.A		36,607			95,671
Sarantis S.A.		6,826			127,546
Thessaloniki Water Supply & Sewage Co. S.A.		1,610			10,154
Total Common Stocks					920,743
Total Greece (Cost $626,993)					920,743
Hong Kong - 1.36%
Common Stocks - 1.36%
Goldlion Holdings Ltd.		46,000			18,229
Hopewell Highway Infrastructure Ltd.		493,500			302,813
Organic Tea Cosmetics Holdings Co., Ltd.		29,118			91,075
Road King Infrastructure Ltd.		50,000			102,906
Total Common Stocks					515,023
Total Hong Kong (Cost $397,005)					515,023

See accompanying notes

13

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
Hungary - 2.29%
Common Stocks - 2.29%
Magyar Telekom Telecommunications PLC		276,642		$	516,780
MOL Hungarian Oil & Gas PLC		2,320			28,342
Richter Gedeon Nyrt		12,160			312,519
Zwack Unicum Rt		124			8,779
Total Common Stocks					866,420
Total Hungary (Cost $653,599)					866,420
India - 11.35%
Common Stocks - 11.35%
Gillette India Ltd.		1,887			194,356
GlaxoSmithKline Consumer Healthcare Ltd.		1,538			162,012
Hawkins Cookers Ltd.		381			18,623
HCL Technologies Ltd.		25,858			400,064
Hinduja Global Solutions Ltd.		4,072			59,121
Hindustan Unilever Ltd.		25,395			545,122
Infosys Ltd.		9,703			175,300
Infosys Ltd., Sponsored ADR		13,317			239,839
Maruti Suzuki India Ltd.		900			134,426
Nestle India Ltd.		2,457			288,178
Omaxe Ltd.		6,736			24,210
Oracle Financial Services Software Ltd.		5,183			340,624
Pfizer Ltd.		7,381			269,460
Tata Consultancy Services Ltd.		11,495			562,273
Vakrangee Ltd.		64,441			369,551
Wipro Ltd.		87,362			418,997
Wipro Ltd., ADRD		17,962			98,611
Total Common Stocks					4,300,767
Total India (Cost $3,355,482)					4,300,767
Indonesia - 3.93%
Common Stocks - 3.93%
Bank Central Asia Tbk PT		216,600			367,646
Bank Rakyat Indonesia Persero Tbk PT		48,000			13,265
Gudang Garam Tbk PT		600			3,632
Hanjaya Mandala Sampoerna Tbk PT		349,500			127,912
Indofood CBP Sukses Makmur Tbk PT		224,900			146,563
Indofood Sukses Makmur Tbk PT		577,400			334,231
Multipolar Technology Tbk PT		558,900			26,299
Sampoerna Agro PT		71,400			13,546
Telekomunikasi Indonesia Persero Tbk PT		75,300			22,441
Unilever Indonesia Tbk PT		107,000			434,761
Total Common Stocks					1,490,296
Total Indonesia (Cost $1,366,971)					1,490,296
Malaysia - 5.11%
Common Stocks - 5.11%
Batu Kawan Bhd		2,800			14,224
Fraser & Neave Holdings Bhd		35,800			267,828
Kim Loong Resources Bhd		8,700			9,330
Kuala Lumpur Kepong Bhd		6,300			40,763
Maxis Bhd		3,200			4,992
Nestle Malaysia Bhd		16,900			491,250
Public Bank Bhd		102,600			578,577
Tenaga Nasional Bhd		130,900			529,947
Total Common Stocks					1,936,911
Total Malaysia (Cost $1,477,486)					1,936,911

See accompanying notes

14

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
Mexico - 0.90%
Common Stocks - 0.90%
Industrias Bachoco S.A.B. de C.V., Series B		17,308		$	89,127
Megacable Holdings S.A.B. de C.V.E		53,113			243,395
Pena Verde S.A.B		18,193			9,941
Total Common Stocks					342,463
Total Mexico (Cost $278,560)					342,463
Peru - 1.28%
Common Stocks - 1.28%
Alicorp S.A.A.		133,443			463,067
Union de Cervecerias Peruanas Backus y Johnston S.A.A.		3,546			20,398
Total Common Stocks					483,465
Total Peru (Cost $351,043)					483,465
Philippines - 3.24%
Common Stocks - 3.24%
Aboitiz Power Corp.		228,600			182,702
Asia United Bank Corp.		19,880			23,058
Bank of the Philippine Islands		6,810			15,824
Cebu Air, Inc.		48,130			92,976
China Banking Corp.		51,412			36,379
Cosco Capital, Inc.		261,300			36,674
East West Banking Corp.		47,000			26,477
Manila Electric Co.		81,090			535,225
Pepsi-Cola Products Philippines, Inc.		40,900			2,312
Pilipinas Shell Petroleum Corp.		5,480			6,671
RFM Corp.		171,000			16,067
San Miguel Corp.		50,960			143,046
San Miguel Pure Foods Co., Inc.		4,590			55,563
Top Frontier Investment Holdings, Inc.A		1,480			8,107
Union Bank of the Philippines		25,780			45,253
Total Common Stocks					1,226,334
Total Philippines (Cost $1,141,542)					1,226,334
Poland - 0.32%
Common Stocks - 0.32%
Boryszew S.A.A		2,086			6,011
Dom Development S.A.		1,421			35,255
Netia S.A.		10,180			16,098
Neuca S.A.		175			14,098
Stalexport Autostrady S.A.		29,864			39,903
Zespol Elektrocieplowni Wroclawskich Kogeneracja S.A.		433			10,898
Total Common Stocks					122,263
Total Poland (Cost $106,749)					122,263
Republic of Korea - 10.71%
Common Stocks - 10.71%
Aju Capital Co., Ltd.		1,109			7,405
Busan City Gas Co., Ltd.		333			11,694
Daeduck Electronics Co.		1,412			12,747
Daesung Energy Co., Ltd.		8,294			46,602
Daewoo Shipbuilding & Marine Engineering Co., Ltd.		5,019			113,977
Dong-Il Corp.		3,523			176,505
ESTec Corp.		5,543			60,473

See accompanying notes

15

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
Republic of Korea - 10.71% (continued)
Common Stocks - 10.71% (continued)
Green Cross Corp.		278		$	61,570
Incheon City Gas Co., Ltd.		1,136			32,234
Industrial Bank of Korea		3,180			49,583
Jinro Distillers Co., Ltd.		1,536			47,611
JLS Co., Ltd.		5,512			39,075
Kia Motors Corp.		10,960			355,634
KT Corp.		16,598			460,861
LF Corp.		13,905			445,986
LG Electronics, Inc.		4,893			469,666
LG Uplus Corp.		19,687			263,636
Namyang Dairy Products Co., Ltd.		191			125,026
Saeron Automotive Corp.		2,901			19,777
Samsung Electronics Co., Ltd.		160			373,835
Samwonsteel Co., Ltd.		2,041			6,154
Samyang Tongsang Co., Ltd.		868			36,131
SAVEZONE I&C Corp.		6,608			30,012
SK Hynix, Inc.		2,342			161,200
SK Telecom Co., Ltd.		1,981			492,537
TS Corp.		1,139			26,399
YESCO Co., Ltd.		3,120			130,603
Total Common Stocks					4,056,933
Total Republic of Korea (Cost $3,189,047)					4,056,933
Russia - 1.05%
Common Stocks - 1.05%
Gazprom Neft PJSC, Sponsored ADR		8,178			202,406
Rostelecom PJSC, Sponsored ADR		28,013			196,651
Total Common Stocks					399,057
Total Russia (Cost $350,829)					399,057
South Africa - 3.89%
Common Stocks - 3.73%
Aspen Pharmacare Holdings Ltd.		1,686			38,527
Bid Corp. Ltd.		9,144			204,705
Clover Industries Ltd.		54,461			68,914
Combined Motor Holdings Ltd.		3,475			7,911
Mondi Ltd.		13,511			360,807
Tongaat Hulett Ltd.		30,497			295,825
Vodacom Group Ltd.		31,503			434,799
Total Common Stocks					1,411,488
Preferred Stocks - 0.16%
Absa Bank Ltd.B		1,084			62,041
Total South Africa (Cost $1,354,697)					1,473,529
Taiwan - 9.32%
Common Stocks - 9.32%
104 Corp.		4,000			24,429
Aurora Corp.		29,000			87,262
Chunghwa Telecom Co., Ltd.		142,000			528,624
Far Eastern International Bank		1,082,204			358,686
First Financial Holding Co., Ltd.		52,000			35,951
Great Taipei Gas Co., Ltd.		46,000			43,087
Greatek Electronics, Inc.		133,000			258,740

See accompanying notes

16

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
Taiwan - 9.32% (continued)
Common Stocks - 9.32% (continued)
Hon Hai Precision Industry Co., Ltd.		111,288		$	352,053
Lian HWA Food Corp.		3,080			3,625
Microlife Corp.		9,000			21,739
Shanghai Commercial & Savings Bank Ltd.		436,331			501,521
Sysage Technology Co., Ltd.		19,000			20,405
Taichung Commercial Bank Co., Ltd.		1,192,309			413,179
Taiwan Business Bank		364,759			108,131
Taiwan Cooperative Financial Holding Co., Ltd.		99,842			59,435
Taiwan Secom Co., Ltd.		71,105			219,813
Taiwan Semiconductor Manufacturing Co., Ltd.		10,000			87,492
Taiwan Shin Kong Security Co., Ltd.		157,170			208,963
Ttet Union Corp.		11,000			34,420
Union Bank Of Taiwan		308,000			100,604
United Microelectronics Corp.		49,000			23,957
Ve Wong Corp.		44,000			40,384
Total Common Stocks					3,532,500
Total Taiwan (Cost $2,975,991)					3,532,500
Thailand - 4.73%
Common Stocks - 4.73%
Advanced Information Technology PCL		60,500			60,365
Amata B.Grimm Power Plant Infrasture FundE		76,400			21,710
Bangkok Bank PCL		15,400			101,782
Bangkok Bank PCL, NVDR		21,200			140,115
Bangkok Insurance PCL, NVDR		1,900			23,659
Kang Yong Electric PCL, NVDR		100			1,526
Kang Yong Electric PCL		2,100			32,050
Krung Thai Bank PCL, NVDR		571,200			364,751
MBK PCL, NVDR		41,200			28,151
MK Restaurants Group PCL		54,900			153,376
Ratchaburi Electricity Generating Holding PCL		103,400			180,752
Ratchaburi Electricity Generating Holding PCL, NVDR		103,000			180,053
Siam Cement PCL, NVDR		32,000			502,682
Thai Vegetable Oil PCL, NVDR		1,000			1,085
Total Common Stocks					1,792,057
Total Thailand (Cost $1,478,248)					1,792,057
SHORT-TERM INVESTMENTS - 1.57% (Cost $594,472)
Investment Companies - 1.57%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.25%F G		594,472			594,472
SECURITIES LENDING COLLATERAL - 0.26% (Cost $98,112)
Investment Companies - 0.26%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.25%F G		98,112			98,112
TOTAL INVESTMENTS - 98.84% (Cost $29,844,785)					37,453,851
OTHER ASSETS, NET OF LIABILITIES - 1.16%					440,837
TOTAL NET ASSETS - 100.00%				$	37,894,688
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B A type of Preferred Stock that has no maturity date.

^C Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $358 or 0.00% of net assets. Value was determined using significant unobservable inputs.

^D All or a portion of this security is on loan at January 31, 2018.

See accompanying notes

17

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2018

^E Unit - Usually consists of one common stock and/or rights and warrants.

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

^G 7-day yield.

ADR - American Depositary Receipt.

NVDR - Non Voting Depositary Receipt.

PCL - Public Company Limited (Thailand).

PJSC - Private Joint Stock Company.

PLC - Public Limited Company.

Futures Contracts Open on January 31, 2018:
Long Futures
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
Mini MSCI Emerging Markets Index Futures	16	March 2018	$	992,854	$	1,006,240	$	13,386
			$	992,854	$	1,006,240	$	13,386

Index Abbreviations:
MSCI	Morgan Stanley Capital International.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of January 31, 2018, the investments were classified as described below:

Acadian Emerging Markets Managed Volatility Fund	Level 1		Level 2		Level 3		Total
Assets
Foreign Common Stocks
Brazil	$	1,325,839	$	-	$	-	$	1,325,839
Chile		1,079,163		-		-		1,079,163
China		8,862,437				358		8,862,795
Czech Republic		854,010		-		-		854,010
Egypt		956,725		-		-		956,725
Greece		920,743		-		-		920,743
Hong Kong		515,023		-		-		515,023
Hungary		866,420		-		-		866,420
India		4,300,767		-		-		4,300,767
Indonesia		1,490,296		-		-		1,490,296
Malaysia		1,936,911		-		-		1,936,911
Mexico		342,463		-		-		342,463
Peru		483,465		-		-		483,465
Philippines		1,226,334		-		-		1,226,334
Poland		122,263		-		-		122,263
Republic of Korea		4,056,933		-		-		4,056,933
Russia		399,057		-		-		399,057
South Africa		1,411,488		-		-		1,411,488
Taiwan		3,532,500		-		-		3,532,500
Thailand		1,263,732		528,325		-		1,792,057
Foreign Preferred Stocks
Brazil		223,974		-		-		223,974
South Africa		62,041		-		-		62,041
Short-Term Investments		594,472		-		-		594,472
Securities Lending Collateral		98,112		-		-		98,112
Total Investments in Securities - Assets	$	36,925,168	$	528,325	$	358	$	37,453,851
Financial Derivative Instruments - Assets
Futures Contracts	$	13,386	$	-	$	-	$	13,386
Total Financial Derivative Instruments - Assets	$	13,386	$	-	$	-	$	13,386

See accompanying notes

18

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2018

U.S. GAAP requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of the Fund’s assets and liabilities. During the period ended January 31, 2018, there were no transfers between levels.

The following table is a reconciliation of Level 3 assets within 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 10/31/2017	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 1/31/2018		Change in Unrealized Appreciation (Depreciation) at Period end**
Foreign Common Stocks	$13,966	$	-	$	-	$	-	$	-	$	(13,608	)	$	-	$	-	$	358	$	13,966

** 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 Statements of Operations.

The foreign common stock classified as Level 3 was fair valued at a nominal value of 0.10 Hong Kong Dollar (HKD) due to lack of observable inputs.

See accompanying notes

19

American Beacon SGA Global Growth Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
Argentina - 1.93% (Cost $584,229)
Common Stocks - 1.93%
MercadoLibre, Inc.		2,349		$	909,298
Australia - 1.94% (Cost $913,872)
Common Stocks - 1.94%
MYOB Group Ltd.		332,670			914,103
China - 7.38%
Common Stocks - 7.38%
Ctrip.com International Ltd., ADRA		19,627			918,151
New Oriental Education & Technology Group, Inc., Sponsored ADR		12,610			1,161,255
Tencent Holdings Ltd.		23,486			1,391,870
Total Common Stocks					3,471,276
Total China (Cost $2,547,794)					3,471,276
Denmark - 3.31% (Cost $1,144,812)
Common Stocks - 3.31%
Novo Nordisk A/S, Class B		28,007			1,557,684
France - 2.93% (Cost $1,149,704)
Common Stocks - 2.93%
Danone S.A.		15,950			1,375,497
Germany - 3.86% (Cost $1,424,898)
Common Stocks - 3.86%
SAP SE, Sponsored ADR		16,023			1,814,605
Hong Kong - 3.94% (Cost $1,356,051)
Common Stocks - 3.94%
AIA Group Ltd.		216,163			1,851,409
India - 5.32%
Common Stocks - 5.32%
HDFC Bank Ltd., ADR		10,563			1,147,036
Infosys Ltd., Sponsored ADR		75,221			1,354,730
Total Common Stocks					2,501,766
Total India (Cost $1,934,730)					2,501,766
Japan - 2.89% (Cost $1,030,573)
Common Stocks - 2.89%
Fast Retailing Co., Ltd.		3,048			1,359,413
Mexico - 1.85% (Cost $778,433)
Common Stocks - 1.85%
Fomento Economico Mexicano S.A.B. de C.V., Series B, Sponsored ADR		8,921			870,154
Republic of Korea - 1.97% (Cost $932,056)
Common Stocks - 1.97%
Amorepacific Corp.		3,298			924,990
South Africa - 4.80%
Common Stocks - 4.80%
Sanlam Ltd.		130,321			970,291
Shoprite Holdings Ltd.		61,699			1,285,152
Total Common Stocks					2,255,443
Total South Africa (Cost $1,538,782)					2,255,443

See accompanying notes

20

American Beacon SGA Global Growth Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
United States - 52.34%
Common Stocks - 52.34%
Alphabet, Inc., Class CA		1,174		$	1,373,510
Amazon.com, Inc.A		985			1,429,127
Autodesk, Inc.A		11,685			1,351,020
Core Laboratories N.V.B		7,714			881,710
Equinix, Inc., REIT		3,142			1,430,207
FleetCor Technologies, Inc.A		6,500			1,381,250
IHS Markit Ltd.A		28,560			1,363,169
Lowe’s Cos, Inc.		12,731			1,333,318
Mondelez International, Inc., Class A		31,097			1,380,707
Nielsen Holdings PLC		25,204			942,882
NIKE, Inc., Class B		20,304			1,385,139
Priceline Group, Inc.A		470			898,663
Red Hat, Inc.A		10,230			1,344,017
Regeneron Pharmaceuticals, Inc.A		3,673			1,346,705
salesforce.com, Inc.A		12,155			1,384,576
Schlumberger Ltd.		17,928			1,319,142
TJX Companies, Inc.		16,873			1,355,239
Ulta Salon Cosmetics & Fragrance, Inc.A		4,032			895,507
Visa, Inc., Class A		14,593			1,812,888
Total Common Stocks					24,608,776
Total United States (Cost $19,637,814)					24,608,776
SHORT-TERM INVESTMENTS - 5.34% (Cost $2,508,026)
Investment Companies - 5.34%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.25%C D		2,508,026			2,508,026
SECURITIES LENDING COLLATERAL - 1.85% (Cost $868,249)
Investment Companies - 1.85%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.25%C D		868,249			868,249
TOTAL INVESTMENTS - 101.65% (Cost $38,350,023)					47,790,689
LIABILITIES, NET OF OTHER ASSETS - (1.65%)					(775,004	)
TOTAL NET ASSETS - 100.00%				$	47,015,685
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 January 31, 2018.

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

^D 7-day yield.

ADR - American Depositary Receipt.

PLC - Public Limited Company.

REIT - Real Estate Investment Trust.

Futures Contracts Open on January 31, 2018:
Long Futures
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
Mini MSCI EAFE Index Futures	8	March 2018	$	858,477	$	858,200	$	(277	)

See accompanying notes

21

American Beacon SGA Global Growth Fund^SM

Schedule of Investments

January 31, 2018

Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
Mini MSCI Emerging Markets Index Futures	2	March 2018	$	124,524	$	125,780	$	1,256
S&P 500 E-Mini Index Futures	8	March 2018		1,115,346		1,130,320		14,974
			$	2,098,347	$	2,114,300	$	15,953

Index Abbreviations:
MSCI	Morgan Stanley Capital International
MSCI EAFE	Morgan Stanley Capital International—Europe, Australasia, and Far East
S&P 500	Standard & Poor’s U.S. Equity Large-Cap Index

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of January 31, 2018, the investments were classified as described below:

SGA Global Growth Fund	Level 1			Level 2		Level 3		Total
Assets
Foreign Common Stocks
Argentina	$	909,298		$	-	$	-	$	909,298
Australia		914,103			-		-		914,103
China		3,471,276			-		-		3,471,276
Denmark		1,557,684			-		-		1,557,684
France		1,375,497			-		-		1,375,497
Germany		1,814,605			-		-		1,814,605
Hong Kong		1,851,409			-		-		1,851,409
India		2,501,766			-		-		2,501,766
Japan		1,359,413			-		-		1,359,413
Mexico		870,154			-		-		870,154
Republic of Korea		924,990			-		-		924,990
South Africa		2,255,443			-		-		2,255,443
Common Stocks
United States		24,608,776			-		-		24,608,776
Short-Term Investments		2,508,026			-		-		2,508,026
Securities Lending Collateral		868,249			-		-		868,249
Total Investments in Securities - Assets	$	47,790,689		$	-	$	-	$	47,790,689
Financial Derivative Instruments - Assets
Futures Contracts	$	16,230		$	-	$	-	$	16,230
Total Financial Derivative Instruments - Assets	$	16,230		$	-	$	-	$	16,230
Financial Derivative Instruments - Liabilities
Futures Contracts	$	(277	)	$	-	$	-	$	(277	)
Total Financial Derivative Instruments - Liabilities	$	(277	)	$	-	$	-	$	(277	)

U.S. GAAP requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of the Fund’s assets and liabilities. During the period ended January 31, 2018, there were no transfers between levels.

See accompanying notes

22

American Beacon Funds^SM

Statements of Assets and Liabilities

January 31, 2018

	Acadian Emerging Markets Managed Volatility Fund			SGA Global Growth Fund
Assets:
Investments in unaffiliated securities, at fair value† §	$	36,761,267		$	44,414,414
Investments in affiliated securities, at fair value‡		692,584			3,376,275
Foreign currency, at fair value^		484,636			-
Deposit with brokers for futures contracts		33,453			50,255
Dividends and interest receivable		53,728			11,592
Receivable for investments sold		8,909			297,650
Receivable for fund shares sold		193,410			322,413
Receivable for tax reclaims		-			11,578
Receivable for expense reimbursement (Note 2)		42,742			24,639
Receivable for variation margin on open futures contracts (Note 5)		13,456			16,033
Prepaid expenses		31,039			28,998
Total assets		38,315,224			48,553,847
Liabilities:
Payable for investments purchased		-			539,872
Payable for fund shares redeemed		68,319			18,595
Payable upon return of securities loaned (Note 9)§		98,112			868,249
Management and sub-advisory fees payable (Note 2)		44,864			34,534
Service fees payable (Note 2)		1,529			6,903
Transfer agent fees payable (Note 2)		3,260			1,062
Custody and fund accounting fees payable		127,236			21,340
Professional fees payable		69,750			41,880
Trustee fees payable (Note 2)		118			137
Payable for prospectus and shareholder reports		7,122			3,861
Other liabilities		226			1,729
Total liabilities		420,536			1,538,162
Net assets	$	37,894,688		$	47,015,685
Analysis of net assets:
Paid-in-capital	$	29,585,401		$	36,453,282
Undistributed (overdistribution of) net investment income		(47,833	)		1,012
Accumulated net realized gain		734,239			1,104,776
Unrealized appreciation of investments in unaffiliated securitiesA		7,609,066			9,440,666
Unrealized appreciation (depreciation) of foreign currency transactions		429			(4	)
Unrealized appreciation of futures contracts		13,386			15,953
Net assets	$	37,894,688		$	47,015,685
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		484,528			791,305
Y Class		2,371,738			286,447
Investor Class		258,675			986,089
A Class		72,646			194,427
C Class		43,555			108,288
Net assets:
Institutional Class	$	5,706,260		$	15,912,971
Y Class	$	27,820,209		$	5,732,352
Investor Class	$	3,016,153		$	19,473,640
A Class	$	849,017		$	3,835,023
C Class	$	503,049		$	2,061,699
Net asset value, offering and redemption price per share:
Institutional Class	$	11.78		$	20.11
Y Class	$	11.73		$	20.01
Investor Class	$	11.66		$	19.75
A Class	$	11.69		$	19.72
A Class (offering price)	$	12.40		$	20.92
C Class	$	11.55		$	19.04
† Cost of investments in unaffiliated securities	$	29,152,201		$	34,973,748
‡ Cost of investments in affiliated securities	$	692,584		$	3,376,275
§ Fair value of securities on loan	$	93,676		$	837,476
^ Cost of foreign currency	$	484,725		$	-
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

23

American Beacon Funds^SM

Statements of Operations

For the year ended January 31, 2018

	Acadian Emerging Markets Managed Volatility Fund			SGA Global Growth Fund
Investment income:
Dividend income from unaffiliated securities (net of foreign taxes)†	$	1,225,667		$	333,524
Dividend income from affiliated securities		11,252			16,786
Income derived from securities lending (Note 9)		345			5,433
Total investment income		1,237,264			355,743
Expenses:
Management and sub-advisory fees (Note 2)		434,047			270,441
Transfer agent fees:
Institutional Class (Note 2)		4,557			3,562
Y Class (Note 2)		22,958			2,608
Investor Class		1,733			1,959
A Class		59			156
C Class		130			116
Custody and fund accounting fees		163,826			28,259
Professional fees		94,794			51,885
Registration fees and expenses		63,447			69,015
Service fees (Note 2):
Y Class		4,194			295
Investor Class		8,757			37,941
A Class		895			3,641
C Class		756			1,807
Distribution fees (Note 2):
A Class		1,491			6,068
C Class		5,037			12,048
Prospectus and shareholder report expenses		21,913			14,893
Trustee fees (Note 2)		3,061			2,052
Other expenses		9,475			4,980
Total expenses		841,130			511,726
Net fees waived and expenses (reimbursed) (Note 2)		(207,848	)		(96,126	)
Net expenses		633,282			415,600
Net investment income (loss)		603,982			(59,857	)
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from‡:
Investments in unaffiliated securitiesA		5,416,569			2,217,773
Commission recapture (Note 1)		399			-
Foreign currency transactions		(120,660	)		(12,509	)
Futures contracts		458,277			372,753
Change in net unrealized appreciation (depreciation) of:
Investments in unaffiliated securitiesB		3,644,684			8,150,524
Foreign currency transactions		2,227,380			86,317
Futures contracts		(36,652	)		26,768
Net gain from investments		11,589,997			10,841,626
Net increase in net assets resulting from operations	$	12,193,979		$	10,781,769
† Foreign taxes	$	174,134		$	20,182
‡ Net of foreign withholding taxes on capital gains	$	83,902		$	-
A The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities.
B The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at the year end.

See accompanying notes

24

American Beacon Funds^SM

Statements of Changes in Net Assets

	Acadian Emerging Markets Managed Volatility Fund						SGA Global Growth Fund
	Year Ended January 31, 2018			Year Ended January 31, 2017			Year Ended January 31, 2018			Year Ended January 31, 2017
Increase (decrease) in net assets:
Operations:
Net investment income (loss)	$	603,982		$	1,039,953		$	(59,857	)	$	(15,199	)
Net realized gain (loss) from investments in unaffiliated securities, commission recapture, foreign currency transactions, and futures contracts		5,754,585			(1,812,960	)		2,578,017			487,996
Change in net unrealized appreciation of investments in unaffiliated securities, foreign currency transactions, and futures contracts		5,835,412			9,550,142			8,263,609			629,370
Net increase in net assets resulting from operations		12,193,979			8,777,135			10,781,769			1,102,167
Distributions to shareholders:
Net investment income:
Institutional Class		(100,822	)		(862,939	)		–			–
Y Class		(480,371	)		(596,064	)		–			–
Investor Class		(69,880	)		(52,099	)		–			–
A Class		(14,170	)		(7,642	)		–			–
C Class		(5,253	)		(3,871	)		–			–
Net realized gain from investments:
Institutional Class		–			–			(465,632	)		(249,734	)
Y Class		–			–			(142,594	)		(59,401	)
Investor Class		–			–			(592,350	)		(317,163	)
A Class		–			–			(116,358	)		(26,647	)
C Class		–			–			(54,664	)		(30,843	)
Net distributions to shareholders		(670,496	)		(1,522,615	)		(1,371,598	)		(683,788	)
Capital share transactions (Note 10):
Proceeds from sales of shares		9,494,062			26,100,204			18,350,384			16,749,538
Reinvestment of dividends and distributions		655,131			1,516,697			1,357,278			669,589
Cost of shares redeemed		(73,592,119	)		(15,811,551	)		(4,938,231	)		(2,525,553	)
Redemption fees		1,444			–			–			–
Net increase (decrease) in net assets from capital share transactions		(63,441,482	)		11,805,350			14,769,431			14,893,574
Net increase (decrease) in net assets		(51,917,999	)		19,059,870			24,179,602			15,311,953
Net assets:
Beginning of period		89,812,687			70,752,817			22,836,083			7,524,130
End of period*	$	37,894,688		$	89,812,687		$	47,015,685		$	22,836,083
*Includes undistributed (overdistribution of) net investment income	$	(47,833	)	$	(469,952	)	$	1,012		$	(1,910	)

See accompanying notes

25

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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 diversified, open-end management investment companies. As of January 31, 2018, the Trust consists of thirty-three active series, two of which are presented in this filing: American Beacon Acadian Emerging Markets Managed Volatility Fund and American Beacon SGA Global Growth Fund (collectively, the “Funds” and each individually a “Fund”). The remaining thirty-one active series are reported in separate filings. Prior to August 24, 2017, the American Beacon SGA Global Growth Fund was registered under the Act as a non-diversified, open-end management investment company.

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.

Class Disclosure

Each 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
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 through 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 service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.

Recently Adopted 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, and has been adopted accordingly.

Significant Accounting Policies

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

26

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946, Financial Services – Investment Companies, a part of 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.

Commission Recapture

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

Currency Translation

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

Distributions to Shareholders

Distributions, if any, of net investment income are generally paid at least annually and recorded on the ex-dividend date. 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 designate earnings and profits distributed to shareholders on the redemption of shares.

Allocation of Income, Trust Expenses, Gains, and Losses

Investment income, realized and unrealized gains and losses from investments of the Funds are allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Funds. Expenses directly charged or attributable to any Fund will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Funds on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Funds or nature of the services performed and relative applicability to the Funds.

27

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

Use of Estimates

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

Redemption Fees

All Classes of the Acadian Emerging Markets Managed Volatility Fund impose a 2% redemption fee on shares held for less than 90 days. The fee is deducted from the redemption proceeds and is intended to offset the trading costs, market impact, and other costs associated with short-term trading activity in the Fund. The “first-in, first-out” method is used to determine the holding period. The fee is allocated to all classes of this Fund pro-rata based on the net assets.

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 and Investment Sub-Advisory Agreements

The Funds and the Manager are parties to a Management Agreement that obligates the Manager to provide the Funds with investment advisory and administrative services. As compensation for performing the duties under the Management Agreement, the Manager will receive an annualized management fee based on a percentage of each Fund’s average daily net assets that is calculated and accrued daily according to the following schedule:

First $5 billion	0.35	%
Next $5 billion	0.325	%
Next $10 billion	0.30	%
Over $20 billion	0.275	%

The Trust, on behalf of the Funds, and the Manager have entered into an Investment Advisory Agreement with Acadian Asset Management LLC and Sustainable Growth Advisers, LP (“SGA”) (the “Sub-Advisors”) pursuant to which the Funds have agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Funds’ average daily net assets according to the following schedules:

Acadian Asset Management LLC

First $500 million	0.65	%
Over $500 million	0.60	%

Sustainable Growth Advisers, LP

First $100 million	0.45	%
Next $900 million	0.40	%
Over $1 billion	0.35	%

28

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

The Management and Sub-Advisory Fees paid by the Funds for the year ended January 31, 2018 were as follows:

Acadian Emerging Markets Managed Volatility Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	151,941
Sub-Advisor Fees		0.65	%		282,106
Total		1.00	%	$	434,047

SGA Global Growth Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	118,658
Sub-Advisor Fees		0.45	%		151,783
Total		0.80	%	$	270,441

As compensation for services provided by the Manager in connection with securities lending activities conducted by the Funds, the lending Funds pay 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 Statements of Operations. During the year ended January 31, 2018, the Manager received securities lending fees of $40 and $620 for the securities lending activities of the American Beacon Acadian Emerging Markets Managed Volatility Fund and American Beacon SGA Global Growth Fund, respectively.

Distribution Plans

The Funds, except for the A and C Classes, have adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees may be charged to the Funds for distribution purposes. However, the Plan authorizes the management fee 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 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 A 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.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y, Investor, 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 0.25% of the average daily net assets of the A and C Classes, and up to 0.375% of the average daily net assets of the Investor Class of the Funds. Effective April 1, 2017, the Funds terminated the Service Plan for the Y Class.

29

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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 Fund’s transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Fund’s transfer agent. Accordingly, the Funds, pursuant to 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 year ended January 31, 2018, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Acadian Emerging Markets Managed Volatility	$	25,294
SGA Global Growth		4,766

As of January 31, 2018, the Funds owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statements of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent Fees
Acadian Emerging Markets Managed Volatility	$	2,675
SGA Global Growth		472

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 and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the year ended January 31, 2018, the Manager earned fees on the Funds’ direct and indirect investments in the USG Select Fund as shown below:

Fund	Direct Investments in USG Select Fund		Securities Lending Collateral in USG Select Fund		Total
Acadian Emerging Markets Managed Volatility	$	1,468	$	84	$	1,552
SGA Global Growth		1,889		763		2,652

Interfund Credit Facility

Pursuant to an exemptive order issued by the Securities and Exchange Commission (“SEC”), the Funds, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each Fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating Funds for temporary purposes. The interfund credit facility is advantageous to the Funds because it provides added liquidity, and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as

30

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

expected, resulting in a cash shortfall for a fund. When a Fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended January 31, 2018, the Acadian Emerging Markets Managed Volatility Fund borrowed on average $1,923,764 for 13 days at an average interest rate of 1.56% with interest charges of $956. During the year ended January 31, 2018, the SGA Global Growth Fund did not utilize the credit facility. These amounts are recorded within “Other expenses” on the accompanying Statements of Operations.

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Funds to the extent that total operating expenses exceed the Funds’ expense cap. During the year ended January 31, 2018, the Manager waived and/or reimbursed expenses as follows:

		Expense Cap							Expiration of Reimbursed Expenses
Fund	Class	2/1/2017 - 1/31/2018			Reimbursed Expenses		(Recouped) Expenses
Acadian Emerging Markets Managed Volatility	Institutional		1.35	%	$	64,231	$	–		2021
Acadian Emerging Markets Managed Volatility	Y		1.45	%		124,467		–		2021
Acadian Emerging Markets Managed Volatility	Investor		1.73	%		13,684		–		2021
Acadian Emerging Markets Managed Volatility	A		1.75	%		2,943		–		2021
Acadian Emerging Markets Managed Volatility	C		2.50	%		2,523		–		2021
SGA Global Growth	Institutional		0.98	%		41,851		–		2021
SGA Global Growth	Y		1.08	%		10,332		–		2021
SGA Global Growth	Investor		1.36	%		31,684		–		2021
SGA Global Growth	A		1.38	%		8,153		–		2021
SGA Global Growth	C		2.13	%		4,106		–		2021

Of these amounts, $42,742 and $24,639 were disclosed as a receivable from the Manager on the Statements of Assets and Liabilities at January 31, 2018 for the Acadian Emerging Markets Managed Volatility Fund and SGA Global Growth Fund, respectively. The Funds have 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 Funds 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 Funds’ 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 listed above will expire in 2021. The Funds did not record a liability for potential reimbursements due to the current assessment that reimbursements are unlikely. The carryover of excess expenses potentially reimbursable to the Manager are as follows:

Fund	Recouped Expenses		Excess Expense Carryover		Expired Expense Carryover		Expiration of Reimbursed Expenses
Acadian Emerging Markets Managed Volatility	$	–	$	120,326	$	–		2019
Acadian Emerging Markets Managed Volatility		–		93,050		–		2020
SGA Global Growth		–		118,368		–		2019
SGA Global Growth		–		123,518		–		2020

31

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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 year ended January 31, 2018, Foreside collected $390 and $3,009 for Acadian Emerging Markets Managed Volatility Fund and SGA Global Growth Fund, respectively, from the sale of Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Funds’ 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 year ended January 31, 2018, there were no CDSC fees collected for Class A Shares of the Funds.

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 Funds’ 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 year ended January 31, 2018, CDSC fees of $3 and $189 were collected for Class C Shares of the Acadian Emerging Markets Managed Volatility Fund and SGA Global Growth Fund, respectively.

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 $10,000 for each Board 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 $2,500 fee each quarter for his attendance at the committee meetings. Effective January 1, 2018, the Board Vice Chair receives an additional annual retainer of $10,000. 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 Trusts 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 Funds are required to deposit with their 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”)

32

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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.
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, preferred securities, 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.

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 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.

33

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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 (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold.

4. Securities and Other Investments

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

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

Foreign Securities

The Funds may invest in U.S. dollar-denominated and non-U.S. dollar denominated equity and debt securities of foreign issuers and foreign branches of U.S. banks, including negotiable certificates of deposit,

34

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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. While investments in foreign securities may be intended to reduce risk by providing further diversification, such investments involve sovereign and other risks, in addition to the credit and market risks normally associated with domestic securities. These additional risks include the possibility of adverse political and economic developments (including political or social instability, nationalization, expropriation, or confiscatory taxation); the potentially adverse effects of unavailability of public information regarding issuers, different governmental supervision and regulation of financial markets, reduced liquidity of certain financial markets, and the lack of uniform accounting, auditing, and financial reporting standards or the application of standards that are different or less stringent than those applied in the United States; different laws and customs governing securities tracking; and possibly limited access to the courts to enforce the Funds’ rights as an investor.

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 during the year ended January 31, 2018 are disclosed in the Fund’s Notes to the Schedule of Investments.

Regulation S under the Securities Act permits the sale abroad of securities that are not registered for sale in the United States and includes a provision for U.S. investors, such as the Funds, to purchase such unregistered securities if certain conditions are met.

Other Investment Company Securities and Other Exchange-Traded Products

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

35

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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.

5. Financial Derivative Instruments

The Funds may utilize derivative instruments to gain 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 usually reflect this amount on their Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as cash deposited with broker on the Statements of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.

During the year ended January 31, 2018, the Funds entered into futures 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	Year Ended January 31, 2018
Acadian Emerging Markets Managed Volatility		17
SGA Global Growth		16

36

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

The following is a summary of the fair valuations of the Funds’ derivative instruments categorized by risk exposure⁽¹⁾:

Acadian Emerging Markets Managed Volatility Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of January 31, 2018:

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)

$

–

$

–

$

–

$

–

$

13,386

$

13,386

The effect of financial derivative instruments on the Statements of Operations as of January 31, 2018:

Derivatives not accounted for as hedging instruments

Realized gain (loss) from derivatives recognized as a result of operations:

Credit contracts

Foreign exchange contracts

Commodity contracts

Interest rate contracts

Equity contracts

Total

Futures contracts

$

–

$

–

$

–

$

–

$

458,277

$

458,277

Net change in unrealized appreciation (depreciation) of derivatives recognized as a result from operations:

Credit contracts

Foreign exchange contracts

Commodity contracts

Interest rate contracts

Equity contracts

Total

Futures contracts

$

–

$

–

$

–

$

–

$

(36,652

)

$

(36,652

)

SGA Global Growth Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of January 31, 2018:

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)

$

–

$

–

$

–

$

–

$

16,230

$

16,230

Liabilities:

Credit contracts

Foreign exchange contracts

Commodity contracts

Interest rate contracts

Equity contracts

Total

Payable for variation margin from open futures contracts(2)

$

–

$

–

$

–

$

–

$

(277

)

$

(277

)

The effect of financial derivative instruments on the Statements of Operations as of January 31, 2018:

Derivatives not accounted for as hedging instruments

Realized gain (loss) from derivatives recognized as a result of operations:

Credit contracts

Foreign exchange contracts

Commodity contracts

Interest rate contracts

Equity contracts

Total

Futures contracts

$

–

$

–

$

–

$

–

$

372,753

$

372,753

Net change in unrealized appreciation (depreciation) of derivatives recognized as a result from operations:

Credit contracts

Foreign exchange contracts

Commodity contracts

Interest rate contracts

Equity contracts

Total

Futures contracts

$

–

$

–

$

–

$

–

$

26,768

$

26,768

⁽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 Fund’s 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 Funds^SM

Notes to Financial Statements

January 31, 2018

6. Principal Risks

Investing in the Funds may involve certain risks including, but not limited to, those described below.

Counterparty Risk

The Funds are 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 Funds.

Currency Risk

The Funds may have exposure to foreign currencies by making direct investments in non-U.S. currencies, in securities denominated in non-U.S. currencies or by purchasing or selling forward foreign currency exchange contracts in non-U.S. currencies. Foreign currencies will fluctuate, and may decline in value relative to the U.S. dollar and other currencies and thereby affect the Funds’ investments in foreign (non-U.S.) currencies or in securities that traded in, and receive revenues in, or in derivatives that provide exposure to, foreign (non-U.S.) currencies.

Derivatives Risk

Derivatives may involve significant risk. The use of derivative instruments may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities or other instruments underlying those derivatives, including the high degree of leverage often embedded in such instruments, and potential material and prolonged deviations between the theoretical value and realizable value of a derivative. Some derivatives have the potential for unlimited loss, regardless of the size of the Fund’s initial investment. Derivatives may be illiquid and may be more volatile than other types of investments. The Funds may buy or sell derivatives not traded on an exchange and which may be subject to heightened liquidity and valuation risk. Derivative investments can increase portfolio turnover and transaction costs. Derivatives also are subject to counterparty risk. As a result, the Funds may obtain no recovery of their investment or may only obtain a limited recovery, and any recovery may be delayed. Not all derivative transactions require a counterparty to post collateral, which may expose the Funds to greater losses in the event of a default by a counterparty.

Emerging Markets Risk

When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures.

Equity Investment Risk

Equity securities are subject to market risk. The Funds’ investments in equity securities may include common stocks, preferred stocks, securities convertible into or exchangeable for common stocks, REITs, and depositary receipts. Such investments may expose the Funds to additional risk. 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. Preferred stocks and convertible securities are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders. Convertible securities are subject to the risk that the credit standing of the issuer may

38

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

have an effect on the convertible securities’ investment value. 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. 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 fluctuations and political and financial instability in the home country of a particular depositary receipt or foreign stock.

Foreign Investing Risk

The Funds may invest in securities issued by foreign companies through ADRs and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. The Funds 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, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, (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 Funds to additional risks that they would not be subject to if they 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 Funds 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).

Market Risk

The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably based on overall economic conditions and other factors. The value of a security may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investment sentiment generally. Changes in the financial condition of a single issuer can impact a market as a whole.

Market Timing Risk

Frequent trading by Fund shareholders poses risks to other shareholders in that Fund, including (i) the dilution of the Fund’s NAV, (ii) an increase in the Fund’s expenses, and (iii) interference with the portfolio manager’s ability to execute efficient investment strategies. Because of specific types of 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 Funds may invest in shares of other registered investment companies, including money market funds. To the extent that the Funds invest in shares of other registered investment companies, the Funds will indirectly bear the fees and expenses charged by the underlying funds in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those funds.

39

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

Securities Lending Risk

To the extent the Funds lends 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 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.

Valuation Risk

The Funds 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.

Offsetting Assets and Liabilities

The Funds are parties to enforceable master netting agreements between brokers and counterparties which provide for the right to offset under certain circumstances. The Funds employ multiple money managers and counterparties and have elected not to offset qualifying financial and derivative instruments on the Statements of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, January 31, 2018.

Acadian Emerging Markets Managed Volatility Fund

Offsetting of Financial and Derivative Assets as of January 31, 2018:
	Assets			Liabilities
Futures Contracts	$	13,386		$	-
Total derivative assets and liabilities in the Statements of Assets and Liabilities	$	13,386		$	-
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(13,386	)	$	-

	Remaining Contractual Maturity of the Agreements As of January 31, 2018
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	98,112	$	-	$	-	$	-	$	98,112
Total Borrowings	$	98,112	$	-	$	-	$	-	$	98,112
Gross amount of recognized liabilities for securities lending transactions									$	98,112

SGA Global Growth Fund

Offsetting of Financial and Derivative Assets as of January 31, 2018:
	Assets			Liabilities
Futures Contracts	$	16,230		$	277
Total derivative assets and liabilities in the Statements of Assets and Liabilities	$	16,230		$	277
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(16,230	)	$	(277	)

40

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

	Remaining Contractual Maturity of the Agreements As of January 31, 2018
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	868,249	$	-	$	-	$	-	$	868,249
Total Borrowings	$	868,249	$	-	$	-	$	-	$	868,249
Gross amount of recognized liabilities for securities lending transactions									$	868,249

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 distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, each Fund is treated as a single entity for the purpose of determining such qualification.

The Funds do not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended January 31, 2018 remain 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.

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 Funds also utilize earnings and profits distributed to shareholders on redemptions of shares as part of the dividends paid deduction.

The tax character of distributions paid were as follows:

	Acadian Emerging Markets Managed Volatility Fund				SGA Global Growth Fund
	Year Ended January 31, 2018		Year Ended January 31, 2017		Year Ended January 31, 2018		Year Ended January 31, 2017
Distributions paid from:
Ordinary income*
Institutional Class	$	100,822	$	862,939	$	280,924	$	45,901
Y Class		480,371		596,064		86,030		10,918
Investors Class		69,880		52,099		357,376		58,295
A Class		14,170		7,642		70,201		4,898
C Class		5,253		3,871		32,980		5,669
Long-term capital gains
Institutional Class		–		–		184,708		203,833
Y Class		–		–		56,564		48,483
Investors Class		–		–		234,974		258,868
A Class		–		–		46,157		21,749
C Class		–		–		21,684		25,174
Total distributions paid	$	670,496	$	1,522,615	$	1,371,598	$	683,788

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

41

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

As of January 31, 2018 the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Acadian Emerging Markets Managed Volatility	$	30,083,254	$	7,883,843	$	(512,817	)	$	7,371,026
SGA Global Growth		38,388,238		9,674,549		(271,090	)		9,403,459

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)		Other Temporary Differences		Distributable Earnings
Acadian Emerging Markets Managed Volatility	$	7,371,026	$	540,542	$	397,719	$	–	$	–	$	8,309,287
SGA Global Growth		9,403,459		232,951		925,993		–		–		10,562,403

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 investments in passive foreign investment companies, and the realization for tax purposes of unrealized gains (losses) on certain derivative instruments.

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

Accordingly, the following amounts represent current year permanent differences derived from partnership basis adjustments, disposal adjustments from investments in passive foreign investment companies, net operating losses used to offset short-term capital gains and non-utilization of net operating losses as of January 31, 2018:

Fund	Paid-In-Capital		Undistributed (Overdistribution of) Net Investment Income		Accumulated Net Realized Gain (Loss)			Net Unrealized Appreciation (Depreciation)
Acadian Emerging Markets Managed Volatility	$	-	$	488,633	$	(488,633	)	$	-
SGA Global Growth		39		62,779		(62,818	)		-

Under the Regulated Investment Company Modernization Act of 2010 (“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 year January 31, 2018 the Funds did not have any capital loss carryforwards.

8.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended January 31, 2018 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
Acadian Emerging Markets Managed Volatility	$	14,443,261	$	-	$	77,491,981	$	-
SGA Global Growth		22,443,774		-		10,002,931		-

42

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

A summary of the Funds’ transactions in the USG Select Fund for the year ended January 31, 2018 were as follows:

Fund	Type of Transaction	January 31, 2017 Shares/Fair Value		Purchases		Sales		January 31, 2018 Shares/Fair Value		Dividend Income
Acadian Emerging Markets Managed Volatility	Direct	$	1,304,383	$	98,315,054	$	99,024,965	$	594,472	$	11,252
Acadian Emerging Markets Managed Volatility	Securities Lending		-		2,841,546		2,743,434		98,112		N/A
SGA Global Growth	Direct		1,365,262		30,744,196		29,601,432		2,508,026		16,786
SGA Global Growth	Securities Lending		-		19,310,970		18,442,721		868,249		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 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 as designated by the Manager.

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.

43

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

As of January 31, 2018, the value of outstanding securities on loan and the value of collateral were as follows:

Fund	Market Value of Securities on Loan		Cash Collateral Received		Non-Cash Collateral Received		Total Collateral Received
Acadian Emerging Markets Managed Volatility	$	93,676	$	98,112	$	-	$	98,112
SGA Global Growth		837,476		868,249		-		868,249

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.

10.  Borrowing Arrangements

Effective November 16, 2017, the Funds, along with certain other funds managed by the Manager (“Participating Funds”), entered into a committed revolving line of credit (the “Committed Line”) agreement with State Street Bank and Trust Company (the “Bank”) to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Committed Line is $50 million with interest at a rate equal to the higher of (a) one-month London Inter-Bank Offered Rate (“LIBOR”) plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on amounts borrowed. Each of the Participating Funds will pay a commitment fee at a rate of 0.25% per annum on the unused portion of the Committed Line amount. The Committed Line expires November 15, 2018 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

Effective November 16, 2017, the Funds, along with certain other Participating Funds managed by the Manager, entered into an uncommitted discretionary demand revolving line of credit (the “Uncommitted Line”) agreement with the Bank to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Uncommitted Line is $50 million with interest at a rate equal to the higher of (a) one-month LIBOR plus 1.25% per annum or (b) the Federal Funds rate. The Uncommitted Line expires November 15, 2018 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

The Participating Funds paid administration, legal and arrangement fees, which are recognized as a component of “Other expenses” on the Statements of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets. During the year ended January 31, 2018, the Funds did not utilize this facility.

11.  Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Funds:

	Institutional Class
	Year Ended January 31,
	2018						2017
Acadian Emerging Markets Managed Volatility Fund	Shares			Amount			Shares			Amount
Shares sold		118,476		$	1,193,050			1,404,972		$	12,824,980
Reinvestment of dividends		9,318			100,822			98,509			862,939
Shares redeemed		(5,369,441	)		(52,389,780	)		(602,712	)		(5,525,711	)
Net increase (decrease) in shares outstanding		(5,241,647	)	$	(51,095,908	)		900,769		$	8,162,208

44

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

	Y Class
	Year Ended January 31,
	2018						2017
Acadian Emerging Markets Managed Volatility Fund	Shares			Amount			Shares			Amount
Shares sold		661,605		$	6,777,058			1,348,877		$	12,226,918
Reinvestment of dividends		43,146			465,116			67,633			590,432
Shares redeemed		(1,880,829	)		(18,422,329	)		(877,209	)		(7,851,190	)
Net increase (decrease) in shares outstanding		(1,176,078	)	$	(11,180,155	)		539,301		$	4,966,160
	Investor Class
	Year Ended January 31,
	2018						2017
Acadian Emerging Markets Managed Volatility Fund	Shares			Amount			Shares			Amount
Shares sold		104,015		$	1,045,363			92,875		$	843,971
Reinvestment of dividends		6,508			69,770			5,949			51,813
Shares redeemed		(229,184	)		(2,397,931	)		(194,305	)		(1,674,075	)
Net (decrease) in shares outstanding		(118,661	)	$	(1,282,798	)		(95,481	)	$	(778,291	)
	A Class
	Year Ended January 31,
	2018						2017
Acadian Emerging Markets Managed Volatility Fund	Shares			Amount			Shares			Amount
Shares sold		24,494		$	260,608			16,930		$	153,823
Reinvestment of dividends		1,319			14,170			875			7,642
Shares redeemed		(8,724	)		(88,067	)		(51,033	)		(445,718	)
Net increase (decrease) in shares outstanding		17,089		$	186,711			(33,228	)	$	(284,253	)
	C Class
	Year Ended January 31,
	2018						2017
Acadian Emerging Markets Managed Volatility Fund	Shares			Amount			Shares			Amount
Shares sold		22,464		$	219,427			5,586		$	50,512
Reinvestment of dividends		495			5,253			448			3,871
Shares redeemed		(29,030	)		(294,012	)		(34,716	)		(314,857	)
Net (decrease) in shares outstanding		(6,071	)	$	(69,332	)		(28,682	)	$	(260,474	)
	Institutional Class
	Year Ended January 31,
	2018						2017
SGA Global Growth Fund	Shares			Amount			Shares			Amount
Shares sold		297,426		$	5,174,249			115,376		$	1,734,578
Reinvestment of dividends		24,913			465,632			17,070			249,734
Shares redeemed		(40,518	)		(727,410	)		(74,095	)		(1,114,205	)
Net increase in shares outstanding		281,821		$	4,912,471			58,351		$	870,107
	Y Class
	Year Ended January 31,
	2018						2017
SGA Global Growth Fund	Shares			Amount			Shares			Amount
Shares sold		202,621		$	3,631,956			106,656		$	1,654,360
Reinvestment of dividends		7,121			132,444			3,512			51,209
Shares redeemed		(36,662	)		(660,523	)		(6,078	)		(92,801	)
Net increase in shares outstanding		173,080		$	3,103,877			104,090		$	1,612,768
	Investor Class
	Year Ended January 31,
	2018						2017
SGA Global Growth Fund	Shares			Amount			Shares			Amount
Shares sold		338,281		$	5,871,708			775,795		$	11,870,353
Reinvestment of dividends		32,263			592,350			21,979			317,163
Shares redeemed		(150,290	)		(2,633,764	)		(62,802	)		(979,822	)
Net increase in shares outstanding		220,254		$	3,830,294			734,972		$	11,207,694

45

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

	A Class
	Year Ended January 31,
	2018						2017
SGA Global Growth Fund	Shares			Amount			Shares			Amount
Shares sold		164,780		$	2,822,687			56,052		$	833,835
Reinvestment of dividends		6,125			112,333			1,440			20,764
Shares redeemed		(45,538	)		(748,714	)		(13,720	)		(206,169	)
Net increase in shares outstanding		125,367		$	2,186,306			43,772		$	648,430
	C Class
	Year Ended January 31,
	2018						2017
SGA Global Growth Fund	Shares			Amount			Shares			Amount
Shares sold		47,361		$	849,784			44,531		$	656,412
Reinvestment of dividends		3,077			54,519			2,186			30,719
Shares redeemed		(10,356	)		(167,820	)		(9,133	)		(132,556	)
Net increase in shares outstanding		40,082		$	736,483			37,584		$	554,575

12.  Subsequent Events

Sustainable Growth Advisers, Inc. (“SGA”), subadvisor to the American Beacon SGA Global Growth Fund (the “Fund”), advised American Beacon Advisors, Inc. that it will undergo a change in control following the acquisition of a majority interest in SGA by Virtus Investment Partners, Inc. The transaction is expected to close in mid-2018, subject to customary closing conditions and client approvals. The Fund’s management team at SGA will remain in place and there will be no impact to the Fund as a result of the change in control.

46

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended January 31,												September 27, 2013A to January 31, 2014
	2018			2017			2016			2015
Net asset value, beginning of period	$	9.22		$	8.36		$	10.24		$	9.59		$	10.00
Income from investment operations:
Net investment income (loss)		0.12	G		0.13			0.04			0.13			0.02
Net gains (losses) on investments (both realized and unrealized)		2.65			0.90			(1.84	)		0.64			(0.42	)
Total income (loss) from investment operations		2.77			1.03			(1.80	)		0.77			(0.40	)
Less distributions:
Dividends from net investment income		(0.21	)		(0.17	)		(0.08	)		(0.12	)		(0.01	)
Distributions from net realized gains		-			-			-			-			-
Tax return of capital		-			-			(0.00	)B		-			-
Total distributions		(0.21	)		(0.17	)		(0.08	)		(0.12	)		(0.01	)
Redemption fees added to beneficial interestsB		-			-			-			-			-
Net asset value, end of period	$	11.78		$	9.22		$	8.36		$	10.24		$	9.59
Total returnC		30.24	%		12.37	%		(17.58	)%		8.04	%		(4.05	)%D
Ratios and supplemental data:
Net assets, end of period	$	5,706,260		$	52,787,468		$	40,335,580		$	13,079,558		$	9,968,951
Ratios to average net assets:
Expenses, before reimbursements		1.85	%		1.47	%		1.68	%		2.26	%		4.20	%E
Expenses, net of reimbursements		1.35	%		1.35	%		1.35	%		1.35	%		1.35	%E
Net investment income (loss), before expense reimbursements		0.74	%		1.18	%		1.16	%		0.44	%		(2.30	)%E
Net investment income, net of reimbursements		1.23	%		1.31	%		1.49	%		1.35	%		0.55	%E
Portfolio turnover rate		34	%		32	%		35	%		22	%		9	%F

^A  Commencement of operations.

^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.

^F  Portfolio turnover rate is for the period from September 27, 2013 through January 31, 2014 and is not annualized.

^G  Per share amounts have been calculated using the average shares method.

See accompanying notes

47

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended January 31,												September 27, 2013A to January 31, 2014
	2018			2017			2016			2015
Net asset value, beginning of period	$	9.19		$	8.34		$	10.22		$	9.59		$	10.00
Income from investment operations:
Net investment income		0.13			0.11			0.14			0.04			0.01
Net gains (losses) on investments (both realized and unrealized)		2.62			0.91			(1.94	)		0.71			(0.41	)
Total income (loss) from investment operations		2.75			1.02			(1.80	)		0.75			(0.40	)
Less distributions:
Dividends from net investment income		(0.21	)		(0.17	)		(0.08	)		(0.12	)		(0.01	)
Distributions from net realized gains		-			-			-			-			-
Tax return of capital		-			-			(0.00	)B		-			-
Total distributions		(0.21	)		(0.17	)		(0.08	)		(0.12	)		(0.01	)
Redemption fees added to beneficial interestsB		-			-			-			-			-
Net asset value, end of period	$	11.73		$	9.19		$	8.34		$	10.22		$	9.59
Total returnC		30.12	%		12.28	%		(17.64	)%		7.83	%		(4.05	)%D
Ratios and supplemental data:
Net assets, end of period	$	27,820,209		$	32,606,568		$	25,098,823		$	4,603,907		$	488,729
Ratios to average net assets:
Expenses, before reimbursements		1.93	%		1.55	%		1.77	%		2.12	%		6.19	%E
Expenses, net of reimbursements		1.45	%		1.45	%		1.45	%		1.45	%		1.45	%E
Net investment income (loss), before expense reimbursements		1.04	%		1.15	%		1.23	%		0.01	%		(4.30	)%E
Net investment income, net of reimbursements		1.52	%		1.25	%		1.55	%		0.68	%		0.44	%E
Portfolio turnover rate		34	%		32	%		35	%		22	%		9	%F

^A  Commencement of operations.

^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.

^F  Portfolio turnover rate is for the period from September 27, 2013 through January 31, 2014 and is not annualized.

See accompanying notes

48

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended January 31,												September 27, 2013A to January 31, 2014
	2018			2017			2016			2015
Net asset value, beginning of period	$	9.16		$	8.32		$	10.19		$	9.58		$	10.00
Income from investment operations:
Net investment income		0.11			0.11			0.16			0.07			0.00	B
Net gains (losses) on investments (both realized and unrealized)		2.60			0.87			(1.98	)		0.66			(0.41	)
Total income (loss) from investment operations		2.71			0.98			(1.82	)		0.73			(0.41	)
Less distributions:
Dividends from net investment income		(0.21	)		(0.14	)		(0.05	)		(0.12	)		(0.01	)
Distributions from net realized gains		-			-			-			-			-
Tax return of capital		-			-			(0.00	)B		-			-
Total distributions		(0.21	)		(0.14	)		(0.05	)		(0.12	)		(0.01	)
Redemption fees added to beneficial interestsB		-			-			-			-			-
Net asset value, end of period	$	11.66		$	9.16		$	8.32		$	10.19		$	9.58
Total returnC		29.78	%		11.89	%		(17.86	)%		7.63	%		(4.15	)%D
Ratios and supplemental data:
Net assets, end of period	$	3,016,153		$	3,457,789		$	3,933,437		$	4,612,098		$	1,326,164
Ratios to average net assets:
Expenses, before reimbursements		2.12	%		1.77	%		1.98	%		2.42	%		5.46	%E
Expenses, net of reimbursements		1.73	%		1.73	%		1.73	%		1.73	%		1.73	%E
Net investment income (loss), before expense reimbursements		0.82	%		0.94	%		1.30	%		0.12	%		(3.60	)%E
Net investment income, net of reimbursements		1.21	%		0.98	%		1.55	%		0.81	%		0.13	%E
Portfolio turnover rate		34	%		32	%		35	%		22	%		9	%F

^A  Commencement of operations.

^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.

^F  Portfolio turnover rate is for the period from September 27, 2013 through January 31, 2014 and is not annualized.

See accompanying notes

49

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended January 31,												September 27, 2013A to January 31, 2014
	2018			2017			2016			2015
Net asset value, beginning of period	$	9.18		$	8.34		$	10.18		$	9.58		$	10.00
Income from investment operations:
Net investment income		0.10			0.13			0.12			0.06			0.00	B
Net gains (losses) on investments (both realized and unrealized)		2.62			0.85			(1.94	)		0.66			(0.41	)
Total income (loss) from investment operations		2.72			0.98			(1.82	)		0.72			(0.41	)
Less distributions:
Dividends from net investment income		(0.21	)		(0.14	)		(0.02	)		(0.12	)		(0.01	)
Distributions from net realized gains		-			-			-			-			-
Tax return of capital		-			-			(0.00	)B		-			-
Total distributions		(0.21	)		(0.14	)		(0.02	)		(0.12	)		(0.01	)
Redemption fees added to beneficial interestsB		-			-			-			-			-
Net asset value, end of period	$	11.69		$	9.18		$	8.34		$	10.18		$	9.58
Total returnC		29.83	%		11.84	%		(17.90	)%		7.53	%		(4.15	)%D
Ratios and supplemental data:
Net assets, end of period	$	849,017		$	510,236		$	740,272		$	3,214,591		$	554,182
Ratios to average net assets:
Expenses, before reimbursements		2.24	%		1.90	%		2.10	%		2.49	%		7.71	%E
Expenses, net of reimbursements		1.75	%		1.75	%��		1.75	%		1.77	%		1.85	%E
Net investment income (loss), before expense reimbursements		0.61	%		0.86	%		1.08	%		0.09	%		(5.92	)%E
Net investment income (loss), net of reimbursements		1.10	%		1.01	%		1.43	%		0.81	%		(0.07	)%E
Portfolio turnover rate		34	%		32	%		35	%		22	%		9	%F

^A  Commencement of operations.

^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.

^F  Portfolio turnover rate is for the period from September 27, 2013 through January 31, 2014 and is not annualized.

See accompanying notes

50

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended January 31,												September 27, 2013A to January 31, 2014
	2018			2017			2016			2015
Net asset value, beginning of period	$	9.08		$	8.23		$	10.10		$	9.55		$	10.00
Income from investment operations:
Net investment income (loss)		0.06			0.02			0.10			0.02			(0.01	)
Net gains (losses) on investments (both realized and unrealized)		2.54			0.89			(1.97	)		0.62			(0.43	)
Total income (loss) from investment operations		2.60			0.91			(1.87	)		0.64			(0.44	)
Less distributions:
Dividends from net investment income		(0.13	)		(0.06	)		(0.00	)B		(0.09	)		(0.01	)
Distributions from net realized gains		-			-			-			-			-
Tax return of capital		-			-			(0.00	)B		-			-
Total distributions		(0.13	)		(0.06	)		(0.00	)B		(0.09	)		(0.01	)
Redemption fees added to beneficial interestsB		-			-			-			-			-
Net asset value, end of period	$	11.55		$	9.08		$	8.23		$	10.10		$	9.55
Total returnC		28.71	%		11.11	%		(18.50	)%		6.66	%		(4.45	)%D
Ratios and supplemental data:
Net assets, end of period	$	503,049		$	450,626		$	644,705		$	623,506		$	148,736
Ratios to average net assets:
Expenses, before reimbursements		3.00	%		2.67	%		2.87	%		3.26	%	��	10.04	%E
Expenses, net of reimbursements		2.50	%		2.50	%		2.50	%		2.52	%		2.60	%E
Net investment income (loss), before expense reimbursements		(0.01	)%		0.11	%		0.40	%		(0.90	)%		(8.13	)%E
Net investment income (loss), net of reimbursements		0.49	%		0.28	%		0.77	%		(0.16	)%		(0.68	)%E
Portfolio turnover rate		34	%		32	%		35	%		22	%		9	%F

^A  Commencement of operations.

^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.

^F  Portfolio turnover rate is for the period from September 27, 2013 through January 31, 2014 and is not annualized.

See accompanying notes

51

American Beacon SGA Global Growth Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended January 31,												Four Months Ended January 31, 2014			Year Ended September 30, 2013
	2018			2017			2016			2015
Net asset value, beginning of period	$	15.11		$	13.79		$	13.43		$	13.05		$	13.15		$	12.04
Income from investment operations:
Net investment income (loss)		(0.01	)		0.03			0.03			0.06			0.01			(0.04	)A
Net gains on investments (both realized and unrealized)		5.65			1.84			0.56			0.72			0.15			1.36
Total income from investment operations		5.64			1.87			0.59			0.78			0.16			1.32
Less distributions:
Dividends from net investment income		-			-			(0.02	)		(0.03	)		-			-
Distributions from net realized gains		(0.64	)		(0.55	)		(0.21	)		(0.37	)		(0.26	)		(0.21	)
Total distributions		(0.64	)		(0.55	)		(0.23	)		(0.40	)		(0.26	)		(0.21	)
Net asset value, end of period	$	20.11		$	15.11		$	13.79		$	13.43		$	13.05		$	13.15
Total returnB		37.64	%		13.66	%		4.26	%		5.98	%		1.13	%C		11.21	%D
Ratios and supplemental data:
Net assets, end of period	$	15,912,971		$	7,698,159		$	6,219,477		$	5,106,079		$	4,738,199		$	4,351,023
Ratios to average net assets:
Expenses, before reimbursements		1.34	%		2.03	%		2.62	%		3.82	%		5.28	%E		8.00	%
Expenses, net of reimbursements		0.98	%		0.98	%		0.98	%		0.98	%		1.00	%E		1.75	%
Net investment (loss), before expense reimbursements		(0.28	)%		(0.83	)%		(1.37	)%		(2.41	)%		(4.12	)%E		(6.56	)%
Net investment income (loss), net of reimbursements		0.08	%		0.21	%		0.27	%		0.42	%		0.16	%E		(0.31	)%
Portfolio turnover rate		31	%		32	%		39	%		38	%		15	%F		39	%

^A  The Predecessor Fund calculated the change in undistributed net investment income based on average shares outstanding during the period.

^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  Total returns would have been lower had expenses not been waived or absorbed by the Predecessor Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distribution or the redemption of Fund shares.

^E  Annualized.

^F  Portfolio turnover rate is for the period from October 1, 2013 through January 31, 2014 and is not annualized.

See accompanying notes

52

American Beacon SGA Global Growth Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended January 31,												October 4, 2013A to January 31, 2014
	2018			2017			2016			2015
Net asset value, beginning of period	$	15.05		$	13.75		$	13.41		$	13.05		$	13.25
Income from investment operations:
Net investment income (loss)		0.00	B		(0.03	)		0.02			0.04			0.00	B
Net gains on investments (both realized and unrealized)		5.60			1.88			0.55			0.72			0.06
Total income from investment operations		5.60			1.85			0.57			0.76			0.06
Less distributions:
Dividends from net investment income		-			-			(0.02	)		(0.03	)		-
Distributions from net realized gains		(0.64	)		(0.55	)		(0.21	)		(0.37	)		(0.26	)
Total distributions		(0.64	)		(0.55	)		(0.23	)		(0.40	)		(0.26	)
Net asset value, end of period	$	20.01		$	15.05		$	13.75		$	13.41		$	13.05
Total returnC		37.52	%		13.55	%		4.12	%		5.83	%		0.37	%D
Ratios and supplemental data:
Net assets, end of period	$	5,732,352		$	1,706,678		$	127,585		$	119,680		$	105,161
Ratios to average net assets:
Expenses, before reimbursements		1.40	%		1.88	%		2.72	%		3.84	%		10.23	%E
Expenses, net of reimbursements		1.08	%		1.07	%		1.08	%		1.08	%		1.08	%E
Net investment (loss), before expense reimbursements		(0.37	)%		(0.96	)%		(1.51	)%		(2.44	)%		(9.09	)%E
Net investment income (loss), net of reimbursements		(0.04	)%		(0.15	)%		0.13	%		0.32	%		0.06	%E
Portfolio turnover rate		31	%		32	%		39	%		38	%		15	%F

^A  Commencement of operations.

^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.

^F  Portfolio turnover rate is for the period from October 1, 2013 through January 31, 2014 and is not annualized.

See accompanying notes

53

American Beacon SGA Global Growth Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended January 31,												October 4, 2013A to January 31, 2014
	2018			2017			2016			2015
Net asset value, beginning of period	$	14.90		$	13.66		$	13.36		$	13.03		$	13.25
Income from investment operations:
Net investment income (loss)		(0.04	)		0.06			(0.04	)		0.01			(0.01	)
Net gains on investments (both realized and unrealized)		5.53			1.73			0.57			0.72			0.05
Total income from investment operations		5.49			1.79			0.53			0.73			0.04
Less distributions:
Dividends from net investment income		-			-			(0.02	)		(0.03	)		-
Distributions from net realized gains		(0.64	)		(0.55	)		(0.21	)		(0.37	)		(0.26	)
Total distributions		(0.64	)		(0.55	)		(0.23	)		(0.40	)		(0.26	)
Net asset value, end of period	$	19.75		$	14.90		$	13.66		$	13.36		$	13.03
Total returnB		37.16	%		13.20	%		3.84	%		5.60	%		0.22	%C
Ratios and supplemental data:
Net assets, end of period	$	19,473,640		$	11,414,261		$	421,630		$	108,458		$	106,990
Ratios to average net assets:
Expenses, before reimbursements		1.57	%		2.05	%		3.08	%		5.28	%		10.37	%D
Expenses, net of reimbursements		1.36	%		1.34	%		1.36	%		1.36	%		1.36	%D
Net investment (loss), before expense reimbursements		(0.50	)%		(1.14	)%		(2.04	)%		(3.88	)%		(9.22	)%D
Net investment income (loss), net of reimbursements		(0.29	)%		(0.43	)%		(0.32	)%		0.05	%		(0.22	)%D
Portfolio turnover rate		31	%		32	%		39	%		38	%		15	%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 October 1, 2013 through January 31, 2014 and is not annualized.

See accompanying notes

54

American Beacon SGA Global Growth Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended January 31,												October 4, 2013A to January 31, 2014
	2018			2017			2016			2015
Net asset value, beginning of period	$	14.89		$	13.65		$	13.35		$	13.03		$	13.25
Income from investment operations:
Net investment income (loss)		(0.02	)		0.03			(0.03	)		0.00	B		0.00	B
Net gains on investments (both realized and unrealized)		5.49			1.76			0.56			0.72			0.04
Total income from investment operations		5.47			1.79			0.53			0.72			0.04
Less distributions:
Dividends from net investment income		-			-			(0.02	)		(0.03	)		-
Distributions from net realized gains		(0.64	)		(0.55	)		(0.21	)		(0.37	)		(0.26	)
Total distributions		(0.64	)		(0.55	)		(0.23	)		(0.40	)		(0.26	)
Net asset value, end of period	$	19.72		$	14.89		$	13.65		$	13.35		$	13.03
Total returnC		37.05	%		13.21	%		3.84	%		5.53	%		0.22	%D
Ratios and supplemental data:
Net assets, end of period	$	3,835,023		$	1,028,223		$	345,107		$	434,636		$	362,595
Ratios to average net assets:
Expenses, before reimbursements		1.72	%		2.33	%		3.05	%		4.19	%		8.22	%E
Expenses, net of reimbursements		1.38	%		1.38	%		1.38	%		1.42	%		1.48	%E
Net investment (loss), before expense reimbursements		(0.77	)%		(1.22	)%		(1.90	)%		(2.78	)%		(6.91	)%E
Net investment (loss), net of reimbursements		(0.43	)%		(0.27	)%		(0.22	)%		(0.01	)%		(0.17	)%E
Portfolio turnover rate		31	%		32	%		39	%		38	%		15	%F

^A  Commencement of operations.

^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.

^F  Portfolio turnover rate is for the period from October 1, 2013 through January 31, 2014 and is not annualized.

See accompanying notes

55

American Beacon SGA Global Growth Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended January 31,												October 4, 2013A to January 31, 2014
	2018			2017			2016			2015
Net asset value, beginning of period	$	14.50		$	13.40		$	13.21		$	13.00		$	13.25
Income from investment operations:
Net investment income (loss)		(0.04	)		0.05			(0.12	)		(0.05	)		(0.04	)
Net gains on investments (both realized and unrealized)		5.22			1.60			0.54			0.66			0.05
Total income from investment operations		5.18			1.65			0.42			0.61			0.01
Less distributions:
Dividends from net investment income		-			-			(0.02	)		(0.03	)		-
Distributions from net realized gains		(0.64	)		(0.55	)		(0.21	)		(0.37	)		(0.26	)
Total distributions		(0.64	)		(0.55	)		(0.23	)		(0.40	)		(0.26	)
Net asset value, end of period	$	19.04		$	14.50		$	13.40		$	13.21		$	13.00
Total returnB		36.04	%		12.41	%		3.04	%		4.69	%		(0.01	)%C
Ratios and supplemental data:
Net assets, end of period	$	2,061,699		$	988,762		$	410,331		$	393,478		$	109,489
Ratios to average net assets:
Expenses, before reimbursements		2.47	%		3.08	%		3.76	%		4.77	%		11.36	%D
Expenses, net of reimbursements		2.13	%		2.12	%		2.13	%		2.16	%		2.23	%D
Net investment (loss), before expense reimbursements		(1.42	)%		(1.95	)%		(2.51	)%		(3.41	)%		(10.22	)%D
Net investment (loss), net of reimbursements		(1.08	)%		(1.00	)%		(0.89	)%		(0.80	)%		(1.09	)%D
Portfolio turnover rate		31	%		32	%		39	%		38	%		15	%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 October 1, 2013 through January 31, 2014 and is not annualized.

See accompanying notes

56

American Beacon Funds^SM

Federal Tax Information

January 31, 2018 (Unaudited)

Certain tax information regarding the Funds is required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended January 31, 2018. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2017.

The Funds designated the following items with regard to distributions paid during the fiscal year ended January 31, 2018. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Funds to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Corporate Dividends-Received Deduction:
Acadian Emerging Markets		N/A
SGA Global		9.63	%
Qualified Dividend Income:
Acadian Emerging Markets		100.00	%
SGA Global		31.39	%
Long-Term Capital Gain Distributions:
Acadian Emerging Markets	$	-
SGA Global		544,087
Short-Term Capital Gain Distributions:
Acadian Emerging Markets	$	-
SGA Global		827,511

Shareholders received notification in January 2018 of the applicable tax information necessary to prepare their 2017 income tax returns.

57

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

The Trustees and officers of the American Beacon Funds (the “Trust”) are listed below, together with their principal occupations during the past five years. The address of each person listed below is 220 Las Colinas Boulevard East, Suite 1200, Irving, Texas 75039. Each Trustee oversees thirty-five funds in the fund complex that includes the Trust, the American Beacon Select Funds and the American Beacon Institutional Funds Trust. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Alan D. Feld** (81)	Trustee since 1996	Sole Shareholder of a professional corporation which is a Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Mileage Funds (1996-2012); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Master Trust (1996-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (48)	Trustee since 2015	Director, Kura MD, Inc. (local telehealth organization) (2015-present); Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Vice President & CFO, Sierra Health Foundation: Center for Health Program Management (California public benefit corporation) (2012-Present); Director, Innovative North State (2012-2015); Director, Sacramento Regional Technology Alliance (2011-2016); Director, Women’s Empowerment (2009-2014); Director, Valley Healthcare Staffing (2017–present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Joseph B. Armes (55)	Trustee since 2015	Chairman & CEO, CSW Industrials f/k/a Capital Southwest Corporation (investment company) (2015-Present); Chairman of the Board of Capital Southwest Corporation, predecessor to CSW Industrials, Inc. (2014-present) (investment company); CEO, Capital Southwest Corporation (2013-2015); President & CEO, JBA Investment Partners (family investment vehicle) (2010-Present); Director and Chair of Audit Committee, RSP Permian (oil and gas producer) (2013-Present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Gerard J. Arpey (59)	Trustee since 2012	Director, The Home Depot, Inc. (2015-Present); Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Brenda A. Cline (57)	Trustee since 2004	Executive Vice President, Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Director, Range Resources Corporation (oil and natural gas company) (2015-Present); Director, Tyler Technologies, Inc. (public sector software solutions company) (2014-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).

58

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTEDTRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Eugene J. Duffy (63)	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-Present); Principal and Executive Vice President, Paradigm Asset Management (1994-2014); Director, Sunrise Bank of Atlanta (2008-2013); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Douglas A. Lindgren*** (56)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Managing Director, IPS Investment Management and Global Head, Content Management, UBS Wealth Management (2010-2016); Managing Director, P&S Hedge Funds, UBS Wealth Management (2008-2010); Managing Director, Head of Alternative Investments, UBS Financial Services, Inc. (2005-2008).
Richard A. Massman (74)	Trustee since 2004 Chairman since 2008	Consultant and General Counsel Emeritus, Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities) (2009-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Barbara J. McKenna, CFA (54)	Trustee since 2012	Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
R. Gerald Turner (72)	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-Present); Director, Kronus Worldwide Inc. (chemical manufacturing) (2003-Present); Trustee, American Beacon Mileage Funds (2001-2012); Trustee, American Beacon Select Funds (2001-Present); Trustee, American Beacon Master Trust (2001-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (63)	President since 2009	President, CEO and Director, American Beacon Advisors, Inc. (2009-Present); President, CEO and Director, Resolute Investment Managers, Inc. (2015-Present); President, CEO and Director, Resolute Acquisition, Inc. (2015-Present); President, CEO and Director, Resolute Topco, Inc. (2015-Present), President & CEO, Resolute Investment Holdings, LLC (2015-Present); President, CEO and Director, Lighthouse Holdings, Inc. (2009-2015); President and CEO, Lighthouse Holdings Parent, Inc. (2009-2015); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-Present); Director, ARK Investment Management LLC (2016-Present); Director, Shapiro Capital Management LLC (2017-Present); Member, Investment Advisory Committee, Employees Retirement System of Texas (2017-Present); Trustee, American Beacon NextShares Trust (2015-Present); President, American Beacon Select Funds (2009-Present); President, American Beacon Mileage Funds (2009-2012); President, American Beacon Master Trust (2009-2012); President, American Beacon Institutional Funds Trust (2017-Present).

59

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rosemary K. Behan (58)	VP, Secretary and Chief Legal Officer since 2006	Vice President and Secretary, American Beacon Advisors, Inc. (2006-Present); Secretary, Resolute Investment Holdings, LLC (2015-Present) Secretary, Resolute Investment Managers, Inc. (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015-Present); Secretary, Lighthouse Holdings, Inc. (2008-2015); Secretary, Lighthouse Holdings Parent, Inc. (2008-2015); Secretary, American Private Equity Management, LLC (2008-Present); Secretary, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Secretary, Alpha Quant Advisors, LLC (2016-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Select Funds (2006-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Mileage Funds (2006-2012); Chief Legal Officer, Vice President and Secretary, American Beacon Master Trust (2006-2012); Chief Legal Officer, Vice President and Secretary, American Beacon Institutional Funds Trust (2017-Present).
Brian E. Brett (57)	VP since 2004	Senior Vice President (2012-Present) and Vice President (2004-2012), American Beacon Advisors, Inc.; Vice President, American Beacon Select Funds (2004-Present); Vice President, American Beacon Mileage Funds (2004-2012); Vice President, American Beacon Master Trust (2004-2012); Vice President, American Beacon Institutional Funds Trust (2017-Present).
Paul B. Cavazos (48)	VP since 2016	Senior Vice President, American Beacon Advisors, Inc. (2016-Present); Chief Investment Officer and Assistant Treasurer, DTE Energy (2007-2016); Vice President, American Beacon Select Funds (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present).
Erica Duncan (47)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Mileage Funds (2011-2012); Vice President, American Beacon Master Trust (2011-2012); Vice President, American Beacon Institutional Funds Trust (2017-Present).
Melinda G. Heika (56)	Treasurer since 2010	Treasurer, American Beacon Advisors, Inc. (2010-Present); Resolute Investment Managers, Inc. (2015-Present); Treasurer, Resolute Acquisition, Inc. (2015-Present); Treasurer, Resolute Topco, Inc. (2015-Present); Treasurer, Resolute Investment Holdings, LLC. (2015-Present); Treasurer, Lighthouse Holdings, Inc. (2010-2015); Treasurer, Lighthouse Holdings Parent Inc., (2010-2015); Treasurer, American Private Equity Management, LLC (2012-Present); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Select Funds (2010-Present); Treasurer, American Beacon Mileage Funds (2010-2012); Treasurer, American Beacon Master Trust (2010-2012); Treasurer, American Beacon Institutional Funds Trust (2017-Present).
Terri L. McKinney (54)	VP since 2010	Vice President (2009-Present) and Managing Director (2003-2009), American Beacon Advisors, Inc.; Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Mileage Funds (2010-2012); Vice President, American Beacon Master Trust (2010-2012); Vice President, American Beacon Institutional Funds Trust (2017-Present).

60

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Jeffrey K. Ringdahl (42)	VP since 2010	Senior Vice President (2013-Present), Vice President (2010-2013), and Director (2015-Present), American Beacon Advisors, Inc.; Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Mileage Funds (2010-2012); Vice President, American Beacon Master Trust (2010-2012); Senior Vice President (2012-Present) and Manager (2015-Present), American Private Equity Management, LLC; Senior Vice President, Lighthouse Holdings, Inc. (2013-2015); Senior Vice President, Lighthouse Holdings Parent, Inc. (2013-2015); Director and Vice President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Trustee, American Beacon NextShares Trust (2015-Present); Director and Senior Vice Present, Resolute Investment Holdings, LLC (2015-Present); Director and Senior Vice President, Resolute Topco, Inc. (2015-Present); Director and Senior Vice President, Resolute Acquisition, Inc. (2015-Present); Director and Senior Vice President, Resolute Investment Managers, Inc. (2015-Present); Director, Executive Vice President and Chief Operating Officer, Alpha Quant Advisors, LLC (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-President); Director, Shapiro Capital Management, LLC (2017-Present).
Samuel J. Silver (54)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Mileage Funds (2011-2012); Vice President, American Beacon Master Trust (2011-2012); American Beacon Institutional Funds Trust (2011-Present).
Christina E. Sears (46)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Chief Compliance Officer, American Beacon Advisors, Inc. (2004-Present); Chief Compliance Officer, American Private Equity Management, LLC (2012-Present); Chief Compliance Officer and Vice President, Alpha Quant Advisors, LLC (2016-Present); Chief Compliance Officer (2004-Present) and Assistant Secretary (1999-Present), American Beacon Select Funds; Chief Compliance Officer (2004-2012) and Assistant Secretary (1999-2012), American Beacon Mileage Funds; Chief Compliance Officer (2004-2012) and Assistant Secretary (1999-2012), American Beacon Master Trust; Chief Compliance Officer and Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).
Sonia L. Bates (61)	Asst. Treasurer since 2011	Assistant Treasurer, American Beacon Advisors, Inc. (2011-Present); Assistant Treasurer, Resolute Investment Managers, Inc. (2015-Present); Assistant Treasurer, Resolute Acquisition, Inc. (2015-Present); Assistant. Treasurer, Resolute Topco, Inc. (2015-Present); Assistant Treasurer, Resolute Investment Holdings, LLC.; Assistant Treasurer, Lighthouse Holdings, Inc. (2011-2015); Assistant Treasurer, Lighthouse Holdings Parent Inc. (2011-2015); Assistant Treasurer, American Private Equity Management, LLC (2012-Present); Assistant Treasurer, American Beacon Select Funds (2011-Present); Assistant Treasurer American Beacon Mileage Funds (2011-2012); Assistant Treasurer, American Beacon Master Trust (2011-2012); Assistant Treasurer, American Beacon Institutional Funds Trust (2017-Present).
Shelley D. Abrahams (43)	Assistant Secretary since 2008	Assistant Secretary, American Beacon Advisors, Inc. (2008-Present); Assistant Secretary, American Beacon Select Funds (2008-Present); Assistant Secretary, American Beacon Mileage Funds (2008-2012); Assistant Secretary, American Beacon Master Trust (2008-2012); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).

61

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rebecca L. Harris (51)	Assistant Secretary since 2010	Vice President, American Beacon Advisors, Inc. (2016-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2010-Present); Assistant Secretary, American Beacon Mileage Funds (2010-2012); Assistant Secretary, American Beacon Master Trust (2010-2012); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).
Diana N. Lai (42)	Assistant Secretary since 2012	Assistant Secretary, American Beacon Advisors, Inc. (2012-Present); Assistant Secretary, American Beacon Select Funds (2012-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).
Teresa A. Oxford (59)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2015-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 75.

** Mr. Feld is deemed to be an “interested person” of the Trusts, as defined by the 1940 Act. Mr. Feld’s law firm of Akin, Gump, Strauss, Hauer & Feld LLP has provided legal services within the past two fiscal years to one or more of the Trust’s sub-advisors.

*** Douglas A. Lindgren became a new Trustee to each of the Trusts on 1/1/2018.

62

American Beacon Funds^SM

Privacy Policy

January 31, 2018 (Unaudited)

The American Beacon Funds recognize and respect the privacy of our shareholders. We are providing this notice to you so you will understand how shareholder information may be collected and used.

We may collect nonpublic personal information about you from one or more of the following sources:

• information we receive from you on applications or other forms;

• information about your transactions with us or our service providers; and

• information we receive from third parties.

We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.

We restrict access to your nonpublic personal information to those employees or service providers who need to know that information to provide products or services to you. To ensure the confidentiality of your nonpublic personal information, we maintain safeguards that comply with federal standards.

63

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64

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: 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 Acadian Emerging Markets Managed Volatility Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately sixty days after the end of each quarter. A complete schedule of the American Beacon SGA Global Growth 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 DST Asset Manager Solutions, Inc. Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Boston, Massachusetts DISTRIBUTOR Resolute Investment Distributors, Inc. Irving, Texas

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 Acadian Emerging Markets Managed Volatility Fund and American Beacon SGA Global Growth Fund are service marks of American Beacon Advisors, Inc.

AR 1/18

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.

CRESCENT SHORT DURATION HIGH INCOME FUND

The Fund’s investments in high-yield securities, including loans, restricted securities and floating rate securities are subject to greater levels of credit, interest rate, market and liquidity risks than investment-grade securities. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. 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 January 31, 2018

Contents

President’s Message	1
Market and Performance Overviews	2
Expense Examples	5
Report of Independent Registered Public Accounting Firm	7
Schedule of Investments:
American Beacon Crescent Short Duration High Income Fund	8
Financial Statements	18
Notes to Financial Statements	21
Financial Highlights:
American Beacon Crescent Short Duration High Income Fund	38
Federal Tax Information	43
Trustees and Officers of the American Beacon Funds	44
Privacy Policy	49

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   At American Beacon, we are proud to offer a broad range of equity, fixed-income and alternative mutual fund products for institutions and individuals. Our mutual funds – which span the domestic, international, global, frontier and emerging markets – are sub-advised by experienced portfolio managers who employ distinctive investment processes to manage assets through a variety of economic and market conditions. Together, we work diligently to help our clients and shareholders meet their long-term financial goals.   Institutional wisdom, enduring value. Since our inception as a pension fiduciary in 1986, American Beacon has focused on identifying and overseeing institutional investment managers and portfolio risk management. In 1987, we leveraged our size and experience to launch a series of sub-advised, multi-

manager mutual funds providing individual investors access to many of the same institutional managers as our pension clients. Following the financial crisis in 2008, we saw that investors were looking for unique solutions from managers who were not necessarily mainstream. In 2010, we began offering mutual funds from single managers with distinctive investment styles or asset classes. As we continue to expand our family of funds, our solutions- based approach provides innovative investments.

Guiding principles. Our “manager of managers” philosophy is built on a long-standing history of innovative thinking, discipline and consistency in applying our solutions-based approach. As a manager of managers, our goal is to engage the most effective money managers for each asset class, investment style or market strategy – whether through a single sub-advisor or a combination of sub-advisors. Because we take our fiduciary responsibilities very seriously, our thorough manager evaluation and selection process is rigorous and ongoing. Our guiding principles – predictability, style consistency, competitive pricing and long-term relationships – provide a strong foundation for our due-diligence process. Our broad range of mutual funds helps investors navigate the economic storms and market downturns in the U.S. and abroad. Our years of experience evaluating sub-advisors have led us to identify and partner with asset managers who have adhered to their disciplined processes for many years and through multiple market cycles.

Focus on asset protection and risk mitigation. We strive to provide innovative, long-term products without gimmicks. From offering some of the first multi-manager funds, one of the first retirement-income funds and the first open-end mutual fund in the U.S. to focus primarily on frontier-market debt, our robust history includes applying a disciplined, solutions-based approach to our product development process to help protect assets and mitigate risk.

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

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

High Yield Bond Market Overview

January 31, 2018 (Unaudited)

The global bond market produced positive returns over the 12-month period ended January 31, 2018, evidenced by the Bloomberg Barclays Global Aggregate Index return of 7.5%.

In response to better economic conditions, the U.S. Federal Reserve (“the Fed”) hiked rates at their March, June and December meetings during the 2017 calendar year. The rate hikes were highly anticipated and, thus, did not move markets as economic indicators and investor sentiment improved throughout the year. The U.S. Congress passed a tax-reform package in December, which gave the credit cycle an additional boost. The yield curve started flattening toward the end of the period, indicating the Fed’s rate hikes would help keep inflation in check. Other central banks, including the European Central Bank (“ECB”) and the Bank of Japan (“BOJ”), have not yet started raising rates, signifying some divergence among the three largest central banks.

Volatility throughout the period remained low by historical standards, which proved to be a healthy environment for credit markets as spreads moved lower. In the U.S., both high- and low-quality corporate credits had solid periods as investors continued to search for yield. The ICE BofAML US Corporate Index (Investment Grade) returned 5.1% and the ICE BofAML US High Yield Index returned 6.7% for the period.

Emerging and frontier market bonds performed well over the period as initial concerns over U.S. protectionism were replaced by optimism following a pickup in global growth and higher commodity prices. Market sentiment was occasionally shaken by country-specific news from countries like Brazil, Venezuela, South Africa and Turkey, as well as NAFTA negotiations exposing large conceptual disagreement. The JPMorgan Emerging Market Bond Index-Global Diversified (hard currency) posted a solid 8.6% return for the period. Local currency emerging-market results were even stronger as the JPMorgan Government Bond Index-Emerging Markets Global Diversified Index was up 17.7%. The smaller, less-developed frontier economies also produced strong results, represented by the JPMorgan Next Generation Markets Index, which returned 14.8%.

The period ended with optimism as the theme of synchronized global growth continues to play out. However, many risks could develop since the domestic environment is tightening and U.S. Treasury yields are expected to rise. It remains to be seen how the markets will react when other central banks, such as ECB and BOJ, begin to phase out accommodative policies or inflation meaningfully picks up.

2

American Beacon Crescent Short Duration High Income Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

The Investor Class of the American Beacon Crescent Short Duration High Income Fund (the “Fund”) returned 4.04% for the twelve-month period ended January 31, 2018, underperforming (net of fees) the Bank of America Merrill Lynch U.S. High Yield Cash Pay BB-B 1-5 Year Index (the “Index”) return of 5.15%.

Comparison of Change in Value of a $10,000 Investment for the period from 10/1/2014 through 1/31/2018

Total Returns for the Period ended January 31, 2018
	Ticker	1 Year			3 Years			Since Inception 10/1/2014			Value of $10,000 10/1/2014- 1/31/2018
Institutional Class (1,3)	ACHIX		4.45	%		4.69	%		3.70	%		$	11,286
Y Class (1,3)	ACHYX		4.33	%		4.57	%		3.57	%		$	11,242
Investor Class (1,3)	ACHPX		4.04	%		4.31	%		3.31	%		$	11,147
A without Sales Charge (1,3)	ACHAX		4.02	%		4.25	%		3.25	%		$	11,127
A with Sales Charge (1,3)	ACHAX		1.39	%		3.36	%		2.46	%		$	10,845
C without Sales Charge (1,3)	ACHCX		3.24	%		3.48	%		2.49	%		$	10,855
C with Sales Charge (1,3)	ACHCX		2.24	%		3.48	%		2.49	%		$	10,855
BofA Merrill Lynch U.S High Yield Cash Pay BB-B 1-5 Year Index (2) .......			5.15	%		4.85	%		4.27	%		$	11,496

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. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only, and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of the fees charged to each Class of the Fund has been waived since Fund inception. Performance prior to waiving fees was lower than the actual returns shown since inception. A Class shares have a maximum sales charge of 2.50%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase.

2. The BofA Merrill Lynch U.S. High Yield Cash Pay BB-B 1-5 Year Index is an unmanaged index that generally tracks the performance of BB-B rated U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market with maturities of 1 to 5 years. One cannot directly invest in an index.

3

American Beacon Crescent Short Duration High Income Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

3. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A, and C Class shares were 1.27%, 1.37%, 1.57%, 1.67% and 2.42%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund’s sub-advisor actively allocates among traditional high-yield, floating-rate bank loan and private-debt sectors of the bond market to seek attractive risk-adjusted returns with lower volatility than that of the high-yield market overall. This flexibility also allows for the opportunity to invest in securities outside of the traditional indices.

On average during the period, the Fund held approximately 77% of assets in traditional high yield, 13% in floating-rate bank loans and 10% in private debt. The decision to overweight high yield bonds and underweight bank loans added value as fixed rate securities outperformed floating rate for most of the period.

The Fund had good security selection in the Technology & Electronics, Basic Industry and Leisure sectors which contributed positively to relative performance. Conversely, an underweight positioning and weak security selection in the Energy sector detracted from relative performance, as Energy was one of the top performing sectors in the Index during the period. From a ratings standpoint, the Fund benefited from good security selection in BB–rated issuers, although this was slightly offset by poor security selection in CCC.

Overall, the Fund performed as expected during the period and delivered attractive risk-adjusted returns. The Fund’s consistent approach to short-duration, high-yield investing is positioned to continue adding value with less volatility than the Index.

Top Ten Holdings (% Net Assets)
Sprint Corp., 7.250%, Due 9/15/2021		1.2
T-Mobile USA, Inc., 6.625%, Due 4/1/2023		1.2
Navient Corp., 5.875%, Due 3/25/2021		1.2
New Gold, Inc., 6.250%, Due 11/15/2022		0.8
Calpine Corp., 5.250%, Due 6/1/2026		0.8
Energizer Holdings, Inc., 5.500%, Due 6/15/2025		0.8
Sirius XM Radio, Inc., 3.875%, Due 8/1/2022		0.7
Hess Infrastructure Partners LP / Hess Infrastructure Partners Finance Corp., 5.625%, Due 2/15/2026		0.7
Block Communications, Inc., 6.875%, Due 2/15/2025		0.7
Intesa Sanpaolo SpA		0.7
Total Fund Holdings	345
Sector Allocation (% Investments)
Consumer, Non-Cyclical		14.2
Communications		13.8
Energy		13.5
Consumer, Cyclical		12.8
Financial		10.1
Industrial		7.6
Technology		7.5
Basic Materials		6.7
Service		3.7
Utilities		3.3
Consumer		2.5
Manufacturing		1.9
Health Care		0.9
Telecommunications		0.9
Media		0.3
Transportation		0.3

4

American Beacon Crescent Short Duration High Income Fund^SM

Expense Examples

January 31, 2018 (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, distribution (12b-1) fees, sub-transfer agent 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 August 1, 2017 through January 31, 2018.

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 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 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 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 tables are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.

5

American Beacon Crescent Short Duration High Income Fund^SM

Expense Examples

January 31, 2018 (Unaudited)

Crescent Short Duration High Income Fund
	Beginning Account Value 8/1/2017		Ending Account Value 1/31/2018		Expenses Paid During Period 8/1/2017-1/31/2018*
Institutional Class
Actual		$1,000.00		$1,013.40		$4.31
Hypothetical**		$1,000.00		$1,020.90		$4.33
Y Class
Actual		$1,000.00		$1,012.90		$4.82
Hypothetical**		$1,000.00		$1,020.40		$4.84
Investor Class
Actual		$1,000.00		$1,011.40		$6.24
Hypothetical**		$1,000.00		$1,019.00		$6.26
A Class
Actual		$1,000.00		$1,011.30		$6.34
Hypothetical**		$1,000.00		$1,018.90		$6.36
C Class
Actual		$1,000.00		$1,007.50		$10.12
Hypothetical**		$1,000.00		$1,015.10		$10.16

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.85%, 0.95%, 1.23%, 1.25%, and 2.00% for the Institutional, Y, Investor, 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

6

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of American Beacon Funds and Shareholders of American Beacon Crescent Short Duration High Income Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of American Beacon Crescent Short Duration High Income Fund (one of the series constituting American Beacon Funds, referred to hereafter as the “Fund”) as of January 31, 2018, the related statement of operations for the year ended January 31, 2018, the statement of changes in net assets for each of the two years in the period ended January 31, 2018, including the related notes, and the financial highlights for each of the two years in the period ended January 31, 2018 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of January 31, 2018, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended January 31, 2018 and the financial highlights for each of the two years in the period ended January 31, 2018 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of January 31, 2018 by correspondence with the custodian, transfer agents and agent banks; when replies were not received from agent banks, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

The financial statements as of and for the year ended January 31, 2016 and the financial highlights for each of the periods ended on or prior to January 31, 2016 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated March 31, 2016 expressed an unqualified opinion on those financial statements and financial highlights.

PricewaterhouseCoopers LLP

Boston, MA

March 27, 2018

We have served as the auditor of one or more American Beacon investment companies since 2016.

7

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2018

	Shares			Fair Value
COMMON STOCKS - 0.00%
Energy - 0.00%
Oil, Gas & Consumable Fuels - 0.00%
Energy Exploration AssetA B			3		$	-
Health Care - 0.00%
Pharmaceuticals - 0.00%
Millennium Health LLCA B			4,651			507
Total Common Stocks (Cost $26,255)						507
	Principal Amount
BANK LOAN OBLIGATIONSC - 14.31%
Basic Materials - 0.44%
Golden Nugget, Inc., 4.878%, Due 10/4/2023, 2017 Incremental Term Loan, (3 mo. LIBOR + 3.250%)		$	124,370			125,756
Phoenix Services International LLC, Due 1/26/2025, Term LoanD			125,000			124,375
PQ Corp., 5.022%, Due 11/4/2022, 2017 USD Term Loan, (3 mo. LIBOR + 3.250%)			124,330			125,076
Univar Inc., 4.074%, Due 7/1/2024, 2017 USD Term Loan B, (1 mo. LIBOR + 2.500%)			9,551			9,639
						384,846
Consumer - 2.33%
Alphabet Holding Co., Inc., 5.074%, Due 9/26/2024, 2017 1st Lien Term Loan, (1 mo. LIBOR + 3.500%)			124,688			123,222
Arby’s Restaurant Group, Inc., Due 1/17/2025, 1st Lien Term LoanD			125,000			126,641
Capri Finance LLC, 5.022%, Due 11/1/2024, USD 2017 1st Lien Term Loan, (3 mo. LIBOR + 3.250%)			125,000			125,104
Casablanca US Holdings, Inc., 6.522%, Due 3/15/2024, 1st Lien Term Loan, (2 mo. LIBOR + 4.750%)			29,775			29,750
Global Appliance Inc., 5.570%, Due 9/29/2024, Term Loan B, (1 mo. LIBOR + 4.000%)			124,688			126,325
iHeartCommunications, Inc., 8.443%, Due 1/30/2019, Term Loan D, (3 mo. LIBOR + 6.750%)			43,315			33,106
NVA Holdings, Inc., Due 1/29/2025, Term Loan B3D			125,000			125,235
P.F. Chang’s China Bistro Inc., 6.509%, Due 8/18/2022, 2017 Term Loan B, (6 mo. LIBOR + 5.000%)			124,688			120,947
Paradigm Acquisition Corp., 5.943%, Due 10/11/2024, 1st Lien Term Loan, (3 mo. LIBOR + 4.250%)			187,000			188,053
Realogy Corp., Due 1/25/2025, 2018 Term Loan BD			11,303			11,382
RSC Acquisition, Inc., 6.943%, Due 11/30/2022, Term Loan, (3 mo. LIBOR + 5.250%)			245,004			241,329
SMG (Stadium Management Group), 4.890%, Due 1/11/2025, 2017 1st Lien Term Loan, (2 mo. LIBOR + 3.250%)			125,000			126,406
Strategic Partners, Inc., 6.074%, Due 6/30/2023, 2016 Term Loan, (1 mo. LIBOR + 4.500%)			118,802			119,396
TGP Holdings III LLC,
Due 9/25/2024, Delayed Draw Term LoanD E			22,102			22,350
6.693%, Due 9/25/2024, 1st Lien Term Loan, (3 mo. LIBOR + 5.000%)			140,546			142,127
10.193%, Due 9/25/2025, 2nd Lien Term Loan, (3 mo. LIBOR + 8.500%)			50,000			50,500
TriMark USA LLC,
Due 8/28/2024, Delayed Draw Term LoanD			5,342			5,390
5.070%, Due 8/28/2024, 2017 1st Lien Term Loan, (1 mo. LIBOR + 3.500%)			119,359			120,433
Varsity Brands, Inc., 5.074%, Due 12/15/2024, 2017 Term Loan B, (1 mo. LIBOR + 3.500%)			125,000			126,303
William Morris Endeavor Entertainment LLC, 8.824%, Due 5/6/2022, 2nd Lien Term Loan, (1 mo. LIBOR + 7.250%)			84,000			84,315
						2,048,314
Energy - 0.73%
California Resources Corp.,
11.936%, Due 12/31/2021, Second Out Term Loan, (1 mo. LIBOR + 10.375%)			12,000			13,590
Due 12/31/2022, 2017 1st Lien Term Loan, (1 mo. LIBOR + 4.750%)D			13,000			13,228
Chief Exploration & Development LLC, 7.959%, Due 5/16/2021, 2nd Lien Term Loan, (3 mo. LIBOR + 6.500%)			250,000			249,062
Cortes NP Acquisition Corp., 5.568%, Due 11/30/2023, 2017 Term Loan B, (1 mo. LIBOR + 4.000%)			78,111			78,892
Energy & Exploration Partners, Inc., 5.000%, Due 5/13/2022, 2016 2nd Lien PIK Term Loan, PIK (5.000%)			6,506			65
Energy Future Intermediate Holding Co. LLC, 4.567%, Due 6/30/2018, 2017 DIP Term Loan, (1 mo. LIBOR + 3.000%)			125,000			125,424
Medallion Midland Acquisition LLC, 4.824%, Due 10/30/2024, 1st Lien Term Loan, (1 mo. LIBOR + 3.250%)			125,000			125,625
Peabody Energy Corp., 5.074%, Due 3/31/2022, Exit Term Loan, (1 mo. LIBOR + 3.500%)			35,387			35,844
						641,730

See accompanying notes

8

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount			Fair Value
BANK LOAN OBLIGATIONS - 14.31% (continued)
Financial - 1.32%
Acrisure LLC, 5.991%, Due 11/22/2023, 2017 Term Loan B, (3 mo. LIBOR + 4.250%)		$	127,489		$	129,521
AssuredPartners, Inc., 5.074%, Due 10/22/2024, 2017 1st Lien Add-On Term Loan, (1 mo. LIBOR + 3.500%)			134,332			135,536
Asurion LLC, 7.574%, Due 8/4/2025, 2017 2nd Lien Term Loan, (1 mo. LIBOR + 6.000%)			125,000			128,906
Capital Automotive L.P., 7.580%, Due 3/24/2025, 2017 2nd Lien Term Loan, (1 mo. LIBOR + 6.000%)			123,031			125,492
EIG Management Co. LLC, Due 1/31/2025, 2018 Term Loan BD			104,000			103,610
Endo Luxembourg Finance Co. I S.a r.l., 5.875%, Due 4/29/2024, 2017 Term Loan B, (1 mo. LIBOR + 4.250%)			124,375			124,437
Focus Financial Partners LLC, 4.443%, Due 7/3/2024, 2018 1st Lien Term Loan, (3 mo. LIBOR + 2.750%)			124,688			125,622
Jane Street Group LLC, 6.074%, Due 8/25/2022, 2017 Term Loan B, (1 mo. LIBOR + 4.500%)			64,509			65,356
Nautilus Power LLC, 5.824%, Due 5/16/2024, Term Loan B, (1 mo. LIBOR + 4.250%)			24,471			24,838
VFH Parent LLC, 4.945%, Due 12/30/2021, 2017 Refinanced Term Loan B, (3 mo. LIBOR + 3.250%)			71,353			72,290
VICI Properties LLC, 3.811%, Due 12/20/2024, Replacement Term Loan B, (1 mo. LIBOR + 2.250%)			125,000			125,924
WEX, Inc., Due 6/30/2023, 2017 Term Loan B2D			3,274			3,310
						1,164,842
Health Care - 0.88%
Affordable Care Holding Corp., 6.404%, Due 10/22/2022, 2015 1st Lien Term Loan, (2 mo. LIBOR + 4.750%)			47,526			47,526
Amneal Pharmaceuticals LLC, 5.193%, Due 11/1/2019, New Term Loan, (3 mo. LIBOR + 3.500%)			64,840			65,144
Avantor, Inc., 5.561%, Due 11/21/2024, 2017 1st Lien Term Loan, (3 mo. LIBOR + 4.000%)			125,000			126,719
Beaver-Visitec International, Inc., 6.693%, Due 8/21/2023, 1st Lien Term Loan, (3 mo. LIBOR + 5.000%)			74,622			74,622
Curo Health Services Holdings, Inc., 5.413%, Due 2/7/2022, 2015 1st Lien Term Loan, (3 mo. LIBOR + 4.000%)			114,111			114,539
EAB Global, Inc., 5.484%, Due 11/15/2024, 1st Lien Term Loan, (3 mo. LIBOR + 3.750%)			125,000			125,704
Onex Carestream Finance LP, 5.693%, Due 6/7/2019, 1st Lien Term Loan, (3 mo. LIBOR + 4.000%)			61,938			62,058
Prospect Medical Holdings, Inc., 7.500%, Due 6/30/2022, Term Loan, (6 mo. LIBOR + 6.000%)			73,875			73,875
Team Health Holdings, Inc., Due 2/6/2024, 1st Lien Term LoanD			22,000			21,560
Valeant Pharmaceuticals International, Inc., 5.060%, Due 4/1/2022, Term Loan B F4, (1 mo. LIBOR + 3.500%)			57,558			58,415
						770,162
Manufacturing - 1.82%
American Bath Group LLC, 6.943%, Due 9/30/2023, 2017 Term Loan B, (3 mo. LIBOR + 5.250%)			247,494			249,555
ASP Chromaflo Dutch B.V., 5.574%, Due 11/18/2023, Term Loan B2, (1 mo. LIBOR + 4.000%)			69,953			70,259
ASP Chromaflo Intermediate Holdings, Inc., 5.574%, Due 11/18/2023, Term Loan B1, (1 mo. LIBOR + 4.000%)			53,797			54,032
Berlin Packaging LLC, 4.863%, Due 10/1/2021, 2017 Term Loan B, (3 mo. LIBOR + 3.250%)			124,044			125,027
BWAY Holding Co., 4.958%, Due 4/3/2024, 2017 Term Loan B, (2 mo. LIBOR + 3.250%)			48,755			49,121
Consolidated Container Co. LLC, 5.074%, Due 5/22/2024, 2017 1st Lien Term Loan, (1 mo. LIBOR + 3.500%)			124,688			125,259
CPG International, Inc., 5.593%, Due 5/3/2024, 2017 Term Loan, (6 mo. LIBOR + 3.750%)			122,350			123,574
Emerald Performance Materials LLC, 5.074%, Due 8/1/2021, New 1st Lien Term Loan, (1 mo. LIBOR + 3.500%)			124,800			125,789
Flex Acquisition Co., Inc., 4.695%, Due 12/29/2023, 1st Lien Term Loan, (3 mo. LIBOR + 3.000%)			124,063			124,896
Netsmart Technologies, Inc., 6.193%, Due 4/19/2023, 2016 Term Loan C1, (3 mo. LIBOR + 4.500%)			39,499			40,042
Road Infrastructure Investment LLC, 5.067%, Due 6/13/2023, 2016 1st Lien Term Loan, (PRIME + 2.500%)			77,030			77,030
SHO Holding Corp., 6.568%, Due 10/27/2022, Term Loan, (1 mo. LIBOR + 5.000%)			245,000			232,750
Tank Holding Corp., 5.927%, Due 3/16/2022, Refi Term Loan, (3 mo. LIBOR + 4.250%)			83,043			83,459
Vencore, Inc., 6.443%, Due 11/23/2019, 1st Lien Term Loan, (3 mo. LIBOR + 4.750%)			123,552			124,787
						1,605,580
Media - 0.30%
Meredith Corp., Due 1/17/2025, Term Loan BD			125,000			126,320
Radiate Holdco LLC, Due 2/1/2024, 1st Lien Term LoanD			138,312			138,683
						265,003

See accompanying notes

9

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount			Fair Value
BANK LOAN OBLIGATIONS - 14.31% (continued)
Service - 3.46%
Academy, Ltd., 5.546%, Due 7/1/2022, 2015 Term Loan B, (3 mo. LIBOR + 4.000%)		$	15,000		$	12,037
Albany Molecular Research, Inc., 4.824%, Due 8/30/2024, 2017 1st Lien Term Loan, (1 mo. LIBOR + 3.250%)			124,688			125,155
Allied Universal Holdco LLC, 5.443%, Due 7/28/2022, 2015 Term Loan, (3 mo. LIBOR + 3.750%)			61,247			60,591
ATI Holdings Acquisition, Inc., 5.204%, Due 5/10/2023, 2016 Term Loan, (3 mo. LIBOR + 3.500%)			99,385			100,255
BioClinica, Inc., 6.000%, Due 10/20/2023, 1st Lien Term Loan, (3 mo. LIBOR + 4.250%)			85,811			83,666
Brand Energy & Infrastructure Services, Inc., 5.996%, Due 6/21/2024, 2017 Term Loan, (3 mo. LIBOR + 4.250%)			124,375			125,874
Brickman Group Ltd. LLC, 8.056%, Due 12/17/2021, Initial Term Loan (Second Lien), (1 mo. LIBOR + 6.500%)			58,511			58,862
California Pizza Kitchen, Inc., 7.580%, Due 8/23/2022, 2016 Term Loan, (1 mo. LIBOR + 6.000%)			246,875			241,320
Camelot UK Holdco Ltd., Due 10/3/2023, 2017 Repriced Term LoanD			69,825			70,502
CareerBuilder LLC, 8.443%, Due 7/26/2023, Term Loan, (3 mo. LIBOR + 6.750%)			35,550			35,461
Fort Dearborn Co., 5.696%, Due 10/19/2023, 2016 1st Lien Term Loan, (2 mo. LIBOR + 4.000%)			32,803			32,865
IG Investment Holdings LLC, 5.193%, Due 10/29/2021, 2017 1st Lien Term Loan, (3 mo. LIBOR + 3.500%)			65,523			66,178
Institutional Shareholder Services, Inc.,
Due 10/16/2024, 2017 Delayed Draw Term LoanD E			8,333			8,361
5.470%, Due 10/16/2024, 2017 1st Lien Term Loan, (3 mo. LIBOR + 3.750%)			91,667			91,972
9.470%, Due 10/16/2025, 2017 2nd Lien Term Loan, (3 mo. LIBOR + 7.750%)			25,000			25,125
Kingpin Intermediate Holdings LLC, 5.730%, Due 6/28/2024, 2017 1st Lien Term Loan B, (3 mo. LIBOR + 4.250%)			124,375			126,396
Lakeland Tours LLC,
Due 12/15/2024, 2017 Delayed Draw Term LoanD E			9,511			9,654
5.589%, Due 12/15/2024, 2017 1st Lien Term Loan B, (3 mo. LIBOR + 4.000%)			115,489			117,221
Mister Car Wash Holdings, Inc., 4.904%, Due 8/20/2021, Term Loan B, (2 mo. LIBOR + 3.250%)			123,592			124,210
NMSC Holdings, Inc., 6.693%, Due 4/19/2023, 1st Lien Term Loan, (3 mo. LIBOR + 5.000%)			250,000			248,125
Packers Holdings LLC, 4.737%, Due 12/4/2024, 2017 Term Loan B, (3 mo. LIBOR + 3.250%)			125,000			125,104
Playpower, Inc., 6.443%, Due 6/23/2021, 2015 1st Lien Term Loan, (3 mo. LIBOR + 4.750%)			244,975			245,587
Red Ventures LLC, 5.574%, Due 11/8/2024, 1st Lien Term Loan, (1 mo. LIBOR + 4.000%)			124,688			126,059
Rentpath, Inc., 6.330%, Due 12/17/2021, 2017 Term Loan, (1 mo. LIBOR + 4.750%)			119,404			119,777
Tribune Media Co., 4.574%, Due 12/27/2020, Term Loan, (1 mo. LIBOR + 3.000%)			4,219			4,222
TruGreen Limited Partnership, 5.536%, Due 4/13/2023, 2017 Term Loan, (3 mo. LIBOR + 4.000%)			65,436			66,131
Vestcom Parent Holdings, Inc., 5.574%, Due 12/19/2023, 2016 1st Lien Term Loan, (1 mo. LIBOR + 4.000%)			124,060			124,680
Vistage Worldwide, Inc., 7.074%, Due 8/19/2021, Term Loan B, (1 mo. LIBOR + 5.500%)			98,111			98,111
Vivid Seats Ltd., 5.574%, Due 6/30/2024, 2017 1st Lien Term Loan, (1 mo. LIBOR + 4.000%)			124,375			124,272
World Triathlon Corp., 5.943%, Due 6/26/2021, Term Loan, (3 mo. LIBOR + 4.250%)			248,072			248,072
						3,045,845
Technology - 1.53%
Almonde, Inc.,
4.979%, Due 6/13/2024, USD 1st Lien Term Loan, (3 mo. LIBOR + 3.500%)			57,017			57,308
8.729%, Due 6/13/2025, USD 2nd Lien Term Loan, (3 mo. LIBOR + 7.250%)			124,825			125,543
Applied Systems, Inc., 4.943%, Due 9/19/2024, 2017 1st Lien Term Loan, (3 mo. LIBOR + 3.250%)			124,688			125,917
Compuware Corp., 5.900%, Due 12/15/2021, Term Loan B3, (2 mo. LIBOR + 4.250%)			106,779			107,247
Convergint Technologies LLC,
Due 1/24/2025, 2018 Delayed Draw Term LoanD			12,097			12,157
Due 1/25/2025, 2018 1st Lien Term LoanD			112,903			113,468
Epicor Software Corp., 5.330%, Due 6/1/2022, 1st Lien Term Loan, (1 mo. LIBOR + 3.750%)			124,680			125,459
Marketo, Inc., Due 1/30/2025, 2018 1st Lien Term LoanD			125,000			124,375
MH Sub I LLC, 5.339%, Due 9/13/2024, 2017 1st Lien Term Loan, (3 mo. LIBOR + 3.750%)			124,688			125,217
Navicure, Inc., 5.318%, Due 11/1/2024, 1st Lien Term Loan B, (1 mo. LIBOR + 3.750%)			125,000			125,469
Omnitracs, Inc., 5.450%, Due 11/25/2020, 1st Lien Term Loan, (3 mo. LIBOR + 3.750%)			73,594			74,123
Scientific Games International, Inc., 4.824%, Due 8/14/2024, 2017 Term Loan B4, (1 mo. LIBOR + 3.250%)			124,688			125,328
SMS Systems Maintenance Services, Inc., 6.567%, Due 10/30/2023, 2016 1st Lien Term Loan, (1 mo. LIBOR + 5.000%)			31,348			26,803
Triple Point Technology, Inc., 5.943%, Due 7/10/2020, 1st Lien Term Loan, (3 mo. LIBOR + 4.250%)			83,867			75,942
						1,344,356
Telecommunications - 0.81%
Avaya, Inc., 6.310%, Due 12/15/2024, Exit Term Loan B, (1 mo. LIBOR + 4.750%)			125,000			125,572
Charter Communications Operating LLC, Due 4/30/2025, 2017 Term Loan B D			125,000			125,684

See accompanying notes

10

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount			Fair Value
BANK LOAN OBLIGATIONS - 14.31% (continued)
Telecommunications - 0.81% (continued)
CSC Holdings LLC, Due 1/25/2026, 2018 Term Loan BD		$	125,000		$	125,860
Merrill Communications LLC, 7.022%, Due 6/1/2022, 2015 Term Loan, (3 mo. LIBOR + 5.250%)			79,727			80,524
NeuStar, Inc., 5.147%, Due 8/8/2024, Term Loan B2, (3 mo. LIBOR + 3.750%)			124,688			125,934
Peak 10, Inc., 5.193%, Due 8/1/2024, 2017 1st Lien Term Loan, (3 mo. LIBOR + 3.500%)			124,688			125,259
						708,833
Transportation - 0.29%
American Tire Distributors Holdings, Inc., 5.824%, Due 9/1/2021, 2015 Term Loan, (1 mo. LIBOR + 4.250%)			124,043			125,517
Boing US Holdco Inc., 4.885%, Due 10/3/2024, 2017 1st Lien Term Loan, (3 mo. LIBOR + 3.500%)			125,000			125,937
						251,454
Utilities - 0.40%
Compass Power Generation LLC, 5.391%, Due 12/20/2024, 2017 Term Loan B, (3 mo. LIBOR + 3.750%)			125,000			126,485
Helix Gen Funding LLC, 5.443%, Due 6/2/2024, Term Loan B, (3 mo. LIBOR + 3.750%)			104,832			105,763
TPF II Power LLC, 5.324%, Due 10/2/2023, Term Loan B, (1 mo. LIBOR + 3.750%)			121,191			122,783
						355,031
Total Bank Loan Obligations (Cost $12,520,411)						12,585,996
CORPORATE OBLIGATIONS - 61.91%
Basic Materials - 3.81%
AK Steel Corp., 6.375%, Due 10/15/2025			400,000			395,000
Aleris International, Inc., 9.500%, Due 4/1/2021G			150,000			158,783
CF Industries, Inc.,
3.450%, Due 6/1/2023			200,000			195,440
5.150%, Due 3/15/2034			250,000			252,187
Chemours Co.,
6.625%, Due 5/15/2023			200,000			210,750
7.000%, Due 5/15/2025			400,000			437,000
Freeport-McMoRan, Inc., 3.550%, Due 3/1/2022			600,000			595,500
Hexion, Inc., 6.625%, Due 4/15/2020			250,000			227,813
Huntsman International LLC, 5.125%, Due 11/15/2022			250,000			265,625
PQ Corp., 6.750%, Due 11/15/2022G			100,000			106,875
United States Steel Corp., 8.375%, Due 7/1/2021G			159,000			171,720
Venator Finance Sarl / Venator Materials LLC, 5.750%, Due 7/15/2025G			325,000			334,750
						3,351,443
Communications - 10.07%
AMC Networks, Inc., 5.000%, Due 4/1/2024			125,000			126,875
Block Communications, Inc., 6.875%, Due 2/15/2025G			600,000			624,000
Cablevision Systems Corp., 5.875%, Due 9/15/2022			550,000			555,500
CenturyLink, Inc., 7.500%, Due 4/1/2024, Series Y			325,000			327,437
Cequel Communications Holdings I LLC / Cequel Capital Corp., 5.125%, Due 12/15/2021G			250,000			250,938
DISH DBS Corp.,
6.750%, Due 6/1/2021			250,000			261,875
5.000%, Due 3/15/2023			250,000			234,463
5.875%, Due 11/15/2024			200,000			189,625
Frontier Communications Corp.,
7.125%, Due 3/15/2019			250,000			252,187
10.500%, Due 9/15/2022			250,000			206,563
9.000%, Due 8/15/2031			65,000			42,413
Level 3 Financing, Inc.,
5.375%, Due 1/15/2024			400,000			398,000
5.250%, Due 3/15/2026			250,000			245,313
Nielsen Finance LLC / Nielsen Finance Co., 5.000%, Due 4/15/2022G			250,000			254,062
Plantronics, Inc., 5.500%, Due 5/31/2023G			500,000			517,500
Qwest Corp., 6.750%, Due 12/1/2021			25,000			26,750
Salem Media Group, Inc., 6.750%, Due 6/1/2024G			75,000			73,313
Sinclair Television Group, Inc.,
5.375%, Due 4/1/2021			250,000			253,437
6.125%, Due 10/1/2022			150,000			154,313

See accompanying notes

11

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 61.91% (continued)
Communications - 10.07% (continued)
Sirius XM Radio, Inc., 3.875%, Due 8/1/2022G		$	650,000		$	647,562
Sprint Communications, Inc., 6.000%, Due 11/15/2022			425,000			423,406
Sprint Corp., 7.250%, Due 9/15/2021			1,000,000			1,062,710
T-Mobile USA, Inc., 6.625%, Due 4/1/2023			1,000,000			1,039,300
Townsquare Media, Inc., 6.500%, Due 4/1/2023G			175,000			168,000
Univision Communications, Inc.,
5.125%, Due 5/15/2023G			425,000			423,087
5.125%, Due 2/15/2025G			100,000			97,000
						8,855,629
Consumer, Cyclical - 8.78%
Allison Transmission, Inc., 5.000%, Due 10/1/2024G			500,000			505,000
Ashton Woods USA LLC / Ashton Woods Finance Co., 6.875%, Due 2/15/2021G			298,000			302,470
AV Homes, Inc., 6.625%, Due 5/15/2022			300,000			313,500
CEC Entertainment, Inc., 8.000%, Due 2/15/2022			500,000			495,000
Century Communities, Inc., 5.875%, Due 7/15/2025			350,000			354,813
EMI Music Publishing Group North America Holdings, Inc., 7.625%, Due 6/15/2024G			225,000			247,500
Golden Nugget, Inc., 6.750%, Due 10/15/2024G			350,000			361,812
Guitar Center, Inc., 6.500%, Due 4/15/2019G			250,000			244,375
Intrepid Aviation Group Holdings LLC / Intrepid Finance Co., 6.875%, Due 2/15/2019G			500,000			497,500
KFC Holding Co. / Pizza Hut Holdings LLC / Taco Bell of America LLC, 5.250%, Due 6/1/2026G			125,000			127,500
M/I Homes, Inc., 5.625%, Due 8/1/2025			200,000			203,500
MDC Holdings, Inc., 5.500%, Due 1/15/2024			500,000			525,000
Navistar International Corp., 6.625%, Due 11/1/2025G			375,000			391,987
Neiman Marcus Group Ltd. LLC, 8.000%, Due 10/15/2021G			300,000			191,250
PF Chang’s China Bistro, Inc., 10.250%, Due 6/30/2020G			350,000			310,625
Pinnacle Entertainment, Inc., 5.625%, Due 5/1/2024			125,000			133,750
Scientific Games International, Inc., 10.000%, Due 12/1/2022			500,000			548,125
Springs Industries, Inc., 6.250%, Due 6/1/2021			375,000			382,969
Tempur Sealy International, Inc., 5.625%, Due 10/15/2023			475,000			489,250
Tesla, Inc., 5.300%, Due 8/15/2025G			250,000			238,000
United Continental Holdings, Inc., 4.250%, Due 10/1/2022			500,000			502,500
Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp., 5.500%, Due 3/1/2025G			350,000			353,281
						7,719,707
Consumer, Non-Cyclical - 11.50%
APX Group, Inc., 7.875%, Due 12/1/2022			350,000			375,375
Cardtronics, Inc., 5.125%, Due 8/1/2022			250,000			241,875
Cardtronics, Inc. / Cardtronics USA, Inc., 5.500%, Due 5/1/2025G			300,000			278,250
CHS/Community Health Systems, Inc.,
8.000%, Due 11/15/2019			350,000			328,125
6.250%, Due 3/31/2023			100,000			92,500
Cott Holdings, Inc., 5.500%, Due 4/1/2025G			175,000			178,281
DaVita, Inc.,
5.750%, Due 8/15/2022			100,000			103,063
5.125%, Due 7/15/2024			500,000			503,765
Dean Foods Co., 6.500%, Due 3/15/2023G			600,000			594,000
Encompass Health Corp., 5.750%, Due 11/1/2024			300,000			306,000
Endo Finance LLC / Endo Finco, Inc., 5.375%, Due 1/15/2023G			250,000			195,000
First Quality Finance Co., Inc., 5.000%, Due 7/1/2025G			250,000			251,875
HCA, Inc.,
5.875%, Due 5/1/2023			500,000			536,250
5.375%, Due 2/1/2025			100,000			102,125
Herc Rentals, Inc., 7.500%, Due 6/1/2022G			418,000			448,827
Hertz Corp., 5.875%, Due 10/15/2020			225,000			225,000
Horizon Pharma, Inc., 6.625%, Due 5/1/2023			90,000			90,675
Horizon Pharma, Inc. / Horizon Pharma USA, Inc., 8.750%, Due 11/1/2024G			75,000			81,563
Kronos Acquisition Holdings, Inc., 9.000%, Due 8/15/2023G			175,000			171,938
LifePoint Health, Inc.,
5.875%, Due 12/1/2023			525,000			525,656
5.375%, Due 5/1/2024			150,000			144,563
MEDNAX, Inc., 5.250%, Due 12/1/2023G			225,000			229,781
Midas Intermediate Holdco II LLC / Midas Intermediate Holdco II Finance, Inc., 7.875%, Due 10/1/2022G			200,000			204,440
Monitronics International, Inc., 9.125%, Due 4/1/2020			300,000			262,312
Rent-A-Center, Inc., 4.750%, Due 5/1/2021			200,000			185,500
Spectrum Brands, Inc., 5.750%, Due 7/15/2025			550,000			578,875

See accompanying notes

12

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 61.91% (continued)
Consumer, Non-Cyclical - 11.50% (continued)
Syniverse Foreign Holdings Corp., 9.125%, Due 1/15/2022G		$	500,000		$	518,125
Tenet Healthcare Corp.,
4.750%, Due 6/1/2020			200,000			204,000
6.750%, Due 6/15/2023			200,000			197,020
United Rentals North America, Inc.,
5.750%, Due 11/15/2024			150,000			157,875
5.500%, Due 7/15/2025			250,000			263,750
5.500%, Due 5/15/2027			200,000			210,000
Universal Health Services, Inc., 4.750%, Due 8/1/2022G			350,000			358,330
Universal Hospital Services, Inc., 7.625%, Due 8/15/2020			450,000			452,250
Vector Group Ltd., 6.125%, Due 2/1/2025G			500,000			518,750
						10,115,714
Energy - 9.39%
Antero Resources Corp., 5.125%, Due 12/1/2022			300,000			306,453
Archrock Partners LP / Archrock Partners Finance Corp., 6.000%, Due 4/1/2021			250,000			253,125
Calfrac Holdings LP, 7.500%, Due 12/1/2020G			350,000			346,500
Carrizo Oil & Gas, Inc., 7.500%, Due 9/15/2020			145,000			147,900
Cheniere Energy Partners LP, 5.250%, Due 10/1/2025G			200,000			203,750
Chesapeake Energy Corp.,
8.000%, Due 12/15/2022G			24,000			25,740
8.000%, Due 6/15/2027G			275,000			273,281
Continental Resources, Inc., 5.000%, Due 9/15/2022			100,000			101,250
Crestwood Midstream Partners LP / Crestwood Midstream Finance Corp., 6.250%, Due 4/1/2023			200,000			208,500
CSI Compressco LP / CSI Compressco Finance, Inc., 7.250%, Due 8/15/2022			300,000			295,500
Denbury Resources, Inc., 9.000%, Due 5/15/2021G			250,000			255,625
Diamond Offshore Drilling, Inc., 4.875%, Due 11/1/2043			75,000			57,375
EP Energy LLC / Everest Acquisition Finance, Inc., 8.000%, Due 11/29/2024G			175,000			184,188
Gulfport Energy Corp., 6.375%, Due 1/15/2026G			500,000			507,500
Hess Infrastructure Partners LP / Hess Infrastructure Partners Finance Corp., 5.625%, Due 2/15/2026G			625,000			634,375
Hilcorp Energy I LP / Hilcorp Finance Co., 5.000%, Due 12/1/2024G			300,000			301,500
Jones Energy Holdings LLC / Jones Energy Finance Corp., 6.750%, Due 4/1/2022			350,000			266,000
Laredo Petroleum, Inc., 5.625%, Due 1/15/2022			400,000			405,000
Nabors Industries, Inc., 5.500%, Due 1/15/2023			425,000			425,000
Newfield Exploration Co., 5.375%, Due 1/1/2026			425,000			448,906
Oceaneering International, Inc., 4.650%, Due 11/15/2024			500,000			486,250
Parker Drilling Co., 6.750%, Due 7/15/2022			250,000			215,000
Parsley Energy LLC / Parsley Finance Corp., 5.375%, Due 1/15/2025G			200,000			202,000
Peabody Energy Corp., 6.000%, Due 3/31/2022G			75,000			77,903
Pioneer Energy Services Corp., 6.125%, Due 3/15/2022			200,000			179,000
QEP Resources, Inc., 5.625%, Due 3/1/2026			350,000			357,000
SESI LLC, 7.125%, Due 12/15/2021			500,000			511,875
SM Energy Co., 5.625%, Due 6/1/2025			175,000			173,250
Summit Midstream Holdings LLC / Summit Midstream Finance Corp., 5.500%, Due 8/15/2022			125,000			126,250
Sunoco LP / Sunoco Finance Corp., 4.875%, Due 1/15/2023G			100,000			101,852
WPX Energy, Inc., 7.500%, Due 8/1/2020			168,000			181,440
						8,259,288
Financial - 6.81%
Acrisure LLC / Acrisure Finance, Inc., 7.000%, Due 11/15/2025G			425,000			421,812
Ally Financial, Inc., 5.125%, Due 9/30/2024			300,000			316,125
Cornerstone Chemical Co., 6.750%, Due 8/15/2024G			100,000			100,250
Credit Acceptance Corp.,
6.125%, Due 2/15/2021			575,000			580,750
7.375%, Due 3/15/2023			100,000			104,500
CyrusOne LP / CyrusOne Finance Corp., 5.375%, Due 3/15/2027			125,000			130,000
Equinix, Inc.,
5.375%, Due 1/1/2022			250,000			259,063
5.875%, Due 1/15/2026			250,000			265,625
FelCor Lodging LP, 5.625%, Due 3/1/2023			375,000			384,375
Greystar Real Estate Partners LLC, 5.750%, Due 12/1/2025G			50,000			51,375
Icahn Enterprises LP / Icahn Enterprises Finance Corp.,
6.000%, Due 8/1/2020			300,000			307,035
6.250%, Due 2/1/2022			100,000			102,750
iStar, Inc., 4.625%, Due 9/15/2020			300,000			303,750

See accompanying notes

13

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 61.91% (continued)
Financial - 6.81% (continued)
Ladder Capital Finance Holdings LLLP / Ladder Capital Finance Corp., 5.875%, Due 8/1/2021G		$	90,000		$	92,925
LPL Holdings, Inc., 5.750%, Due 9/15/2025G			425,000			433,500
Navient Corp., 5.875%, Due 3/25/2021			1,000,000			1,030,000
Oxford Finance LLC / Oxford Finance Co-Issuer II, Inc., 6.375%, Due 12/15/2022G			175,000			180,661
SBA Communications Corp., 4.875%, Due 7/15/2022			400,000			409,500
Springleaf Finance Corp., 5.250%, Due 12/15/2019			500,000			515,000
						5,988,996
Industrial - 4.57%
Energizer Holdings, Inc., 5.500%, Due 6/15/2025G			650,000			666,250
Gibraltar Industries, Inc., 6.250%, Due 2/1/2021			250,000			253,750
Grinding Media, Inc. / Moly-Cop AltaSteel Ltd., 7.375%, Due 12/15/2023G			575,000			612,375
Ingram Micro, Inc.,
5.000%, Due 8/10/2022			100,000			99,760
5.450%, Due 12/15/2024			350,000			346,685
Novelis Corp., 5.875%, Due 9/30/2026G			500,000			515,295
Plastipak Holdings, Inc., 6.250%, Due 10/15/2025G			175,000			181,563
Standard Industries, Inc., 5.375%, Due 11/15/2024G			500,000			517,500
TransDigm, Inc., 6.000%, Due 7/15/2022			550,000			564,437
Tutor Perini Corp., 6.875%, Due 5/1/2025G			250,000			266,250
						4,023,865
Technology - 4.32%
Advanced Micro Devices, Inc., 7.000%, Due 7/1/2024			500,000			525,000
BMC Software Finance, Inc., 8.125%, Due 7/15/2021G			500,000			500,625
First Data Corp., 7.000%, Due 12/1/2023G			425,000			447,580
Harland Clarke Holdings Corp., 8.375%, Due 8/15/2022G			75,000			78,188
Infor Software Parent LLC / Infor Software Parent, Inc., 7.125%, Due 5/1/2021, Cash (7.125%) or PIK (7.875%)G			150,000			153,000
j2 Cloud Services LLC / j2 Global Co-Obligor, Inc., 6.000%, Due 7/15/2025G			500,000			528,750
Micron Technology, Inc., 5.500%, Due 2/1/2025			33,000			34,609
NCR Corp., 5.000%, Due 7/15/2022			500,000			510,150
Solera LLC / Solera Finance, Inc., 10.500%, Due 3/1/2024G			425,000			476,531
Western Digital Corp., 7.375%, Due 4/1/2023G			500,000			544,375
						3,798,808
Utilities - 2.66%
AES Corp.,
5.500%, Due 3/15/2024			250,000			257,575
6.000%, Due 5/15/2026			125,000			134,063
Calpine Corp., 5.250%, Due 6/1/2026G			700,000			686,875
Dynegy, Inc., 7.375%, Due 11/1/2022			500,000			528,200
NRG Energy, Inc.,
6.250%, Due 7/15/2022			100,000			103,625
6.250%, Due 5/1/2024			250,000			261,345
Talen Energy Supply LLC, 9.500%, Due 7/15/2022G			350,000			365,925
						2,337,608
Total Corporate Obligations (Cost $54,180,211)						54,451,058
FOREIGN CORPORATE OBLIGATIONS - 17.94%
Basic Materials - 2.05%
Alcoa Nederland Holding B.V., 7.000%, Due 9/30/2026G			350,000			387,975
Constellium N.V., 5.750%, Due 5/15/2024G			100,000			102,250
INEOS Group Holdings S.A., 5.625%, Due 8/1/2024G			250,000			256,563
New Gold, Inc., 6.250%, Due 11/15/2022G			700,000			717,500
NOVA Chemicals Corp., 4.875%, Due 6/1/2024G			125,000			125,781
Perstorp Holding AB, 8.500%, Due 6/30/2021G			204,000			217,362
						1,807,431
Communications - 2.93%
Altice Luxembourg S.A., 7.750%, Due 5/15/2022G			100,000			96,000
SFR Group S.A., 6.000%, Due 5/15/2022G			350,000			341,583
Telecom Italia SpA, 5.303%, Due 5/30/2024G			400,000			422,500
Virgin Media Finance PLC, 6.375%, Due 4/15/2023G			500,000			515,000
VTR Finance B.V., 6.875%, Due 1/15/2024G			290,000			305,225

See accompanying notes

14

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount			Fair Value
FOREIGN CORPORATE OBLIGATIONS - 17.94% (continued)
Communications - 2.93% (continued)
Wind Tre SpA, 5.000%, Due 1/20/2026G		$	500,000		$	453,810
Ziggo Bond Finance B.V., 6.000%, Due 1/15/2027G			150,000			147,750
Ziggo Secured Finance B.V., 5.500%, Due 1/15/2027G			300,000			297,750
						2,579,618
Consumer, Cyclical - 3.29%
1011778 BC ULC / New Red Finance, Inc., 4.250%, Due 5/15/2024G			500,000			491,250
Aston Martin Capital Holdings Ltd., 6.500%, Due 4/15/2022G			400,000			422,500
Fiat Chrysler Automobiles N.V., 5.250%, Due 4/15/2023			150,000			158,700
International Game Technology PLC, 6.500%, Due 2/15/2025G			500,000			556,250
Mclaren Finance PLC, 5.750%, Due 8/1/2022G			375,000			384,563
Melco Resorts Finance Ltd., 4.875%, Due 6/6/2025G			225,000			224,781
Silversea Cruise Finance Ltd., 7.250%, Due 2/1/2025G			250,000			269,500
Viking Cruises Ltd., 6.250%, Due 5/15/2025G			300,000			310,500
VOC Escrow Ltd., 5.000%, Due 2/15/2028G			75,000			74,625
						2,892,669
Consumer, Non-Cyclical - 1.91%
Clearwater Seafoods, Inc., 6.875%, Due 5/1/2025G			100,000			102,000
IHS Markit Ltd., 5.000%, Due 11/1/2022G			325,000			344,906
Mallinckrodt International Finance S.A. / Mallinckrodt CB LLC, 5.625%, Due 10/15/2023G			350,000			299,250
Valeant Pharmaceuticals International, Inc.,
7.000%, Due 3/15/2024G			500,000			531,720
6.125%, Due 4/15/2025G			450,000			402,840
						1,680,716
Energy - 2.60%
Ensco PLC, 5.750%, Due 10/1/2044			225,000			160,594
MEG Energy Corp.,
6.375%, Due 1/30/2023G			300,000			258,000
7.000%, Due 3/31/2024G			50,000			43,313
Noble Holding International Ltd., 7.750%, Due 1/15/2024			325,000			301,437
Transocean, Inc., 8.375%, Due 12/15/2021			250,000			276,875
Weatherford International Ltd.,
5.125%, Due 9/15/2020			500,000			512,500
4.500%, Due 4/15/2022			250,000			236,250
Welltec A/S, 9.500%, Due 12/1/2022G			475,000			496,612
						2,285,581
Financial - 1.38%
goeasy Ltd., 7.875%, Due 11/1/2022G			325,000			346,938
Intesa Sanpaolo SpA, 5.017%, Due 6/26/2024G			600,000			612,474
Royal Bank of Scotland Group PLC, 4.700%, Due 7/3/2018			250,000			252,524
						1,211,936
Industrial - 2.54%
Ardagh Packaging Finance PLC , 7.250%, Due 5/15/2024G			300,000			322,410
Ardagh Packaging Finance PLC / Ardagh Holdings USA, Inc., 4.625%, Due 5/15/2023G			50,000			50,500
Bombardier, Inc., 6.000%, Due 10/15/2022G			550,000			550,000
Cemex S.A.B. de C.V., 7.750%, Due 4/16/2026G			500,000			566,250
Park Aerospace Holdings Ltd.,
5.250%, Due 8/15/2022G			250,000			246,875
5.500%, Due 2/15/2024G			500,000			495,000
						2,231,035
Technology - 1.24%
Open Text Corp., 5.875%, Due 6/1/2026G			550,000			578,875
Seagate HDD Cayman, 4.750%, Due 6/1/2023			500,000			514,375
						1,093,250
Total Foreign Corporate Obligations (Cost $15,663,957)						15,782,236

See accompanying notes

15

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
SHORT-TERM INVESTMENTS - 2.48% (Cost $2,182,064)
Investment Companies - 2.48%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.25%F H		2,182,064		$	2,182,064
TOTAL INVESTMENTS - 96.64% (Cost $84,572,898)					85,001,861
OTHER ASSETS, NET OF LIABILITIES - 3.36%					2,953,931
TOTAL NET ASSETS - 100.00%				$	87,955,792
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $507 or 0.00% of net assets. Value was determined using significant unobservable inputs.

^C Bank loan obligations, unless otherwise stated, carry a floating rate of interest. The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

^D Coupon rates may not be available for bank loans that are unsettled and/or unfunded as of January 31, 2018.

^E Unfunded Loan Commitment. At period end, the amount of unfunded loan commitments was $39,946 or 0.05% of net assets. Of this amount, $8,333 relates to Institutional Shareholder Services, Inc., $9,511 relates to Lakeland Tours LLC, and $22,102 relates to TGP Holdings III LLC.

^F 7-day yield.

^G Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $35,932,850 or 40.85% of net assets. The Fund has no right to demand registration of these securities.

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

DIP - Debtor in Possession.

LIBOR - London Interbank Offered Rate.

LLC - Limited Liability Company.

LLLP - Limited Liability Limited Partnership.

LP - Limited Partnership.

PIK - Payment in Kind.

PLC - Public Limited Company.

PRIME - A rate, charged by banks, based on the U.S. Federal Funds rate.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of January 31, 2018, the investments were classified as described below:

Crescent Short Duration High Income Fund	Level 1		Level 2		Level 3		Total
Assets
Common Stocks	$	-	$	-	$	507	$	507
Bank Loan Obligations		-		12,585,996		-		12,585,996
Corporate Obligations		-		54,451,058		-		54,451,058
Foreign Corporate Obligations		-		15,782,236		-		15,782,236
Short-Term Investments		2,182,064		-		-		2,182,064
Total Investments in Securities – Assets	$	2,182,064	$	82,819,290	$	507	$	85,001,861

U.S. GAAP requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of the Fund’s assets and liabilities. During the year ended January 31, 2018, there were transfers from Level 1 to Level 3, with a fair value of $507, due to the security being priced by a single broker quote.

The following table is a reconciliation of Level 3 assets within 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:

See accompanying notes

16

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2018

Security Type	Balance as of 1/31/2017	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 1/31/2018		Change in Unrealized Appreciation (Depreciation) at Period end**
Common Stocks	$-	$-	$-	$	-	$	-	$	-	$	507	$	-	$	507	$	507

** 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 stocks classified as Level 3 were fair valued using private valuation reports provided to the Fund’s Sub-Advisor from a pricing vendor.

See accompanying notes

17

American Beacon Crescent Short Duration High Income Fund^SM

Statement of Assets and Liabilities

January 31, 2018

Assets:
Investments in unaffiliated securities, at fair value†	$	82,819,797
Investments in affiliated securities, at fair value‡		2,182,064
Cash		16,644
Dividends and interest receivable		1,178,117
Receivable for investments sold		4,601,394
Receivable for fund shares sold		478,557
Receivable for expense reimbursement (Note 2)		33,172
Prepaid expenses		27,897
Total assets		91,337,642
Liabilities:
Payable for investments purchased		3,070,808
Payable for fund shares redeemed		93,696
Dividends payable		2,321
Unfunded loan commitments		39,946
Management and sub-advisory fees payable (Note 2)		54,556
Service fees payable (Note 2)		1,363
Transfer agent fees payable (Note 2)		1,339
Custody and fund accounting fees payable		43,804
Professional fees payable		62,204
Trustee fees payable (Note 2)		280
Payable for prospectus and shareholder reports		7,743
Other liabilities		3,790
Total liabilities		3,381,850
Net assets	$	87,955,792
Analysis of net assets:
Paid-in-capital	$	89,965,244
Undistributed net investment income		30,552
Accumulated net realized (loss)		(2,468,967	)
Unrealized appreciation of investments in unaffiliated securitiesA		428,963
Net assets	$	87,955,792
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		8,230,944
Y Class		614,123
Investor Class		102,123
A Class		171,455
C Class		55,924
Net assets:
Institutional Class	$	78,914,147
Y Class	$	5,883,759
Investor Class	$	979,646
A Class	$	1,642,414
C Class	$	535,826
Net asset value, offering and redemption price per share:
Institutional Class	$	9.59
Y Class	$	9.58
Investor Class	$	9.59
A Class	$	9.58
A Class (offering price)	$	9.83
C Class	$	9.58
† Cost of investments in unaffiliated securities	$	82,390,834
‡ Cost of investments in affiliated securities	$	2,182,064
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

18

American Beacon Crescent Short Duration High Income Fund^SM

Statement of Operations

For the year ended January 31, 2018

Investment income:
Dividend income from affiliated securities	$	34,409
Interest income		4,572,529
Total investment income		4,606,938
Expenses:
Management and sub-advisory fees (Note 2)		602,428
Transfer agent fees:
Institutional Class (Note 2)		7,379
Y Class (Note 2)		4,414
Investor Class		1,706
A Class		12
Custody and fund accounting fees		57,941
Professional fees		80,629
Registration fees and expenses		69,195
Service fees (Note 2):
Y Class		980
Investor Class		4,858
A Class		2,426
C Class		870
Distribution fees (Note 2):
A Class		4,043
C Class		5,799
Prospectus and shareholder report expenses		24,634
Trustee fees (Note 2)		4,559
Other expenses		13,302
Total expenses		885,175
Net fees waived and expenses (reimbursed) (Note 2)		(175,701	)
Net expenses		709,474
Net investment income		3,897,464
Realized and unrealized gain (loss) from investments:
Net realized gain from:
Investments in unaffiliated securitiesA		323,728
Change in net unrealized appreciation of:
Investments in unaffiliated securitiesB		(801,438	)
Net (loss) from investments		(477,710	)
Net increase in net assets resulting from operations	$	3,419,754
A The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities.
B The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at year end.

See accompanying notes

19

American Beacon Crescent Short Duration High Income Fund^SM

Statement of Changes in Net Assets

	Year Ended January 31, 2018			Year Ended January 31, 2017
Increase (decrease) in net assets:
Operations:
Net investment income	$	3,897,464		$	2,419,008
Net realized gain (loss) from investments in unaffiliated securities		323,728			(1,100,111	)
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities		(801,438	)		4,409,874
Net increase in net assets resulting from operations		3,419,754			5,728,771
Distributions to shareholders:
Net investment income:
Institutional Class		(3,407,440	)		(1,882,382	)
Y Class		(295,367	)		(321,091	)
Investor Class		(86,903	)		(147,957	)
A Class		(72,041	)		(50,709	)
C Class		(21,430	)		(16,867	)
Net distributions to shareholders		(3,883,181	)		(2,419,006	)
Capital share transactions (Note 9):
Proceeds from sales of shares		32,726,092			19,803,117
Reinvestment of dividends and distributions		3,843,806			2,333,667
Cost of shares redeemed		(10,553,290	)		(13,547,704	)
Net increase in net assets from capital share transactions		26,016,608			8,589,080
Net increase in net assets		25,553,181			11,898,845
Net assets:
Beginning of period		62,402,611			50,503,766
End of period*	$	87,955,792		$	62,402,611
*Includes undistributed net investment income	$	30,552		$	310

See accompanying notes

20

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

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 amended, as a diversified, open-end management investment company. As of January 31, 2018, the Trust consists of thirty-three active series, one of which is presented in this filing: American Beacon Crescent Short Duration High Income Fund (the “Fund”). The remaining thirty-two 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.

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 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
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 through 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 service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.

Recently Adopted 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, and has been adopted accordingly.

Significant Accounting Policies

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

21

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946, Financial Services - Investment Companies, a part of 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.

Distributions to Shareholders

Distributions, if any, of net investment income are generally paid monthly and recorded on the ex-dividend date. 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.

Allocation of Income, Trust Expenses, Gains, and Losses

Investment income, realized and unrealized gains and losses from investments of the Fund is allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Fund. Expenses directly charged or attributable to any Fund will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Fund on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Fund or nature of the services performed and relative applicability to the Fund.

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.

Concentration of Ownership

From time to time, the Fund 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 significant

22

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

ownership of more than 5% of the Fund’s outstanding shares could have a material impact on the Fund. As of January 31, 2018, based on management’s evaluation of the shareholder account base, two accounts in the Crescent Short Duration High Income Fund have been identified as representing an unaffiliated significant ownership of approximately 43% of the Fund’s outstanding shares.

2.  Transactions with Affiliates

Management and Investment Sub-Advisory Agreements

The Fund and the Manager are parties to a Management Agreement that obligates the Manager to provide the Fund with investment advisory and administrative services. As compensation for performing the duties under the Management Agreement, the Manager will receive an annualized management fee based on a percentage of the Fund’s average daily net assets that is calculated and accrued daily according to the following schedule:

First $5 billion	0.35	%
Next $5 billion	0.325	%
Next $10 billion	0.30	%
Over $20 billion	0.275	%

The Trust, on behalf of the Fund, and the Manager have entered into an Investment Advisory Agreement with the following Sub-Advisor pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund’s average daily net assets according to the following schedule:

First $250 million	0.40	%
Next $750 million	0.35	%
Over $1 billion	0.30	%

The Management and Sub-Advisory Fees paid by the Fund during the year ended January 31, 2018 were as follows:

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	281,133
Sub-Advisor Fees		0.40	%		321,295
Total		0.75	%	$	602,428

Distribution Plans

The Fund, except for the 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 fee 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 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 A 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.

Service Plans

The Manager and the Trust entered into Service Plans that obligates the Manager to oversee additional shareholder servicing of the Y, Investor, A, and C Classes of the Fund. As compensation for performing the duties

23

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

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 0.25% of the average daily net assets of the A and C Classes, and up to 0.375% of the average daily net assets of the Investor Class of the Fund. 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 intermediary for providing services to Y class. Intermediaries transact with the Fund primarily through the use of omnibus accounts on behalf of their 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 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 year ended January 31, 2018, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Crescent Short Duration High Income	$	8,811

As of January 31, 2018, 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
Crescent Short Duration High Income	$	603

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 and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the year ended January 31, 2018, the Manager earned fees on the Fund’s direct investments in the USG Select Fund as shown below:

Fund	Direct Investments in USG Select Fund
Crescent Short Duration High Income	$	4,167

Interfund Credit Facility

Pursuant to an exemptive order issued by the Securities and Exchange Commission (“SEC”), the Fund, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each Fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating Funds for temporary purposes. The interfund credit facility is advantageous to the Funds because it provides added liquidity, and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain

24

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a Fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended January 31, 2018, the Fund did not utilize the credit facility.

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Fund to the extent that total operating expenses exceed the Fund’s expense cap. During the year ended January 31, 2018, the Manager waived and/or reimbursed expenses as follows:

		Expense Cap							Expiration of Reimbursed Expenses
Fund	Class	2/1/2017 - 1/31/2018			Reimbursed Expenses		(Recouped) Expenses
Crescent Short Duration High Income	Institutional		0.85	%	$	155,995	$	-		2021
Crescent Short Duration High Income	Y		0.95	%		12,077		-		2021
Crescent Short Duration High Income	Investor		1.23	%		3,090		-		2021
Crescent Short Duration High Income	A		1.25	%		3,350		-		2021
Crescent Short Duration High Income	C		2.00	%		1,189		-		2021

Of these amounts, $33,172 is disclosed as a receivable from the Manager to the Crescent Short Duration High Income Fund on the Statement of Assets and Liabilities at January 31, 2018. 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 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 listed above will expire in 2021. The Fund did not record a liability for potential reimbursements due to the current assessment that reimbursements are unlikely. The carryover of excess expenses potentially reimbursable to the Manager are as follows:

Fund	Recouped Expenses		Excess Expense Carryover		Expired Expense Carryover		Expiration of Reimbursed Expenses
Crescent Short Duration High Income	$	-	$	180,253	$	-		2019
Crescent Short Duration High Income		-		201,928		-		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 year ended January 31, 2018, Foreside collected $1,403 for the Fund from the sale of Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Fund’s 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 year ended January 31, 2018, there were no CDSC fees collected for Class A Shares of the Fund.

25

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

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 Fund’s 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 year ended January 31, 2018, CDSC fees of $329 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 $10,000 for each Board 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 $2,500 fee each quarter for his attendance at the committee meetings. Effective January 1, 2018, the Board Vice Chair receives an additional annual retainer of $10,000. 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 Trusts 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.

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.

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 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.

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

Level 3 - Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment.

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

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

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

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 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

27

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

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 (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold.

4.  Securities and Other Investments

Bank Loans and Senior Loans

Loans are typically administered by a bank, insurance company, finance company or other financial institution (the “agent”) for a lending syndicate of financial institutions. In a typical loan, the agent administers the terms of the loan agreement and is responsible for the collection of principal and interest and fee payments from the borrower and the apportionment of these payments to all lenders that are parties to the loan agreement. In addition, an institution (which may be the agent) may hold collateral on behalf of the lenders. Typically, under loan agreements, the agent is given broad authority in monitoring the borrower’s performance and is obligated to use the same care it would use in the management of its own property. In asserting rights against a borrower, the Fund normally will be dependent on the willingness of the lead bank to assert these rights, or upon a vote of all the lenders to authorize the action. If an agent becomes insolvent, or has a receiver, conservator, or similar official appointed for it by the appropriate regulatory authority, or becomes a debtor in a bankruptcy proceeding, the agent’s appointment may be terminated and a successor agent would be appointed. If an appropriate regulator or court determines that assets held by the agent for the benefit of purchasers of loans are subject to the claims of the agent’s general or secured creditors, the Fund might incur certain costs and delays in realizing payment on a loan or suffer a loss of principal and/or interest. The Fund may be subject to similar risks when it buys a participation interest or an assignment from an intermediary.

Bank loans can be fixed and floating rate loans arranged through private negotiations between a company or a non-U.S. government and one or more financial institutions (lenders). The Fund may invest in senior loans, which are floating rate loans that hold a senior position in the capital structure of U.S. and foreign corporations, partnerships or other business entities that, under normal circumstances, allow them to have priority of claim ahead of other obligations of a borrower in the event of liquidation. Bank loans and senior loans may be collateralized or uncollateralized. They pay interest at rates that float above, or are adjusted periodically based on, a benchmark that reflects current interest rates. The Fund may invest in such loans in the form of participations in loans and assignments of all or a portion of loans from third parties. In connection with purchasing participations in such instruments, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement relating to the loan, nor any rights of set-off against the borrower, and the Fund may not benefit directly from any collateral supporting the loan in which it has purchased the participation. When the Fund purchases assignments from lenders, the Fund will acquire direct rights against the borrower on the loan.

The Fund earns a commitment fee, typically set as a percentage of the commitment amount. Such fee income, which is included in “Interest income” on the Statement of Operations, is recognized ratably over the commitment period. Unfunded floating rate loan interests are marked-to-market daily, and any unrealized appreciation (depreciation) is included on the Statement of Assets and Liabilities and Statement of Operations.

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

28

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

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.

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 a 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 specific characteristics of each security. Fixed-income securities are also subject to credit risk, which is the risk that the credit strength of an issuer of a fixed-income security will weaken and/or that the issuer will be unable to make timely principal and interest payments and that the security may go into default.

Delayed Funding Loans and Revolving Credit Facilities

A Fund may enter into, or acquire participations in, delayed funding loans and revolving credit facilities. Delayed funding loans and revolving credit facilities are borrowing arrangements in which the lender agrees to make loans up to a maximum amount upon demand by the borrower during a specific term. A revolving credit facility differs from a delayed funding loan in that as the borrower repays the loan, an amount equal to the repayment may be borrowed again during the term of the revolving credit facility. Delayed funding loans and revolving credit facilities usually provide for floating or variable rates of interest. These commitments may have the effect of requiring a Fund to increase its investment in a company at a time when it might not otherwise decide to do so (including at a time when the company’s financial condition makes it unlikely that such amounts will be repaid). To the extent that a Fund is committed to advance additional funds, it will at all times segregate or “earmark” assets, determined to be liquid in accordance with procedures established by the Trust’s Board, in an amount sufficient to meet such commitments.

A Fund may invest in delayed funding loans and revolving credit facilities with credit quality comparable to that of issuers of its securities investments. Delayed funding loans and revolving credit facilities may be subject to restrictions on transfer, and only limited opportunities may exist to resell such instruments. As a result, a Fund may be unable to sell such investments at an opportune time or may have to resell them at less than fair market value.

Floating Rate Loan Interest

The Fund may invest in floating rate loan interests. The floating rate loan interests held by the Fund are typically issued to companies (the “borrower”) by banks, other financial institutions, and privately and publicly offered corporations (the “lender”). Floating rate loan interests are generally non-investment grade, often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. Floating rate loan interests may include fully funded term loans or revolving lines of credit. Floating rate loan interests are typically senior in the corporate capital structure of the borrower. Floating rate loan interests generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. The base lending rates are generally the lending rate offered by one or more European banks, such as the London Interbank Offered Rate (“LIBOR”), the prime rate offered by one or more U.S. banks or the certificate of deposit rate. Floating rate loan interests may involve foreign borrowers, and investments may be denominated in foreign currencies. The Fund considers these investments to be investments in debt securities for purposes of its investment policies.

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

When the Fund purchases a floating rate loan interest it may receive a facility fee and when it sells a floating rate loan interest, it may pay a facility fee. On an ongoing basis, the Fund may receive a commitment fee based on the undrawn portion of the underlying line of credit amount of a floating rate loan interest. Facility and commitment fees are typically amortized to income over the term of the loan or term of the commitment, respectively. Consent and amendment fees are recorded to income as earned. Prepayment penalty fees, which may be received by the Fund upon the prepayment of a floating rate loan interest by a borrower, are recorded as realized gains. The Fund may invest in multiple series or tranches of a loan. A different series or tranche may have varying terms and carry different associated risks.

Floating rate loan interests are usually freely callable at the borrower’s option. The Fund may invest in such loans in the form of participations in loans (“Participations”) or assignments (“Assignments”) of all or a portion of loans from third parties. Participations typically will result in the Fund having a contractual relationship only with the lender, not with the borrower. The Fund will have the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the Participation and only upon receipt by the lender of the payments from the borrower. In connection with purchasing Participations, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement, nor any rights of offset against the borrower, and the Fund may not benefit directly from any collateral supporting the loan in which it has purchased the Participation. As a result, the Fund will assume the credit risk of both the borrower and the lender that is selling the Participation. The Fund’s investment in Participations involves the risk of insolvency of the financial intermediaries who are parties to the transactions. In the event of the insolvency of the lender selling the Participation, the Fund may be treated as a general creditor of the lender and may not benefit from any offset between the lender and the borrower. Assignments typically result in the Fund having a direct contractual relationship with the borrower, and the Fund may enforce compliance by the borrower with the terms of the loan agreement.

In connection with floating rate loan interests, the Fund may also enter into unfunded floating rate loan interests (“commitments”). In connection with these commitments, the Fund earns a commitment fee, typically set as a percentage of the commitment amount. Such fee income, which is included in “Interest income” on the Statement of Operations, is recognized ratably over the commitment period. Unfunded floating rate loan interests are marked-to-market daily, and any unrealized appreciation (depreciation) is included on the Statement of Assets and Liabilities and Statement of Operations.

Foreign Debt Securities

The Fund may invest in foreign fixed and floating rate income securities (including emerging market securities) all or a portion of which may be non-U.S. dollar denominated and which include: (a) debt obligations issued or guaranteed by foreign national, provincial, state, municipal or other governments with taxing authority or by their agencies or instrumentalities, including Brady Bonds; (b) debt obligations of supranational entities; (c) debt obligations of the U.S. Government issued in non-dollar securities; (d) debt obligations and other fixed income securities of foreign corporate issuers (both dollar and non-dollar denominated); and (e) U.S. corporate issuers (both Eurodollar and non-dollar denominated). There is no minimum rating criteria for the Fund’s investments in such securities. Investing in the securities of foreign issuers involves special considerations that are not typically associated with investing in the securities of U.S. issuers. In addition, emerging markets are markets that have risks that are different and higher than those in more developed markets.

High-Yield Securities

Non-investment-grade securities are rated below the four highest credit grades by at least one of the public rating agencies (or are unrated if not publicly rated). Participation in high-yielding securities transactions generally involves greater returns in the form of higher average yields. However, participation in such transactions involves greater risks, including sensitivity to economic changes, solvency, and relative liquidity in the secondary trading market. Lower ratings may reflect a greater possibility that the financial condition of the issuer, or adverse

30

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

changes in general economic conditions, or both, may impair the ability of the issuer to make payments of interest and principal. The prices and yields of lower-rated securities generally fluctuate more than higher-quality securities, and such prices may decline significantly in periods of general economic difficulty or rising interest.

Illiquid and Restricted Securities

The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities may be sold privately, but are required to be registered or exempted from such registration before being sold to the public. Private placement securities are generally considered to be restricted except for 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 during the year ended January 31, 2018 are disclosed in the Fund’s Notes to the Schedule of Investments.

Other Investment Company Securities and Other Exchange-Traded Products

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

Payment-In-Kind Securities

The Fund may invest in payment-in-kind securities (“PIKs”). PIKs give the issuer the option at each interest payment date of making interest payments in either cash or additional debt securities. Those additional debt securities usually have the same terms, including maturity dates and interest rates, and associated risks as the original bonds. The daily market quotations of the original bonds may include the accrued interest (referred to as a dirty price) and require a pro-rata adjustment from the “Unrealized appreciation (depreciation) of investments” to “Dividend and interest receivable” in the Statement of Assets and Liabilities.

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 derivatives contract or a loan, will fail to make timely payment of interest or principal or otherwise honor its obligations or default completely.

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

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 interest rates on 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.

High-Yield Securities Risk

Investing in high-yield, below investment-grade securities (commonly referred to as “junk bonds”) generally involves significantly greater risks of loss of your money than an investment in investment grade securities. High-yield debt securities may fluctuate more widely in price and yield and may fall in price when the economy is weak or expected to become weak. High-yield securities are considered to be speculative with respect to an issuer’s ability to pay interest and principal and carry a greater risk that the issuers of lower-rated securities will default on the timely payment of principal and interest. Below investment grade securities may experience greater price volatility and less liquidity than investment grade securities.

Illiquid and Restricted Securities Risk

Securities not registered in the U.S. under the Securities Act of 1933, as amended (the “Securities Act”), including Rule 144A securities, are restricted as to their resale. Such securities may not be listed on an exchange and may have no active trading market. They may be more difficult to purchase or sell at an advantageous time or price because such securities may not be readily marketable in broad public markets. The Fund may not be able to sell a restricted security when the sub-advisor considers it desirable to do so and/or may have to sell the security at a lower price than the Fund believes is its fair market value. In addition, transaction costs may be higher for restricted securities and the Fund may receive only limited information regarding the issuer of a restricted security. The Fund may have to bear the expense of registering restricted securities for resale and the risk of substantial delays in effecting the registration.

Interest Rate Risk

The Fund is subject to the risk that the market value of fixed-income securities or derivatives 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 to movements in interest rates. The Federal Reserve raised the federal funds rate in December 2016, March 2017, June 2017, and December 2017 and has signaled additional increases in 2018. Interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in substantial losses to the Fund. The prices of fixed-income securities or derivatives are also affected by their duration. Fixed-income securities or derivatives with longer duration generally have greater sensitivity to changes in interest rates. An increase in interest rates can impact markets broadly as well.

Liquidity Risk

The Fund is susceptible to the risk that certain investments held by the Fund may have limited marketability or be subject to restrictions on sale, and may be difficult to 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. For example, the Fund may be forced to sell certain investments at unfavorable prices to meet redemption requests or other cash needs.

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

Loan Interests Risk

Unlike publicly traded common stocks which trade on national exchanges, there is no central place or exchange for loans, including bank loans and senior loans, to trade. Loans trade in an over-the-counter market, and confirmation and settlement, which are effected through standardized procedures and documentation, may take significantly longer than seven days to complete. Extended trade settlement periods may, in unusual market conditions with a high volume of shareholder redemptions, present risk to shareholders regarding a Fund’s ability to pay redemption proceeds within the allowable time periods stated in its prospectus. The secondary market for floating rate loans also may be subject to irregular trading activity and wide bid/ask spreads. The lack of an active trading market for certain loans may impair the ability of a Fund to sell its loan interests at a time when it may otherwise be desirable to do so or may require a Fund to sell them at prices that are less than what a Fund regards as their fair market value and may make it difficult to value such loans. Interest in loans made to finance highly leveraged companies or transactions, such as corporate acquisitions, may be especially vulnerable to adverse changes in economic or market conditions. When a Fund’s loan interest is a participation, the Fund is subject to the risk that the party selling the participation interest will not remit a Fund’s pro rata share of loan payments to the Fund, and the Fund may have less control over the exercise of remedies than the party selling the participation interest.

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 the underlying funds in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those funds.

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

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 the 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.

Unrated Securities Risk

Because the Fund may purchase securities that are not rated by any rating organization, the sub-advisor, after assessing their credit quality, may internally assign ratings to certain of those securities in categories similar to those of rating organizations. Some unrated securities may not have an active trading market or may be difficult to value, which means a Fund might have difficulty selling them promptly at an acceptable price. Unrated securities may be subject to greater liquidity risk and price volatility.

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 distributions 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 January 31, 2018 remain 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:

	Year Ended January 31, 2018		Year Ended January 31, 2017
Distributions paid from:
Ordinary income*
Institutional Class	$	3,407,440	$	1,882,382
Y Class		295,367		321,091
Investors Class		86,903		147,957
A Class		72,041		50,709
C Class		21,430		16,867
Total distributions paid	$	3,883,181	$	2,419,006

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

34

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

As of January 31, 2018 the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Crescent Short Duration High Income	$	84,578,961	$	1,222,972	$	(800,072	)	$	422,900

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)			Other Temporary Differences			Distributable Earnings
Crescent Short Duration High Income	$	422,900	$	32,873	$	-	$	(2,462,904	)	$	(2,321	)	$	(2,009,452	)

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 dividends payable.

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 January 31, 2018:

Fund	Paid-In-Capital		Undistributed (Overdistribution of) Net Investment Income		Accumulated Net Realized Gain (Loss)			Net Unrealized Appreciation (Depreciation)
Crescent Short Duration High Income	$	-	$	15,959	$	(15,959	)	$	-

Under the Regulated Investment Company Modernization Act of 2010 (“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.

During the year January 31, 2018, the Fund had the following post RIC MOD capital loss carryforwards:

Fund	Short-Term Capital Loss Carryforwards		Long-Term Capital Loss Carryforwards
Crescent Short Duration High Income	$	1,116,531	$	1,346,373

The Fund utilized $275,396 in long-term capital loss carryforwards. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

7.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended January 31, 2018 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
Crescent Short Duration High Income	$	82,806,687	$	-	$	56,850,121	$	-

35

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

A summary of the Fund’s transactions in the USG Select Fund for the year ended January 31, 2018 were as follows:

Fund	Type of Transaction		January 31, 2017 Share/Fair Value		Purchases		Sales		January 31, 2018 Share/Fair Value		Dividend Income
Crescent Short Duration High Income		Direct	$	2,498,843	$	50,617,922	$	50,934,701	$	2,182,064	$	34,409

8.  Borrowing Arrangements

Effective November 16, 2017, the Fund, along with certain other funds managed by the Manager (“Participating Funds”), entered into a committed revolving line of credit (the “Committed Line”) agreement with State Street Bank and Trust Company (the “Bank”) to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Committed Line is $50 million with interest at a rate equal to the higher of (a) one-month London Inter-Bank Offered Rate (“LIBOR”) plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on amounts borrowed. Each of the Participating Funds will pay a commitment fee at a rate of 0.25% per annum on the unused portion of the Committed Line amount. The Committed Line expires November 15, 2018 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

Effective November 16, 2017, the Fund, along with certain other Participating Funds managed by the Manager, entered into an uncommitted discretionary demand revolving line of credit (the “Uncommitted Line”) agreement with the Bank to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Uncommitted Line is $50 million with interest at a rate equal to the higher of (a) one-month LIBOR plus 1.25% per annum or (b) the Federal Funds rate. The Uncommitted Line expires November 15, 2018 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

The Participating Funds paid administration, legal and arrangement fees, which are recognized as a component of “Other expenses” on the Statement of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets. During the year ended January 31, 2018, the Fund did not utilize this facility.

9.  Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Fund:

	Institutional Class
	Year Ended January 31,
	2018						2017
Crescent Short Duration High Income Fund	Shares			Amount			Shares			Amount
Shares sold		3,035,175		$	29,281,462			1,604,936		$	15,345,755
Reinvestment of dividends		353,215			3,406,053			199,329			1,878,899
Shares redeemed		(536,404	)		(5,189,606	)		(530,776	)		(4,904,046	)
Net increase in shares outstanding		2,851,986		$	27,497,909			1,273,489		$	12,320,608
	Y Class
	Year Ended January 31,
	2018						2017
Crescent Short Duration High Income Fund	Shares			Amount			Shares			Amount
Shares sold		216,234		$	2,083,182			374,672		$	3,523,009
Reinvestment of dividends		29,095			280,460			30,309			285,423
Shares redeemed		(283,003	)		(2,725,395	)		(695,631	)		(6,454,380	)
Net (decrease) in shares outstanding		(37,674	)	$	(361,753	)		(290,650	)	$	(2,645,948	)

36

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2018

	Investor Class
	Year Ended January 31,
	2018						2017
Crescent Short Duration High Income Fund	Shares			Amount			Shares			Amount
Shares sold		28,126		$	271,672			45,154		$	424,004
Reinvestment of dividends		7,617			73,541			11,800			111,013
Shares redeemed		(211,566	)		(2,043,360	)		(174,202	)		(1,643,102	)
Net (decrease) in shares outstanding		(175,823	)	$	(1,698,147	)		(117,248	)	$	(1,108,085	)
	A Class
	Year Ended January 31,
	2018						2017
Crescent Short Duration High Income Fund	Shares			Amount			Shares			Amount
Shares sold		83,232		$	802,939			26,753		$	254,321
Reinvestment of dividends		6,732			64,862			4,742			44,656
Shares redeemed		(41,404	)		(399,151	)		(23,427	)		(221,496	)
Net increase in shares outstanding		48,560		$	468,650			8,068		$	77,481
	C Class
	Year Ended January 31,
	2018						2017
Crescent Short Duration High Income Fund	Shares			Amount			Shares			Amount
Shares sold		29,843		$	286,837			27,226		$	256,028
Reinvestment of dividends		1,959			18,890			1,451			13,676
Shares redeemed		(20,299	)		(195,778	)		(34,989	)		(324,680	)
Net increase (decrease) in shares outstanding		11,503		$	109,949			(6,312	)	$	(54,976	)

10.  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.

37

American Beacon Crescent Short Duration High Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended January 31,									October 1, 2014A to January 31,
	2018			2017			2016			2015
Net asset value, beginning of period	$	9.64		$	9.01		$	9.68		$	10.00
Income (loss) from investment operations:
Net investment income		0.47			0.46			0.47			0.16
Net gains (losses) on investments (both realized and unrealized)		(0.05	)		0.63			(0.67	)		(0.32	)
Total income (loss) from investment operations		0.42			1.09			(0.20	)		(0.16	)
Less distributions:
Dividends from net investment income		(0.47	)		(0.46	)		(0.47	)		(0.16	)
Distributions from net realized gains		-			-			-			-
Total distributions		(0.47	)		(0.46	)		(0.47	)		(0.16	)
Net asset value, end of period	$	9.59		$	9.64		$	9.01		$	9.68
Total returnB		4.45	%		12.38	%		(2.23	)%		(1.65	)%C
Ratios and supplemental data:
Net assets, end of period	$	78,914,147		$	51,834,666		$	36,971,459		$	33,903,138
Ratios to average net assets:
Expenses, before reimbursements		1.07	%		1.26	%		1.27	%		2.24	%D
Expenses, net of reimbursements		0.85	%		0.85	%		0.85	%		0.85	%D
Net investment income, before expense reimbursements		4.66	%		4.51	%		4.41	%		3.37	%D
Net investment income, net of reimbursements		4.89	%		4.93	%		4.83	%		4.76	%D
Portfolio turnover rate		75	%		95	%		72	%		31	%E

^A  October 1, 2014 is the inception date of the Crescent Short Duration High Income Fund.

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

^C  Not annualized.

^D  Annualized.

^E  Portfolio turnover rate is for the period from October 1, 2014 through January 31, 2015 and is not annualized.

See accompanying notes

38

American Beacon Crescent Short Duration High Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended January 31,									October 1, 2014A to January 31,
	2018			2017			2016			2015
Net asset value, beginning of period	$	9.63		$	9.00		$	9.68		$	10.00
Income (loss) from investment operations:
Net investment income		0.46			0.45			0.46			0.15
Net gains (losses) on investments (both realized and unrealized)		(0.05	)		0.63			(0.68	)		(0.32	)
Total income (loss) from investment operations		0.41			1.08			(0.22	)		(0.17	)
Less distributions:
Dividends from net investment income		(0.46	)		(0.45	)		(0.46	)		(0.15	)
Distributions from net realized gains		-			-			-			-
Total distributions		(0.46	)		(0.45	)		(0.46	)		(0.15	)
Net asset value, end of period	$	9.58		$	9.63		$	9.00		$	9.68
Total returnB		4.33	%		12.27	%		(2.39	)%		(1.68	)%C
Ratios and supplemental data:
Net assets, end of period	$	5,883,759		$	6,277,416		$	8,481,991		$	98,343
Ratios to average net assets:
Expenses, before reimbursements		1.14	%		1.36	%		1.29	%		7.71	%D
Expenses, net of reimbursements		0.95	%		0.95	%		0.95	%		0.95	%D
Net investment income (loss), before expense reimbursements		4.59	%		4.42	%		4.80	%		(2.11	)%D
Net investment income, net of reimbursements		4.78	%		4.83	%		5.14	%		4.64	%D
Portfolio turnover rate		75	%		95	%		72	%		31	%E

^A  October 1, 2014 is the inception date of the Crescent Short Duration High Income Fund.

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

^C  Not annualized.

^D  Annualized.

^E  Portfolio turnover rate is for the period from October 1, 2014 through January 31, 2015 and is not annualized.

See accompanying notes

39

American Beacon Crescent Short Duration High Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended January 31,									October 1, 2014A to January 31,
	2018			2017			2016			2015
Net asset value, beginning of period	$	9.64		$	9.01		$	9.69		$	10.00
Income (loss) from investment operations:
Net investment income		0.44			0.43			0.44			0.14
Net gains (losses) on investments (both realized and unrealized)		(0.06	)		0.63			(0.68	)		(0.31	)
Total income (loss) from investment operations		0.38			1.06			(0.24	)		(0.17	)
Less distributions:
Dividends from net investment income		(0.43	)		(0.43	)		(0.44	)		(0.14	)
Distributions from net realized gains		-			-			-			-
Total distributions		(0.43	)		(0.43	)		(0.44	)		(0.14	)
Net asset value, end of period	$	9.59		$	9.64		$	9.01		$	9.69
Total returnB		4.04	%		11.96	%		(2.67	)%		(1.67	)%C
Ratios and supplemental data:
Net assets, end of period	$	979,646		$	2,679,338		$	3,560,159		$	189,898
Ratios to average net assets:
Expenses, before reimbursements		1.39	%		1.56	%		1.46	%		6.21	%D
Expenses, net of reimbursements		1.23	%		1.23	%		1.23	%		1.23	%D
Net investment income (loss), before expense reimbursements		4.33	%		4.22	%		4.44	%		(0.41	)%D
Net investment income, net of reimbursements		4.49	%		4.55	%		4.68	%		4.57	%D
Portfolio turnover rate		75	%		95	%		72	%		31	%E

^A  October 1, 2014 is the inception date of the Crescent Short Duration High Income Fund.

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

^C  Not annualized.

^D  Annualized.

^E  Portfolio turnover rate is for the period from October 1, 2014 through January 31, 2015 and is not annualized.

See accompanying notes

40

American Beacon Crescent Short Duration High Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended January 31,									October 1, 2014A to January 31,
	2018			2017			2016			2015
Net asset value, beginning of period	$	9.63		$	9.00		$	9.68		$	10.00
Income (loss) from investment operations:
Net investment income		0.43			0.43			0.43			0.14
Net gains (losses) on investments (both realized and unrealized)		(0.05	)		0.63			(0.68	)		(0.32	)
Total income (loss) from investment operations		0.38			1.06			(0.25	)		(0.18	)
Less distributions:
Dividends from net investment income		(0.43	)		(0.43	)		(0.43	)		(0.14	)
Distributions from net realized gains		-			-			-			-
Total distributions		(0.43	)		(0.43	)		(0.43	)		(0.14	)
Net asset value, end of period	$	9.58		$	9.63		$	9.00		$	9.68
Total returnB		4.02	%		11.94	%		(2.71	)%		(1.78	)%C
Ratios and supplemental data:
Net assets, end of period	$	1,642,414		$	1,183,362		$	1,033,329		$	98,255
Ratios to average net assets:
Expenses, before reimbursements		1.46	%		1.66	%		1.55	%		7.97	%D
Expenses, net of reimbursements		1.25	%		1.25	%		1.25	%		1.25	%D
Net investment income (loss), before expense reimbursements		4.26	%		4.13	%		4.28	%		(2.37	)%D
Net investment income, net of reimbursements		4.47	%		4.54	%		4.59	%		4.36	%D
Portfolio turnover rate		75	%		95	%		72	%		31	%E

^A  October 1, 2014 is the inception date of the Crescent Short Duration High Income Fund.

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

^C  Not annualized.

^D  Annualized.

^E  Portfolio turnover rate is for the period from October 1, 2014 through January 31, 2015 and is not annualized.

See accompanying notes

41

American Beacon Crescent Short Duration High Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended January 31,									October 1, 2014A to January 31,
	2018			2017			2016			2015
Net asset value, beginning of period	$	9.63		$	9.00		$	9.68		$	10.00
Income (loss) from investment operations:
Net investment income		0.36			0.35			0.36			0.12
Net gains (losses) on investments (both realized and unrealized)		(0.05	)		0.63			(0.68	)		(0.32	)
Total income (loss) from investment operations		0.31			0.98			(0.32	)		(0.20	)
Less distributions:
Dividends from net investment income		(0.36	)		(0.35	)		(0.36	)		(0.12	)
Distributions from net realized gains		-			-			-			-
Total distributions		(0.36	)		(0.35	)		(0.36	)		(0.12	)
Net asset value, end of period	$	9.58		$	9.63		$	9.00		$	9.68
Total returnB		3.24	%		11.10	%		(3.40	)%		(2.03	)%C
Ratios and supplemental data:
Net assets, end of period	$	535,826		$	427,829		$	456,828		$	97,911
Ratios to average net assets:
Expenses, before reimbursements		2.21	%		2.41	%		2.36	%		8.70	%D
Expenses, net of reimbursements		2.00	%		2.00	%		2.00	%		2.00	%D
Net investment income (loss), before expense reimbursements		3.51	%		3.37	%		3.76	%		(3.12	)%D
Net investment income, net of reimbursements		3.71	%		3.78	%		4.12	%		3.59	%D
Portfolio turnover rate		75	%		95	%		72	%		31	%E

^A  October 1, 2014 is the inception date of the Crescent Short Duration High Income Fund.

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

^C  Not annualized.

^D  Annualized.

^E  Portfolio turnover rate is for the period from October 1, 2014 through January 31, 2015 and is not annualized.

See accompanying notes

42

American Beacon Crescent Short Duration High Income Fund^SM

Federal Tax Information

January 31, 2018 (Unaudited)

Certain tax information regarding the Fund is required to be provided to shareholders based upon the Fund’s income and distributions for the taxable year ended January 31, 2018. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2017.

The Fund designated the following items with regard to distributions paid during the fiscal year ended January 31, 2018. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Fund to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Long-Term Capital Gain Distributions:

Crescent Short Duration High Income $                 -

Short-Term Capital Gain Distributions:

Crescent Short Duration High Income $                 -

Shareholders received notification in January 2018 of the applicable tax information necessary to prepare their 2017 income tax returns.

43

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

The Trustees and officers of the American Beacon Funds (the “Trust”) are listed below, together with their principal occupations during the past five years. The address of each person listed below is 220 Las Colinas Boulevard East, Suite 1200, Irving, Texas 75039. Each Trustee oversees thirty-five funds in the fund complex that includes the Trust, the American Beacon Select Funds and the American Beacon Institutional Funds Trust. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Alan D. Feld** (81)	Trustee since 1996	Sole Shareholder of a professional corporation which is a Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Mileage Funds (1996-2012); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Master Trust (1996-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (48)	Trustee since 2015	Director, Kura MD, Inc. (local telehealth organization) (2015-present); Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Vice President & CFO, Sierra Health Foundation: Center for Health Program Management (California public benefit corporation) (2012-Present); Director, Innovative North State (2012-2015); Director, Sacramento Regional Technology Alliance (2011-2016); Director, Women’s Empowerment (2009-2014); Director, Valley Healthcare Staffing (2017–present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Joseph B. Armes (55)	Trustee since 2015	Chairman & CEO, CSW Industrials f/k/a Capital Southwest Corporation (investment company) (2015-Present); Chairman of the Board of Capital Southwest Corporation, predecessor to CSW Industrials, Inc. (2014-present) (investment company); CEO, Capital Southwest Corporation (2013-2015); President & CEO, JBA Investment Partners (family investment vehicle) (2010-Present); Director and Chair of Audit Committee, RSP Permian (oil and gas producer) (2013-Present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Gerard J. Arpey (59)	Trustee since 2012	Director, The Home Depot, Inc. (2015-Present); Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Brenda A. Cline (57)	Trustee since 2004	Executive Vice President, Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Director, Range Resources Corporation (oil and natural gas company) (2015-Present); Director, Tyler Technologies, Inc. (public sector software solutions company) (2014-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).

44

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Eugene J. Duffy (63)	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-Present); Principal and Executive Vice President, Paradigm Asset Management (1994-2014); Director, Sunrise Bank of Atlanta (2008-2013); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
	Lifetime of Trust until removal, resignation or retirement*
Douglas A. Lindgren*** (56)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Managing Director, IPS Investment Management and Global Head, Content Management, UBS Wealth Management (2010-2016); Managing Director, P&S Hedge Funds, UBS Wealth Management (2008-2010); Managing Director, Head of Alternative Investments, UBS Financial Services, Inc. (2005-2008).
Richard A. Massman (74)	Trustee since 2004 Chairman since 2008	Consultant and General Counsel Emeritus, Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities) (2009-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Barbara J. McKenna, CFA (54)	Trustee since 2012	Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
R. Gerald Turner (72)	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-Present); Director, Kronus Worldwide Inc. (chemical manufacturing) (2003-Present); Trustee, American Beacon Mileage Funds (2001-2012); Trustee, American Beacon Select Funds (2001-Present); Trustee, American Beacon Master Trust (2001-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (63)	President since 2009	President, CEO and Director, American Beacon Advisors, Inc. (2009-Present); President, CEO and Director, Resolute Investment Managers, Inc. (2015-Present); President, CEO and Director, Resolute Acquisition, Inc. (2015-Present); President, CEO and Director, Resolute Topco, Inc. (2015-Present), President & CEO, Resolute Investment Holdings, LLC (2015-Present); President, CEO and Director, Lighthouse Holdings, Inc. (2009-2015); President and CEO, Lighthouse Holdings Parent, Inc. (2009-2015); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-Present); Director, ARK Investment Management LLC (2016-Present); Director, Shapiro Capital Management LLC (2017-Present); Member, Investment Advisory Committee, Employees Retirement System of Texas (2017-Present); Trustee, American Beacon NextShares Trust (2015-Present); President, American Beacon Select Funds (2009-Present); President, American Beacon Mileage Funds (2009-2012); President, American Beacon Master Trust (2009–2012); President, American Beacon Institutional Funds Trust (2017-Present).

45

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rosemary K. Behan (58)	VP, Secretary and Chief Legal Officer since 2006	Vice President and Secretary, American Beacon Advisors, Inc. (2006-Present); Secretary, Resolute Investment Holdings, LLC (2015-Present) Secretary, Resolute Investment Managers, Inc. (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015 – Present); Secretary, Lighthouse Holdings, Inc. (2008-2015); Secretary, Lighthouse Holdings Parent, Inc. (2008-2015); Secretary, American Private Equity Management, LLC (2008-Present); Secretary, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Secretary, Alpha Quant Advisors, LLC (2016-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Select Funds (2006-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Mileage Funds (2006-2012); Chief Legal Officer, Vice President and Secretary, American Beacon Master Trust (2006-2012); Chief Legal Officer, Vice President and Secretary, American Beacon Institutional Funds Trust (2017-Present).
Brian E. Brett (57)	VP since 2004	Senior Vice President (2012-Present) and Vice President (2004-2012), American Beacon Advisors, Inc.; Vice President, American Beacon Select Funds (2004-Present); Vice President, American Beacon Mileage Funds (2004-2012); Vice President, American Beacon Master Trust (2004-2012); Vice President, American Beacon Institutional Funds Trust (2017-Present).
Paul B. Cavazos(48)	VP since 2016	Senior Vice President, American Beacon Advisors, Inc. (2016-Present); Chief Investment Officer and Assistant Treasurer, DTE Energy (2007-2016); Vice President, American Beacon Select Funds (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present).
Erica Duncan (47)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Mileage Funds (2011-2012); Vice President, American Beacon Master Trust (2011-2012); Vice President, American Beacon Institutional Funds Trust (2017-Present).
Melinda G. Heika (56)	Treasurer since 2010	Treasurer, American Beacon Advisors, Inc. (2010-Present); Resolute Investment Managers, Inc. (2015-Present); Treasurer, Resolute Acquisition, Inc. (2015-Present); Treasurer, Resolute Topco, Inc. (2015-Present); Treasurer, Resolute Investment Holdings, LLC. (2015-Present); Treasurer, Lighthouse Holdings, Inc. (2010-2015); Treasurer, Lighthouse Holdings Parent Inc., (2010-2015); Treasurer, American Private Equity Management, LLC (2012-Present); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Select Funds (2010-Present); Treasurer, American Beacon Mileage Funds (2010-2012); Treasurer, American Beacon Master Trust (2010-2012); Treasurer, American Beacon Institutional Funds Trust (2017-Present).
Terri L. McKinney (54)	VP since 2010	Vice President (2009-Present) and Managing Director (2003-2009), American Beacon Advisors, Inc.; Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Mileage Funds (2010-2012); Vice President, American Beacon Master Trust (2010-2012); Vice President, American Beacon Institutional Funds Trust (2017-Present).

46

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Jeffrey K. Ringdahl (42)	VP since 2010	Senior Vice President (2013-Present), Vice President (2010-2013), and Director (2015-Present), American Beacon Advisors, Inc.; Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Mileage Funds (2010-2012); Vice President, American Beacon Master Trust (2010-2012); Senior Vice President (2012-Present) and Manager (2015-Present), American Private Equity Management, LLC; Senior Vice President, Lighthouse Holdings, Inc. (2013-2015); Senior Vice President, Lighthouse Holdings Parent, Inc. (2013-2015); Director and Vice President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Trustee, American Beacon NextShares Trust (2015-Present); Director and Senior Vice Present, Resolute Investment Holdings, LLC (2015-Present); Director and Senior Vice President, Resolute Topco, Inc. (2015-Present); Director and Senior Vice President, Resolute Acquisition, Inc. (2015-Present); Director and Senior Vice President, Resolute Investment Managers, Inc. (2015-Present); Director, Executive Vice President and Chief Operating Officer, Alpha Quant Advisors, LLC (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-President); Director, Shapiro Capital Management, LLC (2017-Present).
Samuel J. Silver (54)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Mileage Funds (2011-2012); Vice President, American Beacon Master Trust (2011-2012); American Beacon Institutional Funds Trust (2011-Present).
Christina E. Sears (46)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Chief Compliance Officer, American Beacon Advisors, Inc. (2004-Present); Chief Compliance Officer, American Private Equity Management, LLC (2012-Present); Chief Compliance Officer and Vice President, Alpha Quant Advisors, LLC (2016-Present); Chief Compliance Officer (2004-Present) and Assistant Secretary (1999-Present), American Beacon Select Funds; Chief Compliance Officer (2004-2012) and Assistant Secretary (1999-2012), American Beacon Mileage Funds; Chief Compliance Officer (2004-2012) and Assistant Secretary (1999-2012), American Beacon Master Trust; Chief Compliance Officer and Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).
Sonia L. Bates (61)	Asst. Treasurer since 2011	Assistant Treasurer, American Beacon Advisors, Inc. (2011-Present); Assistant Treasurer, Resolute Investment Managers, Inc. (2015-Present); Assistant Treasurer, Resolute Acquisition, Inc. (2015-Present); Assistant. Treasurer, Resolute Topco, Inc. (2015-Present); Assistant Treasurer, Resolute Investment Holdings, LLC.; Assistant Treasurer, Lighthouse Holdings, Inc. (2011-2015); Assistant Treasurer, Lighthouse Holdings Parent Inc. (2011-2015); Assistant Treasurer, American Private Equity Management, LLC (2012-Present); Assistant Treasurer, American Beacon Select Funds (2011-Present); Assistant Treasurer American Beacon Mileage Funds (2011-2012); Assistant Treasurer, American Beacon Master Trust (2011-2012); Assistant Treasurer, American Beacon Institutional Funds Trust (2017-Present).
Shelley D. Abrahams (43)	Assistant Secretary since 2008	Assistant Secretary, American Beacon Advisors, Inc. (2008-Present); Assistant Secretary, American Beacon Select Funds (2008-Present); Assistant Secretary, American Beacon Mileage Funds (2008-2012); Assistant Secretary, American Beacon Master Trust (2008-2012); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).

47

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rebecca L. Harris (51)	Assistant Secretary since 2010	Vice President, American Beacon Advisors, Inc. (2016-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2010-Present); Assistant Secretary, American Beacon Mileage Funds (2010-2012); Assistant Secretary, American Beacon Master Trust (2010-2012); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).
Diana N. Lai (42)	Assistant Secretary since 2012	Assistant Secretary, American Beacon Advisors, Inc. (2012-Present); Assistant Secretary, American Beacon Select Funds (2012-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).
Teresa A. Oxford (59)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2015-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 75.

** Mr. Feld is deemed to be an “interested person” of the Trusts, as defined by the 1940 Act. Mr. Feld’s law firm of Akin, Gump, Strauss, Hauer & Feld LLP has provided legal services within the past two fiscal years to one or more of the Trust’s sub-advisors.

*** Douglas A. Lindgren became a new Trustee to each of the Trusts on 1/1/2018.

48

American Beacon Funds^SM

Privacy Policy

January 31, 2018 (Unaudited)

The American Beacon Funds recognize and respect the privacy of our shareholders. We are providing this notice to you so you will understand how shareholder information may be collected and used.

We may collect nonpublic personal information about you from one or more of the following sources:

• information we receive from you on applications or other forms;

• information about your transactions with us or our service providers; and

• information we receive from third parties.

We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.

We restrict access to your nonpublic personal information to those employees or service providers who need to know that information to provide products or services to you. To ensure the confidentiality of your nonpublic personal information, we maintain safeguards that comply with federal standards.

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52

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: 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 Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately sixty days after the end of each quarter.	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 DST Asset Manager Solutions, Inc. Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Boston, Massachusetts DISTRIBUTOR Resolute Investment Distributors, Inc. Irving, Texas

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 Crescent Short Duration High Income Fund are service marks of American Beacon Advisors, Inc.

AR 1/18

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.

GLOBAL EVOLUTION FRONTIER MARKETS INCOME FUND

Investing in foreign, emerging and frontier market securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in derivative instruments involves liquidity, credit, interest rate and market risks. The use of fixed-income securities entails interest rate and credit risks. 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.

GLG TOTAL RETURN FUND

Investing in foreign and emerging market securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in derivative instruments involves liquidity, credit, interest rate and market risks. The use of fixed-income securities entails interest rate and credit risks. Because the Fund may invest in fewer issuers than a more diversified portfolio, the fluctuating value of a single holding may have a greater effect on the value of the Fund. 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 January 31, 2018

Contents

President’s Message	1
Market and Performance Overviews	2
Expense Examples	9
Report of Independent Registered Public Accounting Firm	11
Schedules of Investments:
American Beacon Global Evolution Frontier Markets Income Fund	12
American Beacon GLG Total Return Fund	21
Financial Statements	28
Notes to Financial Statements	32
Financial Highlights:
American Beacon Global Evolution Frontier Markets Income Fund	60
American Beacon GLG Total Return Fund	65
Federal Tax Information	71
Trustees and Officers of the American Beacon Funds	72
Privacy Policy	77

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   At American Beacon, we are proud to offer a broad range of equity, fixed- income and alternative mutual fund products for institutions and individuals. Our mutual funds – which span the domestic, international, global, frontier and emerging markets – are sub-advised by experienced portfolio managers who employ distinctive investment processes to manage assets through a variety of economic and market conditions. Together, we work diligently to help our clients and shareholders meet their long-term financial goals.   Institutional wisdom, enduring value. Since our inception as a pension fiduciary in 1986, American Beacon has focused on identifying and overseeing institutional investment managers and portfolio risk management. In 1987, we leveraged our size and experience to launch a series of sub-advised, multi-

manager mutual funds providing individual investors access to many of the same institutional managers as our pension clients. Following the financial crisis in 2008, we saw that investors were looking for unique solutions from managers who were not necessarily mainstream. In 2010, we began offering mutual funds from single managers with distinctive investment styles or asset classes. As we continue to expand our family of funds, our solutions- based approach provides innovative investments.

Guiding principles. Our “manager of managers” philosophy is built on a long-standing history of innovative thinking, discipline and consistency in applying our solutions-based approach. As a manager of managers, our goal is to engage the most effective money managers for each asset class, investment style or market strategy – whether through a single sub-advisor or a combination of sub-advisors. Because we take our fiduciary responsibilities very seriously, our thorough manager evaluation and selection process is rigorous and ongoing. Our guiding principles – predictability, style consistency, competitive pricing and long-term relationships – provide a strong foundation for our due-diligence process. Our broad range of mutual funds helps investors navigate the economic storms and market downturns in the U.S. and abroad. Our years of experience evaluating sub-advisors have led us to identify and partner with asset managers who have adhered to their disciplined processes for many years and through multiple market cycles.

Focus on asset protection and risk mitigation. We strive to provide innovative, long-term products without gimmicks. From offering some of the first multi-manager funds, one of the first retirement-income funds and the first open-end mutual fund in the U.S. to focus primarily on frontier-market debt, our robust history includes applying a disciplined, solutions-based approach to our product development process to help protect assets and mitigate risk.

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

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Global Fixed-Income Market Overview

January 31, 2018 (Unaudited)

The global bond market produced positive returns over the 12-month period ended January 31, 2018, evidenced by the Bloomberg Barclays Global Aggregate Index return of 7.5%.

In response to better economic conditions, the U.S. Federal Reserve (the “Fed”) hiked rates at their March, June and December meetings during the 2017 calendar year. The rate hikes were highly anticipated and, thus, did not move markets as economic indicators and investor sentiment improved throughout the year. The U.S. Congress passed a tax-reform package in December, which gave the credit cycle an additional boost. The yield curve started flattening toward the end of the period, indicating the Fed’s rate hikes would help keep inflation in check. Other central banks, including the European Central Bank (“ECB”) and the Bank of Japan (“BOJ”), have not yet started raising rates, signifying some divergence among the three largest central banks.

Volatility throughout the period remained low by historical standards, which proved to be a healthy environment for credit markets as spreads moved lower. In the U.S., both high- and low-quality corporate credits had solid periods as investors continued to search for yield. The ICE BofAML US Corporate Index (Investment Grade) returned 5.1% and the ICE BofAML US High Yield Index returned 6.7% for the period.

Emerging and frontier market bonds performed well over the period as initial concerns over U.S. protectionism were replaced by optimism following a pickup in global growth and higher commodity prices. Market sentiment was occasionally shaken by country-specific news from countries like Brazil, Venezuela, South Africa and Turkey, as well as NAFTA negotiations exposing large conceptual disagreement. The JPMorgan Emerging Market Bond Index-Global Diversified (hard currency) posted a solid 8.6% return for the period. Local currency emerging-market results were even stronger as the JPMorgan Government Bond Index-Emerging Markets Global Diversified Index was up 17.7%. The smaller, less-developed frontier economies also produced strong results, represented by the JPMorgan Next Generation Markets Index, which returned 14.8%.

The period ended with optimism as the theme of synchronized global growth continues to play out. However, many risks could develop since the domestic environment is tightening and U.S. Treasury yields are expected to rise. It remains to be seen how the markets will react when other central banks, such as ECB and BOJ, begin to phase out accommodative policies or inflation meaningfully picks up.

2

American Beacon Global Evolution Frontier Markets Income Fund^SM Performance Overview

January 31, 2018 (Unaudited)

The Investor Class of the American Beacon Global Evolution Frontier Markets Income Fund (the “Fund”) returned 15.47% for the twelve-month period ending January 31, 2018. The Fund outperformed the JPMorgan EMBI Global Diversified Index (the “Index”) (hard currency) return of 8.64% for the period. For additional comparison, the JPMorgan GBI-EM Global Diversified Index (local currency) returned 17.72%, and the JP Morgan NEXGEM Index (local currency frontier markets) returned 14.76%.

Comparison of Change in Value of a $10,000 Investment for the period from 2/25/2014 through 1/31/2018

Total Returns for the Period ended January 31, 2018
	Ticker	1 Year			3 Years			Since Inception 2/25/2014			Value of $10,000 2/25/2014- 1/31/2018
Institutional Class (1,3)	AGEIX		15.92	%		7.81	%		6.64	%		$	12,879
Y Class (1,3)	AGEYX		15.84	%		7.63	%		6.54	%		$	12,830
Investor Class (1,3)	AGEPX		15.47	%		7.38	%		6.24	%		$	12,690
A without Sales Charge (1,3)	AGUAX		15.39	%		7.37	%		6.22	%		$	12,679
A with Sales Charge (1,3)	AGUAX		9.88	%		5.65	%		4.91	%		$	12,076
C without Sales Charge (1,3)	AGECX		14.54	%		6.56	%		5.39	%		$	12,297
C with Sales Charge (1,3)	AGECX		13.54	%		6.56	%		5.39	%		$	12,297
JPMorgan EMBI Global Diversified Index (2)			8.64	%		6.77	%		6.88	%		$	12,994

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please call 1-800-967-9009 or visit www.americanbeaconfunds.com. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only, and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of the fees charged to each Class of the Fund was waived from Fund inception through 2015 and partially recovered in 2016. Performance prior to waiving fees was lower than actual returns shown through 2015. A Class shares have a maximum sales charge of 4.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future.

3

American Beacon Global Evolution Frontier Markets Income Fund^SM Performance Overview

January 31, 2018 (Unaudited)

2. The JPMorgan EMBI Global Diversified Index is an emerging market debt benchmark that tracks dollar-denominated bonds issued by frontier and emerging market governments. 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, Investor, A, and C Class shares were 1.41%, 1.49%, 1.73%, 1.79% and 2.56%, 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.

Frontier markets performed well in the period as initial concerns over U.S. protectionism were replaced by optimism following a pickup in global growth and higher commodity prices. The Fund started the year with a small overweight in local currency exposure that steadily increased throughout the period.

The largest contributor to positive performance for the period was the overweight to local fixed income in Africa. In Zambia, the local currency position was a top contributor as the monetary easing cycle led to large capital gains as well as a contribution from high carry. Another top contributor was a local currency position in Mozambique where the commodity price recovery provided a tailwind and the currency appreciated after a multi-year currency crisis. A local currency position in Egypt performed strongly due to support provided by the IMF program which stabilized the Egyptian pound and allowed the high carry to contribute to performance. Additionally, local currency positions in Uganda and Nigeria were additive to performance.

The largest negative contributions to performance came from just three positions in Tajikistan, Ukraine and Algeria.

The sub-advisor’s investment process involves a top-down approach to assess macroeconomic factors affecting the relationships between developed, emerging and frontier countries, and a bottom-up process to identify fundamentally attractive investments. The sub-advisor also examines relative valuations across countries to identify appropriate risk-adjusted opportunities. This investment process has remained consistent since the Fund’s inception.

Top Ten Holdings (% Net Assets)
Dominican Republic International Bond, 11.500%, Due 5/10/2024		2.3
Mongolia Government International Bond, 8.750%, Due 3/9/2024		2.3
Angolan Government International Bond, 9.500%, Due 11/12/2025		2.2
Costa Rica Titulos de Propiedad, 9.660%, Due 9/30/2026		1.9
Ivory Coast Government International Bond, 5.750%, Due 12/31/2032		1.9
Republic of Cameroon International Bond, 9.500%, Due 11/19/2025		1.9
Iraq International Bond, 5.800%, Due 1/15/2028		1.8
Zambia Government Bond, 13.000%, Due 8/29/2026		1.7
Mozambique Government Bonds (Issuer ICBC Standard Bank PLC)		1.6
Republic of Tajikistan International Bond, 7.125%, Due 9/14/2027		1.6
Total Fund Holdings	117
Top Ten Country Weightings (% Investments)
Egypt		5.2
Sri Lanka		5.1
Ghana		5.1
Zambia		5.1
Nigeria		5.0
Argentina		4.9
Iraq		3.9
Uganda		3.8
Kenya		3.7
Ivory Coast		3.6
Sector Allocation (% Investments)
Foreign Sovereign Obligations		79.0
Credit-Linked Notes		19.7
Financial		1.3

4

American Beacon Global Evolution Frontier Markets Income Fund^SM Performance Overview

January 31, 2018 (Unaudited)

Country Allocation (% Investments)
Egypt	5.2
Sri Lanka	5.1
Ghana	5.1
Zambia	5.1
Nigeria	5.0
Argentina	4.9
Iraq	3.9
Uganda	3.8
Kenya	3.7
Ivory Coast	3.6
Dominican Republic	3.5
Ecuador	3.4
Ukraine	3.4
Uruguay	3.3
Angola	3.2
Costa Rica	3.1
Mongolia	3.0
Mozambique	2.8
Nicaragua	2.7
Kazakhstan	2.3
Cameroon	2.2
Georgia	1.9
Tajikistan	1.8
Supranational	1.7
Netherlands	1.5
United Kingdom	1.4
Ethiopia	1.3
Azerbaijan	1.2
Gabon	1.2
Tunisia	1.2
Paraguay	1.1
Suriname	1.0
Gambia	1.0
United States	1.0
Malawi	0.9
Rwanda	0.9
Armenia	0.9
Senegal	0.8
Belarus	0.8
Bosnia & Herzegovina	0.1

5

American Beacon GLG Total Return Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

The Investor Class of the American Beacon GLG Total Return Fund (the “Fund”) returned -1.05% for the twelve-month period ended January 31, 2018. The Fund underperformed the BofA Merrill Lynch 3 Month LIBOR Constant Maturity Index (the “Index”) return of 1.16% for the same period. For additional comparison, the JP Morgan EMBI Global Index (hard currency) returned 7.56%, and the JP Morgan GBI-EM Global Diversified Index (local currency) returned 17.72 %.

Comparison of Change in Value of a $10,000 Investment for the period from 5/20/2016 through 1/31/2018

Total Returns for the Period ended January 31, 2018
	Ticker	1 Year			Since Inception 5/20/2016			Value of $10,000 5/20/2016- 1/31/2018
Institutional Class (1,3)	GLGIX		-0.64	%		4.21	%		$	10,726
Y Class (1,3)	GLGYX		-0.78	%		4.06	%		$	10,701
Investor Class (1,3)	GLGPX		-1.05	%		3.78	%		$	10,652
A without Sales Charge (1,3)	GLGAX		-1.15	%		3.72	%		$	10,641
A Class with Sales Charge (1,3)	GLGAX		-5.83	%		0.79	%		$	10,135
C without Sales Charge (1,3)	GLGCX		-1.86	%		2.94	%		$	10,506
C Class with Sales Charge (1,3)	GLGCX		-2.86	%		2.94	%		$	10,506
Ultra Class (1,3)	GLGUX		-0.57	%		4.25	%		$	10,734
BofA Merrill Lynch 3-Month LIBOR Constant Maturity Index (2)			1.16	%		0.98	%		$	10,167
JPMorgan EMBI Global Index (2)			7.56	%		7.27	%		$	11,269

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. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only, and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of the fees charged to each Class of the Fund has been waived since Fund inception. Performance

6

American Beacon GLG Total Return Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

prior to waiving fees was lower than the actual returns shown since inception. A Class shares have a maximum sales charge of 4.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase.

2. The BofA Merrill Lynch 3-Month LIBOR Constant Maturity Index represents the London Interbank Offered Rate (LIBOR) with a constant 3-month average maturity. LIBOR is a composite of the rates of interest at which banks borrow from one another in the London market, and it is a widely used benchmark for short-term interest rates. The JPMorgan EMBI Global Index is an emerging market debt benchmark that tracks dollar-denominated bonds issued by emerging market governments. 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, Investor, A, C, and Ultra Class shares were 2.10%, 5.32%, 5.15%, 5.63%, 6.38% and 2.10%, 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.

Emerging-market debt continued to post strong returns during the period as investors flocked to the incremental yield and diversification of the asset class. In early 2017, however, the Fund began to adopt a defensive posture toward the market as valuations appeared to become stretched and investor exposures had become crowded. The Fund did maintain positions in higher-quality, short-duration sovereign and quasi-sovereign bonds denominated in U.S. dollars to generate income for the Fund, but the broader emerging-market exposures were significantly reduced.

The Fund reduced its exposures to local currencies early in the period, and by mid-2017, the Fund held a net short position in currency. The primary shorts were in the Brazilian real, Indonesian rupiah, South Korean won and Russian ruble. The Fund held a long position in the Mexican peso that added value, but overall, the Fund was short currency.

In addition, the Fund reduced its credit exposure to a variety of emerging market countries as credit spreads became too narrow to justify the risk. The Fund developed this position primarily by entering into credit default swap transactions wherein the Fund purchased credit protection on the sovereign issuers. This resulted in net short exposure to emerging market credit risk. By period end, the largest short positions were in Argentina, Indonesia, South Africa, Lebanon and Russia.

Investor sentiment toward emerging market credit had become significantly overweight, and the fundamentals in many countries were weakening (current account balances, inflation expectations, currency valuations, fiscal spending, etc.). Credit spreads also had become historically narrow as investors searched for yield. As a result, the Fund positioned itself for an eventual reversal in the markets.

The sub-advisor has maintained a consistent top-down and bottom-up approach toward the markets since the Fund’s inception, and the sub-advisor seeks to generate attractive long-term results with lower volatility than that of the emerging markets over a full market cycle.

Top Ten Holdings (% Net Assets)
U.S. Treasury Bills, 0.010%, Due 3/1/2018		28.4
U.S. Treasury Bills, 0.010%, Due 5/3/2018		14.4
U.S. Treasury Bills, 0.010%, Due 4/26/2018		9.4
U.S. Treasury Bills, Due 2/1/2018		8.8
U.S. Treasury Bills, 0.010%, Due 3/29/2018		8.6
U.S. Treasury Bills, Due 5/31/2018		6.7
Turkey Government International Bond, 6.750%, Due 4/3/2018		4.5
U.S. Treasury Bills, 0.010%, Due 6/14/2018		3.4
Banco Nacional de Desenvolvimento Economico e Social, 6.369%, Due 6/16/2018		1.7
Republic of South Africa Government International Fund, 6.875%, Due 5/27/2019		1.5
Total Fund Holdings	27

7

American Beacon GLG Total Return Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

Sector Exposures (%)	Fund1 Long/(Short)
Foreign Sovereign		10.4
Turkey	4.5
South Africa	2.7
Brazil	1.8
Indonesia	0.8
Colombia	0.6
Foreign Corporate Obligations		6.3
Energy	4.2
Financial	1.4
Utilities	0.7
Cash & Cash Equivalent		79.7
U.S. dollar denominated.

¹  Percentages represent the Fund’s risk-based, notional exposure as a percentage of the Fund’s total net assets. Due to the use of derivative instruments, which typically introduce leverage, percentages may not add to 100%.

Country Allocation (% Investments)
United States	83.0
Turkey	5.0
South Africa	2.7
Mexico	2.5
Brazil	2.1
British Virgin Islands	1.4
Indonesia	0.9
India	0.8
Israel	0.6
Colombia	0.6
Malaysia	0.4

8

American Beacon Funds^SM

Expense Examples

January 31, 2018 (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, distribution (12b-1) fees, sub-transfer agent 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 August 1, 2017 through January 31, 2018.

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 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 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 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 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.

9

American Beacon Funds^SM

Expense Examples

January 31, 2018 (Unaudited)

American Beacon Global Evolution Frontier Markets Income Fund
	Beginning Account Value 8/1/2017		Ending Account Value 1/31/2018		Expenses Paid  During Period 8/1/2017-1/31/2018*
Institutional Class
Actual		$1,000.00		$1,062.00		$5.98
Hypothetical**		$1,000.00		$1,019.40		$5.85
Y Class
Actual		$1,000.00		$1,060.50		$6.49
Hypothetical**		$1,000.00		$1,018.90		$6.36
Investor Class
Actual		$1,000.00		$1,059.00		$8.15
Hypothetical**		$1,000.00		$1,017.30		$7.98
A Class
Actual		$1,000.00		$1,058.90		$8.04
Hypothetical**		$1,000.00		$1,017.40		$7.88
C Class
Actual		$1,000.00		$1,054.80		$11.91
Hypothetical**		$1,000.00		$1,013.60		$11.67

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 1.15%, 1.25%, 1.57%, 1.55%, and 2.30% for the Institutional, Y, Investor, 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

American Beacon GLG Total Return Fund
	Beginning Account Value 8/1/2017		Ending Account Value 1/31/2018		Expenses Paid  During Period 8/1/2017-1/31/2018*
Institutional Class
Actual		$1,000.00		$985.40		$5.25
Hypothetical**		$1,000.00		$1,019.90		$5.35
Y Class
Actual		$1,000.00		$984.30		$5.75
Hypothetical**		$1,000.00		$1,019.40		$5.85
Investor Class
Actual		$1,000.00		$983.10		$7.15
Hypothetical**		$1,000.00		$1,018.00		$7.27
A Class
Actual		$1,000.00		$983.10		$7.25
Hypothetical**		$1,000.00		$1,017.90		$7.38
C Class
Actual		$1,000.00		$978.60		$10.97
Hypothetical**		$1,000.00		$1,014.10		$11.17
Ultra Class
Actual		$1,000.00		$985.40		$4.75
Hypothetical**		$1,000.00		$1,020.40		$4.84

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 1.05%, 1.15%, 1.43%, 1.45%, 2.20%, and 0.95% for the Institutional, Y, Investor, A, C, and Ultra 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

10

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of American Beacon Funds and Shareholders of American Beacon Global Evolution Frontier Markets Income Fund and American Beacon GLG Total Return Fund

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of American Beacon Global Evolution Frontier Markets Income Fund and American Beacon GLG Total Return Fund (two of the series constituting American Beacon Funds, referred to hereafter as the “Funds”) as of January 31, 2018, the related statements of operations for the year ended January 31, 2018, the statements of changes in net assets for each of the periods listed in the table below, including the related notes, and the financial highlights for each of the periods listed in the table below (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of January 31, 2018, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the periods listed in the table below and each of the financial highlights for each of the periods listed in the table below in conformity with accounting principles generally accepted in the United States of America.

Fund Name	Statements of changes in net assets and financial highlights
American Beacon Global Evolution Frontier Markets Income Fund	Each of the two years in the period ended January 31, 2018
American Beacon GLG Total Return Fund	Period May 20, 2016 (commencement of operations) through January 31, 2017 and the year ended January 31, 2018

Basis for Opinions

These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of January 31, 2018 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.

With respect to the American Beacon Global Evolution Frontier Markets Income Fund, the financial statements as of and for the year ended January 31, 2016 and the financial highlights for each of the periods ended on or prior to January 31, 2016 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated March 31, 2016 expressed an unqualified opinion on those financial statements and financial highlights.

PricewaterhouseCoopers LLP

Boston, MA

March 27, 2018

We have served as the auditor of one or more American Beacon investment companies since 2016.

11

American Beacon Global Evolution Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount*			Fair Value
Angola - 2.74%
Credit-Linked Notes - 0.55%
Republic of Angola (Issuer Aurora Australis B.V.), 8.032%, Due 12/19/2023, (6 mo. USD LIBOR + 6.250%)A B		$	1,125,000		$	1,098,258
Foreign Sovereign Obligations - 2.19%
Angolan Government International Bond, 9.500%, Due 11/12/2025A			3,750,000			4,390,650
Total Angola (Cost $5,023,852)						5,488,908
Argentina - 4.05%
Foreign Sovereign Obligations - 4.05%
Argentina Bonar Bonds,
25.730%, Due 3/1/2018, (BADLARP Index + 2.750%)B		ARS	28,388,072			1,449,181
25.466%, Due 3/11/2019, (BADLARP Index + 2.500%)B		ARS	44,841,687			2,334,041
24.897%, Due 4/3/2022, (BADLARP Index + 2.000%)B		ARS	36,500,000			1,980,448
Argentine Bonos del Tesoro,
22.750%, Due 3/5/2018		ARS	17,750,000			901,310
21.200%, Due 9/19/2018		ARS	12,100,000			613,864
16.000%, Due 10/17/2023		ARS	16,250,000			830,017
Total Foreign Sovereign Obligations						8,108,861
Total Argentina (Cost $9,358,880)						8,108,861
Armenia - 0.76% (Cost $1,500,000)
Credit-Linked Notes - 0.76%
Republic of Armenia Treasury Bonds (Issuer Frontera Capital B.V.), 10.000%, Due 5/7/2021C D			1,500,000			1,519,657
Azerbaijan - 1.00% (Cost $2,000,000)
Credit-Linked Notes - 1.00%
Republic of Azerbaijan (Issuer Frontera Capital B.V.), 14.000%, Due 3/30/2020C D			2,000,000			2,002,972
Belarus - 0.68%
Foreign Sovereign Obligations - 0.68%
Republic of Belarus International Bond,
6.875%, Due 2/28/2023A			510,000			561,122
7.625%, Due 6/29/2027A			685,000			796,381
Total Foreign Sovereign Obligations						1,357,503
Total Belarus (Cost $1,189,716)						1,357,503
Bosnia & Herzegovina - 0.09% (Cost $210,081)
Foreign Sovereign Obligations - 0.09%
Bosnia & Herzegovina Government International Bond, 0.500%, Due 12/20/2021, Series B, (6 mo. EUR LIBOR + 0.813%)A B H		EUR	333,333			176,155
Cameroon, United Republic Of - 1.89% (Cost $3,466,231)
Foreign Sovereign Obligations - 1.89%
Republic of Cameroon International Bond, 9.500%, Due 11/19/2025A			3,200,000			3,794,112
Costa Rica - 2.67%
Foreign Sovereign Obligations - 2.67%
Costa Rica Titulos de Propiedad,
9.660%, Due 9/30/2026A		CRC	2,250,000,000			3,901,141
10.580%, Due 9/26/2029A		CRC	800,000,000			1,440,777
Total Foreign Sovereign Obligations						5,341,918
Total Costa Rica (Cost $5,427,877)						5,341,918

See accompanying notes

12

American Beacon Global Evolution Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount*			Fair Value
Dominican Republic - 2.97%
Foreign Sovereign Obligations - 2.97%
Dominican Republic Bond, 10.500%, Due 4/7/2023A		DOP	57,000,000		$	1,301,600
Dominican Republic International Bond, 11.500%, Due 5/10/2024A		DOP	200,000,000			4,652,351
Total Foreign Sovereign Obligations						5,953,951
Total Dominican Republic (Cost $5,901,582)						5,953,951
Ecuador - 2.95%
Foreign Sovereign Obligations - 2.95%
Ecuador Government International Bond,
10.500%, Due 3/24/2020A		$	1,400,000			1,536,500
8.750%, Due 6/2/2023A			660,000			726,000
9.650%, Due 12/13/2026A			1,550,000			1,767,000
9.625%, Due 6/2/2027A			500,000			567,500
8.875%, Due 10/23/2027A			1,200,000			1,306,500
Total Foreign Sovereign Obligations						5,903,500
Total Ecuador (Cost $5,436,293)						5,903,500
Egypt - 4.46%
Foreign Sovereign Obligations - 4.46%
Egypt Government Bond, 17.180%, Due 5/9/2027, Series 10YR		EGP	14,500,000			919,564
Egypt Treasury Bills,
18.400%, Due 11/27/2018		EGP	10,000,000			497,520
18.700%, Due 6/5/2018, Series 273D		EGP	19,000,000			1,015,732
21.200%, Due 7/24/2018, Series 364D		EGP	10,000,000			522,651
17.500%, Due 10/16/2018, Series 364D		EGP	10,000,000			506,065
17.700%, Due 11/13/2018, Series 364D		EGP	33,000,000			1,651,383
17.901%, Due 12/11/2018, Series 364D		EGP	12,000,000			593,582
17.343%, Due 1/8/2019, Series 364D		EGP	41,000,000			2,002,383
16.810%, Due 1/22/2019, Series 364D		EGP	25,000,000			1,215,585
Total Foreign Sovereign Obligations						8,924,465
Total Egypt (Cost $8,733,165)						8,924,465
Ethiopia - 1.11%
Foreign Sovereign Obligations - 1.11%
Ethiopia International Bond,
6.625%, Due 12/11/2024A			1,600,000			1,690,336
6.625%, Due 12/11/2024A			500,000			528,230
Total Foreign Sovereign Obligations						2,218,566
Total Ethiopia (Cost $2,077,418)						2,218,566
Gabon - 1.04%
Foreign Sovereign Obligations - 1.04%
Gabon Government International Bond,
6.375%, Due 12/12/2024A			1,150,000			1,161,730
6.950%, Due 6/16/2025A			900,000			929,178
Total Foreign Sovereign Obligations						2,090,908
Total Gabon (Cost $2,011,956)						2,090,908
Gambia - 0.80% (Cost $1,599,718)
Credit-Linked Notes - 0.80%
Republic of Gambia (Issuer Frontera Capital B.V.), 11.180%, Due 8/9/2021C D			1,600,000			1,600,755
Georgia - 1.58%
Credit-Linked Notes - 1.58%
Georgia Government (Issuer Frontera Capital B.V.), 10.000%, Due 8/4/2021A C		$	1,250,000			1,231,845
Georgia Government (Issuer Zambezi B.V.), 9.500%, Due 8/9/2022D			2,000,000			1,929,687
Total Credit-Linked Notes						3,161,532
Total Georgia (Cost $3,250,000)						3,161,532

See accompanying notes

13

American Beacon Global Evolution Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount*			Fair Value
Ghana - 4.37%
Credit-Linked Notes - 0.14%
Ghana Promissory Notes (Issued Saderea DAC), 12.500%, Due 11/30/2026A		$	252,874		$	283,534
Foreign Sovereign Obligations - 4.23%
Ghana Government Bond,
24.750%, Due 3/1/2021		GHS	3,900,000			1,051,535
24.750%, Due 7/19/2021		GHS	5,300,000			1,455,725
18.250%, Due 7/25/2022		GHS	11,225,000			2,706,880
19.000%, Due 11/2/2026, Series 10Y		GHS	9,775,000			2,534,876
21.000%, Due 3/23/2020, Series 5YR		GHS	1,000,000			242,155
18.750%, Due 1/24/2022, Series 5YR		GHS	2,000,000			486,806
Total Foreign Sovereign Obligations						8,477,977
Total Ghana (Cost $8,273,117)						8,761,511
Iraq - 3.37%
Foreign Sovereign Obligations - 3.37%
Iraq International Bond,
6.752%, Due 3/9/2023A			2,580,000			2,680,625
5.800%, Due 1/15/2028A			3,600,000			3,562,632
5.800%, Due 1/15/2028A			500,000			494,810
Total Foreign Sovereign Obligations						6,738,067
Total Iraq (Cost $6,023,705)						6,738,067
Ivory Coast - 3.12%
Foreign Sovereign Obligations - 3.12%
Ivory Coast Government International Bond,
6.375%, Due 3/3/2028A			500,000			530,514
5.750%, Due 12/31/2032A C E			3,921,750			3,889,200
5.750%, Due 12/31/2032A C E			1,842,750			1,827,455
Total Foreign Sovereign Obligations						6,247,169
Total Ivory Coast (Cost $6,084,499)						6,247,169
Kazakhstan - 2.01%
Credit-Linked Notes - 2.01%
National Bank of Kazakhstan (Issuer Citigroup Global Markets Holdings, Inc.),
9.450%, Due 3/3/2018A		KZT	115,000,000			352,892
7.750%, Due 4/2/2018A		KZT	485,000,000			1,481,082
7.750%, Due 9/11/2018A		KZT	128,806,961			379,256
7.900%, Due 10/15/2018		KZT	618,439,888			1,820,919
Total Credit-Linked Notes						4,034,149
Total Kazakhstan (Cost $3,834,404)						4,034,149
Kenya - 3.20%
Foreign Sovereign Obligations - 3.20%
Kenya Infrastructure Bond,
12.500%, Due 11/18/2024		KES	100,000,000			1,005,847
12.000%, Due 9/18/2023, Series 12YR		KES	57,400,000			551,699
11.000%, Due 10/12/2026, Series 12YR		KES	100,000,000			945,730
12.000%, Due 10/6/2031, Series 15YR		KES	288,000,000			2,818,028
11.000%, Due 12/2/2024, Series 9YR		KES	75,000,000			712,654
12.500%, Due 5/12/2025, Series 9YR		KES	36,000,000			363,118
Total Foreign Sovereign Obligations						6,397,076
Total Kenya (Cost $6,297,519)						6,397,076
Kyrgyzstan - 1.00% (Cost $1,999,999)
Credit-Linked Notes - 1.00%
Kyrgyz Republic (Issuer Frontera Capital B.V.), 8.000%, Due 1/31/2020D		$	132,958,171			1,999,957

See accompanying notes

14

American Beacon Global Evolution Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount*			Fair Value
Malawi - 0.77%
Credit-Linked Notes - 0.77%
Republic of Malawi (Issuer Zambezi B.V.),
15.100%, Due 10/19/2018D		$	450,000		$	466,425
12.000%, Due 10/8/2020D			1,100,000			1,070,935
Total Credit-Linked Notes						1,537,360
Total Malawi (Cost $1,571,406)						1,537,360
Mongolia - 2.61%
Foreign Sovereign Obligations - 2.61%
Mongolia Government International Bond,
8.750%, Due 3/9/2024A			600,000			696,023
8.750%, Due 3/9/2024A			3,900,000			4,524,148
Total Foreign Sovereign Obligations						5,220,171
Total Mongolia (Cost $5,036,296)						5,220,171
Mozambique - 2.42%
Credit-Linked Notes - 1.60%
Mozambique Government Bonds (Issuer ICBC Standard Bank PLC),
1.000%, Due 4/23/2019C		MZN	30,000,000			330,051
27.000%, Due 2/26/2020		MZN	180,000,000			2,877,099
Total Credit-Linked Notes						3,207,150
Foreign Sovereign Obligations - 0.82%
Mozambique International Bond, 10.500%, Due 1/18/2023A			1,900,000			1,632,100
Total Mozambique (Cost $4,842,805)						4,839,250
Netherlands - 0.31% (Cost $650,000)
Foreign Corporate Obligations - 0.31%
Nederlandse Financierings Maatschappij voor Ontwikkelingslanden N.V., 7.350%, Due 9/11/2020A			650,000			629,210
Nicaragua - 2.29%
Credit-Linked Notes - 2.16%
Empresa Administadora de Aeropuertos Internacionales (Issuer Zambezi B.V.), 7.000%, Due 4/8/2024C D			2,000,000			1,916,167
Republic of Nicaragua (Issuer Zambezi B.V.), 6.750%, Due 8/5/2022D			2,400,000			2,407,489
Total Credit-Linked Notes						4,323,656
Foreign Sovereign Obligations - 0.13%
Nicaragua Government International Bond, 5.000%, Due 2/1/2019C E		$	275,834			266,180
Total Nicaragua (Cost $4,672,705)						4,589,836
Nigeria - 4.24%
Foreign Sovereign Obligations - 4.24%
Nigeria Government Bond,
16.250%, Due 4/18/2037		NGN	888,958,000			2,975,177
16.288%, Due 3/17/2027, Series 10YR		NGN	663,000,000			2,102,500
Nigeria Treasury Bills,
21.913%, Due 7/5/2018		NGN	320,000,000			834,482
20.359%, Due 8/2/2018		NGN	1,000,000,000			2,585,042
Total Foreign Sovereign Obligations						8,497,201
Total Nigeria (Cost $8,022,064)						8,497,201
Paraguay - 0.91% (Cost $2,000,475)
Credit-Linked Notes - 0.91%
Municipalidad De Asuncion (Issuer Zambezi B.V.), 11.000%, Due 3/23/2027D			2,000,000			1,820,822

See accompanying notes

15

American Beacon Global Evolution Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount*			Fair Value
Rwanda - 0.79% (Cost $1,494,407)
Foreign Sovereign Obligations - 0.79%
Rwanda International Government Bond, 6.625%, Due 5/2/2023A		NGN	1,500,000		$	1,575,000
Senegal - 0.72% (Cost $1,355,928)
Foreign Sovereign Obligations - 0.72%
Senegal Government International Bond, 6.250%, Due 7/30/2024A			1,350,000			1,435,860
Sri Lanka - 4.39%
Foreign Sovereign Obligations - 4.39%
Sri Lanka Government Bonds,
11.500%, Due 9/1/2028		LKR	68,000,000			488,114
10.750%, Due 3/1/2021, Series A		LKR	26,000,000			175,028
9.000%, Due 5/1/2021, Series A		LKR	465,000,000			2,985,700
11.000%, Due 8/1/2021, Series A		LKR	300,000,000			2,043,170
11.400%, Due 1/1/2024, Series A		LKR	200,000,000			1,393,017
11.000%, Due 8/1/2024, Series A		LKR	245,000,000			1,695,823
Total Foreign Sovereign Obligations						8,780,852
Total Sri Lanka (Cost $8,489,077)						8,780,852
Supranational - 1.49%
Foreign Sovereign Obligations - 1.49%
European Bank for Reconstruction & Development,
7.090%, Due 12/6/2018C		GEL	2,200,000			878,633
6.940%, Due 12/20/2018C		GEL	2,900,000			1,162,883
13.750%, Due 10/9/2019A			1,142,857			937,257
Total Foreign Sovereign Obligations						2,978,773
Total Supranational (Cost $2,920,488)						2,978,773
Suriname - 0.84% (Cost $1,617,439)
Foreign Sovereign Obligations - 0.84%
Republic of Suriname, 9.250%, Due 10/26/2026A			1,600,000			1,688,000
Tajikistan - 1.57% (Cost $3,199,147)
Foreign Sovereign Obligations - 1.57%
Republic of Tajikistan International Bond, 7.125%, Due 9/14/2027A			3,230,000			3,142,144
Tunisia - 0.99% (Cost $1,914,361)
Foreign Sovereign Obligations - 0.99%
Banque Centrale de Tunisie International Bond, 5.750%, Due 1/30/2025A		$	2,000,000			1,981,200
Uganda - 3.25%
Foreign Sovereign Obligations - 3.25%
Republic of Uganda Government Bonds,
10.750%, Due 9/6/2018		UGX	1,925,000,000			539,643
16.500%, Due 5/13/2021		UGX	4,355,000,000			1,352,130
16.750%, Due 10/28/2021		UGX	6,940,000,000			2,181,643
14.125%, Due 7/7/2022		UGX	5,000,000,000			1,440,135
16.000%, Due 5/6/2027		UGX	2,500,000,000			762,686
16.125%, Due 3/22/2018, Series 2YR		UGX	800,000,000			223,210
Total Foreign Sovereign Obligations						6,499,447
Total Uganda (Cost $6,253,731)						6,499,447
Ukraine - 4.60%
Credit-Linked Notes - 3.90%
Ukraine Government Bonds (Issuer Citigroup Global Markets Holdings, Inc.),
13.300%, Due 8/2/2019A		UAH	15,150,000			534,528
13.460%, Due 6/12/2020A		UAH	14,840,000			523,248
13.500%, Due 8/21/2020A		UAH	37,000,000			1,321,238
14.160%, Due 10/14/2022A		UAH	52,000,000			1,829,749
14.160%, Due 10/17/2022A		UAH	45,000,000			1,601,278
Ukraine Government Bonds (Issuer ICBC Standard Bank PLC), 14.910%, Due 10/14/2022		UAH	54,000,000			2,006,149
Total Credit-Linked Notes						7,816,190

See accompanying notes

16

American Beacon Global Evolution Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount*			Fair Value
Foreign Sovereign Obligations - 0.70%
Ukraine Government International Bond,
7.750%, Due 9/1/2023A		UAH	500,000		$	543,215
7.750%, Due 9/1/2025A			800,000			861,904
Total Foreign Sovereign Obligations						1,405,119
Total Ukraine (Cost $9,662,644)						9,221,309
Uruguay - 2.79%
Foreign Sovereign Obligations - 2.79%
Uruguay Government International Bond,
9.875%, Due 6/20/2022A		UYU	48,203,000			1,760,250
8.500%, Due 3/15/2028A		UYU	65,802,000			2,250,002
Uruguay Notas del Tesoro, 13.900%, Due 7/29/2020, Series 8		UYU	40,750,000			1,579,741
Total Foreign Sovereign Obligations						5,589,993
Total Uruguay (Cost $5,457,517)						5,589,993
Zambia - 4.35%
Foreign Sovereign Obligations - 4.35%
Zambia Government Bond,
13.000%, Due 8/29/2026		ZMW	42,500,000			3,366,402
11.000%, Due 9/1/2019, Series 5YR		ZMW	4,800,000			445,138
11.000%, Due 2/16/2020, Series 5YR		ZMW	500,000			45,269
11.000%, Due 5/26/2020, Series 5YR		ZMW	23,100,000			2,066,019
12.000%, Due 5/23/2023, Series 7YR		ZMW	6,100,000			508,225
12.000%, Due 11/21/2023, Series 7YR		ZMW	14,900,000			1,221,354
Zambia Government International Bond, 8.970%, Due 7/30/2027A			950,000			1,053,769
Total Foreign Sovereign Obligations						8,706,176
Total Zambia (Cost $8,561,213)						8,706,176
	Shares
SHORT-TERM INVESTMENTS - 13.91% (Cost $27,848,722)
Investment Companies - 13.91%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.25%F G			27,848,722			27,848,722
TOTAL INVESTMENTS - 99.03% (Cost $195,270,437)						198,403,018
OTHER ASSETS, NET OF LIABILITIES - 0.97%						1,944,971
TOTAL NET ASSETS - 100.00%					$	200,347,989
Percentages are stated as a percent of net assets. *In U.S. Dollars unless otherwise noted.

^A Reg S - Security purchased under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.

^B Variable, floating, or adjustable rate securities with an interest rate that changes periodically. Rates are periodically reset with rates that are based on a predetermined benchmark such as a widely followed interest rate such as T-bills, LIBOR or PRIME plus a fixed spread. The interest rate disclosed reflects the rate in effect on January 31, 2018.

^C Coupon rate may change based on changes of the underlying collateral or prepayments of principal. The coupon rate shown represents the rate at period end.

^D 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 $16,709,827 or 8.35% of net assets. The Fund has no right to demand registration of these securities.

^E Step Up/Down - A zero coupon bond that converts to a fixed rate or variable interest rate at a designated future date. The rate disclosed represents the coupon rate at January 31, 2018. The maturity date disclosed represents the final maturity date.

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

^G 7-day yield.

^H Value was determined using significant unobservable inputs.

BADLARP - Benchmark rate provided by the Banco Central de la Republica Argentina.

LIBOR - London Interbank Offered Rate.

PLC - Public Limited Company.

See accompanying notes

17

American Beacon Global Evolution Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2018

Forward Foreign Currency Contracts Open on January 31, 2018:
Currency Purchased*		Currency Sold*		Settlement Date		Counter- party		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
KZT	515,629	USD	500,000		2/12/2018		ICBC	$	15,629	$	-		$	15,629
UAH	487,761	USD	500,000		3/12/2018		ICBC		-		(12,239	)		(12,239	)
KZT	1,598,196	USD	1,500,000		3/14/2018		ICBC		98,196		-			98,196
KZT	513,467	USD	500,000		5/29/2018		ICBC		13,467		-			13,467
GEL	666,880	USD	700,000		8/22/2018		ICBC		-		(33,120	)		(33,120	)
DZD	160,413	USD	150,000		8/28/2018		ICBC		10,413		-			10,413
KZT	1,247,071	USD	1,200,000		10/26/2018		ICBC		47,071		-			47,071
								$	184,776	$	(45,359	)	$	139,417

* All values denominated in USD.

Glossary:
Counterparty Abbreviations:
ICBC	ICBC Standard Bank PLC
Currency Abbreviations:
ARS	Argentine Peso
CRC	Costa Rican Colon
DOP	Dominican Peso
DZD	Algerian Dinars
EGP	Egyptian Pound
EUR	Euro
GEL	Georgian Lari
GHS	Ghanaian Cedi
KES	Kenyan Shilling
KZT	Kazakhstani Tenge
LKR	Sri Lankan Rupee
MZN	Mozambique Metical
NGN	Nigerian Naira
UAH	Ukrainian Hryvnia
UGX	Ugandan Shilling
UYU	Uruguayan Peso
USD	United States Dollar
ZMW	Zambian Kwacha

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of January 31, 2018, the investments were classified as described below:

Global Evolution Frontier Markets Income Fund	Level 1		Level 2		Level 3		Total
Assets
Credit-Linked Notes
Angola	$	-	$	1,098,258	$	-	$	1,098,258
Armenia		-		1,519,657		-		1,519,657
Azerbaijan		-		2,002,972		-		2,002,972
Gambia		-		1,600,755		-		1,600,755
Georgia		-		3,161,532		-		3,161,532
Ghana		-		283,534		-		283,534
Kazakhstan		-		4,034,149		-		4,034,149
Kyrgyzstan		-		1,999,957		-		1,999,957
Malawi		-		1,537,360		-		1,537,360
Mozambique		-		3,207,150		-		3,207,150
Nicaragua		-		4,323,656		-		4,323,656
Paraguay		-		1,820,822		-		1,820,822
Ukraine		-		7,816,190		-		7,816,190

See accompanying notes

18

American Beacon Global Evolution Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2018

Global Evolution Frontier Markets Income Fund	Level 1		Level 2			Level 3		Total
Assets (continued)
Foreign Sovereign Obligations
Angola	$	-	$	4,390,650		$	-	$	4,390,650
Argentina		-		8,108,861			-		8,108,861
Belarus		-		1,357,503			-		1,357,503
Bosnia & Herzegovina		-		-			176,155		176,155
Cameroon		-		3,794,112			-		3,794,112
Costa Rica		-		5,341,918			-		5,341,918
Dominican Republic		-		5,953,951			-		5,953,951
Ecuador		-		5,903,500			-		5,903,500
Egypt		-		8,924,465			-		8,924,465
Ethiopia		-		2,218,566			-		2,218,566
Gabon		-		2,090,908			-		2,090,908
Ghana		-		8,477,977			-		8,477,977
Iraq		-		6,738,067			-		6,738,067
Ivory Coast		-		6,247,169			-		6,247,169
Kenya		-		6,397,076			-		6,397,076
Mongolia		-		5,220,171			-		5,220,171
Mozambique		-		1,632,100			-		1,632,100
Nicaragua		-		266,180			-		266,180
Nigeria		-		8,497,201			-		8,497,201
Rwanda		-		1,575,000			-		1,575,000
Senegal		-		1,435,860			-		1,435,860
Sri Lanka		-		8,780,852			-		8,780,852
Supranational		-		2,978,773			-		2,978,773
Suriname		-		1,688,000			-		1,688,000
Tajikistan		-		3,142,144			-		3,142,144
Tunisia		-		1,981,200			-		1,981,200
Uganda		-		6,499,447			-		6,499,447
Ukraine		-		1,405,119			-		1,405,119
Uruguay		-		5,589,993			-		5,589,993
Zambia		-		8,706,176			-		8,706,176
Foreign Corporate Obligations
Netherlands		-		629,210			-		629,210
Short-Term Investments		27,848,722		-			-		27,848,722
Total Investments in Securities - Assets	$	27,848,722	$	170,378,141		$	176,155	$	198,403,018
Financial Derivative Instruments - Assets
Forward Foreign Currency Contracts	$	-	$	184,776		$	-	$	184,776
Total Financial Derivative Instruments - Assets	$	-	$	184,776		$	-	$	184,776
Financial Derivative Instruments - Liabilities
Forward Foreign Currency Contracts	$	-	$	(45,359	)	$	-	$	(45,359	)
Total Financial Derivative Instruments - Liabilities	$	-	$	(45,359	)	$	-	$	(45,359	)

U.S. GAAP requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of the Fund’s assets and liabilities. During the year ended January 31, 2018, there were transfers from Level 3 to Level 2, with a fair value of $6,132,505.

See accompanying notes

19

American Beacon Global Evolution Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2018

The following table is a reconciliation of Level 3 assets within 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 1/31/2017		Purchases		Sales		Accrued Discounts (Premiums)		Realized Gain (Loss)			Change in Unrealized Appreciation (Depreciation)			Transfer into Level 3		Transfer out of Level 3		Balance as of 1/31/2018		Change in Unrealized Appreciation (Depreciation) at Period end**
Credit Linked Notes	$	13,898,654	$	-	$	10,457,456	$	134,361	$	(1,244,012	)	$	3,534,778		$	-	$	5,866,325	$	-	$	-
Foreign Sovereign Obligations		2,273,510		-		350,536		9,221		(13,684	)		(1,476,176	)		-		266,180		176,155		37,263
	$	16,172,164	$	-	$	10,807,992	$	143,582	$	(1,257,696	)	$	2,058,602		$	-	$	6,132,505	$	176,155	$	37,263

** 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 Statements of Operations.

The credit-linked notes and foreign government obligations, classified as Level 3, were valued using single broker quotes. The principal amount of these securities, valued at $176,155, have been deemed level 3 due to limited market transparency and/or lack of corroboration to support the quoted prices.

See accompanying notes

20

American Beacon GLG Total Return Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount			Fair Value
Brazil - 2.04%
Foreign Corporate Obligations - 0.21%
Itau Unibanco Holding S.A., 2.850%, Due 5/26/2018A		$	1,600,000		$	1,600,720
Foreign Sovereign Obligations - 1.83%
Banco Nacional de Desenvolvimento Economico e Social,
6.369%, Due 6/16/2018A			12,495,000			12,649,938
4.000%, Due 4/14/2019A			1,000,000			1,012,500
Total Foreign Sovereign Obligations						13,662,438
Total Brazil (Cost $15,282,348)						15,263,158
British Virgin Islands - 1.39%
Foreign Corporate Obligations - 1.39%
CNOOC Finance 2013 Ltd., 1.750%, Due 5/9/2018			3,534,000			3,526,992
CNPC General Capital Ltd., 2.750%, Due 5/14/2019A			4,850,000			4,844,527
Sinopec Group Overseas Development 2013 Ltd., 2.500%, Due 10/17/2018A			1,500,000			1,498,587
Sinopec Group Overseas Development 2014 Ltd., 2.750%, Due 4/10/2019A			250,000			249,679
Sinopec Group Overseas Development 2016 Ltd., 2.125%, Due 5/3/2019A			250,000			247,827
Total Foreign Corporate Obligations						10,367,612
Total British Virgin Islands (Cost $10,417,868)						10,367,612
Colombia - 0.57% (Cost $4,232,853)
Foreign Sovereign Obligations - 0.57%
Colombia Government International Bond, 7.375%, Due 3/18/2019			4,000,000			4,210,000
India - 0.82%
Foreign Corporate Obligations - 0.82%
ICICI Bank Ltd.,
4.700%, Due 2/21/2018A			1,200,000			1,201,290
4.800%, Due 5/22/2019A			4,339,000			4,437,764
State Bank of India, 3.622%, Due 4/17/2019A			500,000			504,108
Total Foreign Corporate Obligations						6,143,162
Total India (Cost $6,174,365)						6,143,162
Indonesia - 0.87%
Foreign Corporate Obligations - 0.09%
Majapahit Holding B.V., 8.000%, Due 8/7/2019A			650,000			699,270
Foreign Sovereign Obligations - 0.78%
Indonesia Government International Bond, 11.625%, Due 3/4/2019A			5,300,000			5,812,038
Total Indonesia (Cost $6,544,213)						6,511,308
Israel - 0.58% (Cost $4,355,329)
Foreign Corporate Obligations - 0.58%
Israel Electric Corp. Ltd., 5.625%, Due 6/21/2018A			4,300,000			4,338,614
Malaysia - 0.39% (Cost $2,942,891)
Foreign Corporate Obligations - 0.39%
Petronas Capital Ltd., 5.250%, Due 8/12/2019A			2,810,000			2,917,089
Mexico - 2.45%
Foreign Corporate Obligations - 2.45%
Petroleos Mexicanos,
5.500%, Due 2/4/2019			8,300,000			8,528,250
6.000%, Due 3/5/2020			9,200,000			9,734,980
Total Foreign Corporate Obligations						18,263,230
Total Mexico (Cost $18,198,108)						18,263,230

See accompanying notes

21

American Beacon GLG Total Return Fund^SM

Schedule of Investments

January 31, 2018

	Principal Amount			Fair Value
South Africa - 2.68%
Foreign Sovereign Obligations - 2.68%
Republic of South Africa Government International Bond,
6.875%, Due 5/27/2019		$	10,750,000		$	11,275,137
5.500%, Due 3/9/2020			8,300,000			8,689,104
Total Foreign Sovereign Obligations						19,964,241
Total South Africa (Cost $20,082,869)						19,964,241
Turkey - 4.87%
Foreign Corporate Obligations - 0.36%
Akbank Turk A/S, 6.500%, Due 3/9/2018A			2,650,000			2,655,878
Foreign Sovereign Obligations - 4.51%
Turkey Government International Bond, 6.750%, Due 4/3/2018			33,400,000			33,625,450
Total Turkey (Cost $36,297,947)						36,281,328
	Shares
SHORT-TERM INVESTMENTS - 81.56%
Investment Companies - 1.87%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.25%B C			13,961,256			13,961,256
	Par Amount
U.S. Treasury Obligations - 79.69%
U.S. Treasury Bills,
1.045%, Due 2/1/2018		$	65,700,000			65,700,000
1.107%, Due 3/1/2018			212,000,000			211,768,950
1.127%, Due 3/29/2018			64,000,000			63,868,805
1.123%, Due 4/26/2018			70,000,000			69,767,849
1.403%, Due 5/3/2018			108,000,000			107,604,832
1.473%, Due 5/31/2018			50,000,000			49,754,152
1.500%, Due 6/14/2018			25,800,000			25,656,117
Total U.S. Treasury Obligations						594,120,705
Total Short-Term Investments (Cost $608,236,232)						608,081,961
TOTAL INVESTMENTS - 98.22% (Cost $732,765,023)						732,341,703
OTHER ASSETS, NET OF LIABILITIES - 1.78%						13,242,579
TOTAL NET ASSETS - 100.00%					$	745,584,282
Percentages are stated as a percent of net assets.

^A Reg S - Security purchased under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.

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

^C  7-day yield.

See accompanying notes

22

American Beacon GLG Total Return Fund^SM

Schedule of Investments

January 31, 2018

OTC Swap Agreements Outstanding on January 31, 2018:

Credit Default Swaps on Corporate and Sovereign Securities - Buy Protection(1)
Reference Entity	Counter- Party	Fixed Rate (%)	Expiration Date	Implied Credit Spread at 1/31/2018(3) (%)		Curr		Notional Amount(4) (000s)		Premiums Paid (Received)			Fair Value			Unrealized Appreciation (Depreciation)
Lebanese Republic	BRC	1.00	12/20/2019		3.9521		USD		150	$	8,623		$	6,232		$	(2,391	)
Lebanese Republic	BCC	1.00	6/20/2021		3.9521		USD		200		22,100			17,271			(4,829	)
Lebanese Republic	BRC	1.00	6/20/2021		3.9521		USD		275		32,469			23,747			(8,722	)
Russian Federation	BRC	1.00	6/20/2021		0.7254		USD		500		21,085			(4,581	)		(25,666	)
Lebanese Republic	BCC	1.00	12/20/2021		3.9521		USD		15,000		1,746,488			1,514,399			(232,089	)
Lebanese Republic	BRC	1.00	12/20/2021		3.9521		USD		800		95,165			80,768			(14,397	)
Lebanese Republic	BRC	1.00	12/20/2021		3.9521		USD		3,000		423,041			302,880			(120,161	)
Republic Of Indonesia	BRC	1.00	12/20/2021		0.6500		USD		800		15,034			(11,166	)		(26,200	)
Republic Of Indonesia	BRC	1.00	12/20/2021		0.6500		USD		1,000		19,833			(13,957	)		(33,790	)
Republic Of Kazakhstan	BRC	1.00	12/20/2021		0.7654		USD		250		9,193			(2,716	)		(11,909	)
Republic Of Kazakhstan	BRC	1.00	12/20/2021		0.7654		USD		800		18,632			(8,690	)		(27,322	)
Republic Of Kazakhstan	BRC	1.00	12/20/2021		0.7654		USD		3,000		107,235			(32,588	)		(139,823	)
Republic Of Kazakhstan	BRC	1.00	12/20/2021		0.7654		USD		15,000		360,575			(162,941	)		(523,516	)
Republic Of South Africa	BRC	1.00	12/20/2021		1.1422		USD		1,500		55,698			6,074			(49,624	)
Republic Of South Africa	BRC	1.00	12/20/2021		1.1422		USD		2,000		77,650			8,099			(69,551	)
Republic Of South Africa	BRC	1.00	12/20/2021		1.1422		USD		6,000		225,389			24,297			(201,092	)
Republic Of Kazakhstan	CBK	1.00	12/20/2021		0.7654		USD		300		10,188			(3,259	)		(13,447	)
Russian Federation	CBK	1.00	12/20/2021		0.7254		USD		3,000		131,913			(20,117	)		(152,030	)
Russian Federation	CBK	1.00	12/20/2021		0.7254		USD		13,000		358,004			(87,174	)		(445,178	)
Republic Of Colombia	FBF	1.00	12/20/2021		0.2400		USD		4,000		51,974			(52,444	)		(104,418	)
Republic Of Indonesia	HUS	1.00	12/20/2021		0.6500		USD		1,800		33,264			(25,123	)		(58,387	)
Republic Of Indonesia	UAG	1.00	12/20/2021		0.6500		USD		3,000		44,001			(41,871	)		(85,872	)
Republic Of Turkey	BCC	1.00	6/20/2022		1.5175		USD		5,000		276,747			100,974			(175,773	)
Republic Of Turkey	BCC	1.00	6/20/2022		1.5175		USD		9,375		514,148			189,326			(324,822	)
Russian Federation	BCC	1.00	6/20/2022		0.7254		USD		4,500		126,960			(7,611	)		(134,571	)
Lebanese Republic	BRC	1.00	6/20/2022		3.9521		USD		12,500		1,743,994			1,486,328			(257,666	)
Republic Of Indonesia	BRC	1.00	6/20/2022		0.6500		USD		5,000		34,549			(55,876	)		(90,425	)
Russian Federation	BRC	1.00	6/20/2022		0.7254		USD		2,600		45,226			(4,397	)		(49,623	)
Russian Federation	BRC	1.00	6/20/2022		0.7254		USD		4,300		122,592			(7,272	)		(129,864	)
Republic Of South Africa	CBK	1.00	6/20/2022		1.1422		USD		2,500		112,081			30,090			(81,991	)
Republic Of South Africa	CBK	1.00	6/20/2022		1.1422		USD		4,000		160,901			48,143			(112,758	)
Republic Of South Africa	CBK	1.00	6/20/2022		1.1422		USD		5,500		214,479			66,197			(148,282	)
Republic Of Turkey	CBK	1.00	6/20/2022		1.5175		USD		4,000		152,034			80,779			(71,255	)
Republic Of Indonesia	HUS	1.00	6/20/2022		0.6500		USD		3,000		36,034			(33,526	)		(69,560	)
Lebanese Republic	BOA	1.00	12/20/2022		3.9521		USD		3,000		452,784			408,000			(44,784	)
Lebanese Republic	BOA	1.00	12/20/2022		3.9521		USD		5,000		764,118			679,999			(84,119	)
Republic Of South Africa	BOA	1.00	12/20/2022		1.1422		USD		4,300		182,115			85,152			(96,963	)
Argentine Republic	BRC	5.00	12/20/2022		2.3400		USD		2,500		(285,843	)		(287,965	)		(2,122	)
Argentine Republic	BRC	5.00	12/20/2022		2.3400		USD		3,000		(340,331	)		(345,558	)		(5,227	)
Argentine Republic	BRC	5.00	12/20/2022		2.3400		USD		11,000		(1,225,545	)		(1,267,046	)		(41,501	)
Argentine Republic	BRC	5.00	12/20/2022		2.3400		USD		13,000		(1,454,493	)		(1,497,418	)		(42,925	)
Argentine Republic	BRC	5.00	12/20/2022		2.3400		USD		17,000		(1,809,362	)		(1,958,162	)		(148,800	)
Kingdom Of Saudi Arabia	BRC	1.00	12/20/2022		0.7900		USD		11,000		(25,269	)		(115,442	)		(90,173	)
Republic Of Indonesia	BRC	1.00	12/20/2022		0.6500		USD		2,000		(5,432	)		(16,909	)		(11,477	)
Republic Of Indonesia	BRC	1.00	12/20/2022		0.6500		USD		4,500		(33,471	)		(33,471	)		-
Republic Of Indonesia	BRC	1.00	12/20/2022		0.6500		USD		4,900		(2,213	)		(41,426	)		(39,213	)
Republic Of Korea	BRC	1.00	12/20/2022		0.5009		USD		3,100		(33,823	)		(72,487	)		(38,664	)
Republic Of Korea	BRC	1.00	12/20/2022		0.5009		USD		7,800		(85,102	)		(182,386	)		(97,284	)
Republic Of South Africa	BRC	1.00	12/20/2022		1.1422		USD		3,000		112,839			59,409			(53,430	)
Republic Of South Africa	BRC	1.00	12/20/2022		1.1422		USD		8,600		358,715			170,304			(188,411	)
Republic Of Turkey	BRC	1.00	12/20/2022		1.5175		USD		1,500		54,770			43,173			(11,597	)
Republic Of Turkey	BRC	1.00	12/20/2022		1.5175		USD		3,000		113,483			86,346			(27,137	)
Republic Of Turkey	BRC	1.00	12/20/2022		1.5175		USD		8,600		448,100			247,526			(200,574	)
Argentine Republic	CBK	5.00	12/20/2022		2.3400		USD		7,000		(768,372	)		(806,302	)		(37,930	)
Argentine Republic	CBK	5.00	12/20/2022		2.3400		USD		8,000		(898,870	)		(921,488	)		(22,618	)

See accompanying notes

23

American Beacon GLG Total Return Fund^SM

Schedule of Investments

January 31, 2018

Reference Entity	Counter- Party	Fixed Rate (%)	Expiration Date	Implied Credit Spread at 1/31/2018(3) (%)		Curr		Notional Amount(4) (000s)		Premiums Paid (Received)			Fair Value			Unrealized Appreciation (Depreciation)
Kingdom Of Saudi Arabia	CBK	1.00	12/20/2022		0.7900		USD		2,000	$	(15,567	)	$	(20,989	)	$	(5,422	)
Republic Of Indonesia	CBK	1.00	12/20/2022		0.6500		USD		3,500		(11,077	)		(29,590	)		(18,513	)
Republic Of Indonesia	CBK	1.00	12/20/2022		0.6500		USD		4,500		1			(38,044	)		(38,045	)
Republic Of South Africa	CBK	1.00	12/20/2022		1.1422		USD		8,600		364,229			170,304			(193,925	)
Republic Of South Africa	CBK	1.00	12/20/2022		1.1422		USD		8,600		362,392			170,304			(192,088	)
Republic Of South Africa	CBK	1.00	12/20/2022		1.1422		USD		13,000		525,342			257,437			(267,905	)
Republic Of Turkey	CBK	1.00	12/20/2022		1.5175		USD		8,600		458,945			247,526			(211,419	)
Russian Federation	CBK	1.00	12/20/2022		0.7254		USD		3,000		39,894			9,628			(30,266	)
Lebanese Republic	DUB	1.00	12/20/2022		3.9521		USD		700		121,632			95,200			(26,432	)
Lebanese Republic	DUB	1.00	12/20/2022		3.9521		USD		1,100		190,938			149,600			(41,338	)
Lebanese Republic	DUB	1.00	12/20/2022		3.9521		USD		1,600		272,776			217,600			(55,176	)
Argentine Republic	HUS	5.00	12/20/2022		2.3400		USD		3,500		(387,492	)		(403,151	)		(15,659	)
Argentine Republic	HUS	5.00	12/20/2022		2.3400		USD		8,200		(907,458	)		(944,525	)		(37,067	)
Republic Of Indonesia	HUS	1.00	12/20/2022		0.6500		USD		4,000		(903	)		(33,817	)		(32,914	)
Republic Of Indonesia	HUS	1.00	12/20/2022		0.6500		USD		4,500		1			(38,044	)		(38,045	)
Republic Of Indonesia	HUS	1.00	12/20/2022		0.6500		USD		6,100		(2,755	)		(51,571	)		(48,816	)
Republic Of Indonesia	HUS	1.00	12/20/2022		0.6500		USD		8,500		-			(71,862	)		(71,862	)
Republic Of Indonesia	UAG	1.00	12/20/2022		0.6500		USD		5,500		(2,484	)		(46,499	)		(44,015	)
Republic Of Indonesia	UAG	1.00	12/20/2022		0.6500		USD		5,500		(3,106	)		(46,499	)		(43,393	)
										$	3,931,405		$	(2,762,848	)	$	(6,694,253	)

Credit Default Swaps on Corporate and Sovereign Securities - Sell Protection(2)
Reference Entity	Counter- Party	Fixed Rate (%)	Expiration Date	Implied Credit Spread at 1/31/2018(3) (%)		Curr		Notional Amount(4) (000s)		Premiums Paid (Received)		Fair Value		Unrealized Appreciation (Depreciation)
Republic Of Philippines	BCC	1.00	12/20/2019		0.2300		USD		3,000	$	20,539		$    42,363	$	21,824
Republic Of Philippines	BRC	1.00	12/20/2019		0.2300		USD		500		2,582		7,060		4,478
Republic Of Colombia	HUS	1.00	12/20/2021		0.2400		USD		7,000		29,713		87,011		57,298
										$	52,834		$  136,434	$	83,600

Interest Rate Swaps
Pay/Receive Floating Rate	Floating Rate Index	Counter- Party	Fixed Rate (%)		Expiration Date		Curr	Notional Amount(4) (000s)		Premiums Paid (Received)		Fair Value			Unrealized Appreciation (Depreciation)
Pay	1-Day BRL-CDI	BOA		9.10		1/4/2021	BRL		70,000	$	-		$     (256,366	)	$	(256,366	)
Pay	1-Day BRL-CDI	HUS		8.75		1/4/2021	BRL		24,500		-		(31,740	)		(31,740	)
Pay	1-Day BRL-CDI	HUS		9.30		1/4/2021	BRL		24,800		-		(183,915	)		(183,915	)
Pay	1-Day BRL-CDI	HUS		9.12		1/4/2021	BRL		30,100		-		(104,956	)		(104,956	)
Pay	1-Day BRL-CDI	UAG		9.17		1/4/2021	BRL		191,800		-		(864,246	)		(864,246	)
Receive	1-Day BRL-CDI	UAG		10.36		1/4/2021	BRL		76,400		-		(1,016,476	)		(1,016,476	)
Receive	1-Day BRL-CDI	UAG		9.84		1/4/2021	BRL		41,000		-		(771,820	)		(771,820	)
Receive	1-Day BRL-CDI	UAG		10.26		1/4/2021	BRL		80,900		-		(1,019,231	)		(1,019,231	)
Receive	1-Day BRL-CDI	UAG		9.53		1/4/2021	BRL		187,700	$	-		$  (1,346,634	)	$	(1,346,634	)
										$	-		$  (5,595,384	)	$	(5,595,384	)

⁽¹⁾  If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

⁽²⁾  If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

See accompanying notes

24

American Beacon GLG Total Return Fund^SM

Schedule of Investments

January 31, 2018

⁽³⁾  Implied credit spreads, represented in absolute terms, utilized in determining the fair value of credit default swaps agreements on corporate issues and sovereign issues of an emerging country as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

⁽⁴⁾  The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

Forward Foreign Currency Contracts Open on January 31, 2018:
Currency Purchased*		Currency Sold*		Settlement Date		Counter- party		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
BRL	14,700,039	USD	14,468,435		2/2/2018		HUS	$	231,604	$	-		$	231,604
BRL	14,700,039	USD	14,466,200		2/2/2018		HUS		233,839		-			233,839
BRL	14,700,039	USD	14,468,435		2/2/2018		HUS		231,604		-			231,604
BRL	14,700,039	USD	14,466,201		2/2/2018		HUS		233,838		-			233,838
BRL	14,700,039	USD	14,475,143		2/2/2018		HUS		224,896		-			224,896
USD	30,332,156	BRL	30,817,699		2/2/2018		HUS		-		(485,543	)		(485,543	)
USD	30,332,156	BRL	30,817,699		2/2/2018		HUS		-		(485,543	)		(485,543	)
USD	7,220,000	BRL	7,505,537		2/2/2018		HUS		-		(285,537	)		(285,537	)
USD	2,600,000	BRL	2,698,744		2/2/2018		HUS		-		(98,744	)		(98,744	)
USD	1,600,000	BRL	1,660,515		2/2/2018		HUS		-		(60,515	)		(60,515	)
ZAR	5,621,194	USD	4,523,000		3/8/2018		HUS		1,098,194		-			1,098,194
ZAR	5,848,289	USD	4,697,000		3/8/2018		HUS		1,151,289		-			1,151,289
USD	9,416,313	ZAR	11,448,522		3/8/2018		HUS		-		(2,032,209	)		(2,032,209	)
USD	5,707,000	ZAR	6,400,467		3/8/2018		HUS		-		(693,467	)		(693,467	)
USD	5,035,999	ZAR	5,649,455		3/8/2018		HUS		-		(613,456	)		(613,456	)
USD	4,029,000	ZAR	4,518,266		3/8/2018		HUS		-		(489,266	)		(489,266	)
USD	37,920,705	EUR	39,039,392		4/4/2018		HUS		-		(1,118,687	)		(1,118,687	)
USD	3,926,040	IDR	4,075,669		4/30/2018		HUS		-		(149,629	)		(149,629	)
USD	3,926,040	IDR	4,073,629		4/30/2018		HUS		-		(147,589	)		(147,589	)
USD	3,926,030	IDR	4,070,705		4/30/2018		HUS		-		(144,675	)		(144,675	)
USD	3,926,020	IDR	4,070,694		4/30/2018		HUS		-		(144,674	)		(144,674	)
USD	3,926,020	IDR	4,050,297		4/30/2018		HUS		-		(124,277	)		(124,277	)
USD	3,926,010	IDR	4,050,287		4/30/2018		HUS		-		(124,277	)		(124,277	)
USD	3,926,010	IDR	4,049,413		4/30/2018		HUS		-		(123,403	)		(123,403	)
USD	3,926,010	IDR	4,048,247		4/30/2018		HUS		-		(122,237	)		(122,237	)
USD	3,610,000	IDR	3,714,092		4/30/2018		HUS		-		(104,092	)		(104,092	)
USD	750,000	IDR	763,721		4/30/2018		HUS		-		(13,721	)		(13,721	)
USD	479,778	IDR	494,965		4/30/2018		HUS		-		(15,187	)		(15,187	)
USD	14,336,453	BRL	14,556,280		5/3/2018		HUS		-		(219,827	)		(219,827	)
USD	14,330,750	BRL	14,556,280		5/3/2018		HUS		-		(225,530	)		(225,530	)
USD	14,330,312	BRL	14,556,280		5/3/2018		HUS		-		(225,968	)		(225,968	)
USD	14,328,558	BRL	14,556,280		5/3/2018		HUS		-		(227,722	)		(227,722	)
USD	14,326,805	BRL	14,556,280		5/3/2018		HUS		-		(229,475	)		(229,475	)
USD	2,200,000	BRL	2,196,605		5/3/2018		HUS		3,395		-			3,395
								$	3,408,659	$	(8,705,250	)	$	(5,296,591	)

* All values denominated in USD.

See accompanying notes

25

American Beacon GLG Total Return Fund^SM

Schedule of Investments

January 31, 2018

Glossary:
Counterparty Abbreviations:
BCC	Barclays Capital, Inc.
BOA	Bank of America, N.A.
BRC	Barclays Bank PLC
CBK	Citibank, N.A.
DUB	Deutsche Bank AG
FBF	Credit Suisse International
HUS	HSBC Bank (USA)
UAG	UBS AG
Currency Abbreviations:
BRL	Brazilian Real
EUR	Euro
IDR	Indonesian Rupiah
USD	United States Dollar
ZAR	South African Rand
Exchange Abbreviations:
OTC	Over-the-Counter
Other Abbreviations:
CDI	Chess Depository Interest

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of January 31, 2018, the investments were classified as described below:

GLG Total Return Fund	Level 1		Level 2			Level 3		Total
Assets
Foreign Corporate Obligations
Brazil	$	-	$	1,600,720		$	-	$	1,600,720
British Virgin Islands		-		10,367,612			-		10,367,612
India		-		6,143,162			-		6,143,162
Indonesia		-		699,270			-		699,270
Israel		-		4,338,614			-		4,338,614
Malaysia		-		2,917,089			-		2,917,089
Mexico		-		18,263,230			-		18,263,230
Turkey		-		2,655,878			-		2,655,878
Foreign Sovereign Obligations
Brazil		-		13,662,438			-		13,662,438
Colombia		-		4,210,000			-		4,210,000
Indonesia		-		5,812,038			-		5,812,038
South Africa		-		19,964,241			-		19,964,241
Turkey		-		33,625,450			-		33,625,450
Short-Term Investments
Investment Companies		13,961,256		-			-		13,961,256
U.S. Treasury Obligations		-		594,120,705			-		594,120,705
Total Investments in Securities - Assets	$	13,961,256	$	718,380,447		$	-	$	732,341,703
Financial Derivative Instruments - Assets
Swap Contract Agreements	$	-	$	83,600		$	-	$	83,600
Forward Foreign Currency Contracts		-		3,408,659			-		3,408,659
Total Financial Derivative Instruments - Assets	$	-	$	3,492,259		$	-	$	3,492,259
Financial Derivative Instruments - Liabilities
Swap Contract Agreements	$	-	$	(12,289,637	)	$	-	$	(12,289,637	)
Forward Foreign Currency Contracts		-		(8,705,250	)		-		(8,705,250	)
Total Financial Derivative Instruments - Liabilities	$	-	$	(20,994,887	)	$	-	$	(20,994,887	)

See accompanying notes

26

American Beacon GLG Total Return Fund^SM

Schedule of Investments

January 31, 2018

U.S. GAAP requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of the Fund’s assets and liabilities. During the year ended January 31, 2018, there were no transfers between levels.

See accompanying notes

27

American Beacon Funds^SM

Statements of Assets and Liabilities

January 31, 2018

	Global Evolution Frontier Markets Income Fund			GLG Total Return Fund
Assets:
Investments in unaffiliated securities, at fair value†	$	170,554,296		$	718,380,447
Investments in affiliated securities, at fair value‡		27,848,722			13,961,256
Foreign currency, at fair value^		1,434,349			309
Cash		5,681			–
Swap premium paid		–			12,283,207
Swap income receivable		–			12,528
Cash collateral held at custodian for the benefit of the broker		–			22,965,000
Dividends and interest receivable		4,330,873			2,376,156
Receivable for investments sold		–			4,805,250
Receivable for fund shares sold		3,157,464			3,222,307
Receivable for expense reimbursement (Note 2)		–			203,872
Unrealized appreciation from swap agreements		–			83,600
Unrealized appreciation from forward foreign currency contracts		184,776			3,408,659
Prepaid expenses		65,249			29,410
Total assets		207,581,410			781,732,001
Liabilities:
Payable for investments purchased		6,736,827			4,466,529
Payable for fund shares redeemed		90,941			545,240
Payable under excess expense reimbursement plan (Note 2)		16,374			–
Swap premium received		–			8,298,968
Cash collateral held at broker for the benefit of the custodian		–			230,000
Swap income payable		–			813,829
Management and sub-advisory fees payable (Note 2)		140,040			567,641
Service fees payable (Note 2)		16,594			260
Transfer agent fees payable (Note 2)		7,656			59,077
Custody and fund accounting fees payable		92,143			35,171
Professional fees payable		70,142			45,748
Trustee fees payable (Note 2)		591			2,345
Payable for prospectus and shareholder reports		3,678			10,749
Unrealized depreciation from swap agreements		–			12,289,637
Unrealized depreciation from forward foreign currency contracts		45,359			8,705,250
Other liabilities		13,076			77,275
Total liabilities		7,233,421			36,147,719
Net assets	$	200,347,989		$	745,584,282
Analysis of net assets:
Paid-in-capital	$	211,472,180		$	762,439,644
Undistributed (overdistribution of) net investment income		1,041,079			1,078,927
Accumulated net realized gain (loss)		(15,463,988	)		(8,344	)
Unrealized appreciation (depreciation) of investments in unaffiliated securitiesA		3,132,581			(423,320	)
Unrealized (depreciation) of forward foreign currency contracts		139,417			(5,296,591	)
Unrealized appreciation of foreign currency transactions		26,720			3
Unrealized (depreciation) of swap agreements		–			(12,206,037	)
Net assets	$	200,347,989		$	745,584,282

See accompanying notes

28

American Beacon Funds^SM

Statements of Assets and Liabilities

January 31, 2018

	Global Evolution Frontier Markets Income Fund		GLG Total Return Fund
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		7,030,878		30,646
Y Class		8,206,266		99,228
Investor Class		4,323,491		14,472
A Class		387,375		10,212
C Class		876,841		10,160
Ultra Class		N/A		70,874,882
Net assets:
Institutional Class	$	67,653,731	$	321,683
Y Class	$	79,007,953	$	1,038,736
Investor Class	$	41,560,845	$	150,889
A Class	$	3,726,687	$	106,439
C Class	$	8,398,773	$	105,096
Ultra Class		N/A	$	743,861,439
Net asset value, offering and redemption price per share:
Institutional Class	$	9.62	$	10.50
Y Class	$	9.63	$	10.47
Investor Class	$	9.61	$	10.43
A Class	$	9.62	$	10.42
A Class (offering price)	$	10.10	$	10.94
C Class	$	9.58	$	10.34
Ultra Class		N/A	$	10.50
† Cost of investments in unaffiliated securities	$	167,421,715	$	718,803,767
‡ Cost of investments in affiliated securities	$	27,848,722	$	13,961,256
^ Cost of foreign currency	$	1,414,123	$	306
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

29

American Beacon Funds^SM

Statements of Operations

For the year ended January 31, 2018

	Global Evolution Frontier Markets Income Fund			GLG Total Return Fund
Investment income:
Dividend income from affiliated securities	$	130,139		$	188,529
Interest income (net of foreign taxes)†		12,534,263			7,564,654
Total investment income		12,664,402			7,753,183
Expenses:
Management and sub-advisory fees (Note 2)		1,056,247			5,159,325
Transfer agent fees:
Institutional Class (Note 2)		8,365			60
Y Class (Note 2)		41,011			591
Investor Class		2,546			1,240
A Class		260			-
C Class		141			-
Ultra Class		-			290,566
Custody and fund accounting fees		122,927			46,909
Professional fees		132,866			89,833
Registration fees and expenses		86,471			191,316
Service fees (Note 2):
Y Class		4,303			911
Investor Class		78,685			378
A Class		2,384			163
C Class		4,738			161
Distribution fees (Note 2):
A Class		9,917			271
C Class		33,380			1,076
Prospectus and shareholder report expenses		19,013			41,113
Trustee fees (Note 2)		5,205			31,468
Dividends and interest on securities sold short		-			4,909
Other expenses		10,037			30,387
Total expenses		1,618,496			5,890,677
Net fees waived and expenses (reimbursed) / recouped (Note 2)		25,376			(669,221	)
Net expenses		1,643,872			5,221,456
Net investment income		11,020,530			2,531,727
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments in unaffiliated securitiesA		(1,997,048	)		3,954,107
Foreign currency transactions		(19,358	)		105,469
Forward foreign currency contracts		(7,711	)		2,752,629
Futures contracts		-			(9	)
Swap agreements		-			(3,678,687	)
Change in net unrealized appreciation (depreciation) of:
Investments in unaffiliated securitiesB		5,649,676			(269,730	)
Foreign currency transactions		1,882,321			42,665
Forward foreign currency contracts		146,096			(6,318,307	)
Swap agreements		-			(12,110,142	)
Net gain (loss) from investments		5,653,976			(15,522,005	)
Net increase (decrease) in net assets resulting from operations	$	16,674,506		$	(12,990,278	)
† Foreign taxes	$	277,097		$	-
A The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities.
B The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at year end.

See accompanying notes

30

American Beacon Funds^SM

Statements of Changes in Net Assets

	Global Evolution Frontier Markets Income Fund						GLG Total Return Fund
	Year Ended January 31, 2018			Year Ended January 31, 2017			Year Ended January 31, 2018			May 20, 2016A to January 31, 2017
Increase (decrease) in net assets:
Operations:
Net investment income	$	11,020,530		$	5,714,964		$	2,531,727		$	373,398
Net realized gain (loss) from investments in unaffiliated securities, foreign currency transactions, forward foreign currency contracts, futures contracts, and swap agreements		(2,024,117	)		(3,144,932	)		3,133,509			1,150,406
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, foreign currency transactions, forward foreign currency contracts, and swap agreements		7,678,093			5,440,998			(18,655,514	)		729,569
Net increase (decrease) in net assets resulting from operations		16,674,506			8,011,030			(12,990,278	)		2,253,373
Distributions to shareholders:
Net investment income:
Institutional Class		(2,845,735	)		(95,303	)		(34,454	)		(93,409	)
Y Class		(3,511,778	)		(188,232	)		(6,291	)		(953	)
Investor Class		(2,275,358	)		(128,864	)		(1,298	)		(1,131	)
A Class		(293,772	)		(52,461	)		(987	)		(953	)
C Class		(214,080	)		(14,541	)		(422	)		(953	)
Ultra Class		-			-			(4,299,303	)		(459,958	)
Net realized gain from investments:
Institutional Class		-			-			(517	)		(6,972	)
Y Class		-			-			(1,675	)		(71	)
Investor Class		-			-			(244	)		(85	)
A Class		-			-			(173	)		(71	)
C Class		-			-			(172	)		(71	)
Ultra Class		-			-			(1,163,013	)		(45,281	)
Return of capital:
Institutional Class		-			(769,911	)		(152	)		-
Y Class		-			(1,520,652	)		(491	)		-
Investor Class		-			(1,041,038	)		(72	)		-
A Class		-			(423,814	)		(51	)		-
C Class		-			(117,474	)		(50	)		-
Ultra Class		-			-			(341,068	)		-
Net distributions to shareholders		(9,140,723	)		(4,352,290	)		(5,850,433	)		(609,908	)
Capital share transactions (Note 10):
Proceeds from sales of shares		148,370,285			25,553,537			793,714,239			78,842,000
Reinvestment of dividends and distributions		8,065,854			4,251,801			184,104			105,707
Cost of shares redeemed		(26,890,130	)		(35,677,428	)		(104,815,311	)		(10,249,211	)
Redemption fees		11,114			7,270			-			-
Net increase (decrease) in net assets from capital share transactions		129,557,123			(5,864,820	)		689,083,032			68,698,496
Net increase (decrease) in net assets		137,090,906			(2,206,080	)		670,242,321			70,341,961
Net assets:
Beginning of period		63,257,083			65,463,163			75,341,961			5,000,000	B
End of period*	$	200,347,989		$	63,257,083		$	745,584,282		$	75,341,961
*Includes undistributed (overdistribution of) net investment income	$	1,041,079		$	6,679		$	1,078,927		$	609,498
A Commencement of operations.
B Seed capital.

See accompanying notes

31

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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 diversified, open-end management investment companies. As of January 31, 2018, the Trust consists of thirty-three active series, two of which are presented in this filing: American Beacon Global Evolution Frontier Markets Income Fund and American Beacon GLG Total Return Fund (collectively, the “Funds” and each individually a “Fund”). The remaining thirty-one active series are reported in separate filings. Prior to August 24, 2017, the American Beacon Global Evolution Frontier Markets Income Fund was registered under the Act as a non-diversified, open-end management investment company.

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.

Class Disclosure

Each Fund has multiple classes of shares designed to meet the needs of different groups of investors; however, not all of the 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—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
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 through employee directed benefit plans with applicable sales charges which may include CDSC.	$	1,000
Ultra	Large institutional investors - sold directly or through intermediary channels.	$	500,000,000

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 respective Fund. Class specific expenses, where applicable, currently include service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.

Recently Adopted 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, and has been adopted accordingly.

32

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

Significant Accounting Policies

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 the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946, Financial Services – Investment Companies, a part of the 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.

Currency Translation

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

Distributions to Shareholders

Distributions, if any, of net investment income are generally paid at least annually and recorded on the ex-dividend date. 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.

Allocation of Income, Trust Expenses, Gains, and Losses

Investment income, realized and unrealized gains and losses from investments of the Funds are allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Funds. Expenses directly charged or attributable to any Fund will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Funds on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Funds or nature of the services performed and relative applicability to the Funds.

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.

33

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

Redemption Fees

All Classes of the Global Evolution Fund impose a 2% redemption fee on shares held for less than 90 days. The fee is deducted from the redemption proceeds and is intended to offset the trading costs, market impact, and other costs associated with short-term trading activity in the Fund. The “first-in, first-out” method is used to determine the holding period. The fee is allocated to all classes of this Fund pro-rata based on the net assets.

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 and Investment Sub-Advisory Agreements

The Funds and the Manager are parties to a Management Agreement that obligates the Manager to provide the Funds with investment advisory and administrative services. As compensation for performing the duties under the Management Agreement, the Manager will receive an annualized management fee based on a percentage of each Fund’s average daily net assets that is calculated and accrued daily according to the following schedule:

First $5 billion	0.35	%
Next $5 billion	0.325	%
Next $10 billion	0.30	%
Over $20 billion	0.275	%

The Trust, on behalf of the Funds, and the Manager have entered into an Investment Advisory Agreement with Global Evolution USA, LLC and GLG LLC (the “Sub-Advisors”) pursuant to which the Funds have agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Funds’ average daily net assets according to the following schedules:

Global Evolution USA, LLC

All Assets 0.50 % 

GLG LLC

First $500 million	0.60	%
Next $500 million	0.55	%
Over $1 billion	0.50	%

The Management and Sub-Advisory Fees paid by the Funds for the year ended January 31, 2018 were as follows:

Global Evolution Frontier Markets Income Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	434,925
Sub-Advisor Fees		0.50	%		621,322
Total		0.85	%	$	1,056,247

34

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

GLG Total Return Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	1,918,840
Sub-Advisor Fees		0.59	%		3,240,485
Total		0.94	%	$	5,159,325

Distribution Plans

The Funds, except for the 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 may be charged to the Funds for distribution purposes. However, the Plan authorizes the management fee 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 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 A 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.

Service Plans

The Manager and the Trust entered into Service Plans that obligates the Manager to oversee additional shareholder servicing of the Y, Investor, 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 0.25% of the average daily net assets of the A and C Classes, and up to 0.375% of the average daily net assets of the Investor Class of the Funds. 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 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 Fund’s transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Fund’s transfer agent. Accordingly, the Funds, pursuant to 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 year ended January 31, 2018, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Global Evolution Frontier Markets Income	$	45,635
GLG Total Return		597

35

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

As of January 31, 2018, the Funds owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statements of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent Fees
Global Evolution Frontier Markets Income	$	6,390
GLG Total Return		80

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 and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the year ended January 31, 2018, the Manager earned fees on the Funds’ direct investments in the USG Select Fund as shown below:

Fund	Direct Investments in USG Select Fund
Global Evolution Frontier Markets Income	$	13,820
GLG Total Return		22,068

Interfund Credit Facility

Pursuant to an exemptive order issued by the Securities and Exchange Commission (“SEC”), the Funds, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each Fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating Funds for temporary purposes. The interfund credit facility is advantageous to the Funds because it provides added liquidity, and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a Fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended January 31, 2018, the Funds did not utilize the credit facility.

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Funds to the extent that total operating expenses exceed the Funds’ expense cap. During the year ended January 31, 2018, the Manager waived and/or reimbursed expenses as follows:

		Expense Cap								Expiration of Reimbursed Expenses
Fund	Class	2/1/2017 - 1/31/2018			Reimbursed Expenses		(Recouped) Expenses
Global Evolution Frontier Markets Income	Institutional		1.15	%	$	8,156	$	–			2021
Global Evolution Frontier Markets Income	Y		1.25	%		–		(526	)		2021

36

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

		Expense Cap								Expiration of Reimbursed Expenses
Fund	Class	2/1/2017 - 1/31/2018			Reimbursed Expenses		(Recouped) Expenses
Global Evolution Frontier Markets Income	Investor		1.53	%	$	–	$	(29,904	)		2021
Global Evolution Frontier Markets Income	A		1.55	%		–		(2,902	)		2021
Global Evolution Frontier Markets Income	C		2.30	%		–		(200	)		2021
GLG Total Return	Institutional		1.05	%		–		(156	)		2021
GLG Total Return	Y		1.15	%		300		–			2021
GLG Total Return	Investor		1.43	%		994		–			2021
GLG Total Return	A		1.45	%		–		(35	)		2021
GLG Total Return	C		2.20	%		–		(35	)		2021
GLG Total Return	Ultra		0.95	%		668,153		–			2021

Of these amounts, $203,872 was disclosed as a receivable from the Manager on the Statements of Assets and Liabilities at January 31, 2018 for the GLG Total Return Fund and $16,374 was disclosed as a payable to the Manager on the Statements of Assets and Liabilities at January 31, 2018 for the Global Evolution Frontier Markets Income Fund.

The Funds have 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 Funds 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 Funds’ 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 listed above will expire in 2021. The carryover of excess expenses potentially reimbursable to the Manager, but not recorded as a liability are as follows:

Fund	Recouped Expenses		Excess Expense Carryover			Expired Expense Carryover		Expiration of Reimbursed Expenses
Global Evolution Frontier Markets Income	$	33,532	$	66,857		$	–		2018
Global Evolution Frontier Markets Income		–		18,592			–		2019
Global Evolution Frontier Markets Income		–		63,671	(1)		–		2020
GLG Total Return		226		263,456			–		2020

⁽¹⁾  Contractual expense caps were removed from the Institutional, Y, Investor, and A Classes on May 29, 2016. Voluntary expense caps were reinstated November 29, 2016 for the Institutional, Y, Investor, and A Classes.

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 year ended January 31, 2018, Foreside collected $10,006 for Global Evolution Frontier Markets Income Fund, from the sale of Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Funds’ 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 year ended January 31, 2018, there were no CDSC fees collected for Class A Shares of the Funds.

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 Funds’ 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 year ended January 31, 2018, CDSC fees of $562 were collected for Class C Shares of the Global Evolution Frontier Markets Income Fund.

37

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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 significant ownership of more than 5% of the Funds’ outstanding shares could have a material impact on the Funds. As of January 31, 2018, based on management’s evaluation of the shareholder account base, one account in the Global Evolution Frontier Markets Income Fund has been identified as representing an unaffiliated significant ownership of approximately 7% of the Fund’s outstanding shares.

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 $10,000 for each Board 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 $2,500 fee each quarter for his attendance at the committee meetings. Effective January 1, 2018, the Board Vice Chair receives an additional annual retainer of $10,000. 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 Trusts 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.

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.

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.

Forward foreign currency contracts are valued using the prevailing forward exchange rate and are categorized as Level 2 in the fair value hierarchy. Swap contracts are valued at prices furnished by independent swap dealers or by an independent pricing service and are generally categorized as a Level 2 in the fair value hierarchy. Forward foreign currency contracts and swap contracts involve, to varying degrees, risk of loss in excess of the unrealized appreciation (depreciation) on the Statement of Assets and Liabilities.

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Valuation Inputs

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

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

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

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

Common stocks, preferred securities, 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.

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 and structured notes, 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.

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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 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 (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold.

4.  Securities and Other Investments

Credit-Linked Notes

Credit-linked notes (“CLNs”) are derivative debt obligations that are issued by limited purpose entities or by financial firms, such as banks, securities firms or their affiliates, and that are structured so that their performance is linked to that of an underlying bond or other debt obligation (a “reference asset”), normally by means of an embedded or underlying credit default swap. The reference assets for the CLNs in which the Fund may invest will be limited to sovereign or quasi-sovereign debt instruments or other investments in which the Fund’s investment policies permit it to invest directly. The Fund may invest in CLNs when the Fund’s Sub-Advisor believes that doing so is more efficient than investing in the reference assets directly or when such direct investment by the Fund is not feasible due to legal or other restrictions.

The issuer or one of the affiliates of the issuer of the CLNs in which the Fund will invest, normally will purchase the reference asset underlying the CLN directly, but in some cases it may gain exposure to the reference asset through a credit default swap or other derivative. Under the terms of a CLN, the Fund will receive a fixed or variable rate of interest on the outstanding principal amount of the CLN, which in turn will be subject to reduction (potentially down to zero) if a “credit event” occurs with respect to the underlying reference asset or its issuer. Such credit events will include payment defaults on the reference asset, and normally will also include events that do not involve an actual default, such as actual or potential insolvencies, repudiations of indebtedness, moratoria on payments, reference asset restructurings, limits on the convertibility or repatriation of currencies, and the imposition of ownership restrictions. If a credit event occurs, payments on the CLN would terminate, and the Fund normally would receive delivery of the underlying reference asset (or, in some cases, a comparable “deliverable” asset) in lieu of the repayment of principal. In some cases, however, including but not limited to instances where there has been a market disruption or in which it is or has become illegal, impossible or impracticable for the Fund to purchase, hold or receive the reference assets, the Fund may receive a cash settlement based on the value of the reference asset or a comparable instrument, less fees charged and certain expenses incurred by the CLN issuer.

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January 31, 2018

CLNs are debt obligations of the CLN issuers, and the Fund would have no ownership or other property interest in the reference assets (other than following a credit event that results in the reference assets being delivered to the Fund) or any direct recourse to the issuers of those reference assets. Thus, the Fund will be exposed to the credit risk of the issuers of the reference assets that underlie its CLNs, as well as to the credit risk of the issuers of the CLNs themselves. CLNs will also be subject to currency risk, liquidity risk, valuation risks, and the other risks of a credit default swap. Various determinations that may need to be made with respect to the CLNs, including the occurrence of a credit event, the selection of deliverable assets (where applicable) and the valuation of the reference asset for purposes of determining any cash settlement amount, normally will be made by the issuer or sponsor of the CLN. The interests of such issuer or sponsor may not be aligned with those of the Fund or other investors in the CLN. Accordingly, CLNs may also be subject to potential conflicts of interest. There may be no established trading market for the Fund’s CLNs, in which event they may constitute illiquid investments.

Fixed-Income Investments

The Funds 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 Funds’ 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. For example, while securities with longer maturities tend to produce higher yields, they also tend to be more sensitive to changes in prevailing interest rates and are, therefore, more volatile than shorter-term securities and are subject to greater market fluctuations as a result of changes in interest rates. Fixed-income securities are also subject to credit risk, which is the risk that the credit strength of an issuer of a fixed-income security will weaken and/or that the issuer will be unable to make timely principal and interest payments and that the security may go into default. In addition, there is prepayment risk, which is the risk that during periods of falling interest rates, certain fixed-income securities with higher interest rates, such as mortgage- and asset-backed securities, may be prepaid by their issuers thereby reducing the amount of interest payments. This may result in a Fund having to reinvest its proceeds in lower yielding securities. Securities underlying mortgage- and asset-backed securities, which may include subprime mortgages, also may be subject to a higher degree of credit risk, valuation risk, and liquidity risk.

Foreign Debt Securities

The Funds may invest in foreign fixed and floating rate income securities (including emerging market securities) all or a portion of which may be non-U.S. dollar denominated and which include: (a) debt obligations issued or guaranteed by foreign national, provincial, state, municipal or other governments with taxing authority or by their agencies or instrumentalities, including Brady Bonds; (b) debt obligations of supranational entities; (c) debt obligations of the U.S. Government issued in non-dollar securities; (d) debt obligations and other fixed income securities of foreign corporate issuers (both dollar and non-dollar denominated); and (e) U.S. corporate issuers (both Eurodollar and non-dollar denominated). There is no minimum rating criteria for the Funds’ investments in such securities. Investing in the securities of foreign issuers involves special considerations that are not typically associated with investing in the securities of U.S. issuers. In addition, emerging markets are markets that have risks that are different and higher than those in more developed markets.

Foreign Securities

The Funds may invest in U.S. dollar-denominated and non-U.S. dollar denominated equity and debt securities of foreign issuers and foreign branches of U.S. banks, including negotiable certificates of deposit, 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. While investments in foreign securities may be intended to reduce risk by providing further diversification, such investments involve sovereign and other risks, in addition to the credit and market risks

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January 31, 2018

normally associated with domestic securities. These additional risks include the possibility of adverse political and economic developments (including political or social instability, nationalization, expropriation, or confiscatory taxation); the potentially adverse effects of unavailability of public information regarding issuers, different governmental supervision and regulation of financial markets, reduced liquidity of certain financial markets, and the lack of uniform accounting, auditing, and financial reporting standards or the application of standards that are different or less stringent than those applied in the United States; different laws and customs governing securities tracking; and possibly limited access to the courts to enforce the Funds’ rights as an investor.

Frontier and Emerging Market Investments

The Funds may invest in the securities and derivatives with exposure to various countries with emerging capital markets. Investments in the securities and derivatives with exposure to countries with emerging capital markets involve significantly higher risks not involved in investments in securities in more developed capital markets, such as (i) low or non-existent trading volume, resulting in a lack of liquidity and increased volatility in prices for such securities, as compared to securities from more developed capital markets, (ii) uncertain national policies and social, political and economic instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of inflation or unfavorable diplomatic developments, (iii) possible fluctuations in exchange rates, differing legal systems and the existence or possible imposition of exchange controls, custodial restrictions or other non-U.S. or U.S. governmental laws or restrictions applicable to such investments, (iv) national policies that may limit the Fund’s investment opportunities such as restrictions on investment in issuers or industries deemed sensitive to national interests, (v) the lack or relatively early development of legal structures governing private and foreign investments and private property, and (vi) less diverse or immature economic structures. In addition to withholding taxes on investment income, some countries with emerging capital markets may impose differential capital gain taxes on foreign investors.

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 during the year ended January 31, 2018 are disclosed in the Fund’s Notes to the Schedule of Investments.

Regulation S under the Securities Act permits the sale abroad of securities that are not registered for sale in the United States and includes a provision for U.S. investors, such as the Funds, to purchase such unregistered securities if certain conditions are met.

Inflation-Indexed Bonds

The Funds may invest in inflation-indexed bonds. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted based on the rate of inflation. The interest rate on these bonds is generally fixed at issuance at a rate lower than typical bonds. Over the life of an inflation-indexed bond, however, interest will be paid based on principal value, which is adjusted for inflation. Any increase or decrease in the principal amount of an inflation-indexed bond will be included as interest income on the Statement of Operations, even though investors do not receive their principal until maturity.

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January 31, 2018

Other Investment Company Securities and Other Exchange-Traded Products

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

Sovereign and Quasi-Sovereign Government and Supranational Debt

The Funds can invest in debt securities issued or guaranteed by foreign governments and their political subdivisions or agencies which involve special risks. Sovereign debt differs from debt obligations issued by private entities in that, generally, remedies for defaults must be pursued in the courts of the defaulting party. Sovereign debt securities may include: debt securities issued or guaranteed by governments, governmental agencies or instrumentalities and political subdivisions located in emerging market countries; debt securities issued by government owned, controlled or sponsored entities located in emerging market countries; interests in entities organized and operated for the purpose of restructuring the investment characteristics of instruments issued by government owned, controlled or sponsored entities located in emerging market countries; interests in entities organized and operated for the purpose of restructuring the investment characteristics of instruments issued by any of the above issuers; participations in loans between emerging market governments and financial institutions; and Brady Bonds, which are debt securities issued under the framework of the Brady Plan as a means for debtor nations to restructure their outstanding external indebtedness.

Supranational entities may also issue debt securities. Supranational organizations are entities designated or supported by a government or governmental group to promote economic development. Included among these organizations are the Asian Development Bank, the European Investment Bank, the Inter-American Development Bank, the International Monetary Fund, the United Nations, the World Bank and the European Bank for Reconstruction and Development. Supranational organizations have no taxing authority and are dependent on their members for payments of interest and principal to the extent their assets are insufficient. Further, the lending activities of such entities are limited to a percentage of their total capital, reserves and net income.

Variable or Floating Rate Obligations

The interest rates payable on certain fixed-income securities in which the Funds may invest are not fixed and may fluctuate based upon changes in market rates. A variable rate obligation has an interest rate which is adjusted at predesignated periods in response to changes in the market rate of interest on which the interest rate is based. Variable and floating rate obligations are less effective than fixed rate instruments at locking in a particular yield. Nevertheless, such obligations may fluctuate in value in response to interest rate changes if there is a delay between changes in market interest rates and the interest reset date for the obligation, or for other reasons.

5.  Financial Derivative Instruments

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

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Notes to Financial Statements

January 31, 2018

Forward Foreign Currency Contracts

The Funds may enter into forward foreign currency contracts to hedge the exchange rate risk on investment transactions or to hedge the value of the Funds’ securities denominated in foreign currencies. Forward foreign currency contracts are valued at the forward exchange rate prevailing on the day of valuation. The Funds may also use currency contracts to increase exposure to a foreign currency or to shift exposure to foreign currency fluctuations from one country to another. The Funds bear 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 Funds also bear the credit risk if the counterparty fails to perform under the contract.

During the year ended January 31, 2018, the Funds entered into forward foreign currency contracts primarily for hedging foreign currency fluctuations.

The Funds’ forward foreign 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 foreign currency contracts. For the purpose of this disclosure, volume is measured by the amounts bought and sold in USD at each quarter end.

Average Forward Foreign Currency Notional Amount Outstanding Year ended January 31, 2018
Fund	Purchased Contracts		Sold Contracts
Global Evolution Frontier Markets Income	$	2,644,169	$	-
GLG Total Return		173,709,065		308,054,272

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 usually reflects this amount on the Schedules of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as cash deposited with broker on the Statements of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.

During the year ended January 31, 2018, the GLG Total Return Fund entered into futures contracts primarily for exposing cash to markets.

The GLG Total Return Fund invested in an insignificant volume of futures contracts during the year, and no positions were held as of January 31, 2018.

Swap Agreements

The Funds may invest in swap agreements. Swap agreements are negotiated between the Fund and a counterparty to exchange or swap investment cash flows, assets, foreign currencies, or market-linked returns at

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specified, future intervals. Swap agreements are either privately negotiated in the over-the-counter market (“OTC Swaps”) or cleared in a central clearing house (“Centrally Cleared Swaps”). The Fund may enter into credit default, cross-currency, interest rate and other forms of swap agreements to manage its exposure to credit, currency, interest rate, and inflation risk. In connection with these agreements, securities or cash may be identified as collateral in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default or bankruptcy/insolvency.

Swaps are marked to market daily based upon values from third party vendors or quotations from market makers to the extent available and the change in value, if any, is recorded as an unrealized gain or loss on the Statement of Assets and Liabilities. Daily fluctuations in the value of centrally cleared swaps are recorded in variation margin on the Statement of Assets and Liabilities and recorded as unrealized gain or loss. In the event that market quotes are not readily available and the swap cannot be valued pursuant to one of the valuation methods, the value of the swap will be determined in good faith by the Valuation Committee pursuant to procedures approved by the Board.

For OTC swaps payments received or made at the beginning of the measurement period are reflected as such on the Statement of Assets and Liabilities and represent payments made or received upon entering into the swap agreement to compensate for differences between the stated terms of the swap agreement and prevailing market conditions (credit spreads, currency exchange rates, interest rates, and other relevant factors). Centrally cleared swaps provide the same rights to the protection buyer and seller except the payments between parties, including upfront premiums, are settled through a central clearing agent through variation margin payments. Upfront and periodic payments for OTC and centrally cleared swapsare recorded as realized gains or losses on the Statement of Operations upon termination or maturity of the swap. A liquidation payment received or made at the termination of the swap is recorded as realized gain or loss on the Statement of Operations. Net periodic payments received or paid by the Fund are included as part of realized gains or losses on the Statement of Operations.

Entering into these agreements involves, to varying degrees, elements of credit, market and documentation risk in excess of the amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of contractual terms in the agreements and that there may be unfavorable changes in interest rates.

The Fund’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from the counterparty over the contract’s remaining life, to the extent that amount is positive. The risk is mitigated by having a master netting arrangement between the Fund and the counterparty and by the posting of collateral to the Fund to cover the Fund’s exposure to the counterparty.

Credit Default Swap Agreements

Credit default swap agreements involve one party making a stream of payments (referred to as the buyer of protection) to another party (the seller of protection) in exchange for the right to receive a specified return in the event of a default or other credit event for the referenced entity, obligation or index. As a seller of protection on credit default swap agreements, the Fund will generally receive from the buyer of protection a fixed rate of periodic premiums throughout the term of the swap provided that there is no credit event. As the seller, the Fund would effectively add leverage to its portfolio because, in addition to its total net assets, the Fund would be subject to investment exposure up to the notional amount of the swap.

If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. If the Fund is a buyer of protection and a credit event occurs, as defined under

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the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. Recovery values are estimated by market makers considering either industry standard recovery rates or entity specific factors and considerations until a credit event occurs. If a credit event has occurred, the recovery value is determined by a facilitated auction whereby a minimum number of allowable broker bids, together with a specified valuation method, are used to calculate the settlement value.

Credit default swap agreements on corporate issues, sovereign issues of an emerging country or U.S. municipal issues involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. If a credit event occurs and cash settlement is not elected, a variety of other deliverable obligations may be delivered in lieu of the specific referenced obligation. The ability to deliver other obligations may result in a cheapest-to-deliver option (the buyer of protection’s right to choose the deliverable obligation with the lowest value following a credit event). The Fund may use credit default swaps on corporate issues, sovereign issues of an emerging country or U.S. municipal issues to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where the Fund owns or has exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood of a particular issuer’s default.

Credit default swap agreements on asset-backed securities involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. Unlike credit default swaps on corporate issues, sovereign issues of an emerging country or U.S. municipal issues, deliverable obligations in most instances would be limited to the specific referenced obligation as performance for asset-backed securities can vary across deals. Prepayments, principal paydowns, and other writedown or loss events on the underlying mortgage loans will reduce the outstanding principal balance of the referenced obligation. These reductions may be temporary or permanent as defined under the terms of the swap agreement and the notional amount for the swap agreement will be adjusted by corresponding amounts. The Fund may use credit default swaps on asset-backed securities to provide a measure of protection against defaults of the referenced obligation that the Fund owns or to take an active long or short position with respect to the likelihood of a particular referenced obligation’s default that the Fund does not own.

Credit default swap agreements on credit indices involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising the credit index. A credit index is a basket of credit instruments or exposures designed to be representative of some part of the credit market as a whole. These indices are made up of reference credits that are judged by a poll of dealers to be the most liquid entities in the credit default swap market based on the sector of the index. Components of the indices may include, but are not limited to, investment grade securities, high yield securities, asset-backed securities, emerging markets, and/or various credit ratings within each sector. Credit indices are traded using credit default swaps with standardized terms including a fixed spread and standard maturity dates. An index credit default swap references all the names in the index, and if there is a default, the credit event is settled based on that name’s weight in the index. The composition of the indices changes periodically, usually every six months, and for most indices, each name has an equal weight in the index. The Fund may use credit default swaps on credit indices to hedge a portfolio of credit default swaps or bonds, which is less expensive than it would be to buy many credit default swaps to achieve a similar effect. Credit default swaps on indices are benchmarks for protecting investors owning bonds against default, and traders use them to speculate on changes in credit quality.

Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues, sovereign issues of an emerging country or U.S. municipal issues as of period end are disclosed in the Notes to the Schedule of Investments and serve as an indicator of the current status of the payment/performance risk and represent a market participant view of the likelihood or risk of default for

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January 31, 2018

the underlying referenced security to credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of the payment/performance risk. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

The maximum potential amount of future payments (undiscounted) that the Fund as a seller of protection could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. Notional amounts of each individual credit default swap agreement outstanding as of January 31, 2018, for which the Fund is the seller of protection is disclosed in the Notes to the Schedule of Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by the Fund for the same referenced entity or entities.

During the year ended January 31, 2018, the GLG Total Return Fund entered into credit default swaps primarily for return enhancement, hedging, and exposing cash to markets.

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

Average Credit Default Swap Notional Amounts Outstanding
Fund	Year ended January 31, 2018
GLG Total Return	$	221,525,000

Interest Rate Swap Agreements

The GLG Total Return Fund is subject to interest rate risk exposure in the normal course of pursuing its investment objectives. Because the Fund holds fixed rate bonds, the value of these bonds may decrease if interest rates rise. To help hedge against this risk and to maintain its ability to generate income at prevailing market rates, the Fund may enter into interest rate swap agreements. Interest rate swap agreements involve the exchange by the Fund with another party of their respective commitments to pay or receive interest with respect to the notional amount of principal.

During the year ended January 31, 2018, the GLG Total Return Fund entered into interest rate swaps primarily for return enhancement, hedging and exposing cash to markets.

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

Average Interest Rate Swap Notional Amounts Outstanding
Fund	Year ended January 31, 2018
GLG Total Return		435,075,000

47

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

The following is a summary of the fair valuations of the Funds’ derivative instruments categorized by risk exposure⁽¹⁾:

Global Evolution Frontier Markets Income Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of January 31, 2018:
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 foreign currency contracts		$	-		$	184,776			$	-		$	-		$	-		$	184,776
Liabilities:	Credit contracts			Foreign exchange contracts				Commodity contracts			Interest rate contracts			Equity contracts			Total
Unrealized depreciation of forward foreign currency contracts		$	-		$	(45,359	)		$	-		$	-		$	-		$	(45,359	)

The effect of financial derivative instruments on the Statements of Operations as of January 31, 2018:
Derivatives not accounted for as hedging instruments
Realized gain (loss) from derivatives recognized as a result of operations:	Credit contracts			Foreign exchange contracts				Commodity contracts			Interest rate contracts			Equity contracts			Total
Forward foreign currency contracts		$	-		$	(7,711	)		$	-		$	-		$	-		$	(7,711	)
Net change in unrealized appreciation (depreciation) of derivatives recognized as a result from operations:	Credit contracts			Foreign exchange contracts				Commodity contracts			Interest rate contracts			Equity contracts			Total
Forward foreign currency contracts		$	-		$	146,096			$	-		$	-		$	-		$	146,096

GLG Total Return Fund

Fair values of financial instruments on the Statement of Assets and Liabilities as of January 31, 2018:
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 foreign currency contracts		$	-			$	3,408,659			$	-		$	-			$	-		$	3,408,659
Unrealized appreciation from swap agreements			83,600				-				-			-				-			83,600
Liabilities:	Credit contracts				Foreign exchange contracts				Commodity contracts			Interest rate contracts				Equity contracts			Total
Unrealized depreciation of forward foreign currency contracts		$	-			$	(8,705,250	)		$	-		$	-			$	-		$	(8,705,250	)
Unrealized depreciation from swap agreements			(6,694,253	)			-				-			(5,595,384	)			-			(12,289,637	)

48

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

The effect of financial derivative instruments on the Statement of Operations as of January 31, 2018:
Derivatives not accounted for as hedging instruments
Realized gain (loss) from derivatives recognized as a result of operations:	Credit contracts				Foreign exchange contracts				Commodity contracts			Interest rate contracts				Equity contracts			Total
Forward foreign currency contracts		$	-			$	2,752,629			$	-		$	-			$	-		$	2,752,629
Futures contracts			-				-				-			(9	)			-			(9	)
Swap agreements			(3,678,687	)			-				-			-				-			(3,678,687	)
Net change in unrealized appreciation (depreciation) of derivatives recognized as a result from operations:	Credit contracts				Foreign exchange contracts				Commodity contracts			Interest rate contracts				Equity contracts			Total
Forward foreign currency contracts		$	-			$	(6,318,307	)		$	-		$	-			$	-		$	(6,318,307	)
Swap agreements			(6,514,758	)			-				-			(5,595,384	)			-			(12,110,142	)

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

Master Agreements

International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) with counterparties govern transactions in OTC derivative and foreign exchange contracts entered into by the Funds 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.

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

6.  Principal Risks

Investing in the Funds may involve certain risks including, but not limited to, those described below.

Counterparty Risk

The Funds are 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 Funds.

Credit Risk

The Funds are subject to the risk that the issuer or guarantor of a debt security, or the counterparty to a derivatives contract or a loan, will fail to make timely payment of interest or principal or otherwise honor its obligations or default completely. Credit risk is typically greater for securities with ratings that are below

49

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

investment grade (commonly referred to as “junk bonds”). Since the Fund can invest significantly in lower-quality debt securities considered speculative in nature, this risk will be substantial.

Currency Risk

The Funds 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 foreign currency exchange contracts in non- U.S. currencies, non-U.S. currency futures contracts and swaps for cross-currency investments. Foreign currencies will fluctuate, and may decline, in value relative to the U.S. dollar and other currencies and thereby affect the Funds’ investments in foreign (non-U.S.) currencies or in securities that trade in, and receive revenues in, or in derivatives that provide exposure to, foreign (non-U.S.) currencies.

Custody Risk

The Funds may invest in markets that are less developed than those in the U.S., which may expose the Funds to risks in the process of clearing and settling trades and the holding of securities by foreign banks, agents and depositories. Investments in frontier and emerging markets may be subject to greater custody risks than investments in more developed markets.

Derivatives Risk

Derivatives may involve significant risk. The use of derivative instruments may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities or other instruments underlying those derivatives, including the high degree of leverage often embedded in such instruments, and potential material and prolonged deviations between the theoretical value and realizable value of a derivative. Some derivatives have the potential for unlimited loss, regardless of the size of the Funds’ initial investment. Derivatives may be illiquid and may be more volatile than other types of investments. The Funds may buy or sell derivatives not traded on an exchange and which may be subject to heightened liquidity and valuation risk. Derivative investments can increase portfolio turnover and transaction costs. Derivatives also are subject to counterparty risk. As a result, the Funds may obtain no recovery of their investment or may only obtain a limited recovery, and any recovery may be delayed. Not all derivative transactions require a counterparty to post collateral, which may expose the Funds to greater losses in the event of a default by a counterparty.

Emerging and Frontier Markets Risk

When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures. Frontier market countries generally have smaller economies and less developed capital markets or legal, regulatory and political systems than traditional emerging market countries. As a result, the risks of investing in emerging market countries are magnified in frontier market countries.

Forward Foreign Currency Contracts Risk

Forward foreign currency contracts, including non-deliverable forwards, are derivative instruments pursuant to a contract with a counterparty to pay a fixed price for an agreed amount of securities or other underlying assets at an agreed date or to buy or sell a specific currency at a future date at a price set at the time of the contract. The use of forward foreign currency contracts may expose the Funds to additional risks that it would not be subject to if it invested directly in the securities or currencies underlying the forward foreign currency contract.

50

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

High Portfolio Turnover Risk

Portfolio turnover is a measure of the Funds’ trading activity over a one-year period. A portfolio turnover rate of 100% would indicate that the Funds sold and replaced the entire value of its securities holdings during the period. High portfolio turnover could increase the Funds’ transaction costs, have a negative impact on performance, and generate higher capital gain distributions to shareholders than if the Funds have a lower portfolio turnover rate.

Interest Rate Risk

The Funds are subject to the risk that the market value of fixed-income securities or derivatives 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 to movements in interest rates. The Federal Reserve raised the federal funds rate in December 2016, March 2017, June 2017, and December 2017. Interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in substantial losses to the Funds. The prices of fixed-income securities or derivatives are also affected by their duration. Fixed-income securities or derivatives with longer duration generally have greater sensitivity to changes in interest rates. An increase in interest rates can impact markets broadly as well. Some investors buy securities with borrowed money; an increase in interest rates can cause a decline in those markets.

Leverage Risk

The GLG Total Return Fund’s use of futures, forward foreign currency contracts, swaps, other derivative instruments and selling securities short will have the economic effect of financial leverage. Financial leverage magnifies the exposure to the swings in prices of an asset or class of assets underlying a derivative instrument and results in increased volatility, which means that the Fund will have the potential for greater losses than if the Fund does not use the derivative instruments that have a leveraging effect. Leverage may result in losses that exceed the amount originally invested and may accelerate the rate of losses. Leverage tends to magnify, sometimes significantly, the effect of an increase or decrease in the Fund’s exposure to an asset or class of assets and may cause the Fund’s NAV to be volatile.

Liquidity Risk

The Funds are susceptible to the risk that certain fixed-income investments, 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 Funds could lose money if they are unable to dispose of an investment at a time that is most beneficial to the Funds. The Funds 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 Funds. For example, the Funds 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

The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably based on overall economic conditions and other factors. The value of a security may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investment sentiment generally. Changes in the financial condition of a single issuer can impact a market as a whole.

51

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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 NAV, (ii) an increase in the Fund’s expenses, and (iii) interference with 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 Funds may invest in shares of other registered investment companies, including ETFs and money market funds. To the extent that the Funds invest in shares of other registered investment companies, the Funds will indirectly bear the fees and expenses charged by the underlying funds in addition to the Funds’ direct fees and expenses and will be subject to the risks associated with investments in those funds. For example, ETF shares may trade at a premium or discount to their net asset value. An ETF that tracks an index may not precisely replicate the returns of its benchmark index.

Sovereign and Quasi Sovereign Debt Risk

The Funds normally will have significant investments in sovereign and quasi-sovereign debt securities. These investments are subject to risk of payment delays or defaults due to (1) country cash flow problems, (2) insufficient foreign currency reserves, (3) political considerations, (4) large debt positions relative to the country’s economy, (5) policies toward foreign lenders or investors, (6) the failure to implement economic reforms required by the International Monetary Fund or other multilateral agencies, or (7) an inability or unwillingness to repay debts. It may be particularly difficult to enforce the rights of debt holders in frontier and emerging markets. A governmental entity that defaults on an obligation may request additional time in which to pay or further loans or may seek to restructure its obligations to reduce interest rates or outstanding principal. There is no legal process for collecting sovereign and quasi-sovereign debt that a government does not pay nor are there bankruptcy proceedings through which all or part of the sovereign debt that a governmental entity has not repaid may be collected. Sovereign and quasi-sovereign debt risk is increased for emerging and frontier markets issuers, which are among the largest debtors to commercial banks and foreign governments. At times, certain emerging market countries have declared moratoria on the payment of principal and interest on external debt. Certain emerging market countries have experienced difficulty in servicing their sovereign debt on a timely basis, which has led to defaults and the restructuring of certain indebtedness.

Variable and Floating Rate Securities Risk

The interest rates payable on variable and 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. Variable and 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 rate change for a given period of time. 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.

52

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

Offsetting Assets and Liabilities

The Funds are parties to enforceable master netting agreements between brokers and counterparties which provide for the right to offset under certain circumstances. The Funds employ multiple money managers and counterparties and have elected not to offset qualifying financial and derivative instruments on the Statements of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, January 31, 2018.

Global Evolution Frontier Markets Income Fund

Offsetting of Financial and Derivative Assets as of January 31, 2018:
	Assets		Liabilities
Forward Foreign Currency Contracts	$	184,776	$	45,359
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	184,776	$	45,359
Total derivative assets and liabilities subject to an MNA	$	184,776	$	45,359

Financial Assets, Derivatives, and Collateral Received/(Pledged) by Counterparty as of January 31, 2018:
					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
ICBC STANDARD BANK PLC	$	184,776	$	-	$	-	$	-	$	184,776
					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
ICBC STANDARD BANK PLC	$	45,359	$	-	$	-	$	-	$	45,359

GLG Total Return Fund

Offsetting of Financial and Derivative Assets as of January 31, 2018:
	Assets		Liabilities
Swap Agreement - OTC	$	83,600	$	12,289,637
Forward Foreign Currency Contracts		3,408,659		8,705,250
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	3,492,259	$	20,994,887
Total derivative assets and liabilities subject to an MNA	$	3,492,259	$	20,994,887

53

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

Financial Assets, Derivatives, and Collateral Received/(Pledged) by Counterparty as of January 31, 2018:
						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
Barclays Bank PLC	$	4,478	$	(4,478	)	$	-	$	-	$	-
Barclays Capital, Inc.		21,824		(21,824	)		-		-		-
HSBC Bank (USA)		3,465,957		(3,465,957	)		-		-		-
Total	$	3,492,259	$	(3,492,259	)	$	-	$	-	$	-
						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
Bank of America, N.A.	$	482,232	$	-		$	-	$	230,000	$	252,232
Barclays Bank PLC		2,780,277		(4,478	)		-		-		2,775,799
Barclays Capital, Inc.		872,084		(21,824	)		-		-		850,260
Citibank, N.A.		2,043,072		-			-		-		2,043,072
Credit Suisse International		104,418		-			-		-		104,418
Deutsche Bank AG		122,946		-			-		-		122,946
HSBC Bank (USA)		9,398,171		(3,465,957	)		-		-		5,932,214
UBS AG		5,191,687		-			-		-		5,191,687
Total	$	20,994,887	$	(3,492,259	)	$	-	$	230,000	$	17,272,628

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 distributions 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. For the Global Evolution Frontier Markets Income Fund, each of the tax years in the 4 year period ended January 31, 2018 and for the GLG Total Return Fund, each of the tax years in the 2 year period ended January 31, 2018 remain 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.

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 Funds also utilize earnings and profits distributed to shareholders on redemptions of shares as part of the dividends paid deduction.

54

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

The tax character of distributions paid were as follows:

	Global Evolution Frontier Markets Income Fund				GLG Total Return Fund
	Year Ended January 31, 2018		Year Ended January 31, 2017		Year Ended January 31, 2018		From May 20, 2016 to January 31, 2017
Distributions paid from:
Ordinary income*
Institutional Class	$	2,845,735	$	95,303	$	34,961	$	99,988
Y Class		3,511,778		188,232		7,933		1,020
Investors Class		2,275,358		128,864		1,537		1,211
A Class		293,772		52,461		1,157		1,020
C Class		214,080		14,541		591		1,020
Ultra Class		-		-		5,439,268		502,688
Long-term capital gains
Institutional Class		-		769,911		10		393
Y Class		-		1,520,652		33		4
Investors Class		-		1,041,038		5		5
A Class		-		423,814		3		4
C Class		-		117,474		3		4
Ultra Class		-		-		23,048		2,551
Return of capital
Institutional Class		-		-		152		-
Y Class		-		-		491		-
Investors Class		-		-		72		-
A Class		-		-		51		-
C Class				-		50		-
Ultra Class		-		-		341,068		-
Total distributions paid	$	9,140,723	$	4,352,290	$	5,850,433	$	609,908

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

As of January 31, 2018 the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Global Evolution Frontier Markets Income	$	195,519,577	$	5,353,385	$	(2,303,807	)	$	3,049,578
GLG Total Return		732,770,889		5,334,322		(12,572,650	)		(7,238,328	)

Fund	Net Unrealized Appreciation (Depreciation)			Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)			Other Temporary Differences			Distributable Earnings
Global Evolution Frontier Markets Income	$	3,049,578		$	1,290,220	$	-	$	(15,463,989	)	$	-		$	(11,124,191	)
GLG Total Return		(7,238,328	)		-		-		(9,615,471	)		(1,563	)		(16,855,362	)

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, amortization of organizational costs, defaulted bond income accruals, straddle deferrals, and the realization for tax purposes of unrealized gains (losses) on certain derivative instruments.

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.

55

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

Accordingly, the following amounts represent current year permanent differences derived from foreign currency reclasses, paydown reclasses, swap income reclasses, net operating loss not utilized, and dividends that have been redesignated as of January 31, 2018:

Fund	Paid-In-Capital		Undistributed (Overdistribution of) Net Investment Income			Accumulated Net Realized Gain (Loss)			Net Unrealized Appreciation (Depreciation)
Global Evolution Frontier Markets Income	$	-	$	(845,407	)	$	845,407		$	-
GLG Total Return		-		2,280,457			(2,280,457	)		-

Under the Regulated Investment Company Modernization Act of 2010 (“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 year January 31, 2018 the Funds had the following post RIC MOD capital loss carryforwards:

Fund	Short-Term Capital Loss Carryforwards		Long-Term Capital Loss Carryforwards
Global Evolution Frontier Markets Income	$	3,882,282	$	11,581,707
GLG Total Return		-		-

The Funds are permitted for tax purposes to defer into their next fiscal year qualified late year losses. Qualified late year capital losses are any capital losses incurred after October 31 through the Fund’s fiscal year ending January 31, 2018. Qualified late year ordinary losses are specified losses generally incurred after October 31 and ordinary losses incurred after December 31 through the end of the Fund’s fiscal year, January 31, 2018. For the period ended January 31, 2018, GLG deferred $2,013 in short-term capital losses, $465 in long-term capital losses, and $9,612,993 in late year ordinary losses to February 1, 2018.

8.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended January 31, 2018 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
Global Evolution Frontier Markets Income	$	123,720,101	$	-	$	21,323,344	$	-
GLG Total Return		127,224,460		218,113,609		58,783,585		241,353,206

A summary of the Funds’ transactions in the USG Select Fund for the year ended January 31, 2018 were as follows:

Fund	Type of Transaction		January 31, 2017 Shares/Fair Value		Purchases		Sales		January 31, 2018 Shares/Fair Value		Dividend Income
Global Evolution Frontier Markets Income		Direct	$	2,688,411	$	113,554,726	$	88,394,415	$	27,848,722	$	130,139
GLG Total Return		Direct		1,673,669		871,972,563		859,684,976		13,961,256		188,529

56

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

9.  Borrowing Arrangements

Effective November 16, 2017, the Funds, along with certain other funds managed by the Manager (“Participating Funds”), entered into a committed revolving line of credit (the “Committed Line”) agreement with State Street Bank and Trust Company (the “Bank”) to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Committed Line is $50 million with interest at a rate equal to the higher of (a) one-month London Inter-Bank Offered Rate (“LIBOR”) plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on amounts borrowed. Each of the Participating Funds will pay a commitment fee at a rate of 0.25% per annum on the unused portion of the Committed Line amount. The Committed Line expires November 15, 2018 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

Effective November 16, 2017, the Funds, along with certain other Participating Funds managed by the Manager, entered into an uncommitted discretionary demand revolving line of credit (the “Uncommitted Line”) agreement with the Bank to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Uncommitted Line is $50 million with interest at a rate equal to the higher of (a) one-month LIBOR plus 1.25% per annum or (b) the Federal Funds rate. The Uncommitted Line expires November 15, 2018 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

The Participating Funds paid administration, legal and arrangement fees, which are recognized as a component of “Other expenses” on the Statements of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets. During the year ended January 31, 2018, the Funds did not utilize this facility.

10.  Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Funds:

	Institutional Class
	Year Ended January 31,
	2018						2017
Global Evolution Frontier Markets Income Fund	Shares			Amount			Shares			Amount
Shares sold		6,139,305		$	57,844,697			493,702		$	4,414,663
Reinvestment of dividends		194,497			1,822,176			95,060			846,663
Shares redeemed		(759,494	)		(7,164,036	)		(393,043	)		(3,450,022	)
Redemption fees		-			(626	)		-			1,420
Net increase in shares outstanding		5,574,308		$	52,502,211			195,719		$	1,812,724
	Y Class
	Year Ended January 31,
	2018						2017
Global Evolution Frontier Markets Income Fund	Shares			Amount			Shares			Amount
Shares sold		5,977,636		$	56,371,234			961,556		$	8,569,138
Reinvestment of dividends		371,040			3,480,135			186,466			1,661,715
Shares redeemed		(787,633	)		(7,423,091	)		(2,031,446	)		(17,271,103	)
Redemption fees		-			6,934			-			2,746
Net increase/(decrease) in shares outstanding		5,561,043		$	52,435,212			(883,424	)	$	(7,037,504	)
	Investor Class
	Year Ended January 31,
	2018						2017
Global Evolution Frontier Markets Income Fund	Shares			Amount			Shares			Amount
Shares sold		2,670,141		$	24,877,596			1,143,932		$	10,163,789
Reinvestment of dividends		242,444			2,266,383			129,099			1,148,901
Shares redeemed		(836,260	)		(7,768,266	)		(933,950	)		(8,233,420	)
Redemption fees		-			3,588			-			2,061
Net increase in shares outstanding		2,076,325		$	19,379,301			339,081		$	3,081,331

57

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

	A Class
	Year Ended January 31,
	2018						2017
Global Evolution Frontier Markets Income Fund	Shares			Amount			Shares			Amount
Shares sold		246,600		$	2,317,510			232,584		$	2,079,763
Reinvestment of dividends		30,605			284,937			52,708			469,460
Shares redeemed		(408,936	)		(3,828,759	)		(665,786	)		(5,800,487	)
Redemption fees		-			616			-			792
Net (decrease) in shares outstanding		(131,731	)	$	(1,225,696	)		(380,494	)	$	(3,250,472	)
	C Class
	Year Ended January 31,
	2018						2017
Global Evolution Frontier Markets Income Fund	Shares			Amount			Shares			Amount
Shares sold		736,515		$	6,959,248			36,625		$	326,184
Reinvestment of dividends		22,677			212,223			14,074			125,062
Shares redeemed		(75,480	)		(705,978	)		(103,328	)		(922,396	)
Redemption fees		-			602			-			251
Net increase/(decrease) in shares outstanding		683,712		$	6,466,095			(52,629	)	$	(470,899	)
	Institutional Class
	Year Ended January 31,
	2018						2017
GLG Total Return Fund	Shares			Amount			Shares			Amount
Shares sold		-		$	-			530,000	A	$	5,300,000	A
Reinvestment of dividends		3,291			35,124			9,624			100,381
Shares redeemed		(679,807	)		(7,300,030	)		(282,462	)		(3,000,000	)
Net increase/(decrease) in shares outstanding		(676,516	)	$	(7,264,906	)		257,162		$	2,400,381
	Y Class
	Year Ended January 31,
	2018						2017
GLG Total Return Fund	Shares			Amount			Shares			Amount
Shares sold		99,879		$	1,076,470			-	A	$	-	A
Reinvestment of dividends		794			8,458			98			1,024
Shares redeemed		(11,543	)		(124,763	)		-			-
Net increase in shares outstanding		89,130		$	960,165			98		$	1,024
	Investor Class
	Year Ended January 31,
	2018						2017
GLG Total Return Fund	Shares			Amount			Shares			Amount
Shares sold		2,242		$	24,098			1,961	A	$	20,010	A
Reinvestment of dividends		152			1,614			116			1,216
Net increase in shares outstanding		2,394		$	25,712			2,077		$	21,226
	A Class
	Year Ended January 31,
	2018						2017
GLG Total Return Fund	Shares			Amount			Shares			Amount
Shares sold		-		$	-			-	A	$	-	A
Reinvestment of dividends		114			1,210			98			1,024
Net increase in shares outstanding		114		$	1,210			98		$	1,024
	C Class
	Year Ended January 31,
	2018						2017
GLG Total Return Fund	Shares			Amount			Shares			Amount
Shares sold		-		$	-			-	A	$	-	A
Reinvestment of dividends		62			644			99			1,024
Net increase in shares outstanding		62		$	644			99		$	1,024

58

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

	Ultra Class
	Year Ended January 31,
	2018						2017
GLG Total Return Fund	Shares			Amount			Shares			Amount
Shares sold		73,646,676		$	792,613,671			6,974,431	A	$	73,521,990	A
Reinvestment of dividends		12,855			137,054			99			1,038
Shares redeemed		(9,080,295	)		(97,390,518	)		(688,884	)		(7,249,211	)
Net increase in shares outstanding		64,579,236		$	695,360,207			6,285,646		$	66,273,817

^A Seed capital was received in the amount of $4,500,000 for the Institutional, and $100,000 each for Y, Investor, A, C and Ultra Classes, respectively. As a result, shares were issued in the amount of 450,000 for the Institutional class and 100,000 for each remaining classes, respectively.

11.  Subsequent Events

Global Evolution USA, LLC (“Global Evolution”), subadvisor to the American Beacon Global Evolution Frontier Markets Income Fund (the “Fund”), advised American Beacon Advisors, Inc. that it will undergo a change in control following the acquisition of a 45 percent interest in Global Evolution’s parent company by Conning Holdings Limited. The transaction is expected to close in March 2018, subject to customary regulatory approvals and closing conditions. The Fund’s management team at Global Evolution will remain in place and there will be no impact to the Fund as a result in the change in control.

59

American Beacon Global Evolution Frontier Markets Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended January 31,									February 25, 2014A to January 31,
	2018			2017			2016			2015
Net asset value, beginning of period	$	8.96		$	8.35		$	9.68		$	10.00
Income (loss) from investment operations:
Net investment income		0.77			0.88			0.67			0.59
Net gains (losses) on investments (both realized and unrealized)		0.61			0.44			(1.30	)		(0.30	)
Total income (loss) from investment operations		1.38			1.32			(0.63	)		0.29
Less distributions:
Dividends from net investment income		(0.72	)		(0.08	)		(0.50	)		(0.59	)
Distributions from net realized gains		-			-			-			(0.02	)
Tax return of capital		-			(0.63	)H		(0.20	)H		-
Total distributions		(0.72	)		(0.71	)		(0.70	)		(0.61	)
Redemption fees added to beneficial interestsB		-			-			-			-
Net asset value, end of period	$	9.62		$	8.96		$	8.35		$	9.68
Total returnC		15.92	%		16.20	%		(6.98	)%		2.76	%D
Ratios and supplemental data:
Net assets, end of period	$	67,653,731		$	13,047,515		$	10,531,288		$	9,225,629
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.17	%		1.40	%		1.14	%		1.95	%E
Expenses, net of reimbursements or recoupments		1.15	%		1.27	%F		1.15	%		1.15	%E
Net investment income, before expense reimbursements or recoupments		9.04	%		9.98	%		7.14	%		5.43	%E
Net investment income, net of reimbursements or recoupments		9.06	%		10.11	%		7.13	%		6.22	%E
Portfolio turnover rate		22	%		69	%		68	%		23	%G

^A  February 25, 2014 is the inception date of the Global Evolution Frontier Markets Income Fund.

^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.

^F  Voluntary expense cap. See Note 2 of the Notes to the Financial Statements.

^G  Portfolio turnover rate is for the period from February 25, 2014 through January 31, 2015 and is not annualized.

^H  Return of capital is calculated based on outstanding shares at the time of distribution.

See accompanying notes

60

American Beacon Global Evolution Frontier Markets Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended January 31,									February 25, 2014A to January 31,
	2018			2017			2016			2015
Net asset value, beginning of period	$	8.97		$	8.34		$	9.69		$	10.00
Income (loss) from investment operations:
Net investment income		0.79			0.90			0.61			0.58
Net gains (losses) on investments (both realized and unrealized)		0.58			0.44			(1.28	)		(0.28	)
Total income (loss) from investment operations		1.37			1.34			(0.67	)		0.30
Less distributions:
Dividends from net investment income		(0.71	)		(0.08	)		(0.50	)		(0.59	)
Distributions from net realized gains		-			-			-			(0.02	)
Tax return of capital		-			(0.63	)H		(0.18	)H		-
Total distributions		(0.71	)		(0.71	)		(0.68	)		(0.61	)
Redemption fees added to beneficial interestsB		-			-			-			-
Net asset value, end of period	$	9.63		$	8.97		$	8.34		$	9.69
Total returnC		15.83	%		16.37	%		(7.40	)%		2.87	%D
Ratios and supplemental data:
Net assets, end of period	$	79,007,953		$	23,715,300		$	29,434,613		$	138,082,358
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.25	%		1.48	%		1.18	%		1.50	%E
Expenses, net of reimbursements or recoupments		1.25	%		1.37	%F		1.25	%		1.25	%E
Net investment income, before expense reimbursements or recoupments		8.94	%		10.49	%		7.35	%		6.33	%E
Net investment income, net of reimbursements or recoupments		8.94	%		10.61	%		7.28	%		6.59	%E
Portfolio turnover rate		22	%		69	%		68	%		23	%G

^A  February 25, 2014 is the inception date of the Global Evolution Frontier Markets Income Fund.

^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.

^F  Voluntary expense cap. See Note 2 of the Notes to the Financial Statements.

^G  Portfolio turnover rate is for the period from February 25, 2014 through January 31, 2015 and is not annualized.

^H  Return of capital is calculated based on outstanding shares at the time of distribution.

See accompanying notes

61

American Beacon Global Evolution Frontier Markets Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended January 31,									February 25, 2014A to January 31,
	2018			2017			2016			2015
Net asset value, beginning of period	$	8.95		$	8.35		$	9.68		$	10.00
Income (loss) from investment operations:
Net investment income		0.78			0.85			0.63			0.55
Net gains (losses) on investments (both realized and unrealized)		0.57			0.43			(1.30	)		(0.29	)
Total income (loss) from investment operations		1.35			1.28			(0.67	)		0.26
Less distributions:
Dividends from net investment income		(0.69	)		(0.07	)		(0.47	)		(0.56	)
Distributions from net realized gains		-			-			-			(0.02	)
Tax return of capital		-			(0.61	)H		(0.19	)H		-
Total distributions		(0.69	)		(0.68	)		(0.66	)		(0.58	)
Redemption fees added to beneficial interestsB		-			-			-			-
Net asset value, end of period	$	9.61		$	8.95		$	8.35		$	9.68
Total returnC		15.59	%		15.69	%		(7.33	)%		2.47	%D
Ratios and supplemental data:
Net assets, end of period	$	41,560,845		$	20,120,332		$	15,934,048		$	13,987,805
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.41	%		1.72	%		1.44	%		1.78	%E
Expenses, net of reimbursements or recoupments		1.51	%		1.63	%F		1.53	%		1.53	%E
Net investment income, before expense reimbursements or recoupments		8.73	%		9.62	%		6.84	%		5.86	%E
Net investment income, net of reimbursements or recoupments		8.64	%		9.71	%		6.76	%		6.12	%E
Portfolio turnover rate		22	%		69	%		68	%		23	%G

^A  February 25, 2014 is the inception date of the Global Evolution Frontier Markets Income Fund.

^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.

^F  Voluntary expense cap. See Note 2 of the Notes to the Financial Statements.

^G  Portfolio turnover rate is for the period from February 25, 2014 through January 31, 2015 and is not annualized.

^H  Return of capital is calculated based on outstanding shares at the time of distribution.

See accompanying notes

62

American Beacon Global Evolution Frontier Markets Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended January 31,									February 25, 2014A to January 31,
	2018			2017			2016			2015
Net asset value, beginning of period	$	8.96		$	8.35		$	9.68		$	10.00
Income (loss) from investment operations:
Net investment income		0.81			0.90			0.62			0.54
Net gains (losses) on investments (both realized and unrealized)		0.53			0.39			(1.29	)		(0.29	)
Total income (loss) from investment operations		1.34			1.29			(0.67	)		0.25
Less distributions:
Dividends from net investment income		(0.68	)		(0.07	)		(0.47	)		(0.55	)
Distributions from net realized gains		-			-			-			(0.02	)
Tax return of capital		-			(0.61	)H		(0.19	)H		-
Total distributions		(0.68	)		(0.68	)		(0.66	)		(0.57	)
Redemption fees added to beneficial interestsB		-			-			-			-
Net asset value, end of period	$	9.62		$	8.96		$	8.35		$	9.68
Total returnC		15.51	%		15.77	%		(7.36	)%		2.42	%D
Ratios and supplemental data:
Net assets, end of period	$	3,726,687		$	4,648,954		$	7,513,980		$	15,782,502
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.48	%		1.78	%		1.52	%		1.88	%E
Expenses, net of reimbursements or recoupments		1.55	%		1.67	%F		1.55	%		1.55	%E
Net investment income, before expense reimbursements or recoupments		8.65	%		9.85	%		6.89	%		5.82	%E
Net investment income, net of reimbursements or recoupments		8.58	%		9.96	%		6.86	%		6.15	%E
Portfolio turnover rate		22	%		69	%		68	%		23	%G

^A  February 25, 2014 is the inception date of the Global Evolution Frontier Markets Income Fund.

^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.

^F  Voluntary expense cap. See Note 2 of the Notes to the Financial Statements.

^G  Portfolio turnover rate is for the period from February 25, 2014 through January 31, 2015 and is not annualized.

^H  Return of capital is calculated based on outstanding shares at the time of distribution.

See accompanying notes

63

American Beacon Global Evolution Frontier Markets Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended January 31,						February 25, 2014 to January 31,			Year EndedA January 31,
	2018			2017			2016			2015
Net asset value, beginning of period	$	8.93		$	8.34		$	9.67		$	10.00
Income (loss) from investment operations:
Net investment income		0.65			0.83			0.56			0.47
Net gains (losses) on investments (both realized and unrealized)		0.62			0.39			(1.30	)		(0.30	)
Total income (loss) from investment operations		1.27			1.22			(0.74	)		0.17
Less distributions:
Dividends from net investment income		(0.62	)		(0.07	)		(0.42	)		(0.48	)
Distributions from net realized gains		-			-			-			(0.02	)
Tax return of capital		-			(0.56	)H		(0.17	)H		-
Total distributions		(0.62	)		(0.63	)		(0.59	)		(0.50	)
Redemption fees added to beneficial interestsB		-			-			-			-
Net asset value, end of period	$	9.58		$	8.93		$	8.34		$	9.67
Total returnC		14.66	%		14.90	%		(8.06	)%		1.60	%D
Ratios and supplemental data:
Net assets, end of period	$	8,398,773		$	1,724,982		$	2,049,234		$	1,244,636
Ratios to average net assets:
Expenses, before reimbursements or recoupments		2.29	%		2.55	%		2.31	%		3.01	%E
Expenses, net of reimbursements or recoupments		2.30	%		2.30	%		2.30	%		2.31	%E
Net investment income, before expense reimbursements or recoupments		7.81	%		8.90	%		5.89	%		4.62	%E
Net investment income, net of reimbursements or recoupments		7.81	%		9.14	%		5.90	%		5.33	%E
Portfolio turnover rate		22	%		69	%		68	%		23	%F

^A  February 25, 2014 is the inception date of the Global Evolution Frontier Markets Income Fund.

^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.

^F  Portfolio turnover rate is for the period from February 25, 2014 through January 31, 2015 and is not annualized.

^H  Return of capital is calculated based on outstanding shares at the time of distribution.

See accompanying notes

64

American Beacon GLG Total Return Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended January 31,			May 20, 2016A to January 31,
	2018			2017
Net asset value, beginning of period	$	10.69		$	10.00
Income (loss) from investment operations:
Net investment income (loss)		0.06	F		0.07
Net gains on investments (both realized and unrealized)		(0.12	)		0.73
Total income (loss) from investment operations		(0.06	)		0.80
Less distributions:
Dividends from net investment income		(0.11	)		(0.10	)
Distributions from net realized gains		(0.02	)		(0.01	)
Tax return of capital		(0.00	)G H		-
Total distributions		(0.13	)		(0.11	)
Net asset value, end of period	$	10.50		$	10.69
Total returnB		(0.64	)%		7.95	%C
Ratios and supplemental data:
Net assets, end of period	$	321,683		$	7,560,278
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.03	%		2.09	%D
Expenses, net of reimbursements or recoupments		1.05	%		1.05	%D
Net investment income, before expense reimbursements or recoupments		0.49	%		0.01	%D
Net investment income, net of reimbursements or recoupments		0.46	%		1.05	%D
Portfolio turnover rate		248	%		311	%E

^A  May 20, 2016 is the inception date of the GLG Total Return Fund.

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

^C  Not annualized.

^D  Annualized.

^E  Portfolio turnover rate is for the period from May 20, 2016 through January 31, 2017 and is not annualized.

^F  Per share amounts have been calculated using the average shares method.

^G  Return of capital is calculated based on shares outstanding at the time of distribution.

^H  Amount represents less than $0.01 per share.

See accompanying notes

65

American Beacon GLG Total Return Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended January 31,			May 20, 2016A to January 31,
	2018			2017
Net asset value, beginning of period	$	10.68		$	10.00
Income (loss) from investment operations:
Net investment income		0.09			0.07
Net gains (losses) on investments (both realized and unrealized)		(0.17	)		0.72
Total income (loss) from investment operations		(0.08	)		0.79
Less distributions:
Dividends from net investment income		(0.10	)		(0.10	)
Distributions from net realized gains		(0.02	)		(0.01	)
Tax return of capital		(0.01	)F		-
Total distributions		(0.13	)		(0.11	)
Net asset value, end of period	$	10.47		$	10.68
Total returnB		(0.78	)%		7.85	%C
Ratios and supplemental data:
Net assets, end of period	$	1,038,736		$	107,884
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.18	%		5.31	%D
Expenses, net of reimbursements or recoupments		1.15	%		1.15	%D
Net investment income (loss), before expense reimbursements or recoupments		0.18	%		(3.21	)%D
Net investment income, net of reimbursements or recoupments		0.21	%		0.95	%D
Portfolio turnover rate		248	%		311	%E

^A  May 20, 2016 is the inception date of the GLG Total Return Fund.

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

^C  Not annualized.

^D  Annualized.

^E  Portfolio turnover rate is for the period from May 20, 2016 through January 31, 2017 and is not annualized.

^F  Return of capital is calculated based on shares outstanding at the time of distribution.

See accompanying notes

66

American Beacon GLG Total Return Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended January 31,			May 20, 2016A to January 31,
	2018			2017
Net asset value, beginning of period	$	10.66		$	10.00
Income (loss) from investment operations:
Net investment income		0.02			0.05
Net gains (losses) on investments (both realized and unrealized)		(0.13	)		0.72
Total income (loss) from investment operations		(0.11	)		0.77
Less distributions:
Dividends from net investment income		(0.09	)		(0.10	)
Distributions from net realized gains		(0.02	)		(0.01	)
Tax return of capital		(0.01	)F		-
Total distributions		(0.12	)		(0.11	)
Net asset value, end of period	$	10.43		$	10.66
Total returnB		(1.05	)%		7.65	%C
Ratios and supplemental data:
Net assets, end of period	$	150,889		$	128,790
Ratios to average net assets:
Expenses, before reimbursements or recoupments		2.09	%		5.14	%D
Expenses, net of reimbursements or recoupments		1.43	%		1.43	%D
Net investment (loss), before expense reimbursements or recoupments		(0.62	)%		(3.04	)%D
Net investment income, net of reimbursements or recoupments		0.03	%		0.67	%D
Portfolio turnover rate		248	%		311	%E

^A  May 20, 2016 is the inception date of the GLG Total Return Fund.

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

^C  Not annualized.

^D  Annualized.

^E  Portfolio turnover rate is for the period from May 20, 2016 through January 31, 2017 and is not annualized.

^F  Return of capital is calculated based on shares outstanding at the time of distribution.

See accompanying notes

67

American Beacon GLG Total Return Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended January 31, 2018			May 20, 2016A to January 31, 2017
Net asset value, beginning of period	$	10.66		$	10.00
Income (loss) from investment operations:
Net investment income		0.00	B		0.05
Net gains (losses) on investments (both realized and unrealized)		(0.12	)		0.72
Total income (loss) from investment operations		(0.12	)		0.77
Less distributions:
Dividends from net investment income		(0.10	)		(0.10	)
Distributions from net realized gains		(0.02	)		(0.01	)
Tax return of capital		(0.00	)B G		-
Total distributions		(0.12	)		(0.11	)
Net asset value, end of period	$	10.42		$	10.66
Total returnC		(1.15	)%		7.65	%D
Ratios and supplemental data:
Net assets, end of period	$	106,439		$	107,660
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.42	%		5.62	%E
Expenses, net of reimbursements or recoupments		1.45	%		1.45	%E
Net investment income (loss), before expense reimbursements or recoupments		0.05	%		(3.51	)%E
Net investment income, net of reimbursements or recoupments		0.02	%		0.65	%E
Portfolio turnover rate		248	%		311	%F

^A  May 20, 2016 is the inception date of the GLG Total Return Fund.

^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.

^F  Portfolio turnover rate is for the period from May 20, 2016 through January 31, 2017 and is not annualized.

^G  Return of capital is calculated based on shares outstanding at the time of distribution.

See accompanying notes

68

American Beacon GLG Total Return Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended January 31, 2018			May 20, 2016A to January 31, 2017
Net asset value, beginning of period	$	10.61		$	10.00
Income (loss) from investment operations:
Net investment (loss)		(0.08	)		(0.01	)
Net gains (losses) on investments (both realized and unrealized)		(0.12	)		0.73
Total income (loss) from investment operations		(0.20	)		0.72
Less distributions:
Dividends from net investment income		(0.04	)		(0.10	)
Distributions from net realized gains		(0.02	)		(0.01	)
Tax return of capital		(0.01	)F		-
Total distributions		(0.07	)		(0.11	)
Net asset value, end of period	$	10.34		$	10.61
Total returnB		(1.95	)%		7.15	%C
Ratios and supplemental data:
Net assets, end of period	$	105,096		$	107,101
Ratios to average net assets:
Expenses, before reimbursements or recoupments		2.17	%		6.37	%D
Expenses, net of reimbursements or recoupments		2.20	%		2.20	%D
Net investment (loss), before expense reimbursements or recoupments		(0.70	)%		(4.27	)%D
Net investment (loss), net of reimbursements or recoupments		(0.73	)%		(0.10	)%D
Portfolio turnover rate		248	%		311	%E

^A  May 20, 2016 is the inception date of the GLG Total Return Fund.

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

^C  Not annualized.

^D  Annualized.

^E  Portfolio turnover rate is for the period from May 20, 2016 through January 31, 2017 and is not annualized.

^F  Return of capital is calculated based on shares outstanding at the time of distribution.

See accompanying notes

69

American Beacon GLG Total Return Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Ultra
	Year Ended January 31, 2018			May 20, 2016A to January 31, 2017
Net asset value, beginning of period	$	10.69		$	10.00
Income (loss) from investment operations:
Net investment income		0.11			0.07
Net gains (losses) on investments (both realized and unrealized)		(0.17	)		0.73
Total income (loss) from investment operations		(0.06	)		0.80
Less distributions:
Dividends from net investment income		(0.10	)		(0.10	)
Distributions from net realized gains		(0.02	)		(0.01	)
Tax return of capital		(0.01	)F		-
Total distributions		(0.13	)		(0.11	)
Net asset value, end of period	$	10.50		$	10.69
Total returnB		(0.57	)%		7.95	%C
Ratios and supplemental data:
Net assets, end of period	$	743,861,439		$	67,330,248
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.07	%		2.09	%D
Expenses, net of reimbursements or recoupments		0.95	%		0.95	%D
Net investment income, before expense reimbursements or recoupments		0.34	%		0.76	%D
Net investment income, net of reimbursements or recoupments		0.46	%		1.91	%D
Portfolio turnover rate		248	%		311	%E

^A  May 20, 2016 is the inception date of the GLG Total Return Fund.

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

^C  Not annualized.

^D  Annualized.

^E  Portfolio turnover rate is for the period from May 20, 2016 through January 31, 2017 and is not annualized.

^F  Return of capital is calculated based on shares outstanding at the time of distribution.

See accompanying notes

70

American Beacon Funds^SM

Federal Tax Information

January 31, 2018 (Unaudited)

Certain tax information regarding the Funds is required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended January 31, 2018. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2017.

The Funds designated the following items with regard to distributions paid during the fiscal year ended January 31, 2018. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Funds to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Long-Term Capital Gain Distributions:
Global Evolution Frontier Markets Income	$	-
GLG Total Return		23,102
Short-Term Capital Gain Distributions:
Global Evolution Frontier Markets Income	$	-
GLG Total Return		1,136,382

Shareholders received notification in January 2018 of the applicable tax information necessary to prepare their 2017 income tax returns.

71

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

The Trustees and officers of the American Beacon Funds (the “Trust”) are listed below, together with their principal occupations during the past five years. The address of each person listed below is 220 Las Colinas Boulevard East, Suite 1200, Irving, Texas 75039. Each Trustee oversees thirty-five funds in the fund complex that includes the Trust, the American Beacon Select Funds and the American Beacon Institutional Funds Trust. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Alan D. Feld** (81)	Trustee since 1996	Sole Shareholder of a professional corporation which is a Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Mileage Funds (1996-2012); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Master Trust (1996-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (48)	Trustee since 2015	Director, Kura MD, Inc. (local telehealth organization) (2015-present); Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Vice President & CFO, Sierra Health Foundation: Center for Health Program Management (California public benefit corporation) (2012-Present); Director, Innovative North State (2012-2015); Director, Sacramento Regional Technology Alliance (2011-2016); Director, Women’s Empowerment (2009-2014); Director, Valley Healthcare Staffing (2017–present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Joseph B. Armes (55)	Trustee since 2015	Chairman & CEO, CSW Industrials f/k/a Capital Southwest Corporation (investment company) (2015-Present); Chairman of the Board of Capital Southwest Corporation, predecessor to CSW Industrials, Inc. (2014-present) (investment company); CEO, Capital Southwest Corporation (2013-2015); President & CEO, JBA Investment Partners (family investment vehicle) (2010-Present); Director and Chair of Audit Committee, RSP Permian (oil and gas producer) (2013-Present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Gerard J. Arpey (59)	Trustee since 2012	Director, The Home Depot, Inc. (2015-Present); Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Brenda A. Cline (57)	Trustee since 2004	Executive Vice President, Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Director, Range Resources Corporation (oil and natural gas company) (2015-Present); Director, Tyler Technologies, Inc. (public sector software solutions company) (2014-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).

72

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Eugene J. Duffy (63)	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-Present); Principal and Executive Vice President, Paradigm Asset Management (1994-2014); Director, Sunrise Bank of Atlanta (2008-2013); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Douglas A. Lindgren*** (56)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Managing Director, IPS Investment Management and Global Head, Content Management, UBS Wealth Management (2010-2016); Managing Director, P&S Hedge Funds, UBS Wealth Management (2008-2010); Managing Director, Head of Alternative Investments, UBS Financial Services, Inc. (2005-2008).
Richard A. Massman (74)	Trustee since 2004 Chairman since 2008	Consultant and General Counsel Emeritus, Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities) (2009-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Barbara J. McKenna, CFA (54)	Trustee since 2012	Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
R. Gerald Turner (72)	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-Present); Director, Kronus Worldwide Inc. (chemical manufacturing) (2003-Present); Trustee, American Beacon Mileage Funds (2001-2012); Trustee, American Beacon Select Funds (2001-Present); Trustee, American Beacon Master Trust (2001-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (63)	President since 2009	President, CEO and Director, American Beacon Advisors, Inc. (2009-Present); President, CEO and Director, Resolute Investment Managers, Inc. (2015-Present); President, CEO and Director, Resolute Acquisition, Inc. (2015-Present); President, CEO and Director, Resolute Topco, Inc. (2015-Present), President & CEO, Resolute Investment Holdings, LLC (2015-Present); President, CEO and Director, Lighthouse Holdings, Inc. (2009-2015); President and CEO, Lighthouse Holdings Parent, Inc. (2009-2015); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-Present); Director, ARK Investment Management LLC (2016-Present); Director, Shapiro Capital Management LLC (2017-Present); Member, Investment Advisory Committee, Employees Retirement System of Texas (2017-Present); Trustee, American Beacon NextShares Trust (2015-Present); President, American Beacon Select Funds (2009-Present); President, American Beacon Mileage Funds (2009-2012); President, American Beacon Master Trust (2009–2012); President, American Beacon Institutional Funds Trust (2017-Present).

73

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rosemary K. Behan (58)	VP, Secretary and Chief Legal Officer since 2006	Vice President and Secretary, American Beacon Advisors, Inc. (2006-Present); Secretary, Resolute Investment Holdings, LLC (2015-Present) Secretary, Resolute Investment Managers, Inc. (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015-Present); Secretary, Lighthouse Holdings, Inc. (2008-2015); Secretary, Lighthouse Holdings Parent, Inc. (2008-2015); Secretary, American Private Equity Management, LLC (2008-Present); Secretary, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Secretary, Alpha Quant Advisors, LLC (2016-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Select Funds (2006-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Mileage Funds (2006-2012); Chief Legal Officer, Vice President and Secretary, American Beacon Master Trust (2006-2012); Chief Legal Officer, Vice President and Secretary, American Beacon Institutional Funds Trust (2017-Present).
Brian E. Brett (57)	VP since 2004	Senior Vice President (2012-Present) and Vice President (2004-2012), American Beacon Advisors, Inc.; Vice President, American Beacon Select Funds (2004-Present); Vice President, American Beacon Mileage Funds (2004-2012); Vice President, American Beacon Master Trust (2004-2012); Vice President, American Beacon Institutional Funds Trust (2017-Present).
Paul B. Cavazos (48)	VP since 2016	Senior Vice President, American Beacon Advisors, Inc. (2016-Present); Chief Investment Officer and Assistant Treasurer, DTE Energy (2007-2016); Vice President, American Beacon Select Funds (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present).
Erica Duncan (47)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Mileage Funds (2011-2012); Vice President, American Beacon Master Trust (2011-2012); Vice President, American Beacon Institutional Funds Trust (2017-Present).
Melinda G. Heika (56)	Treasurer since 2010	Treasurer, American Beacon Advisors, Inc. (2010-Present); Resolute Investment Managers, Inc. (2015-Present); Treasurer, Resolute Acquisition, Inc. (2015-Present); Treasurer, Resolute Topco, Inc. (2015-Present); Treasurer, Resolute Investment Holdings, LLC. (2015-Present); Treasurer, Lighthouse Holdings, Inc. (2010-2015); Treasurer, Lighthouse Holdings Parent Inc., (2010-2015); Treasurer, American Private Equity Management, LLC (2012-Present); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Select Funds (2010-Present); Treasurer, American Beacon Mileage Funds (2010-2012); Treasurer, American Beacon Master Trust (2010-2012); Treasurer, American Beacon Institutional Funds Trust (2017-Present).
Terri L. McKinney (54)	VP since 2010	Vice President (2009-Present) and Managing Director (2003-2009), American Beacon Advisors, Inc.; Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Mileage Funds (2010-2012); Vice President, American Beacon Master Trust (2010-2012); Vice President, American Beacon Institutional Funds Trust (2017-Present).

74

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Jeffrey K. Ringdahl (42)	VP since 2010	Senior Vice President (2013-Present), Vice President (2010-2013), and Director (2015-Present), American Beacon Advisors, Inc.; Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Mileage Funds (2010-2012); Vice President, American Beacon Master Trust (2010-2012); Senior Vice President (2012-Present) and Manager (2015-Present), American Private Equity Management, LLC; Senior Vice President, Lighthouse Holdings, Inc. (2013-2015); Senior Vice President, Lighthouse Holdings Parent, Inc. (2013-2015); Director and Vice President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Trustee, American Beacon NextShares Trust (2015-Present); Director and Senior Vice Present, Resolute Investment Holdings, LLC (2015-Present); Director and Senior Vice President, Resolute Topco, Inc. (2015-Present); Director and Senior Vice President, Resolute Acquisition, Inc. (2015-Present); Director and Senior Vice President, Resolute Investment Managers, Inc. (2015-Present); Director, Executive Vice President and Chief Operating Officer, Alpha Quant Advisors, LLC (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-President); Director, Shapiro Capital Management, LLC (2017-Present).
Samuel J. Silver (54)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Mileage Funds (2011-2012); Vice President, American Beacon Master Trust (2011-2012); American Beacon Institutional Funds Trust (2011-Present).
Christina E. Sears (46)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Chief Compliance Officer, American Beacon Advisors, Inc. (2004-Present); Chief Compliance Officer, American Private Equity Management, LLC (2012-Present); Chief Compliance Officer and Vice President, Alpha Quant Advisors, LLC (2016-Present); Chief Compliance Officer (2004-Present) and Assistant Secretary (1999-Present), American Beacon Select Funds; Chief Compliance Officer (2004-2012) and Assistant Secretary (1999-2012), American Beacon Mileage Funds; Chief Compliance Officer (2004-2012) and Assistant Secretary (1999-2012), American Beacon Master Trust; Chief Compliance Officer and Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).
Sonia L. Bates (61)	Asst. Treasurer since 2011	Assistant Treasurer, American Beacon Advisors, Inc. (2011-Present); Assistant Treasurer, Resolute Investment Managers, Inc. (2015-Present); Assistant Treasurer, Resolute Acquisition, Inc. (2015-Present); Assistant. Treasurer, Resolute Topco, Inc. (2015-Present); Assistant Treasurer, Resolute Investment Holdings, LLC.; Assistant Treasurer, Lighthouse Holdings, Inc. (2011-2015); Assistant Treasurer, Lighthouse Holdings Parent Inc. (2011-2015); Assistant Treasurer, American Private Equity Management, LLC (2012-Present); Assistant Treasurer, American Beacon Select Funds (2011-Present); Assistant Treasurer American Beacon Mileage Funds (2011-2012); Assistant Treasurer, American Beacon Master Trust (2011-2012); Assistant Treasurer, American Beacon Institutional Funds Trust (2017-Present).
Shelley D. Abrahams (43)	Assistant Secretary since 2008	Assistant Secretary, American Beacon Advisors, Inc. (2008-Present); Assistant Secretary, American Beacon Select Funds (2008-Present); Assistant Secretary, American Beacon Mileage Funds (2008-2012); Assistant Secretary, American Beacon Master Trust (2008-2012); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).

75

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rebecca L. Harris (51)	Assistant Secretary since 2010	Vice President, American Beacon Advisors, Inc. (2016-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2010-Present); Assistant Secretary, American Beacon Mileage Funds (2010-2012); Assistant Secretary, American Beacon Master Trust (2010-2012); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).
Diana N. Lai (42)	Assistant Secretary since 2012	Assistant Secretary, American Beacon Advisors, Inc. (2012-Present); Assistant Secretary, American Beacon Select Funds (2012-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).
Teresa A. Oxford (59)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2015-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 75.

** Mr. Feld is deemed to be an “interested person” of the Trusts, as defined by the 1940 Act. Mr. Feld’s law firm of Akin, Gump, Strauss, Hauer & Feld LLP has provided legal services within the past two fiscal years to one or more of the Trust’s sub-advisors.

*** Douglas A. Lindgren became a new Trustee to each of the Trusts on 1/1/2018.

76

American Beacon Funds^SM

Privacy Policy

January 31, 2018 (Unaudited)

The American Beacon Funds recognize and respect the privacy of our shareholders. We are providing this notice to you so you will understand how shareholder information may be collected and used.

We may collect nonpublic personal information about you from one or more of the following sources:

• information we receive from you on applications or other forms;

• information about your transactions with us or our service providers; and

• information we receive from third parties.

We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.

We restrict access to your nonpublic personal information to those employees or service providers who need to know that information to provide products or services to you. To ensure the confidentiality of your nonpublic personal information, we maintain safeguards that comply with federal standards.

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80

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: 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 each 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 DST Asset Manager Solutions, Inc. Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Boston, Massachusetts DISTRIBUTOR Resolute Investment Distributors, Inc. Irving, Texas

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 Global Evolution Frontier Markets Income Fund and American Beacon GLG Total Return Fund are service marks of American Beacon Advisors, Inc.

AR 1/18

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.

GROSVENOR LONG/SHORT FUND

Because the Fund may invest in fewer issuers than a more diversified portfolio, the fluctuating value of a single holding may have a greater effect on the value of the Fund. The Fund may have high portfolio turnover risk, which could increase the Fund’s transaction costs and possibly have a negative impact on performance. Investing in small- or mid-capitalization stocks may involve greater volatility and lower liquidity than larger company stocks. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in derivative instruments involves liquidity, credit, interest rate and market risks and in some cases the addition of financial leverage, which can magnify these risks. Short sales involve special risks, including greater reliance on the sub-advisor’s ability to accurately anticipate the future value of a security or instrument; the Fund’s losses are potentially unlimited in a short sale.

NUMERIC INTEGRATED ALPHA FUND

Short sales involve special risks, including greater reliance on the sub-advisor’s ability to accurately anticipate the future value of a security or instrument; the Fund’s losses are potentially unlimited in a short sale. Investing in derivative instruments involves liquidity, credit, interest rate and market risks and in some cases the addition of financial leverage, which can magnify these risks. Investing in foreign and emerging market securities may involve heightened risk due to currency fluctuations and economic and political risks. Because the Fund may invest in fewer issuers than a more diversified portfolio, the fluctuating value of a single holding may have a greater effect on the value of the Fund. The Fund may have high portfolio turnover risk, which could increase the Fund’s transaction costs and possibly have a negative impact on performance. Investing in small- or mid-capitalization stocks may involve greater volatility and lower liquidity than larger company stocks.

Please see the prospectus for a complete discussion of the Funds’ risks. There can be no assurances that the investment objectives of the Funds 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 January 31, 2018

Contents

President’s Message	1
Market and Performance Overviews	2
Expense Examples	9
Report of Independent Registered Public Accounting Firm	11
Schedules of Investments:
American Beacon Grosvenor Long/Short Fund	12
American Beacon Numeric Integrated Alpha Fund	31
Financial Statements	45
Notes to Financial Statements	49
Financial Highlights:
American Beacon Grosvenor Long/Short Fund	74
American Beacon Numeric Integrated Alpha Fund	77
Federal Tax Information	79
Disclosure Regarding Approvals of the Management and Investment Advisory Agreements	80
Trustees and Officers of the American Beacon Funds	82
Privacy Policy	87

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   At American Beacon, we are proud to offer a broad range of equity, fixed- income and alternative mutual fund products for institutions and individuals. Our mutual funds – which span the domestic, international, global, frontier and emerging markets – are sub-advised by experienced portfolio managers who employ distinctive investment processes to manage assets through a variety of economic and market conditions. Together, we work diligently to help our clients and shareholders meet their long-term financial goals.   Institutional wisdom, enduring value. Since our inception as a pension fiduciary in 1986, American Beacon has focused on identifying and overseeing institutional investment managers and portfolio risk management. In 1987, we leveraged our size and experience to launch a series of sub-advised, multi-

manager mutual funds providing individual investors access to many of the same institutional managers as our pension clients. Following the financial crisis in 2008, we saw that investors were looking for unique solutions from managers who were not necessarily mainstream. In 2010, we began offering mutual funds from single managers with distinctive investment styles or asset classes. As we continue to expand our family of funds, our solutions- based approach provides innovative investments.

Guiding principles. Our “manager of managers” philosophy is built on a long-standing history of innovative thinking, discipline and consistency in applying our solutions-based approach. As a manager of managers, our goal is to engage the most effective money managers for each asset class, investment style or market strategy – whether through a single sub-advisor or a combination of sub-advisors. Because we take our fiduciary responsibilities very seriously, our thorough manager evaluation and selection process is rigorous and ongoing. Our guiding principles – predictability, style consistency, competitive pricing and long-term relationships – provide a strong foundation for our due-diligence process. Our broad range of mutual funds helps investors navigate the economic storms and market downturns in the U.S. and abroad. Our years of experience evaluating sub-advisors have led us to identify and partner with asset managers who have adhered to their disciplined processes for many years and through multiple market cycles.

Focus on asset protection and risk mitigation. We strive to provide innovative, long-term products without gimmicks. From offering some of the first multi-manager funds, one of the first retirement-income funds and the first open-end mutual fund in the U.S. to focus primarily on frontier-market debt, our robust history includes applying a disciplined, solutions-based approach to our product development process to help protect assets and mitigate risk.

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

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Global Equity Market Overview

January 31, 2018 (Unaudited)

Global equity markets produced very strong returns for the 12-month period ended January 31, 2018, evidenced by the 27.5% return of the MSCI All Country World Index. Market conditions characterized by low volatility, central-bank accommodation, low inflation and strong corporate results provided a healthy backdrop for equity markets.

Domestic small-cap stocks, represented by the Russell 2000 Index, returned 17.2%. Small caps underperformed large-cap stocks, represented by the S&P 500 Index, which returned 26.4%. Remarkably, the S&P 500 Index only had one instance during the period where it was down more than 0.5% on consecutive trading days. From a sector perspective within the S&P 500 Index, all sectors produced positive returns for the year. The top performers were Information Technology up 43.1% and Financials up 29.8%. On the other hand, lagging sectors included Telecommunications Services up 1.8%, Energy up 6.6% and Real Estate up 8.8%. From a style standpoint, investors favored growth stocks, which easily outperformed value as demonstrated by the Russell 3000 Growth Index return of 34.1% compared to the Russell 3000 Value Index return of 16.7%.

International, developed markets provided strong returns over the period as the MSCI EAFE Index was up 27.6%. In Europe, the high returns were broad-based – represented by the MSCI Italy Index up 47.2%, the MSCI France Index up 37.0%, the MSCI Germany Index up 31.2% and the MSCI United Kingdom Index up 24.4% – as investors bid up shares in an improving European economy. In Japan, the MSCI Japan Index returned an impressive 25.0% as Prime Minister Shinzo Abe’s market-friendly reform efforts continued to take hold.

In the developing world, emerging markets (“EMs”) had an extraordinary year as rising commodity prices and positive investor sentiment lifted stocks. The MSCI Emerging Markets Index returned 41.0%. China, the largest country classified as an EM, led the way during the period with the MSCI China Index up an astonishing 62.3%. Other notable EM markets included the MSCI Poland Index up 52.4%, the MSCI India Index up 37.6% and the MSCI Brazil Index up 31.0%. The MSCI Mexico Index was up 22.4%, weak relative to other EMs, as investors worried about the outcome of ongoing NAFTA negotiations and a presidential election in the summer of 2018.

2

American Beacon Grosvenor Long/Short Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

The Investor Class of the American Beacon Grosvenor Long/Short Fund (the “Fund”) returned 13.99% for the twelve months ended January 31, 2018. The Fund underperformed the long-only MSCI World Index (the “Index”) return of 25.83%, and for additional comparison, the Fund outperformed the Morningstar Long/Short Equity category average return of 13.39%.

Comparison of Change in Value of a $10,000 Investment for the period from 10/1/2015 through 1/31/2018

Total Returns for the Period ended January 31, 2018
	Ticker	1 Year			Since Inception 10/1/2015			Value of  $10,000 10/01/2015- 1/31/2018
Institutional Class (1,3)	GVRIX		14.39	%		9.80	%		$	12,437
Y Class (1,3)	GVRYX		14.32	%		9.68	%		$	12,406
Investor Class (1,3)	GVRPX		13.99	%		9.37	%		$	12,326
A without Sales Charge (1,3)	GSVAX		13.89	%		9.33	%		$	12,315
A with Sales Charge (1,3)	GSVAX		7.31	%		6.59	%		$	11,607
C without Sales Charge (1,3)	GVRCX		13.07	%		8.52	%		$	12,102
C with Sales Charge (1,3)	GVRCX		12.07	%		8.52	%		$	12,102
Ultra Class (1,3)	GVRUX		14.38	%		9.79	%		$	12,437
MSCI World Index (2)			25.83	%		17.44	%		$	14,560

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. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only, and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of the fees charged to each Class of the Fund has been waived since Fund inception. Performance prior to waiving fees was lower than the actual returns shown since inception. A Class shares have a maximum sales charge of 5.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase.

3

American Beacon Grosvenor Long/Short Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

2. The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. 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, Investor, A, C and Ultra Class shares were 4.29%, 4.76%, 5.02%, 5.06%, 5.80%, and 4.33% respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

During this twelve month period, global equity and credit markets experienced strong performance, and the Fund captured gains on both an absolute basis and relative to its long/short equity peer group. Corporate earnings resumed positive growth rates across a number of sectors, and macroeconomic trends were positive given the modest uptick in global GDP growth. Labor markets in many major economies are near full employment, and volatility remained suppressed well below historical levels despite widening divisions between the major central bank approaches toward monetary policy. Cyclical sectors generally outperformed defensives and drove strong gains in the Fund’s allocations to information technology, industrials, materials and financials. The Fund’s holdings in consumer discretionary, including online retail and entertainment, were beneficial as well.

The Fund’s lead sub-advisor, Grosvenor Capital Management, provides a distinct investment process consisting of thorough manager due diligence and dynamic manager allocation. Comprehensive analysis is performed by three separate teams covering the areas of investment research, risk management and operations of each manager and continues with ongoing monitoring. This investment process has remained consistent since the Fund’s inception.

Top 10 Long Exposures (% Net Assets)
Lowe’s Cos, Inc.	1.6
Teck Resources Ltd.	1.6
Caesars Entertainment Corp.	1.3
FirstEnergy Corp.	1.3
SS&C Technologies Holdings, Inc.	1.2
OneMain Holdings, Inc.	1.2
Domino’s Pizza, Inc.	1.2
LKQ Corp.	1.2
Exelon Corp.	1.1
Middleby Corp.	1.1
Top 10 Short Exposures (% Net Assets)
Consumer Discretionary Select Sector SPDR Fund	(2.0	)
Vanguard Total International Bond ETF	(1.0	)
Consumer Staples Select Sector SPDR Fund	(0.9	)
iShares 20+ Year Treasury Bond ETF	(0.7	)
Health Care Select Sector SPDR Fund	(0.6	)
Technology Select Sector SPDR Fund	(0.6	)
Xcel Energy, Inc.	(0.4	)
Duke Energy Corp.	(0.4	)
iShares 7-10 Year Treasury Bond ETF	(0.3	)
Vanguard REIT ETF	(0.3	)

4

American Beacon Grosvenor Long/Short Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

Net Sector Exposures (% Investments)
Consumer Discretionary	28.2
Financials	20.9
Information Technology	19.0
Industrials	14.5
Materials	11.5
Utilities	8.3
Consumer Staples	3.3
Energy	2.9
Telecommunication Services	2.1
Investment Companies	1.8
Health Care	1.6
Real Estate	1.1
Exchange-Traded Instruments	(15.2	)
Fund Level Exposure (% Net Assets)	Fund
Net Exposure	55.2
Gross Exposure	101.6
Long Exposure	78.4
Short Exposure	23.2

5

American Beacon Numeric Integrated Alpha Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

The Investor Class of the American Beacon Numeric Integrated Alpha Fund (the “Fund”) returned -1.06% for the twelve months ended January 31, 2018.

Comparison of Change in Value of a $10,000 Investment for the period from 11/01/2016 through 1/31/2018

Total Returns for the Period ended January 31, 2018
	Ticker	1 Year			Since Inception 11/1/2016			Value of  $10,000 11/1/2016- 1/31/2018
Institutional Class (1,3)	NIAIX		(0.67	)%		1.45	%		10,182
Y Class (1,3)	NIAYX		(0.79	)%		1.43	%		10,179
Investor Class (1,3)	NIAPX		(1.06	)%		1.13	%		10,141
Ultra Class (1,3)	NIAUX		(0.57	)%		1.69	%		10,211
BofA Merrill Lynch U.S. 3-Month Treasury Bill Index (2)			0.93	%		0.83	%		10,104

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. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only, and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of the fees charged to each Class of the Fund has been waived since Fund inception. Performance prior to waiving fees was lower than the actual returns shown since inception.

2. The BofA Merrill Lynch 3-Month U.S. Treasury Bill Index is designed to measure the total return on cash, including price and interest income, based on short-term government Treasury bills of about 90-day maturity. 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, Investor, and Ultra Class shares were 6.17%, 6.27%, 6.55%, and 6.07%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

6

American Beacon Numeric Integrated Alpha Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

Among the Fund’s strategies, the Core Market Neutral component was the primary detractor from performance during the period. This strategy develops a market-neutral, long-short equity portfolio that seeks to identify mispriced securities caused by valuation discrepancies, investor sentiment, seasonal trends and other events that cause equity prices to fluctuate around fundamental valuations. The Fund’s U.S. equity exposures detracted from returns during the period, but European equities were the top contributors.

Within Core Market Neutral, the Fund also employs industry-specific models in both Retail and Real Estate Investment Trust (REIT). The Retail model detracted from performance during the period, while the REIT model contributed positively.

The Fund’s Dynamic Beta component contributed positively to returns during the period. This strategy uses global equity indices and U.S. Treasuries to add long exposure to the Fund through futures contracts when the models identify opportunity. During this period, exposures to all equity indices benefitted the Fund, led by the Emerging Markets, EAFE and U.S. equities in order of significance. Exposure to ten-year U.S. Treasuries, however, detracted slightly.

Lastly, the Dislocation and the Sector components of the Fund’s strategies both detracted from performance during the period. The Dislocation strategy seeks to benefit from market-neutral long and short positions in companies whose stock prices have been dislocated, or moved, beyond typical ranges due to news headlines, earnings results, analyst opinions or other announcements. The Fund seeks to benefit when prices revert to more appropriate levels.

The Sector strategy seeks to benefit from market-neutral long and short positions by utilizing S&P 500 Index Sector Exchange Traded Funds. To the extent that valuation discrepancies across equity sectors become abnormally large, the Fund seeks to benefit from their return to more appropriate levels.

The sub-advisor’s systematic investment process utilizes a fundamentals-based approach that combines a diversified set of uncorrelated quantitative strategies. This investment process has remained consistent since the Fund’s inception.

Top Ten Long Exposures (% Net Assets)
Technology Select Sector SPDR Fund		3.4
Consumer Discretionary Select Sector SPDR Fund		2.5
Domino’s Pizza, Inc.		1.3
Equinix, Inc.		1.3
Ameriprise Financial, Inc.		1.2
Empire State Realty Trust, Inc., Class A		1.2
QTS Realty Trust, Inc., Class A		1.2
CoreSite Realty Corp.		1.2
Forest City Realty Trust, Inc., Class A		1.2
GameStop Corp.		1.2
Total Fund Holdings	179
Top Ten Short Exposures (% Net Assets)
Real Estate Select Sector SPDR Fund		(2.6	)
Utilities Select Sector SPDR Fund		(1.9	)
Consumer Staples Select SPDR Fund		(1.5	)
Financial Select Sector SPDR Fund		(1.4	)
Tesla, Inc.		(1.3	)
Tapestry, Inc.		(1.3	)
Murphy USA, Inc.		(1.2	)
Wabtec Corp.		(1.2	)
Hersha Hospitality Trust		(1.2	)
Omega Healthcare Investors, Inc.		(1.2	)
Total Fund Holdings	90

7

American Beacon Numeric Integrated Alpha Fund^SM

Performance Overview

January 31, 2018 (Unaudited)

Sector Exposure (%)	Portfolio Long	Portfolio Short
Real Estate	15.4	(15.8	)
Consumer Discretionary	9.1	(9.6	)
Exchange-Traded Instruments	7.9	(7.9	)
Information Technology	6.2	(2.9	)
Industrials	6.0	(2.8	)
Financials	5.0	(3.9	)
Energy	3.9	(4.2	)
Health Care	3.6	(1.0	)
Consumer Staples	2.5	(0.1	)
Utilities	1.3	(1.8	)
Materials	0.7	(0.3	)
Telecommunication Services	0.1	(0.0	)

8

American Beacon Funds^SM

Expense Example

January 31, 2018 (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, distribution (12b-1) fees, sub-transfer agent 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 August 1, 2017 through January 31, 2018.

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 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 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 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 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.

9

American Beacon Funds^SM

Expense Example

January 31, 2018 (Unaudited)

Grosvenor Long/Short Fund
	Beginning Account Value 8/1/2017		Ending Account Value 1/31/2018		Expenses Paid During Period 8/1/2017-1/31/2018*
Institutional Class
Actual		$1,000.00		$1,094.60		$20.70
Hypothetical**		$1,000.00		$1,005.40		$19.81
Y Class
Actual		$1,000.00		$1,093.80		$21.32
Hypothetical**		$1,000.00		$1,004.80		$20.41
Investor Class
Actual		$1,000.00		$1,092.50		$22.52
Hypothetical**		$1,000.00		$1,003.70		$21.57
A Class
Actual		$1,000.00		$1,091.60		$22.77
Hypothetical**		$1,000.00		$1,003.40		$21.81
C Class
Actual		$1,000.00		$1,087.20		$26.78
Hypothetical**		$1,000.00		$999.50		$25.65
Ultra ClassA
Actual		$1,000.00		$1,080.90		$7.14
Hypothetical**		$1,000.00		$1,009.00		$16.25

* Expenses are equal to the Fund’s annualized expense ratios (including non-operating expenses (See Financial Highlights for more information)) for the six-month period of 3.92%, 4.04%, 4.27%, 4.32%, 5.09%, and 3.21% for the Institutional, Y, Investor, A, C, and Ultra 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

^A  Commencement of operations, November 14, 2017 through January 31, 2018.

Numeric Integrated Alpha Fund
	Beginning Account Value 8/1/2017		Ending Account Value 1/31/2018		Expenses Paid During Period 8/1/2017-1/31/2018*
Institutional Class
Actual		$1,000.00		$1,007.10		$27.82
Hypothetical**		$1,000.00		$997.50		$27.69
Y Class
Actual		$1,000.00		$1,006.80		$28.33
Hypothetical**		$1,000.00		$997.00		$28.19
Investor Class
Actual		$1,000.00		$1,005.10		$29.72
Hypothetical**		$1,000.00		$995.60		$29.58
Ultra Class
Actual		$1,000.00		$1,008.00		$26.42
Hypothetical**		$1,000.00		$998.90		$26.30

* Expenses are equal to the Fund’s annualized expense ratios (including non-operating expenses (See Financial Highlights for more information)) for the six-month period of 5.50%, 5.60%, 5.88%, and 5.22% for the Institutional, Y, Investor, and Ultra 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

10

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of American Beacon Funds and Shareholders of American Beacon Grosvenor Long/Short Fund and American Beacon Numeric Integrated Alpha Fund

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of American Beacon Grosvenor Long/Short Fund and American Beacon Numeric Integrated Alpha Fund (two of the series constituting American Beacon Funds, referred to hereafter as the “Funds”) as of January 31, 2018, the related statements of operations for the year ended January 31, 2018, the statements of changes in net assets for each of the periods listed in the table below, including the related notes, and the financial highlights for each of the periods listed in the table below (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of January 31, 2018, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the periods listed in the table below and each of the financial highlights for each of the periods listed in the table below in conformity with accounting principles generally accepted in the United States of America.

Fund Name	Statement of changes in net assets and financial highlights
American Beacon Grosvenor Long/Short Fund	Each of the two years in the period ended January 31, 2018
American Beacon Numeric Integrated Alpha Fund	Period November 1, 2016 (commencement of operations) through January 31, 2017 and year ended January 31, 2018

Basis for Opinions

These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of January 31, 2018 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.

With respect to the American Beacon Grosvenor Long/Short Fund, the financial statements as of January 31, 2016 and for the period October 1, 2015 to January 31, 2016 and the financial highlights for the period October 1, 2015 to January 31, 2016 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated March 31, 2016 expressed an unqualified opinion on those financial statements and financial highlights.

PricewaterhouseCoopers LLP

Boston, MA

March 27, 2018

We have served as the auditor of one or more American Beacon investment companies since 2016.

11

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
SECURITIES HELD LONG
COMMON STOCKS - 77.07%
Consumer Discretionary - 18.05%
Auto Components - 0.09%
Cia Energetica de Minas Gerais, Sponsored ADR		6,973		$	16,247
Commencement BankA		17			264
Mountain Commerce Bancorp, Inc.A		146			2,635
					19,146
Automobiles - 0.32%
Harley-Davidson, Inc.		1,350			65,421
Distributors - 1.16%
LKQ Corp.A B		5,651			237,512
Hotels, Restaurants & Leisure - 5.33%
Caesars Entertainment Corp.A B		19,186			267,645
Carnival Corp.		1,910			136,775
Domino’s Pizza, Inc.		1,123			243,523
Marriott International, Inc., Class A		187			27,553
Melco Resorts & Entertainment Ltd., ADR		2,964			88,268
Norwegian Cruise Line Holdings Ltd.A		2,888			175,417
SeaWorld Entertainment, Inc.A		2,198			33,519
Wyndham Worldwide Corp.		970			120,406
Yum! Brands, Inc.		5			423
					1,093,529
Household Durables - 2.15%
AV Homes, Inc.A		650			10,985
Century Communities, Inc.A		1,164			36,782
DR Horton, Inc.		1,700			83,385
iRobot Corp.A		340			30,175
Lennar Corp., Class A		417			26,129
M/I Homes, Inc.A		693			22,412
Meritage Homes Corp.A		223			10,581
Mohawk Industries, Inc.A B		641			180,160
Taylor Morrison Home Corp., Class AA		1,037			26,371
William Lyon Homes, Class AA		501			13,602
					440,582
Internet & Direct Marketing Retail - 1.52%
JD.com, Inc., ADRA		796			39,187
Netflix, Inc.A		235			63,520
Priceline Group, Inc.A		96			183,557
Yoox Net-A-Porter Group SpAA		531			24,953
					311,217
Leisure Products - 0.30%
Brunswick Corp.		983			61,713
Media - 2.54%
CBS Corp., Class B, NVDR		2,302			132,618
Liberty Media Corp-Liberty SiriusXM, Tracking Stock, Class AA B C		3,956			178,060
Liberty Media Corp-Liberty SiriusXM, Tracking Stock, Class CA B C		908			40,688
Viacom, Inc., Class B		5,058			169,038
					520,404
Multiline Retail - 1.03%
B&M European Value Retail S.A.		21,348			126,063

See accompanying notes

12

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
COMMON STOCKS - 77.07% (continued)
Consumer Discretionary - 18.05% (continued)
Multiline Retail - 1.03% (continued)
Macy’s, Inc.		305		$	7,915
Target Corp.		1,034			77,777
					211,755
Specialty Retail - 3.28%
Five Below, Inc.A		275			17,856
Lowe’s Cos, Inc.B		3,228			338,068
MarineMax, Inc.A		4,070			93,407
O’Reilly Automotive, Inc.A		783			207,252
Tile Shop Holdings, Inc.		1,761			16,465
					673,048
Textiles, Apparel & Luxury Goods - 0.33%
Deckers Outdoor Corp.A		304			26,056
Moncler SpA		556			18,321
Swatch Group AG		49			22,453
					66,830
Total Consumer Discretionary					3,701,157
Consumer Staples - 2.35%
Beverages - 0.84%
Anheuser-Busch InBev S.A., Sponsored ADR		966			109,622
Constellation Brands, Inc., Class A		285			62,549
					172,171
Food & Staples Retailing - 0.09%
Koninklijke Ahold Delhaize N.V.		800			17,849
Food Products - 0.61%
Mondelez International, Inc., Class A		2,811			124,808
Household Products - 0.81%
Procter & Gamble Co.		1,933			166,895
Total Consumer Staples					481,723
Energy - 1.82%
Oil, Gas & Consumable Fuels - 1.82%
Hess Corp.		2,863			144,610
Kunlun Energy Co., Ltd.		12,000			11,856
Laredo Petroleum, Inc.A		4,614			44,894
Novatek PJSC, GDR		436			58,032
PetroChina Co., Ltd., Class H		76,000			60,236
YPF S.A., Sponsored ADR		2,201			53,154
					372,782
Financials - 15.69%
Banks - 9.72%
1st Capital BankA		2,265			35,311
American Business BankA B		2,775			113,081
American River Bankshares		2,042			30,793
American Riviera BankA B		2,244			43,197
Atlantic Capital Bancshares, Inc.A		1,517			27,079
Bank of Ireland Group PLCA		4,957			48,496
Bank of the James Financial Group, Inc.B		3,536			51,909
Baycom Corp.A		2,038			40,658

See accompanying notes

13

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
COMMON STOCKS - 77.07% (continued)
Financials - 15.69% (continued)
Banks - 9.72% (continued)
Bridge Bancorp, Inc.B		3,696		$	126,773
Burke & Herbert Bank & Trust Co.		3			8,253
California Bancorp, Inc.A		881			20,748
Cambridge BancorpB		914			70,378
Chemung Financial Corp.		541			24,167
Commerce West BankB		1,605			39,403
Community Financial Corp.B		2,139			78,801
Delmarva Bancshares, Inc.A		1,193			8,852
DNB Financial Corp.		136			4,631
Eagle Financial Services, Inc.		69			2,180
Embassy Bancorp, Inc.		42			701
ENB Financial Corp.		23			791
Esquire Financial Holdings, Inc.A		2,470			56,217
Exchange Bank		136			24,315
Farmers & Merchants Bank of Long Beach		7			56,140
First Foundation, Inc.A		5,146			100,090
First Northern Community BancorpA		2,422			32,818
First of Long Island Corp.B		2,713			76,235
First Savings Financial Group, Inc.		155			9,843
First United Corp.A		563			9,768
Franklin Financial Network, Inc.A		736			23,736
Independent Bank Corp.		821			18,924
Meridian BankA		2,342			42,531
Metro Bank PLCA		611			31,526
Metropolitan Bank Holding Corp.A		1,369			65,014
MidSouth Bancorp, Inc.		595			8,419
Oak Valley Bancorp		391			7,867
Old Point Financial Corp.		155			4,548
Pacific City Financial Corp.		2,148			32,327
Peapack Gladstone Financial Corp.B		2,143			76,119
Premier Commercial BancorpA		1,462			17,383
Premier Financial Bancorp, Inc.		707			13,447
Private Bancorp of America, Inc.A		417			10,429
Sandy Spring Bancorp, Inc.		1,638			61,949
Seacoast Banking Corp. of FloridaA B		2,087			53,824
Seacoast Commerce Banc Holdings		1,185			24,482
Shore Bancshares, Inc.		1,940			35,347
Stewardship Financial Corp.		2,013			22,445
Sussex BancorpB		1,956			56,920
Tri City Bankshares Corp.		690			14,283
UniCredit SpAA		4,776			105,227
Veritex Holdings, Inc.A B		1,729			49,294
WTB Financial Corp., Class B		206			75,190
					1,992,859
Capital Markets - 1.03%
S&P Global, Inc.B		1,162			210,438
Consumer Finance - 2.36%
Ally Financial, Inc.B		4,351			129,529
OneMain Holdings, Inc.A B		7,553			247,059
Regional Management Corp.A B		3,762			106,690
					483,278
Diversified Financial Services - 0.17%
Marlin Business Services Corp.		1,489			35,289

See accompanying notes

14

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
COMMON STOCKS - 77.07% (continued)
Financials - 15.69% (continued)
Thrifts & Mortgage Finance - 2.41%
BofI Holding, Inc.A B		1,360		$	48,919
Charter Court Financial Services Group PLCA C		10,214			46,843
Home Capital Group, Inc.		603			8,383
Merchants BancorpA		4,538			92,122
Meta Financial Group, Inc.		353			41,301
OneSavings Bank PLC		5,943			33,685
PennyMac Financial Services, Inc., Class AA B		4,129			91,664
Provident Bancorp, Inc.A B		1,968			47,330
Sterling Bancorp, Inc.A		6,583			83,538
					493,785
Total Financials					3,215,649
Health Care - 0.96%
Health Care Providers & Services - 0.79%
Cigna Corp.		502			104,592
Express Scripts Holding Co.A		37			2,930
Universal Health Services, Inc., Class B		445			54,067
					161,589
Pharmaceuticals - 0.17%
Takeda Pharmaceutical Co., Ltd.		591			34,728
Total Health Care					196,317
Industrials - 10.41%
Aerospace & Defense - 0.91%
Meggitt PLC		8,925			58,824
Spirit AeroSystems Holdings, Inc., Class A		342			35,007
TransDigm Group, Inc.		291			92,221
					186,052
Air Freight & Logistics - 0.46%
FedEx Corp.		360			94,493
Airlines - 0.57%
Alaska Air Group, Inc.		447			29,381
Copa Holdings S.A., Class A		222			30,709
Southwest Airlines Co.		916			55,693
					115,783
Building Products - 1.78%
AO Smith Corp.		323			21,570
Builders FirstSource, Inc.A		1,236			26,475
Daikin Industries Ltd.		400			47,980
Fortune Brands Home & Security, Inc.		1,752			124,270
Masco Corp.		3,241			144,743
					365,038
Commercial Services & Supplies - 1.39%
Advanced Disposal Services, Inc.A		3,333			81,225
China Everbright International Ltd.		29,000			44,338
KAR Auction Services, Inc.B		2,915			158,984
					284,547
Construction & Engineering - 0.44%
AECOMA		1,481			57,922

See accompanying notes

15

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
COMMON STOCKS - 77.07% (continued)
Industrials - 10.41% (continued)
Construction & Engineering - 0.44% (continued)
Beijing Urban Construction Design & Development Group Co., Ltd., Class HD		54,000		$	32,927
					90,849
Electrical Equipment - 0.59%
Enphase Energy, Inc.A		13,591			29,900
Philips Lighting N.V.D		1,116			43,923
Zhuzhou CRRC Times Electric Co., Ltd., Class H		8,400			46,496
					120,319
Machinery - 2.68%
China Conch Venture Holdings Ltd.		9,500			26,596
Deere & Co.		342			56,916
Gates Industrial Corp. PLCA		685			13,426
Kennametal, Inc.		368			17,951
Middleby Corp.A B		1,614			219,924
Navistar International Corp.A		2,490			114,117
Tadano Ltd.		383			6,680
Trinity Industries, Inc.		2,180			75,144
Wabtec Corp.		112			9,076
Xylem, Inc.		127			9,177
					549,007
Professional Services - 0.20%
IHS Markit Ltd.A		868			41,430
Road & Rail - 0.56%
Genesee & Wyoming, Inc., Class AA		96			7,665
Kansas City Southern		953			107,813
					115,478
Trading Companies & Distributors - 0.83%
AerCap Holdings N.V.A B		1,809			97,867
Air Lease Corp.B		1,163			56,545
BOC Aviation Ltd.D		2,747			16,153
					170,565
Total Industrials					2,133,561
Information Technology - 10.75%
Communications Equipment - 0.73%
Palo Alto Networks, Inc.A		951			150,135
Electronic Equipment, Instruments & Components - 0.82%
Itron, Inc.A		752			55,046
Landis+Gyr Group AGA		777			64,281
Universal Display Corp.		300			47,820
					167,147
Internet Software & Services - 2.25%
Alibaba Group Holding Ltd., Sponsored ADRA		769			157,099
Alphabet, Inc., Class AA B		163			192,702
Auto Trader Group PLCD		5,240			26,791
Facebook, Inc., Class AA		121			22,614
Five9, Inc.A		2,351			61,150
					460,356

See accompanying notes

16

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
COMMON STOCKS - 77.07% (continued)
Information Technology - 10.75% (continued)
IT Services - 2.20%
Fidelity National Information Services, Inc.B		1,585		$	162,241
PayPal Holdings, Inc.A		1,158			98,800
Worldpay, Inc., Class AA		2,352			188,889
					449,930
Semiconductors & Semiconductor Equipment - 0.09%
Micron Technology, Inc.A		431			18,843
Software - 4.58%
Activision Blizzard, Inc.		908			67,310
CDK Global, Inc.		3,068			218,718
LINE Corp., Sponsored ADRA		3,091			137,209
Microsoft Corp.		688			65,367
Nintendo Co., Ltd.		99			43,501
Red Hat, Inc.A		620			81,456
ServiceNow, Inc.A		492			73,244
SS&C Technologies Holdings, Inc.B		5,026			252,707
					939,512
Technology Hardware, Storage & Peripherals - 0.08%
Apple, Inc.		103			17,245
Total Information Technology					2,203,168
Materials - 6.99%
Chemicals - 1.70%
DowDuPont, Inc.		1,112			84,045
Mosaic Co.		1,522			41,551
Olin Corp.		1,671			62,295
Sherwin-Williams Co.B		384			160,170
					348,061
Construction Materials - 0.78%
Buzzi Unicem SpA		980			28,775
Forterra, Inc.A		3,258			22,643
Loma Negra Cia Industrial Argentina S.A., Sponsored ADRA		2,252			53,507
Summit Materials, Inc., Class AA		1,747			55,817
					160,742
Metals & Mining - 3.38%
China Molybdenum Co., Ltd., Class H		48,000			36,939
First Quantum Minerals Ltd.		11,942			178,062
Teck Resources Ltd., Class B		11,345			329,572
voestalpine AG		1,060			68,803
Warrior Met Coal, Inc.		2,802			78,372
					691,748
Paper & Forest Products - 1.13%
Canfor Corp.A		6,414			150,442
West Fraser Timber Co., Ltd.		1,171			81,932
					232,374
Total Materials					1,432,925
Real Estate - 0.97%
Real Estate Management & Development - 0.97%
Realogy Holdings Corp.		7,243			199,255

See accompanying notes

17

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
COMMON STOCKS - 77.07% (continued)
Telecommunication Services - 1.18%
Diversified Telecommunication Services - 0.32%
Telefonica Deutschland Holding AG		13,021		$	65,796
Wireless Telecommunication Services - 0.86%
TIM Participacoes S.A., ADR		6,131			128,874
XL Axiata Tbk PTA		214,405			47,882
					176,756
Total Telecommunication Services					242,552
Utilities - 7.90%
Electric Utilities - 5.17%
Avangrid, Inc.		2,184			106,404
Edison International		792			49,524
Exelon Corp.		5,788			222,896
FirstEnergy Corp.		8,062			265,240
NextEra Energy, Inc.		1,014			160,638
PG&E Corp.		3,412			144,771
Enel SpA		17,503			111,045
					1,060,518
Gas Utilities - 0.24%
ENN Energy Holdings Ltd.		6,519			50,334
Independent Power & Renewable Electricity Producers - 1.18%
AES Corp.		13,402			154,927
8Point3 Energy Partners LP		1,683			24,656
NRG Energy, Inc.		2,374			61,748
					241,331
Multi-Utilities - 0.52%
RWE AGA		2,962			59,281
NiSource, Inc.		1,930			47,632
					106,913
Water Utilities - 0.79%
Guangdong Investment Ltd.		44,000			65,472
Beijing Enterprises Water Group Ltd.A		132,817			95,589
					161,061
Total Utilities					1,620,157
Total Common Stocks (Cost $13,620,273)					15,799,246
RIGHTS - 0.00% (Cost $0)
Financials - 0.00%
Banks - 0.00%
UniCredit SpA, Withdrawal RightsA E		4,776			-
INVESTMENT COMPANIES - 1.01% (Cost $157,778)
Closed-End Funds - 1.01%
Altaba, Inc.A		2,590			206,889
EXCHANGE-TRADED INSTRUMENTS - 0.29% (Cost $61,559)
Exchange-Traded Funds - 0.29%
Nikkei 225 Bull 2x ETF		290			59,637

See accompanying notes

18

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares			Fair Value
SHORT-TERM INVESTMENTS - 19.35% (Cost $3,966,444)
Investment Companies - 19.35%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.25%F G		3,966,444			$	3,966,444
TOTAL SECURITIES HELD LONG (Cost $17,806,054)						20,032,216
SECURITIES HELD SHORT
COMMON STOCKS - (14.49%)
Consumer Discretionary - (2.48%)
Automobiles - (0.12%)
Ford Motor Co.		(749	)			(8,217	)
General Motors Co.		(374	)			(15,861	)
						(24,078	)
Hotels, Restaurants & Leisure - (0.34%)
Cheesecake Factory, Inc.		(308	)			(15,150	)
Darden Restaurants, Inc.		(128	)			(12,269	)
Red Robin Gourmet Burgers, Inc.A		(72	)			(3,791	)
Vail Resorts, Inc.		(37	)			(8,087	)
Wyndham Worldwide Corp.		(222	)			(27,557	)
Wynn Macau Ltd.		(794	)			(2,801	)
						(69,655	)
Household Durables - (0.66%)
DR Horton, Inc.		(286	)			(14,028	)
Installed Building Products, Inc.A		(81	)			(5,828	)
KB Home		(403	)			(12,703	)
Leggett & Platt, Inc.		(115	)			(5,349	)
LGI Homes, Inc.A		(167	)			(11,302	)
Meritage Homes Corp.A		(590	)			(27,995	)
Newell Brands, Inc.		(270	)			(7,139	)
NVR, Inc.A		(1	)			(3,178	)
PulteGroup, Inc.		(683	)			(21,740	)
Roku, Inc.A		(114	)			(4,631	)
Tempur Sealy International, Inc.A		(87	)			(5,189	)
Toll Brothers, Inc.		(112	)			(5,217	)
TopBuild Corp.A		(139	)			(10,639	)
						(134,938	)
Media - (0.53%)
Altice USA, Inc., Class AA		(877	)			(18,829	)
AMC Networks, Inc., Class AA		(309	)			(15,941	)
Interpublic Group of Companies, Inc.		(498	)			(10,901	)
Omnicom Group, Inc.		(159	)			(12,188	)
ProSiebenSat.1 Media SE		(639	)			(24,427	)
Publicis Groupe S.A.		(164	)			(11,337	)
WPP PLC		(774	)			(14,045	)
						(107,668	)
Multiline Retail - (0.08%)
Dollarama, Inc.		(43	)			(5,879	)
Next PLC		(92	)			(6,652	)
Nordstrom, Inc.		(70	)			(3,452	)
						(15,983	)
Specialty Retail - (0.47%)
AutoNation, Inc.A		(154	)			(9,274	)
Best Buy Co., Inc.		(28	)			(2,046	)
CarMax, Inc.A		(232	)			(16,558	)
Floor & Decor Holdings, Inc., Class AA		(139	)			(6,519	)

See accompanying notes

19

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares			Fair Value
COMMON STOCKS - (14.49%) (continued)
Consumer Discretionary - (2.48%) (continued)
Specialty Retail - (0.47%) (continued)
Hennes & Mauritz AB, Class B		(320	)		$	(5,658	)
Home Depot, Inc.		(22	)			(4,439	)
Lithia Motors, Inc., Class A		(67	)			(8,372	)
Monro, Inc.		(200	)			(11,300	)
Penske Automotive Group, Inc.		(551	)			(28,757	)
Tractor Supply Co.		(57	)			(4,346	)
						(97,269	)
Textiles, Apparel & Luxury Goods - (0.28%)
Gildan Activewear, Inc.		(190	)			(6,461	)
HUGO BOSS AG		(41	)			(3,766	)
Pandora A/S		(209	)			(19,817	)
Ralph Lauren Corp.		(247	)			(28,235	)
						(58,279	)
Total Consumer Discretionary						(507,870	)
Consumer Staples - (0.54%)
Beverages - (0.05%)
Boston Beer Co., Inc., Class AA		(51	)			(9,682	)
Food & Staples Retailing - (0.32%)
Costco Wholesale Corp.		(59	)			(11,498	)
ICA Gruppen AB		(183	)			(7,148	)
Loblaw Companies Ltd.		(123	)			(6,663	)
Metro, Inc.		(121	)			(4,049	)
SUPERVALU, Inc.A		(592	)			(9,377	)
Wal-Mart Stores, Inc.		(160	)			(17,056	)
Wm Morrison Supermarkets PLC		(3,104	)			(9,784	)
						(65,575	)
Food Products - (0.04%)
Blue Buffalo Pet Products, Inc.A		(58	)			(1,971	)
Danone S.A.		(77	)			(6,640	)
						(8,611	)
Tobacco - (0.13%)
Japan Tobacco, Inc.		(833	)			(27,561	)
Total Consumer Staples						(111,429	)
Energy - (0.25%)
Oil, Gas & Consumable Fuels - (0.25%)
Snam SpA		(10,297	)			(50,101	)
Financials - (4.15%)
Banks - (3.04%)
1st Source Corp.		(626	)			(32,733	)
AIB Group PLC		(4,893	)			(34,110	)
Aldermore Group PLCA		(958	)			(4,236	)
City Holding Co.		(427	)			(29,378	)
Commerce Bancshares, Inc.		(888	)			(51,957	)
Cullen/Frost Bankers, Inc.		(333	)			(35,434	)
CVB Financial Corp.		(2,234	)			(52,276	)
CYBG PLC		(1,813	)			(8,253	)
First Financial Bankshares, Inc.		(1,031	)			(47,890	)

See accompanying notes

20

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares			Fair Value
COMMON STOCKS - (14.49%) (continued)
Financials - (4.15%) (continued)
Banks - (3.04%) (continued)
German American Bancorp, Inc.		(842	)		$	(29,209	)
Glacier Bancorp, Inc.		(1,486	)			(58,281	)
Heritage Financial Corp.		(1,241	)			(38,223	)
Independent Bank Corp.		(455	)			(32,464	)
Lakeland Financial Corp.		(924	)			(44,417	)
S&T Bancorp, Inc.		(191	)			(7,709	)
South State Corp.		(600	)			(53,160	)
Webster Financial Corp.		(1,113	)			(63,018	)
						(622,748	)
Capital Markets - (0.04%)
Close Brothers Group PLC		(391	)			(8,738	)
Consumer Finance - (0.45%)
Discover Financial Services		(424	)			(33,835	)
Enova International, Inc.A		(749	)			(13,407	)
Synchrony Financial		(683	)			(27,101	)
World Acceptance Corp.A		(151	)			(17,826	)
						(92,169	)
Thrifts & Mortgage Finance - (0.62%)
Beneficial Bancorp, Inc.		(1,893	)			(30,761	)
Clifton Bancorp, Inc.		(851	)			(13,897	)
Kearny Financial Corp.		(1,439	)			(19,858	)
Meridian Bancorp, Inc.		(760	)			(15,542	)
WSFS Financial Corp.		(937	)			(47,881	)
						(127,939	)
Total Financials						(851,594	)
Health Care - (0.08%)
Biotechnology - (0.02%)
Celgene Corp.A		(32	)			(3,237	)
Incyte Corp.A		(9	)			(813	)
						(4,050	)
Health Care Providers & Services - (0.02%)
Aetna, Inc.		(13	)			(2,429	)
HCA Healthcare, Inc.A		(29	)			(2,933	)
						(5,362	)
Pharmaceuticals - (0.04%)
Mallinckrodt PLCA		(166	)			(2,998	)
Teva Pharmaceutical Industries Ltd., Sponsored ADR		(228	)			(4,653	)
						(7,651	)
Total Health Care						(17,063	)
Industrials - (2.40%)
Air Freight & Logistics - (0.17%)
United Parcel Service, Inc., Class B		(269	)			(34,249	)
Airlines - (0.13%)
Norwegian Air Shuttle ASAA		(382	)			(11,194	)
SAS ABA		(5,220	)			(12,633	)
United Continental Holdings, Inc.A		(52	)			(3,527	)
						(27,354	)

See accompanying notes

21

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares			Fair Value
COMMON STOCKS - (14.49%) (continued)
Industrials - (2.40%) (continued)
Building Products - (0.10%)
American Woodmark Corp.A		(58	)		$	(7,879	)
Simpson Manufacturing Co., Inc.		(95	)			(5,580	)
USG Corp.A		(186	)			(7,191	)
						(20,650	)
Commercial Services & Supplies - (0.34%)
ADT, Inc.A		(1,441	)			(17,984	)
Cintas Corp.		(65	)			(10,949	)
Republic Services, Inc.		(448	)			(30,822	)
Ritchie Bros Auctioneers, Inc.		(299	)			(9,724	)
						(69,479	)
Construction & Engineering - (0.16%)
Valmont Industries, Inc.		(200	)			(32,720	)
Electrical Equipment - (0.68%)
Eaton Corp. PLC		(273	)			(22,924	)
Generac Holdings, Inc.A		(1,298	)			(63,511	)
Regal Beloit Corp.		(687	)			(53,517	)
						(139,952	)
Machinery - (0.50%)
Flowserve Corp.		(734	)			(33,265	)
Kone OYJ, Class B		(189	)			(10,818	)
SKF AB, Class B		(1,067	)			(26,371	)
Timken Co.		(444	)			(23,332	)
Volvo AB, Class B		(449	)			(9,165	)
						(102,951	)
Marine - (0.11%)
Kirby Corp.A		(295	)			(22,095	)
Road & Rail - (0.09%)
Canadian National Railway Co.		(112	)			(8,974	)
Schneider National, Inc., Class B		(308	)			(9,018	)
						(17,992	)
Trading Companies & Distributors - (0.12%)
Aircastle Ltd.		(1,032	)			(24,376	)
Total Industrials						(491,818	)
Information Technology - (0.25%)
Communications Equipment - (0.02%)
Cisco Systems, Inc.		(78	)			(3,240	)
IT Services - (0.07%)
Accenture PLC, Class A		(90	)			(14,463	)
Software - (0.13%)
Adobe Systems, Inc.A		(25	)			(4,994	)
Atlassian Corp. PLC, Class AA		(50	)			(2,699	)
Blackline, Inc.A		(24	)			(798	)
Check Point Software Technologies Ltd.A		(4	)			(414	)
Fortinet, Inc.A		(56	)			(2,578	)
Snap, Inc., Class AA		(295	)			(3,988	)
Ultimate Software Group, Inc.A		(38	)			(8,850	)

See accompanying notes

22

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares			Fair Value
COMMON STOCKS - (14.49%) (continued)
Information Technology - (0.25%) (continued)
Software - (0.13%) (continued)
Zendesk, Inc.A		(53	)		$	(2,042	)
						(26,363	)
Technology Hardware, Storage & Peripherals - (0.03%)
Logitech International S.A.		(156	)			(6,547	)
Total Information Technology						(50,613	)
Materials - (0.67%)
Chemicals - (0.38%)
Albemarle Corp.		(302	)			(33,700	)
Eastman Chemical Co.		(170	)			(16,861	)
Methanex Corp.		(452	)			(28,453	)
						(79,014	)
Metals & Mining - (0.05%)
Kaiser Aluminum Corp.		(92	)			(10,142	)
Paper & Forest Products - (0.24%)
Domtar Corp.		(438	)			(22,496	)
Louisiana-Pacific Corp.A		(882	)			(26,116	)
						(48,612	)
Total Materials						(137,768	)
Real Estate - (0.34%)
Equity Real Estate Investment Trusts (REITs) - (0.34%)
Camden Property Trust		(73	)			(6,319	)
Empire State Realty Trust, Inc., Class A		(210	)			(4,105	)
Federal Realty Investment Trust		(22	)			(2,658	)
Host Hotels & Resorts, Inc.		(1,146	)			(23,791	)
Public Storage, REIT		(10	)			(1,958	)
Regency Centers Corp.		(72	)			(4,529	)
Ryman Hospitality Properties, Inc.		(298	)			(22,812	)
UDR, Inc.		(117	)			(4,274	)
						(70,446	)
Total Real Estate						(70,446	)
Utilities - (3.33%)
Electric Utilities - (2.01%)
Southern Co.		(1,416	)			(63,876	)
American Electric Power Co., Inc.		(540	)			(37,141	)
Duke Energy Corp.		(921	)			(72,299	)
PPL Corp.		(1,999	)			(63,708	)
Xcel Energy, Inc.		(1,777	)			(81,102	)
Terna Rete Elettrica Nazionale SpA		(11,318	)			(68,124	)
Orsted A/SD		(413	)			(25,078	)
						(411,328	)
Multi-Utilities - (0.97%)
Avista Corp.		(235	)			(11,912	)
Consolidated Edison, Inc.		(833	)			(66,940	)
DTE Energy Co.		(531	)			(56,095	)
WEC Energy Group, Inc.		(445	)			(28,613	)
Innogy SED		(943	)			(35,943	)
						(199,503	)

See accompanying notes

23

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

	Shares			Fair Value
COMMON STOCKS - (14.49%) (continued)
Utilities - (3.33%) (continued)
Water Utilities - (0.35%)
American Water Works Co., Inc.		(574	)		$	(47,740	)
AquaVenture Holdings Ltd.A		(1,568	)			(23,849	)
						(71,589	)
Total Utilities						(682,420	)
TOTAL COMMON STOCKS (Proceeds $(2,780,177))						(2,971,122	)
EXCHANGE-TRADED INSTRUMENTS - (8.70%)
Exchange-Traded Funds - (8.70%)
Consumer Discretionary Select Sector SPDR Fund		(3,755	)			(404,827	)
Consumer Staples Select Sector SPDR Fund		(3,125	)			(180,687	)
Energy Select Sector SPDR Fund		(120	)			(8,982	)
Health Care Select Sector SPDR Fund		(1,434	)			(126,335	)
Industrial Select Sector SPDR Fund		(681	)			(54,296	)
iShares 20+ Year Treasury Bond ETF		(1,228	)			(150,712	)
iShares 7-10 Year Treasury Bond ETF, Class B		(676	)			(69,831	)
iShares MSCI Brazil ETF		(201	)			(9,365	)
iShares MSCI Emerging Markets ETF		(1,065	)			(54,347	)
iShares Russell 1000 Growth ETF		(205	)			(29,528	)
iShares Russell 2000 ETF		(97	)			(15,167	)
iShares STOXX Europe 600 UCITS ETF		(1,036	)			(50,003	)
iShares U.S. Home Construction ETF		(245	)			(10,506	)
Materials Select Sector SPDR Fund		(260	)			(16,367	)
PowerShares QQQ Trust Series 1		(281	)			(47,601	)
Real Estate Select Sector SPDR Fund		(753	)			(24,329	)
SPDR S&P 500 ETF Trust		(104	)			(29,318	)
SPDR S&P MidCap 400 ETF Trust		(19	)			(6,745	)
SPDR S&P Regional Banking ETF		(110	)			(6,853	)
SPDR S&P Telecom ETF		(471	)			(33,017	)
Technology Select Sector SPDR Fund		(1,678	)			(114,859	)
Utilities Select Sector SPDR Fund		(1,076	)			(54,919	)
VanEck Vectors Semiconductor ETF		(137	)			(14,592	)
Vanguard REIT ETF		(877	)			(69,678	)
Vanguard Total International Bond ETF		(3,692	)			(199,590	)
Total Exchange-Traded Funds						(1,782,454	)
TOTAL EXCHANGE-TRADED INSTRUMENTS (Proceeds $(1,560,729))						(1,782,454	)
TOTAL SECURITIES SOLD SHORT (Proceeds $(4,340,906))						(4,753,576	)
TOTAL INVESTMENTS IN SECURITIES (EXCLUDES SECURITIES SOLD SHORT) - 97.72% (Cost $17,806,054)						20,032,216
TOTAL PURCHASED OPTIONS CONTRACTS - 0.10% (Premiums Paid $25,214)						21,249
TOTAL SECURITIES SOLD SHORT - (23.19%) (Proceeds $(4,340,906))						(4,753,576	)
OTHER ASSETS, NET OF LIABILITIES - 25.37%						5,200,628
NET ASSETS - 100.00%					$	20,500,517
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B This security or a piece thereof is held as segregated collateral.

^C Tracking Stock - A form of common stock that is issued by a parent company and tracks the performance of a specific division of that parent company. It allows investors the chance to invest in an individual sector of a company while the parent company maintains overall control.

See accompanying notes

24

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

^D 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 $105,616 or 0.52% of net assets. The Fund has no right to demand registration of these securities.

^E 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. Value was determined using significant unobservable inputs.

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

^G 7-day yield.

ADR - American Depositary Receipt.

ETF - Exchange-Traded Fund.

GDR - Global Depositary Receipt.

LP - Limited Partnership.

MSCI - Morgan Stanley Capital International.

NVDR - Non Voting Depositary Receipt.

PJSC - Private Joint Stock Company.

PLC - Public Limited Company.

S&P - Standard & Poor’s.

S&P 500 - Standard & Poor’s U.S. Equity Large-Cap Index.

SPDR - Standard & Poor���s Depositary Receipt.

UCITS - Undertaking for Collective Investments in Transferable Securities.

OTC Swap Agreements Outstanding on January 31, 2018:

OTC Swap Agreement Contracts for Difference – Equity

Reference Entity	Counter- party	Long/ Short	Currency	Financing Rate	Expiration Date		Notional Amount			Premiums Paid (Received)		Unrealized Appreciation (Depreciation)
CEZ A/S	MSC	Long	CZK	0.800%		1/30/2020		653		$	16,751	$	(15	)
Aeroports de Paris	MSC	Long	EUR	0.145%		1/13/2020		138			28,220		437
Cellnex Telecom S.A.	MSC	Long	EUR	0.145%		1/13/2020		3,994			105,166		541
Electricite de France S.A.	MSC	Long	EUR	0.145%		1/13/2020		5,850			80,909		(498	)
Ferrovial S.A.	MSC	Long	EUR	0.145%		1/13/2020		3,954			90,333		(69	)
Fortum OYJ	MSC	Long	EUR	0.145%		1/13/2020		4,838			107,578		(3,196	)
Obrascon Huarte Lain S.A.	MSC	Long	EUR	0.145%		1/13/2020		7,101			44,557		(731	)
Suez	MSC	Long	EUR	0.145%		1/13/2020		7,063			101,933		2,907
Veolia Environnement S.A.	MSC	Long	EUR	0.145%		1/13/2020		4,915			122,767		462
Glencore PLC	MSC	Long	GBP	0.500%		1/30/2020		9,302			53,873		(867	)
Aena SME S.A.	MSC	Short	EUR	0.855%		1/13/2020		(169	)		36,570		(232	)
EDP-Energias de Portugal S.A.	MSC	Short	EUR	0.678%		1/13/2020		(9,386	)		33,264		458
Enagas S.A.	MSC	Short	EUR	0.855%		1/13/2020		(1,155	)		31,116		(351	)
Endesa S.A.	MSC	Short	EUR	0.855%		1/13/2020		(730	)		16,337		(62	)
Engie S.A.	MSC	Short	EUR	0.755%		1/13/2020		(6,935	)		121,614		3,721
Red Electrica Corp S.A.	MSC	Short	EUR	0.855%		1/13/2020		(2,632	)		55,630		(133	)
Stoxx Europe 600 Utilities	MSC	Short	EUR	0.450%		1/30/2020		(377	)		131,385		-
Vinci S.A.	MSC	Short	EUR	0.755%		1/13/2020		(346	)		37,380		18
CGN Power Co Ltd.	MSC	Short	HKD	0.405%		1/30/2020		(59,000	)		16,802		128
China Gas Holdings Ltd.	MSC	Short	HKD	0.405%		1/30/2020		(8,800	)		26,685		914
CRRC Corp Ltd.	MSC	Short	HKD	0.405%		1/30/2020		(18,000	)		17,940		100
HK Electric Investments & HK Electric Investments Ltd.	MSC	Short	HKD	0.280%		1/30/2020		(48,000	)		44,319		(61	)
										$	1,321,129	$	3,471

See accompanying notes

25

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

Total Return Swap Agreements
Pay/Receive Floating Rate	Description	Reference Entity	Counter- party	Floating Rate	Expiration Date	Reference Quantity		Notional Amount*		Premiums Paid (Received)			Unrealized Appreciation (Depreciation)
Pay	1-Month HKD-HONIA	Air China Ltd.	MSC	1.850%	2/22/2018		14,143		111,081	$	(46	)	$	6,530
Pay	1-Month HKD-HONIA	Tencent Holdings Ltd.	MSC	1.850%	2/22/2018		408		160,199		(22	)		3,723
Pay	1-Month EUR-EURIBOR	Accor S.A.	MSC	0.130%	8/24/2018		1,091		41,318		(122	)		10,929
Pay	1-Month USD-FEDEF	Alphabet, Inc.	MSC	1.920%	10/2/2018		84		68,344		-			30,962
Pay	1-Month USD-FEDEF	Caterpillar, Inc.	MSC	1.920%	10/2/2018		805		76,201		-			54,837
Pay	1-Month USD-FEDEF	Delta Air Lines, Inc.	MSC	1.920%	10/2/2018		757		39,125		-			3,850
Pay	1-Day USD-FEDEF	Knight-Swift Transportation Holdings, Inc.	MSC	1.920%	10/2/2018		1,951		58,782		(1	)		38,358
Pay	1-Month USD-FEDEF	Las Vegas Sands Corp.	MSC	1.920%	10/2/2018		1,304		78,312		-			22,774
Pay	1-Month USD-FEDEF	Monster Beverage Corp.	MSC	1.920%	10/2/2018		975		45,798		-			20,726
Pay	1-Day USD-FEDEF	NVR, Inc.	MSC	1.920%	10/2/2018		87		148,278		-			128,223
Pay	1-Day USD-FEDEF	Rio Tinto PLC	MSC	1.920%	10/2/2018		3,357		135,512		-			52,850
Pay	1-Day USD-FEDEF	Take-Two Interactive Software, Inc.	MSC	1.920%	10/2/2018		1,745		86,092		-			134,947
Pay	1-Month EUR-EURIBOR	Air France-KLM	MSC	0.130%	10/5/2018		2,042		25,504		-			51
Pay	1-Month GBP-LIBOR	Anglo American PLC	MSC	0.990%	10/5/2018		260		4,470		-			(40	)
Pay	1-Month GBP-LIBOR	Antofagasta PLC	MSC	0.990%	10/5/2018		2,811		22,071		-			5,821
Pay	1-Month EUR-EURIBOR	Cie Plastic Omnium S.A.	MSC	0.130%	10/5/2018		1,130		33,710		-			16,243
Pay	1-Month GBP-LIBOR	easyJet PLC	MSC	0.990%	10/5/2018		527		6,671		-			2,949
Pay	1-Month GBP-LIBOR	International Consolidated Airlines Group S.A.	MSC	0.990%	10/5/2018		4,106		20,803		-			7,785
Pay	1-Month EUR-EURIBOR	Kering	MSC	0.130%	10/5/2018		40		9,546		-			8,400
Pay	1-Month GBP-LIBOR	Rio Tinto PLC	MSC	0.990%	10/5/2018		764		25,291		-			6,634
Pay	1-Month EUR-EURIBOR	Ryanair Holdings	MSC	0.130%	10/5/2018		768		12,798		-			-
Pay	1-Month GBP-LIBOR	Smurfit Kappa Group PLC	MSC	0.990%	10/5/2018		1,700		37,107		-			6,982
Receive	1-Day USD-FEDEF	Utilities Select Sector Index	MSC	1.270%	11/12/2018		43		97,163		-			6,323
Receive	1-Day USD-FEDEF	Consumer Discretionary Select Sector Index	MSC	1.420%	12/14/2018		35		97,453		-			(16,806	)
Receive	1-Month EUR-EURIBOR	Jeronimo Martins SGPS SA	MSC	0.500%	2/23/2019		109		1,904		-			42
Receive	1-Day USD-FEDEF	NASDAQ 100 Total Return Index	MSC	1.570%	11/8/2019		14		100,061		-			(10,374	)
Receive	1-Day USD-FEDEF	Consumer Staples Select Sector Index	MSC	1.270%	11/12/2019		44		97,013		-			(10,354	)
Receive	1-Day USD-FEDEF	S&P 500 Total Return Index	MSC	1.620%	11/12/2019		19		95,686		-			(9,027	)
Pay	1-Month EUR-EURIBOR	Accor S.A.	MSC	0.550%	1/17/2020		2,913		108,731		(66	)		30,894

See accompanying notes

26

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

Pay/Receive Floating Rate	Description	Reference Entity	Counter- party	Floating Rate		Expiration Date		Reference Quantity		Notional Amount*		Premiums Paid (Received)			Unrealized Appreciation (Depreciation)
Pay	1-Day EUR-EONIA	FinecoBank Banca Fineco SpA	MSC		0.550%		1/17/2020		6,954		44,507	$	(7	)	$	31,173
Receive	1-Day EUR-EONIA	Casino Guichard Perrachon S.A.	MSC		0.400%		1/17/2020		159		8,291		(7	)		1,005
Receive	1-Day EUR-EONIA	Eutelsat Communications S.A.	MSC		0.420%		1/17/2020		975		18,454		-			1,461
Receive	1-Day GBP-SONIA	Ted Baker PLC	MSC		0.430%		1/17/2020		46		1,361		-			(27	)
Receive	1-Month IDR-SOR	Telekomunikasi Indonesia Persero Tbk PT	MSC		2.580%		1/17/2020		34,741		139,965,514		-			101
Receive	1-Day TWD-FEDEF	China Steel Corp.	MSC		1.110%		1/21/2020		4,020		81,547		-			(636	)
Receive	1-Day BRL-FEDEF	Raia Drogasil S.A.	MSC		0.300%		1/21/2020		41		2,826		-			(199	)
Receive	1-Day BRL-FEDEF	Telefonica Brasil S.A.	MSC		0.420%		1/21/2020		1,148		51,279		-			(3,309	)
												$	(271	)	$	583,801

* Notional amounts are denominated in local currency.

Purchased Options Contracts Open on January 31, 2018:

Equity Options
Description	Counter- party		Exercise Price	Expiration Date	Currency	Number of Contracts	Notional Amount		Premiums Paid		Fair Value		Unrealized Appreciation (Depreciation)
Call - ServiceNow, Inc.		CCP	157.50	2/2/2018	USD	4		400	$	895	$	648	$	(247	)
Put - Cigna Corp.		CCP	220.00	2/2/2018	USD	1		100		193		1,000		807
Put - Cigna Corp.		CCP	207.50	2/2/2018	USD	3		300		1,060		1,060		-
Call - Procter & Gamble Co.		CCP	97.50	2/16/2018	USD	43		4,300		1,028		86		(942	)
Call - Bed Bath & Beyond, Inc.		CCP	25.00	2/16/2018	USD	10		1,000		1,334		170		(1,164	)
Call - Mondelez International, Inc.		CCP	46.00	2/16/2018	USD	11		1,100		370		506		136
Call - Palo Alto Networks, Inc.		CCP	160.00	2/16/2018	USD	3		300		615		909		294
Call - Viacom, Inc.		CCP	35.00	2/16/2018	USD	13		1,300		740		1,040		300
Call - Melco Resorts & Entertainment Ltd.		CCP	30.00	2/16/2018	USD	24		2,400		1,825		2,280		455
Call - Viacom, Inc.		CCP	40.00	2/16/2018	USD	16		1,600		878		320		(558	)
Put - Hennes & Mauritz AB		MSC	140.00	2/16/2018	SEK	26		2,600		378		1,501		1,123
Put - Fortinet, Inc.		CCP	42.00	2/16/2018	USD	7		700		672		350		(322	)
Put - Tractor Supply Co.		CCP	74.00	2/16/2018	USD	4		400		512		700		188
Call - Procter & Gamble Co.		CCP	95.00	3/16/2018	USD	30		3,000		1,592		210		(1,382	)
Call - CBS Corp.		CCP	65.00	3/16/2018	USD	9		900		674		477		(197	)
Call - Procter & Gamble Co.		CCP	92.50	3/16/2018	USD	1		100		134		16		(118	)
Put - Hennes & Mauritz AB		MSC	180.00	3/16/2018	SEK	8		800		343		4,061		3,718
Put - Tesla, Inc.		CCP	280.00	3/16/2018	USD	1		100		448		256		(192	)
Put - Tesla, Inc.		CCP	300.00	3/16/2018	USD	1		100		448		470		22
Put - Costco Wholesale Corp.		CCP	175.00	3/16/2018	USD	4		400		376		380		4
Put - Facebook, Inc.		CCP	170.00	3/16/2018	USD	2		200		416		444		28
Put - Apple, Inc.		CCP	155.00	3/16/2018	USD	2		200		295		490		195
Put - Costco Wholesale Corp.		CCP	165.00	7/20/2018	USD	3		300		613		603		(10	)
Call - Koninklijke Ahold N.V.		MSC	22.00	12/21/2018	EUR	4		400		848		93		(755	)
Call - Koninklijke Ahold N.V.		MSC	22.03	12/21/2018	EUR	2		200		169		45		(124	)
									$	16,856	$	18,115	$	1,259

See accompanying notes

27

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

Exchange-Traded Fund Options
Description	Counter- party	Exercise Price	Expiration Date	Currency		Number of Contracts		Notional Amount		Premiums Paid		Fair Value		Unrealized Appreciation (Depreciation)
Put - PowerShares QQQ Trust Series 1	CCP	160.00	2/16/2018		USD		13		1,300	$	1,333	$	650	$	(683	)
Put - PowerShares QQQ Trust Series 1	CCP	165.00	2/16/2018		USD		6		600		699		702		3
Put - Financial Select Sector SPDR Fund	CCP	25.00	3/16/2018		USD		204		20,400		4,780		816		(3,964	)
Put - VanEck Vectors Semiconductor ETF	CCP	97.00	3/16/2018		USD		4		400		351		416		65
Put - iShares Core S&P Small-Cap ETF	CCP	58.00	5/18/2018		USD		20		2,000		1,195		550		(645	)
										$	8,358	$	3,134	$	(5,224	)

Forward Foreign Currency Contracts Open on January 31, 2018:
Currency Purchased*		Currency Sold*		Settlement Date		Counterparty		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
JPY	4,402	USD	4,265		2/28/2018		MSC	$	137	$	-		$	137
CAD	4,736	USD	4,728		2/28/2018		MSC		8		-			8
GBP	4,969	USD	4,967		2/28/2018		MSC		2		-			2
GBP	5,474	USD	5,482		2/28/2018		MSC		-		(8	)		(8	)
CAD	6,095	USD	6,041		2/28/2018		MSC		54		-			54
CAD	6,726	USD	6,516		2/28/2018		MSC		210		-			210
NOK	8,609	USD	7,948		2/28/2018		MSC		661		-			661
SEK	33,431	USD	31,617		2/28/2018		MSC		1,814		-			1,814
USD	360,282	CAD	375,946		2/28/2018		MSC		-		(15,664	)		(15,664	)
USD	84,186	EUR	87,583		2/28/2018		MSC		-		(3,397	)		(3,397	)
USD	24,590	GBP	25,970		2/28/2018		MSC		-		(1,380	)		(1,380	)
USD	19,524	JPY	20,207		2/28/2018		MSC		-		(683	)		(683	)
USD	18,305	CHF	19,284		2/28/2018		MSC		-		(979	)		(979	)
USD	10,058	CAD	10,232		2/28/2018		MSC		-		(174	)		(174	)
USD	9,882	CAD	10,029		2/28/2018		MSC		-		(147	)		(147	)
USD	5,986	CAD	6,089		2/28/2018		MSC		-		(103	)		(103	)
USD	5,770	EUR	5,933		2/28/2018		MSC		-		(163	)		(163	)
USD	5,543	EUR	5,769		2/28/2018		MSC		-		(226	)		(226	)
USD	5,306	CAD	5,456		2/28/2018		MSC		-		(150	)		(150	)
USD	5,182	CAD	5,285		2/28/2018		MSC		-		(103	)		(103	)
USD	5,062	EUR	5,269		2/28/2018		MSC		-		(207	)		(207	)
USD	5,069	GBP	5,260		2/28/2018		MSC		-		(191	)		(191	)
USD	4,997	CAD	5,093		2/28/2018		MSC		-		(96	)		(96	)
USD	4,576	GBP	4,844		2/28/2018		MSC		-		(268	)		(268	)
USD	4,668	CAD	4,744		2/28/2018		MSC		-		(76	)		(76	)
USD	4,527	JPY	4,614		2/28/2018		MSC		-		(87	)		(87	)
USD	4,564	CAD	4,580		2/28/2018		MSC		-		(16	)		(16	)
USD	4,334	GBP	4,528		2/28/2018		MSC		-		(194	)		(194	)
SEK	18,017	USD	17,659		4/18/2018		MSC		358		-			358
DKK	21,157	USD	20,804		4/18/2018		MSC		353		-			353
EUR	26,243	USD	26,218		4/18/2018		MSC		25		-			25
EUR	47,151	USD	47,121		4/18/2018		MSC		30		-			30
USD	305,168	EUR	310,063		4/18/2018		MSC		-		(4,895	)		(4,895	)
USD	139,809	JPY	142,334		4/18/2018		MSC		-		(2,525	)		(2,525	)
USD	59,757	GBP	61,312		4/18/2018		MSC		-		(1,555	)		(1,555	)
USD	7,757	CAD	8,132		6/1/2018		MSC		-		(375	)		(375	)
EUR	9,716	USD	9,706		6/4/2018		MSC		10		-			10
GBP	59,898	USD	56,956		6/4/2018		MSC		2,942		-			2,942
USD	75,558	GBP	79,753		6/4/2018		MSC		-		(4,195	)		(4,195	)
USD	30,588	GBP	32,215		6/4/2018		MSC		-		(1,627	)		(1,627	)
USD	18,425	GBP	18,891		6/4/2018		MSC		-		(466	)		(466	)
USD	17,231	GBP	17,293		6/4/2018		MSC		-		(62	)		(62	)

See accompanying notes

28

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

Currency Purchased*		Currency Sold*		Settlement Date		Counterparty		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
USD	14,627	EUR	15,226		6/4/2018		MSC	$	-	$	(599	)	$	(599	)
USD	4,110	EUR	4,177		6/4/2018		MSC		-		(67	)		(67	)
USD	3,173	EUR	3,281		6/4/2018		MSC		-		(108	)		(108	)
USD	2,186	EUR	2,296		6/4/2018		MSC		-		(110	)		(110	)
								$	6,604	$	(40,896	)	$	(34,292	)

* All values denominated in USD.

Glossary:
Counterparty Abbreviations:
MSC	Morgan Stanley & Co. Inc.
Currency Abbreviations:
BRL	Brazilian Real
CAD	Canadian Dollar
CHF	Swiss Franc
DKK	Danish Krone
EUR	Euro
GBP	Pound Sterling
HKD	Hong Kong Dollar
IDR	Indonesian Rupiah
JPY	Japanese Yen
NOK	Norwegian Krone
SEK	Swedish Krona
TWD	Taiwan Dollar
USD	United States Dollar
Other Abbreviations:
CCP	Central Counterparty Clearing House
EONIA	Euro Overnight Index Average
ETF	Exchange-Traded Fund
EURIBOR	Euro Interbank Offered Rate.
FEDEF	Effective Federal Funds Rate
HONIA	Hong Kong Dollar Overnight Index Average
LIBOR	London Interbank Offered Rate
LP	Limited Partnership
NASDAQ	National Association of Securities Dealers Automated Quotations
PLC	Public Limited Company
S&P 500	Standard & Poor’s U.S. Equity Large-cap Index
SONIA	Sterling Overnight Index Average
SOR	Swap Offer Rate
SPDR	Standard & Poor’s Depositary Receipt

See accompanying notes

29

American Beacon Grosvenor Long/Short Fund^SM

Schedule of Investments

January 31, 2018

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of January 31, 2018, the investments were classified as described below:

Grosvenor Long/Short Fund	Level 1			Level 2			Level 3			Total
Assets
Common Stocks	$	15,799,246		$	-		$	-		$	15,799,246
Rights		-			-			-	(1)		-
Investment Companies		206,889			-			-			206,889
Exchange-Traded Instruments		59,637			-			-			59,637
Short-Term Investments		3,966,444			-			-			3,966,444
Total Investments in Securities - Assets	$	20,032,216		$	-		$	-		$	20,032,216
Liabilities
Common Stocks (Sold Short)	$	(2,971,122	)	$	-		$	-		$	(2,971,122	)
Exchange-Traded Instruments (Sold Short)		(1,782,454	)		-			-			(1,782,454	)
Total Investments in Securities - Liabilities		(4,753,576	)		-			-			(4,753,576	)
Total Investments in Securities	$	15,278,640		$	-		$	-		$	15,278,640
Financial Derivative Instruments - Assets
OTC Swap Agreement Contracts for Difference - Equity	$	-		$	9,686		$	-		$	9,686
Swap Contract Agreements		-			634,573			-			634,573
Purchased Options		21,249			-			-			21,249
Forward Foreign Currency Contracts		-			6,604			-			6,604
Total Financial Derivative Instruments - Assets	$	21,249		$	650,863		$	-		$	672,112
Financial Derivative Instruments - Liabilities
OTC Swap Agreement Contracts for Difference - Equity	$	-		$	(6,215	)	$	-		$	(6,215	)
Swap Contract Agreements		-			(50,772	)		-			(50,772	)
Forward Foreign Currency Contracts		-			(40,896	)		-			(40,896	)
Total Financial Derivative Instruments - Liabilities	$	-		$	(97,883	)	$	-		$	(97,883	)

⁽¹⁾ Investment held in the Fund’s portfolio with $0 fair value.

U.S. GAAP requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of the Fund’s assets and liabilities. As of January 31, 2018, there were no transfers between levels.

The following table is a reconciliation of Level 3 assets within 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 1/31/2017		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 1/31/2018			Change in Unrealized Appreciation (Depreciation) at Period end**
Rights	$	-	$	-	(1)	$	-	$	-	$	-	$	-	$	-	$	-	$	-	(1)	$	-

** 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 Statements of Operations.

⁽¹⁾ Investment held in the Fund’s portfolio with $0 fair value.

The rights classified as Level 3 were fair valued using private valuation reports provided to the Fund’s Sub-Advisor from a pricing vendor.

See accompanying notes

30

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
SECURITIES HELD LONG
COMMON STOCKS - 53.83%
Consumer Discretionary - 9.10%
Diversified Consumer Services - 0.12%
K12, Inc.A		12,000		$	208,200
Hotels, Restaurants & Leisure - 3.29%
BBX Capital Corp.		24,300			221,373
Bojangles’, Inc.A		3,500			42,875
Carrols Restaurant Group, Inc.		86,200			1,073,190
Chipotle Mexican Grill, Inc.A		580			188,361
Dave & Buster’s Entertainment, Inc.A		4,300			202,100
Del Frisco’s Restaurant Group, Inc.A		5,700			99,750
Del Taco Restaurants, Inc.A		40,700			515,669
Domino’s Pizza, Inc.		10,600			2,298,610
International Game Technology PLC		16,800			488,376
McDonald’s Corp.		600			102,684
Papa John’s International, Inc.		1,300			84,357
Texas Roadhouse, Inc.		8,300			487,376
					5,804,721
Household Durables - 0.60%
Taylor Morrison Home Corp., Class AA		41,900			1,065,517
Internet & Direct Marketing Retail - 0.10%
Shutterfly, Inc.A		2,600			177,190
Leisure Products - 0.15%
MCBC Holdings, Inc.A		4,500			108,765
Vista Outdoor, Inc.A		10,500			159,075
					267,840
Multiline Retail - 0.31%
JC Penney Co., Inc.		148,300			550,193
Specialty Retail - 4.23%
Advance Auto Parts, Inc.		1,700			198,883
Bed Bath & Beyond, Inc.		11,800			272,344
Dick’s Sporting Goods, Inc.		200			6,292
Finish Line, Inc., Class A		31,500			356,895
Floor & Decor Holdings, Inc., Class AA		25,700			1,205,330
Foot Locker, Inc.		1,200			58,980
GameStop Corp., Class A		121,000			2,034,010
Hibbett Sports, Inc.A		1,500			33,900
National Vision Holdings, Inc.		700			27,384
Tractor Supply Co.		12,400			945,500
Ulta Salon Cosmetics & Fragrance, Inc.A		8,200			1,821,220
Zumiez, Inc.A		24,900			516,675
					7,477,413
Textiles, Apparel & Luxury Goods - 0.30%
Lakeland Industries, Inc.A		33,500			472,350
Lululemon Athletica, Inc.A		800			62,568
					534,918
Total Consumer Discretionary					16,085,992
Consumer Staples - 2.50%
Beverages - 0.06%
Coca-Cola Bottling Co. Consolidated		500			101,260

See accompanying notes

31

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
COMMON STOCKS - 53.83% (continued)
Consumer Staples - 2.50% (continued)
Food & Staples Retailing - 1.17%
Costco Wholesale Corp.		4,400		$	857,428
Kroger Co.		18,600			564,696
Performance Food Group Co.		3,200			109,920
US Foods Holding Corp.		3,000			97,205
Walgreens Boots Alliance, Inc.		5,900			444,034
					2,073,283
Food Products - 1.01%
Dean Foods Co.		35,600			369,172
Fresh Del Monte Produce, Inc.		11,400			539,334
Sanderson Farms, Inc.		2,300			291,870
TreeHouse Foods, Inc.A		12,500			589,500
					1,789,876
Personal Products - 0.09%
Nu Skin Enterprises, Inc., Class A		200			14,368
USANA Health Sciences, Inc.A		2,000			149,300
					163,668
Tobacco - 0.17%
Universal Corp.		6,200			297,600
Total Consumer Staples					4,425,687
Energy - 3.92%
Energy Equipment & Services - 2.95%
Archrock, Inc.		137,100			1,275,030
Rowan Cos PLC, Class AA		131,100			1,929,792
Transocean Ltd.A		185,200			1,998,308
					5,203,130
Oil, Gas & Consumable Fuels - 0.97%
Oasis Petroleum, Inc.		22,200			192,252
SilverBow Resources, Inc.		500			15,411
Whiting Petroleum Corp.		54,104			1,510,584
					1,718,247
Total Energy					6,921,377
Financials - 5.01%
Banks - 0.01%
Independent Bank Corp.		900			20,745
Capital Markets - 1.95%
Ameriprise Financial, Inc.		12,600			2,125,620
Morgan Stanley		20,700			1,170,585
Raymond James Financial, Inc.		1,600			154,224
					3,450,429
Consumer Finance - 1.22%
Navient Corp.		132,800			1,892,400
Santander Consumer USA Holdings, Inc.A		14,800			255,300
					2,147,700
Insurance - 1.83%
Assured Guaranty Ltd.		33,100			1,178,029
CNO Financial Group, Inc.		6,600			162,294

See accompanying notes

32

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
COMMON STOCKS - 53.83% (continued)
Financials - 5.01% (continued)
Insurance - 1.83% (continued)
Third Point Reinsurance Ltd.A		132,500		$	1,888,125
					3,228,448
Total Financials					8,847,322
Health Care - 3.61%
Biotechnology - 0.63%
Achillion Pharmaceuticals, Inc.A		91,500			242,475
Applied Genetic Technologies Corp.A		57,900			286,605
Celgene Corp.A		3,200			323,712
CytomX Therapeutics, Inc.A		5,400			144,450
Exelixis, Inc.A		2,300			69,713
United Therapeutics Corp.A		400			51,600
					1,118,555
Health Care Equipment & Supplies - 2.01%
Boston Scientific Corp.		30,400			849,984
FONAR Corp.A		3,896			95,647
Hill-Rom Holdings, Inc.		5,100			435,183
Hologic, Inc.A		9,900			422,730
Masimo Corp.A		5,300			499,472
NuVasive, Inc.		9,000			439,830
Zimmer Biomet Holdings, Inc.		6,400			813,568
					3,556,414
Health Care Providers & Services - 0.67%
DaVita, Inc.A		9,900			772,596
Owens & Minor, Inc.		15,700			330,642
Premier, Inc., Class A		2,200			71,390
					1,174,628
Health Care Technology - 0.04%
athenahealth, Inc.A		600			75,186
Life Sciences Tools & Services - 0.08%
Charles River Laboratories International, Inc.A		1,300			137,072
Pharmaceuticals - 0.18%
Depomed, Inc.A		2,500			18,375
Intersect ENT, Inc.		1,400			52,290
Tetraphase Pharmaceuticals, Inc.A		43,700			255,208
					325,873
Total Health Care					6,387,728
Industrials - 6.04%
Aerospace & Defense - 0.20%
Vectrus, Inc.A		11,600			352,640
Building Products - 0.10%
Builders FirstSource, Inc.A		8,500			182,070
Commercial Services & Supplies - 0.10%
Pitney Bowes, Inc.		12,400			174,964
Construction & Engineering - 0.09%
Argan, Inc.		3,500			152,600

See accompanying notes

33

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
COMMON STOCKS - 53.83% (continued)
Industrials - 6.04% (continued)
Electrical Equipment - 0.02%
Encore Wire Corp.		600		$	30,360
Machinery - 2.08%
Allison Transmission Holdings, Inc.		31,300			1,384,712
Crane Co.		6,600			659,604
Hurco Cos, Inc.		6,400			288,960
ITT, Inc.		14,300			800,800
Nordson Corp.		3,800			546,136
					3,680,212
Professional Services - 1.02%
FTI Consulting, Inc.A		4,400			191,268
Heidrick & Struggles International, Inc.		2,400			63,360
ManpowerGroup, Inc.		3,700			486,143
RPX Corp.A		75,300			1,057,212
					1,797,983
Road & Rail - 0.81%
ArcBest Corp.		29,500			1,048,725
Marten Transport Ltd.		3,700			85,840
Werner Enterprises, Inc.		7,400			301,415
					1,435,980
Trading Companies & Distributors - 1.62%
GMS, Inc.		10,395			356,341
MSC Industrial Direct Co., Inc., Class A		6,200			582,056
Rush Enterprises, Inc., Class AA		35,800			1,934,990
					2,873,387
Total Industrials					10,680,196
Information Technology - 6.18%
Communications Equipment - 0.89%
CommScope Holding Co., Inc.A		7,100			274,273
F5 Networks, Inc.A		3,400			491,436
Juniper Networks, Inc.		20,600			538,690
NETGEAR, Inc.A		2,200			153,340
Plantronics, Inc.		2,000			117,980
					1,575,719
Electronic Equipment, Instruments & Components - 1.33%
Avnet, Inc.		12,300			522,750
Benchmark Electronics, Inc.A		2,800			81,060
PCM, Inc.A		12,000			106,200
Vishay Intertechnology, Inc.		75,100			1,648,445
					2,358,455
Internet Software & Services - 0.68%
Akamai Technologies, Inc.A		6,300			422,037
Blucora, Inc.A		6,249			152,476
NIC, Inc.		3,500			58,100
SPS Commerce, Inc.A		1,500			78,900
Web.com Group, Inc.A		21,000			488,250
					1,199,763
IT Services - 1.02%
Booz Allen Hamilton Holding Corp.		1,300			50,934

See accompanying notes

34

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
COMMON STOCKS - 53.83% (continued)
Information Technology - 6.18%
IT Services - 1.02% (continued)
Cardtronics PLC, Class AA		6,700		$	163,882
CSRA, Inc.		5,700			189,696
Euronet Worldwide, Inc.		6,000			563,220
Hackett Group, Inc.		3,000			48,030
Science Applications International Corp.		10,200			781,830
					1,797,592
Semiconductors & Semiconductor Equipment - 0.35%
Kulicke & Soffa Industries, Inc.A		7,900			181,779
Micron Technology, Inc.A		2,900			126,788
MKS Instruments, Inc.		2,500			255,750
Photronics, Inc.A		7,100			59,640
					623,957
Software - 1.41%
CA, Inc.		12,000			430,200
CommVault Systems, Inc.A		2,500			133,375
Finjan Holdings, Inc.A		73,000			141,620
MicroStrategy, Inc., Class AA		1,800			247,914
Progress Software Corp.		29,400			1,465,002
Verint Systems, Inc.A		1,600			66,800
					2,484,911
Technology Hardware, Storage & Peripherals - 0.50%
Seagate Technology PLC		2,400			132,480
Super Micro Computer, Inc.A		10,700			244,227
Western Digital Corp.		4,900			436,002
Xerox Corp.		1,800			61,434
					874,143
Total Information Technology					10,914,540
Materials - 0.68%
Chemicals - 0.54%
Axalta Coating Systems Ltd.A		11,300			355,950
Cabot Corp.		1,800			121,752
Huntsman Corp.		12,200			421,754
Venator Materials PLC		2,400			54,288
					953,744
Containers & Packaging - 0.07%
Greif, Inc., Class B		1,900			120,935
Paper & Forest Products - 0.07%
Verso Corp., Class A		7,600			122,056
Total Materials					1,196,735
Real Estate - 15.41%
Equity Real Estate Investment Trusts (REITs) - 15.41%
American Assets Trust, Inc.		12,600			444,276
American Homes 4 Rent, Class A		55,500			1,153,845
AvalonBay Communities, Inc.		1,600			272,640
Brixmor Property Group, Inc.		40,600			658,938
CareTrust REIT, Inc.		48,105			764,388
CBL & Associates Properties, Inc.		126,500			703,340
CoreSite Realty Corp.		19,200			2,079,744
Corporate Office Properties Trust		14,100			384,930

See accompanying notes

35

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

	Shares		Fair Value
COMMON STOCKS - 53.83% (continued)
Real Estate - 15.41% (continued)
Equity Real Estate Investment Trusts (REITs) - 15.41% (continued)
CyrusOne, Inc.		14,400		$	830,736
Empire State Realty Trust, Inc., Class A		107,900			2,109,445
Equinix, Inc., REIT		4,890			2,225,879
Equity LifeStyle Properties, Inc.		15,700			1,355,224
Essex Property Trust, Inc.		500			116,490
Federal Realty Investment Trust		500			60,349
First Industrial Realty Trust, Inc.		17,200			530,792
Forest City Realty Trust, Inc., Class A		87,600			2,055,972
Global Net Lease, Inc.		35,900			658,406
Healthcare Trust of America, Inc., Class A		35,700			985,677
Hospitality Properties Trust		11,363			322,823
Hudson Pacific Properties, Inc.		14,900			476,353
Invitation Homes, Inc.		32,100			721,929
Kite Realty Group Trust		27,800			468,708
PS Business Parks, Inc.		5,400			659,394
QTS Realty Trust, Inc., Class A		42,300			2,106,540
Ryman Hospitality Properties, Inc.		10,200			780,810
Simon Property Group, Inc.		10,400			1,699,048
Tanger Factory Outlet Centers, Inc.		26,800			674,824
VEREIT, Inc., REIT		88,600			637,920
Vornado Realty Trust		18,200			1,304,576
					27,243,996
Total Real Estate					27,243,996
Telecommunication Services - 0.09%
Diversified Telecommunication Services - 0.09%
Cogent Communications Holdings, Inc.		3,400			153,340
Utilities - 1.29%
Independent Power & Renewable Electricity Producers - 0.80%
Atlantica Yield PLC		67,500			1,422,900
Multi-Utilities - 0.49%
MDU Resources Group, Inc.		3,500			92,680
SCANA Corp.		18,900			768,096
					860,776
Total Utilities					2,283,676
Total Common Stocks (Cost $92,641,831)					95,140,589
EXCHANGE-TRADED INSTRUMENTS - 7.86%
Exchange-Traded Funds - 7.86%
Consumer Discretionary Select Sector SPDR FundB		40,900			4,409,429
Energy Select Sector SPDR FundB		27,100			2,028,435
Health Care Select Sector SPDR Fund		13,800			1,221,478
Materials Select Sector SPDR Fund		3,900			245,220
Technology Select Sector SPDR FundB		87,500			5,989,375
Total Exchange-Traded Funds					13,893,937
Total Exchange-Traded Instruments (Cost $13,475,593)					13,893,937
SHORT-TERM INVESTMENTS - 15.01% (Cost $26,525,936)
Investment Companies - 15.01%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.25%C D		26,525,936			26,525,936
TOTAL SECURITIES HELD LONG (Cost $132,643,360)					135,560,462

See accompanying notes

36

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

	Shares			Fair Value
SECURITIES HELD SHORT
COMMON STOCKS - (42.23%)
Consumer Discretionary - (9.57%)
Automobiles - (1.30%)
Tesla, Inc.A		(6,490	)		$	(2,299,472	)
Diversified Consumer Services - (0.37%)
Weight Watchers International, Inc.		(10,000	)			(642,900	)
Internet & Direct Marketing Retail - (0.18%)
Overstock.com, Inc.		(4,700	)			(322,890	)
Leisure Products - (0.98%)
Mattel, Inc.		(109,600	)			(1,736,064	)
Multiline Retail - (0.16%)
Ollie’s Bargain Outlet Holdings, Inc.		(5,100	)			(283,305	)
Specialty Retail - (3.71%)
Chico’s FAS, Inc.		(69,700	)			(662,847	)
Conn’s, Inc.A		(52,800	)			(1,758,240	)
Guess?, Inc.		(22,500	)			(413,325	)
Lumber Liquidators Holdings, Inc.A		(11,300	)			(315,722	)
Murphy USA, Inc.A		(25,700	)			(2,192,467	)
Tiffany & Co.		(11,400	)			(1,215,810	)
						(6,558,411	)
Textiles, Apparel & Luxury Goods - (2.87%)
NIKE, Inc., Class B		(20,600	)			(1,405,332	)
Tapestry, Inc.		(47,500	)			(2,234,400	)
Under Armour, Inc., Class AA		(75,600	)			(1,047,816	)
Under Armour, Inc., Class CA		(30,100	)			(386,785	)
						(5,074,333	)
Total Consumer Discretionary						(16,917,375	)
Consumer Staples - (0.13%)
Food & Staples Retailing - (0.13%)
CVS Health Corp.		(700	)			(55,578	)
Wal-Mart Stores, Inc.		(1,600	)			(171,700	)
						(227,278	)
Total Consumer Staples						(227,278	)
Energy - (4.20%)
Energy Equipment & Services - (0.37%)
Baker Hughes a GE Co.		(20,500	)			(659,075	)
Oil, Gas & Consumable Fuels - (3.83%)
Cheniere Energy, Inc.A		(26,800	)			(1,515,808	)
Golar LNG Ltd.		(56,900	)			(1,552,801	)
Hess Corp.		(4,400	)			(222,244	)
ONEOK, Inc.		(15,400	)			(906,444	)
SemGroup Corp., Class A		(37,200	)			(1,065,780	)
Targa Resources Corp.		(30,200	)			(1,449,600	)
Williams Companies, Inc.		(1,800	)			(56,694	)
						(6,769,371	)
Total Energy						(7,428,446	)

See accompanying notes

37

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

	Shares			Fair Value
COMMON STOCKS - (42.23%) (continued)
Financials - (3.86%)
Insurance - (2.32%)
Chubb Ltd.		(1,700	)		$	(265,455	)
Markel Corp.A		(695	)			(797,645	)
RLI Corp.		(19,400	)			(1,246,644	)
Trupanion, Inc.		(20,100	)			(701,892	)
Willis Towers Watson PLC		(6,800	)			(1,091,196	)
						(4,102,832	)
Thrifts & Mortgage Finance - (1.54%)
LendingTree, Inc.A		(4,850	)			(1,784,072	)
Ocwen Financial Corp.A		(244,400	)			(823,628	)
PHH Corp.A		(10,700	)			(95,979	)
Walter Investment Management Corp.A		(21,500	)			(14,474	)
						(2,718,153	)
Total Financials						(6,820,985	)
Health Care - (0.97%)
Biotechnology - (0.12%)
Immunomedics, Inc.A		(7,700	)			(128,359	)
Puma Biotechnology, Inc.		(1,300	)			(86,083	)
						(214,442	)
Health Care Equipment & Supplies - (0.13%)
Nevro Corp.		(2,800	)			(224,728	)
Health Care Providers & Services - (0.30%)
Teladoc, Inc.A		(9,853	)			(368,502	)
Tenet Healthcare Corp.		(8,500	)			(160,480	)
						(528,982	)
Pharmaceuticals - (0.42%)
Reata Pharmaceuticals, Inc., Class AA		(2,200	)			(62,700	)
Teva Pharmaceutical Industries Ltd., Sponsored ADR		(33,800	)			(689,858	)
						(752,558	)
Total Health Care						(1,720,710	)
Industrials - (2.80%)
Building Products - (0.66%)
Johnson Controls International PLC		(29,600	)			(1,158,248	)
Commercial Services & Supplies - (0.16%)
Covanta Holding Corp.		(17,000	)			(277,950	)
Construction & Engineering - (0.68%)
Chicago Bridge & Iron Co. N.V.		(57,700	)			(1,204,199	)
Electrical Equipment - (0.03%)
Babcock & Wilcox Enterprises, Inc.		(8,500	)			(55,154	)
Machinery - (1.24%)
Wabtec Corp.		(27,000	)			(2,188,080	)
Road & Rail - (0.03%)
Hertz Global Holdings, Inc.A		(2,400	)			(55,032	)
Total Industrials						(4,938,663	)

See accompanying notes

38

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

	Shares			Fair Value
COMMON STOCKS - (42.23%) (continued)
Information Technology - (2.87%)
Communications Equipment - (0.94%)
Lumentum Holdings, Inc.A		(19,100	)		$	(884,330	)
ViaSat, Inc.		(10,200	)			(771,324	)
						(1,655,654	)
Internet Software & Services - (0.18%)
Benefitfocus, Inc.A		(12,600	)			(317,520	)
IT Services - (0.32%)
WEX, Inc.A		(3,700	)			(572,797	)
Semiconductors & Semiconductor Equipment - (1.09%)
Impinj, Inc.A		(53,500	)			(1,196,795	)
MACOM Technology Solutions Holdings, Inc.A		(10,900	)			(338,990	)
PDF Solutions, Inc.A		(28,600	)			(391,248	)
						(1,927,033	)
Software - (0.16%)
Autodesk, Inc.		(1,000	)			(115,664	)
Snap, Inc., Class AA		(11,900	)			(160,888	)
						(276,552	)
Technology Hardware, Storage & Peripherals - (0.18%)
3D Systems Corp.A		(31,700	)			(324,608	)
Total Information Technology						(5,074,164	)
Materials - (0.26%)
Construction Materials - (0.26%)
Forterra, Inc.A		(66,500	)			(462,175	)
Real Estate - (15.79%)
Equity Real Estate Investment Trusts (REITs) - (15.79%)
Chatham Lodging Trust		(93,000	)			(2,083,200	)
Chesapeake Lodging Trust		(39,900	)			(1,092,063	)
Colony NorthStar, Inc., Class A		(75,900	)			(681,582	)
Community Healthcare Trust, Inc.		(7,800	)			(207,792	)
DDR Corp.		(64,100	)			(520,492	)
Easterly Government Properties, Inc., REIT		(29,900	)			(622,817	)
Equity Residential		(33,900	)			(2,088,579	)
Farmland Partners, Inc.		(66,300	)			(540,345	)
GEO Group, Inc.		(40,600	)			(915,530	)
Government Properties Income Trust		(19,900	)			(341,484	)
Hersha Hospitality Trust		(117,600	)			(2,181,480	)
Iron Mountain, Inc.		(55,600	)			(1,947,668	)
Kilroy Realty Corp.		(2,800	)			(199,696	)
Life Storage, Inc.		(23,500	)			(1,952,850	)
LTC Properties, Inc.		(5,900	)			(241,782	)
Macerich Co.		(32,500	)			(2,098,525	)
Medical Properties Trust, Inc.		(42,100	)			(550,668	)
Omega Healthcare Investors, Inc.		(79,000	)			(2,136,160	)
Rayonier, Inc.		(25,700	)			(834,222	)
Seritage Growth Properties		(45,500	)			(1,874,600	)
Spirit Realty Capital, Inc.		(150,400	)			(1,228,768	)
Urban Edge Properties		(16,600	)			(388,108	)
Whitestone REIT		(157,800	)			(2,073,492	)
WP Carey, Inc.		(16,900	)			(1,095,289	)
						(27,897,192	)
Total Real Estate						(27,897,192	)

See accompanying notes

39

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

	Shares			Fair Value
COMMON STOCKS - (42.23%) (continued)
Utilities - (1.78%)
Electric Utilities - (0.97%)
Southern Co.		(38,100	)		$	(1,718,691	)
Independent Power & Renewable Electricity Producers - (0.03%)
Vivint Solar, Inc.A		(16,726	)			(57,705	)
Multi-Utilities - (0.78%)
Dominion Energy, Inc.		(18,000	)			(1,375,920	)
Total Utilities						(3,152,316	)
TOTAL COMMON STOCKS (Proceeds $(71,442,793))						(74,639,304	)
EXCHANGE-TRADED INSTRUMENTS - (7.90%)
Exchange-Traded Funds - (7.90%)
Consumer Staples Select Sector SPDR Fund		(47,100	)			(2,723,322	)
Financial Select Sector SPDR Fund		(81,200	)			(2,417,481	)
Industrial Select Sector SPDR Fund		(12,200	)			(971,974	)
Real Estate Select Sector SPDR Fund		(141,200	)			(4,562,172	)
Utilities Select Sector SPDR Fund		(64,500	)			(3,292,080	)
Total Exchange-Traded Funds						(13,967,029	)
TOTAL EXCHANGE-TRADED INSTRUMENTS (Proceeds $(13,979,398))						(13,967,029	)
TOTAL SECURITITES SOLD SHORT (Proceeds $(85,422,191))						(88,606,333	)
TOTAL INVESTMENTS IN SECURITIES (EXCLUDES SECURITIES SOLD SHORT) - 76.70% (Cost $132,643,360)						135,560,462
TOTAL SECURITIES SOLD SHORT - (50.13%) (Proceeds $(85,422,191))						(88,606,333	)
OTHER ASSETS, NET OF LIABILITIES - 73.43%						129,786,292
NET ASSETS - 100.00%					$	176,740,421
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B This security or a piece thereof is held as segregated collateral.

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

^D 7-day yield.

ADR - American Depositary Receipt.

PLC - Public Limited Company.

SPDR - Standard & Poor’s Depositary Receipt.

Futures Contracts Open on January 31, 2018:
Long Futures
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
Mini MSCI EAFE Index Futures	95	March 2018	$	9,640,362	$	10,191,125	$	550,763
Mini MSCI Emerging Markets Index Futures	67	March 2018		3,780,111		4,213,630		433,519
			$	13,420,473	$	14,404,755	$	984,282

See accompanying notes

40

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

Short Futures
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount			Contract Value			Unrealized Appreciation (Depreciation)
S&P 500 E-Mini Index Futures	92	March 2018	$	(12,204,023	)	$	(12,998,680	)	$	(794,657	)
			$	(12,204,023	)	$	(12,998,680	)	$	(794,657	)

OTC Swap Agreements Outstanding on January 31, 2018:

OTC Swap Agreement Contracts for Difference - Equity
Reference Entity	Counter- party	Long/Short	Currency	Financing Rate	Expiration Date		Notional Amount		Premiums Paid (Received)		Unrealized Appreciation (Depreciation)
Siegfried Holding AG	MSC	Long	CHF	0.501%		10/22/2018		6,080	$	2,123,396	$	(13,081	)
Sunrise Communications Group AG	MSC	Long	CHF	0.501%		10/22/2018		590		55,830		(295	)
Bavarian Nordic A/S	MSC	Long	DKK	0.073%		10/22/2018		33,457		1,342,307		(64,742	)
Dfds A/S	MSC	Long	DKK	0.073%		10/22/2018		8,864		524,874		(297	)
GN Store Nord A/S	MSC	Long	DKK	0.073%		10/22/2018		28,430		946,536		(476	)
Royal Unibrew A/S	MSC	Long	DKK	0.073%		10/22/2018		37,377		2,226,780		13,764
Sydbank A/S	MSC	Long	DKK	0.073%		10/22/2018		8,897		365,301		(1,541	)
Arkema S.A.	MSC	Long	EUR	0.119%		10/22/2018		4,160		546,358		(22,284	)
ASTM SpA	MSC	Long	EUR	0.069%		10/22/2018		5,770		174,961		(20,845	)
AT&S Austria Technologie & Systemtechnik AG	MSC	Long	EUR	0.069%		3/20/2018		3,480		108,828		1,668
Bauer AG	MSC	Long	EUR	0.119%		10/22/2018		28,440		993,033		(134,631	)
BE Semiconductor Industries N.V.	MSC	Long	EUR	0.061%		10/22/2018		14,605		1,446,674		(60,951	)
Beneteau S.A.	MSC	Long	EUR	0.119%		3/20/2018		46,290		1,268,849		(53,583	)
bet-at-home.com AG	MSC	Long	EUR	0.119%		10/22/2018		2,760		333,252		(9,236	)
Biesse SpA	MSC	Long	EUR	0.069%		10/22/2018		2,490		144,233		(6,204	)
Cewe Stiftung & Co. KGAA	MSC	Long	EUR	0.119%		10/22/2018		3,056		339,212		(11,040	)
CIE Automotive S.A.	MSC	Long	EUR	0.069%		10/22/2018		6,420		206,390		11,197
Covestro AG	MSC	Long	EUR	0.119%		10/22/2018		18,567		2,129,152		(23,592	)
CTS Eventim AG & Co. KGaA	MSC	Long	EUR	0.119%		10/22/2018		4,670		233,664		(3,258	)
Derichebourg S.A.	MSC	Long	EUR	0.119%		10/22/2018		144,311		1,440,941		(12,584	)
Deutsche Beteiligungs AG	MSC	Long	EUR	0.119%		10/22/2018		682		43,031		(1,529	)
Deutsche Lufthansa AG	MSC	Long	EUR	0.119%		10/22/2018		49,760		1,773,334		(21,411	)
Deutz AG	MSC	Long	EUR	0.119%		10/22/2018		229,975		2,241,351		(138,948	)
Dialog Semiconductor PLC	MSC	Long	EUR	0.119%		10/22/2018		38,820		1,220,397		(56,581	)
Draegerwerk AG & Co. KGaA	MSC	Long	EUR	0.119%		10/22/2018		2,118		161,141		(1,847	)
El.En. SpA	MSC	Long	EUR	0.069%		10/22/2018		3,266		112,048		8,281
Elmos Semiconductor AG	MSC	Long	EUR	0.119%		10/22/2018		4,140		129,593		(8,768	)
Ence Energia y Celulosa S.A.	MSC	Long	EUR	0.069%		10/22/2018		313,437		2,098,599		(113,235	)
Falck Renewables SpA	MSC	Long	EUR	0.069%		10/22/2018		43,130		109,644		(2,686	)
Faurecia	MSC	Long	EUR	0.119%		10/22/2018		10,390		936,877		(15,791	)
Fiat Chrysler Automobiles N.V.	MSC	Long	EUR	0.069%		10/22/2018		6,120		149,566		(1,188	)
ForFarmers N.V.	MSC	Long	EUR	0.069%		10/22/2018		13,600		171,952		(3,388	)
International Consolidated Airlines Group S.A.	MSC	Long	EUR	0.069%		10/22/2018		75,900		688,489		(7,942	)
IPSOS	MSC	Long	EUR	0.119%		10/22/2018		6,210		253,809		(20,114	)
Jacquet Metal Service	MSC	Long	EUR	0.119%		10/22/2018		14,941		585,759		(39,087	)
JOST Werke AG	MSC	Long	EUR	0.119%		10/22/2018		3,890		202,090		(8,474	)
Kaufman & Broad S.A.	MSC	Long	EUR	0.106%		10/22/2018		12,753		636,848		20,335
La Doria SpA	MSC	Long	EUR	0.069%		10/22/2018		4,795		95,961		(5,459	)
Leoni AG	MSC	Long	EUR	0.119%		10/22/2018		2,650		210,523		(6,920	)
Mediaset Espana Comunicacion S.A.	MSC	Long	EUR	0.069%		10/22/2018		41,300		474,760		(12,312	)
Mersen S.A.	MSC	Long	EUR	0.119%		10/22/2018		5,962		296,556		(9,655	)
Neopost S.A.	MSC	Long	EUR	0.119%		10/22/2018		32,776		1,072,955		(111,060	)
NH Hotel Group S.A.	MSC	Long	EUR	0.069%		10/22/2018		15,800		118,854		(197	)
Peugeot S.A.	MSC	Long	EUR	0.106%		10/22/2018		30,670		714,307		(35,151	)
Pharming Group N.V.	MSC	Long	EUR	0.069%		10/22/2018		146,000		276,357		(182	)
PNE Wind AG	MSC	Long	EUR	0.119%		10/22/2018		154,500		596,872		(6,884	)

See accompanying notes

41

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

Reference Entity	Counter- party	Long/Short	Currency	Financing Rate	Expiration Date		Notional Amount			Premiums Paid (Received)		Unrealized Appreciation (Depreciation)
Saeta Yield S.A.	MSC	Long	EUR	0.069%		10/22/2018		48,394		$	677,090	$	(10,852	)
Sanoma OYJ	MSC	Long	EUR	0.069%		10/22/2018		4,090			55,470		(3,210	)
Tom Tailor Holding SE	MSC	Long	EUR	0.119%		10/22/2018		32,260			456,010		(9,207	)
Ubisoft Entertainment S.A.	MSC	Long	EUR	0.119%		3/20/2018		16,320			1,375,199		6,357
Unieuro SpA	MSC	Long	EUR	0.069%		10/22/2018		53,764			951,147		(29,470	)
Valmet OYJ	MSC	Long	EUR	0.069%		10/22/2018		63,200			1,423,153		(24,407	)
Van Lanschot Kempen N.V.	MSC	Long	EUR	0.069%		10/22/2018		12,101			401,772		3,769
Wacker Neuson SE	MSC	Long	EUR	0.119%		10/22/2018		2,620			107,660		(1,893	)
Wuestenrot & Wuerttembergische AG	MSC	Long	EUR	0.119%		10/22/2018		14,370			435,734		(11,636	)
3i Group PLC	MSC	Long	GBP	0.744%		10/22/2018		163,610			2,105,453		23,266
Abcam PLC	MSC	Long	GBP	0.744%		10/22/2018		134,760			2,232,201		84,320
Central Asia Metals PLC	MSC	Long	GBP	0.744%		10/22/2018		121,578			537,484		(24,326	)
Clinigen Healthcare Ltd.	MSC	Long	GBP	0.744%		10/22/2018		7,976			122,314		-
Drax Group PLC	MSC	Long	GBP	0.744%		10/22/2018		49,700			194,219		(13,994	)
Evraz PLC	MSC	Long	GBP	0.022%		10/22/2018		185,434			1,024,032		(62,496	)
Fevertree Drinks PLC	MSC	Long	GBP	0.744%		10/22/2018		1,580			55,836		(981	)
Games Workshop Group PLC	MSC	Long	GBP	0.744%		10/22/2018		11,437			395,344		(21,143	)
Indivior PLC	MSC	Long	GBP	0.744%		10/22/2018		48,943			282,653		(7,517	)
Jackpotjoy PLC	MSC	Long	GBP	0.744%		10/22/2018		57,725			677,222		(24,626	)
Numis Corp. PLC	MSC	Long	GBP	0.744%		10/22/2018		11,800			56,340		(127	)
Plus500 Ltd.	MSC	Long	GBP	0.744%		10/22/2018		114,641			1,703,489		102,275
SSP Group PLC	MSC	Long	GBP	0.744%		10/22/2018		12,700			111,821		(1,892	)
Stock Spirits Group PLC	MSC	Long	GBP	0.744%		10/22/2018		34,650			148,811		(1,725	)
Taylor Wimpey PLC	MSC	Long	GBP	0.744%		10/22/2018		163,600			445,445		(10,120	)
Vedanta Resources PLC	MSC	Long	GBP	0.744%		10/22/2018		50,680			631,661		(47,422	)
Wizz Air Holdings PLC	MSC	Long	GBP	0.744%		10/22/2018		24,551			1,201,492		(14,314	)
Austevoll Seafood ASA	MSC	Long	NOK	1.040%		10/22/2018		68,584			552,974		(25,017	)
BW Offshore Ltd.	MSC	Long	NOK	1.040%		10/22/2018		88,600			439,431		(6,925	)
DNO ASA	MSC	Long	NOK	1.040%		10/22/2018		97,935			130,649		(8,038	)
Grieg Seafood ASA	MSC	Long	NOK	1.040%		10/22/2018		37,680			337,346		(10,799	)
Kvaerner ASA	MSC	Long	NOK	1.040%		10/22/2018		142,630			314,523		(17,094	)
Scatec Solar ASA	MSC	Long	NOK	1.040%		10/22/2018		35,200			221,402		(16,567	)
SpareBank 1 Nord Norge	MSC	Long	NOK	1.040%		10/22/2018		86,600			714,751		1,128
SpareBank 1 SMN	MSC	Long	NOK	1.040%		10/22/2018		10,500			115,905		821
SpareBank 1 SR-Bank ASA	MSC	Long	NOK	1.040%		10/22/2018		16,400			193,755		(1,923	)
Boliden AB	MSC	Long	SEK	0.181%		10/22/2018		1,520			55,935		(938	)
Concentric AB	MSC	Long	SEK	0.181%		10/22/2018		2,199			42,713		(616	)
Dometic Group AB	MSC	Long	SEK	0.181%		10/22/2018		15,700			171,125		(924	)
Granges AB	MSC	Long	SEK	0.181%		10/22/2018		10,700			111,910		(1,499	)
LeoVegas AB	MSC	Long	SEK	0.181%		10/22/2018		5,700			77,004		2,903
Loomis AB	MSC	Long	SEK	0.181%		10/22/2018		2,880			112,422		3,079
Oriflame Holding AG	MSC	Long	SEK	0.181%		10/22/2018		3,360			150,592		206
SAS AB	MSC	Long	SEK	0.181%		10/22/2018		682,334			1,699,155		(80,791	)
Vitrolife AB	MSC	Long	SEK	0.181%		10/22/2018		7,174			615,888		(457	)
Arbonia AG	MSC	Short	CHF	1.426%		10/22/2018		(3,020	)		54,162		492
COSMO Pharmaceuticals N.V.	MSC	Short	CHF	1.426%		10/22/2018		(2,935	)		434,901		9,089
LafargeHolcim Ltd.	MSC	Short	CHF	1.101%		10/22/2018		(8,780	)		545,637		25,501
Panalpina Welttransport Holding AG	MSC	Short	CHF	1.379%		10/22/2018		(3,098	)		508,244		11,664
Vifor Pharma AG	MSC	Short	CHF	1.101%		10/22/2018		(15,407	)		2,155,521		(43,092	)
ALK-Abello A/S	MSC	Short	DKK	0.673%		10/22/2018		(6,021	)		789,990		33,630
AP Moller - Maersk A/S	MSC	Short	DKK	0.020%		10/22/2018		(138	)		249,712		6,814
Chr Hansen Holding A/S	MSC	Short	DKK	0.673%		10/22/2018		(15,050	)		1,339,979		42,826
Coloplast A/S	MSC	Short	DKK	0.673%		10/22/2018		(23,130	)		2,001,060		(31,043	)
Accor S.A.	MSC	Short	EUR	0.619%		10/22/2018		(39,860	)		2,260,059		21,352
ALD S.A.	MSC	Short	EUR	0.994%		3/20/2018		(3,960	)		70,097		(4	)
Banco BPM SpA	MSC	Short	EUR	0.871%		10/22/2018		(184,200	)		689,747		(8,068	)
Biocartis N.V.	MSC	Short	EUR	7.619%		10/22/2018		(58,579	)		994,705		(45,244	)
Bollore S.A.	MSC	Short	EUR	0.619%		10/22/2018		(384,500	)		2,198,954		(5,748	)

See accompanying notes

42

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

Reference Entity	Counter- party	Long/Short	Currency	Financing Rate		Expiration Date		Notional Amount			Premiums Paid (Received)		Unrealized Appreciation (Depreciation)
Cairn Homes PLC	MSC	Short	EUR		0.619%		10/22/2018		(11,546	)	$	27,018	$	144
Carrefour S.A.	MSC	Short	EUR		0.619%		10/22/2018		(74,220	)		1,679,033		(74,892	)
Delivery Hero AG	MSC	Short	EUR		0.619%		10/22/2018		(26,710	)		1,128,969		(1,996	)
Deutsche Bank AG	MSC	Short	EUR		0.619%		10/22/2018		(92,540	)		1,789,516		114,129
Huhtamaki OYJ	MSC	Short	EUR		0.669%		10/22/2018		(13,440	)		549,800		(16,408	)
Industria de Diseno Textil S.A.	MSC	Short	EUR		0.669%		10/22/2018		(35,500	)		1,249,113		(6,634	)
Innogy SE	MSC	Short	EUR		0.619%		10/22/2018		(3,980	)		154,503		3,071
Kone OYJ	MSC	Short	EUR		0.669%		10/22/2018		(12,750	)		711,677		(8,577	)
OCI N.V.	MSC	Short	EUR		1.328%		10/22/2018		(33,520	)		865,282		27,560
Parmalat SpA	MSC	Short	EUR		0.669%		10/22/2018		(5,790	)		22,203		36
Parrot S.A.	MSC	Short	EUR		11.324%		10/22/2018		(30,755	)		306,334		-
Porr AG	MSC	Short	EUR		4.244%		3/20/2018		(2,310	)		83,912		5,324
Rocket Internet SE	MSC	Short	EUR		1.244%		10/22/2018		(19,810	)		545,594		(21,717	)
Salvatore Ferragamo SpA	MSC	Short	EUR		6.869%		10/22/2018		(73,270	)		2,122,085		89,451
Siemens AG	MSC	Short	EUR		0.619%		10/22/2018		(14,460	)		2,203,119		39,630
Siemens Gamesa Renewable Energy S.A.	MSC	Short	EUR		0.669%		10/22/2018		(142,240	)		2,283,746		94,800
Tenaris S.A.	MSC	Short	EUR		0.628%		10/22/2018		(85,020	)		1,511,394		51,368
Tod’s SpA	MSC	Short	EUR		6.619%		10/22/2018		(2,380	)		177,284		148
Umicore S.A.	MSC	Short	EUR		0.669%		10/22/2018		(17,900	)		940,585		11,818
Vallourec S.A.	MSC	Short	EUR		8.453%		10/22/2018		(37,965	)		274,146		17,783
Allied Minds PLC	MSC	Short	GBP		10.631%		10/22/2018		(60,504	)		137,233		1,205
Barclays PLC	MSC	Short	GBP		0.244%		10/22/2018		(208,600	)		609,676		27,304
Capital & Counties Properties PLC	MSC	Short	GBP		0.506%		10/22/2018		(422,500	)		1,760,812		20,428
Cobham PLC	MSC	Short	GBP		0.244%		10/22/2018		(489,400	)		914,817		11,098
Domino’s Pizza Group PLC	MSC	Short	GBP		0.244%		10/22/2018		(84,300	)		416,085		18,821
Fresnillo PLC	MSC	Short	GBP		0.244%		10/22/2018		(50,740	)		984,408		24,940
HSBC Holdings PLC	MSC	Short	GBP		0.244%		10/22/2018		(201,400	)		2,206,683		95,658
Mediclinic International PLC	MSC	Short	GBP		1.506%		10/22/2018		(115,100	)		979,959		20,296
Melrose Industries PLC	MSC	Short	GBP		0.244%		10/22/2018		(297,200	)		953,864		14,369
Metro Bank PLC	MSC	Short	GBP		0.429%		10/22/2018		(7,950	)		406,161		2,713
Ocado Group PLC	MSC	Short	GBP		0.118%		10/22/2018		(41,363	)		304,215		13,529
Phoenix Group Holdings	MSC	Short	GBP		0.244%		10/22/2018		(50,733	)		562,316		20,917
Purplebricks Group PLC	MSC	Short	GBP		13.131%		10/22/2018		(181,127	)		1,065,514		(176,694	)
Reckitt Benckiser Group PLC	MSC	Short	GBP		0.244%		10/22/2018		(6,140	)		592,693		6,802
Royal Bank of Scotland Group PLC	MSC	Short	GBP		0.244%		10/22/2018		(271,400	)		1,129,863		37,932
Sirius Minerals PLC	MSC	Short	GBP		3.881%		10/22/2018		(2,227,254	)		701,150		(32,306	)
Smart Metering Systems PLC	MSC	Short	GBP		2.756%		10/22/2018		(64,455	)		705,765		28,414
Sound Energy PLC	MSC	Short	GBP		18.506%		10/22/2018		(216,085	)		157,537		12,353
Travis Perkins PLC	MSC	Short	GBP		0.244%		10/22/2018		(58,890	)		1,218,104		17,168
Asetek A/S	MSC	Short	NOK		4.260%		10/22/2018		(7,584	)		89,696		2,470
Avanza Bank Holding AB	MSC	Short	SEK		1.094%		10/22/2018		(11,014	)		581,182		(26,642	)
Eltel AB	MSC	Short	SEK		4.731%		10/22/2018		(40,151	)		148,877		6,236
Hennes & Mauritz AB	MSC	Short	SEK		0.781%		10/22/2018		(107,690	)		2,099,241		236,097
Nordea Bank AB	MSC	Short	SEK		0.781%		10/22/2018		(50,280	)		632,484		24,199
RaySearch Laboratories AB	MSC	Short	SEK		2.731%		10/22/2018		(10,347	)		190,283		(12,250	)
Recipharm AB	MSC	Short	SEK		7.606%		10/22/2018		(15,800	)		204,596		16,294
Skanska AB	MSC	Short	SEK		0.781%		10/22/2018		(105,470	)		2,130,622		26,885
Telefonaktiebolaget LM Ericsson	MSC	Short	SEK		0.694%		10/22/2018		(151,300	)		1,079,066		128,675
											$	112,069,759	$	(366,908	)

See accompanying notes

43

American Beacon Numeric Integrated Alpha Fund^SM

Schedule of Investments

January 31, 2018

Glossary:
Counterparty Abbreviations:
MSC	Morgan Stanley & Co., Inc.
Currency Abbreviations:
CHF	Swiss Franc
DKK	Danish Krone
EUR	Euro
GBP	Pound Sterling
NOK	Norwegian Krone
SEK	Swedish Krona
Index Abbreviations:
MSCI	Morgan Stanley Capital International
MSCI EAFE	Morgan Stanley Capital International—Europe, Australasia, and Far East
S&P 500	Standard & Poor’s U.S. Equity Large-Cap Index
Exchange Abbreviations:
OTC	Over-the-Counter
Other Abbreviations:
PLC	Public Limited Company

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of January 31, 2018, the investments were classified as described below:

Numeric Integrated Alpha Fund	Level 1			Level 2			Level 3		Total
Assets
Common Stocks	$	95,140,589		$	-		$	-	$	95,140,589
Exchange-Traded Instruments		13,893,937			-			-		13,893,937
Short-Term Investments		26,525,936			-			-		26,525,936
Total Investments in Securities - Assets	$	135,560,462		$	-		$	-	$	135,560,462
Liabilities
Common Stocks (Sold Short)	$	(74,639,304	)	$	-		$	-	$	(74,639,304	)
Exchange-Traded Instruments (Sold Short)		(13,967,029	)		-			-		(13,967,029	)
Total Investments in Securities - Liabilities		(88,606,333	)		-			-		(88,606,333	)
Total Investments in Securities	$	46,954,129		$	-		$	-	$	46,954,129
Financial Derivative Instruments - Assets
Futures Contracts	$	984,282		$	-		$	-	$	984,282
OTC Swap Agreement Contracts for Difference - Equity		-			1,704,802			-		1,704,802
Total Financial Derivative Instruments - Assets	$	984,282		$	1,704,802		$	-	$	2,689,084
Financial Derivative Instruments - Liabilities
Futures Contracts	$	(794,657	)	$	-		$	-	$	(794,657	)
OTC Swap Agreement Contracts for Difference - Equity		-			(2,071,710	)		-		(2,071,710	)
Total Financial Derivative Instruments - Liabilities	$	(794,657	)	$	(2,071,710	)	$	-	$	(2,866,367	)

U.S. GAAP requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of the Fund’s assets and liabilities. As of January 31, 2018, there were no transfers between levels.

See accompanying notes

44

American Beacon Funds^SM

Statements of Assets and Liabilities

January 31, 2018

	Grosvenor Long/Short Fund			Numeric Integrated Alpha Fund
Assets:
Investments in unaffiliated securities, at fair value†	$	16,065,772		$	109,034,526
Investments in affiliated securities, at fair value‡		3,966,444			26,525,936
Foreign currency, at fair value^		240,828			645,438
Purchased options contracts outstanding (premiums paid $25,214)		21,249			-
Swap income receivable		1,667			-
Cash with brokers		3,951,678			79,161,091
Deposit with brokers for futures contracts		-			856,482
Cash collateral held at custodian for the benefit of the broker		1,841,899			46,775,000
Dividends and interest receivable		10,844			54,467
Receivable for investments sold		642,648			13,312,755
Receivable for fund shares sold		-			2,673,379
Receivable for tax reclaims		260			-
Receivable for expense reimbursement (Note 2)		89,478			17,975
Receivable for variation margin from open futures contracts (Note 5)		-			190,135
Unrealized appreciation from swap agreements		644,259			1,704,802
Unrealized appreciation from forward foreign currency contracts		6,604			-
Prepaid expenses		27,115			35,508
Total assets		27,510,745			280,987,494
Liabilities:
Payable for investments purchased		971,057			12,941,640
Payable for fund shares redeemed		-			106,824
Payable for foreign currency, at fair value1		134,530			-
Swap premium received		271			-
Securities sold short, at fair value±		4,753,576			88,606,333
Cash due to custodian		870,541			-
Swap income payable		6			18,185
Dividends and interest expense payable		1,109			112,417
Management and sub-advisory fees payable (Note 2)		34,848			253,631
Service fees payable (Note 2)		404			22
Transfer agent fees payable (Note 2)		2,644			17,963
Custody and fund accounting fees payable		93,661			51,237
Professional fees payable		48,722			38,053
Trustee fees payable (Note 2)		63			567
Payable for prospectus and shareholder reports		675			14,142
Unrealized depreciation from swap agreements		56,987			2,071,710
Unrealized depreciation from forward foreign currency contracts		40,896			-
Other liabilities		238			14,349
Total liabilities		7,010,228			104,247,073
Net assets	$	20,500,517		$	176,740,421
Analysis of net assets:
Paid-in-capital	$	18,448,442		$	179,493,005
Undistributed (Overdistribution) of net investment income		(499,885	)		342,188
Accumulated net realized gain (loss)		194,267			(2,655,321	)
Unrealized appreciation of investments in unaffiliated securitiesA		2,226,162			2,917,102
Unrealized (depreciation) of forward foreign currency contracts		(34,292	)		-
Unrealized appreciation (depreciation) of foreign currency transactions		(4,814	)		4,872
Unrealized appreciation of futures contracts		-			189,625
Unrealized appreciation (depreciation) of swap agreements		587,272			(366,908	)
Unrealized (depreciation) of purchased options contracts		(3,965	)		-
Unrealized (depreciation) of short sales		(412,670	)		(3,184,142	)
Net assets	$	20,500,517		$	176,740,421

See accompanying notes

45

American Beacon Funds^SM

Statements of Assets and Liabilities

January 31, 2018

	Grosvenor Long/Short Fund			Numeric Integrated Alpha Fund
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		1,660,750			12,247
Y Class		37,063			10,169
Investor Class		79,020			10,162
A Class		18,977			N/A
C Class		16,593			N/A
Ultra Class		9,574	B		17,608,042
Net assets:
Institutional Class	$	18,701,925		$	122,715
Y Class	$	416,381		$	101,793
Investor Class	$	881,290		$	101,438
A Class	$	211,579			N/A
C Class	$	181,475			N/A
Ultra Class	$	107,867	B	$	176,414,475
Net asset value, offering and redemption price per share:
Institutional Class	$	11.26		$	10.02
Y Class	$	11.23		$	10.01
Investor Class	$	11.15		$	9.98
A Class	$	11.15			N/A
A Class (offering price)	$	11.83			N/A
C Class	$	10.94			N/A
Ultra Class	$	11.27	B	$	10.02
† Cost of investments in unaffiliated securities	$	13,839,610		$	106,117,424
‡ Cost of investments in affiliated securities	$	3,966,444		$	26,525,936
^ Cost of foreign currency	$	237,523		$	-
+ Cost of foreign currency with broker	$	-		$	640,566
± Proceeds of securities sold short	$	4,340,906		$	85,422,191
1 Cost of payable for foreign currency	$	130,990		$	-
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.
B Class commenced operations November 14, 2017 (Note 1).

See accompanying notes

46

American Beacon Funds^SM

Statements of Operations

For the year ended January 31, 2018

	Grosvenor Long/Short Fund			Numeric Integrated Alpha Fund
Investment income:
Dividend income from unaffiliated securities (net of foreign taxes)†	$	221,485	A	$	1,462,906
Dividend income from affiliated securities		30,098			145,233
Interest income		182,829			1,051,184
Total investment income		434,412			2,659,323
Expenses:
Management and sub-advisory fees (Note 2)		338,781			2,536,362
Transfer agent fees:
Institutional Class (Note 2)		1,426			3
Y Class (Note 2)		173			103
Investor Class		567			1,213
Ultra Class		359	B		108,879
Custody and fund accounting fees		123,636			46,819
Professional fees		118,277			61,208
Registration fees and expenses		62,010			116,331
Service fees (Note 2):
Y Class		49			-
Investor Class		1,487			253
A Class		286			-
C Class		303			-
Distribution fees (Note 2):
A Class		484			-
C Class		2,019			-
Prospectus and shareholder report expenses		14,247			40,155
Trustee fees (Note 2)		1,017			8,377
Prime broker fees		236,121			1,150,935
Dividends and interest on securities sold short		137,850			2,913,291
Other expenses		5,125			16,123
Total expenses		1,044,217			7,000,052
Net fees waived and expenses (reimbursed) (Note 2)		(279,922	)		(282,447	)
Net expenses		764,295			6,717,605
Net investment (loss)		(329,883	)		(4,058,282	)
Realized and unrealized gain (loss) from investments:
Net realized gain from:
Investments in unaffiliated securitiesC		1,812,506			4,320,888
Purchased options contracts		33,179			-
Commission recapture (Note 1)		-			302
Foreign currency transactions		(6,288	)		88,943
Forward foreign currency contracts		(22,278	)		-
Futures contracts		-			1,558,504
Swap agreements		201,842			5,129,443
Written options contracts		(8,889	)		-
Short sales		(453,437	)		(6,036,234	)
Change in net unrealized appreciation of:
Investments in unaffiliated securitiesD		894,270			2,690,427
Purchased options contracts		9,639			-
Foreign currency transactions		20,734			2,409
Forward foreign currency contracts		(25,606	)		-
Futures contracts		-			(7,658	)
Swap agreements		423,501			(747,877	)
Written options contracts		96			-
Short sales		(34,899	)		(3,006,767	)
Net gain from investments		2,844,370			3,992,380
Net increase (decrease) in net assets resulting from operations	$	2,514,487		$	(65,902	)
† Foreign taxes	$	2,242		$	26
A Includes non-recurring dividends of $31,410.
B Class commenced operations November 14, 2017 (Note 1).
C The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities.
D The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at year end.

See accompanying notes

47

American Beacon Funds^SM

Statements of Changes in Net Assets

	Grosvenor Long/Short Fund						Numeric Integrated Alpha Fund
	Year Ended January 31, 2018			Year Ended January 31, 2017			Year Ended January 31, 2018			November 1, 2016A to January 31, 2017
Increase (decrease) in net assets:
Operations:
Net investment (loss)	$	(329,883	)	$	(227,373	)	$	(4,058,282	)	$	(307,501	)
Net realized gain from investments in unaffiliated securities, purchased options contracts, commission recapture, foreign currency transactions, forward foreign currency contracts, futures contracts, swap agreements, written options contracts, and short sales		1,556,635			603,723			5,061,846			270,104
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, purchased options contracts, foreign currency transactions, forward foreign currency contracts, futures contracts, swap agreements, written options contracts, and short sales		1,287,735			1,315,597			(1,069,466	)		630,015
Net increase (decrease) in net assets resulting from operations		2,514,487			1,691,947			(65,902	)		592,618
Distributions to shareholders:
Net investment income:
Institutional Class		(88,770	)		-			-			-
Y Class		(2,016	)		-			(71	)		-
Investor Class		(3,387	)		-			-			-
A Class		(1,022	)		-			-			-
C Class		(1,017	)		-			-			-
Ultra Class		(516	)B		-			(505,474	)		-
Net realized gain from investments:
Institutional Class		(1,261,803	)		(309,752	)		(1,928	)		-
Y Class		(28,648	)		(4,695	)		(1,600	)		-
Investor Class		(48,133	)		(7,003	)		(1,600	)		-
A Class		(14,525	)		(3,589	)		-			-
C Class		(14,710	)		(4,279	)		-			-
Ultra Class		(7,334	)B		-			(2,768,627	)		-
Net distributions to shareholders		(1,471,879	)		(329,318	)		(3,279,300	)		-
Capital share transactions (Note 10):
Proceeds from sales of shares		1,122,598			196,119			156,192,646			63,420,763
Reinvestment of dividends and distributions		1,471,879			329,318			1,498,078			-
Cost of shares redeemed		(303,320	)		(861,941	)		(35,313,498	)		(11,304,984	)
Net increase (decrease) in net assets from capital share transactions		2,291,157			(336,504	)		122,377,226			52,115,779
Net increase in net assets		3,333,765			1,026,125			119,032,024			52,708,397
Net assets:
Beginning of period		17,166,752			16,140,627			57,708,397			5,000,000	C
End of period *	$	20,500,517		$	17,166,752		$	176,740,421		$	57,708,397
*Includes (overdistribution) of net investment income	$	(499,885	)	$	(191,094	)	$	342,188		$	(82,585	)
A Commencement of operations.
B Class commenced operations November 14, 2017 (Note 1).
C Seed capital.

See accompanying notes

48

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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 non-diversified, open-end management investment companies. As of January 31, 2018, the Trust consists of thirty-three active series, two of which are presented in this filing: American Beacon Grosvenor Long/Short Fund and American Beacon Numeric Integrated Alpha Fund (collectively, the “Funds” and each individually a “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.

Class Disclosure

On November 14, 2017, the Grosvenor Long/Short Fund created the Ultra Class, a new class made available for sale to large institutional investors pursuant to an amendment to the Fund’s registration statement filed with the U.S. Securities and Exchange Commission. Refer to the Fund’s prospectus for more details.

Each Fund has multiple classes of shares designed to meet the needs of different groups of investors; however, not all of the 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 - sold directly or through intermediary channels.	$	100,000
Investor	All investors using intermediary organizations such as broker-dealers or retirement plan sponsors.	$	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 through employee directed benefit plans with applicable sales charges, which may include CDSC.	$	1,000
Ultra	Large institutional investors - sold directly or through intermediary channels.	$	350,000,000

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 respective Fund. Class specific expenses, where applicable, currently include service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.

Recently Adopted 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, and has been adopted accordingly.

49

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

Significant Accounting Policies

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 the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946, Financial Services – Investment Companies, a part of 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.

Commission Recapture

The Funds 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 Funds. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Funds. This amount is reported with the net realized gain in the Fund’s Statement of Operations, if applicable.

Currency Translation

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

Distributions to Shareholders

Distributions, if any, of net investment income are generally paid at least annually and recorded on the ex-dividend date. 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 designate earnings and profits distributed to shareholders on the redemption of shares.

Allocation of Income, Trust Expenses, Gains, and Losses

Investment income, realized and unrealized gains and losses from investments of the Funds are allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Funds. Expenses directly charged or attributable to any Fund will be paid from the assets of the Fund.

50

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

Generally, expenses of the Trust will be allocated among and charged to the assets of the Funds on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Funds or nature of the services performed and relative applicability to the Funds.

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 and Investment Sub-Advisory Agreements

The Grosvenor Long/Short Fund operates in a manager of managers structure. The Manager has engaged Grosvenor Capital Management, L.P., an unaffiliated alternative investment advisory firm, to serve as the Fund’s lead Sub-Advisor (“Lead Sub-Advisor”). The Fund and the Manager have received an exemptive order from the Securities and Exchange Commission (“SEC”) that permits the Fund, subject to certain conditions and approval by the Board, to hire and replace Sub-Advisors (but not the Lead Sub-Advisor) that are unaffiliated with the Manager without approval of shareholders. The Manager has ultimate responsibility, subject to oversight by the Board, to oversee the Lead Sub-Advisor and Sub-Advisors and recommend their hiring, termination and replacement. The order also exempts the Fund from disclosing the advisory fees paid by the Fund to individual sub-advisors that are unaffiliated with the Manager in various documents filed with the SEC and provided to shareholders. Instead, the fees payable to unaffiliated sub-advisors are aggregated, and fees payable to sub-advisors that are affiliated with the Manager, if any, would be aggregated with fees payable to the Manager. Disclosure of the separate fees paid to an affiliated sub-advisor would be required. Whenever a sub-advisor change is proposed in reliance on the order, in order for the change to be implemented, the Board must approve the change. In addition, the Fund is required to provide shareholders with certain information regarding any new sub-advisor within 90 days of the hiring of any new sub-advisor. The Fund’s Sub-Advisors are set forth below.

• Basswood Capital Management, LLC

• Electron Capital Partners, LLC (Effective 12/29/2017)

• Impala Asset Management LLC

• Incline Global Management, LLC

• Pine River Capital Management L.P. (Terminated 11/17/2017)

• River Canyon Fund Management LLC (Terminated 12/31/2017)

• Tremblant Capital LP

The Grosvenor Long/Short Fund and the Manager are parties to a Management Agreement that obligates the Manager to provide the Fund with management, administrative, and supervisory services. The Manager is paid a management fee as compensation that is calculated and accrued daily equal to 1.85% of the Fund’s average daily net assets. As part of the fee, the Manager receives an annualized management fee equal to 0.35%. The remain portion of the fee is used by the Manager to compensate the Lead Sub-Advisor pursuant to a Lead Investment Advisory Agreement between the Trust, on behalf of the Fund, and the Manager. The fee is calculated and accrued daily equal to 1.50% of the Funds average daily assets. The Lead Sub-Advisor pays the fees of each Sub-Advisor.

51

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

The Numeric Integrated Alpha Fund and the Manager are parties to a Management Agreement that obligates the Manager to provide the Fund with management, administrative, and supervisory services. The Manager receives an annualized management fee based on a percentage of the Numeric Integrated Alpha Fund’s average daily net assets that is calculated and accrued daily in accordance to the following schedule:

First $1 billion	0.425	%
Next $4 billion	0.40	%
Next $5 billion	0.375	%
Over $10 billion	0.35	%

The Trust, on behalf of the Numeric Integrated Alpha Fund, and the Manager have entered into an Investment Advisory Agreement with Numeric Investors LLC (the “Sub-Advisor”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund’s average daily net assets according to the following schedule:

First $800 million	1.35	%
Over $800 million	1.30	%

The Management and Sub-Advisory Fees paid by the Funds for the year ended January 31, 2018 were as follows:

Grosvenor Long/Short Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	64,094
Sub-Advisor Fees		1.50	%		274,687
Total		1.85	%	$	338,781

Numeric Integrated Alpha Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.43	%	$	607,298
Sub-Advisor Fees		1.35	%		1,929,064
Total		1.78	%	$	2,536,362

Distribution Plans

The Funds, except for the 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 may be charged to the Funds for distribution purposes. However, the Plan authorizes the management fee 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 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 A 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.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y, Investor, A, and C Classes of the Grosvenor Long/Short Fund and the Investor Class

52

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

of the Numeric Integrated Alpha Fund. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee of up to 0.10% of the average daily net assets of the Y Class, up to 0.25% of the average daily net assets of the A and C Classes, and up to 0.375% of the average daily net assets of the Investor Class of the Funds. 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 Grosvenor Long/Short Fund and the Institutional and Y Classes of the Numeric Integrated Alpha Fund and has agreed to compensate the intermediaries for providing these services. Effective April 1, 2017, the Grosvenor Long/Short 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 their customers who hold positions in the Fund. 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 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 year ended January 31, 2018, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Grosvenor Long/Short	$	1,442
Numeric Integrated Alpha		85

As of January 31, 2018, the Funds owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statements of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent Fees
Grosvenor Long/Short	$	98
Numeric Integrated Alpha		9

Investments in Affiliated Funds

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

Fund	Direct Investments in USG Select Fund
Grosvenor Long/Short	$	3,365
Numeric Integrated Alpha		16,404

Interfund Credit Facility

Pursuant to an exemptive order issued by the Securities and Exchange Commission (“SEC”), the Funds, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each Fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating Funds for temporary purposes. The interfund credit facility is advantageous to the Funds because it provides added liquidity, and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain

53

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a Fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended January 31, 2018, the Funds did not utilize the credit facility.

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Funds to the extent that total operating expenses exceed the Funds’ expense cap. During the year ended January 31, 2018, the Manager waived and/or reimbursed expenses as follows:

		Expense Cap							Expiration of Reimbursed Expenses
Fund	Class	2/1/2017 - 1/31/2018			Reimbursed Expenses		(Recouped) Expenses
Grosvenor Long/Short	Institutional		2.10	%	$	258,274	$	-		2021
Grosvenor Long/Short	Y		2.20	%		5,609		-		2021
Grosvenor Long/Short	Investor		2.48	%		9,109		-		2021
Grosvenor Long/Short	A		2.50	%		2,934		-		2021
Grosvenor Long/Short	C		3.25	%		3,007		-		2021
Grosvenor Long/Short	Ultra		1.99	%		989		-		2021
Numeric Integrated Alpha	Institutional		1.95	%		26		-		2021
Numeric Integrated Alpha	Y		2.05	%		20		-		2021
Numeric Integrated Alpha	Investor		2.33	%		1,099		-		2021
Numeric Integrated Alpha	Ultra		1.85	%		281,302		-		2021

Of these amounts, $89,478 and $17,975 were disclosed as a receivable from the Manager on the Statements of Assets and Liabilities at January 31, 2018 for the Grosvenor Long/Short Fund and Numeric Integrated Alpha Fund, respectively. The Funds have 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 Funds 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 Funds’ 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 listed above will expire in 2021. The Funds did not record a liability for potential reimbursements due to the current assessment that reimbursements are unlikely. The carryover of excess expenses potentially reimbursable to the Manager are as follows:

Fund	Recouped Expenses		Excess Expense Carryover		Expired Expense Carryover		Expiration of Reimbursed Expenses
Grosvenor Long/Short	$	-	$	426,070	$	-		2019
Grosvenor Long/Short		-		281,244		-		2020
Numeric Integrated Alpha		-		189,564		-		2020

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 year ended January 31, 2018, there were no fees collected by Foreside for the sale of Class A Shares of the Funds.

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 Funds’

54

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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 year ended January 31, 2018, there were no CDSC fees collected for Class A Shares of the Funds.

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 Funds’ 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 year ended January 31, 2018, there were no CDSC fees collected for Class C Shares of the Funds.

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 $10,000 for each Board 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 $2,500 fee each quarter for his attendance at the committee meetings. Effective January 1, 2018, the Board Vice Chair receives an additional annual retainer of $10,000. 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 Trusts according to its respective net assets.

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 significant ownership of more than 5% of the Funds’ outstanding shares could have a material impact on the Funds. As of January 31, 2018, based on management’s evaluation of the shareholder account base, one account in the Grosvenor Long/Short Fund has been identified as representing an affiliated significant ownership of approximately 59% and one unaffiliated account of approximately 30% of the Fund’s outstanding shares.

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.

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 a fund’s 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

55

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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 Funds may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Funds’ pricing time of 4:00 p.m. Eastern 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 Funds use 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.

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.

Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, the Funds are required to deposit with their 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.

Forward foreign currency contracts are valued using the prevailing forward exchange rate and are categorized as Level 2 in the fair value hierarchy. Swap contracts are valued at prices furnished by independent swap dealers or by an independent pricing service and are generally categorized as a Level 2 in the fair value hierarchy. Forward foreign currency contracts and swap contracts involve, to varying degrees, risk of loss in excess of the unrealized appreciation (depreciation) on the Statement of Assets and Liabilities.

Valuation Inputs

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

Level 1	-	Quoted prices in active markets for identical securities.
Level 2	-	Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
Level 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, ETFs, 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. Valuation adjustments may be applied to certain securities that

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are solely traded on a foreign exchange to account for the market movement between the close of the foreign market and the close of the Exchange. These securities are valued using pricing service providers that consider the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments. Securities using these valuation adjustments are categorized as Level 2 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are generally 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 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 (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold.

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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 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 OTC. OTC stock may be less liquid than exchange-traded stock.

Foreign Securities

The Funds may invest in U.S. dollar-denominated and non-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. While investments in foreign securities may be intended to reduce risk by providing further diversification, such investments involve sovereign and other risks, in addition to the credit and market risks normally associated with domestic securities. These additional risks include the possibility of adverse political and economic developments (including political or social instability, nationalization, expropriation, or confiscatory taxation); the potentially adverse effects of unavailability of public information regarding issuers, different governmental supervision and regulation of financial markets, reduced liquidity of certain financial markets, and the lack of uniform accounting, auditing, and financial reporting standards or the application of standards that are different or less stringent than those applied in the United States; different laws and customs governing securities tracking; and possibly limited access to the courts to enforce the Funds’ rights as an investor.

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

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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 during the year ended January 31, 2018 are disclosed in the Notes to the Schedules of Investments.

Regulation S under the Securities Act permits the sale abroad of securities that are not registered for sale in the United States and includes a provision for U.S. investors, such as the Funds, to purchase such unregistered securities if certain conditions are met.

Other Investment Company Securities and Other Exchange-Traded Products

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

Short Sales

The Funds may enter into short sale transactions. A short sale is a transaction in which a Fund sells a security it does not own in anticipation of a decline in the market price of the security. Securities sold in short sale transactions and the dividends and interest payable on such securities, if any, are reflected as a liability on the Statement of Assets and Liabilities. A Fund is obligated to deliver the security at the market price at the time the short position is closed. The risk of loss on a short sale transaction is theoretically unlimited, because there is no limit to the cost of replacing the security sold short, whereas losses from purchase transactions cannot exceed the total amount invested. As of January 31, 2018, short positions were held by the Funds and are detailed in the Schedules of Investments.

5.  Financial Derivative Instruments

The Funds may utilize derivative instruments to gain 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.

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Contracts for Difference

The Funds may utilize equity-related securities including total return swaps based on individual companies (also referred to as contracts for difference (“CFDs”)). A CFD is a form of equity swap in which its value is based on the fluctuating value of some underlying asset (e.g., shares of a particular stock or a stock index). A CFD is a contract between two parties, buyer and seller, stipulating that the seller will pay to the buyer the difference between the nominal value of the underlying stock at the opening of the contract and the stock’s value at the close of the contract. The size of the contract and the contract’s expiration date are typically negotiated by the parties to the CFD transaction. CFDs enable the Funds to take short or long positions on an underlying stock and thus potentially capture gains on movements in the share prices of the stock without the need to own the underlying stock. By entering into a CFD transaction, the Fund could incur losses because it would face many of the same types of risks as owning the underlying equity securities directly as well as the other risks associated with the investments in swaps. As with other types of swap transactions, CFDs also carry counterparty risk, i.e., the risk that the counterparty to the CFD transaction may be unable or unwilling to make payments or to otherwise honor its financial obligations under the terms of the contract. If the counterparty were to do so, the value of the contract, and of the Funds’ shares, may be reduced. Entry into a CFD transaction may, in certain circumstances, require the payment of an initial margin and adverse market movements against the underlying stock may require the buyer to make additional margin payments. The Fund’s use of swaps is intended to generate profits, adjust leverage, hedge exposures, and manager volatility.

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

Average Contracts for Difference Notional Amounts Outstanding
Fund	Year Ended January 31, 2018
Grosvenor Long/Short	$	50,835
Numeric Integrated Alpha		12,573,093

Forward Foreign Currency Contracts

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

During the year ended January 31, 2018, the Fund entered into forward foreign currency contracts primarily for speculative purposes.

The Funds’ forward foreign 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 foreign currency contracts. For the purpose of this disclosure, volume is measured by the amounts bought and sold in USD at each quarter end.

Average Forward Foreign Currency Notional Amount Outstanding Year Ended January 31, 2018
Fund	Purchased Contracts		Sold Contracts
Grosvenor Long/Short	$	203,987	$	1,275,165

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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’ use of futures is intended to generate profits, adjust leverage, hedge exposures, and manage volatility. The Funds may also 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 usually reflects this amount on the Schedules of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as cash deposited with broker on the Statements of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.

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	Year Ended January 31, 2018
Numeric Integrated Alpha		357

Options Contracts

The Grosvenor Long/Short Fund may write (1) call and put options on futures, swaps (“swaptions”), securities, commodities or currencies it owns or in which it may invest and (2) inflation-capped options. Writing put options tends to increase the Fund’s exposure to unfavorable movements of the underlying instrument in exchange for an upfront premium. Writing call options tends to decrease the Fund’s exposure to favorable movements of the underlying instrument in exchange for an upfront premium. When the Funds writes a call, put, or inflation-capped option, an amount equal to the premium received is recorded as a liability and subsequently marked to market to reflect the current value of the option written. The purpose of inflation-capped options is to protect the buyer from inflation erosion above a certain rate on a given notional exposure. A floor can be used to give downside protection to investments in inflation-linked products. These liabilities are reflected as written options outstanding on the Statement of Assets and Liabilities. Certain options may be written with premiums to be determined on a future date. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against amounts paid on the underlying futures, swap, security or currency transaction to determine the realized gain or loss when the underlying transaction is sold. The Funds, as a writer of an option has no control over whether the underlying instrument may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the instrument underlying the written option. There is the risk the Funds may not be able to enter into a closing transaction because of an illiquid market.

The Grosvenor Long/Short Fund may also purchase put and call options. Purchasing call options tends to increase the Funds’ exposure to favorable movements of the underlying instrument in exchange for paying an upfront premium. Purchasing put options tends to decrease the Funds’ exposure to unfavorable movements of the underlying instrument. The Funds pay a premium which is included on the Statement of Assets and Liabilities as an

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investment and subsequently marked to market to reflect the current value of the option. Premiums paid for purchasing options which expire are treated as realized losses. Certain options may be purchased with premiums to be determined on a future date. The premiums for these options are based upon implied volatility parameters at specified terms. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying investment transaction to determine the realized gain or loss when the underlying transaction is sold.

During the year ended January 31, 2018, the Grosvenor Long/Short Fund purchased/sold options primarily for return enhancement and hedging.

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

Average Option Notional Amount Outstanding Year Ended January 31, 2018
Fund	Purchased		Sold
Grosvenor Long/Short	$	122,029	$	1,025

Total Return Swap Agreements

The Grosvenor Long/Short Fund may enter into total return swaps in order to take a “long” or “short” position with respect to an underlying referenced asset. The Fund is subject to market price volatility of the underlying referenced asset. A total return swap involves commitments to pay interest in exchange for a market linked return based on a notional amount. To the extent that the total return of the security, group of securities or index underlying the transaction exceeds or falls short of the offsetting interest obligation, the Fund will receive a payment from or make a payment to the counterparty.

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

Average Total Return Swap Contracts Outstanding
Fund	Year Ended January 31, 2018
Grosvenor Long/Short	$	36,615,477

The following is a summary of the fair valuations of the Funds’ derivative instruments categorized by risk exposure⁽¹⁾:

Grosvenor Long/Short Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of January 31, 2018:
Derivatives not accounted for as hedging instruments
Assets:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts			Total
Purchased options outstanding		$	-		$	-		$	-		$	-		$	21,249		$	21,249
Unrealized appreciation of forward foreign currency contracts			-			6,604			-			-			-			6,604
Unrealized appreciation from swap agreements			-			-			-			-			644,259			644,259

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Liabilities:	Credit contracts			Foreign exchange contracts				Commodity contracts			Interest rate contracts			Equity contracts				Total
Unrealized depreciation of forward foreign currency contracts		$	-		$	(40,896	)		$	-		$	-		$	-			$	(40,896	)
Unrealized depreciation from swap agreements			-			-				-			-			(56,987	)			(56,987	)

The effect of financial derivative instruments on the Statements of Operations as of January 31, 2018:
Derivatives not accounted for as hedging instruments
Realized gain (loss) from derivatives recognized as a result of operations:	Credit contracts			Foreign exchange contracts				Commodity contracts			Interest rate contracts			Equity contracts				Total
Purchased options contracts		$	-		$	(139	)		$	-		$	-		$	33,318			$	33,179
Forward foreign currency contracts			-			(22,278	)			-			-			-				(22,278	)
Swap agreements			-			-				-			-			201,842				201,842
Written options contracts			-			-				-			-			(8,889	)			(8,889	)
Net change in unrealized appreciation (depreciation) of derivatives recognized as a result from operations:	Credit contracts			Foreign exchange contracts				Commodity contracts			Interest rate contracts			Equity contracts				Total
Purchased options contracts		$	-		$	-			$	-		$	-		$	9,639			$	9,639
Forward foreign currency contracts			-			(25,606	)			-			-			-				(25,606	)
Swap agreements			-			-				-			-			423,501				423,501
Written options contracts			-			-				-			-			96				96

Numeric Integrated Alpha Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of January 31, 2018:
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)	$	-	$	-	$	-	$	-	$	984,282		$	984,282
Unrealized appreciation from swap agreements		-		-		-		-		1,704,802			1,704,802
Liabilities:	Credit contracts		Foreign exchange contracts		Commodity contracts		Interest rate contracts		Equity contracts			Total
Payable for variation margin from open futures contracts(2)	$	-	$	-	$	-	$	-	$	(794,657	)	$	(794,657	)
Unrealized depreciation from swap agreements		-		-		-		-		(2,071,710	)		(2,071,710	)

The effect of financial derivative instruments on the Statements of Operations as of January 31, 2018:
Derivatives not accounted for as hedging instruments
Realized gain (loss) from derivatives recognized as a result of operations:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts				Equity contracts				Total
Futures contracts		$	-		$	-		$	-		$	(242,372	)		$	1,800,876			$	1,558,504
Swap agreements			-			-			-			-				5,129,443				5,129,443
Net change in unrealized appreciation (depreciation) of derivatives recognized as a result from operations:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts				Equity contracts				Total
Futures contracts		$	-		$	-		$	-		$	-			$	(7,658	)		$	(7,658	)
Swap agreements			-			-			-			-				(747,877	)			(747,877	)

⁽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 Fund’s Schedules of Investments footnotes. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

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Master Agreements

International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) with counterparties govern transactions in OTC derivative and foreign exchange contracts entered into by the Funds 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.

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

6.  Principal Risks

Investing in the Funds may involve certain risks including, but not limited to, those described below.

Counterparty Risk

The Funds are 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 Funds.

Currency Risk

The Funds 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 foreign currency exchange contracts in non- U.S. currencies, non-U.S. currency futures contracts and swaps for cross-currency investments. Foreign currencies will fluctuate, and may decline, in value relative to the U.S. dollar and other currencies and thereby affect the Funds’ investments in foreign (non-U.S.) currencies or in securities that trade in, and receive revenues in, or in derivatives that provide exposure to, foreign (non-U.S.) currencies.

Derivatives Risk

Derivatives may involve significant risk. The use of derivative instruments may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities or other instruments underlying those derivatives, including the high degree of leverage often embedded in such instruments, and potential material and prolonged deviations between the theoretical value and realizable value of a derivative. Some derivatives have the potential for unlimited loss, regardless of the size of the Funds’ initial investment. Derivatives may be illiquid and may be more volatile than other types of investments. The Funds may buy or sell derivatives not traded on an exchange and which may be subject to heightened liquidity and valuation risk. Derivative investments can increase portfolio turnover and transaction costs. Derivatives also are subject to counterparty risk. As a result, the Funds may obtain no recovery of their investment or may only obtain a limited recovery, and any recovery may be delayed. Not all derivative transactions require a counterparty to post collateral, which may expose the Funds to greater losses in the event of a default by a counterparty.

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Emerging Markets Risk

When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures.

Forward Foreign Currency Contracts Risk

Forward foreign currency contracts, including non-deliverable forwards, are derivative instruments pursuant to a contract with a counterparty to pay a fixed price for an agreed amount of securities or other underlying assets at an agreed date or to buy or sell a specific currency at a future date at a price set at the time of the contract. The use of forward foreign currency contracts may expose the Funds to additional risks that it would not be subject to if it invested directly in the securities or currencies underlying the forward foreign currency contract.

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 Funds to additional risks that they would not be subject to if they 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 Funds 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).

High Portfolio Turnover Risk

Portfolio turnover is a measure of the Funds’ trading activity over a one-year period. A portfolio turnover rate of 100% would indicate that the Funds sold and replaced the entire value of its securities holdings during the period. High portfolio turnover could increase the Funds’ transaction costs, have a negative impact on performance, and generate higher capital gain distributions to shareholders than if the Funds have a lower portfolio turnover rate.

Illiquid and Restricted Securities Risk

Securities not registered in the U.S. under the Securities Act of 1933, as amended (the “Securities Act”), including Rule 144A securities, are restricted as to their resale. Such securities may not be listed on an exchange and may have no active trading market. They may be more difficult to purchase or sell at an advantageous time or price because such securities may not be readily marketable in broad public markets. The Funds may not be able to sell a restricted security when the sub-advisor considers it desirable to do so and/or may have to sell the security at a lower price than the Funds believe is its fair market value. In addition, transaction costs may be higher for restricted securities and the Funds may receive only limited information regarding the issuer of a restricted security. The Funds may have to bear the expense of registering restricted securities for resale and the risk of substantial delays in effecting the registration.

Leverage Risk

The Funds’ use of futures, forward foreign currency contracts, swaps, other derivative instruments and selling securities short will have the economic effect of financial leverage. Financial leverage magnifies the

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exposure to the swings in prices of an asset or class of assets underlying a derivative instrument and results in increased volatility, which means that the Funds will have the potential for greater losses than if the Funds do not use the derivative instruments that have a leveraging effect. Leverage may result in losses that exceed the amount originally invested and may accelerate the rate of losses. Leverage tends to magnify, sometimes significantly, the effect of an increase or decrease in the Funds’ exposure to an asset or class of assets and may cause the Funds’ NAV to be volatile.

Liquidity Risk

The Funds are susceptible to the risk that certain fixed-income investments, 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 Funds could lose money if they are unable to dispose of an investment at a time that is most beneficial to the Funds. The Funds 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 Funds. For example, the Funds 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 an unusually high degree of volatility in the financial markets, both domestic and foreign. 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 of a rate increase on various 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.

Multi-Manager Risk

The Grosvenor Long/Short Fund’s performance depends on, among other things, the Lead Sub-Advisor’s success in monitoring and allocating the Fund’s assets among the Sub-Advisors. The Sub-Advisors investment styles may not always be complementary. The Sub-Advisors make investment decisions independently of one another, and may make conflicting investment decisions. The Fund’s multi-manager approach may result in the Fund investing a significant percentage of its assets in certain types of securities, which could be beneficial or detrimental to the Fund’s performance depending on the performance of those securities and the overall market environment. The Sub-Advisors may underperform the market generally or underperform other investment managers that could have been selected for the Fund. The Lead Sub-Advisor and the Sub-Advisors also may use proprietary or licensed strategies that are based on considerations and factors that are not fully disclosed to the Board, the Manager or the Lead Sub-Advisor. The success of a particular Sub-Advisor in implementing its investment strategy is dependent on the expertise of its portfolio managers, and certain Sub-Advisors may have a limited number of investment management professionals. The loss of one or more of a Sub-Advisor’s key investment professionals could have a materially adverse effect on the performance of the Fund. A Sub-Advisor may have little or no experience

66

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

managing the assets of a registered investment company which, unlike the other accounts a Sub-Advisor may manage, is subject to daily inflows and outflows of investor cash and are subject to certain legal and tax-related restrictions on their investments and operations.

Non-Diversification Risk

The Funds are non-diversified, which means the Funds may focus their investments in the securities of a comparatively small number of issuers. Investments in securities of a limited number of issuers exposes the Funds to greater market risk and potential losses than if assets were diversified among the securities of a greater number of issuers.

Options Risk

In order for a call option to be profitable, the market price of the underlying security must rise sufficiently above the exercise price to cover the premium and transaction costs. These costs will reduce any profit that might have been realized had it bought the underlying security at the time it purchased the call option. For a put option to be profitable, the market price of the underlying security must decline sufficiently below the exercise price to cover the premium and transaction costs. By using put options in this manner, the Funds will reduce any profit it might otherwise have realized from appreciation of the underlying security by the premium paid for the put option and by transaction costs. If the Funds sell a put option, there is a risk that the Funds may be required to buy the underlying asset at a disadvantageous price. If the Funds sell a call option, there is a risk that the Funds may be required to sell the underlying asset at a disadvantageous price. If the Funds sell a call option on an underlying asset that the Funds own and the underlying asset has increased in value when the call option is exercised, the Funds will be required to sell the underlying asset at the call price and will not be able to realize any of the underlying asset’s value above the call price.

Other Investment Companies Risk

The Funds may invest in shares of other registered investment companies, including ETFs and money market funds. To the extent that the Funds invest in shares of other registered investment companies, the Funds will indirectly bear the fees and expenses charged by the underlying funds in addition to the Funds’ direct fees and expenses and will be subject to the risks associated with investments in those funds. For example, ETF shares may trade at a premium or discount to their net asset value. An ETF that tracks an index may not precisely replicate the returns of its benchmark index.

Short Position Risk

The Funds will incur a loss as a result of a short position if the price of the instrument sold short increases in value between the date of the short sale and the date on which an offsetting position is purchased. Short positions may be considered speculative transactions and involve special risks, including greater reliance on the sub-advisor’s ability to accurately anticipate the future value of a security or instrument. The Funds’ losses are potentially unlimited in a short position transaction.

Valuation Risk

The Funds 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.

67

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

Offsetting Assets and Liabilities

The Funds are parties to enforceable master netting agreements between brokers and counterparties which provide for the right to offset under certain circumstances. The Funds employ multiple money managers and counterparties and have elected not to offset qualifying financial and derivative instruments on the Statements of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, January 31, 2018.

Grosvenor Long/Short Fund

Offsetting of Financial and Derivative Assets as of January 31, 2018:
	Assets		Liabilities
Swap Agreement - OTC	$	644,259	$	56,987
Purchased Options Contracts		21,249		-
Forward Foreign Currency Contracts		6,604		40,896
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	672,112	$	97,883
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	15,549	$	-
Total derivative assets and liabilities subject to an MNA	$	656,563	$	97,883

Financial Assets, Derivatives, and Collateral Received/(Pledged) by Counterparty as of January 31, 2018:
						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
Morgan Stanley & Co. Inc.	$	656,563	$	(97,883	)	$	(558,680	)	$	-	$	-
						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
Morgan Stanley & Co. Inc.	$	97,883	$	(97,883	)	$	-		$	-	$	-

Numeric Integrated Alpha Fund

Offsetting of Financial and Derivative Assets as of January 31, 2018:
	Assets			Liabilities
Futures Contracts	$	984,282		$	794,657
Swap Agreement - OTC		1,704,802			2,071,710
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	2,689,084		$	2,866,367
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(984,282	)	$	(794,657	)
Total derivative assets and liabilities subject to an MNA	$	1,704,802		$	2,071,710

68

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

Financial Assets, Derivatives, and Collateral Received/(Pledged) by Counterparty as of January 31, 2018:
						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
Morgan Stanley & Co., Inc.	$	1,704,802	$	(1,704,802	)	$	-		$	-	$	-
						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
Morgan Stanley & Co., Inc.	$	2,071,710	$	(1,704,802	)	$	(366,908	)	$	-	$	-

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 distributions 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. For the Grosvenor Long/Short Fund, each of the tax years in the 3 year period ended January 31, 2018 and for the Numeric Integrated Alpha Fund, each of the tax years in the 2 year period ended January 31, 2018 remain 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.

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 Funds also utilize earnings and profits distributed to shareholders on redemptions of shares as part of the dividends paid deduction.

69

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

The tax character of distributions paid were as follows:

	Grosvenor Long/Short Fund				Numeric Integrated Alpha Fund
	Year Ended January 31, 2018		Year Ended January 31, 2017		Year Ended January 31, 2018		From November 1, 2016 to January 31, 2017
Distributions paid from:
Ordinary income
Institutional Class	$	744,110	$	294,627	$	1,182	$	-
Y Class		16,894		4,466		1,053		-
Investors Class		28,384		6,661		982		-
A Class		8,566		3,414		-		-
C Class		8,657		4,070		-		-
Ultra Class		4,325		-		2,205,298		-
Long-term capital gains
Institutional Class		606,463		15,125		746		-
Y Class		13,770		229		618		-
Investors Class		23,134		342		618		-
A Class		6,981		175		-		-
C Class		7,070		209		-		-
Ultra Class		3,525		-		1,068,803		-
Total distributions paid	$	1,471,879	$	329,318	$	3,279,300	$	-

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

As of January 31, 2018 the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Grosvenor Long/Short	$	18,086,894	$	2,983,813	$	(1,456,117	)	$	1,527,696
Numeric Integrated Alpha		135,490,589		9,982,503		(13,091,901	)		(3,109,398	)

Fund	Net Unrealized Appreciation (Depreciation)			Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)			Other Temporary Differences			Distributable Earnings
Grosvenor Long/Short	$	1,527,696		$	329,827	$	251,545	$	-		$	(56,993	)	$	2,052,075
Numeric Integrated Alpha		(3,109,398	)		731,287		-		(349,754	)		(24,719	)		(2,752,584	)

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, amortization of organizational costs, deferral of losses from straddles, deferral of losses from unsettled short sales transactions, gains from constructive sales, 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 Statements of Assets and Liabilities.

Accordingly, the following amounts represent current year permanent differences derived from foreign currency reclasses, reclassifications of income from real estate trusts and partnerships, disposal adjustments from investments in passive foreign investment companies, swap income reclasses, dividends that have been redesignated, and net operating losses that have been reclassified as of January 31, 2018:

Fund	Paid-In-Capital		Undistributed (Overdistribution of) Net Investment Income		Accumulated Net Realized Gain (Loss)			Net Unrealized Appreciation (Depreciation)
Grosvenor Long/Short	$	-	$	117,818	$	(117,818	)	$	-
Numeric Integrated Alpha		-		4,988,600		(4,988,600	)		-

70

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

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

For the year ended January 31, 2018, the Funds did not have any capital loss carryforwards.

The Funds are permitted for tax purposes to defer into their next fiscal year qualified late year losses. Qualified late year capital losses are any capital losses incurred after October 31 through the Fund’s fiscal year ending January 31, 2018. Qualified late year ordinary losses are specified losses generally incurred after October 31 and ordinary losses incurred after December 31 through the end of the Funds’ fiscal year, January 31, 2018. For the period ended January 31, 2018, Numeric deferred $349,754 in long-term capital losses to February 1, 2018.

8.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended January 31, 2018 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Sales (non-U.S. Government Securities)
Grosvenor Long/Short	$	36,805,790	$	35,683,287
Numeric Integrated Alpha		551,869,075		533,743,529

A summary of the Funds’ transactions in the USG Select Fund for the year ended January 31, 2018 are as follows:

Fund	Type of Transaction		January 31, 2017 Shares/Fair Value		Purchases		Sales		January 31, 2018 Shares/Fair Value		Dividend Income
Grosvenor Long/Short		Direct	$	2,991,077	$	31,512,751	$	30,537,384	$	3,966,444	$	30,098
Numeric Integrated Alpha		Direct		3,929,099		182,488,198		159,891,361		26,525,936		145,233

9.  Borrowing Arrangements

Effective November 16, 2017, the Funds, along with certain other funds managed by the Manager (“Participating Funds”), entered into a committed revolving line of credit (the “Committed Line”) agreement with State Street Bank and Trust Company (the “Bank”) to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Committed Line is $50 million with interest at a rate equal to the higher of (a) one-month London Inter-Bank Offered Rate (“LIBOR”) plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on amounts borrowed. Each of the Participating Funds will pay a commitment fee at a rate of 0.25% per annum on the unused portion of the Committed Line amount. The Committed Line expires November 15, 2018 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

Effective November 16, 2017, the Funds, along with certain other Participating Funds managed by the Manager, entered into an uncommitted discretionary demand revolving line of credit (the “Uncommitted Line”) agreement with the Bank to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Uncommitted Line is $50 million with interest at a rate equal to the higher of (a) one-month LIBOR plus 1.25% per annum or (b) the Federal Funds rate. The Uncommitted Line expires November 15, 2018 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

The Participating Funds paid administration, legal and arrangement fees, which are recognized as a component of “Other expenses” on the Statements of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets. During the year ended January 31, 2018, the Funds did not utilize this facility.

71

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

10.  Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Funds:

	Institutional Class
	Year Ended January 31,
	2018							2017
Grosvenor Long/Short Fund	Shares				Amount			Shares			Amount
Shares sold		24,792			$	275,000			-		$	-
Reinvestment of dividends		124,822				1,350,573			29,613			309,752
Shares redeemed		(1,252	)			(13,588	)		(58,796	)		(572,526	)
Net increase (decrease) in shares outstanding		148,362			$	1,611,985			(29,183	)	$	(262,774	)
	Y Class
	Year Ended January 31,
	2018							2017
Grosvenor Long/Short Fund	Shares				Amount			Shares			Amount
Shares sold		20,612			$	225,000			9,255		$	96,500
Reinvestment of dividends		2,839				30,664			449			4,695
Shares redeemed		(12,642	)			(140,173	)		(436	)		(4,580	)
Net increase in shares outstanding		10,809			$	115,491			9,268		$	96,615
	Investor Class
	Year Ended January 31,
	2018							2017
Grosvenor Long/Short Fund	Shares				Amount			Shares			Amount
Shares sold		47,906			$	522,598			3,471		$	33,712
Reinvestment of dividends		4,806				51,520			673			7,003
Shares redeemed		(7,889	)			(87,672	)		(18,720	)		(185,132	)
Net increase (decrease) in shares outstanding		44,823			$	486,446			(14,576	)	$	(144,417	)
	A Class
	Year Ended January 31,
	2018							2017
Grosvenor Long/Short Fund	Shares				Amount			Shares			Amount
Shares sold		-			$	-			1,211		$	12,123
Reinvestment of dividends		1,450				15,547			345			3,589
Shares redeemed		-				-			(9,862	)		(99,703	)
				��
Net increase/(decrease) in shares outstanding		1,450			$	15,547			(8,306	)	$	(83,991	)
	C Class
	Year Ended January 31,
	2018							2017
Grosvenor Long/Short Fund	Shares				Amount			Shares			Amount
Shares sold		-			$	-			5,482		$	53,784
Reinvestment of dividends		1,495				15,726			415			4,279
Shares redeemed		(5,799	)			(61,887	)		-			-
Net increase (decrease) in shares outstanding		(4,304	)		$	(46,161	)		5,897		$	58,063
	Ultra Class
	November 15,2017A to January 31, 2018
Grosvenor Long/Short Fund	Shares				Amount
Shares sold		8,849			$	100,000
Reinvestment of dividends		725				7,849
Net increase in shares outstanding		9,574			$	107,849

72

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2018

	Institutional Class
	Year Ended January 31, 2018						November 1, 2016A to January 31, 2017
Numeric Integrated Alpha Fund	Shares			Amount			Shares(1)			AmountB
Shares sold		-		$	-			500,000		$	5,000,000
Reinvestment of dividends		195			1,928			-			-
Shares redeemed		-			-			(957,948	)		(9,726,147	)
Net increase (decrease) in shares outstanding		195		$	1,928			(457,948	)	$	(4,726,147	)
	Y Class
	Year Ended January 31, 2018						November 1, 2016A to January 31, 2017
Numeric Integrated Alpha Fund	Shares			Amount			Shares(1)			AmountB
Shares sold		-		$	-			-		$	-
Reinvestment of dividends		169			1,671			-			-
Net increase in shares outstanding		169		$	1,671			-		$	-
	Investor Class
	Year Ended January 31, 2018						November 1, 2016A to January 31, 2017
Numeric Integrated Alpha Fund	Shares			Amount			Shares(1)			AmountB
Shares sold		-		$	-			-		$	-
Reinvestment of dividends		162			1,600			-			-
Net increase in shares outstanding		162		$	1,600			-		$	-
	Ultra Class
	Year Ended January 31, 2018						November 1, 2016A to January 31, 2017
Numeric Integrated Alpha Fund	Shares			Amount			Shares(1)			AmountB
Shares sold		15,360,264		$	156,192,646			5,733,727		$	58,420,763
Reinvestment of dividends		150,491			1,492,879			-			-
Shares redeemed		(3,491,355	)		(35,313,498	)		(155,085	)		(1,578,837	)
Net increase in shares outstanding		12,019,400		$	122,372,027			5,578,642		$	56,841,926

^A Commencement of operations.

^B Seed capital has been received in the amounts of $4,700,000 for Institutional class and $100,000 each for the Y, Investor, and Ultra classes, respectively. As a result, the shares were issued in the amounts of 470,000 for the Institutional Class and 10,000 for each remaining class, respectively.

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 Funds’ financial statements through this date.

73

American Beacon Grosvenor Long/Short Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended January 31,						October 1, 2015A to January 31,
	2018			2017			2016
Net asset value, beginning of period	$	10.66		$	9.79		$	10.00
Income (loss) from investment operations:
Net investment (loss)		(0.16	)F		(0.14	)		(0.02	)
Net gains (losses) on investments (both realized and unrealized)		1.65			1.22			(0.19	)
Total income (loss) from investment operations		1.49			1.08			(0.21	)
Less distributions:
Dividends from net investment income		(0.06	)		-			-
Distributions from net realized gains		(0.83	)		(0.21	)		-
Total distributions		(0.89	)		(0.21	)		-
Net asset value, end of period	$	11.26		$	10.66		$	9.79
Total returnB		14.29	%		11.06	%		(2.10	)%C
Ratios and supplemental data:
Net assets, end of period	$	18,701,925		$	16,119,517		$	15,098,172
Ratios to average net assets:
Expenses, before reimbursements		5.67	%		6.13	%		11.84	%D
Expenses, net of reimbursementsE		4.14	%		4.41	%		3.95	%D
Net investment (loss), before expense reimbursements		(3.30	)%		(3.10	)%		(10.23	)%D
Net investment (loss), net of reimbursements		(1.77	)%		(1.37	)%		(2.34	)%D
Portfolio turnover rate		186	%		250	%		77	%C
	Y Class
	Year Ended January 31,						October 1, 2015A to January 31,
	2018			2017			2016
Net asset value, beginning of period	$	10.65		$	9.79		$	10.00
Income (loss) from investment operations:
Net investment (loss)		(0.15	)F		(0.10	)		(0.01	)
Net gains (losses) on investments (both realized and unrealized)		1.62			1.17			(0.20	)
Total income (loss) from investment operations		1.47			1.07			(0.21	)
Less distributions:
Dividends from net investment income		(0.06	)		-			-
Distributions from net realized gains		(0.83	)		(0.21	)		-
Total distributions		(0.89	)		(0.21	)		-
Net asset value, end of period	$	11.23		$	10.65		$	9.79
Total returnB		14.11	%		10.96	%		(2.10	)%C
Ratios and supplemental data:
Net assets, end of period	$	416,381		$	279,480		$	166,300
Ratios to average net assets:
Expenses, before reimbursements		5.75	%		6.58	%		14.92	%D
Expenses, net of reimbursementsE		4.27	%		4.49	%		4.03	%D
Net investment (loss), before expense reimbursements		(3.36	)%		(3.57	)%		(13.32	)%D
Net investment (loss), net of reimbursements		(1.88	)%		(1.48	)%		(2.43	)%D
Portfolio turnover rate		186	%		250	%		77	%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.

^E  Includes non-operating expenses consisting of prime broker fees and dividend from securities sold short. The expenses, net of reimbursements ratios excluding non-operating expenses are 2.10% and 2.20% for the Institutional and Y Classes, respectively, for the years(s) disclosed above.

^F  Includes non-recurring dividends. Without these dividends, net investment income per share would have been $(0.18) and $(0.17) for Institutional Class and Y Class, respectively.

See accompanying notes

74

American Beacon Grosvenor Long/Short Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended January 31,						October 1, 2015A to January 31,
	2018			2017			2016
Net asset value, beginning of period	$	10.60		$	9.78		$	10.00
Income (loss) from investment operations:
Net investment (loss)		(0.02	)F		(0.21	)		(0.01	)
Net gains (losses) on investments (both realized and unrealized)		1.46			1.24			(0.21	)
Total income (loss) from investment operations		1.44			1.03			(0.22	)
Less distributions:
Dividends from net investment income		(0.06	)		-			-
Distributions from net realized gains		(0.83	)		(0.21	)		-
Total distributions		(0.89	)		(0.21	)		-
Net asset value, end of period	$	11.15		$	10.60		$	9.78
Total returnB		13.89	%		10.56	%		(2.20	)%C
Ratios and supplemental data:
Net assets, end of period	$	881,290		$	362,643		$	477,097
Ratios to average net assets:
Expenses, before reimbursements		6.04	%		6.89	%		15.21	%D
Expenses, net of reimbursementsE		4.51	%		4.82	%		4.37	%D
Net investment (loss), before expense reimbursements		(3.66	)%		(3.80	)%		(13.54	)%D
Net investment (loss), net of reimbursements		(2.13	)%		(1.73	)%		(2.69	)%D
Portfolio turnover rate		186	%		250	%		77	%C
	A Class
	Year Ended January 31,						October 1, 2015A to January 31,
	2018			2017			2016
Net asset value, beginning of period	$	10.60		$	9.78		$	10.00
Income (loss) from investment operations:
Net investment (loss)		(0.20	)F		(0.23	)		(0.02	)
Net gains (losses) on investments (both realized and unrealized)		1.64			1.26			(0.20	)
Total income (loss) from investment operations		1.44			1.03			(0.22	)
Less distributions:
Dividends from net investment income		(0.06	)		-			-
Distributions from net realized gains		(0.83	)		(0.21	)		-
Total distributions		(0.89	)		(0.21	)		-
Net asset value, end of period	$	11.15		$	10.60		$	9.78
Total returnB		13.89	%		10.56	%		(2.20	)%C
Ratios and supplemental data:
Net assets, end of period	$	211,579		$	185,823		$	252,710
Ratios to average net assets:
Expenses, before reimbursements		6.06	%		6.96	%		14.66	%D
Expenses, net of reimbursementsE		4.54	%		4.88	%		4.36	%D
Net investment (loss), before expense reimbursements		(3.69	)%		(3.89	)%		(13.03	)%D
Net investment (loss), net of reimbursements		(2.17	)%		(1.80	)%		(2.74	)%D
Portfolio turnover rate		186	%		250	%		77	%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.

^E  Includes non-operating expenses consisting of prime broker fees and dividend from securities sold short. The expenses, net of reimbursements ratios excluding non-operating expenses are 2.48% and 2.50% for the Investor and A Classes, respectively, for the years(s) disclosed above.

^F  Includes non-recurring dividends. Without these dividends, net investment income per share would have been $(0.03) and $(0.22) for Investor Class and A Class, respectively.

See accompanying notes

75

American Beacon Grosvenor Long/Short Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended January 31,						October 1, 2015A to January 31,
	2018			2017			2016
Net asset value, beginning of period	$	10.49		$	9.76		$	10.00
Income (loss) from investment operations:
Net investment (loss)		(0.43	)F		(0.22	)		(0.05	)
Net gains (losses) on investments (both realized and unrealized)		1.77			1.16			(0.19	)
Total income (loss) from investment operations		1.34			0.94			(0.24	)
Less distributions:
Dividends from net investment income		(0.06	)		-			-
Distributions from net realized gains		(0.83	)		(0.21	)		-
Total distributions		(0.89	)		(0.21	)		-
Net asset value, end of period	$	10.94		$	10.49		$	9.76
Total returnB		13.07	%		9.66	%		(2.40	)%C
Ratios and supplemental data:
Net assets, end of period	$	181,475		$	219,289		$	146,348
Ratios to average net assets:
Expenses, before reimbursements		6.80	%		7.62	%		16.08	%D
Expenses, net of reimbursementsE		5.31	%		5.53	%		5.10	%D
Net investment (loss), before expense reimbursements		(4.40	)%		(4.61	)%		(14.48	)%D
Net investment (loss), net of reimbursements		(2.91	)%		(2.52	)%		(3.49	)%D
Portfolio turnover rate		186	%		250	%		77	%C

	Ultra
	November 14, 2017A to January 31,
	2018
Net asset value, beginning of period	$	11.30
Income (loss) from investment operations:
Net investment (loss)		(0.02	)F
Net gains on investments (both realized and unrealized)		0.88
Total income (loss) from investment operations		0.86
Less distributions:
Dividends from net investment income		(0.06	)
Distributions from net realized gains		(0.83	)
Total distributions		(0.89	)
Net asset value, end of period	$	11.27
Total returnB		7.90	%C
Ratios and supplemental data:
Net assets, end of period	$	107,867
Ratios to average net assets:
Expenses, before reimbursements		7.68	%D
Expenses, net of reimbursementsE		3.21	%D
Net investment (loss), before expense reimbursements		(5.43	)%D
Net investment (loss), net of reimbursements		(0.96	)%D
Portfolio turnover rate		186	%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.

^E  Includes non-operating expenses consisting of prime broker fees and dividend from securities sold short. The expenses, net of reimbursements ratio excluding non-operating expenses are 3.25% and 1.99% for the C and Ultra Classes, respectively, for the year(s) disclosed above.

^F  Includes non-recurring dividends. Without these dividends, net investment income per share would have been $(0.45) and $(0.04) for C Class and Ultra Class, respectively.

See accompanying notes

76

American Beacon Numeric Integrated Alpha Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended January 31,			November 1, 2016A to January 31,
	2018			2017
Net asset value, beginning of period	$	10.28		$	10.00
Income (loss) from investment operations:
Net investment (loss)		(0.23	)		(4.25	)
Net gains on investments (both realized and unrealized)		0.13			4.53
Total income (loss) from investment operations		(0.10	)		0.28
Less distributions:
Dividends from net investment income		-			-
Distributions from net realized gains		(0.16	)		-
Total distributions		(0.16	)		-
Net asset value, end of period	$	10.02		$	10.28
Total returnB		(0.96	)%		2.80	%C
Ratios and supplemental data:
Net assets, end of period	$	122,715		$	123,935
Ratios to average net assets:
Expenses, before reimbursements		4.82	%		6.48	%D
Expenses, net of reimbursementsE		4.80	%		4.56	%D
Net investment (loss), before expense reimbursements		(3.02	)%		(4.74	)%D
Net investment (loss), net of reimbursements		(3.00	)%		(2.82	)%D
Portfolio turnover rate		329	%		114	%C
	Y Class
	Year Ended January 31,			November 1, 2016A to January 31,
	2018			2017
Net asset value, beginning of period	$	10.26		$	10.00
Income (loss) from investment operations:
Net investment (loss)		(0.31	)		(0.08	)
Net gains on investments (both realized and unrealized)		0.23			0.34
Total income (loss) from investment operations		(0.08	)		0.26
Less distributions:
Dividends from net investment income		(0.01	)		-
Distributions from net realized gains		(0.16	)		-
Total distributions		(0.17	)		-
Net asset value, end of period	$	10.01		$	10.26
Total returnB		(0.79	)%		2.60	%C
Ratios and supplemental data:
Net assets, end of period	$	101,793		$	102,596
Ratios to average net assets:
Expenses, before reimbursements		4.92	%		12.24	%D
Expenses, net of reimbursementsE		4.90	%		4.62	%D
Net investment (loss), before expense reimbursements		(3.12	)%		(10.64	)%D
Net investment (loss), net of reimbursements		(3.10	)%		(3.02	)%D
Portfolio turnover rate		329	%		114	%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.

^E  Includes non-operating expenses consisting of prime broker fees and dividend from securities sold short. The expenses, net of reimbursements ratios excluding non-operating expenses are 1.95% and 2.05% for the Institutional and Y Classes, respectively, for the year(s) disclosed above.

See accompanying notes

77

American Beacon Numeric Integrated Alpha Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended January 31,			November 1, 2016A to January 31,
	2018			2017
Net asset value, beginning of period	$	10.25		$	10.00
Income (loss) from investment operations:
Net investment (loss)		(0.34	)		(0.08	)
Net gains on investments (both realized and unrealized)		0.23			0.33
Total income (loss) from investment operations		(0.11	)		0.25
Less distributions:
Dividends from net investment income		-			-
Distributions from net realized gains		(0.16	)		-
Total distributions		(0.16	)		-
Net asset value, end of period	$	9.98		$	10.25
Total returnB		(1.06	)%		2.50	%C
Ratios and supplemental data:
Net assets, end of period	$	101,438		$	102,524
Ratios to average net assets:
Expenses, before reimbursements		6.26	%		13.71	%D
Expenses, net of reimbursementsE		5.18	%		4.90	%D
Net investment (loss), before expense reimbursements		(4.46	)%		(12.11	)%D
Net investment (loss), net of reimbursements		(3.38	)%		(3.30	)%D
Portfolio turnover rate		329	%		114	%C
	Ultra
	Year Ended January 31,			November 1, 2016A to January 31,
	2018			2017
Net asset value, beginning of period	$	10.27		$	10.00
Income (loss) from investment operations:
Net investment (loss)		(0.20	)		(0.05	)
Net gains on investments (both realized and unrealized)		0.14			0.32
Total income (loss) from investment operations		(0.06	)		0.27
Less distributions:
Dividends from net investment income		(0.03	)		-
Distributions from net realized gains		(0.16	)		-
Total distributions		(0.19	)		-
Net asset value, end of period	$	10.02		$	10.27
Total returnB		(0.57	)%		2.70	%C
Ratios and supplemental data:
Net assets, end of period	$	176,414,475		$	57,379,342
Ratios to average net assets:
Expenses, before reimbursements		4.90	%		6.74	%D
Expenses, net of reimbursementsE		4.70	%		4.87	%D
Net investment income (loss), before expense reimbursements		(3.04	)%		(5.04	)%D
Net investment (loss), net of reimbursements		(2.84	)%		(3.17	)%D
Portfolio turnover rate		329	%		114	%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.

^E  Includes non-operating expenses consisting of prime broker fees and dividend from securities sold short. The expenses, net of reimbursements ratios excluding non-operating expenses are 2.33% and 1.85% for the Investor and Ultra Classes, respectively, for the year(s) disclosed above.

See accompanying notes

78

American Beacon Funds^SM

Federal Tax Information

January 31, 2018 (Unaudited)

Certain tax information regarding the Funds is required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended January 31, 2018. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2017.

The Funds designated the following items with regard to distributions paid during the fiscal year ended January 31, 2018. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Funds to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Corporate Dividends-Received Deduction:

Grosvenor	22.34	%
Numeric Integrated	25.68	%

Qualified Dividend Income:

Grosvenor	29.88	%
Numeric Integrated	28.13	%

Long-Term Capital Gain Distributions:

Grosvenor	$	660,943
Numeric Integrated		1,070,785

Short-Term Capital Gain Distributions:

Grosvenor	$	714,210
Numeric Integrated		1,896,772

Shareholders received notification in January 2018 of the applicable tax information necessary to prepare their 2017 income tax returns.

79

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

Approval Related to American Beacon Grosvenor Long/Short Fund

At its August 22-23, 2017 meetings, the Board of Trustees (“Board”) considered the approval of a new investment advisory agreement among American Beacon Advisors, Inc. (“Manager”), Electron Capital Partners, LLC. (“Electron”) and Grosvenor Capital Management, L.P. (“Grosvenor”), with respect to the American Beacon Grosvenor Long/Short Fund (“Grosvenor Fund”), a series of the Trust (the “Electron Agreement”).

Prior to the Board meeting, the Board reviewed information provided by Electron in response to requests from the Board and/or the Manager in connection with the Board’s consideration of the Electron Agreement, and the Investment Committee of the Board met with representatives of Electron. Also in attendance at that Investment Committee meeting were representatives of the Manager and Grosvenor, the lead subadviser to the Grosvenor Fund, who explained the basis for Grosvenor’s recommendation of Electron.

Provided below is an overview of the primary factors the Board considered when it approved the Electron Agreement. The Board considered, among other things, the following factors: (1) the nature and quality of the services to be provided; (2) the investment performance of certain accounts managed by Electron; (3) the extent to which economies of scale, if any, have been taken into account in setting the fee schedule; (4) whether fee levels reflect these economies of scale, if any, for the benefit of investors; (5) comparisons of services and fees with contracts entered into by Electron with other clients; and (6) any other benefits anticipated to be derived by Electron from its relationship with the Grosvenor Fund. In addition, the Board considered that Electron would be compensated for its services exclusively by Grosvenor from its fixed rate advisory fee, and not by the Grosvenor Fund.

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

Additional Considerations With Respect to the Approval of the Electron Agreement

Nature, extent and quality of the services to be provided by Electron. The Board considered information regarding Electron’s principal business activities, its reputation, financial condition and overall capabilities to perform the services under the Electron Agreement. In addition, the Board considered the background and experience of the personnel who will be assigned responsibility for managing Electron’s allocation of the Grosvenor Fund. The Board also considered Electron’s investment resources, infrastructure and the adequacy of its compliance program. In addition, the Board took into consideration that Grosvenor had recommended Electron, and the Manager had not identified any issues that would warrant a contrary recommendation by it. The Board considered Electron’s representations regarding its financial condition and that its current staffing levels were adequate to service the Grosvenor Fund. Based on this information, the Board concluded that the nature, extent and quality of the advisory services to be provided by Electron were appropriate for the Grosvenor Fund in light of its investment objective, and, thus, supported a decision to approve the Electron Agreement.

Performance of Electron. The Board evaluated the information provided by Electron regarding the performance of a hedge fund managed by Electron (the “Hedge Fund”) relative to the performance of the MSCI World Utilities Index and the S&P 500 Index. The Board considered Electron’s representation that, for various periods ended June 30, 2017, the Hedge Fund’s performance relative to these benchmarks generally was favorable. The Board also considered Electron’s representation that the Grosvenor Fund’s strategy would not be identical to that of the Hedge Fund and that Electron does not currently manage any other accounts in a strategy that is similar to that of the Grosvenor Fund. Based on the foregoing information, the Board concluded that the historical investment performance record of Electron supported approval of the Electron Agreement.

80

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

Comparisons of the amounts to be paid under the Electron Agreement with those under contracts between Electron and its other clients. In evaluating the Electron Agreement, the Board reviewed the proposed advisory fee rate for services to be performed by Electron on behalf of the Grosvenor Fund. The Board considered Electron’s representation that it does not provide comparable services to its other clients. The Board also considered Electron’s representation that the investment advisory fee rate proposed for the Grosvenor Fund is lower than the standard fee for the Hedge Fund and the fee rate charged by Electron to any other fee-based account. After evaluating this information, the Board concluded that the advisory fee rate under the Electron Agreement was reasonable in light of the services to be provided to the Grosvenor Fund.

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

Economies of Scale. The Board considered Electron’s representation that potential future economies of scale were reflected in the proposed investment advisory fee rate under the Electron Agreement.

Benefits to be derived by Electron from the relationship with the Grosvenor Fund. The Board considered the “fall-out” or ancillary benefits that might accrue to Electron as a result of its relationship with the Grosvenor Fund, including Electron’s representation that it may receive soft dollar benefits in connection with Grosvenor Fund transactions. Based on the foregoing information, the Board concluded that the potential benefits accruing to Electron by virtue of its relationship with the Grosvenor Fund appear to be fair and reasonable.

Board’s Conclusion. Based on the various considerations described above, the Board, including a majority of Trustees who are not “interested persons” of the Fund, the Manager, Grosvenor or Electron, as that term is defined in the 1940 Act, concluded that the proposed investment advisory fee rate is fair and reasonable and that the approval of the Electron Agreement is in the best interests of the Grosvenor Fund and approved the Electron Agreement.

81

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

The Trustees and officers of the American Beacon Funds (the “Trust”) are listed below, together with their principal occupations during the past five years. The address of each person listed below is 220 Las Colinas Boulevard East, Suite 1200, Irving, Texas 75039. Each Trustee oversees thirty-five funds in the fund complex that includes the Trust, the American Beacon Select Funds and the American Beacon Institutional Funds Trust. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Alan D. Feld** (81)	Trustee since 1996	Sole Shareholder of a professional corporation which is a Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Mileage Funds (1996-2012); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Master Trust (1996-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (48)	Trustee since 2015	Director, Kura MD, Inc. (local telehealth organization) (2015-present); Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Vice President & CFO, Sierra Health Foundation: Center for Health Program Management (California public benefit corporation) (2012-Present); Director, Innovative North State (2012-2015); Director, Sacramento Regional Technology Alliance (2011-2016); Director, Women’s Empowerment (2009-2014); Director, Valley Healthcare Staffing (2017–present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Joseph B. Armes (55)	Trustee since 2015	Chairman & CEO, CSW Industrials f/k/a Capital Southwest Corporation (investment company) (2015-Present); Chairman of the Board of Capital Southwest Corporation, predecessor to CSW Industrials, Inc. (2014-present) (investment company); CEO, Capital Southwest Corporation (2013-2015); President & CEO, JBA Investment Partners (family investment vehicle) (2010-Present); Director and Chair of Audit Committee, RSP Permian (oil and gas producer) (2013-Present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Gerard J. Arpey (59)	Trustee since 2012	Director, The Home Depot, Inc. (2015-Present); Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Brenda A. Cline (57)	Trustee since 2004	Executive Vice President, Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Director, Range Resources Corporation (oil and natural gas company) (2015-Present); Director, Tyler Technologies, Inc. (public sector software solutions company) (2014-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).

82

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Eugene J. Duffy (63)	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-Present); Principal and Executive Vice President, Paradigm Asset Management (1994-2014); Director, Sunrise Bank of Atlanta (2008-2013); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Douglas A. Lindgren*** (56)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Managing Director, IPS Investment Management and Global Head, Content Management, UBS Wealth Management (2010-2016); Managing Director, P&S Hedge Funds, UBS Wealth Management (2008-2010); Managing Director, Head of Alternative Investments, UBS Financial Services, Inc. (2005-2008).
Richard A. Massman (74)	Trustee since 2004 Chairman since 2008	Consultant and General Counsel Emeritus, Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities) (2009-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
Barbara J. McKenna, CFA (54)	Trustee since 2012	Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present).
R. Gerald Turner (72)	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-Present); Director, Kronus Worldwide Inc. (chemical manufacturing) (2003-Present); Trustee, American Beacon Mileage Funds (2001-2012); Trustee, American Beacon Select Funds (2001-Present); Trustee, American Beacon Master Trust (2001-2012); Trustee, American Beacon Institutional Funds Trust (2017-Present).
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (63)	President since 2009	President, CEO and Director, American Beacon Advisors, Inc. (2009-Present); President, CEO and Director, Resolute Investment Managers, Inc. (2015-Present); President, CEO and Director, Resolute Acquisition, Inc. (2015-Present); President, CEO and Director, Resolute Topco, Inc. (2015-Present), President & CEO, Resolute Investment Holdings, LLC (2015-Present); President, CEO and Director, Lighthouse Holdings, Inc. (2009-2015); President and CEO, Lighthouse Holdings Parent, Inc. (2009-2015); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-Present); Director, ARK Investment Management LLC (2016-Present); Director, Shapiro Capital Management LLC (2017-Present); Member, Investment Advisory Committee, Employees Retirement System of Texas (2017-Present); Trustee, American Beacon NextShares Trust (2015-Present); President, American Beacon Select Funds (2009-Present); President, American Beacon Mileage Funds (2009-2012); President, American Beacon Master Trust (2009–2012); President, American Beacon Institutional Funds Trust (2017-Present).

83

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rosemary K. Behan (58)	VP, Secretary and Chief Legal Officer since 2006	Vice President and Secretary, American Beacon Advisors, Inc. (2006-Present); Secretary, Resolute Investment Holdings, LLC (2015-Present) Secretary, Resolute Investment Managers, Inc. (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015-Present); Secretary, Lighthouse Holdings, Inc. (2008-2015); Secretary, Lighthouse Holdings Parent, Inc. (2008-2015); Secretary, American Private Equity Management, LLC (2008-Present); Secretary, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Secretary, Alpha Quant Advisors, LLC (2016-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Select Funds (2006-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Mileage Funds (2006-2012); Chief Legal Officer, Vice President and Secretary, American Beacon Master Trust (2006-2012); Chief Legal Officer, Vice President and Secretary, American Beacon Institutional Funds Trust (2017-Present).
Brian E. Brett (57)	VP since 2004	Senior Vice President (2012-Present) and Vice President (2004-2012), American Beacon Advisors, Inc.; Vice President, American Beacon Select Funds (2004-Present); Vice President, American Beacon Mileage Funds (2004-2012); Vice President, American Beacon Master Trust (2004-2012); Vice President, American Beacon Institutional Funds Trust (2017-Present).
Paul B. Cavazos (48)	VP since 2016	Senior Vice President, American Beacon Advisors, Inc. (2016-Present); Chief Investment Officer and Assistant Treasurer, DTE Energy (2007-2016); Vice President, American Beacon Select Funds (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present).
Erica Duncan (47)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Mileage Funds (2011-2012); Vice President, American Beacon Master Trust (2011-2012); Vice President, American Beacon Institutional Funds Trust (2017-Present).
Melinda G. Heika (56)	Treasurer since 2010	Treasurer, American Beacon Advisors, Inc. (2010-Present); Resolute Investment Managers, Inc. (2015-Present); Treasurer, Resolute Acquisition, Inc. (2015-Present); Treasurer, Resolute Topco, Inc. (2015-Present); Treasurer, Resolute Investment Holdings, LLC. (2015-Present); Treasurer, Lighthouse Holdings, Inc. (2010-2015); Treasurer, Lighthouse Holdings Parent Inc., (2010-2015); Treasurer, American Private Equity Management, LLC (2012-Present); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Select Funds (2010-Present); Treasurer, American Beacon Mileage Funds (2010-2012); Treasurer, American Beacon Master Trust (2010-2012); Treasurer, American Beacon Institutional Funds Trust (2017-Present).
Terri L. McKinney (54)	VP since 2010	Vice President (2009-Present) and Managing Director (2003-2009), American Beacon Advisors, Inc.; Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Mileage Funds (2010-2012); Vice President, American Beacon Master Trust (2010-2012); Vice President, American Beacon Institutional Funds Trust (2017-Present).

84

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Jeffrey K. Ringdahl (42)	VP since 2010	Senior Vice President (2013-Present), Vice President (2010-2013), and Director (2015-Present), American Beacon Advisors, Inc.; Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Mileage Funds (2010-2012); Vice President, American Beacon Master Trust (2010-2012); Senior Vice President (2012-Present) and Manager (2015-Present), American Private Equity Management, LLC; Senior Vice President, Lighthouse Holdings, Inc. (2013-2015); Senior Vice President, Lighthouse Holdings Parent, Inc. (2013-2015); Director and Vice President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Trustee, American Beacon NextShares Trust (2015-Present); Director and Senior Vice Present, Resolute Investment Holdings, LLC (2015-Present); Director and Senior Vice President, Resolute Topco, Inc. (2015-Present); Director and Senior Vice President, Resolute Acquisition, Inc. (2015-Present); Director and Senior Vice President, Resolute Investment Managers, Inc. (2015-Present); Director, Executive Vice President and Chief Operating Officer, Alpha Quant Advisors, LLC (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-President); Director, Shapiro Capital Management, LLC (2017-Present).
Samuel J. Silver (54)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Mileage Funds (2011-2012); Vice President, American Beacon Master Trust (2011-2012); American Beacon Institutional Funds Trust (2011-Present).
Christina E. Sears (46)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Chief Compliance Officer, American Beacon Advisors, Inc. (2004-Present); Chief Compliance Officer, American Private Equity Management, LLC (2012-Present); Chief Compliance Officer and Vice President, Alpha Quant Advisors, LLC (2016-Present); Chief Compliance Officer (2004-Present) and Assistant Secretary (1999-Present), American Beacon Select Funds; Chief Compliance Officer (2004-2012) and Assistant Secretary (1999-2012), American Beacon Mileage Funds; Chief Compliance Officer (2004-2012) and Assistant Secretary (1999-2012), American Beacon Master Trust; Chief Compliance Officer and Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).
Sonia L. Bates (61)	Asst. Treasurer since 2011	Assistant Treasurer, American Beacon Advisors, Inc. (2011-Present); Assistant Treasurer, Resolute Investment Managers, Inc. (2015-Present); Assistant Treasurer, Resolute Acquisition, Inc. (2015-Present); Assistant. Treasurer, Resolute Topco, Inc. (2015-Present); Assistant Treasurer, Resolute Investment Holdings, LLC.; Assistant Treasurer, Lighthouse Holdings, Inc. (2011-2015); Assistant Treasurer, Lighthouse Holdings Parent Inc. (2011-2015); Assistant Treasurer, American Private Equity Management, LLC (2012-Present); Assistant Treasurer, American Beacon Select Funds (2011-Present); Assistant Treasurer American Beacon Mileage Funds (2011-2012); Assistant Treasurer, American Beacon Master Trust (2011-2012); Assistant Treasurer, American Beacon Institutional Funds Trust (2017-Present).
Shelley D. Abrahams (43)	Assistant Secretary since 2008	Assistant Secretary, American Beacon Advisors, Inc. (2008-Present); Assistant Secretary, American Beacon Select Funds (2008-Present); Assistant Secretary, American Beacon Mileage Funds (2008-2012); Assistant Secretary, American Beacon Master Trust (2008-2012); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).

85

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rebecca L. Harris (51)	Assistant Secretary since 2010	Vice President, American Beacon Advisors, Inc. (2016-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2010-Present); Assistant Secretary, American Beacon Mileage Funds (2010-2012); Assistant Secretary, American Beacon Master Trust (2010-2012); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).
Diana N. Lai (42)	Assistant Secretary since 2012	Assistant Secretary, American Beacon Advisors, Inc. (2012-Present); Assistant Secretary, American Beacon Select Funds (2012-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).
Teresa A. Oxford (59)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2015-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 75.

** Mr. Feld is deemed to be an “interested person” of the Trusts, as defined by the 1940 Act. Mr. Feld’s law firm of Akin, Gump, Strauss, Hauer & Feld LLP has provided legal services within the past two fiscal years to one or more of the Trust’s sub-advisors.

*** Douglas A. Lindgren became a new Trustee to each of the Trusts on 1/1/2018.

86

American Beacon Funds^SM

Privacy Policy

January 31, 2018 (Unaudited)

The American Beacon Funds recognize and respect the privacy of our shareholders. We are providing this notice to you so you will understand how shareholder information may be collected and used.

We may collect nonpublic personal information about you from one or more of the following sources:

• information we receive from you on applications or other forms;

• information about your transactions with us or our service providers; and

• information we receive from third parties.

We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.

We restrict access to your nonpublic personal information to those employees or service providers who need to know that information to provide products or services to you. To ensure the confidentiality of your nonpublic personal information, we maintain safeguards that comply with federal standards.

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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: 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 each Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately sixty days after the end of each quarter.	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 DST Asset Manager Solutions, Inc. Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Boston, Massachusetts DISTRIBUTOR Resolute Investment Distributors, Inc. Irving, Texas

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 Grosvenor Long/Short Fund and American Beacon Numeric Integrated Alpha Fund are service marks of American Beacon Advisors, Inc.

AR 1/18

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.

The Trust’s Board of Trustees has determined that Ms. Brenda A. Cline, a member of the Trust’s Audit and Compliance Committee, is an “audit committee financial expert” as defined in Form N-CSR. Ms. Brenda Cline is “independent” as defined in Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a)
Audit Fees	Fiscal Year Ended
$295,750		1/31/2017
$326,959		1/31/2018
(b)
Audit-Related Fees	Fiscal Year Ended
$0		1/31/2017
$0		1/31/2018
(c)
Tax Fees	Fiscal Year Ended
$132,995		1/31/2017
$127,409		1/31/2018
(d)
All Other Fees	Fiscal Year Ended
$0		1/31/2017
$0		1/31/2018

e)(1) Pursuant to its charter, the Trust’s Audit and Compliance Committee shall have the following duties and powers pertaining to pre-approval of audit and non-audit services provided by the Trust’s principal accountant:

- to approve, prior to appointment, the engagement of auditors to annually audit and provide their opinion on the Trusts’ financial statements, and, in connection therewith, reviewing and evaluating matters potentially affecting the independence and capabilities of the auditors;

- to approve, prior to appointment, the engagement of the auditors to provide non-audit services to the Trusts, an investment adviser to any series of the Trusts or any entity controlling, controlled by, or under common control with an investment adviser (“adviser affiliate”) that provides ongoing services to the Trusts, if the engagement relates directly to the operations and financial reporting of the Trusts;

- to consider whether the non-audit services provided by a Trust’s auditor to an investment adviser or any adviser affiliate that provides ongoing services to a series of the Trusts, which services were not pre-approved by the Committee, are compatible with maintaining the auditor’s independence;

- to review the arrangements for and scope of the annual audit and any special audits; and

- to review and approving the fees proposed to be charged to the Trusts by the auditors for each audit and non-audit service.

The Audit and Compliance Committee may delegate any portion of its authority, including the authority to grant pre-approvals of audit and permitted non-audit services, to a subcommittee of one or more members. Any decisions of the subcommittee to grant pre-approvals shall be presented to the full audit committee at its next regularly scheduled meeting.

(e)(2) None of the fees disclosed in paragraphs (b) through (d) above were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f)    Not applicable.

(g)    

Aggregate Non-Audit Fees for Services Rendered to the:

Registrant	Adviser			Adviser’s Affiliates Providing Ongoing Services to Registrant		Fiscal Year Ended
$132,995	$	215,882	*		N/A		1/31/2017
$127,409	$	110,167			N/A		1/31/2018

*    Fees are associated with Ernst & Young, LLP.

(h)    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: May 8, 2018

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: May 8, 2018

By /s/ Melinda G. Heika

Melinda G. Heika

Treasurer

American Beacon Funds

Date: May 8, 2018